DY CIT CIRLCE- 2 (3)(2), MUMBAI V. M/S SOLARFIELD ENERGY PVT LTD., MUMBAI

ITA 7945/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1829 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS PADMAJA SIRIPURAPU
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 7945 /MUM/2019 ASSESSMENT Y EAR: 2013 - 14 DCIT CIRCLE 2 (3) (2), ROOM NO. 552, 5 TH FLOOR, AAYAKA R BHAWAN, M.K. ROAD, CHURCHGATE, MUMBAI - 400020 VS. M/S SOLARFIELD ENERGY PVT. LTD., 21, 3 RD FLOOR, SETHI MANSION, KUMTHA STREET, BALLARD ESTATE, MUMBAI - 400038 PAN: AAOCS4380A (APPELLANT) (RESPONDENT) REVENUE BY : MRS. PADMAJA SIRIPURAPU (CIT DR ) ASSESSEE BY : NONE DATE OF HEARING: 01/06 /20 21 DATE OF PRONOUNCEMENT: 28 / 06 /202 1 O R D E R PER SAKTIJIT DEY , J M THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 24.10.2019 OF L EARNED COMMISS IONER OF INCOME TAX (APPEALS)34 , MUMBAI DELETING THE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT , 1961 FOR THE ASSESSMENT YEAR 2013 - 14 . 2. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. HOWEVER, CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DISPOSE OF THE APPEALS EX - PARTE QUA TH E ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTA L REPRESENTATIVE AND BASED ON MATERIAL ON RECORD. BEFORE WE DEAL WITH THE SUBSTANTIVE ISSUE RAISED IN THE APPEAL, IT MUST BE PUT ON RECORD THAT THE REGISTRY HAS POINTED OUT DELAY OF 669 DAYS IN FILING THE APPEAL. AFTER HEARING THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE, WE ARE CONVINCED THAT ACTUALLY THERE IS NO DELAY IN FILING THE APPEAL. THE CONFUSION REGARDING DELAY IN FILING THE APPEAL HAS ARISEN BECAUSE OF WRONG 2 ITA NO . 7945 / MUM/2019 ASSESSMENT YEAR: 2013 - 14 MENTIONING OF DATE OF COMMUNICATION OF ORDER APPEALED AGAINST IN COLUMN NO. 3(C) OF THE MEMORANDUM OF APPEAL IN FORM NO. 36. INSTEAD OF MENTIONING THE DATE OF COMMUNICATION OF ORDE R PASSED BY LEARNED COMMISSIONER (APPEALS), THE DATE OF COMMUNICATION OF PENALTY ORDER HAS BEEN WRONGLY MENTIONED. THUS, THERE BEING NO DELAY, THE APPEAL IS TAKEN UP FOR ADJUDICATION ON MERITS. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF SMT. PADMAJA SIRIPURA PU, LEARNED CIT DR AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE REVENUE IS AGGRIEVED WITH THE DELETION OF PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT. AS COULD BE SEEN FROM THE FACTS ON RECORD , ASSESSMENT IN CASE OF THE ASSES SEE WAS ORIGINA LLY COMPLETED UNDER SECTION 143 ( 3) OF THE ACT ON 09.03.2016. T HE ASSESSMENT ORDER SO P ASSED WAS REVISED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (PCIT) IN EXERCISE OF POWER CONFERRED UNDER SECTION 263 OF THE ACT. WHILE DOING SO , HE SET ASIDE THE ASSESSMENT ORDER TO THE AO WITH CERTAIN DIRECTION S. I N PURSUANCE TO THE DIRECTION S O F LEARNED PCIT, T HE AO PASSED A FRESH ASSESSMENT ORDER UNDER SECTION 143 (3) R.W.S. 263 OF THE ACT ON 09.11.2017 ADDING AN AMOUNT OF RS. 14,86,04,756/ - TOWARDS REVENUE EAR NED THROUGH SALE OF ELECTRICITY DURING TESTING PERIOD. BASED ON SUCH ADDITION , THE AO INITIATED PROCEEDIN GS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1) (C) OF THE ACT AND ULTIMATELY PASSED A N ORDER IMPOSING PENALTY OF RS. 9,18,37,740/ - , BEING 200% OF THE TAX ALLEGEDLY SOUGHT TO BE EVADED . A GAINST THE PENALTY ORDER SO PASSED , THE ASSESSEE PREFERRED AN A PPEAL BEFORE LEARNED FI RST APPELLATE AUTHORITY. LEARNED COMMISSIONER (APPEALS) HAVING FOUND THAT THE ORDER PASSED UNDER SECTION 263 OF THE ACT WAS QUASHED BY THE TRIBUNAL WHILE DECIDING THE ASSESSEES APPEAL , DELETED THE PENALTY IMPOSED WITH THE FOLLOWING OBSERVATIONS: 5 . 3 I HAVE CAREFULLY CONSIDERED FADS OF THE CASE, ORAL CONTENTION AND WRITTEN SUBMISSION OF THE ASSESSES, DISCUSSION OF THE AO IN THE IMPUGNE D ORDER AND MATERIAL AVAILABLE ON RECORD. THE APPELLANT IN THEIR SUBMISSION HAVE MENTIONED THAT IN THE APPEAL FILED AGAINST THE ORDER PASSED U/S. 263 OF THE ACT BY LD. PCIT - 2, MUMBAI , THE HON'BLE IT AT HAVE DECIDED THE ISSUE IN FAVOUR OF THE APPELLANT IN 1 TA NO. 7209/MUM/20 17 DATED 14.10.20 19 THE APPELLANT ACCORDINGLY HAS CONTENDED THAT NO PENALTY IS OUGHT TO BE LEVIED WHEN THE DISALLOWANCE 3 ITA NO . 7945 / MUM/2019 ASSESSMENT YEAR: 2013 - 14 ON WHICH PENALTY IS SOUGHT TO BE LEVIED ITSELF HAS BEEN ALLOWED THE APPELLANT HAS PLACED RELIANCE ON THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF K. C. BUILDERS V. ACIT (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHERE AN ORDER OF ASSESSME NT OR REASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE ASSESSES HAS ITSELF BEEN FINALLY SET ASIDE OR CANCELLED B Y THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND THE SAME IS LIABLE TO BE CANCELLED. IT IS SEEN FROM THE LAST SENTENCE OF PARA 4 OF THE ORDER OF HON'BLE IT AT IN ITA NO. 7209/MUM/20 17 DATED 14,10.2019 WHICH WAS THE ORDER PASSED IN THE APP EAL FILED BY THE ASSESSES AGAINST THE ORDER PASSED BY THE LD. PCIT - 2, MUMBAI, U/S 263, IT HAS BEEN DIRECTED ASUNDER: THEREFORE, ON THE GIVEN SET OF FACTS, THE BENCH FORM ED AN OPINION THAT T HE ISSUE OF REVISIONAL JU RISDICTION U/S. 263 WOULD GO BACK TO LD PCIT T O RECONSIDER THE DIRECTIONS GIVEN IN THE IMPUGNED ORDER IN THE LIGHT OF SUBSEQUENT DECISION RENDERE D BY THE TRIBUNAL, AS CI TE D ABOVE. WE ORDER SO. IT CAN BE SEEN FROM THE AFORESAID DIRECTIONS OF THE HON'BLE TRIBUNAL (HAT THE ORDER PAS SED U/S. 263 BY THE PCIT, MUMBAI DATED 30.10.2017 WHICH FORMED THE BASIS FOR PASSING THE ORDER U/S, 143(3) R.W.S. 263 BY THE AO, CONSEQUENT INITIATION OF PENALTY U/S, 271(1)(C) AND PASSING THE IMPUGNED ORDER BY THE AO U/S. 271(1)(C) DATED 26.12.2017. ITSEL F HAS BEEN SET ASIDE AND THEREFORE, IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF K. C, BUILDERS V. ACIT (SUPRA) AND OTHER DECISIONS RELIED UPON BY THE APPELLANT IN THIS REGARD, THE PENALTY LEVIED THROUGH THE IMPUGNED ORDER CANNOT SURVIVE . IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND DISCUSSION HEREINABOVE THE PENALTY SO LEVIED IS DIRECTED TO BE CANCELLED AND ACCORDINGLY THE ONLY ISSUE RAISED IN THIS APPEAL IS ALLOWED. 4. THE OBSERVATIONS OF LEARNED FIRST APPELLATE AUTHORITY RE P RODUCED ABOVE ARE SELF EXPLANATORY. UNDISPUTEDLY, THE PENALTY IMPOSED UNDER SECTION 271(1) (C ) OF THE ACT WAS BASED ON THE ADDITION MADE IN THE FRESH ASSESSMENT ORDER PASSED IN PURSUANCE TO THE DIRECTION S OF LEARNED PCIT UNDER SECTION 263 OF THE ACT. AS OBS ERVED BY LEARNED COMMISSIONER (APPEALS), THE ORDER PASSED UNDER SECTION 263 OF THE ACT, I N THE MEANWHILE , HAS BEEN SET ASIDE BY THE TRIBUNAL VIDE ORDER PASSED IN ITA NO . 7209/MUM/2017 DATED 14.10.2019. THE AFORESAID F ACTUAL POSITION HAS NOT BEEN DISPUTED B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE . H ER SUBMISSION IS , AGAINST THE ORDER PASSED BY THE TRIBUNAL, THE DEPARTMENT MIGHT HAVE PREFERRED AN APP EAL TO THE HONBLE HIGH COURT. B E 4 ITA NO . 7945 / MUM/2019 ASSESSMENT YEAR: 2013 - 14 THAT AS IT MAY , AS ON DATE THE ORDER PASSED BY THE TRIBUNAL SETTING ASIDE TH E ORDER PASSED UNDER SECTION 263 OF THE ACT IS STILL I N FORCE. THAT BEING THE CASE , THE ASSESSMENT ORDER AS WELL AS THE PEN ALTY ORDER PASSED CONSEQUENT UPON THE ORDER PASSED UNDER SECTION 263 OF THE ACT CANNOT HAVE ANY INDEPENDENT EXISTENCE IN ABSENCE OF T HE ORDER PASSED UNDER SECTION 263 OF THE ACT. EVEN OTHERWISE ALSO, IT IS EVIDENT FROM THE AFORESAID ORDER OF THE TRIBUNAL, WHILE SETTING ASIDE THE ORDER PASSED UNDER SECTION 263 OF THE ACT, THE TRIBUNAL HAS TAKEN NOTE OF THE FACT THAT ISSUE HAS BEEN DECIDE D IN FAVOUR OF THE ASSESSEE ON MERITS IN ASSESSMENT YEAR 2012 13. IN VIEW OF THE AFORESAID , WE FULL Y AGREE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT. 5. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE , 2021 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 28 / 06 /202 1 ALINDRA, PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI