JIK INDUSTRIES LTD, MUMBAI V. DCIT 2(2), MUMBAI

ITA 3634/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71392 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 22-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 22-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Assessee Lawyers: AJAY R SINGH
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH, MUMBAI , BEFORE SHRI H.L.KARWA , PRESIDENT & SHRI N.K.BILLAIYA , AM ITA N O. 3634 / MUM/ 20 12 ( ASSESSMENT YEAR : 20 03 - 20 04 ) M/S JIK INDUSTRIES LIMITED, 1 - 3, GUNDECHA CHAMBERS, N.M.ROAD, FORT, MUMBAI - 400023 VS. DCI T (2)(2) , MUMBAI PAN/GIR NO. : A ABCJ 2982 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. AJAY R. SINGH /REVENUE BY : MR. R.K.SAHU DATE OF HEARING : DATE OF PRONOUNCEMENT : 22 ND OCTOBER, 2 013 O R D E R PER N.K.BILLAIYA , AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 5 , MUMBAI , DATED 1 - 3 - 2012 , PERTAINING TO ASSESSMENT YEAR 20 03 - 2004 . 2 . THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CO NFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE IS FURTHER AGGRIEVED BY THE FACT THAT THE CIT(A) FAILED TO APPRECIATE THAT THE COMPANY IS REGISTERED WITH BIFR AND BY ORDER DATED 26 - 8 - 2008, THE ASSESSEE WAS GRANTED IMMUNITY FRO M LEVY OF PENALTY. I TA NO. 3634 /12 2 3 . THE ROUTES FOR THE LEVY OF PENALTY LIE IN THE ASSESSMENT ORDER DATED 29 - 3 - 2006, WHEREIN THE AO HAS DISALLOWED SHARE ISSUE EXPENDITURE TO THE TUNE OF RS. 27,38,796/ - , WHICH IS THE CAUSE FOR THE INITIATION AND LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT. 4 . THE CIT(A) , IN APPEAL, WHILE CONFIRMING THE ACTION OF THE AO , HAS MADE THE FOLLOWING OBSERVATIONS : - I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. ON APPEAL BY I.T. DEPT. AGAINST ORDER DATED 26.08.2008 OF BOARD FOR INDU STRIAL AND FINANCIAL RECONSTRUCTION IN CASE NO. 306/2004 IN IN RE M/S JIK INDUSTRIES LTD., BENCH III, THE APPELLATE AUTHORITY FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION, NEW DELHI IN APPEAL NO. 239/08 ORDER DATED 30.06.2011 HAS HELD AS UNDER : - SO FAR A S SUB - PARA (V) IS CONCERNED, IT IS NECESSARY FOR THE RESPONDENT COMPANY TO QUANTIFY THE RELIEF SOUGHT AND, THEREFOR E THE RESPONDENT COMPANY NEEDS TO FURNISH INFORMATION IN RESPECT OF INTEREST AND PENALTY LEVIED OR LEVIABLE TO THE APPELLANT DEPARTMENT. INTE R E ST/PENALTY LEVIABLE WOULD NATURALLY MEAN INTER E ST/PENALTY WHICH COULD BE LEVIED IN RESPECT OF THE ACTS/OMISSIONS ALREADY COMMITTED AND NOT WHICH WILL BE COMMITTED IN FUTURE. THUS, THE APPELLATE AUTHORITY DIRECTED TO THE APPELLANT COMPANY TO QUANTIFY T HE RELIEF SOUGHT FOR AND TO FU R NISH INFORMATION IN RESPECT OF INTEREST AND PENALTY LEVIED OR LEVIABLE TO THE APPELLATE DEPARTMENT. NO EVIDENCE IS BROUGHT ON RECORD TO SHOW THAT ANY INFORMATION IN THIS REGARD, PARTICULARLY PE NALTY FOR THE YEAR UNDER CONSIDE RATION, HAS BEEN INTIMATED TO THE I.T. DEPARTMENT AS DIRECTED BY THE APPELLATE AUTHORITY FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION, NEW DELHI. IT IS, THEREFORE, HELD THAT RELIANCE ON SICA PROVISIONS ARE OF NO HELP TO THE APPELLANT ON THE FACTS AND CIRCUMST ANCES OF THE CASE. 3.2.IV IN VIEW OF THE ABOVE REASONINGS, PENALTY LEV I ED BY THE AO IS UPHELD. 5 . BEFORE US, THE COUNSEL FOR THE ASSESSEE SUBMITTED THE ORDER OF THE BIFR IN THE CASE OF THE ASSESSEE AND DREW OUR ATTENTION TO THE FOLLOWING OBSERVATIONS IN THE ORDER OF THE BIFR : - . THE RELIEFS GRANTED UNDER SUB - PARA (V) & (VI) OF THE SANCTIONED SCHEME WERE AS FOLLOWS : - I TA NO. 3634 /12 3 (V) TO WAIVE INTEREST / PENALTIES ETC. LEVIED / LEVIABLE UNDER THE PROVISIONS OF INCOME TAX ACT 1961 ON ACCOUNT ANY ADDITIONS AN D/OR DISALLOWANCES AND PAYMENT OF TAXES. (INCLUDING INSTALLMENT) UPTO AND RELATING TO F.Y.2008 - 09/COD. (VI) TO AGREE NOT TO TAKE ANY COERCIVE STEPS FOR THE RECOVERY OF ARREARS DEMANDS PENDING IN LITIGATION AND TO VACATE / LIFT THE ATTACHMENTS MADE ON MOVA BLE AND IMMOVABLE ASSETS OF THE COMPANY FOR THE SMOOTH FUNCTIONING TILL THE IMPLEMENTATION OF THE SCHEME. THE COUNSEL FURTHER DREW OUR ATTENTION TO THE CONCLUSION OF THE BIFR IN PARA 9.3 OF ITS ORDER, WHICH READS AS UNDER : - 9.3 THE BENCH OBSERVED THAT WHEN THE DIRECTIONS GIVEN BY BOARD IN THE SANCTIONED SCHEME AND THE FACT THAT THE H ON BLE AAIFR HAS NOT MODIFIED RELIEF AS FAR AS SUB - PARA (V) (VI) ARE CONCERNED. THE COMPANY HAS ALREADY FILED INFORMATION AS FAR AS SUB PARA (V) IS CONCERNED IN COMPLIANCE WITH THE DIR E CTION OF HON BLE AAIFR ORDER DATED 30.06.2011 DURING THE VALIDITY PERIOD OF SANCTIONED SCHEME AND NO TIME LIMIT WAS FIXED BY THE HON BLE AAIFR. FURTHER THE DIT(R)/INCOME TAX DEPARTMENT HAS ADMITTED AS FAR AS SUB - PARA (VI) IS CONCERNED, THE DEP ARTMENT IN ITS LETTER DATED 21.07.08 AND AGAINST LETTER DATED 01.04.2013 ALREADY STATED THAT THE COMPANY IS PROTECTED UNDER SECTION 22 OF SICA TILL THE IMPLEMENTATION OF THE SANCTIONED SCHEME. ACCORDINGLY, THE BENCH ISSUED THE FOLLOWING DIRECTIONS : - I) M A IS ALLOWED AND DIT(R) SHALL NOT TAKE ANY COERCIVE MEASURES OF RECOVERY OF ANY DEMANDS DURING SCHEME PERIOD, WHICH IS VALID UPTO 2017 AGAINST THE COMPANY/GUARANTORS/PROMOTERS. II) MA NO. 175/2013 IS DISPOSED OFF ACCORDINGLY. IT IS THE PLEA OF THE COUNSE L FOR THE ASSESSEE THAT THE MATTER MAY BE RESTORED BACK TO THE FILE S OF THE CIT(A) TO DECIDE AFRESH AFTER CONSIDERING THE AFOREMENTIONED ORDER OF THE BIFR. 6 . ON THE OTHER HAND, LEARNED DR FAIRLY CONCEDED TO THE ABOVE SUBMISSION MADE BY THE COUNSEL FOR TH E ASSESSEE. 7 . WE HAVE CAREFULLY PERUSED THE ORDER OF THE AUTHORITIES BELOW AND THE ORDER OF THE BIFR, WHICH IS BROUGHT ON RECORD BEFORE US. AFTER CONSIDERING THE OBSERVATIONS MADE BY THE BIFR, WE FIND FORCE IN THE CONTENTION OF THE COUNSEL FOR THE ASSES SEE. WE, ACCORDINGLY, RESTORE I TA NO. 3634 /12 4 THIS ISSUE BACK TO THE FILE OF THE CIT(A) . THE CIT(A) IS DIRECTED TO DECIDE THIS ISSUE AFRESH IN THE LIGHT OF THE OR D ER OF THE BIFR AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE ASSESSEE IS ALSO DIR ECTED TO SUBMIT COPY OF THE ORDER OF THE BIFR BEFORE THE CIT(A) . 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 /10/ 2013 . SD/ - ( ) ( H.L.KARWA ) SD/ - ( ) ( N.K.BILLAIYA ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED : 2 2 /10 /2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI