KEYSTONE REALTORS P.LTD, MUMBAI V. ASST CIT CEN CIR 10, MUMBAI

ITA 6194/MUM/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5599 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2002-2003
• Appeal Filed On: 22-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NIGSHEN
• Keywords: Competent authority; Revised return; Reassessment proceedings
• Section: 143(3); 115JB; 80IB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6194/MUM/2013, (A.Y. 2002-03) ITA NO.6195/MUM/2013, (A.Y. 2003-04) ITA NO.6196/MUM/2013, (A.Y. 2007-08) ITA NO.6201/MUM/2013, (A.Y. 2004-05) KEYSTONE REALTORS PVT. LTD. 702, NATRAJ, M.V.ROAD JUNCTION, WESTERN EXPRESS HIGHWAY, ANDHERI(EAST), MUMBAI 400 099 PAN: AAACK 2499Q ...... APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE -10, AAYKAR BHAVAN,M.K.ROAD, MUMBAI-400 020 ..... RESPONDENT APPELLANT BY : SHRI YOGESH JOIJODE RESPONDENT BY : SHRI M.C.OMI NIGSHEN DATE OF HEARING : 04/07/2018 DATE OF PRONOUNCEMENT : 31/07/2018 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEALS FILED BY THE ASSESSEE PER TAINING TO ASSESSMENT YEARS 2002-03,2003-04, 2007-08 & 2004-0 5 ARE DIRECTED AGAINST A COMMON ORDER PASSED BY CIT(A)-37, MUMBAI DATED 25/07/2013 WHICH IN TURN ARISE OUT OF PENALTY ORDERS PASSED BY THE ASSESSING OFFICER 2 ITA NO.6194/MUM/2013, (A.Y. 2002-03) ITA NO.6195/MUM/2013, (A.Y. 2003-04) ITA NO.6196/MUM/2013, (A.Y. 2007-08) ITA NO.6201/MUM/2013, (A.Y. 2004-05) UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 20/03/2012. 2. THE ISSUE INVOLVED IN THESE APPEALS ARE IDENTICA L, EXCEPT DIFFERENCE IN FIGURES, THEREFORE, THEY HAVE BEEN HEARD TOGETHE R AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE A ND BREVITY. SINCE THE ISSUE INVOLVED IS IDENTICAL, ITA NO.6194/MUM/2013 P ERTAINING TO ASSESSMENT YEAR 2002-03 IS TAKEN AS THE LEAD CASE. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL READ AS UNDER:- THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) (HEREINAFTER REFERRED AS 'CIT (A)') HAS ERRED IN CONFIRMING THE ORDER OF LEA RNED ASSESSING OFFICER (HEREINAFTER REFERRED AS 'A.O.') LEVYING PENALTY OF RS.1,55,36,210/- U/S 271(1)(C) OF INCOME TAX ACT, 1961. IT IS SUBMITTED THAT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3), DEDUCTION U/S 80 IB(10) WAS ALLOWED TO THE APPELLANT HOWEVER, IN THE REASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 147, CLAIM OF DEDUCTION U/S 80IB (10) WAS REJECTED. IN VIEW OF THE ABOVE, THE DEDUCTION CLAIMED OF RS. 3,54,25,711/- WAS NOT ALLOWED. WITHOUT PREJUDICE, CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF AO IN LEVYING PENALTY OF RS.1,55,36,210/- BASED ON DIFFERENCE IN TAX LIABILITY AS PER ORIGINAL ASSESSMENT OF RS.33,01,871/- AS WELL AS IN TAX LIAB ILITY AS PER REASSESSMENT OF RS.1,88,38,081/-. IT IS SUBMITTED THAT SAID CALCULA TION OF PENALTY IS NOT IN ACCORDANCE WITH BASIC PRINCIPLES OF LAW. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT PENALTY LEVIED IN THESE CASE IS UNWARRANTED AND THE SAME SHOULD BE DELETED. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF BUILDERS AND DEVELOPERS FOR THE PAST SEVERAL YEARS. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR THE ASSESSMENT YEAR 2 002-03 ON 31/10/2002 DECLARING A TOTAL INCOME OF NIL. THEREAFTER ON 3 1/03/2003 ASSESSEE FILED REVISED RETURN DECLARING INCOME OF RS.3,81,265/-. THE RETURN WAS PROCESSED AT THE DECLARED INCOME AND ASSESSMENT UND ER SECTION 143(3) 3 ITA NO.6194/MUM/2013, (A.Y. 2002-03) ITA NO.6195/MUM/2013, (A.Y. 2003-04) ITA NO.6196/MUM/2013, (A.Y. 2007-08) ITA NO.6201/MUM/2013, (A.Y. 2004-05) WAS COMPLETED AT RS.3,91,266/- ON 31/03/2005. THE B OOK PROFIT WAS DETERMINED UNDER SECTION 115JB AT RS.3,58,06,980/-. THEREAFTER, IT WAS NOTICED THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(1 0) OF THE ACT FOR THE ELIGIBLE PROJECTS AND ALSO FOR SOME PROJECTS WHICH WERE NOT ELIGIBLE FOR THE SAME. THE ORIGINAL ASSESSMENT UNDER SECTION 143(3 ) OF THE ACT WAS COMPLETED AND THE DEDUCTION WAS ALLOWED. HOWEVER, SUBSEQUENTLY IT WAS NOTICED BY THE SUBSEQUENT ASSESSING OFFICER THAT TH E COMMENCEMENT CERTIFICATES ISSUED BY THE COMPETENT AUTHORITY (I.E . B.M.C) FOR SOME OF THE PROJECTS INCLUDED IN THE ASSESSEES ORIGINAL CLAIM OF DEDUCTION UNDER SECTION 80B WERE PRIOR TO 01/10/98. THUS, THESE PR OJECTS WERE INELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT HAV ING COMMENCED PRIOR TO 01/10/98. THE ASSESSING OFFICER ISSUED NOTICE U NDER SECTION 147 OF THE ACT AND THE ASSESSMENT WAS COMPLETED BY DISALLOWING THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT FOR THE PROJECTS WHICH COMMENCED PRIOR TO 01/10/1998 AND A PENALTY OF RS.1 ,55,36,210/-WAS IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT(A), WHO UPHELD THE ORDER O F THE ASSESSING OFFICER IMPOSING PENALTY UNDER SECTION 271(1)(C) OF THE ACT . BEING AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS IN APPEAL BEFORE T HE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEES APPEAL IN QUANTUM A SSESSMENT PROCEEDINGS HAS BEEN ALLOWED BY THE TRIBUNAL VIDE ITS ORDER IN ITA NOS. 5527/MUM/2010 TO 5531/MUM/2010 DATED 11/08/2017 FO R ASSESSMENT YEARS 2002-03 TO 2004-05 AND 2006-07 TO 2007-08, C OPY OF WHICH IS 4 ITA NO.6194/MUM/2013, (A.Y. 2002-03) ITA NO.6195/MUM/2013, (A.Y. 2003-04) ITA NO.6196/MUM/2013, (A.Y. 2007-08) ITA NO.6201/MUM/2013, (A.Y. 2004-05) PLACED ON RECORD. IN VIEW OF THE ABOVE, THE LD. R EPRESENTATIVE FOR THE ASSESSEE PLEADED THAT THE ADDITIONS ON THE BASIS O F WHICH THE PENALTY HAS BEEN LEVIED UNDER SECTION 271(1)(C) DO NOT SURVIVE . 5. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT OPP OSE THE FACTUAL MATRIX BROUGHT OUT BY THE LEARNED REPRESENTATIVE FO R THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. PERTINENTL Y, FOR ALL THE CAPTIONED YEARS, THE PENALTY U/S.271(1)(C) OF THE A CT HAS BEEN LEVIED ON ACCOUNT OF DENIAL OF DEDEUCTION CLAIMED BY THE ASSE SSEE U/S 80 IB(10) OF THE ACT. SO FAR AS THE DENIAL OF DEDUCTION FOR ASS ESSMENT YEARS 2002- 03,2003-04 AND 2004-05 ARE CONCERNED, IT HAS BEEN D ONE IN THE RESPECTIVE ASSESSMENTS FINALIZED BY INVOKING SECTION 147/148 O F THE ACT, AND FOR ASSESSMENT YEAR 2007-08, THE DENIAL OF DEDUCTION IS IN AN ASSESSMENT FINALIZED U/S.143(3) OF THE ACT. IN THE QUANTUM PR OCEEDINGS THE TRIBUNAL VIDE ITS ORDER DATED 11/08/2017(SUPRA) HAS SET-ASID E THE INVOKING OF SECTION 147/148 OF THE ACT AS WELL AS ALLOWED THE C LAIM OF THE ASSESSEE ON MERITS TOO FOR ASSESSMENT YEARS 2002-03, 2003-04 AN D 2004-05; AND, FOR ASSESSMENT YEAR 2007-08, THE TRIBUNAL ALLOWED ASSES SEES CLAIM FOR DEDUCTION U/S. 80 IB(10) OF THE ACT IN ITS ORDER DA TED 11/08/2017(SUPRA). THUS, IN NUT-SHELL, THE PROCEEDINGS ON THE BASIS O F WHICH THE IMPUGNED PENALTY PROCEEDINGS HAVE BEEN INITIATED DO NOT SUR VIVE AS THE SAME HAVE BEEN SET-ASIDE BY THE TRIBUNAL VIDE ITS ORDER IN IT A NOS. 5527/MUM/2010 TO 5531/MUM/2010 DATED 11/08/2017 FOR ASSESSMENT Y EARS 2002-03 TO 2004-05 AND 2007-08. IN VIEW OF THE ABOVE, THE P ENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN THE IMPUGNED PR OCEEDINGS DO NOT SURVIVE 5 ITA NO.6194/MUM/2013, (A.Y. 2002-03) ITA NO.6195/MUM/2013, (A.Y. 2003-04) ITA NO.6196/MUM/2013, (A.Y. 2007-08) ITA NO.6201/MUM/2013, (A.Y. 2004-05) AND, THEREFORE, WE SET-ASIDE THE ORDER OF THE CIT(A ), AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. 7. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT T HE FACTS AND CIRCUMSTANCES IN OTHER APPEALS ARE PARI-MATERIA TO THOSE CONSIDERED BY US IN ITA NO. 6194/MUM/2013 FOR ASSESSMENT YEAR 20 02-03, IN THE EARLIER PARAGRAPHS; THUS, OUR DECISION THEREIN SHAL L APPLY MUTATIS MUTANDIS IN ITA NO.6195/MUM/2013,(A.Y. 2003-04), ITA NO.6196 /MUM/2013 (A.Y.2007-08) AND ITA NO.6201/MUM/2013 (A.Y.2004-05 ) ALSO. 8 IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE AR E ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2018 . SD/- SD/- (PAWAN SINGH ) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31/07/2018 VM , SR. PS 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