ADHIRAJ INVESTMENT AND FINANCE P.LTD, MUMBAI V. ASST CIT 1(1), MUMBAI

ITA 5240/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0933 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: RISHABH S HAH
• Keywords: Rectification of order; Revised return
• Section: 14A; 154

Judgement Text

ITA NO.5240/MUM/2014 ADHIRAJ INVESTMENTS AND FINANCE PVT. LTD.,, ASSESSMENT YEAR 2009-2010 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JM AND SHRI RAMIT KOCHAR, AM ./ I.T.A. NO. 5240/MUM/2014 ( / ASSESSMENT YEAR: 2009-2010) ADHIRAJ INVETMENT AND FINANCE PVT. LTD. 303, SHARDA CHAMBERS, 15, NEW MARINE LINES, MUMBAI 400 020. / VS. ASST. COMMISSIONER OF INCOME TAX 1(1), AAYKAR BHAVAN, M.K. MARG, MUMBAI 400 020. ./ ./PAN/GIR NO. AAACA5217G ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RISHABH SHAH / RESPONDENT BY : SHRI RAJESH KUMAR YADAV / DATE OF HEARING : 22/03/2017 / DATE OF PRONOUNCEMENT : 03 /05/2017 2 ITA NO.5240/MUM/2014 ADHIRAJ INVESTMENTS AND FINANCE PVT. LTD.,, ASSESSMENT YEAR 2009-2010 / O R D E R PER D.T. GARASIA (JUDICIAL MEMBER) 1. THE CAPTIONED APPEAL BY THE ASSESSEE FOR THE ASS ESSMENT YEAR 2009-10 AS RAISED OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)- 01 [CIT(A)], MUMBAI DATED 16/06/2014. FOLLOWING GROUNDS ARE RAISED IN THE ASS ESSEES APPEAL:- 1. PENALTY OF RS. 15,66,306/- LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APP ELLANT SUBMITS THAT THE HON. COMMISSIONER OF INCOME TAX APPEALS, MUMBAI ERRED IN UPHOLDING THE ADDITIONS OF THE AMOUNT OF PROVISION FOR FBT AND INCOME TAX OF RS. 46,08,13 9/- MADE U/S. 154 OF THE INCOME TAX ACT, 1961 BY THE LEARNED ASSESSING OFFICER AS CONCEALED INCOME. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APP ELLANT SUBMITS THAT THE HON. COMMISSIONR OF INCOME TAX ERRED IN LEVYING THE PENALTY OF RS. 15,6 6,306/- U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. THE APPELLANT SUBMITS THAT THE PENALTY OF RS. 15,6 6,306/- LEVIED U/S. 271(1)(C) BE DELETED. 2. THE SAID FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 03/10/2009 DECLARING INCOME OF RS. 96,36,542/-. THE RETURN WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS PE R THE AUDITED PROFIT & LOSS ACCOUNT THE PROFIT WAS SHOWN AT RS. 1,38,15,629/- AND AFTER MA KING PROVISIONS OF FBT AND PROVISIONS FOR INCOME TAX, THE PROFIT WAS RS. 92,07,490/-. HO WEVER, IN COMPUTATION OF INCOME THE STATED FIGURE HAS BEEN TAKEN AT RS. 92,07,490/- AND PROVISION FOR FBT AND INCOME TAX WAS NOT ADDED BACK. ASSESSEE HAS FILED THE ORIGINAL RET URN WHEREIN TAXES WAS RIGHTLY CALCULATED THOUGH THE ASSESSEE FILED REVISED RETURN ON 03/10 /2009 SHOWING THE NET INCOME OF RS. 96,36,542/-. THEREFORE, AO HAS RECTIFIED THE ORDER U/S. 154 BY PASSING THE RECTIFICATION ORDER. THE AO HAS ADDED THE AMOUNT OF RS. 46,08,139/- TO T HE TOTAL INCOME OF THE ASSESSEE AND PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TA X ACT WAS INITIATED BY AO FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN REPLY TO SHOW CAUSE NOTICE, THE ASSESSEE CONTENDED THAT 3 ITA NO.5240/MUM/2014 ADHIRAJ INVESTMENTS AND FINANCE PVT. LTD.,, ASSESSMENT YEAR 2009-2010 THE ASSESSEE HAS NOT WILLFULLY FILED ANY INACCURAT E PARTICULARS OF INCOME WHICH WAS DUE TO THE ERROR IN COMPUTATION OF TOTAL INCOME MAINLY THE PROVISION FOR INCOME TAX, FBT, AND MANDATORY ADDITION ON ACCOUNT OF 14A THESE ORDER U/ S. 154 HAS BEEN PASSED. THEREFORE, PENALTY MAY BE DROPPED BUT THE ASSESSEE HAS DELIBER ATELY ATTEMPTED AND FURNISHED THE INACCURATE PARTICULARS OF INCOME. THEREFORE, HE LEV IED THE PENALTY U/S. 271(1)(C) OF THE ACT. 3. MATTER WAS CARRIED TO CIT(A) AND CIT(A) HAS DISM ISSED. DURING THE COURSE OF HEARING THE LD. AR HAS TAKEN THE ADDITIONAL GROUND BEFORE U S NOTICE U/S. 274 OF THE ACT DOES NOT SPECIFY THE CHARGE WHETHER PARTY HAS BEEN LEVIED FO R FURNISHING FOR INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE LD. AR SUBMITT ED THAT IN THE ASSESSMENT ORDER AND IN PENALTY ORDER THE PENALTY HAS BEEN IMPOSED FOR FURN ISHING INACCURATE PARTICULARS OF INCOME. WHILE IN THE NOTICE THE AO HAS NOT POINTED OUT WHET HER THE PENALTY HAS BEEN IMPOSED FOR CONCEALMENT OF INCOME. IT IS THE DUTY OF THE AO TO SPECIFY THE CHARGE BEFORE INITIATING THE PENALTY. THE LD. AR RELIED UPON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, VS. MANJUNATHA COTTON & GINNING FACTORY 35 TAXMANN.COM 250 (KARNATAKA),WHEREIN THE HONBLE HIG H COURT HAS MADE THE CONCLUSION IN THE JUDGEMENT THAT IT IS A DUTY OF THE AO WHICH HAS NOT SPECIFY THE CHARGE, THEREFORE, PENALTY MAY BE DELETED. ON THE OTHER HAND, THE LD. DR SUBMI TTED THAT AS PER SECTION 292B NOTICES DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES AND SAI D THAT WHEN ASSESSEE APPEARS IN PROCEEDINGS OR IN THE ENQUIRY RELATING TO ASSESSMEN T OR RE-ASSESSMENT. IT SHOULD HAVE BEEN DEEMED THAT PROPER NOTICE HAS BEEN SERVED UPON HIM IN ACCORDANCE WITH THE PROVISION OF THE ACT AND ASSESSEE HAS PARTICIPATED IN PROCEEDINGS OR ENQUIRY AND NOT OBJECTED THAT NOTICES SERVED UPON HIM WAS I AN IMPROPER MANNER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES ALONG TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CAS E THESE LEGAL GROUND WAS NOT TAKEN BEFORE CIT(A). MOREOVER, THE ASSESSEE HAS PRODUCED THE X EROX COPY OF NOTICE U/S. 274 R.W.S. 4 ITA NO.5240/MUM/2014 ADHIRAJ INVESTMENTS AND FINANCE PVT. LTD.,, ASSESSMENT YEAR 2009-2010 271(1)(C) OF THE ACT BEFORE US. THESE ARE LEGAL GRO UND WHICH WAS NOT TAKEN BEFORE CIT(A). MOREOVER, SECTION 292B ALSO CAME INTO PLEA WHILE DE CIDING THE ASSESSEES ISSUES. THEREFORE, IN THE INTEREST OF JUSTICE WE RESTORE THESE ISSUE TO THE FILE OF THE CIT(A) AND CIT(A) IS DIRECTED TO DECIDE THESE LEGAL GROUND BY CONSIDERIN G THE DECISIONS OF HIGH COURT OF KARNATAKA 35 TAXMANN 250 AND LATEST JUDICIAL PRECED ING AND ALSO SECTION 292B OF THE INCOME TAX ACT, 1961. CIT(A) IS DIRECTED TO GRANT O PPORTUNITY OF HEARING TO ASSESSEE BEFORE DECIDING THE SAME. IN THE RESULT, THE APPEAL OF ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2017 SD/- SD/- (RAMIT KOCHAR) (D.T. GARASIA) ! / ACCOUNTANT MEMBER '# ! / JUDICIAL MEMBER MUMBAI; # DATED : 03 .05.2017 PS:- POOJA K. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. & ( ) / THE CIT(A) 4. & / CIT - CONCERNED 5. ) , ) , / DR, ITAT, MUMBAI 6. *+ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI