JT.CIT.,-8(1)(OSD), MUMBAI V. CLEANTEC HOSPITALITY SERVICES PVT.LTD.(NOW KNOWN AS ISS INTERGREATED FACILITY SERVICES PVT.LTD), MUMBAI

ITA 469/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2355 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: K P KAPADIA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.469/MUM/2013 ASSESSMENT YEAR: 2006-07 DY.CIT, RANGE-8(1), R. NO. 260A, 2 ND FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 VS. M/S CLEANTEC HOSPITALITY SERVICES PVT. LTD. (NOW KNOWN AS ISS INTEGRATED FACILITY SERVICES PVT. LTD.), GODREJ INDL. COMPLEX, ROAD NO.4, SIR PHIROZ SHAH NAGAR, EASTERN EXPRESS HIGHWAY, ANDHERI(E), MUMBAI-400079. PAN: AAACA8682K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PREMANAND J. (DR) ASSESSEE BY : SHRI K.P.KAPADIA DATE OF HEARING : 24.08.2015 DATE OF PRONOUNCEMENT : 20.11.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF CIT(A)-16, MUMBAI DATED 31.10.2012 IN RESPECT OF ASSESSMENT YE AR (AY) 2006-07 ON THE FOLLOWING GROUNDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING THE PENALTY OF RS.12,05,725/- L EVIED BY THE AO U/S 27L(1)(C) OF THE I.T. ACT. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING THE PENALTY LEVIED BY THE AO U/ S 27L(1)(C) OF THE I.T. ACT, IN 2 ITA NO. 469/M/2013 M/S CLEANTEC HOSPITALITY SERVICE S PVT. LTD. RESPECT OF UNACCOUNTED RECEIPTS OF UNACCOUNTED RECE IPTS OF RS.35,82,071/-- DETECTED DUE TO GENERATION OF CASS REPORT WHICH THE ASSESSEE FAILED TO RECONCILE OR EXPLAIN.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING THE PENALTY LEVIED BY THE AO U/ S 27L(1)(C) OF THE I.T. ACT, BY RELYING UPON THE DECISION OF HON'BLE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS (P) LTD.(2010) 322 ITR 158 (SC), THE FACTS OF WHICH ARE DISTINGUISHABLE FROM THE FACTS OF THE ASSESSEE'S CA SE AND THEREFORE THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY U/S27L(1) (C) BY REFERRING TO THE SAID DECISION.' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING THE PENALTY LEVIED BY THE AO U/ S 27L(1)(C) OF THE I.T. ACT, BY RELYING UPON THE DECISION OF HON'BLE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS (P) LTD.(2010) 322 ITR 158 (SC), WITH OUT APPRECIATING THAT, THE QUANTUM ADDITION HAS BEEN CONFIRMED BY THE LD. C!T( A) HIMSELF ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISH EVIDENCE TO SHO W THAT THE SAID RECEIPTS OF RS.35,82,07L/- DID NOT PERTAIN TO IT, AND THUS THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS IN TERMS OF SECTION 27L(L)(C) R.W. EXPLANA TION 1 THEREOF.' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND ABOVE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 30.11.2006 DECLARING TOTAL INCOME OF RS. 1,29,29,73 0/-. THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY. WHILE MAKING ASSESSMENT THE ASSESSING OFFICER (AO) SEEK EXPLANATION ABOUT THE ENTRIES APPEARING IN THE B OOKS OF ACCOUNT OF THE ASSESSEE AND ADDED A TOTAL SUM OF RS. 35,82,071/- BEING UNEXPLAI NED AMOUNT IN THE INCOME OF THE ASSESSEE AND INITIATED PENALTY PROCEEDING FOR CONCE ALMENT OF INCOME VIDE ASSESSMENT ORDER DATED 29.12.2008. 3. AGAINST THE ORDER DATED 29/12/2008, AN APPEAL WAS FILED BEFORE THE CIT(A) AND THE ADDITION MADE BY AO WERE CONFIRMED BY THE CIT(A). 4. IN THE SHOW CAUSE NOTICE AGAINST THE PENALTY PROCEE DINGS, THE ASSESSEE EXPLAINED THAT TRANSACTION INVOLVED MEDIUM AND LARGE SEIZED CORPOR ATE SPREAD OUT ALL OVER INDIA WHEREIN ALL TRANSACTION ARE DONE THROUGH MONTHLY AN D REGULAR BILLING AND PAYMENTS SETTLED BY CROSSED ACCOUNT PAYEE CHEQUE ONLY AND TH EREFORE, MISSING OUT OR RECORDING OF ANY TRANSACTION IS NOT POSSIBLE AND THUS BY INVO KING THE PROVISION OF SECTION 271(1)(C) OF THE ACT, THE AO IMPOSED A PENALTY @ 10 0% OF EVADED TAX . 5. AGAINST THE ORDER OF AO AN APPEAL WAS FILED BEFORE THE CIT(A) AND THE LD. CIT(A) WHILE DISPOSING OF THE APPEAL ACCEPTED THE APPEAL A ND SET-ASIDE THE ORDER OF AO ABOUT THE PENALTY VIDE ORDER DATED 31.10.2012 AGAINST WHI CH THE PRESENT APPEAL IS FILED BY THE REVENUE BEFORE US. 6. WE HAVE HEARD LD. DEPARTMENTAL REPRESENTATIVE (DR) OF THE REVENUE AND AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3 ITA NO. 469/M/2013 M/S CLEANTEC HOSPITALITY SERVICE S PVT. LTD. 7. THE LD. (DR) OF THE REVENUE RELIED UPON THE ORDER O F AO AND ARGUED THAT THE ASSESSEE CONCEALED HIS INCOME AND WAS LIABLE TO SADDLED WITH THE PENALTY AS PROVIDED U/S 271(1)(C) OF THE ACT. 8. WE HAVE SEEN THE ORDER OF THE LD. CIT (A), WHEREIN CIT(A) WRONGLY OBSERVED THAT AO HAS NOT BEEN ABLE TO ESTABLISHED THAT THE EXPLAN ATION GIVEN BY THE ASSESSEE WAS NOT BONA FIDE. THE BURDEN OF PROVE WAS RATHER ON THE AS SESSEE. 9. DURING THE HEARING OF THE APPEAL, THE LD. AR OF THE ASSESSEE SEEKS PERMISSION TO FILE ADDITIONAL EVIDENCE BY WAY OF WRITTEN APPLICATION A LONG WITH THE EVIDENCE (DOCUMENT). THE APPLICATION OF THE ASSESSEE IS SUPPORTED WITH C ERTAIN DOCUMENTS, IN THE APPLICATION, THE ASSESSEE HAS PRAYED THAT DURING TH E ASSESSMENT PROCEEDING, HE DID NOT HAVE ITS BOOKS OF ACCOUNT AS THE ACCOUNTANT OF THE COMPANY HAS RESIGNED FROM M/S TELESOFTWARE, WHEREIN THE BOOKS OF ACCOUNT OF ASSES SEE WERE MAINTAINED , WHICH WAS HAVING PASSWORD PROTECTION DUE TO WHICH THE ASSESSE E COULD NOT RECONCILE THE ENTRIES. 10. THE APPLICATION OF THE ASSESSEE WHICH IS SUPPORTED WITH THE DOCUMENTARY EVIDENCE IS CONSIDERED AND THE SAME IS ALLOWED TO PLACE ON R ECORD. 11. THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE GOES TO THE ROOT OF THE ISSUE FOR LEVYING THE PENALTY U/S 271(1) (C ) OF THE ACT, WHICH HAS N OT BEEN CONSIDERED BY THE LOWER AUTHORITY WHILE DECIDING THE PENALTY IN RESPECT OF THE ADDITIONS / DISALLOWANCE SO MADE IN THE QUANTUM ASSESSMENT. IN VIEW OF FILING AND ALLOWING THE ASSESSEE TO ALLOW THE ADDITIONAL EVIDENCE ON RECORD THE CASE IS RESTORED/ REMANDED TO THE FILE OF AO, WHO SHALL TO RE-EXAMINE THE EVIDENCE FILED BY THE ASSE SSEE, AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE FOR RECONCILIATION OF ENTRIES AFTER GIVING APPROPRIATE OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FULLY CO -OPERATE AND NOT TO SEEK UNNECESSARY ADJOURNMENT DURING THE REMAND PROCEEDING. 12. IN VIEW OF ALLOWING THE APPLICATION FOR FILING ADDI TIONAL EVIDENCE FOR ITS EXAMINATION, THE CASE IS RESTORED TO THE FILE OF AO. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH NOVEMBER 2015. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 20 /11/2015 S.K.PS 4 ITA NO. 469/M/2013 M/S CLEANTEC HOSPITALITY SERVICE S PVT. LTD. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. //// $ //TRUE COPY/