M/s. Dharampal Premchand Ltd., Delhi V. DCIT, New Delhi

ITA 6094/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2833 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 29-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 14A; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER & MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.-6093, 6094/DEL/2016 (A.Y. 2010-11, A.Y. 2011-12) DHARAMPAL PREMCHAND LTD. 4873, CHANDNI CHOWK NEW DELHI PAN : AAACD1952B APPELLANT VS DCIT CENTRAL CIRCLE-29 NEW DELHI RESPONDENT ASSESSEE BY SH. G.N.GUPTA, ADV. REVENUE BY MS. NIDHI SRIVASTAVA, CIT DR ORDER PER SUCHITRA KAMBLE, J.M. THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26.09.2016 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS)- 31, NEW DELHI. 2. GROUNDS OF APPEAL ARE AS UNDER : ITA NO. 6093/DEL/2016 (A.Y. 2010-11) 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -31, N EW DELHI (CIT (A) FOR SHORT) ERRED IN CONFIRMING THE PENALTY OF R S. 10,91,06,410/- IMPOSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, C ENTRAL CIRCLE - 29, NEW DELHI (AO FOR SHORT) U/S 271(1 )(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT FOR SHORT) WITHOUT APPRECIATING THAT I) THE PENALTY WAS IMPOSED BY THE AO WITHOUT APPLICATIO N OF MIND AS WOULD BE EVIDENT FROM PARAS 7 & 8 OF THE AO'S ORD ER U/S 271(L)(C) DATE OF HEARING 28.08.2019 DATE OF PRONOUNCEMENT 02.09.2019 2 ITA NO. 6093,6094/DEL/2016 (DHARAMPAL PREMCHAND LTD.) OF THE ACT, AND II) WITHOUT DEALING WITH THE SUBMISSIONS OF THE APPELLA NT DATED 26.11.2015 IN RESPONSE TO NOTICE DATED 17.11.2015 I SSUED BY THE AO ASKING THE APPELLANT TO SHOW CAUSE WHY PENALTY U /S 271(L)(C) OF THE ACT BE NOT IMPOSED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE P ENALTY OF RS. 10,91,06,410/- LEVIED UNDER THE PROVISIONS OF SECTI ON 271(L)(C) OF THE ACT. 3. THAT THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, VA RY OR AMENDANYGROUND OF APPEAL. ITANO.6094/DEL/2016 (A.Y.2011-12) 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 31, NEW DELHI (CIT (A) FOR SHORT) ERRED IN CONFIRMING THE PENALTY OF RS . 3,78,455/- IMPOSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, C ENTRAL CIRCLE - 29, NEW DELHI (AO FOR SHORT) U/S 271(L)(C) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT FOR SHORT) WITHOUT APPRECIATING THAT I) THE PENALTY WAS IMPOSED BY THE AO WITHOUT APPLICATIO N OF MIND AS WOULD BE EVIDENT FROM PARAS 6 &7 OF THE AO'S ORD ER U/S 271(L)(C) OF THE ACT, AND II) WITHOUT DEALING WITH THE SUBMISSIONS OF THE APPELLA NT DATED 26.11.2015 IN RESPONSE TO NOTICE DATED 17.11.2015 I SSUED BY THE AO ASKING THE APPELLANT TO SHOW CAUSE WHY PENALTY U /S 271(L)(C) OF THE ACT BE NOT IMPOSED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE P ENALTY OF RS. 3,78,455/- LEVIED UNDER THE PROVISIONS OF SECTION 2 71(L)(C) OF THE ACT. THAT THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, VA RY OR AMEND ANY GROUND OF APPEAL. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFAC TURING OF FLAVOURED CHEWING TOBACCO AND KIWAM UNDER THE BRAND NAME BABA. THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 16.01.2012 SHOWING A TOTAL LOSS OF RS. ( -) 40,84,49,906/- AND FOR THE ASSESSMENT YEAR 2011-12 WAS FILED ON 30 .09.2011 SHOWING THE TOTAL LOSS OF RS. (-) 5,07,06,954/-. TH ESE CASES WERE SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) OF THE ACT WERE ISSUED AND SERVED. FOR THE ASSESSMENT YEAR 2011-12, ASSESS MENT WAS 3 ITA NO. 6093,6094/DEL/2016 (DHARAMPAL PREMCHAND LTD.) COMPLETED U/S 143(3) VIDE ORDER DATED 28.03.2013 AT A LOSS OF RS. (-) 5,07,06,954/- MAKING AN ADDITION OF RS. 12,24,775/- ON THE COUNT OF DISALLOWANCE U/S 14A OF THE ACT. FOR THE ASSESSMENT YEAR 2010-11 THE ASSESSING OFFICER PASSED ORDER DATED 28.03.2013 DETERMINING A LOSS OF RS. (-) 8,65,32,934/- THEREBY MAKING AN ADD ITION OF RS. 31,96,23,143/- ON ACCOUNT OF DISALLOWANCES OF DEPRE CIATION AND THAT OF RS. 13,72,475/- U/S 14A. 4. THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED IN RESPECT OF THE ABOVE SAID ADDITIONS. THE SAID PR OCEEDINGS WERE COMPLETED AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND AFTER CONSIDERING ITS SUBMISSION, THE PENALTY ORDERS WERE PASSED ON 04.03.2016 LEVYING A PENALTY OF RS. 10,91,04,410/- AND THAT OF RS. 3,78,455/- FOR THE ASSESSMENT YEARS 2010-11 AND 201 1-12 RESPECTIVELY. 5. BEING AGGRIEVED BY THE ASSESSMENT ORDERS THE ASS ESSEE FILED APPEALS BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE. 6. THE LD. AR SUBMITTED THAT IN THE QUANTUM APPEAL FOR ASSESSMENT YEAR 2010-11 THE ADDITIONS WERE DELETED BY THE TRIBUNAL VIDE ORDER DATED 30.11.2017 BEING ITA NOS. 259/DEL/ 2015 AND 260/DEL/2015. AS REGARDS ASSESSMENT YEAR 2011-12 BY THE SAID ORDER PASSED BY THE TRIBUNAL ADDITION IN RESPECT OF DEPRE CIATION HAS BEEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER AND SECOND ADDITIONS RELATING TO 14A WAS ALLOWED IN FAVOUR OF THE ASSESSEE. SINCE THE QUANTUM APPEAL HAS DECIDED THE VERY EFFECT OF T HE PENALTY, THEREFORE, THE PENALTY DOES NOT SUSTAIN HENCE, BOTH THE APPEALS FILED BY THE ASSESSEE BE ALLOWED. 7. THE LD. DR RELIED UPON THE ASSESSMENT ORDER, PEN ALTY ORDER AND THE ORDER OF THE CIT(A). 4 ITA NO. 6093,6094/DEL/2016 (DHARAMPAL PREMCHAND LTD.) 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NO TE THAT THE QUANTUM APPEALS IN BOTH THE ASSESSMENT YEARS HAVE BEEN DECI DED BY THE TRIBUNAL AND ONE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. SINCE THE VERY BASIS OF THE PENALTY HAS BE EN ALLOWED IN FAVOUR OF THE ASSESSEE AND SET ASIDE BY THE TRIBUNAL, THES E TWO APPEALS DO NOT SURVIVE. HENCE, BOTH THE APPEALS OF THE ASSESSE E ARE ALLOWED. 9. IN RESULT, THE BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 02 ND DAY OF SEPTEMBER, 2019. SD/- SD/- (R.K.PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 02.09.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI