SUNANDA INDUSTRIAL MACHINERY LTD. (SINCE MERGED WITH MAFATLAL INDUSTRIES LTD.), MUMBAI V. DCIT 1(3), MUMBAI

ITA 7063/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6041 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARJU GARODIA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , A M AND SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO. 7063/MUM/2016 ( / ASSESSMENT YEAR: 2008 - 09 ) SUNANDA INDUS TRIAL MACHINERY LIMITED (SINCE MERGED WITH MAFATLAL INDUSTRIES LIMITED) KALEDONIA, OFFICE NO. 3, 6 TH FLOOR, SAHAR ROAD, ANDHERI (EAST), MUMBAI - 400 069 / VS. DY. CIT - 1(3), MUMBAI - 400 020 ./ ./ PAN/GIR NO. AAECS 6379 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI KETAN VED / RESPONDENT BY : MS. AARJU GARODIA / DATE OF HEARING : 04.06.2018 / DATE OF PRONOUNCEMENT : 02.07 .2018 / O R D E R PER S HAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 3, MUMBAI DATED 14.10.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2008 - 09. 2. T HE GROUNDS OF APPE AL READ AS UNDER : 2 ITA NO. 7063/MUM/2016 SUNANDA INDUSTRIAL MACHINERY LIMITED EX - PARTE ORDER 1. THE LEARNED COMMISSIONER (APPEALS) ERRED IN PASSING ORDER EX - PARTE. 2. THE ORDER PASSED BY THE COMMISSIONER (APPEALS) IS ULTRA VIRES AND OUGHT TO BE QUASHED. 3. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT. NOTICES SENT TO NON - EXISTENT PERSON 4. THE APPELLANT SUBMITS THAT THE APPELLANT HAS NOT RECEIVED ANY NOTICES OF HEARING OR SHOW CAUSE NOTICES. 5. THE LEARNED COMMISSIONER (APPEALS) ERR ED IN SENDING NOTICE DATED 28 SEPTEMBER 2016 TO SUNANDA INDUSTRIAL MACHINERY LTD., A NON - EXISTENT PERSON. 6. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES OUGHT TO BE SERVED ON THE APPELLANT VIZ. MAFATLAL INDUSTRIES LIMITE D, BEING SUCCESSOR OF SUNANDA INDUSTRIAL MACHINERY LTD. APPEARANCE BEFORE THE COMMISSIONER (APPEALS) 7. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE APPELLANT DID NOT ATTEND BEFORE THE LEARNED COMMISSIONER (APPEALS) FOR THE APPEAL HEARING . 8. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD APPEARED BEFORE THE OFFICE OF THE LEARNED COMMISSIONER (APPEALS) ON 30 JULY 2015 PURSUANT TO A TELEPHONE CALL RECEIVED FROM THE OFFICE OF THE COMMISSIONER (APPEALS) ON 29 JULY 2015. 9. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD APPEARED BEFORE THE LEARNED COMMISSIONER (APPEALS) ON 12 AUGUST 2015 ALONG WITH THE WRITTEN SUBMISSIONS AND PAPERBOOK AND EXPLAINED THAT THE QUANTUM A PPEAL IS PENDING BEFORE THE TRIBUNAL WHICH IS SCHEDULED FOR HEARING ON 2 DECEMBER 2015. THE APPELLANT SUBMITS THAT THE COMMISSIONER (APPEALS) HAD AGREED TO KEEP THE INSTANT PENALTY APPEAL HEARING IN ABEYANCE TILL DISPOSAL OF QUANTUM APPEAL BY THE HON'BLE T RIBUNAL. GROUNDS NOT ADJUDICATED 10. THE LEARNED COMMISSIONER (APPEALS), ERRED IN HOLDING THAT GROUND NOS. 1 AND 2 REPRODUCED BELOW ARE OF GENERAL IN NATURE AND DO NOT REQUIRE ADJUDICATION. 'ORDER HAD IN LAW AND ON FACTS 1. THE LEARNED DEPUTY COMMISSIONER ERRED IN PASSING THE PENALTY ORDER UNDER SECTION 27L(L)(C) OF THE ACT ON A NON - EXISTENT ENTITY I.E. SIML. 2. THE LEARNED DEPUTY COMMISSIONER OUGHT TO HAVE APPRECIATED THAT NO ASSESSMENT CAN BE MADE OF A NON - EXISTENT PERSON AND ACCORDINGLY NO ACTION CAN B E BROUGHT ON IT. ' PENALTY PROCEEDINGS UNDER SECTION 27J(L)(C) 11. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE PENALTY OF RS. 17,60,006 LEVIED UNDER SECTION 271(1 )(C). 12. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE APPELLAN T HAS NO EVIDENCE TO PRODUCE IN CONTRARY TO THE EVIDENCE OF THE ASSESSING OFFICER AND DOES NOT INTEND TO GIVE ANY EXPLANATION IN SUPPORT OF THE GROUNDS OF APPEAL. 3 ITA NO. 7063/MUM/2016 SUNANDA INDUSTRIAL MACHINERY LIMITED 13. THE APPELLANT SUBMITS THAT THE ORDER OUGHT TO BE QUASHED. GENERAL 3. T HIS CASE RELATES TO LEVY OF PENALTY U /S. 271(1)(C) OF THE INCOME TAX ACT, 1961. U PON CONFIRMATION OF THE PENALTY BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE HAS RAISED VARIOUS GROUNDS A GAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) W HICH INCLUDES ISSUES OF OPPOR TUNITY AND LACK OF JURISDICTION. 4. HOWEVER BEFORE US , THE LEARNED COUNSEL OF THE ASSESSEE WAS NOT IN A POSITION TO SUBSTANTIATE THE OTHER GROUNDS RAISED , EXCEPT FOR SUBMITTING THAT ON QUANTUM ADDITION , THIS TRIBUNAL HAS RE MITTED THE ISSUE TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). HE ALSO REFERRED TO ANOTHER TRIBUNAL DECISION IN WHICH IT WAS HELD THAT PENALTY DOESN'T SURVIVE IF THE QUANTUM ADDITION HAS BEEN REMITTED TO THE FILE OF THE AUTHORITIES BELOW. 5 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT A FINDING HAS BEEN GIVEN BY THE TRIBUNAL IN THE QUANTUM ADDITION IN THIS CASE THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) W AS NOT A SPEAKING AND REASON ED ORDER. HEN CE, THE ISSUE WAS REMITTED TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 6. IN THE PRESENT CASE , WE FIND THAT THERE ARE VARIOUS ISSUES RAISED BY THE ASSESSEE REGARDING LACK OF OPPORTUNITY AND LACK OF JURISDICTION WHICH NEEDS TO BE ADDRESSE D BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). FURTHERMORE AS NOTED ABOVE , THE MERITS OF ADDITION HAVE ALSO BEEN REMITTED BY THE TRIBUNAL TO THE FILE OF THE LD. COMMISSIONER OF 4 ITA NO. 7063/MUM/2016 SUNANDA INDUSTRIAL MACHINERY LIMITED INCOME TAX (APPEALS), A S IT WAS HELD THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT A SPEAKING AND REASONED ORDER. 7. ACCORDINGLY IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND CONSIDERING THE DISCUSSIONS HERE IN ABOVE , IN OUR CONSIDERED OPINION , THE INTEREST OF JUSTICE WILL BE SERVED IF THE ISSUE S RAISED IN THIS APPEAL ARE REMITTED TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS DIRECTED TO CONSIDER THE ISSUES AFRESH AND PASS AN ORDER ACCORDINGLY AS PER LAW. 8. IN THE RESULT , THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02.07.2018 SD/ - SD/ - ( SANDEEP GOSAIN ) (S HAMIM YAHYA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 02.07.2018 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI