SAIMANGAL INVESTRADE LTD, MUMBAI V. DCIT CEN CIR-40, MUMBAI

ITA 3923/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 15-07-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 18-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: SATYENDRA LAHOTI
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KUM AR ,(AM) ITA NO.3923/MUM/2009 ASSESSMENT YEAR : 2002-03 SAIMANGAL INVESTRADE LTD. RADHA BHAVAN, 1 ST FLOOR 121, NAGINDAS MASTER ROAD MUMBAI-400 023. ..( APPELLANT ) P.A. NO. (AABCS 4255 R) VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-40 MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI SATYENDRA LAHOTI RESPONDENT BY : DR. P. DANIEL O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 21.5.2009 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2002-03. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND SECURITIE S, FILED RETURN DECLARING LOSS OF RS.15,82,97,470/-. HOWEVER, THE ASSESSMEN T WAS COMPLETED AT AN INCOME OF RS.58,320/- VIDE ORDER DATED 30.3.2005 PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). THE ITA NO.3923/M/09 A.Y:02-03 2 ASSESSING OFFICER IN THE SAID ORDER DISALLOWED THE CLAIM OF BUSINESS LOSS ON SHARE TRADING AMOUNTING TO RS.3.67 CRORES WHICH WAS FO UND TO BE NON-GENUINE. BESIDES, INTEREST ON BORROWED FUNDS AMOU NTING TO RS.12.12 LACS WAS ALSO DISALLOWED AS THE ASSESSEE WAS FOUND TO HAVE ADVANCED INTEREST FREE LOAN TO SISTER CONCERNS FOR NON-B USINESS PURPOSES. IT WAS FURTHER NOTED THAT THE TRIBUNAL DISMI SSED THE APPEAL OF THE ASSESSEE ON ACCOUNT OF NON-ATTENDANCE OF THE ASSESSEE IN THE APPEAL PROCEEDING. MOREOVER, EVEN IN THE PENALTY PR OCEEDINGS, DESPITE OPPORTUNITY ACCORDED, THE ASSESSEE DID NOT MAKE AN Y COMPLIANCE. THUS, IN THE ABSENCE OF ANY EXPLANATION ON THE ISSUES INVOLVED THE ASSESSING OFFICER LEVIED PENALTY BY INVOKIN G EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND IMPOSED PENALTY OF RS.5,80,68,203/- VIDE ORDER DATED 23.12.2008 PASSED U/ S.271(1)(C) OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A) AGAIN THER E WAS NO COMPLIANCE BY THE ASSESSEE. IN THE ABSENCE THEREOF THE LD . CIT(A) DID NOT FIND ANY REASON FOR INTERFERENCE IN THE ACTION OF THE ASSESSING OFFICER AND ACCORDINGLY UPHELD THE ORDER PASSED BY THE A SSESSING OFFICER AND DISMISSED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL : 1. THE CIT(A) ERRED IN UPHOLDING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.3923/M/09 A.Y:02-03 3 2. THE APPELLANTS CONTEND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CI T(A) OUGHT NOT TO HAVE UPHELD THE LEVY OF THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. AT THE TIME OF HEARING THE LD. REPRESENTATIVE OF THE ASSESSEE SEEKS ADJOURNMENT. HOWEVER, HE SUBMITS THAT HE HAS NO OB JECTION IF THE ISSUE IS SET ASIDE TO THE FILE LD. CIT(A). 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIN D THAT THERE IS NO DISPUTE THAT IN THIS CASE THE ASSESSEE WAS REQUIRED TO SUBMIT HIS EXPLANATION BEFORE THE ASSESSING OFFICER. HOWEVER, HE F AILED TO MAKE COMPLIANCE AND, HENCE, THE ASSESSING OFFICER IN THE ABSENCE OF ANY EXPLANATION IMPOSED PENALTY OF RS.5,80,68,203/- U/S.27 1(1)(C) OF THE ACT. WE FURTHER FIND THAT DESPITE REPEATED OPPORTUNI TIES GIVEN TO THE ASSESSEE BY THE LD. CIT(A) THERE WAS NO APPEARANCE PUT I N BY THE ASSESSEE AND, HENCE, LD. CIT(A) CONFIRMED THE PENALTY IMP OSED BY THE ASSESSING OFFICER. WE DO AGREE THAT THE ASSESSEE DOES NOT DE SERVE ANY CLEMENCY YET, THE MATTER BEING QUITE CONTENTIOUS A ND THE AMOUNT INVOLVED BEING QUITE HIGH, IT WOULD BE BETTER IF WE HAVE THE BENEFIT OF THE REASONED ORDER OF THE LOWER AUTHORITIES AFTER HEA RING THE ASSESSEE. ITA NO.3923/M/09 A.Y:02-03 4 THIS BEING SO AND KEEPING IN VIEW THE INTEREST OF JUST ICE WE ARE OF THE VIEW THAT THE MATTER SHOULD GO BACK TO THE FILE OF TH E LD. CIT(A) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD. CIT( A) AND SEND BACK THE MATTER TO HIS FILE WHO SHALL DECIDE THE SAME A FRESH AND ACCORDING TO LAW AFTER PROVIDING SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE TO PROVE HIS CASE. IT IS MADE CLEAR THAT IF THE ASSESSEE REMAINS RECALCITRANT, THE LD. CIT(A) SHALL BE AT LIBERT Y TO DRAW ADVERSE INFERENCE AS HE DEEMS FIT, AND, DECIDE THE ISSUE ACCORDIN GLY. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALL OWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEE'S APPEAL STANDS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.7.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED: 30.7.2010. JV. ITA NO.3923/M/09 A.Y:02-03 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.