DY.CIT-1(3)(2), MUMBAI V. LIQUIDATOR MEMON CO-OP BANK LIMITED(UNDER LIQUIDATION), MUMBAI

ITA 4291/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6817 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Assessee Lawyers: SHRI
• Keywords: Revised return; Liquidation
• Section: 271(1)(c); 143(3); 28

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL E BENC H MUMBAI BEFORE SHRI G. S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 4291/MUM/2017 (ASSESSMENT YEAR 2012-13) DCIT-1(3)(1) ROOM NO. 540, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20. VS. M/S THE LIQUIDATOR MEMON CO- OP BANK LTD. (UNDER LIQUIDATION), PATEL & SONY ARCADE, 234 BELLASIS ROAD, NAGPADA, MUMBAI- 400008. P AN: AAAAT0066G APPELLANT RESPONDENT APPELLANT BY : SHRI D.G. PANSARI (DR) RESPONDENT BY : SHRI PANKAJ TOPRANI (AR) DATE OF HEARING : 21.01.2019 DATE OF PRONOUNCEMEN T : 28.02.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-3, MUMBAI (THE LD. CIT(A) D ATED 31.03.2017 FOR ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS, AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE PENALTY U/S 271(1)( C) AMOUNTING TO RS.44,26,445/- ? 2. WHETHER ON THE FACTS, AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY BASED ON T HE OBSERVATIONS WHICH ARE NOT CORRECT SUCH AS (I) THAT THE ASSESSEE MERGED WI TH BANK OF BARODA AND CEASED TO EXIST AS A SEPARATE PARTY ENTITY EVEN THO UGH IT HAD FILED RETURNS UPTO ITA NO. 4291 MUM 2017-M/S THE LIQUIDATOR MEMON CO-OP BANK LTD. 2 A.Y. 2016-17 (II) THAT THE LOSS CLAIMED WAS VOLUNTA RILY GIVEN UP EVEN THOUGH NO REVISED RETURN HAD BEEN FILED TO WITHDRAW IT . 3. WHETHER ON THE FACTS, AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE LOSS DISALLOWED AMOUNTING TO RS.1,43,25,065/- REPRESENTED INCOME IN RESPECT OF W HICH PARTICULARS HAVE BEEN CONCEALED BY THE ASSESSEE BY VIRTUE OF THE DEEMING PROVISIONS OF EXPLANATION 1 TO SECTION 271(L)(C). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE BANK, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 ON 03.12.2012 DECLARING LOSS OF RS. 1.43 CRORE. THE ASSESSMENT WA S COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT (THE ACT) ON 2 0.01.2015. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R DISALLOWED THE LOSS OF RS. 1.43 CRORE. THE ASSESSING OFFICER DISALLOWED THE LOSS BY TAKING HIS VIEW THAT THE ASSESSEE BANK IS IN LIQUIDATION FROM FINANCIAL YEAR 2010-11 AND CEASED TO FUNCTION EXCEPT CARRYING OUT THE LIQU IDATION PROCEEDINGS AND NO DETAILS OF LOSS IS FURNISHED BY THE ASSESSEE . THE ASSESSING OFFICER ALSO INITIATED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER LEVIED THE PENALTY OF RS. 44,26,4 45/- BEING 100% OF THE TAX SOUGHT TO BE EVADED VIDE ITS ORDER DATED 30.07. 2015. ON APPEAL BEFORE THE LD. CIT(A), THE ENTIRE PENALTY WAS DELETED. THE LD. CIT(A) WHILE DELETING THE PENALTY CONCLUDED THAT MERE NOT FILING THE DETAILS CALLED FOR DURING THE ASSESSMENT AS THE ASSESSEE WAS NOT IN A POSITION TO SUBMIT THE DETAILS FOR CLAIMING THE LOSS WHICH THEY HAVE ALREA DY GIVEN UP AND DELETED ITA NO. 4291 MUM 2017-M/S THE LIQUIDATOR MEMON CO-OP BANK LTD. 3 THE ENTIRE PENALTY. AGGRIEVED BY THE ORDER OF LD. C IT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSION OF LD. DEPARTMENTAL RE PRESENTATIVE (DR) FOR THE REVENUE AND LD. AUTHORIZED REPRESENTATIVE ( AR) OF THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE L D. DR FOR THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICER AND PRAYED FOR RESTORING THE ORDER OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT . 4. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMI TS THAT FOR ASSESSMENT YEAR 2010-11 SIMILAR PENALTY WAS LEVIED BY ASSESSIN G OFFICER AND AFFIRMED BY LD. CIT(A), HOWEVER, ON APPEAL BEFORE T RIBUNAL, THE ORDER F PENALTY UNDER SECTION 271(1)(C) WAS SET-ASIDE IN IT A NO. 2978/MUM/2015 DATED 12.07.2017, ON THE GROUND THAT THE PENALTY WAS INITIATED ON FIRST LIMB I.E FOR CONCEALMENT OF INCO ME AND LEVIED ON SECOND LIMB I.E. FOR FURNISHING INACCURATE PARTICULAR. THE LD. AR SUBMITS THAT FACTS FOR THE YEAR UNDER CONSIDERATION ARE ALSO SIM ILAR. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE NO TED THAT DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTED THAT ASSESS EE BANK IS UNDER LIQUIDATION SINCE FINANCIAL YEAR 2010-11 AND CEASED TO FUNCTION EXCEPT CARRYING OUT LIQUIDATION RELATED ACTIVITIES. DURING THE ASSESSMENT, THE ASSESSING OFFICER ISSUED SHOW-CAUSE NOTICE AS TO WH Y THE LOSS OF RS. 1.43 CRORE SHOULD NOT BE DISALLOWED AS ASSESSEE BANK IS IN LIQUIDATION. THE ITA NO. 4291 MUM 2017-M/S THE LIQUIDATOR MEMON CO-OP BANK LTD. 4 ASSESSEE COULD NOT FURNISH ANY DETAIL PERTAINING TO LOSS. THE ASSESSING OFFICER THEREBY DISALLOWED THE LOSS OF RS. 1.43 CRO RE. 6. WE HAVE NOTED THAT THE LOSS WAS DISALLOWED AS REQUI SITE DETAILS PERTAINING TO LOSS WERE NOT FURNISHED BEFORE THE ASSESSING OFF ICER. THE PENALTY WAS LEVIED BY ASSESSING OFFICER ON SUCH DISALLOWANCE VI DE ITS ORDER DATED 30.07.2015. BEFORE THE LD. CIT(A), THE ASSESSEE URG ED THAT THE OPERATION OF ASSESSEE BANK WERE TAKEN OVER BY BANK OF BARODA AS PER THE DIRECTION OF RESERVE BANK OF INDIA. ALL ITS EMPLOYEES, BRANCH ES AND RECORD INCLUDING INFRASTRUCTURE BECAME PART OF BANK OF BAR ODA, HENCE, IT WAS NOT POSSIBLE TO THEM FOR FURNISHING THE VARIOUS DETAILS OF LOSSES. THE LOSS WAS DISALLOWED DUE TO NON-SUBMISSION OF DETAILS. THE LD . CIT(A) AFTER CONSIDERING THE CONTENTION OF ASSESSEE CONCLUDED TH AT THERE WAS JUSTIFIABLE CAUSE FOR NON-SUBMISSION OF THE DETAILS DUE TO WHICH THE LOSS COULD NOT BE SUBSTANTIATED BEING EXTRAORDINARY NATU RE OF CASE AND AS THERE IS NO ENTRY IN EXISTENCE. THE LOSS CLAIMED BY ASSES SEE WAS VOLUNTARILY GIVEN UP AND DETERMINATION OF LOSS AND FURTHER CREA TING A DEMAND IS OF NO CONSEQUENCE. THE LD. CIT(A) ALSO CONCLUDED THAT LOS S CLAIMED BY ASSESSEE WAS VOLUNTARILY GIVEN UP. THE LD. CIT(A) A LSO CONCLUDED THAT THE ASSESSING OFFICER HAS NOT IDENTIFIED THE TYPE OF PA RTICULARS OF INCOME OR CONCEALMENT OF INCOME BY THE ASSESSEE MERELY NOT FI LING DETAILS CALLED FOR, WHICH WAS NOT IN A POSITION TO BE SUBMIT AND C LAIMING THE LOSS WHICH THEY HAVE ALREADY GIVEN UP. THE LD. CIT(A) CONCLUDE D THAT ASSESSEE HAS ITA NO. 4291 MUM 2017-M/S THE LIQUIDATOR MEMON CO-OP BANK LTD. 5 NOT CONCEALED THE INCOME FOR INVOKING THE PROVISION OF SECTION 271(1)(C) OF THE ACT. WE HAVE GIVEN THE CAREFUL CONSIDERATION TO THE FINDING OF LD. CIT(A) AND FIND THAT THERE WAS A SUFFICIENT AND JUS TIFIABLE REASONS THAT THE ASSESSEE FOR NOT FURNISHING THE REQUISITE DETAILS O F LOSS CLAIMED BY ASSESSEE. MOREOVER, THE ASSESSEE HAS NOT CLAIMED SE T OFF OF LOSS AGAINST ANY FUTURE INCOME. THEREFORE, WE CONCUR WITH THE FI NDING OF LD. CIT(A). 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/ 02/2019. SD/ SD/- G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUD ICIAL MEMBER MUMBAI, DATE: 28 .02.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI