DCIT 9(1), MUMBAI V. BADASAAB PROPERTIES P.LTD, MUMBAI

ITA 6178/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79501 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMBIT MISHRA
• Assessee Lawyers: V C SHAH
• Keywords: Rectification of order
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 6178/MUM/2012 ASSESSMENT YEAR: 2006-07 DCIT 9(1) R. NO. 223, AAYAKAR BHAVAN, MK ROAD MUMBAI 400 020 VS. M/S. BADSAAB PROPERTIES PVT. LTD. 2, KEVAL KAMAL, 28 TH ROAD, TPS III, BANDRA (W), MUMBAI 400 050 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :-AAACB 1642 A ASSESSEE BY : SHRI V.C. SHAH REVENUE BY : SHRI SAMBIT MISHRA DATE OF HEARING : 19.06.2014 DATE OF PRONOUNCEMENT : 30 . 07 .201 4 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-19, MUMBAI DATED 01.08.2012 DELETING THE PENALTY OF RS.9,67,350/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT FOR T HE ASSESSMENT YEAR 2006-07. 2. THE RELEVANT FACTS ARE THAT THE AO LEVIED THE IM PUGNED PENALTY ON ACCOUNT OF DISALLOWANCE OF MISCELLANEOUS EXPENSES OF RS.15,79, 029/- AND ADDITION MADE U/S 69C OF THE ACT OF RS.12,99,863/-. IN THE QUANTUM AP PEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE LD.CIT(A) HAD DIRECTED THE AO TO VER IFY THE CLAIM OF MISCELLANEOUS EXPENSES AND IF FOUND THAT THE CLAIM WAS LIMITED ON LY TO THE EXTENT TO 3,65,563/-, THE ASSESSEE IS ENTITLED TO THE RELIEF AS CLAIMED. FURTHER, ON THE ISSUE OF ADDITION U/S 69C, THE LD.CIT(A) DIRECTED THE ASSESSEE TO PROVIDE THE NECESSARY PARTICULARS AS REQUIRED BY THE AO TO SUBSTANTIATE THAT THE INVESTM ENT WAS MADE AND SUBJECT TO SUCH VERIFICATION, THE LD.CIT(A) DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE. IN SHORT, THE LD.CIT(A) SET ASIDE BOTH THE ISSUES T O THE FILE OF THE AO FOR VERIFICATION OF THE CLAIM MADE BY THE ASSESSEE AND TO PASS A CON SEQUENT ORDER AS TO THE CLAIM MADE BY THE ASSESSEE. IN THE APPEAL FILED AGAINST T HE PENALTY ORDER, THE LD.CIT(A) DELETED THE PENALTY ON THE REASON THAT PENALTY CANN OT BE LEVIED MECHANICALLY ONLY ITA NO. 6178/MUM/2012 M/S. BADSAAB PROPERTIES PVT. LTD. ASSESSMENT YEAR: 2006-07 2 BECAUSE SOME ADDITION HAS BEEN MADE IN THE ASSESSME NT ORDER. ACCORDING TO THE LD.CIT(A), THE AO HAD NOT EVEN GIVEN EFFECT TO THE ORDER OF THE LD.CIT(A) AND HENCE THE LEVY OF PENALTY BY THE AO IS BAD IN LAW AS WELL AS ON FACTS. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE LD.CIT(A) HAS DECIDED THE QUANTUM APPEAL VIDE ORDER DATED 22.02.2010. ON THE REASON THAT THERE HAVE BEE N MISTAKES IN THE SAID ORDER OF THE LD.CIT(A), THE ASSESSEE HAS FILED RECTIFICATION APPLICATION BEFORE THE LD.CIT(A) AND THE LD.CIT(A) HAS PASSED THE ORDER DATED 11.05. 2010. WHILE GIVING EFFECT TO THE ORDER OF THE LD.CIT(A), THE AO HAS PASSED AN ORDER ON 31.12.2010 WHEREIN THE EFFECT WAS GIVEN TO THE ORDER OF THE LD.CIT(A) BY T HE AO. HOWEVER, IT APPEARS THAT THE RECTIFICATION ORDER PASSED BY THE LD.CIT(A) DAT ED 11.05.2010 HAS NOT BEEN CONSIDERED BY THE AO. THE ASSESSEE HAS BROUGHT TO T HE NOTICE OF THE AO, BY WAY OF MISCELLANEOUS APPLICATION DATED 25.05.2011, THE FAC T OF NOT CONSIDERING THE RECTIFICATION ORDER PASSED BY THE LD.CIT(A) DATED 1 1.05.2010 WHILE GIVING TO THE ORDER OF THE LD.CIT(A). MEANWHILE, IT APPEARS THAT THE AO HAS PASSED THE PENALTY ORDER DATED 16.03.2011. THE PERUSAL OF THE QUANTUM ORDER OF THE LD.CIT(A) DATED 22.02.2010 AND THE CONSEQUENT RECTIFICATION ORDER P ASSED ON 11.05.2010 INDICATES THAT THE LD.CIT(A) HAS SET ASIDE THE ISSUE OF DISAL LOWANCE OF MISCELLANEOUS EXPENSES AND ADDITION U/S 69C TO THE FILE OF THE AO. SINCE T HE DISALLOWANCE/ADDITIONS ON WHICH THE PENALTY LEVIED HAVE BEEN SET ASIDE TO THE FILE OF THE AO, WE ARE OF THE CONSIDERED OPINION THAT IT IS JUST AND PROPER TO SET ASIDE THE ISSUE OF PENALTY ALSO TO THE FILE OF THE AO TO PASS A FRESH ORDER AFTER TAKING INTO ACCO UNT OF THE ORDER GIVING EFFECT TO THE DECISION OF THE LD.CIT(A). NEEDLESS TO EMPHASIS FURTHER THAT IN THE PROCESS, THE AO SHALL AFFORD REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. WE DIRECT AND ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JULY, 2014. SD/- SD/- (SANJAY ARORA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.07.2014. ITA NO. 6178/MUM/2012 M/S. BADSAAB PROPERTIES PVT. LTD. ASSESSMENT YEAR: 2006-07 3 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR B BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.