MULLER & PHIPPS (I) LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 5575/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2985 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-09-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 28-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G NANTHAKUMAR
• Keywords: Opportunity of being heard; Principle of natural justice; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.C.SHARMA (AM) AND SHRI RAM LAL NEGI (JM ) ITA NO. 5575/MUM/2013 ASSESSMENT YEAR: 2001-02 MULLER & PHIPPS (INDIA) LTD., GROUND FLOOR, UNIQUE INDUSTRIAL ESTATE, OFF VEER SAVARKAR MARG, PRABHADEVI, MUMBAI- 400 025 PAN: AAACM3247N VS. THE ITO 2 (2)( 2 ), 5 TH FLOOR, AAYAKAR BHAVAN MUMBAI- 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. NITIN KULKARNI RESPONDENT BY : SHRI. G. NANTHAKUMAR DATE OF HEARING: 0 9/09/2016 DATE OF PRONOUNCEMENT: 16/09/20 16 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST ORDER DATED 14/03/2013 PASSED BY THE LD. CIT(APPEALS)-5, MUMBAI , FOR THE ASST. YEAR 2001-02 WHEREBY THE LD CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO U/S 271(1(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. CIT(A) HAS ERRED AND DISREGARDED THE FACT THAT A.O HAD NOT GIVEN THE APPELLANT AN OPPORTUNITY OF BEING HEARD AND HAD NOT SERVED ANY SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C ) AND THAT THE PRINCIPLES OF NATURAL JUSTICE HAVE NOT BEEN FOLLOWE D. 2 ITA NO. 5575/MUM/2013 ASSESSMENT YEAR: 2001-02 2. CIT(A) HAS ERRED AND DISREGARDED THAT AO HAD WRO NGLY STATED IN THE PENALTY ORDER THAT HE HAD ISSUED NOTICE UNDER S ECTION 274 R.W.S. 27 (1)(C) REQUIRING THE APPELLANT TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED AND THE APPELLANT HAD REPLIED VIDE LETTER DT. 24TH MARCH, 2011 TO THE SAID NOTICE. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF THE PENA LTY U/S 271 (1)( C ) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING T HE FACT THAT THE APPELLANT HAD RECEIVED RS. 6 CRORES ON ACCOUNT OF T RANSFER OF TRADEMARK PRIOR TO 31.3.2001 I.E. PRIOR TO THE AMEN DMENT IN SECTION 55(2) OF THE INCOME TAX ACT, 1961 AND THAT THE SAID RECEIPT WAS PROPERLY DISCLOSED AS NOT LIABLE FOR TAX FOLLOWING SUPREME COURT DECISION IN B C SRINIVASA SETTY V/S CIT 128 ITR 294 , IN THE RETURN OF INCOME FILED ON 29TH OCTOBER, 2002 4. CIT(A) HAS ERRED AND DISREGARDED THAT AO HAD NOT CONSIDERED THE DETAILS SUBMITTED TO HIM AND THE EXPLANATIONS OFFER ED DURING THE ASSESSMENT OF INCOME WERE CORRECT AND HAD WRONGLY T REATED THE TRANSACTION AS TAXABLE CAPITAL GAINS. 5. CIT(A) HAS ERRED AND HAD FAILED TO APPRECIATE TH AT THE APPELLANT HAD NOT FURNISHED ANY INACCURATE PARTICULARS AND MA DE THE CLAIM IN ACCORDANCE TO THE TRUTH AND THE SAME WAS NOT ERRONE OUS AND THAT THERE WAS NO CONCEALMENT OF INCOME NOR WERE ANY INA CCURATE PARTICULARS OF INCOME FURNISHED ABOUT THE RECEIPT O F MONEY WHILE PASSING THE ORDER U/S 143(3) R.W.S. 147 OF THE ACT AND THEREFORE IT WAS MERELY A CASE OF DIFFERENCE. 3 ITA NO. 5575/MUM/2013 ASSESSMENT YEAR: 2001-02 6. CIT(A) HAS ERRED AND WRONGLY CONCLUDED THAT APPE LLANT HAD FILED INACCURATE PARTICULARS OF INCOME FALLING WITHIN THE MEANING OF SECTION 271(1)(C) READ WITH EXPLANATION THEREOF. 3. AT THE OUTSET THE AUTHORISED REPRESENTATIVE (AR) FOR THE ASSESSEE SUBMITTED THAT THE QUANTUM APPEAL HAS BEEN ALLOWED BY THE MUM BAI BENCH OF ITAT IN FAVOUR OF THE ASSESSEE. THEREFORE, THE PENALTY ORDE R IS NOT SUSTAINABLE. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT THE SAID FACT. 4. WE NOTICE THAT THE ASSESSEE, BESIDES ON MERITS, CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THE FOLLOWING LEG AL GROUND:- I. RE-OPENING IS BAD IN LAW: 1. THE NOTICE U/S.148 DATED 17.02.2006 IS ISSUED ME RELY ON CHANGE OF OPINION. 2. THE COPY OF REASONS RECORDED FOR REOPENING OF AS SESSMENT WAS NOT PROVIDED DURING THE COURSE OF ASST. PROCEEDING IN SPITE OF SPECIFIC REQUEST MADE BY THE ASSESSEE, THEREFORE, THE OPPORT UNITY TO RAISE OBJECTION AGAINST THE REOPENING NOT PROVIDED. THE D ATE OF RECORDING THE REASON IS ALSO NOT KNOWN. THE RECORDING OF REAS ON SHOULD BE PRIOR TO THE DATE ISSUE OF NOTICE U/S.148. 4. THE CO-ORDINATE BENCH BY FOLLOWING THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN GKN DRIVESHAFT 259 ITR 19 AND HONBLE JURISDICTIONAL HIGH COURT IN VIDESH SANCHAR NIGAM LTD. (2012) 340 ITR 66 QUASHED THE REASSESSMENT PROCEEDINGS BEING INVALID AND ALLOWED THE APPEAL OF THE ASSESSEE. IN VIEW OF THE FACT THAT THE COORDINATE BENCH HAS Q UASHED THE REASSESSMENT PROCEEDINGS ON THE BASIS OF WHICH PENALTY WAS IMPOS ED AND ALLOWED THE 4 ITA NO. 5575/MUM/2013 ASSESSMENT YEAR: 2001-02 QUANTUM APPEAL ITA NO. 5926/MUM/2009, THE PENALTY O RDER DOES NOT SURVIVE. WE, THEREFORE, ALLOW ALL THE APPEAL OF THE ASSESSEE AND DIRECT THE AO TO DELETE THE PENALTY SO IMPOSED. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE FOR T HE A.Y. 2001-02 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 16 TH SEPTEMBER, 2016. SD/- SD/- ( R.C. SHARMA ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 16/09/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA