MADHUR PLASTICS P. LTD, MUMBAI V. ITO WD 9(2)(3), MUMBAI

ITA 6384/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79512 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Keywords: Period of limitation; Condonation of delay
• Section: 115JB

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. 6384/MUM/2011 ASSESSMENT YEAR: 2007-08 M/S. MADHUR PLASTICS PVT. LTD. 703,7 TH FLOOR, KINGSTONE PALACE, CHINCHOLI, BUNDER ROAD, MALAD (W), MUMBAI 400 064 VS. ITO WARD-9(2)(3) MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :-AADCM 9815 H ASSESSEE BY : SHRI VISHWAS MEHENDALE REVENUE BY : SHRI PITAMBAR DAS DATE OF HEARING : 10.06.2014 DATE OF PRONOUNCEMENT : 30.07.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-20, MUMBAI DATED 10.03.2011 CONFIRMING TH E PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2007-08. 2. AT THE OUTSET, IT IS OBSERVED THAT THERE IS A D ELAY OF 114 DAYS IN FILING THE APPEAL. IN THIS CONNECTION, THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY IN THE SHAPE OF AN AFFIDAVIT SWORN BY THE DIRECTOR SHRI MEGHJI MAVJI JOISHER, EXPLAINING THE REASONS FOR NOT FILING THE APPEAL WI THIN THE TIME PERIOD OF LIMITATION. THE RELEVANT PORTION OF THE AFFIDAVIT IS EXTRACTED HEREUNDER: THAT, FOR ASSESSMENT YEAR 2007-08, THE COMPANY HAD RECEIVED AN ORDER DATED 29.06.2010 PASSED BY ITO-9(2)(3), MUMBAI FOR LEVYING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) A ND THAT THE COMPANY HAD FILED AN APPEAL NO. CIT(A)20/9(2)(3)/I.T. 104/2010- 11 BEFORE HON. CIT-20, MUMBAI (THE HON. CIT-A) AGAINST THE SAID PENALTY ORDER. THAT, HON. CIT-A DISMISSED THE COMPANYS APPEAL VID E HIS APPELLATE ORDER DATED 10.03.2011 WHICH WAS RECEIVED BY THE COMPANY ON 26.03.2011 AND THAT, AS PER THE PROCEDURES FOLLOWED IN THE COMPANY , THE SAID ORDER WAS KEPT FOR MY ATTENTION AND NECESSARY ACTION BY THE COMPAN YS OFFICE STAFF. ITA NO. 6384/MUM/2011 M/S. MADHUR PLASTICS PVT. LTD ASSESSMENT YEAR: 2007-08 2 THAT, AROUND THE SAME PERIOD, I WAS GETTING FREQUEN T STOMACH DISORDER AND WEAKNESS. THEREFORE, DR. RAJESH G. BHANUSHALI HAD A DVISED ME TO TAKE PROPER CARE AND BED REST FOR SOME PERIOD. THEREAFTE R, AS I WAS NOT GETTING CURED, I CONSULTED ANOTHER DOCTOR MR. P.D. TRIPATHI , WHO ASKED ME TO DO BLOOD TEST AS HE HAD DOUBTS ABOUT THE SYMPTOMS OF J AUNDICE. THAT, MY BLOOD TEST WAS DONE AROUND 10.04.2011 AND IT FOUND THAT I WAS SUFFERING FROM HEPATITIS B. THAT, DUE TO MY ADVANCED AGE, WEAKNESS AND HEPATITI S B, MY DOCTOR ASKED ME TO TAKE VERY STRICT BED REST TILL THE SGPT AND S GOT IN MY BLOOD CAME DOWN TO NORMAL LEVEL. THAT, EVEN AFTER 13005.2011, WHEN I UNDERWENT ANOTH ER BLOOD TEST, THE SGPT/SGOT LEVEL HAD NOT COME DOWN AND THEREFORE, ON CE AGAIN MY REST PERIOD GOT FURTHER EXTENDED. THAT, IT WAS ONLY ON 10.09.2011, MY BLOOD REPORT CA ME OUT CLEAN AND I WAS OUT OF DANGER. THAT, IN THE AFORESAID CIRCUMSTANCES, I WAS UNABLE TO ATTEND TO THE COMPANY OFFICE AND AS A CONSEQUENCE, HUGE PAPERWORK GOT PIL ED UP IN MY OFFICE AND INADVERTENTLY, I COULD NO TAKE ANY ACTION IN RESPEC T OF THE AFORESAID APPELLATE ORDER OF HON. CIT-A. THAT, AFTER I STARTED ATTENDING TO THE OFFICE WORK, OUR CHARTERED ACCOUNTANTS REMINDED ME ABOUT THE APPEAL TO BE FILED AGAINST TH E SAID APPELLATE ORDER BY HON. CIT-A AND HENCE, THE SAME WAS FILED ON 16.09.2 011, WHICH IS DELAYED BY ABOUT 114 DAYS. THAT, THE AFORESAID LAPSE ON MY PART WAS BEYOND MY CONTROL AND WAS INADVERTENT AND I HAVE TO TENDER SINCERE APOLOGIES FOR THE SAME. I REQUEST THE HON. MEMBERS OF THE INCOME TAX APPELLATE TRIBUN AL, MUMBAI TO TAKE A LENIENT VIEW AND ADMIT THE COMPANIES SECOND APPEAL AND OBLIGE ME AND THE COMPANY. THAT, I SAY AND SUBMIT THAT, WHATEVER STATED ABOVE ARE THE TRUE AND CORRECT STATE OF FACTS AND I HEREBY ATTACH THE CERTIFICATE FROM MY FAMILY PHYSICIAN, DR. P.LD. TRIPATHI AND ALSO THE BLOOD TEST REPORTS IN SUPPORT THEREOF. (ATTACH THE DOCTORS CERTIFICATE WHICH COVERS THE PERIOD UP TO 10.09.2011 AND BLOOD TEST REPORTS OF 10.04.2011, 13.05.2011 AND 10.09.20 11.) IN VIEW OF THE SAID REASONS, THE LD.AR HAS PRAYED T HAT THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL MAY BE CONDONED. ON THE OTHER H AND, LD.DR HAS VEHEMENTLY OPPOSED THE CONDONATION OF DELAY. 2.1 AFTER CONSIDERING THE RELEVANT RECORD, FACTS AN D CIRCUMSTANCES OF THE CASE AS WELL AS THE REASONS EXPLAINED BY THE ASSESSEE, WE F IND THAT THE ASSESSEE HAS EXPLAINED SUFFICIENT REASONS FOR NOT FILING THE APP EAL WITHIN TIME. IT IS A SETTLED LAW THAT WHILE CONDONING THE DELAY THE COURT SHOULD TAK E A LENIENT VIEW. IT IS ALWAYS A QUESTION WHETHER THE EXPLANATION AND REASONS FOR DE LAY IS BONA FIDE OR MERELY A DEVISE TO COVER AN ULTERIOR PURPOSE SUCH AS LACHES ON THE PART OF THE LITIGANT OR AN ITA NO. 6384/MUM/2011 M/S. MADHUR PLASTICS PVT. LTD ASSESSMENT YEAR: 2007-08 3 ATTEMPT TO SAVE LIMITATION IN UNDER HAND WAY. WHEN IT IS FOUND ON RECORD THAT THE PARTY HAS NOT ACTED MALAFIDE BUT THE REASON EXPLAIN ED ARE FACTUALLY CORRECT, THEN THE COURT SHOULD BE LIBERAL IN CONSTRUING THE SUFFICIEN T CAUSE AND LEAN IN FAVOUR OF SUCH PARTY. WHENEVER SUBSTANTIAL JUSTICE AND TECHNICAL C ONSIDERATION ARE OPPOSED TO EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE HAS TO BE PREFE RRED AND JUSTICE ORIENTED APPROACH HAS TO BE TAKEN BY THE COURT WHILE DECIDING THE MAT TER FOR CONDONATION OF DELAY. IN VIEW OF THIS LEGAL AND FACTUAL POSITION, WE CONDONE THE DELAY IN FILING THE APPEAL BEFORE US AND TAKE UP THE MATTER FOR ADJUDICATION O N MERITS. 3. ON MERITS, THE SUBJECT MATTER OF PENALTY WAS A S UM OF RS.11,95,362/- COMPUTED AS BOOK PROFITS U/S 115JB WHICH HAD NOT BE EN OFFERED TO TAX IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE AO INITIATED T HE PENALTY PROCEEDINGS U/S 271(1)(C) ON THE REASON THAT THE ASSESSEE HAD CONCE ALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME TO THE TUNE OF RS. 11,95,362/- WHICH REPRESENTED THE BOOK PROFIT AND LEVIED A MINIMUM PENALTY OF RS.4,02 ,359/- BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE. ON APPEAL, THE LD.CIT(A) CONFIRMED THE LEVY OF PENALTY BY UPHOLDING THE REASON OF THE AO THAT T HE ASSESSEES FAILURE TO DECLARE THE BOOK PROFIT IN THE RETURN OF INCOME AMOUNTED TO CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICULARS OF INCOME. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 3.1 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE ASSESSEE COMPANY HAS SHOWN A GROSS TOTAL INCOME OF RS.11,95,362/- AND AFTER CLAIMING THE DEDUCTION OF THE SAME U/S 80IB, IT HAS SHOWN TOTAL INCOME OF NIL. HOWEVER, THE ASSESSEE COMPANY HAS NOT OFFERED THE BOOK PROFIT U/S 115JB OF THE ACT. IN THE ASSESSMENT FRAMED, THE ASSESSEE EXPRESSED ITS NO OBJECTION TO TAX THE PROFITS U/S 115JB, AS THE SUM REMAINED TO BE OFFERED FOR TAXATION INADVERTENTLY. ACCORDINGLY, BOOK PROFITS H AS BEEN ASSESSED AT RS.11,95,362/-. THE PERUSAL OF THE ASSESSMENT ORDER AND THE RELEVANT RECORDS SUGGESTS THAT IN THE ORIGINAL RETURN OF INCOME, THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME OR CONCEALED THE I NCOME EXCEPT THE FAILURE OF THE ASSESSEE TO OFFER THE BOOK PROFIT CALCULATED U/S 11 5JB. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS EXPLAINED THAT THERE IS A MISTAKE IN NOT OFFERING THE ITA NO. 6384/MUM/2011 M/S. MADHUR PLASTICS PVT. LTD ASSESSMENT YEAR: 2007-08 4 BOOK PROFITS FOR TAXATION. CONSIDERING THE INADVERT ENT MISTAKE COMMITTED BY THE ASSESSEE IN THE RETURN OF INCOME, WE ARE OF THE CON SIDERED VIEW THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED B Y THE AO. RESULTANTLY, THE IMPUIGNED PENALTY STANDS DELETED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . 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. *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.