NIMBUS COMMUNICATIONS LTD, MUMBAI V. ASST CIT CIR 16(1),

ITA 3846/MUM/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4210 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Bad and doubtful debts; Revised return; Set aside
• Section: 271(1)(c); 143(3); 14A; 115JB; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 3846 /MUM/201 7 & 3847/MUM/2017 ( / ASSESSMENT YEAR: 20 06 - 07 & 2007 - 08 ) NIMBUS COMMUNICATIONS LTD. NIMBUS CENTRE, OBEROI COMPLEX, ANDHERI (W), MUMBAI - 400053 . / VS. THE COMMISSIONER OF INCOME TAX (A) - 4 MUMBAI, ANDHERI (W), MUMBAI - 400053. NOW: THE ACIT, RANGE - 16(1), MUMBAI ./ ./ PAN/GIR NO. : AAACN3947L ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 24 /0 9 /2020 / DAT E OF PRONOUNCEMENT : 27 /10 /2020 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE ABOVE MENTIONED APPEAL S AGAINST THE DIFFERENT ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 , MUMBAI [HEREINAFTE R REFERRED TO AS T HE CIT(A)] RELEVANT TO THE A.Y S . 2006 - 07 & 2007 - 08 . ITA. NO. 3846/M/2017 2. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 13.02.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A) ] RELEVANT TO THE A.Y S . 2006 - 07 . ASSESSEE BY : NONE REVENUE BY: MS. KAVITA P. KAUSHIK (DR) ITA NO. 3846 & 3847 / M/201 7 A.Y.20 06 - 07 & 2007 - 08 2 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) U/S. 271(1 )(C) IS BAD IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMI NG PENALTY OF RS. 14,10,000/ - U/S. 271(L)(C) OF THE INCOME TAX ACT, 1961. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT PENALTY U/S. 271(0(C) HAD BEEN INITIATED INITIATED BY THE PREDECESSOR ASSESSING OFFICER IN THE CASE OF SAM E ASSESSEE FOR THE SAME ASSESSMENT YEAR ON ADDITIONS MADE IN RESPECT OF THE SAME ISSUES AND THE PENALTY PROCEEDINGS HAD BEEN DROPPED BY THE ASSESSING OFFICER IN ACCORDANCE WITH LAW AFTER DUE CONSIDERATION. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) FAILED TO APPRECIATE THAT IF THE ADDITIONS MADE IN THE ORIGINAL ASSESSMENT ORDER HAS BEEN DULY ADJUDGED BY THE PREDECESSOR ASSESSING OFFICER AS NOT MERITING LEVY OF PENALTY, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY IN RESP ECT OF THE VERY SAME ISSUES WHERE EARLIER ADDITIONS HAD BEEN ONLY REDUCED AND NOT INCREASED. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER DATED 11 - 02 - 2015 IS AN ORDER PASSED U/S. 143(3) R.W.S. 254 AND H ENCE THERE IS NO PROVISION FOR REVIVING PENALTY PROCEEDINGS WHICH HAD BEEN ALREADY DROPPED. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO TAKE INTO ACCOUNT THE FACT THAT THE PREDECESSOR ASSESSING OFFICER HAD DROPPED PENALTY PROCEEDINGS VIDE ORDER DATED 24 - 03 - 2014 AFTER RECEIPT OF ITAT'S ORDER DATED 07 - 08 - 2013 AND THE ASSESSING OFFICER ERRED IN LEVYING THE PRESENT PENALTY ON THE BASIS OF ORDER GIVING EFFECT TO THE SAID ITAT'S ORDER AND THAT IF NO CONCEALMENT HAD BEEN FOUND IN THE FIRST ORDER, THERE CAN BE NO CONCEALMENT IN THE ORDER GIVING EFFECT TO ITAT'S ORDER. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 28 . 11 .20 1 6 DECLARING TO TAL INCOME TO THE TUNE OF RS .1,07,99,899/ - . THEREAFTER, THE ASSESSEE HAS FIL ED THE REVISED RETURN OF INCOME ON 29.03.2008 DEC LARING TOTAL INCOME TO THE TUNE OF RS.3,34,36,493/ - UNDER THE NORMAL PROVISIONS OF I. T. ACT AND DECLARED BOOK PROFIT U/S 115JB OF THE ACT OF RS.98,57,631/ - BASED ON THE DIRECTION ITA NO. 3846 & 3847 / M/201 7 A.Y.20 06 - 07 & 2007 - 08 3 OF DRP, THE FINAL ORDER U/S 143(3) R.W.S. 144C(13) WAS PASSED ON 18.08.2010 ASSESSING TOTAL INCOME OF RS.4,80,19,930/ - UNDER THE NORMAL PROVISIONS OF I. T. ACT AND BOOK PROFIT U/S 115JB OF THE I. T. ACT OF RS.1,97,48,820/ - BY MAKING THE FOLLOWING ADDITION READ AS UNDER.: - NORMAL PRO VISIONS OF I. T. ACT (I) TP ADJUSTMENTS RS.1,24,73,795/ - (II) CASH EXPENSES RS.26,45,716/ - (III) DISALLOWANCE U/S 14A OF THE I. T. ACT RS.11,85,990/ - BOOK PROFIT U/S 115JB OF I. T. ACT (I) DISALLOWANCE U/S 14A OF I. T. ACT RS.11,85,990/ - (II) PROVISIONS FOR DOUBTFUL DEBTS RS.87,05,196/ - ACCORDINGLY, THE AO INVOKE D THE PROVISIONS U/S 271(1)(C) OF THE I. T. ACT. THEREFORE, THE NOTICE WAS GIVEN AND AFTER THE REPLY OF THE ASSESSEE, THE AO LEVIED THE PEN ALTY TO THE TUNE OF RS.14,10,000 / - . FEELING AGGRIEVED, THE ASSESSEE AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE PENALTY , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE DEPARTMENT AND HAS GONE THROUGH THE CASE CAREFULLY . IN FACT, THE LD. REPRESENTATIVE OF THE ASSESSEE DID NOT ARG UE THE CASE ON MERITS BUT ARGUE D THE MATTER ON THIS POINT THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE AND WI THOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. THEREFORE, THE ORDER OF THE CIT( A) I N QUESTION IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPART MENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER OF THE CIT(A) DATED 13 . 0 2 .201 7 , WE NOTICED THAT THE CIT(A) DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY OF ITA NO. 3846 & 3847 / M/201 7 A.Y.20 06 - 07 & 2007 - 08 4 BEING HEARD TO THE ASSESSEE. IT IS AGAI NST THE PRINCIPLE OF NATURAL JUSTICE . A PROPER AND REASONABLE OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE ASSESSEE BEFORE THE DECIDING THE MATTER OF CONTROVERSY IN ACCORDANCE WITH LAW. 6 . FOR THIS PROPOSITION WE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS . ( 1 ) CIT VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) (2017) 154 DTR (BOM) 302 ( 2 ) CIT VS. S CHENNIAPPA MUDALIAR (1969) 74 ITR 1 (SC) 7 . THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF L AW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON ALL THE ISSUES AND RESTORED THE MATTER BEFORE THE CIT(A) TO DECIDE THE MATTER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 8. SINCE THE APPEAL OF THE ASSESSE E BEARING ITA. NO. 3847 /M/201 7 FOR THE A.Y.2007 - 08 IS HAVING SIMILAR CONTROVERSY, THEREFORE, THE FINDING ABOVE IS QUITE APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO AS MUTATIS MUTANDIS, THEREFORE, THE PRESENT APPEAL IS HEREBY ALSO ALLOWED ACCORDINGLY . 9 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE HEREBY ALLOWED STATISTICAL PURPOSE S . ORDER PRONOUNCED IN THE OPEN COURT ON 27 / 10 / 2020 SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 27 /10 / 2020 VIJAY PAL SINGH/SR. PS ITA NO. 3846 & 3847 / M/201 7 A.Y.20 06 - 07 & 2007 - 08 5 / 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