Meridian Promoters Private Limited, Visakhapatnam V. Dy CIT, Central Circle - 2(i/c), Visakhapatnam

ITA 517/VIZ/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6617 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 26-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Tax effect; Set aside
• Section: 271(1)(c); 143(3); 153A; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 5 17 /VIZ/201 7 ( / ASSESSMENT YEAR : 20 03 - 04 ) M/S MERIDIAN PROMOTERS (P) LTD. D.NO.47 - 3 - 29/2, 5 TH LANE DWARAKANAGAR VISA KHAPATNAM [PAN :AA CCM7719D ] VS. DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 2 ( I/C ) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : S HRI G.V.N.HARI , A R / RESPONDENT BY : S MT. SUMAN MALIK, DR / DATE OF HEARING : 2 6 . 0 6 . 201 9 / DATE OF PRONOUNCEMENT : 02 .0 8 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [CIT(A)] - 1, VISAKHAPATNAM VIDE APPEAL NO.030/2011 - 12 DATED 24.05.2017 FOR THE ASSESSMENT YEAR (A.Y.)2003 - 04. 2 I.T.A. NO .5 17 /VIZ/201 7 . A.Y.20 03 - 04 M/S MERIDIAN PROMOTERS PRIVATE LTD. , VISAKHAPATNAM 2. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S.153A OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) FO R THE A.Y.2003 - 04 ON TOTAL INCOME OF RS. 22,16,640 AND THE ASSESSING OFFICER (AO) MADE THE ADDITION OF RS.10,67,700/ - RELATING TO THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AND FURTHER SUM OF RS.8,00,540/ - RELATING TO ADVANCE FOR PURCHASE OF FLAT S. THE AO ALSO INITIATED PENALTY U/S 271(1)(C) OF THE ACT. 2.1. SUBSEQUENTLY, THE AO REOPENED THE ASSESSMENT U/S 147 BY ISSUE OF NOTICE U/S 148 DATED 25.01.2010 AND MADE THE ADDITION OF RS.9,72,000/ - TO THE ASSESSED INCOME OF RS.22,16,640/ - AND COMPUTE D THE TOTAL INCOME OF RS.31,88,640/ - BY AN ORDER DATED 03.11.2010 U/S 143(3) R.W.S. 147. THE AO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) AS PER THE ASSESSMENT ORDER. 2.2. SUBSEQUENT TO PASSING THE REASSESSMENT ORDER, THE AO PASSED PENALTY ORDER U/ S 271(1)(C) BY AN ORDER DATED 29.03.2011, IN A COMMON ORDER COVERING THE ADDITIONS MADE IN THE ASSESSMENT ORDER DATED 30.11.2007 AND 03.11.2010 AND LEVIED THE PENALTY OF RS.3,92,159/ - ON CONCEALED INCOME OF RS.28,39,100/ - . 3 I.T.A. NO .5 17 /VIZ/201 7 . A.Y.20 03 - 04 M/S MERIDIAN PROMOTERS PRIVATE LTD. , VISAKHAPATNAM 3. AGGRIEVED BY THE ORDER OF THE AO FOR IMPOSING THE PENALTY U/S 271(1)(C ) , THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A). D URING THE APPEAL PROCEEDINGS THE LD.CIT(A) FOUND THAT THE ITAT HAS A LLOWED RELIEF IN RESPECT OF ADDITIONS MADE IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153A OF THE ACT DATED 30.11.2007 RELATING TO THE ADDITIONS OF RS.10.67 LAKHS PERTAINING TO SHARE APPLICATION MONEY AND THE SUM OF RS.8,00,540/ - RELATING TO FLAT ADVANCES. THUS THE ADDITIONS REMAINED AS ON THE DATE OF PASSING THE FIRST APPELLATE ORDER WAS RS.9.72 LAKHS REPRESENTING THE FLAT ADVANCES ASSESSED VIDE REASSESSMENT ORDER DATED 03.11.2010. HENCE , THE LD.CIT(A) CONFIRMED THE PENALTY LEVIED U/S 271(1)(C) ONLY WITH RESPECT TO THE ADDITION OF RS.9.72 LAKHS. 4. AGAINST THE ORDER OF THE LD.CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.DR SUBMITTED THAT THE AO MADE THE ADDITION OF RS.10,67,700 AND RS.8,00,540/ - VIDE ORDER U/S 143(3) R.W.S. 153A DATED 30.11.2007. ON A PPEAL FILED BY THE ASSESSEE, THE HONBLE ITAT, VISAKHAPATNAM HAS DELETED THE QUANTUM ADDITIONS BY AN ORDER DATED 06.11.2015. THEREFORE, THE LD.CIT(A) HAS CONFIRMED THE PENALTY ONLY IN RESPECT OF THE ADDITIONS MADE IN THE REASSESSMENT ORDER DATED 03.11.2010 AMOUNTING TO RS.9,72,000/ - WHICH WA S UPHELD BY THE 4 I.T.A. NO .5 17 /VIZ/201 7 . A.Y.20 03 - 04 M/S MERIDIAN PROMOTERS PRIVATE LTD. , VISAKHAPATNAM LD.CIT(A) AND THE SAME IS IN DISPUTE . THE LD.AR FURTHER SUBMITTED THAT THE LD.CIT(A), VISAKHAPATNAM HAS DELETED THE QUANTUM ADDITION OF RS.9,72,000/ - ALSO IN ASSESSEES APPEAL AGAINST THE REASSESSMENT ORD ER AND THE DEPARTMENT DID NOT PREFER APPEAL AGAINST THE ORDER OF FIRST APPEAL , SINCE , THE TAX EFFECT WAS BELOW THE MONETARY LIMIT, THUS SUBMITTED THAT THE ENTIRE QUANTUM ADDITION WAS DELETED BY THE ITAT / CIT(A) AND THE PENALTY IMPOSED U/S 271(1)(C) ALSO S TANDS AUTOMATICALLY DELETED . T HERE WOULD BE NO PENALTY AFTER GIVING EFFECT TO THE CONSEQUENTIAL ORDER, HENCE, ARGUED THAT THE APPEAL IS NOT MAINTAINABLE. 5. ON THE OTHER HAND, THE LD.AR ARGUED THAT THERE WERE TWO ASSESSMENT ORDERS PASSED U/S143(3) R.W.S .153A DATED 30.11.2007 AND SECOND ASSESSMENT ORDER WAS PASSED U/S 143(3) R.W.S. 147 ON 03.11.2010. THOUGH THE AO HA D INITIATED THE PENALTIES SEP A RATELY, THE AO PASSED COMMON ORDER FOR BOTH THE ASSESSMENT ORDERS WHICH IS NOT IN ACCORDANCE WITH LAW, HENCE, R EQUESTED TO QUASH THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE AO PASSED THE COMMON PENALTY ORDER IMPOSING PENALTY U/S 271(1)(C) IN RESPECT OF TH E ADDITIONS MADE VIDE ORDER 5 I.T.A. NO .5 17 /VIZ/201 7 . A.Y.20 03 - 04 M/S MERIDIAN PROMOTERS PRIVATE LTD. , VISAKHAPATNAM 143(3) R.W.S. U/S 153A AND THE ORDER PASSED U/S 143(3) R.W.S. 147 OF THE ACT ON TWO DIFFERENT DATES. BOTH THE ORDERS ARE INDEPENDENT OF EACH OTHER. THEREFORE, THE AO REQUIRED TO INITIATE TWO PENALTY PROCEEDINGS BY ISSUE OF SEP ARATE NOTICES U/S 271(1)(C) OF THE ACT AND TO PASS SEPARATE PENALTY ORDERS INDEPENDENTLY. THEREFORE, THERE WAS A DEFECT IN THE PENALTY ORDER PASSED BY THE AO U/S 271(1)(C) OF THE ACT AND THE SAME IS UNSUSTAINABLE. HOWEVER, DURING THE APPEAL HEARING, THE LD.DR FAIRLY CONCEDED THAT IN THE INSTANT CASE, THE ADDITIONS REPRESENTING THE PENALTY WERE DELETED BY THE CIT(A) AND THE DEPARTMENT DID NOT PREFER APPEAL AGAINST THE CIT(A) ORDER , HENCE THERE IS NO ENFORCEABLE DEMAND IN RESPECT OF THE PENALTIES. AS SUBMI TTED BY THE LD.DR SINCE THE ADDITIONS REPRESENTING PENALTY WERE DELETED, THE PENALTY ALSO GETS SQUARED OFF AND ACCORDINGLY GETS CANCELLED AND THERE WOULD BE NO GRIEVANCE TO THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE PENALTY LEVIED BY THE AO. ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 6 I.T.A. NO .5 17 /VIZ/201 7 . A.Y.20 03 - 04 M/S MERIDIAN PROMOTERS PRIVATE LTD. , VISAKHAPATNAM ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND A UGUST 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 02 .0 8 .2019 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S MERIDIAN PROMOTERS (P) LTD., D.NO.47 - 3 - 29/2, 5 TH LANE, DWARAKANAGAR, VISAKHAPATNAM 2. / THE REVENUE DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(I/C) VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX (CENTRAL) , HYDERABAD 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, GUNTUR 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM