DCIT Circle 4 (1), V. Lakhmi Sugar Mills Co. Ltd,

ITA 3586/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7016 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 1997-1998
• Appeal Filed On: 09-08-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR V R R KUMAR
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI G.C. GUPTA AND SHRI K.D. RANJAN ITA NOS. 3584,3585 & 3586/DEL/07 ASSTT. YRS: 1993-94, 94-95 & 95-96 DCIT, CIRCLE 4(1), VS. M/S LAKSHMI SUGAR MILLS C O. LTD., NEW DELHI. 704, SIDDHARTH BUILDING 96, NEHRU PL ACE, NEW DELHI. PAN/GIR NO. AAAC70034 G. ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : DR. V.R.R. KUMAR DR RESPONDENT BY : NONE (APPLICATION FOR ADJOURNMENT REJECTED) O R D E R PER G.C. GUPTA, J.M, JM: THESE THREE APPEALS, BY THE REVENUE FOR A.Y. 1993- 94, 1996-97 & 1997-98, ARE DIRECTED AGAINST THE COMMON ORDER OF C IT(APPEALS) DATED 25- 4-2007. SINCE IDENTICAL ISSUE IS INVOLVED IN THESE APPEALS, THESE ARE BEING DISPOSED OF BY A CONSOLIDATED ORDER. 2. THE IDENTICAL GROUND OF APPEAL BY THE REVENUE I N ALL THESE APPEALS IS AS UNDER: WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN D ELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961 ON THE GROUND THAT THE TOTAL INCOME OF THE ASSESSEE HAS BE EN ASSESSED AT A MINUS FIGURE/LOSS. 2 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE. APPLICATION OF THE ASSESSEE FOR ADJOURNMENT OF THE APPEALS WAS REJECTED BY THE BENCH. ACCORDINGLY, APPEALS OF THE REVENUE ARE BEING DECIDED EX PARTE, QUA THE ASSESSEE- RESPONDENT, ON MERITS, AFTER HEAR ING THE LEARNED DR. 4. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . 5. WE HAVE CONSIDERED THE SUBMISSIONS OF DR AND PE RUSED THE ORDERS OF AO AND THE CIT(A).WE FIND THAT THE CIT(A) HAS DELET ED THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IN ALL THE THREE YEARS BY HOLDING THAT THE ISSUE IS COVERED WITH THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF VIRTUAL SOFT SYSTEMS LTD. VS. CIT 289 ITR 83 AND AS THE RETURNED INCOME AND ASSESSED INCOME IN THESE CASES ARE A LOSS FIGU RE, THE PENALTY U/S 271(1)(C) CANNOT BE IMPOSED. WE FIND THAT THE DECIS ION OF THE HONBLE SUPREME COURT IN THE CASE OF VIRTUAL SOFT SYSTEMS LTD. (SUPRA) STANDS OVER RULED WITH THE DECISION OF THE APEX COURT IN THE CA SE OF CIT VS. GOLD COIN HEALTH FOOD PVT. LTD. 304 ITR 308 (SC). HOWEVER, SI NCE THE PENALTIES IMPOSED U/S 271(1)(C) IN THESE CASES WERE NOT DECID ED ON THE MERITS THEREOF AND THE CIT(A) HAS RECORDED THAT THERE IS NO NEED T O ADJUDICATE THE ISSUE ON MERITS OF THE CASE IN VIEW OF THE DECISION IN THE C ASE OF VIRTUAL SOFT SYSTEMS LTD. (SUPRA), WE HOLD THAT IT SHALL BE IN THE INTER EST OF JUSTICE TO SET ASIDE THE ISSUE IN ALL THESE APPEALS TO THE FILE OF CIT(A) WI TH DIRECTION TO ADJUDICATE 3 THE APPEALS OF THE ASSESSEE DE NOVO, ON MERITS, AFT ER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE PARTIES. WE DIREC T ACCORDINGLY. 6. IN THE RESULT, THE APPEALS OF THE REVENUE ARE A LLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT, AFTER THE HEAR ING WAS OVER, ON 06-04-2009. ( K.D. RANJAN ) (G.C. GUPTA ) ACCOUNTANT MEMEBR JUDICIAL MEMBER DATED: 06-04-2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR