Mrs. J.P. Stone Crushers Pvt. Ltd., Uttrakhand V. DCIT, Uttrakhand

ITA 3354/DEL/2011

• Counselvise Citation: 335420114 RSA 2011
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: KUNAL NAGPAL; SSH POONAM AHUJA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 3354/DEL/2011 ASSESSMENT YEAR: 2005-06 J.P. STONE CRUSHERS PVT. LTD., VS. DEPUTY CIT, RAMPUR ROAD, HALDWANI, HALDWANI, DIST. NAINITAL, UTTRAKHAND. UTTRAKHAND. (PAN: AABCJ5662M) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. POONAM AHUJA & KUNAL NAGPAL, ADV. RESPONDENT BY: MS. Y. KAKKAR, SR .DR DATE OF HEARING : 04.01.2012 DATE OF PRONOUNCEMENT : 13 .01.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 11.05.2011 PASSED FOR ASSESSMENT YEAR 2005-06. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.16,75,000 IMPOSED UNDE R SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE MANUFACTURING OF STONE GRITS AND DARA I.E. MIXT URE OF SMALL STONES AND STONE DUST FROM BOULDERS AND STONES. THE BOULDERS A ND STONES ARE EXTRACTED 2 FROM GOLA RIVER FROM HALDWANI AFTER ACQUIRING RIGHT S FROM FOREST DEPARTMENT OF UTTRANCHAL GOVERNMENT. THE ASSESSEE H AS FILED ITS RETURN OF INCOME ON 31.10.2005 DECLARING AN INCOME OF RS.1,85 ,600. AN ASSESSMENT WAS FRAMED UNDER SEC. 143(3) ON 28.12.2007, WHEREBY ASSESSING OFFICER HAD DETERMINED THE INCOME OF THE ASSESSEE AT RS. 48 ,41,457. ASSESSING OFFICER HAS MAINLY MADE TWO ADDITIONS, NAMELY, ON A CCOUNT OF ILLEGAL MINING RS.25,000 AND ON ACCOUNT OF SALE OF EXCESS STONES E TC. EXTRACTED ILLEGALLY FROM THE MINE AND NOT ACCOUNTED IN THE BOOKS. ON TH IS COUNT, ASSESSING OFFICER HAS MADE AN ADDITION OF RS.45,46,457. THESE TWO AMOUNTS HAVE BEEN CONSIDERED FOR VISITING THE ASSESSEE WITH THE PENAL TY UNDER SEC. 271(1)(C) OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET POINTED OUT THAT ADDITIONS WERE MADE BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION SUPPLIED BY PWD OF THE UT GOVERNMENT WHO CONDUCTED A SURVEY OF THE SITE. THE AUTHORITIES OF THE STATE GOVERNMENT HAVE DETERMINED ILLEGAL EXTRACTION AND A TRANSPORTATION OF THE STONES BY IL LEGAL MINING OF 518 CUBIC METERS OF STONES. THE PROCEEDINGS BEFORE THE AUTHOR ITIES OF THE STATE GOVERNMENT HAVE NOT BEEN FINALIZED AND ASSESSING OF FICER HAS USED TO PRE- MATURE INFORMATION FOR MAKING THE ADDITION. THE ITA T HAS SET ASIDE THE 3 ASSESSMENT ORDER ON THE APPEAL OF THE ASSESSEE IN I TA NO.350/DEL/2009 VIDE ITS ORDER DATED 25 TH OCTOBER 2011. SHE PLACED ON RECORD COPY OF THE ITA TS ORDER AND SUBMITTED THAT IN VIEW OF THIS, NO PENALT Y IS IMPOSEABLE UPON THE ASSESSEE. LEARNED DR ON THE OTHER HAND SUBMITTED TH AT SINCE THE QUANTUM PROCEEDINGS HAVE BEEN SET ASIDE TO THE ASSESSING OF FICER, THE PENALTY PROCEEDINGS BE ALSO SET ASIDE TO THE ASSESSING OFFI CER. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE VERY BASIS FOR INITIATION OF THE PENALTY PROCEEDINGS IS THE ASSESSMENT ORDER DATED 28.12.2007. THIS ORDER I S NO MORE IN EXISTENCE. ITAT HAS SET ASIDE THIS ORDER AND DIRECTED THE ASSE SSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AS PER LAW. THUS, NO PENALTY COULD BE IMPOSED UPON THE ASSESSEE BY VIRTUE OF THE ASSESSMENT ORDER DATE D 28.12.2007. AS FAR AS THE CONTENTION OF THE LEARNED DR IS CONCERNED, WE A RE OF THE VIEW THAT WHETHER PENALTY PROCEEDINGS DESERVE TO BE INITIATED OR NOT IS DEPENDENT UPON THE ULTIMATE CONCLUSION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS HIS DISCRETION, THEREFORE, WE DO NOT SEE ANY REASON TO SET ASIDE THIS PROCEEDING TO THE ASSESSING OFFICER. AFTER CONSIDER ING THE MATERIAL, HE MAY BE OF THE OPINION THAT NO PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) DESERVE TO BE INITIATED AGAINST THE ASSESSEE. IN SUCH SITUATIO N, IT IS NOT ADVISEABLE ON OUR 4 PART TO KEEP THE PROCEEDINGS IN CONTINUATION. WE AL LOW THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY BECAUSE THERE IS NO BASIS TO COMPUTE THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 13.01.2012 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 /01/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR