DCIT (OSD) RG 8(1), MUMBAI V. LOK HOUSING & CONSTRUCTION LTD, MUMBAI

ITA 3309/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7911 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-09-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Revised return
• Section: 260A; 115JB; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3309 /MUM/20 1 4 ASSESSMENT YEAR: 2007 - 08 & ITA NO. 3310 /MUM/201 4 ASSESSMENT YEAR: 2008 - 09 THE DCIT (OSD) RG 8(1), ROOM NO. 260A , 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S LOK HOUSING & CONSTRUCTION LTD., 4, LOK BHAVAN, LOK BHARTI COMPLEX, MAROL MAROSHI ROAD, ANDHERI (EAST), MUMBAI - 400059 PAN: AAACL1881B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RA JESH KUMAR YADAV (DR) ASSESSEE BY : NONE DATE OF HEARING: 23/10 /201 7 DATE OF PRONOUNCEMENT: 13 / 12 /201 7 O R D E R PER RAM LAL NEGI, JM THESE APPEAL S HAVE BEE N FILED BY THE REVENUE AGAINST TWO SEPARATE ORDER S , BOTH DATED 10/02/2014 , PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI , FOR THE ASSESSMENT YEAR S 2007 - 20 08 AND 2008 - 2009 RESPECTIVELY , WHEREBY THE LD. CIT (A) HAS PARTY ALLOWED THE APPEALS FILED BY THE ASSESSEE AGAIN ST ORDER PASSED U/ S 221(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR THE AFORESAID ASSESSMENT YEARS . SINCE, BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE FOR DIFFERENT ASSESSMENT YEARS AND THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, BOTH WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 ITA NO. 3309/MUM/2014 (ASSESSMENT YEAR: 2007 - 2008 ) BRIEF FACTS OF THE CASE ARE THAT PENALTY OF RS 2,82,00,000/ - U/S 221(1) OF THE ACT WAS LEVI ED BY AO VIDE ORDER DATED 25.11.2008 ON RETURNED INCOME WHICH HAD NOT BEEN PAID BY THE ASSESSEE COMPANY AS SELF ASSESSMENT TAX. THE ORDER IMPOSING PENALTY WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY. AGAINST THE ORDER CONFIRMING PENALTY, THE ASSESSEE PR EFERRED SECOND APPEAL BEFORE THE ITAT. THE ITAT RESTORED THE MATTER BACK TO THE AO FOR FRESH DETERMINATION OF THE QUANTUM OF PENALTY IN THE LIGHT OF THE FACT THAT THE ASSESSEE HAD FILED REVISED RETURN. THE ITAT FURTHER DIRECTED THE AO TO RE - COMPUTE THE PEN ALTY PAYABLE U/S 221(1), AS THE SELF ASSESSMENT TAX U/S 140 IS TO BE WORKED OUT ON THE INCOME DECLARED IN THE REVISED RETURN IF THE SAID RETURN HAS BEEN ACTED UPON BY THE AO AND IF IT HAS BEEN TREATED INVALID THAN TO COMPUTE THE PENALTY AS PER THE PROVISIO NS OF THE ACT. 2. THE AO PASSED ORDER GIVING EFFECT TO THE ORDER OF THE ITAT, HOWEVER, DID NO T CHANGE ITS STAND , HOLDING THAT THE ASSESSEES SUBMISSIONS ARE NOT ACCEPTABLE AS THE DEPARTMENT HAS CHALLENGED THE DECISION OF ITAT BEFORE THE HONBLE HIGH COURT . 3. THE ASSESSEE CHALLENGED THE IMPUGNED ORDER PASSED BY THE AO BEFORE THE LD. CIT(A) AND THE LD. CIT(A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO LEVY THE PENALTY OF 5% ON THE AMOUNT OF MINIMUM ALTERNA TIVE TAX PAYABLE UNDER SECTION 140 OF THE ACT AND RESTRICT THE LEVY TO THE EXTENT AS DIRECTED BY THE ITAT. THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER. 4 . THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PAS SED BY THE LD. CIT (A): - 3 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 (1) OF THE ACT AT 5% ON THE AMOUNT OF MAT OF RS. 15,13,543/ - PAYABLE U/S 140A OF THE ACT ON BOOK PROF IT COMPUTED U/S 115JB AS PER REVISED RETURN OF INCOME FILED ON 01.01.2009, AS AGAINST PENALTY LEVIED U/S 221 (1) OF RS. 2,82,00,000/ - BEING 5% ON THE AMOUNT OF UNPAID S.A. TAX OF RS. 56,40,00,000/ - ON TOTAL INCOME OF RS. 135,47,15,708/ - DECLARED IN THE ORI GINAL RETURN OF INCOME FILED ON 23.09.2008. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 (1) OF THE ACT AT 5% ON THE AMOUNT OF MAT PAYABLE U/S 140A AS PER REVISED RETURN O F INCOME, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE, UNDER WHICH THE AO REJECTED THE VALIDITY OF THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 01.01.2009. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CI T (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 (1) OF THE ACT AT 5% ON THE AMOUNT OF MAT PAYABLE U/S 140A AS PER REVISED RETURN OF INCOME ON THE BASIS OF DECISION DATED 23.10.2012 (ITA NO. 8485/MUM/2011) OF HONBLE ITAT, MUMBAI BENCH A, MUMBAI, WH EREIN THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 01.01.2009 IS TREATED AS A VALID RETURN, IGNORING THE FACT THAT THE DEPARTMENT DID NOT ACCEPT THE DECISION OF THE HONBLE ITAT, MUMBAI, AND HAS FILED APPEAL U/S 260A AGAINST THE SAME, BEFORE THE H ONBLE BOMBAY HIGH COURT. 5. THIS CASE WAS FIXED FOR HEARING ON 19. 10. 20 17. ON THE SAID DATE, WHEN THE CASE WAS CALLED FOR HEARING, NEITHER THE ASSESSEE IN PERSON NOR THROUGH ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE BENCH NOR WE RECEIVED ANY APP LICATION FOR ADJOURNMENT. WE NOTICED THAT THIS CASE WAS FIXED FOR HEARING FOR THE FIRST TIME ON 03.11.2015. ON THE SAID DATE THE CASE WAS ADJOURNED 25.05.16 AT THE REQUEST OF THE ASSESSEE. ON 24.05.16 THE COUNSEL FOR THE ASSESSEE SOUGHT ADJOURNMENT . ACCORD INGLY, THE MATTER WAS ADJOURNED TO 4 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 22.12.16. THEREAFTER, NONE APPEARED ON BEHALF OF THE ASSESSEE FOR THE FOUR SUCCESSIVE DATES I.E., ON 22.12.16, 15.05.17, 19.09.17 AND 23.10.17 DESPITE SERVICE OF NOTICES. FROM THE CONDUCT OF THE APPELLANT/ ASSESSEE, WE AR E SATISFIED THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING ITS CASE. HENCE, WE DECIDED TO DISPOSE OF THE CASE ON THE BASIS OF EVIDENCE ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 6. BEFORE US, THE LD. DR RELYING ON THE FINDINGS OF THE A O SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY DIRECTED THE AO TO LEVY PENALTY U/S 221(1) OF THE ACT ON THE AMOUNT OF MAT OF RS. 15,13,543/ - PAYABLE U/S 140 A OF THE ACT ON BOOK PROFIT COMPUTED U/S 115JB AS PER REVISED RETURN FILED BY THE ASSESSEE WITHOUT APP RECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER WHICH THE AO HAS REJECTED THE VALIDITY OF THE REVISED RETURN FILED BY THE ASSESSEE. THE LD. D R FURTHER SUBMITTED THAT THE LD. D R HAS ERRED IN DIRECTING THE AO TO LEVY PENALTY AS PER THE REVISED RETURN ON THE BASIS OF THE DECISION OF THE ITAT RENDERED IN ITA NO 8485/MUM/2011 WHEREBY THE ITAT HAS TREATED THE REVISED RETURN FILED BY THE ASSESSEE AS VALID RETURN, IGNORING THAT THE DEPARTMENT HAS CHALLENGED THE ORDER OF THE ITAT IN THE HONBLE HIGH COURT. T HE LD. DR FURTHER SUBMITTED THAT SINCE THE IMPUGNED ORDER IS ERRONEOUS, THE SAME MAY BE SET ASIDE. 7. WE HAVE CAREFULLY PERUSED THE MATERIAL ON RECORD INCLUDING THE ORDER S PASSED BY THE AUTHORITIES BELOW. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS WRONGLY PASSED THE IMPUGNED ORDER BY FOLLOWING THE DECISION OF THE ITAT. THEREFORE, THE MAIN REASON FOR ASSAILING THE IMPUGNED ORDER IS THAT SINCE THE DEPARTMENT HAS CHALLENGED THE ORDER PASSED BY THE ITAT, THE LD. CIT(A) OUGHT TO HAVE CONFIRME D THE ASSESSMENT ORDER PASSED BY THE AO AFTER GIVING EFFECT TO THE ORDER OF THE ITAT. WE NOTICE THAT THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER BY FOLLOWING THE DECISION OF THE ITAT. THE RELEVANT PARAS OF THE ORDER READ AS UNDER: 5 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 1.3.4 IN THE INSTAN T CASE, THE HONBLE ITAT A BENCH, MUMBAI VIDE THEIR COMBINED ORDER FOR A.Y. 2007 - 08 AND A.Y. 2008 - 09 BEARING NO. ITA NO. 5224 AND 5225/MUM/2009 DATED 11.03.2011 MADE THE SPECIFIC OBSERVATION WITH A DIRECTION TO THE AO TO RE - COMPUTE THE PENALTY U/S 221 (1 ), AS SELF - ASSESSMENT TAX U/S 140A IS TO BE WORKED OUT ON THE INCOME DECLARED AS PER THE REVISED RETURN OF INCOME IF THE SAID RETURN HAS BEEN ACTED UPON BY THE AO. SUBSEQUENTLY, ON SECOND ROUND OF PENALTY U/S 221 (1) RELATED PROCEEDING, IN RESPONSE TO TH E SHOW CAUSE IT WAS EXPLAINED BEFORE THE LD. AO THAT THE REVISED RETURN OF INCOME FILED FOR THE A.Y. 2007 - 08 HAS BEEN DULY ACCEPTED BY THE HONBLE ITAT, MUMBAI VIDE ORDER NO. ITA NO. 8485/MUM/2011 DATED 23.10.2012 AND ACCORDING TO WHICH THE APPELLANTS TOT AL INCOME STANDS ACCEPTED AT NIL. I FIND THAT THE TOTAL INCOME COMPUTED U/S 115JB COMES TO RS. 1,77,43,902/ - ON WHICH THE SELF - ASSESSMENT TAX WAS PAID ON 15.12.2008 AT RS. 15,13,543/ - AFTER CONSIDERING THE TAX DEDUCTED AT SOURCE. 1.3.5 I FIND THAT THE HO NBLE ITAT HAS ALSO DECIDED THE ISSUE REGARDING THE LACK OF GOOD AND SUFFICIENT REASON FOR NOT PAYING THE SELF - ASSESSMENT TAX AS WAS REQUIRED UNDER THE LAW. WITH REGARD TO THE CONTENTION OF THE APPELLANT THAT THERE WAS PAUCITY OF FUNDS AND FINANCIAL STRING ENCY RESPONSIBLE FOR NON - PAYMENT OF TAX, THE HONBLE ITAT HAS GIVEN A DETAILED FINDING THAT THE REASON STATED BY THE APPELLANT ARE NOT BORNE OUT OF RECORD. THEREFORE, ACCORDING TO THE HONBLE ITAT THE PENALTY WAS EXIGIBLE ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT CASE. IT WAS FURTHER DIRECTED BY THE HONBLE ITAT THAT IF THE REVISED RETURN DIRECTED UPON BY THE DEPARTMENT, THE PENALTY SHOULD BE COMPUTED AS PER THE PROVISIONS OF LAW AND IT SHOULD NOT BE MORE THAN 5% OF THE TEXT YOU BUT NOT PAID UNDER SE CTION 140A OF THE ACT. IT IS TRITE LAW THAT THE TAX PAYABLE UNDER MINIMUM ALTERNATIVE SCHEME OF THE ACT, IS LIABLE FOR PAYMENT OF ADVANCE TAX AND SELF - ASSESSMENT TAX. THE LD. AO IS THEREFORE, DIRECTED TO LEVY THE PENALTY OF 5% ON THE AMOUNT OF MINIMUM ALTE RNATIVE TAX PAYABLE UNDER SECTION 140A OF THE ACT AND RESTRICT THE LEVY 6 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 OF PENALTY TO THAT EXTENT ONLY AS DIRECTED BY THE HONBLE ITAT. THESE GROUND S OF APPEAL ARE THUS PARTLY ALLOWED. 8. SINCE, THE LD CIT(A) HAS PASSED THE IMPUGNED ORDER IN ACCORDANCE W ITH THE DECISION OF THE ITAT PASSED IN ITA NO 8485/MUM/2011 DATED 23.10.2012 AND SINCE THE DEPARTMENT HAS NOT PLEADED THAT THE HONBLE HIGH COURT HAS STAYED THE OPERATION OF THE ORDER PASSED BY THE ITAT IN ITA NO 8485 AFORESAID, WE DO NOT FIND ANY REASON T O INTERFERE WITH THE SAID ORDER. HENCE, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS ALL THE GROU NDS OF APPEAL OF THE DEPARTMENT. ITA NO. 3 310/MUM/2014 (ASSE SSMENT Y EAR: 2008 - 2009 ) THE FACTS AND THE ISSUE S INVOLVED IN THE PRESENT APPEAL ARE IDENT ICAL TO THE FACTS AND THE ISSUE S INVOLVED IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 2008 DISCUSSED ABOVE EXCEPT THE QUANTUM OF AMOUNT INVOLVED. HENCE, WE DO NOT CONSIDER IT NECESSARY TO REPRODUCE THE FACTS OF THIS APPEAL. IN THE PRESENT CASE ALSO, THE LD. CIT(A) HAS DIRECTED THE AO TO RESTRICT THE LEVY OF PENALTY AS DIRECTED BY THE ITAT . 2. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A)ON THE FOLLOWING EFFECTIVE GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 (1) OF THE ACT AT 5% ON THE AMOUNT OF MAT PAYABLE U/S 140A OF THE ACT ON BOOK PROFIT COMPUTED U/S 115JB OF THE ACT OF RS. 41,15,59,446/ - AS PER REVISED RETURN OF INCOME FIL ED ON 01.01.2009, AS AGAINST PENALTY LEVIED U/S 221 (1) OF RS. 1,98,00,000/ - BEING 5% ON THE AMOUNT OF UNPAID S.A. TAX OF RS. 39,55,00,000/ - ON TOTAL INCOME OF RS. 116,49,05,472/ - DECLARED IN THE ORIGINAL RETURN OF INCOME FILED ON 29.09.2008. 2. ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 (1) OF 7 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 THE ACT AT 5% ON THE AMOUNT OF MAT PAYABLE U/S 140A AS PER REVISED RETURN OF INCOME, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCE S OF THE CASE, UNDER WHICH THE AO REJECTED THE VALIDITY OF THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 01.01.2009. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO LEVY PENALTY U/S 221 ( 1) OF THE ACT AT 5% ON THE AMOUNT OF MAT PAYABLE U/S 140A AS PER REVISED RETURN OF INCOME ON THE BASIS OF DECISION DATED 27.02.2013 OF CIT (A) - 17, MUMBAI, WHEREIN THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 01.01.2009 IS TREATED AS A VALID RETURN , IGNORING THE FACT THAT THE DEPARTMENT DID NOT ACCEPT THE DECISION OF THE LD. CIT (A) - 17, MUMBAI, AND HAS FILED APPEAL U/S 260A AGAINST THE SAME, BEFORE THE HONBLE ITAT. 3. THE FACTS OF THE PRESENT CASE AND THE ISSUES INVOLVED ARE IDENTICAL TO THE FACT S AND ISSUES INVOLVED IN THE ASSESSEES CASE FOR THE AY2007 - 2008. W E HAVE DISMISSED THE APPEAL OF THE DEPARTMENT FOR THE ASSESSMENT YEAR 2007 - 2008 . T HEREFORE , CONSISTENT WITH OUR FINDINGS IN THE ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 DISCUSSED ABOVE, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) IN THE PRESENT CASE AND DISMISS ALL THE GROUNDS OF THE APPEAL OF THE REVENUE. IN THE RESULT, APPEALS FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2007 - 2008 AND 2008 - 2009 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER , 2017 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 13 / 12 / 2017 ALINDRA, PS 8 ITA NO S . 33 09 & 3310/MUM/2014 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI