CATRACK ENTERTAINMENT LIMITED, MUMBAI V. INCOME TAX OFFICER 11(1)(1), MUMBAI

ITA 498/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5203 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 23-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.498/M/2018 ASSESSMENT YEAR: 2007-08 M/S. CATRACK ENTERTAINMENT LTD., PLOT NO.400, SECTOR-82, MOHALI 160 055 PAN: AABCC3523A VS. INCOME TAX OFFICER 11(1)(1), AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI ARVIND KUMAR, D.R. DATE OF HEARING : 18.06.2019 DATE OF PRONOUNCEMENT : 19.08.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 05.10.2017 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) UPHOLDING THE ORDER OF AO IMPOSING PENAL TY UNDER SECTION 271(1)(C) OF THE ACT. 3. AT THE OUTSET, WE WOULD LIKE TO MENTION THAT NEI THER ASSESSEE NOR HIS REPRESENTATIVE APPEARED BEFORE US TO REPRESENT THE HEARING DESPITE SERVICE OF NOTICE ON THE ASSESS EE. THE CASE WAS FIRST LISTED FOR HEARING ON 27.02.2019 AND ADJO URNED TO ITA NO.498/M/2018 M/S. CATRACK ENTERTAINMENT LTD. 2 25.04.2019 DUE TO NON APPEARANCE OF THE ASSESSEE O R HIS REPRESENTATIVE WHILE BENCH DID NOT FUNCTION ON 25. 04.2019 AND THEREAFTER THE CASE WAS ADJOURNED TO 18.06.2019. EV EN ON THAT DATE NEITHER ASSESSEE NOR AUTHORISED REPRESENTATIVE APPEARED TO ATTEND THE HEARING NOR ANY ADJOURNMENT APPLICATION WAS RECEIVED. WE ARE THEREFORE DECIDING THE APPEAL OF THE ASSESSEE AFTER HEARING THE LD. D.R. AND CONSIDERING THE MERI TS OF THE CASE. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT IN TH IS CASE WAS FRAMED VIDE ORDER DATED 30.11.2009 PASSED UNDER SEC TION 143(3) ASSESSING THE TOTAL INCOME AT RS.11,13,570/- AS AGA INST THE RETURN LOSS OF RS.8,493/-. THE ONLY ADDITION MADE WAS IN RESPECT OF AMOUNT PAYABLE TO ETC CHANNEL, PUNJAB WH ICH WAS SHOWN AT RS.10,70,462/-. AS THE ARBITRATION PROCEE DINGS WERE PENDING THE AO ISSUED NOTICE UNDER SECTION 133(6) D ATED 03.11.2009 AND ETC CHANNEL, PUNJAB WAS ASKED TO GIV E A COPY OF ACCOUNTS APPEARING IN THEIR BOOKS OF ACCOUNTS BA LANCE OUTSTANDING AS ON 31.03.2007 WHICH WAS REPLIED BY T HE ETC CHANNEL, PUNJAB VIDE LETTER DATED 10.11.2009 WHICH STATED THAT THE AMOUNT OUTSTANDING WAS NIL AND ACCORDINGLY THE SAME WAS ADDED BACK UNDER SECTION 41(1) OF THE ACT AND THERE FORE THE AO INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT WITHOUT POINTING OUT THAT WHETHER THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED T HE PARTICULARS OF INCOME. THEREAFTER, THE PENALTY WAS IMPOSED AFTER ISSUING NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE ACT. FINALLY THE PENALTY WAS LEVIED BY THE AO VIDE ORDER DATED 15.03.2013 PASSED UNDER SECTION 271(1)(C) BY HOLDING THAT THE ASSESSEE HAS CONCEALED HIS INCOME AND ALSO FILE D INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) ITA NO.498/M/2018 M/S. CATRACK ENTERTAINMENT LTD. 3 READ WITH EXPLANATION 1 AND LEVIED A PENALTY OF RS. 3,60,317/- EQUAL TO 100% OF THE TAX SOUGHT TO BE EVADED. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) AFF IRMED THE ORDER OF AO ON THE GROUND THAT ASSESSEE HAS NOT CO- OPERATED IN THE ASSESSMENT PROCEEDINGS AND HAS NOT RAISED ANY G ROUND ON IMPOSITION OF PENALTY AND ONLY RAISED THE ISSUE ON MERIT. 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE OBSERVE THAT THE PENALTY HAS BEEN LEVIED IN RESPECT OF ADDITION MADE UNDER SECTION 41(1) QUA THE AMOUNT SH OWN AS PAYABLE TO ETC CHANNEL, PUNJAB WHEN THE SAID PARTY SHOWED THE AMOUNT AS NIL WHEREAS ASSESSEE HAS SHOWN THE AM OUNT AS PAYABLE TO THE SAID PARTY. THE AO HAS SIMPLY STATE D IN THE ASSESSMENT ORDER THAT THE PENALTY IS INITIATED UNDE R SECTION 271(1)(C) SEPARATELY WITHOUT STATING THAT HOW THE S AID ADDITION FALLS UNDER 4 CORNERS OF SECTION 271(1)(C). IN OTHER WORDS, IT WAS NEITHER STATED TO BE ON ACCOUNT OF CONCEALMENT OF P ARTICULARS INCOME NOR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THUS THERE IS NO SATISFACTION RECORDED IN THE A SSESSMENT ORDER. 7. SIMILARLY, IN PENALTY ORDER, THE PENALTY WAS IMP OSED FOR BOTH THE CHARGES. WE ARE UNABLE TO COMMENT UPON AS TO HOW THE PENALTY NOTICE HAS BEEN ISSUED AS THE CASE IS B EING HEARD EX- PARTE AS WE DO NOT HAVE THE COPY OF THE NOTICE ISSU ED UNDER SECTION 271(1)(C). THUS THE PENALTY AS IMPOSED BY THE AO IN A MECHANICAL MANNER WITHOUT RECORDING SATISFACTION AN D THEREFORE CAN NOT BE SUSTAINED. EVEN ON MERIT, THE PENALTY I S LEVIED ONLY IN RESPECT OF LIABILITY OF RS.10,70,462/- SHOWN AS PAYABLE TO ETC ITA NO.498/M/2018 M/S. CATRACK ENTERTAINMENT LTD. 4 CHANNEL, PUNJAB WHICH WAS ADDED TO THE INCOME OF TH E ASSESSEE UNDER SECTION 41(1). IN OUR OPINION, THE ASSESSEE HAS STATED ALL THE FACTS IN THE RETURN OF INCOME AND NOT CONCEALED ANYTHING. IT IS ALSO NOT CLEAR THAT IN WHICH YEAR THIS AMOUNT WA S BOOKED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE IN CLINED TO SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.08.2019. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19.08.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.