R.K. INDUSTRIES, MUMBAI V. ITO WD 16(10), MUMBAI

ITA 3205/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3257 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-07-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS R M MADHAVI
• Keywords: Bogus purchase

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , ! '# ! '# ! '# ! '# , ,, , $ $ $ $ % % % % BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 3205/MUM./2010 ( $' ( )( / ASSESSMENT YEAR : 199899 ) M/S. R.K. INDUSTRIES C/O SHREE BALAJI ALLOYS 36B, INDUSTRIAL EXTN. AREA NEAR HATLI MORE KATHUA JAMMU & KASHMIR 184102 .. *+ / APPELLANT ' V/S INCOME TAX COMMISSIONER WARD16(10), MUMBAI .... ,-*+ / RESPONDENT * . / PERMANENT ACCOUNT NUMBER AABPA7622H $' (/! 0 1 / ASSESSEE BY : MR. K. GOPAL 2 0 1 / REVENUE BY : MRS. R.M. MADHAVI ' 0 ! / DATE OF HEARING 01.07.2013 ' 34) 0 ! / DATE OF ORDER 03.07.2013 ' ' ' ' / ORDER ! '# ! '# ! '# ! '# , ,, , $ $ $ $ 5 5 5 5 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE, CH ALLENGING THE IMPUGNED ORDER 18 TH MARCH 2010, PASSED BY THE LEARNED COMMISSIONER (AP PEALS)XXIV, MUMBAI, FOR ASSESSMENT YEAR 199899. THE SOLE DISPU TE IN THIS APPEAL IS, WHETHER OR NOT THE FIRST APPELLATE AUTHORITY WAS JUSTIFIED IN LEVYING THE PENALTY OF ` 45,54,933, UNDER SECTION 271(1)(C) OF THE INCOME TA X ACT, 1961 (FOR SHORT THE ACT) FOR THE CONCEALMENT AND FILING INACCURATE PAR TICULARS OF INCOME IN RESPECT OF NONGENUINE PURCHASES ON THE GROUND THAT OPPORTUNIT Y OF HEARING HAS NOT BEEN GRANTED. M/S. R.K. INDUSTRIES 2 2. ON A PERUSAL OF THE IMPUGNED ORDER, IT IS SEEN THAT , IN THE PRESENT CASE, THE LEARNED COMMISSIONER (APPEALS), DURING THE QUANTUM PROCEEDINGS, VIDE ORDER DATED 17 TH APRIL 2009, HAD HELD THAT PURCHASES FROM TWO PARTI ES WERE NOT VERIFIABLE AND REMAIN UNPROVED. THUS, THESE PURCHASES WERE DISALLO WED AND ENHANCEMENT WAS MADE. ACCORDINGLY, PENALTY PROCEEDINGS WERE INITIAT ED UNDER SECTION 271(1)(C) FOR THE CONCEALMENT OF INCOME AND FILING INACCURATE PAR TICULARS OF INCOME IN RESPECT OF NONGENUINE PURCHASES FOR SUMS AGGREGATING TO ` 1,30,14,095. 3. VARIOUS PENALTY NOTICES WHICH WERE ISSUED BY THE LE ARNED COMMISSIONER (APPEALS) EITHER COULD NOT BE SERVED OR COMPLIANCE WAS MADE BY THE ASSESSEE OF THESE NOTICES. DETAILS OF SUCH ISSUING OF NOTICES A ND NONCOMPLIANCE BY THE ASSESSEE HAVE BEEN DISCUSSED BY THE LEARNED COMMISS IONER (APPEALS) FROM PAGES 1 TO 4 / PARAS2 AND 3 OF HIS ORDER. NOW IN THE ABS ENCE OF ANY EXPLANATION BY THE ASSESSEE, THE LEARNED COMMISSIONER (APPEALS) LEVIED THE PENALTY OF ` 45,54,933, BEING 100% OF THE TAX SOUGHT TO BE EVADED ON ALLEGE D BOGUS PURCHASES OF ` 1,30,14,095. 4. BEFORE US, THE LEARNED COUNSEL, ON BEHALF OF THE AS SESSEE, SUBMITTED THAT THE ASSESSEE HAD INFORMED THE LEARNED COMMISSIONER (APP EALS) THAT SINCE THE QUANTUM PROCEEDINGS BEFORE THE TRIBUNAL IS SUBJUDICE, THERE FORE, PENALTY PROCEEDINGS SHOULD BE KEPT IN ABEYANCE. HOWEVER, THE LEARNED COMMISSIO NER (APPEALS), WITHOUT WAITING FOR THE TRIBUNAL ORDER, HAD LEVIED THE PENA LTY. IT HAS BEEN INFORMED BY HIM THAT THE SAID ADDITION ALSO STANDS CONFIRMED BY THE TRIBUNAL. HOWEVER, THERE COULD NOT BE ANY CASE OF LEVY OF PENALTY ON SUCH ADDITION / DISALLOWANCE OF PURCHASES UNDER SECTION 271(1)(C). 5. AFTER GOING THROUGH THE IMPUGNED ORDER PASSED BY TH E LEARNED COMMISSIONER (APPEALS) AND THE FACTS ON RECORD, WE FIND THAT MOS T OF THE NOTICES EITHER COULD NOT BE SERVED OR NO ONE RESPONDED TO SUCH NOTICES. IN T HE ABSENCE OF ANY EXPLANATION OR SUBMISSIONS, THE PENALTY HAS BEEN LEVIED BY THE LEARNED COMMISSIONER (APPEALS). THE LEARNED COUNSEL HAS TRIED TO MAKE OU T A CASE ON MERITS, HOWEVER, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER NE EDS TO BE RESTORED BACK. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSE D BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE BACK T O THE FILE OF THE LEARNED COMMISSIONER (APPEALS) TO DEAL AND DECIDE THE ISSUE OF LEVY OF PENALTY AFRESH AFTER CONSIDERING ALL THE RELEVANT FACTS AND MATERIAL ON RECORD AND AFTER SEEKING EXPLANATION AND SUBMISSIONS FROM THE ASSESSEE. THE ASSESSEE WOULD BE AT LIBERTY TO M/S. R.K. INDUSTRIES 3 FILE ANY DOCUMENTS OR EVIDENCE IN SUPPORT OF ITS EX PLANATION BEFORE THE LEARNED COMMISSIONER (APPEALS). THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. / !6 $' (/! 0 70 89: ! ; ' 2! <= > 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ' 0 34) ? @'6 3 RD JULY 2013 4 0 A > ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY 2013 SD/- . .. . . . . . R.S. SYAL ACCOUNTANT MEMBER SD/- ! ! ! ! '# '# '# '# $ $ $ $ AMIT SHUKLA JUDICIAL MEMBER MUMBAI, @' @' @' @' DATED: 3 RD JULY 2013 ' 0 ,$! B CB)! / COPY OF THE ORDER FORWARDED TO : (1) $' (/! / THE ASSESSEE; (2) 2 / THE REVENUE; (3) D () / THE CIT(A); (4) D / THE CIT, MUMBAI CITY CONCERNED; (5) BGA ,$!$' , , / THE DR, ITAT, MUMBAI; (6) A( H / GUARD FILE. -B! ,$! / TRUE COPY '' / BY ORDER , 2. IJ / PRADEEP J. CHOWDHURY /K $'2 I / SR. PRIVATE SECRETARY 8 / < 2 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI