SAATHI BUILDERS P.LTD, MUMBAI V. ITO 9(3)(1), MUMBAI

ITA 6380/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9982 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Business income; Rectification of order; Question of law
• Section: 143(3); 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI P.K. BANSAL, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6380/MUM/2014 (ASSESSMENT YEAR- 2006-07) M/S SAATHI BUILDERS PVT. LTD. 15, 1 ST FLOOR, GOPAL BHAUVAN BLDG, KAKASAHEB GADGIL MARG, PRABHADEVI, MUMBAI-400023 PAN: AADCS0341J VS. ITO-9(3)(1), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI V. JUSTIN (DR) DATE OF HEARING : 03.08.2017 DATE OF PRONOUNCEMENT : 30.08.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-20, MUMBAI DATED 30.07.2014 FOR THE AY 2006-07. THOUGH, THE ASSESSEE HAS RAISED AS MANY AS THREE GROUNDS OF APPEAL. HOWEVER, AS PER OUR CONSIDERED VIEW, THE ONLY SUBST ANTIAL GROUND OF APPEAL IS WHETHER THE LD. CIT(A) ERRED IN CONFIRMING THE ORDE R U/S 154 OF THE ACT PASSED BY ASSESSING OFFICER (AO) IN ENHANCING THE PENALTY UND ER SECTION 271(1)(C) OF THE ACT FROM RS. 10,93,500/- TO RS.51,87,887/-. REST O F THE GROUND OF APPEAL ARE NARRATION OF FACT OR ARGUMENTATIVE IN NATURE. ITA NO.6380/M/201 4- M/S SAATHI BUILDERS PVT. LTD. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 20.11.2006 DECLARING TOTAL INCOME OF RS. NIL. BOOK PROFIT U/S 115JB WERE COMPUTED AT RS. 39,10,250/- AND MINIMUM ALTERNATIVE TAX(MAT) OF RS. 2,93,270/- @ 7.5% WAS PAID. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 25.11.2008. THE AO DISALLOWED CARRY FORWARD LONG TE RM CAPITAL LOSS (LTCL) AND COMPUTED BUSINESS INCOME OF ASSESSEE AT RS. 48, 22,230/-. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS CONFIRMED. CONSEQU ENTLY, THE AO ISSUED A NOTICE FOR LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. A FTER GIVING OPPORTUNITY TO THE ASSESSEE, THE AO LEVIED THE PENALTY OF RS. 10,93,32 9/- BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED VIDE ORDER DATED 28.03.2 011. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF THE AO WAS CONFIRMED AND ON F URTHER APPEAL BEFORE THE TRIBUNAL, THE PENALTY ORDER WAS UPHELD VIDE ORDER D ATED 23.10.2013. THE AO THEREAFTER ISSUED A NOTICE U/S 154 DATED 05.12.2012 . THE AO RECTIFIED THE PENALTY ORDER PASSED U/S 271(1)(C) OF RS. 10,93,500/- TO RS . 62,81,387/- IN ITS ORDER DATED 03.02.2014. THE ASSESSEE AGAIN FILED APPEAL BEFORE THE LD. CIT(A) WHEREIN THE ACTION OF AO U/S 154 FOR REVISING PENALTY TO RS. 62 ,81,387/- WAS UPHELD. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE P RESENT APPEAL IS FILED BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE REPEATE D CALL ON 03.08.2017. WE LEFT NO OPTION EXCEPT TO HEAR THE LD. DEPARTMENTAL REPRE SENTATIVE (DR) FOR THE REVENUE AND TO DECIDE THE APPEAL ON THE BASIS OF MA TERIAL AVAILABLE ON RECORD. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHO RITIES BELOW. THE LD. DR FOR THE REVENUE ARGUED THAT THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE WAS CONSIDERED OF RS. 42,72,231/- ONLY AND COMPUTED THE TAX @ 20% INSTEAD OF ITA NO.6380/M/201 4- M/S SAATHI BUILDERS PVT. LTD. 3 APPLICABLE RATE OF 30% WHICH WAS INCORRECT ACCORDIN G TO CLAUSE-A TO THE EXPLANATION-4 TO SECTION 271(1)(C) AND CONSIDERING THE ASSESSED INCOME AT RS. 49,06,003/- AS PER RECTIFICATION ORDER DATED 20.11. 2012, THE TOTAL TAX SOUGHT TO BE EVADED IS RS. 62,81,387/-. THE MISTAKE WAS APPARENT FROM THE RECORD AND WAS RECTIFIED BY THE AO ACCORDINGLY. THE AO PASSED THE RECTIFICATION ORDER AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR APPRECIATION OF T HE FACT AND THE CONTROVERSY, WE MAY REFER THE PROVISIONS OF SECTION 154 OF THE ACT WHICH MAY BE READ AS UNDER: 154. RECTIFICATION OF MISTAKE (1) WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD AN INCOME-TAX AUTHORITY REFERRED TO IN SECTION 116 MAY, ( A ) AMEND ANY ORDER PASSED BY IT UNDER THE PROVISIONS OF THIS ACT; ( B ) AMEND ANY INTIMATION OR DEEMED INTIMATION UNDER S UB-SECTION (1) OF SECTION 143.] ( C ) AMEND ANY INTIMATION UNDER SUB-SECTION (1) OF SEC TION 200A. ( D ) AMEND ANY INTIMATION UNDER SUB-SECTION (1) OF SEC TION 206CB. (1A) WHERE ANY MATTER HAS BEEN CONSIDERED AND DECID ED IN ANY PROCEEDING BY WAY OF APPEAL OR REVISION RELATING TO AN ORDER REFERRED TO IN SUB-SECTION (1), THE AUTHORITY PASSING SUCH ORDER MAY, NOTWITHSTANDING ANYTHING CO NTAINED IN ANY LAW FOR THE TIME BEING IN FORCE, AMEND THE ORDER UNDER THAT SUB-SECT ION IN RELATION TO ANY MATTER OTHER THAN THE MATTER WHICH HAS BEEN SO CONSIDERED AND DE CIDED. (2) SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION , THE AUTHORITY CONCERNED ( A ) MAY MAKE AN AMENDMENT UNDER SUB-SECTION (1) OF IT S OWN MOTION, AND ( B ) SHALL MAKE SUCH AMENDMENT FOR RECTIFYING ANY SUCH MISTAKE WHICH HAS BEEN BROUGHT TO ITS NOTICE BY THE ASSESSEE, [OR BY THE DEDUCTOR] [OR BY THE COLLECTOR], AND WHERE THE AUTHORITY CONCERNED IS THE [COMMISSIONER (APPEALS)] , BY THE [ASSESSING] OFFICER ALSO. [ PROVISO OMITTED BY THE FINANCE ACT, 1994, W.E.F. 1- 6-1994 . IT WAS INSERTED BY THE FINANCE ACT,1992, W.E.F. 14-5-1992 .] (3) AN AMENDMENT, WHICH HAS THE EFFECT OF ENHANCING AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SECTION UNLESS THE AUTHORITY CONCERNED HAS GIVEN NO TICE TO THE ASSESSEE OF ITS INTENTION SO TO DO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD. (4) WHERE AN AMENDMENT IS MADE UNDER THIS SECTION, AN ORDER SHALL BE PASSED IN WRITING BY THE INCOME-TAX AUTHORITY CONCERNED. (5) WHERE ANY SUCH AMENDMENT HAS THE EFFECT OF REDU CING THE ASSESSMENT OR OTHERWISE REDUCING THE LIABILITY OF THE ASSESSEE OR THE DEDUC TOR [FOR THE COLLECTOR], THE ASSESSING ITA NO.6380/M/201 4- M/S SAATHI BUILDERS PVT. LTD. 4 OFFICER SHALL MADE ANY REFUND WHICH MAY BE DUE TO S UCH ASSESSEE OR THE DEDUCTOR [OR THE COLLECTOR] (6) WHERE ANY SUCH AMENDMENT HAS THE EFFECT OF ENHA NCING THE ASSESSMENT OR REDUCING A REFUND ALREADY MADE, THE [ASSESSING] OFFICER SHAL L SERVE ON THE ASSESSEE A NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM PA YABLE, AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE ISSUED UNDER SECTION 156 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. (7) SAVE AS OTHERWISE PROVIDED IN SECTION 155 OR SU B-SECTION (4) OF SECTION 186, NO AMENDMENT UNDER THIS SECTION SHALL BE MADE AFTER TH E EXPIRY OF FOUR YEARS [FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE AMENDED WAS PASSED. (8) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (7), WHERE AN APPLICATION FOR AMENDMENT UNDER THIS SECTION IS MADE BY THE ASSESSE E ON OR AFTER THE 1ST DAY OF JUNE, 2001 TO AN INCOME-TAX AUTHORITY REFERRED TO IN SUB- SECTION (1), THE AUTHORITY SHALL PASS AN ORDER, WITHIN A PERIOD OF SIX MONTHS FROM THE END O F THE MONTH IN WHICH THE APPLICATION IS RECEIVED BY IT, ( A ) MAKING THE AMENDMENT; OR ( B ) REFUSING TO ALLOW THE CLAIM. 5. A CAREFUL READING OF SECTION 154 MAKES IT ABUNDANTL Y CLEAR THAT MATTER WHICH CONSIDERED OR DECIDED BY APPELLATE AUTHORITY CANNOT BE RE-OPENED OR RECTIFIED. IT IS NOT IN DISPUTE THAT AGAINST THE DISALLOWANCE OF CAR RY FORWARD LOSS, ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AS WELL AS BEFORE THE TRIBUNAL. THE PENALTY ORDER DATED 28.03.2011 WAS SUBJECT MATTER OF APPEAL BEFOR E THE LD. CIT(A) AND AGAINST BEFORE THE TRIBUNAL. THE HONBLE GAUHATI HIGH COURT IN CASE OF P. DAS AND COMPANY VS. DCIT [1996] 217 ITR 29 (GAU) HELD THAT AO HAD IMPOSED THE PENALTY ON THE ASSESSEE AND ASSESSEE HAD GONE ON AP PEAL BEFORE THE APPELLATE AUTHORITY AND THE APPELLATE AUTHORITY HAD CONSIDERE D ALL ASPECT OF THE MATTER OR HAD TO BE TAKEN TO HAVE CONSIDERED ALL ASPECT OF THE MA TTER AND FOUND THAT PENALTY WAS RIGHTLY AND CORRECTLY IMPOSED, IT WAS NO LONGER OPE N FOR THE ASSESSING AUTHORITY TO PASS AN ORDER FOR RECTIFICATION. THE ORDER OF RE CTIFICATION WAS NOT VALID. 6. WE HAVE FURTHER NOTICED THAT HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES APPEAL IN ITA NO. 1180 OF 2014 VIDE ORDER DATED 28. 06.2017 HAD ADMITTED THE ITA NO.6380/M/201 4- M/S SAATHI BUILDERS PVT. LTD. 5 SUBSTANTIAL QUESTION OF LAW RELATING TO THE UPHOLDI NG THE LEVY OF PENALTY BY TRIBUNAL VIDE ORDER DATED 28.06.2011. THUS, IN ORDE R CONSIDERED OPINION, THE QUESTION IS DEBATABLE AND THE AO HAS NO POWER TO RE CTIFY THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE OBSE RVATIONS, THE GROUND OF APPEAL RAISED BY ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF AUGUST 2017. SD/- SD/- (P.K. BANSAL) (PAWAN SINGH) VICE-PRESIDENT JUDICIAL MEMBER MUMBAI; DATED 29/08/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/