Shri Satya Sai Properties & Investment (P) Ltd., Kolkata V. ITO,Ward-5(1), Kolkata, Kolkata

ITA 681/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70400 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 27-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU SRDR
• Assessee Lawyers: DILIP S DAMLE
• Keywords: Recovery proceedings
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI, R.S. SYAL, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 681 / KOL / 2012 ASSESSMENT YEAR :2003-04 SRI SATYA SAI PROPERTIES & INVESTMENTS (P) LTD., 12, PRETORIA STEET, KOLKATA 700 017 [ PAN NO.AAECS 6102 N ] V/S . INCOME TAX OFFICER, WARD-5(1), P-7, CHOWRINGHEE SQUARE, 8 TH FLOOR, KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI DILIP S DAMLE, AR /BY RESPONDENT SHRI DAVID Z CHAWNGTHU, SR-DR /DATE OF HEARING 19-11-2013 /DATE OF PRONOUNCEMENT 19-11-2013 / // / O R D E R PER R.S. SYAL, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY CIT(APPEALS)-VI, KOLKATA ON 28-12-2011 DISMISSING T HE ASSESSEE'S APPEAL AGAINST THE PENALTY IMPOSED U/S. 271(1) OF THE INC OME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT;) IN RELATION TO THE ASSESSMENT YEAR 2003- 04. ITA NO.681/KOL/2012 A.Y. 2003-04 SH SATYA SAI PROPERTIES & INVST.(P) LTD. V. ITO WD -5(1) KOL PAG E 2 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT OR IGINAL ASSESSMENT IN THIS CASE WAS MADE U/S. 143(3) OF THE ACT MAKING CERTAIN ADDITIONS INTER ALIA DISALLOWANCE OF INTEREST TAX PAYABLE AT RS.10,92,37 7/-. THE PENALTY ORDER WAS PASSED ON 26-05-2009 IMPOSING PENALTY U/S 271(1) O F THE ACT WITH REFERENCE TO DISALLOWANCE OF SUCH INTEREST TAX DEBITED TO THE PROFIT AND LOSS ACCOUNT. IN THE MEANTIME, THE ASSESSEES APPEAL IN THE QUANTUM PROCEEDINGS CAME UP FOR HEARING BEFORE THE TRIBUNAL. VIDE ORDER DATED 26-07 -2009, THE TRIBUNAL REMITTED THE MATTER TO THE FILE OF ASSESSING OFFICE R FOR A FRESH DECISION ON THE QUESTION OF DISALLOWANCE OF INTEREST TAX. THE ASSES SING OFFICER VIDE HIS ORDER U/S. 143(3) R.W.S. 254 OF THE ACT PASSED ON 09-12-2 010 OBSERVED THAT THE UNPAID AMOUNT OF INTEREST TAX STOOD ADJUSTED AGAINS T THE INCOME TAX REFUND. HE, THEREFORE DELETED THE DISALLOWANCE TOWARDS INTE REST TAX COMPONENT AMOUNTING TO RS.9,77,894/-, THE BALANCE OF RS.44,17 7/- WAS HELD TO BE DISALLOWABLE U/S. 43B OF THE ACT SINCE THERE WAS IN COME TAX DEMAND TO THAT EXTENT. IN SUCH ORDER PASSED BY THE ASSESSING OFFI CER OF 09-12-2010, IT WAS HELD THAT : CONSIDERING THE ITAT KOLS SET ASIDE ORDER DATED 24-07-2009 AND CONSEQUENTIAL 143(3)/254 ORDER DATED 09-12-2010, TH E PENALTY ORDER U/S. 271(1) DATED 26-05-2009 FOR THE AY 2003-04 IS HERE BY CANCELLED. IN THE MEANTIME, THE ASSESSEE'S APPEAL AGAINST THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON 26-05-2009 CAME UP FOR HEARING BEFORE THE LD. CIT(A). THE ASSESSEE SUBMITTED BEFORE THE LD. FIRST APPELLA TE AUTHORITY THAT SINCE THE PENALTY ORDER DATED 26-05-2009 HAS BEEN CANCELLED B Y THE ASSESSING OFFICER ITA NO.681/KOL/2012 A.Y. 2003-04 SH SATYA SAI PROPERTIES & INVST.(P) LTD. V. ITO WD -5(1) KOL PAG E 3 VIDE HIS ORDER DATED 09-12-2010, THE ASSESSEE'S APP EAL MAY BE TREATED AS WITHDRAWN. THE LD. CIT(A) RECORDED THIS FACT IN T HE IMPUGNED ORDER AND DISMISSED THE APPEAL AS WITHDRAWN. THE ASSESSEE I S AGGRIEVED AGAINST THE IMPUGNED ORDER BY WHICH THE PENALTY STILL STANDS AN D THE DEPARTMENT HAS INITIATED RECOVERY PROCEEDINGS AGAINST SUCH PENALTY . 3. AFTER CONSIDERING THE RIVAL SUBMISSION AND PERUS ING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE VERY FOUNDATIO N FOR THE IMPOSITION OF PENALTY CEASED TO EXIST BY VIRTUE OF THE ORDER PASS ED BY THE ASSESSING OFFICER U/S. 143(3) R.W.S. 254 OF THE ACT DELETING THE MAJO R ADDITION ON ACCOUNT OF INTEREST TAX AND ALSO SIMULTANEOUSLY CANCELLING TH E PENALTY IMPOSED VIDE ORIGINAL PENALTY ORDER DATED 26-05-2009. IT IS THE SELF-EVIDENT THAT WHEN THE ASSESSING OFFICER HIMSELF CANCELLED THE PENALTY, TH ERE WAS NO RATIONALE WITH THE ASSESSEE TO FURTHER PURSUE THE APPEAL FILED AGA INST THE ORIGINAL ORDER IMPOSING THE PENALTY. THE LD. CIT(A) SHOULD HAVE DI SMISSED THE APPEAL AS HAVING BECOME INFRUCTUOUS IN VIEW OF THE LATER DEVE LOPMENTS TAKING PLACE BY MEANS OF THE ORDER PASSED BY THE ASSESSING OFFICER ON 09-12-2010 CANCELLING THE PENALTY. AS THE LD. CIT(A) SIMPLY DISMISSED THE APPEAL OF THE ASSESSEE AS WITHDRAWN, IT REVIVED THE ORIGINAL PENALTY ORDER WHICH ALREADY STOOD CANCELLED BY THE ASSESSING OFFICER HIMSELF BY HIS SUBSEQUENT ORDER. WE, THEREFORE HOLD THAT THERE CAN BE NO QUESTION OF SUSTAINING ANY PEN ALTY OR MAKING ANY RECOVERY AGAINST SUCH PENALTY ORIGINALLY IMPOSED WH ICH STOOD CANCELLED BY THE ITA NO.681/KOL/2012 A.Y. 2003-04 SH SATYA SAI PROPERTIES & INVST.(P) LTD. V. ITO WD -5(1) KOL PAG E 4 ASSESSING OFFICER HIMSELF IN THE ORDER GIVING EFFEC T TO THE TRIBUNALS ORDER. WE, THEREFORE, CANCEL THE PENALTY. 4. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (GEORGE MATHAN) (R.S. SYAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 19/11/2013 , , , , -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. 1 / CONCERNED CIT 4. 1- / CIT (A) 5. , , , / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / , STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 19/11 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 19/11 4) DATE OF CORRECTION 19/11 5) DATE OF FURTHER CORRECTION - - 6) DATE OF INITIAL SIGN BY MEMBERS 19/11 7) ORDER UPLOADED ON 19/11 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE 19/11 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON