SYNOVATE INDIA P. LTD, MUMBAI V. DCIT 8(3), MUMBAI

ITA 7586/MUM/2012

• Counselvise Citation: 758619914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 24-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: ALOK SAXENA
• Keywords: Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , , BEFORE SHRI SANJAY ARORA , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMB ER . / ITA NO. 7586 /MUM./ 2012 ( / ASSESSMENT YEAR : 20 0 3 04 ) SYNOVATE INDIA PVT. LTD. 501, 5 TH FLOOR, BOSTON HOUSE SUREN ROAD, ANDHERI (EAST) MUMBAI 400 093 .. / APP ELLANT V/S DY. COMMIS SIONER OF INCOME TAX CIRCLE 8(3), MUMBAI .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AACCB0907A / ASSESSEE BY : MR. ALOK SAXENA / REVENUE BY : MR. ASHOK SURI / DATE OF HEARING 0 6 . 03 .201 4 / DATE OF ORDER 14.03.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE CHALLENGI NG THE IMPUGNED ORDER DATED 12 TH NOVEMBER 2012 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) XVIII , MUMBAI , FOR THE ASSESSMENT YEAR 2 0 03 04 . THE SOLE DISPUTE IN THIS APPEAL IS, WHETHER SYNOVATE INDIA PVT. LTD. 2 OR NOT THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN CONFIRMING T HE PENALTY LEVIED UNDER SECTION 271(1)(C) BY THE ASSESSING OFFICER. 2 . FACTS IN BRIEF : THE ASSESSEE FILED ITS RETURN OF INCOME ON 1 ST DECEMBER 2013 DECLARING TOTAL INCOME OF ` 1,26,70,202. AS AGAINST THE RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3), VIDE ORDER DATED 13 TH JANUARY 2006, AT AN INCOME OF ` 1,80,73,300 , AFTER MAKING ADDITION OF ` 50,44,626, ON ACCOUNT OF BAD DEBT AND DISALLOWANCE OF INTEREST ON WORK IN PROGRESS OF ` 3,58,468. THE PENALTY PROCEEDINGS WERE INITIATED ON THE A DDITION OF ` 50,44,626 ON ACCOUNT OF BAD DEBT. 3 . IN THE QUANTUM PROCEEDINGS, THE SAID ADDITION ON ACCOUNT OF BAD DEBT STOOD CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS). 4 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT IN THE APPEAL FI LED BY THE ASSESSEE BEFORE THE TRIBUNAL, THIS ADDITION STANDS DELETED AND THUS, THE PRESENT PENALTY PROCEEDINGS DOES NOT SURVIVE. HE, HOWEVER, SUBMITTED THAT AGAINST THE PENALTY ORDER DATED 28 TH MARCH 2008, THE ASSESSEE HAS PREFERRED THE APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) ON 23 RD SEPTEMBER 2011, WHICH WAS BARRED BY LIMITATION. BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS SUBMITTED THAT THE DELAY IN FILING OF THE APPEAL WAS ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS NOT AWARE OF THE PASS ING OF THE PENALTY ORDER AS THE SAME WAS NOT SERVED UPON IT. THE ASSESSEE COMPANY ONLY CAME TO KNOW ABOUT THE PASSING OF THE PENALTY ORDER , ONLY WHEN IT RECEIVED THE NOTICE DATED 22 ND JANUARY 2010 FOR ADJUST MENT OF REFUND OF THE ASSESSMENT YEAR 2007 08 OUT OF THE DEMAND CREATED OUT OF PRESENT PENALTY ORDER. THEREAFTER, THE ASSESSEE CONTACTED THE ASSESSING OFFICER TO PROVIDE THE COPY OF THE ORDER AND ON SYNOVATE INDIA PVT. LTD. 3 SUCH A REQUEST, THE REVENUE COULD NOT FURNISH THE PROOF OF SERVICE OF THE ORDER. IT WAS ONLY ON 16 TH SEPTE MBER 2011, THAT THE REVENUE SERVED THE COPY TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. IMMEDIATELY THEREAFTER, THE ASSESSEE FILED THE APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS). THE ASSESSEE ALSO FILED A N AFFIDAVIT ALONG WITH PETITION FOR COND ONATION OF DELAY STATING THESE FACTS WHICH REMAINED UNREBUTTED. I T WAS ALSO BROUGHT TO THE NOTICE OF THE LEARNED COMMISSIONER (APPEALS) THAT THE TRIBUNAL, VIDE ORDER DATED 2 ND MAY 2011 , HAS DELETED THE SAID ADDITION, THEREFORE, PENALTY LEVIED HAD NO LEGS T O STAND. 5 . THE LEARNED COMMISSIONER (APPEALS), HOWEVER, REFUSED TO CONDONE THE DELAY ON THE GROUND THAT THERE IS NO REASONABLE CAUSE IN FILING THE APPEAL AFTER EXPIRY OF MORE THAN TWO YEARS. 6 . BEFORE US, THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E LEARNED COMMISSIONER (APPEALS), WITHOUT EXAMINING THE REASONS GIVEN IN THE AFFIDAVIT ACCOMPANYING THE PETITION FOR CONDONATION OF APPEAL HAS SIMPLY REJECTED THE ASSESSEES APPEAL AS UNADMITTED. ONCE THE AVERMENTS MADE BY THE ASSESSEE HA VE NOT BEEN REBUTT ED, THERE IS NO REASON TO DENY THE JUSTICE TO THE ASSESSEE, ESPECIALLY WHEN THE TRIBUNAL HAS DELETED THE ADDITION WHICH IS THE BASIS OF LEVYING PENALTY. 7 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE IMPUGNED ORDER. 8 . W E HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. ONCE THE ASSESSEE HAS ELABORATED THE REASONS FOR FILING THE APPEAL BELATEDLY, WHICH WAS ON ACCOUNT OF THE FACT THAT THE PEN ALTY ORDER ITSELF W AS NOT SERVED UPON THE ASSESSEE, THEN SUCH REASONS OUGHT TO HAVE SYNOVATE INDIA PVT. LTD. 4 CONSIDERED OR EXAMINED IN THE INTEREST OF SUBSTANTIAL JUSTICE. THIS AVERMENT OF THE ASSESSEE WHICH HAS BEEN STATED ON OATH , HAS NOT BEEN REBUTTED BY THE DEPARTMENT AND NO M ATERIAL HAS BEEN PLACED ON RECORD TO SHOW THAT THE ORDER OF THE ASSESSING OFFICER LEVYING THE PENALTY WAS SERVED UPON THE ASSESSEE IN TIME . UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED COMMISSIONER (APPEALS), IN TH E INTEREST OF JUSTICE, SHOULD HAVE CONDONED THE DELAY AND COULD HAVE HEARD THE APPEAL ON MERITS. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE BACK THE MATTER TO HIS FILE AFTER CONDONING THE DELAY IN F ILING OF THE FIRST APPEAL, AS THERE IS NO REBUTTAL OF THE REASONS STATED BY THE ASSESSEE AND DIRECT THE LEARNED COMMISSIONER (APPEALS) TO DECIDE THE APPEAL ON MERIT AFTER CONSIDERING THE OUTCOME OF THE QUANTUM PROCEEDINGS BY THE TRIBUNAL. 9 . 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 14 TH MARCH 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH 2014 S D/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 14 TH MARCH 2014 SYNOVATE INDIA PVT. LTD. 5 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSE E ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI