ACIT CIR. - 6(3), MUMBAI V. M/s. GOODLASS NEROLAC PAINTS LTD., MUMBAI

ITA 7113/MUM/2006

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8307 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 02-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 29-12-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, AM AND SHRI V.DURGA RAO, JM I.T.A.NO. 7113/MUM/2006 ASSESSMENT YEAR : 2001-02 ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 6(3), MUMBAI. VS. M/S.GOODLASS NEROLAC PAINTS LTD., NEROLAC HOUSE, G.K. MARG, LOWER PAREL, MUMBAI 400 013. PAN: AAACG 1376 N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAVAN VED RESPONDENT BY : SMT. AARTI VISSANJI O R D E R PER P.M. JAGTAP, AM : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI, MUMBAI, DATED 19.10.2006, WHEREBY HE RESTRICTED THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) ONLY TO THE EXTENT OF AMOUNT OF TAX SOUGHT TO BE EV ADED ON THE EXCESS INCOME DETERMINED/ASSESSED AFTER GIVING EFFECT TO THE ORDE R OF THE LEARNED CIT(A) PASSED IN THE QUANTUM PROCEEDINGS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF PAINTS AND VARNISHES. T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 31.10.2001, DECLARING A TOTAL INCOME OF RS. 26,30,36,891/-. IN THE ASSESSM ENT COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 09.02.2004, THE TOTAL INCOM E OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.32,54,58, 358/- AFTER MAKING VARIOUS ADDITIONS. PENALTY PROCEEDINGS UNDER SECTION 271(1) (C) WERE ALSO INITIATED BY THE ASSESSING OFFICER AND SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IN REPLY TO THE SHOW CAUSE NOTICE ISSUED DURING THE COURSE OF THE S AID PROCEEDINGS WAS NOT FOUND ACCEPTABLE BY HIM IN RESPECT OF VARIOUS ADDITIONS M ADE ON 11 ISSUES, PENALTY UNDER ITA NO. 7113/M/2006 M/S. GOODLASS NEROLAC PAINTS LTD. 2 SECTION 271(1)(C) WAS IMPOSED BY HIM TO THE EXTENT OF RS. 5,96,09,565/-, BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE IN RESPECT OF THE SAID 11 ADDITIONS. 3. PENALTY IMPOSED BY THE ASSESSING OFFICER U/S.271 (1)(C) WAS CHALLENGED BY THE ASSESSEE IN APPEAL FILED BEFORE THE LEARNED CIT (A). MEANWHILE, THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY T HE ASSESSING OFFICER UNDER SECTION 143(3) CAME TO BE DISPOSED OFF BY THE LEAR NED CIT(A) IN THE QUANTUM PROCEEDINGS, WHEREBY THE RELIEF WAS PARTLY/FULLY AL LOWED TO THE ASSESSEE BY THE LEARNED CIT(A) IN RESPECT OF CERTAIN ISSUES, WHEREA S SOME OF THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE CONFIRMED BY HIM IN F ULL/PART. KEEPING IN VIEW THE RELIEF ALLOWED TO THE ASSESSEE IN THE FIRST APPEAL IN THE QUANTUM PROCEEDINGS, THE LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO CA NCEL THE PENALTY IMPOSED BY HIM U/S.271(1)(C), TO THE EXTENT IT WAS ATTRIBUTABLE TO THE ADDITIONS DELETED IN THE QUANTUM PROCEEDINGS, WHEREAS THE BALANCE AMOUNT OF PENALTY WAS SUSTAINED BY HIM FOR THE REASONS GIVEN IN HIS IMPUGNED ORDER. AG GRIEVED BY THE ORDER OF THE LEARNED CIT(A) GIVING THIS RELIEF TO THE ASSESSEE, THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT T HE CONSEQUENTIAL RELIEF ALLOWED BY THE LEARNED CIT(A) IN THE MATTER OF IMPOSITION OF P ENALTY UNDER SECTION 271(1)(C), BY HIS IMPUGNED ORDER, AS A RESULT OF DELETION OF T HE CORRESPONDING ADDITIONS IN THE QUANTUM PROCEEDINGS IN THE FIRST APPEAL HAS BEEN CH ALLENGED BY THE REVENUE IN THE PRESENT APPEAL ONLY ON THE GROUND THAT A SECOND APP EAL HAS BEEN PREFERRED BY THE DEPARTMENT BEFORE THE TRIBUNAL AGAINST THE ORDER P ASSED BY THE LEARNED CIT(A) IN THE QUANTUM PROCEEDINGS DELETING THE CORRESPONDING ADDITIONS. AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THIS REGARD , ONLY SOME OF THE ADDITIONS DELETED BY THE LEARNED CIT(A) WERE CHALLENGED BY TH E DEPARTMENT IN APPEAL FILED ITA NO. 7113/M/2006 M/S. GOODLASS NEROLAC PAINTS LTD. 3 BEFORE THE TRIBUNAL AND VIDE ITS ORDER DATED 19.01. 2011, PASSED IN ITA NO. 2278/MUM/2005, THE CO-ORDINATE BENCH OF THIS TRIBUN AL HAS CONFIRMED THE SAID DELETION DISMISSING THE APPEAL OF THE REVENUE. THE BASIS ON WHICH THE IMPUGNED ORDER OF THE LEARNED CIT(A) GIVING CONSEQUENTIAL RE LIEF TO THE ASSESSEE IN THE MATTER OF LEVY OF PENALTY UNDER SECTION U/S. 271(1) (C) HAS BEEN CHALLENGED BY THE DEPARTMENT THUS NO MORE SURVIVES AND SINCE THE ORD ER OF THE LEARNED CIT(A) DELETING THE CORRESPONDING ADDITION MADE IN THE QUA NTUM PROCEEDINGS HAS BEEN UPHELD BY THE TRIBUNAL, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LEARNED CIT(A) CANCELING THE PENALTY IMPOSED BY THE ASSESSI NG OFFICER U/S.271(1)(C) IN RESPECT OF THE SAID ADDITIONS. THE SAME IS, THEREFO RE, UPHELD DISMISSING THE APPEAL FILED BY THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF MARCH, 2011. SD. SD. (V.DURGA RAO) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED THE 9 TH MARCH, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE 6(3), MUMBAI 3. THE CIT-6, MUMBAI 4. THE CIT(A)-XXVI, MUMBAI 5. THE DR G BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI