REMI METALS (GUJARAT ) LTD, MUMBAI V. ACIT 9(3), MUMBAI

ITA 6446/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70687 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEKHAR L GAJBHIYE
• Keywords: Retrospective amendment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL D DD D BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKAR D. KARUNAKAR D. KARUNAKAR D. KARUNAKARA AA A RAO RAO RAO RAO, , , , AM AMAM AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO. 6446/MUM/2011 6446/MUM/2011 6446/MUM/2011 6446/MUM/2011 ( $% $% $% $% & & & & / ASSESSMENT YEAR : 2005-06) M/S REMI METALS (GUJARAT) LTD, C/O- SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEER BUILDING, 265, PRINCESS STREET, MUMBAI-400002 % % % % / VS. ACIT 9(3), MUMBAI #' ! ./ ( ./ PAN/GIR NO. :AAACR2121C ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') , , , , / APPELLANT BY : SHRI S. L. JAIN *+') *+') *+') *+') - -- - , , , , /RESPONDENT BY : SHRI SHEKHAR L. GAJBHIYE % % % % - -- - .! .! .! .! / DATE OF HEARING : 6 TH AUGUST 2013 /0& /0& /0& /0& - -- -.! .! .! .! /DATE OF PRONOUNCEMENT: 23 RD AUGUST 2013 ' 1 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 26.7.2011 OF COMMISSIONER OF INCOME TAX(APPEALS) AR ISING FROM THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TA X ACT FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. LEARNED CIT(A) ERRED IN NOT CONDONING DELAY IN FILING THE APPEAL WITHOUT PROPERLY CONSIDERING THE FACTS OF TH E CASE AND LAW APPLICABLE THERETO. 2. THE LEARNED CIT(A) FURTHER ERRED IN NOT CONSIDER ING THE FACT THAT APPELLANT IS HAVING A GOOD CASE ON MERIT AND N O PENALTY WAS WARRANTED TO BE IMPOSED UNDER THE PROVISIONS OF SECTION ITA NO. 6446/M/2011 REMI METALS (GUJARAT) LTD. 2 271(1)(C) ON ADDITIONS MADE OF RS.2,31,43,980/- UND ER THE PROVISIONS OF SECTION 40(A)(IA). DISALLOWANCE MADE UNDER THE PROVISIONS OF SECTION 40(A)(IA) IS ALLOWABLE TO THE APPELLANT IN VIEW OF RETROSPECTIVE AMENDMENT TO THE SAID PROVISI ONS. 3. THE LEARNED CIT(A) ALSO FAILED TO APPRECIATE THA T ALL THE FACTS WERE DISCLOSED BY THE APPELLANT AND A REVISED RETUR N WAS FILED OFFERING DISALLOWANCE UNDER THE PROVISIONS OF SECTI ON 40(A)(IA). 3. AT THE OUTSET WE NOTE THAT THE CIT(A) HAS DISMIS SED THE APPEAL OF THE ASSESSEE IN LIMINE BY TREATING THE SAME AS TIME BARRED. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE FIL ED AN AFFIDAVIT BEFORE THE CIT(A) EXPLAINING THE CONDONATION OF DEL AY. IT HAS BEEN POINTED OUT THAT THE ASSESSEE COMPANY HAD ITS ADMIN ISTRATIVE OFFICE AT 11, CAMA INDUSTRIAL ESTATE, GOREGAON EAST, MUMBAI-6 3. THE COMPANY APPROACHED THE BIFR AND HAS INDUCTED CO-PROMOTER AN D STRATEGIC INVESTOR PURSUANT TO THE APPROVED REHABILITATION SC HEME. THE ADMINISTRATIVE OFFICE OF THE COMPANY WAS SHIFTED FR OM THE OLD ADDRESS TO THE PRESENT ADDRESS WHICH WAS INTIMATED BY THE A SSESSEE TO THE INCOME TAX DEPARTMENT VIDE LETTER DATED 6.4.2010. H E HAS FURTHER POINTED OUT THAT THE PENALTY ORDER IN QUESTION WAS SERVED AT THE OLD ADMINISTRATIVE OFFICE AND BY OVERSIGHT THE SAID ORD ER WAS NOT FORWARDED TO THE ASSESSEE AT THE PRESENT ADDRESS. ONLY WHEN T HERE WAS AN ENQUIRY FOR NON-PAYMENT OF PENALTY AMOUNT BY THE TAX RECOVE RY OFFICER THE AR OF THE ASSESSEE M/S SHANKARLAL JAIN & ASSOCIATES AP PEARING IN THE TAX MATTERS OF THE ASSESSEE CAME TO KNOW ABOUT THE PENA LTY ORDER AND ACCORDINGLY THE ASSESSEE FILED THE APPEAL BELATELY BEFORE THE CIT(A). THUS THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE DELAY IN FILING ITA NO. 6446/M/2011 REMI METALS (GUJARAT) LTD. 3 THE APPEAL WAS NEITHER INTENTION NOR DELIBERATE BUT DUE TO THE EXCEPTIONAL CIRCUMSTANCES WHEN THE ASSESSEE HAS UND ER GONE REHABILITATION SCHEME AS PER THE APPROVAL OF BIFR A ND FURTHER THERE WAS A CHANGE IN ADMINISTRATIVE OFFICE ADDRESS OF THE AS SESSEE. HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF COLLECTOR LAND ACQUISITION VS MST KATIJI & OTHERS 167 ITR 471 AND SUBMITTED THAT WHEN THE EXPLANATION AND REASONS GIVEN BY THE ASSESSEE F OR DELAY IN FILING THE APPEAL ARE NOT FOUND AS MALA FIDES THEN THE SUF FICIENT CAUSE SHOULD BE CONSTITUTE LIBERALLY SO AS TO ADVANCE SUBSTANTIA L JUSTICE. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS SHIFTED ITS OFFICE AT NEW ADDRESS VIDE AGREEMEN T DATED 2.1.2010 AND SUBSEQUENTLY THE ASSESSEE HAS PARTICIPATED IN T HE PENALTY PROCEEDINGS AS THE ASSESSING OFFICER HAS RECORDED I N PARA 3 OF THE PENALTY ORDER THAT THE ASSESSEE FILED WRITTEN REPLY ON 18.3.2010. THEREFORE, THE ASSESSEE WAS AWARE ABOUT THE PENALTY PROCEEDINGS AND CANNOT TAKE AN EXCUSE FOR FILING THE APPEAL BELATLY DUE TO CHANGE OF ADDRESS. THE LD. DR HAS VEHEMENTLY OPPOSED TO THE R EASONS FOR NOT FILING THE APPEAL IN TIME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE HAS UNDER GONE THE REHABILITATION SCHEME AS PER BIF R AND CONSEQUENTLY THERE IS A CHANGE IN THE MANAGEMENT AS WELL AS ADMI NISTRATIVE OFFICE ITA NO. 6446/M/2011 REMI METALS (GUJARAT) LTD. 4 ADDRESS OF THE ASSESSEE. THOUGH THE ASSESSEE HAS NO T INTIMATED THE AO ABOUT THE CHANGE OF ADDRESS BEFORE THE PENALTY ORDE R WAS PASSED HOWEVER AS IT IS STATED THAT THE ASSESSEE INTIMATED THE CHANGE OF ADDRESS VIDE LETTER DATED 6.4.2010. THE PENALTY ORD ER IN QUESTION WAS SEND BY THE AO AT THE OLD ADDRESS OF THE ASSESSEE F ROM WHICH THE ASSESSEE HAS SHIFTED AT THE NEW ADDRESS. THUS IT IS CLEAR THAT THE PENALTY ORDER WAS NOT PROPERLY SERVED ON THE ASSESS EE AS IT WAS SEND TO THE OLD ADDRESS. HAVING REGARD TO THE FACT THAT THE ASSESSEE WAS UNDER BIFR AND THERE IS A CHANGE OF MANAGEMENT AND OFFICE ADDRESS WE FIND THAT THE ASSESSEE HAS EXPLAINED A SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL BEFORE THE CIT(A). THE EXPLANATION AND REASO NS FOR DELAY WAS NOT FOUND AS MALA FIDE OR AS DEVICE TO COVER AN ULT ERIOR PURPOSE OR AN ATTEMPT TO LIMITATION IN A UNDER HAND WAY. WHEN IT IS CLEAR FORM THE RECORD THAT THE ASSESSEE HAS NOT ACTED WITH MALA FI DE AND REASONS EXPLAIN ARE FACTUALLY CORRECT THEN. THE SUFFICIENT CAUSE SHOULD BE CONSTITUTED LIBERALLY. IT IS WELL SETTLED PRINCIPLE THAT TECHNICALITY SHOULD NOT COME IN THE WAY FOR DECIDE THE MATTERS ON MERIT . ACCORDINGLY WE CONDONE THE DELAY OF ABOUT 10 MONTHS IN FILING THE APPEAL BEFORE THE CIT(A) AND REMIT THE MATTER TO THE RECORD OF THE CI T(A) FOR DECIDING THE APPEAL OF THE ASSESSEE ON MERITS. THE ASSESSEE IS D IRECTED TO COOPERATE AND NOT TO TAKE UNNECESSARY ADJOURNMENT BEFORE CIT( A). ITA NO. 6446/M/2011 REMI METALS (GUJARAT) LTD. 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF AUGUST 2013 ' 1 - /0& ! 2 3'%4 23 RD 5#. 0 - 5 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 23 RD AUGUST 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI