OM GURUKRIPA REALTORS, MUMBAI V. ASST CIT 25(2), MUMBAI

ITA 354/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2318 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHIRAMA KARTIKIYAN
• Assessee Lawyers: JANMAY PHADKE
• Keywords: Bogus purchase; Opportunity of being heard; Set aside
• Section: 271(1)(c); 143(3); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI RAVISH SOOD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 354/MUM/2017 ASSESSMENT YEAR: 2008 - 09 OM GURUKRIPA REALTORS, 8, 9, SHIV DARSHAN CO - OPERATIVE HOUSING SOCIETY LTD., KASTUR PARK, SHIMPOLI, BORIVALI (W), MUMBAI - 400092. VS. ASSISTANT COMMISSIONER OF INCOME TAX - 25(2), MUMBAI. PAN NO. AAGFG6644L APPELLANT RESPONDENT ASSESSEE BY : MR . JANMAY PHADKE, AR REVENUE BY : MR. ABHIRAMA KARTIKIYAN, DR DATE OF HEARING : 12/07/2019 DATE OF PRONOUNCEMENT : 28/08/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2008 - 09. TH E APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX - 44, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE PENALTY ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2008 - 09 ON 30.08.2009 DECLARING TOTAL INCOME OF RS.1,50,70,627/ - . THE ASSESSMENT WAS COMPLETED U/S 143(3) BY THE ASSESSING OFFICER (AO) ON 29.12.2010 DE TERMINING THE TOTAL INCOME AT RS.1,50,70,627/ - . THE ASSESSEE IS A BUILDER AND DEVELOPER. DURING THE IMPUGNED ASSESSMENT YEAR, IT WAS ENGAGED IN PURCHASE AND SALE OF PLOTS. OM GURUKRIPA REALTORS ITA NO. 354/MUM/2017 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO DISALLOWED THE ALLEGED BOGUS PUR CHASES OF RS.2,33,45,386/ - FROM THE FOLLOWING PARTIES : S. NO. NAME AMOUNT (RS.) 1. PRAVESH ENTERPRISES 15,27,305/ - 2. BALAJI TRADING 22,19,296/ - 3. RAJ TRADERS 42,89,220/ - 4. JAINAM TRADING CO. 42,20,730/ - 5. MAHAVIR ENTERPRISES 20,12,439/ - 6. PRATIK SALES CORPORATION 90,76,396/ - TOTAL 2,33,45,386/ - THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AGAINST THE ABOVE ORDER OF THE AO. IT IS FOUND THAT THE APPEAL WAS DISMISSED. THEREAFTER, THE AO LEVIED A PENALTY OF RS.72,13,724/ - U/ S 271(1)(C) OF THE ACT ON THE ABOVE CONCEALED INCOME OF RS.2,33,45,386/ - . 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). IT IS MENTIONED BY THE LD. CIT(A) IN HIS APPELLATE ORDER DATED 27.10.2016 THAT THERE WAS NON - C OMPLIANCE BY THE ASSESSEE TO THE NOTICES ISSUED BY HIS OFFICE ON DIFFERENT FIVE DATES. CONSIDERING THE NON - COMPLIANCE BY THE ASSESSEE, THE APPEAL WAS DISMISSED BY THE LD. CIT(A) , WITHOUT CONSIDERING THE GROUNDS OF APPEAL ON MERITS. 4. BEFORE US, THE LD. C OUNSEL FOR THE ASSESSEE SUBMITS THAT REASONABLE OPPORTUNITY SHOULD HAVE BEEN GIVEN BY THE LD. CIT(A) WHILE DISPOSING THE APPEAL. ALSO IT IS STATED BY HIM THAT NO PROPER SATISFACTION WAS EVER RECORDED BY THE AO IN THE NOTICE U/S 271(1)(C) R.W.S. 274 AS WELL AS THE ASSESSMENT ORDER. THEREFORE, THERE IS NO SPECIFIC CHARGE MENTIONED , OM GURUKRIPA REALTORS ITA NO. 354/MUM/2017 3 INDICATING WHETHER THE PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FURTHER IT IS STATED BY HIM TH AT THE PENALTY OF RS.72,13,724/ - LEVIED BY THE AO AND THEREAFTER CONFIRMED BY THE LD. CIT(A) IS UNTENABLE IN LAW AS THE ASSESSED INCOME AND RETURNED INCOME FOR THE IMPUGNED ASSESSMENT YEAR IS SAME AND THERE IS NO TAX SOUGHT TO BE EVADED AS PER EXPLANATIO N 4 TO SECTION 271(1)(C) OF THE ACT. RELIANCE IS PLACED BY HIM ON THE ORDER OF THE TRIBUNAL IN SUTLEJ COACH BUILDERS LTD. V. ITO (ITA NO. 345/ASR/2018 FOR AY 2010 - 11), M/S ORBIT ENTERPRISES V. ITO (ITA NO. 1596 & 1597/MUM/2014 FOR AYS 2005 - 06 & 2006 - 07), M/S OLEANDER FARMS P. LTD. V. DCIT (ITA NO. 5197/MUM/2014 FOR A Y 2004 - 05), DCIT V. SHRI DHAVAL D. SHAH (ITA NO. 1337/MUM/2016 FOR AY 2009 - 10), M/S CENZAR INDUSTRIES LTD. V. ITO (ITA NO. 1970/MUM/2 015 FOR AY 2006 - 07), M/S HICONS DEVELOPERS V. ACIT (ITA NO. 7434/MUM/2014 FOR AY 2006 - 07) AND M/S KAPISHEK FILMS PVT. LTD. V. ITO (ITA NO. 3979/MUM/2013 FOR AY 2003 - 04). RELYING ON THE ABOVE DECISIONS, THE LD. COUNSEL SUBMITS THAT THE PENALTY OF RS.72,13 ,724/ - LEVIED BY THE AO U/S 271(1)(C) BE DELETED. 5. ON THE OTHER HAND, THE LD. DR SUBMITS THAT AS THERE IS REPEATED NON - COMPLIANCE BY THE ASSESSEE TO THE NOTICES ISSUED BY THE CIT(A) ON FIVE OCCASIONS, THE APPELLATE ORDER BE CONFIRMED. RELIANCE IS PLACED BY HIM ON THE DECISION IN SUNDARAM FINANCE LTD. V. ACIT (2018) 93 TAXMANN.COM 250(MADRAS) AND SUNDARAM FINANCE LTD. V. DCIT (2018) 99 TAXMANN.COM 152(SC). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. AS BORNE OUT FRO M THE ORDER DATED 27.10.2016 PASSED OM GURUKRIPA REALTORS ITA NO. 354/MUM/2017 4 BY THE CIT(A), THERE WAS NO COMPLIANCE BY THE ASSESSEE TO THE FIVE NOTICES ISSUED BY HIS OFFICE FIXING THE CASE FOR HEARING ON FIVE DIFFERENT DATES. BUT THERE IS NO MENTION IN THE APPELLATE ORDER WHETHER THOSE NOTICES WE RE SERVED ON THE ASSESSEE. THIS IS A CASE WHERE A PENALTY OF RS.72,13,724/ - HAS BEEN LEVIED BY THE AO U/S 271(1)(C) OF THE ACT ON THE ALLEGED BOGUS PURCHASES OF RS.2,33,45,386/ - . IN JAIN BROS. V. UOI (1970) 77 ITR 107, 116 (SC), IT IS HELD THAT ALTHOUGH PE NALTY HAS BEEN REGARDED AS AN ADDITIONAL TAX IN CERTAIN SENSE AND FOR CERTAIN PURPOSES, IT IS NOT POSSIBLE TO HOLD THAT PENALTY PROCEEDINGS ARE ESSENTIALLY A CONTINUATION OF THE PROCEEDINGS RELATING TO ASSESSMENT WHERE A RETURN HAS BEEN FILED. FOR ALL PRAC TICAL PURPOSES, PROCEEDINGS FOR IMPOSITION OF PENALTY, THOUGH EMANATING FROM PROCEEDINGS FOR ASSESSMENT, ARE INDEPENDENT ASPECTS OF THE PROCEEDINGS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE T HE MATTER TO HIM TO PASS AN ORDER AFRESH ON MERITS, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO RESPOND TO THE NOTICE TO BE ISSUED BY THE OFFICE OF THE CIT(A) AND APPEAR BEFORE HIM ALONG WITH RELEVANT DOCUM ENTS/EVIDENCE TO REPRESENT HIS CASE ON THE DATE TO BE COMMUNICATED. AS THE MATTER HAS BEEN RESTORED TO THE FILE OF THE AO , WE ARE NOT ADVERTING TO THE CASE - LA WS RELIED ON BY THE LD. COUNSEL AND LD.DR . 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28/08/2019. SD/ - SD/ - ( RAVISH SOOD ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; OM GURUKRIPA REALTORS ITA NO. 354/MUM/2017 5 DATED: 28/08/2019 RAHUL SHARMA, SR. P.S. 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// (SR. PRIVATE SECRETARY) ITAT, MUMBAI