Phenil Sugars Ltd., Delhi V. ACIT, New Delhi

ITA 4550/DEL/2013

• Counselvise Citation: 455020114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 07-01-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 01-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Opportunity of being heard

Judgement Text

ITA NO. 4550/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 4550 /DEL/20 1 3 A.Y. : 200 2 - 0 3 PHENIL SUGARS LIMITED, (ERSTWHILE BASTI SUGAR MILLS CO. LTD.) 207, ESSEL HOUSE, 10, ASAF ALI ROAD, DELHI 110 006 (PAN:AAACT0490Q) VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KVSR KRISHNA, CA REVENUE BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING : 0 7 - 0 1 - 201 5 DATE OF ORDER : 0 9 - 01 - 201 5 ORDER PER H.S. SIDHU : J M THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 09 / 4 /20 13 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - V , NEW DELHI ON THE FOLLOWING GROUNDS: - 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY LEVIED BY THE AO WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. NO NOTICE FOR ANY HEARING WAS SERVED ON THE ASSESSEE. THE CIT(A) ORDER IS AGAINST THE PRINCIPLES OF NATURAL JUSTI CE AND HENCE DESERVES TO BE CANCELLED. ITA NO. 4550/ DEL/ 2013 2 2. WITHOUT PREJUDICE, THE CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE PENALTY ORDER OF AO LEVYING PENALTY OF RS. 11,43,712/ - . THE PENALTY IMPOSED IS WRONG AND BAD IN LAW AND D ESERVES TO BE CANCELLED. 3. THE APPELLANT CONTENDS THAT PENALTY PROCEEDINGS ARE INDEPENDENT OF ASSESSMENT PROCEEDINGS EXCEPT FOR RELYING ON THE FINDINGS THERE IS NOTHING ELSE WHICH HAS BEEN NOTED IN THE PENALTY ORDER. THERE IS NO FINDING OF CONCEALMENT OF IN COME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME EITHER BY AO OR BY CIT(A). THEREFORE, THE PENALTY LEVIED DESERVES TO BE CANCELLED. 4. THE APPELLANT CONTENDS THAT THE AO HAS ACCEPTED THE BOOKS OF ACCOUNTS AND THE STOCK POSITION AS PER RG REGISTER OF TH E EXCISE DEPARTMENT AND THE CANE DEPARTMENT'S RECORDS FILED BY THE ASSESSEE TO SUBSTANTIATE THE STOCK OF SUGAR DECLARED IN THE BOOKS. THEREFORE, THERE IS NO CASE FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE AO HAS RELIED UPON THE STATEMENT OF THE BANK AND NOTHING MORE. THE PENALTY U/S 271 (1 )(C) DESERVES TO BE CANCELLED. 5. THE APPELLANT FURTHER CONTENDS THAT THE EARLIER MANAGEMENT MIGHT HAVE PROVIDED THE INFORMATION TO THE BANK OF HIGHER STOCK POSITION FOR OBTAINING HIGHE R CC LIMITS WHICH IS A PLAUSIBLE EXPLANATION. HOWEVER, AS NO FAULT HAS BEEN FOUND IN THE BOOKS OF ACCOUNTS OR STOCKS DECLARED BY THE ASSESSEE, THE PARTICULARS PROVIDED ARE CORRECT AND NO PENALTY U/S 271 (1 )(C) CAN BE LEVIED. ITA NO. 4550/ DEL/ 2013 3 6.THE APPELLANT CONTEND S THAT THE QUANTUM PROCEEDINGS IN THE ASSESSEE'S CASE HAS BEEN SET ASIDE TO THE LD. CIT(A) FOR RE - ADJUDICATION BY THE HON'BLE ITAT DELHI. THEREFORE AS ON DATE THE ISSUE IN QUANTUM IS SUB - JUDICE AND HENCE ON THIS GROUND THE PENALTY SHOULD HAVE BEEN DELETED . 7. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 8.THE APPELLANT PRAYS THAT HE MAY BE ALLOWED TO ADD, AMEND, ALTER OR FORGO ANY OF THE GROUNDS AT THE TIME OF HEARING . 2. THE FACTS IN BRIEF ARE THAT T HE ASSESSEE COMPANY IS MANUFACTURING SUGAR FROM SUGARCANE AS ITS UNIT IN BASTI. THE AO COMPLETED THE ASSESSMENT AT RS. 2,09,60,481/ - AFTER MAKING AN ADDITION OF RS. 32,03,675/ - ON ACCOUNT OF SUPPRESSED CLOSING STOCK OF SUGAR. AS PER THE PENALTY ORDER ASSESSMENT IN THE CASE WAS COMPLETED ON 31.8.2009 U/S. 143(3)/147 AT AN INCOME OF RS. 2,09,60,481/ - WHEREIN A SUM OF RS. 32,03,675/ - AS ADDED ON A/C OF DIFFERENCE IN CLOSING STOCK AS SHOWN IN THE BOOKS AND AS PER STATEMENTS SUBMITTED TO BANK. AS PRIMA FACIE THERE WAS FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME A SHOW CAUSE NOTICE U/S. 274 READ WITH U/S. 271(1)(C) WAS ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AFTER RECORDING REASONS THEREOF. AGGRIEVED WITH THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO VIDE HIS ORDER DATED 1.7.2010 IN APPEAL NO. 92/2009 - 10 DISMISSED THE APPEAL OF THE ASSESSEE. THE AO HAS FURTHER NOTED THAT DURING PENALTY PROCEEDINGS ASSESSEE HAS VEHEMENTLY SUBMITTED THAT THERE IS NEITHER A CONCEALMENT OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME IN THE CASE OF THE ASSESSEE AND HENCE THE PROVISIONS OF SECTION 271(1)(C) ARE NOT ATTRACTED. THE ASSESSEE HAS RELIED ON VARIOUS CASE LAWS IN ITS SUPPORT. HOWEVER, THE JUDICIAL DECISION IN A PARTICULAR CASE IS AS PER THE FACTS AND CIRCUMSTANCES OF THAT CASE. THE FACTS OF THIS CASE MAY BE ITA NO. 4550/ DEL/ 2013 4 BRIEFLY PURSUED. THE ASSESSEE WAS NOT ABLE TO RECONCILE THE DIFFERENCE IN THE CLOSING STOCK SHOWN IN THE BOOKS AND THAT PLEDGED TO THE BANK. THIS FACT ONLY LEADS TO AN IRRESISTIBLE C ONCLUSION THAT THE ASSESSEE DELIBERATELY FURNISHED INACCURATE PARTICULARS OF ITS INCOME FOR EVERY OBVIOUS REASONS. NOT ONLY BEFORE THE AO BUT EVEN BEFORE THE CIT(A) NO SATISFACTORY EXPLANATION WAS FILED FOR THE DISCREPANCY. THE AO IMPOSED A PENALTY OF RS . 11,43,712/ - TREATING IT TO BE A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3 . AGAINST THE ORDER OF THE AO , AS AFORESAID ASSESSEE FILED AN APPEAL BEFORE THE ID. FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER DATED 09.4.2013 DISMISSED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE PENALTY IMPOSED BY THE AO. NOW THE ASSESSE IS AGGRIEVED AGAINST THE IMPUGNED ORDER AND FILED THE PRESENT APPEAL BEFORE US. 4 . AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESSEE STATED THAT IN THE QUANTUM APPEAL THE ITAT HAS SET ASIDE THE ISSUE IN DISPUTE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTIONS THAT HE WILL RE - ADJUDICATE THE ISSUE IN DISPUTE, AS PER THE DIRECTIONS OF THE ITAT PASSED IN ITA NOS. 43 43, 4343 & 4344/DEL/2010 FOR THE ASSTT. YEARS 2000 - 01, 2001 - 02 AND 2002 - 03 ON 26.10.2012. THE PENALTY IN DISPUTE IS ON THE ADDITION MADE FOR THE ASSTT. YEAR 2002 - 03, THEREFORE, THE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW AND MAY BE CANCELLE D. 5 . LD. DR RELIED UPON THE ORDER PASSED BY THE LD. CIT(A) AND STATED THAT ITAT IN THE APPEALS MENTIONED ABOVE BY THE ASSESSEE AS STATED ABOVE VIDE ITS ORDER DATED 26.10.2012 HAS SET ASIDE THE ISSUE IN DISPUTE TO THE FILE OF THE LD. CIT(A) FOR RE - AD JUDICATION, THEREFORE, THE ISSUE OF ITA NO. 4550/ DEL/ 2013 5 PENALTY MAY ALSO BE SET ASIDE TO THE FILE OF THE CIT(A) TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER DECIDING THE QUANTUM APPEAL IN THE ASSESSMENT YEAR IN DISPUTE. 6. WE HAVE HEARD BOTH THE P ARTIES AND PERUSED T HE RELEVANT RECORD AVAILABLE WITH US SPECIALLY THE IMPUGNED ORDER S PASSED BY THE REVENUE AUTHORITIES AND ORDER OF THE TRIBUNAL DATED 26.10.2012 PASSED IN ITA NOS. 4343, 4343 & 4344/DEL/2010 FOR THE ASSTT. YEARS 2000 - 01, 2001 - 02 AND 2002 - 03 IN ASSESSEE S O WN CASE I.E. IN THE CASE OF THE BASTI SUGAR MILLS CO. LTD. VS. ITO, WE ARE OF THE CONSIDERED VIEW THAT IN THE QUANTUM APPEAL THE ITAT VIDE ITS ORDER DATED 26.10.2012 H AS RESTORED BACK THE ISSUE INVOLVED IN THE QUANTUM APPEAL IN THE ASSTT. YEAR IN DIS PUTE TO THE FILE OF LD. CIT(A) TO RE - ADJUDICATE THE ISSUE AFRESH, UNDER THE LAW AND TO PROVIDE THE FULL OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE EVIDENCE, AS PER THE DIRECTIONS GIVEN BY THE ITAT IN ASSESSEE S OWN CASE IN ITA NO. 3803/DEL/2008 FOR THE ASSTT. YEAR 1999 - 2000 VIDE ORDER DATED 30.11.2010 MEANING THEREBY THE QUANTUM APPEAL HAS BEEN SET ASIDE TO THE LD. CIT(A) AND PENALTY IN DISPUTE ON THE QUANTUM IS NOT SUSTAINABLE IN THE EYES OF LAW AND ALSO REQUIRE S RE - ADJUDICATION AT THE L E VEL OF THE L D. CIT(A) WITH THE DIRECTIONS TO DECIDE THE PENALTY MATTER, AS PER LAW, AFTER THE ITA NO. 4550/ DEL/ 2013 6 DECIDING THE QUANTUM APPEAL FOR THE ASSTT. YEAR IN DISPUTE IE. 2002 - 03. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE O PEN C OURT ON 0 9 / 0 1 /20 1 5 . S D / - S D / - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 0 9 / 0 1 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 4550/ DEL/ 2013 7