RUCHI SOYA INDUSTRIES LTD, MUMBAI V. ACIT CC -40, MUMBAI

ITA 6453/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2932 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Assessee Lawyers: MIHIR C NANIWADEKAR
• Keywords: Search and seizure; Opportunity of being heard
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI ( JM) ITA NO. 6453/MUM/2011 ASSESSMENT YEAR: 2004-05 RUCHI SOYA INDUSTRIES LIMITED, 614, TULSIANI CHAMBERS, NARIMAN POINT, MUMBAI- 400 021. PAN: AAACR2892L VS. THE DCIT, CENTRAL CIRCLE - 40, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. MIHIR C. NANIWADEKAR RESPONDENT BY : SHRI. SUMIT KUMAR DATE OF HEARING: 0 9/09/2016 DATE OF PRONOUNCEMENT: 14/09/20 16 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST ORDER DATED 16/03/2011 PASSED BY THE LD. CIT(APPEALS)-38, MUMBA I, FOR THE ASST. YEAR 2004-05 WHEREBY THE LD CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST PENALTY ORDER U/S 271(1(C) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) DATED 15/03/2010. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT/ ASSESSEE COMPANY HAD BEEN SUBJECTED TO SEARCH AND SEIZURE ACTION U/S 132(1) O F THE ACT. ACCORDINGLY, AO CONCLUDED THE ASSESSMENT PROCEEDINGS U/S 153A READ WITH SECTION 143(3) OF THE ACT WHEREIN THE CLAIM THE ASSESSEE FOR EXEMPTIO N U/S 10A OF THE ACT WAS DISALLOWED HOLDING THAT THE ASSESSEE HAD NOT CARRIE D OUT ANY MANUFACTURING 2 ITA NO. 6453/MUM/2011 ASSESSMENT YEAR: 2004-05 ACTIVITY DURING THE RELEVANT PREVIOUS YEAR RATHER I T HAD BEEN CARRYING OUT A TRADING ACTIVITIES. THE ACTION OF AO WAS CHALLENGED BEFORE THE CIT(A). HOWEVER, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF CLAIM MADE U/S 10A OF THE ACT. ACCORDINGLY, PENALTY PROCEEDING WAS INITIATED AND T HE ASSESSEE WAS LEVIED PENALTY OF RS. 23,37,194/-. THE PENALTY ORDER WAS F URTHER CONFIRMED BY THE LD. CIT(A) IN APPEAL. AGGRIEVED, THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) 38 ERRED IN LAW IN CONFIRMING THE PENALTY OF RS. 23,37,194/- U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THE FACTS. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX APPE ALS OUGHT TO HAVE CONSIDERED THE PROPER FACTS OF THE CASE. 3. THAT MERELY DISALLOWANCE OF LEGAL CLAIM DOES NOT AMOUNT TO CONCEALMENT. 4. THE PENALTY ORDER SO CONFIRMED IS QUITE ILLEGAL, ARBITRARY, UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 4. AT THE OUTSET THE AUTHORISED REPRESENTATIVE (AR ) FOR THE ASSESSEE SUBMITTED THAT IN QUANTUM APPEAL ITA NO. 3565/MUM/2 008 AND CROSS APPEAL NO. 3796/MUM/2008, THE ITAT MUMBAI, VIDE ORDER DATE D 23/05/2012 HAS SET ASIDE THE ORDER PASSED BY THE LD. CIT(A), TO THE FI LE OF A.O TO DECIDE THE SAME AFRESH OBSERVING THAT THE CLAIM OF THE ASSESSEE HAS NOT BEEN PROPERLY EXAMINED BY THE AUTHORITIES BELOW. THE LD. AR FURTHER SUBMIT TED THAT SINCE THE QUANTUM APPEAL HAS BEEN SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE BEING NOT SUSTAINABLE. THE LD. DR ON THE OTHER HAND DID NOT DISPUTE THE AFORESAID SEQUEN CE OF FACTS. 3 ITA NO. 6453/MUM/2011 ASSESSMENT YEAR: 2004-05 5. WE NOTICE THAT IN QUANTUM APPEAL ITA NO 3565/MU M/2008, GENERAL FOODS LIMITED (EARLIER NAME OF THE ASSESSEE COMPANY ) VS. ACIT, CENTRAL CIRCLE MUMBAI, THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNA L HAS SET ASIDE THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY TO THE FILE OF AO HOLDING AS UNDER:- 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE CLAIM OF THE ASSESSEE THAT IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING I.E. CONVERTING SOYABEAN MEAL TO SOYABEAN MEAL SUPE R GRADE WHICH ACCORDING TO THE ASSESSEE A DISTINCT COMMODITY FROM THE RAW MATERIAL. IT WAS FURTHER CLAIMED THAT DURING THE PR EVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2004-05 THE ASSESSE E HAS SET UP A UNIT IN KANDLA SEZ AND MADE EXPORTS AND ALSO CLAIME D DEDUCTION U/S 10A OF THE ACT. HOWEVER, WE FIND THAT THE CLAIM OF THE ASSESSEE HAS NOT BEEN EXAMINED EITHER BY THE A.O. OR BY THE LD. CIT(A) DESPITE THE FACT THAT THE ASSESSEE, BEFORE THE LD. CIT(A), HAS FILED ITS WRITTEN SUBMISSIONS APPEARING AT PAGE 3 TO 5 OF THE ORDER O F THE LD. CIT(A). THE LD. CIT(A) WITHOUT GIVING ANY COGENT REASON THA T THE ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING ACTIVITY HAS REJEC TED THE CLAIM OF THE ASSESSEE BY HOLDING THAT IT IS NOT DISPUTED THA T NO MANUFACTURING ACTIVITIES WERE UNDERTAKEN BY THE APP ELLANT WHICH IS A PRIME PRE-REQUISITE FOR CLAIMING DEDUCTION. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE IS NOT CONVERTING SOYABEA N MEAL TO SOYABEAN MEAL SUPER GRADE OR THE SAID CONVERSION DO ES NOT AMOUNT TO MANUFACTURING ACTIVITY. THIS BEING SO, WE ARE OF THE VIEW THAT THE ISSUE HAS NOT BEEN EXAMINED PROPERLY AND HENCE, IN THE INTEREST OF JUSTICE, WE CONSIDER IT FAIR AND REASONABLE THAT TH E MATTER SHOULD GO BACK TO THE FILE OF THE A.O. AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT A ND SEND BACK 4 ITA NO. 6453/MUM/2011 ASSESSMENT YEAR: 2004-05 THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE SA ME AFRESH IN THE LIGHT OF OUR ABOVE OBSERVATIONS AND ACCORDING TO LAW AFTE R PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWE D FOR STATISTICAL PURPOSE. 6. SINCE THE QUANTUM APPEAL HAS BEEN SET ASIDE TO THE A.O., THE PENALTY APPEAL DOES NOT SURVIVE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE TAX AUTHORITIES. HOWEVER, WE MAKE IT CLEAR THAT THE AO IS AT LIBERTY TO INITIATE PENALTY PROCEEDINGS IN THE SET ASIDE PROCEEDINGS, I F IT IS CONSIDERED TO BE NECESSARY. 7. IN THE RESULT APPEAL FILED BY THE ASSESSEE FOR T HE A.Y. 2004-05 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 14 TH SEPTEMBER, 2016. SD/- SD/- ( B.R.BASKARAN ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:14/09/2016 5 ITA NO. 6453/MUM/2011 ASSESSMENT YEAR: 2004-05 / 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 PRAMILA