Appeal details
Counselvise Citation
[2012] 119 COUNSELVISE.COM (IT) 9705 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 8 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-09-2012
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
31-08-2012
Assessment Year
2005-2006
Appeal Filed On
03-01-2011
Judgement Text
N THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 06/PN/2011 (ASSTT. YEAR : 2005-06) JOG ENGINEERING LTD. ... APPELLANT JOG CENTRE, MUMBAI PUNE ROAD, PUNE 411 003 PAN AAACV9251H V. DCIT, CIR 11(1), PUNE RESPONDENT APPELLANT BY : SHRI S.H. AMBEDKAR RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 31/8/12 DATE OF PRONOUNCEMENT : - 9-12 ORDER PER R.S. PADVEKAR, JM IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IM PUGNED ORDER OF THE LD CIT(A) I, PUNE, DATED 16.9.2010FOR THE A.Y . 2005-06 IN WHICH THE PENALTY LEVIED BY THE A.O. U/S. 271(1)(C) HAS B EEN CONFIRMED. 2. THE ASSESSEE HAS TAKEN TWO FOLLOWING EFFECTIVE GROUNDS : 1. CONDOLENCE OF DELAY DENIED BY THE CIT(A) WITHOUT CONSIDERING THE GENUINE REASONS BY THE ASSESSEE BE ALLOWED. 2. CIT(A) HAS NOT DROPPED THE PENALTY LEVIED ON THE ASSESSEE EVEN IF ON THE MERITS THE ASSESSING OFFICER HAS DRO PPED THE PENALTIES OF THE EARLIER YEARS, HENCE THE PENALTIES TO BE DROPPED. 3. THE FIRST ISSUE IS REGARDING THE REFUSAL BY TH E LD CIT(A) TO CONDONE THE DELAY OF 14 MONTHS FOR FILING THE APPEAL. THE FACTS WHICH REVEAL FROM THE RECORD ARE AS UNDER. THE ASSESSEE COMPANY IS E NGAGED IN THE BUSINESS OF UNDERTAKING AND EXECUTION OF WORKS CON TRACT OF CONSTRUCTION AND ALSO UNDERTAKES PROJECTS INVOLVING CIVIL, MECHA NICAL AND ELECTRICAL ENGINEERING. THE ASSESSEE FILED RETURN OF INCOME F OR ASSESSMENT YEAR 2005-06 DECLARING THE TOTAL LOSS OF RS. 1,59,95,540 . THE ASSESSMENT OF THE ASSESSEE HAS BEEN COMPLETED U/S. 143(3) BY DET ERMINING THE TOTAL LOSS OF RS. 1,33,63,542/-. THE ASSESSEE CHALLENGE D THE ASSESSMENT 2 ITA NO. 06/PN/2011 JOG ENGINEERING LTD. A.Y. 2005-06 ORDER BEFORE THE LD CIT(A), BUT DID NOT SUCCEED AS ASSESSEES APPEAL WAS DISMISSED AND THEREAFTER, THE ASSESSEE DID NOT CARR IED THE ISSUE FURTHER. THE A.O. LEVIED THE PENALTY U/S. 271(1)(C ) OF THE ACT OF RS. 9,63,112/- VIDE HIS ORDER DATED 29 SEPTEMBER 2008. THE ASSESSEE CHALLENGED THE PENALTY ORDER BY FILING THE APPEAL BEFORE THE CIT(A ), PUNE, BUT, THERE WAS A DELAY OF 14 MONTHS IN FILING THE SAID APPEAL. TH E PENALTY ORDER WHICH WAS THE SUBJECT MATTER OF APPEAL BEFORE THE CIT(A), PUNE, WAS SERVED ON THE ASSESSEE ON 30 SEPTEMBER 2008 AND AS PER THE PR OVISIONS OF LAW, THE ASSESSEE SHOULD HAVE FILED THE APPEAL WITHIN 30 DA YS I.E. ON OR BEFORE 30 TH OCTOBER 2008. THE ASSESSEE FILED THE APPEAL BEFOR E THE CIT(A), PUNE ON 1 ST JANUARY 2010 AND ALONG WITH THE APPEAL, THE ASSESS EE FILED THE APPLICATION FOR CONDONATION OF THE DELAY. BEFORE T HE LD CIT(A), THE ASSESSEE STATED THAT THE ASSESSEE COMPANY DURING TH E PERIOD OF THE DELAY NEITHER HAD STAFF WITH EXPOSURE IN TAXATION MATTER NOR WAS HAVING SERVICES OF ANY TAX CONSULTANT. THE ASSESSEE FURTH ER STATED THAT IT WAS FACING ROUGH WEATHER IN THE LAST SEVEN YEARS AND IN CURRING LOSSES OWING TO CONTRACTUAL DISPUTES WITH STATE GOVERNMENT IN RESP ECT OF AREAS, MEASURES AND INFRASTRUCTURE PROJECT. IT WAS FURTHE R STATED THAT THE ORIGINAL AUDITORS OF THE COMPANY, WHO WERE WORKING WITH THEM FOR LAST THIRTY YEARS HAD SUDDENLY RESIGNED IN THE MONTH OF MAY 2008 AND NEW AUDITORS WERE APPOINTED AND IN THESE CIRCUMSTANCES, THE PENALTY ORDER PASSED BY THE A.O REMAINED TO BE ATTENDED FOR FILI NG THE APPEAL. THE LD CIT(A) WAS NOT CONVINCED WITH THE EXPLANATION OF TH E ASSESSEE AND DECLINED TO CONDONE THE DELAY. NOW THE ASSESSEE IS IN APPEAL ON THIS ISSUE. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. THE ASSESSEE HAS FILED THE AFFIDAVIT TO EXPLAIN THE SITUATION W HY THERE WAS A DELAY. IN AFFIDAVIT, IT IS STATED THAT THE ASSESSEE WAS GOING FINANCIALLY ROUGH WEATHER AND HEAVY LOSSES AND LACKING THE STAFF. TH E ASSESSEES PROJECT LANDED IN CONTRACTUAL DISPUTE WITH STATE GOVERNMEN T AND THE ASSESSEE WAS DRAGGED TO THE LITIGATION BEFORE THE VARIOUS CO URTS AND HONBLE HIGH COURT OF BOMBAY AS WELL AS DEBT RECOVERY APPELLATE TRIBUNAL, MUMBAI. IT IS ALSO STATED IN THE AFFIDAVIT THAT THE REGULAR AU DITORS OF THE ASSESSEE M/S. JOSHI & SAHNEY, WHO WERE COMPANYS AUDITORS A ND TAX CONSULTANTS FOR 30 YEARS HAD SUDDENLY RESIGNED AS AUDITORS AND TAX CONSULTANT WITHOUT ASSIGNING ANY REASON THEREOF. THE ASSESSEE APPOINTED THE ANOTHER AUDITOR NAMELY M/S. M.V. LONKAR & CO. IN JU LY 2008, BUT THE SAID 3 ITA NO. 06/PN/2011 JOG ENGINEERING LTD. A.Y. 2005-06 AUDITOR ALSO RESIGNED IN JANUARY 2009 AND THEREAFTE R, ANOTHER AUDITOR WAS APPOINTED. IT IS FURTHER STATED THAT IN THE SAID C IRCUMSTANCES, THE PENALTY ORDER PASSED BY THE A.O. REMAINED TO BE CHALLENGED IN THE APPEAL AND IT IS PLEADED THAT THE DELAY MAY BE CONDONED. 5. IT IS TRUE THAT THE ASSESSEE HAS NOT COME OUT WI TH THE CLEAR CASE EXPLAINING THE INORDINATE DELAY OF 14 MONTHS, BUT A T THE SAME TIME, IT IS SEEN THAT THE ASSESSMENT HAS BEEN FINALLY COMPLETED BY DETERMINING THE LOSS. THE REVENUE HAS NOT FILED ANY CONTRA AFFIDA VIT REBUTTING THE AVERMENTS MADE BY THE ASSESSEE IN RESPECT OF THE SU DDEN RESIGNATION OF THEIR AUDITORS AND APPOINTMENT OF THE ANOTHER AUDIT OR ETC.. AS HELD BY HONBLE SUPREME COURT IN THE CASE OF VEDABAU ALIAS VIYANBAHU BABURAO PATIL VS. SHANKARNARAYAN V. PATIL & OTHERS, 253 ITR 798, THE TERM SUFFICIENT CAUSE IS TO BE LIBERALLY CONSTRUED AND T HE PRINCIPLES OF ADVANCING SUBSTANTIAL JUSTICE SHOULD BE GIVEN PRIME IMPORTANC E . IN OUR OPINION, THE ASSESSEES APPLICATION FOR DELAY CONDONATION NEEDS A SYMPATHETIC CONSIDERATION, AS ALSO IT IS PLEADED BEFORE US THAT IN THE PRECEDING YEARS, ON THE IDENTICAL DISALLOWANCE, NO PENALTY IS LEVIED . HENCE, ON THE PRINCIPLES OF ADVANCING CAUSE OF JUSTICE, WE CONDON E THE DELAY FOR FILING THE APPEAL BEFORE THE CIT(A), PUNE AND ALLOW GROUND NO. 1. 6. GROUND NO. 2 IS ON THE MERIT. THE LD COUNSEL SU BMITS THAT MERELY BECAUSE THE LEGITIMATE CLAIM IS DISALLOWED THAT CAN NOT BE SUBJECTED TO THE PENAL CONSEQUENCES AS HELD IN THE CASE OF CIT VS. R ELIANCE PETRO PRODUCTS PVT. LTD., 322 ITR 158 (SC). HE SUBMITS THAT FOR T HE A.YS. 2001-02 AND 2002-03, THE PENALTY PROCEEDINGS INITIATED BY THE A .O U/S. 271(1)(C ) HAVE BEEN DROPPED. HE FURTHER PLEADS THAT ON MERIT , THERE IS NO JUSTIFICATION TO LEVY THE PENALTY AND THERE ALSO SH OULD BE CONSISTENCY IN THE STAND OF THE DEPARTMENT. WE FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL. WE FIND THAT THE ASSESSEES CASE NEEDS RE CONSIDERATION. WE, THEREFORE, SET ASIDE THE GROUND NO.2 TO THE FILE OF CIT(A), PUNE FOR FRESH CONSIDERATION AND ADJUDICATION. THE CIT(A) IS DIRE CTED TO CONSIDER WHETHER IN THE PRECEDING YEARS ON THE IDENTICAL DIS ALLOWANCES PENALTY PROCEEDINGS INITIATED BY THE A.O WERE DROPPED AND A LSO TO CONSIDER THE PLEA OF THE ASSESSEE THAT SAME IS BONAFIDE CLAIM WH ICH IS DISALLOWED, THAT CANNOT BE THE BASIS FOR LEVY OF THE PENALTY U/S. 27 1(1)(C ). NEEDLESS TO SAY, ASSESSEE SHOULD BE GIVEN OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUSTICE. 4 ITA NO. 06/PN/2011 JOG ENGINEERING LTD. A.Y. 2005-06 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 12TH SEPTEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- I, PUNE 4. THE CIT(A)-I, PUNE 5. THE D.R. A BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE
