ITO, Mangalore V. M/s P.F.X. Saldanha and Sons, Mangalore

ITA 801/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63659 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDARARAJAN
• Assessee Lawyers: S VENKATESAN
• Section: 260A

Judgement Text

PAGE 1 OF 4 ITA NOS.796 TO 801/B ANG/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH C BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NOS.796 TO 801/BANG/2011 (ASST. YEARS 2002-03 TO 2007-08) THE INCOME TAX OFFICER, WARD-2(2), MANGALORE. VS M/S P.F.X. SALDANHA AND SONS, D.NO.17-21-1498, HIGHLAND COFFEE WORKS, FALNIR, MANGALORE. PA NO.AADEP3488L (APPELLANT) (RESPONDENT) DATE OF HEARING : 05.09.2012 DATE OF PRONOUNCEMENT : 07.09.2012 ASSESSEE BY : SHRI S VENKATESAN, C.A. REVENUE BY : SHRI SUNDARARAJAN, JCIT ORDER PER BENCH : THESE APPEALS INSTITUTED BY THE REVENUE ARE DIRECT ED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A), MYSORE DATED 2 0/06/2011. THE ORDER OF THE CIT(A) ARISE OUT OF SEPARATE ORDERS OF THE I NCOME TAX OFFICER PASSED UNDER SECTION 271(1)(C) OF THE ACT. THE REL EVANT ASSESSMENT YEARS ARE 2002-03 TO 2007-08. 2. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEA LS AND THEY PERTAIN TO THE SAME ASSESSEE, THEY WERE HEARD TOGETH ER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. PAGE 2 OF 4 ITA NOS.796 TO 801/B ANG/2011 2 3. THE SOLITARY ISSUE THAT ARISE FOR OUR CONSIDERAT ION IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE PENALTY LEVI ED UNDER SECTION 271(1)(C) OF THE ACT IN RESPECT OF THE ASSESSMENT YEARS 2002-0 3 TO 2007-08. 4. BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS A PARTNERSHIP FIRM. IT WAS ENGAG ED IN THE BUSINESS OF COFFEE CURING WORKS AS AN AGENT OF COFF EE BOARD UNDER THE TRADE NAME M/S HIGHLAND COFFEE WORKS. FOR THE CONC ERNED ASSESSMENT YEARS, THE ASSESSEE HAD LET OUT ITS MACHINERIES & PL ANT, GODOWN AND STORAGE SPACE TO THIRD PERSON AND WAS RECEIVING AMOUNTS FOR THE SAME. THE RETURNS OF INCOME WERE FILED FOR THE ABOVE SAID ASSESSMENT YEARS DISCLOSING THE AMOUNT RECEIVED AS INCOME FROM BUSINESS. THE ASS ESSMENTS WERE COMPLETED FOR THE ASSESSMENT YEARS 2002-03 TO 2007-0 8 BY TREATING THE INCOME AS INCOME FROM HOUSE PROPERTY INSTEAD OF B USINESS INCOME AS CLAIMED BY THE ASSESSEE. AS A RESULT OF TREATING TH E INCOME AS INCOME FROM HOUSE PROPERTY, INCIDENTAL EXPENSES CLAIMED BY THE A SSESSEE FIRM WAS DISALLOWED. THE ASSESSMENTS, ON APPEAL, WERE AFFIR MED BY THE CIT(A). 5. SUBSEQUENTLY, THE INCOME TAX OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND PENALTY WAS IMPOSED FOR VARIOUS YEARS AS UNDER:- ASSESSMENT YEAR PENALTY LEVIED 2002-03 RS.6,95,380/- 2003-04 RS.5,22,831/- 2004-05 RS.11,42,270/- 2005-06 RS.10,95,952/- 2006-07 RS.9,51,121/- 2007-08 RS.6,92,680 PAGE 3 OF 4 ITA NOS.796 TO 801/B ANG/2011 3 6. AGGRIEVED BY THE LEVY OF PENALTY, THE ASSESSEE CAR RIED THE MATTER IN APPEALS BEFORE THE FIRST APPELLATE AUTHOR ITY. 7. THE CIT(A) ALLOWED THE ASSESSEES APPEALS AND D ELETED THE PENALTY LEVIED FOR THE CONCERNED ASSESSMENT YEARS FO R THE REASON THAT QUANTUM ASSESSMENT WAS DECIDED IN FAVOUR OF THE ASS ESSEE BY THE TRIBUNAL IN ITA NO.116/2010 & 696 TO 700/BANG/2010 DATED 19 TH NOVEMBER, 2010. 8. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 9. THE LEARNED DR SUBMITTED THAT THE ORDER OF THE TRIBUNAL IN QUANTUM ASSESSMENT HAS NOT ATTAINED FINALITY AND THE REVENUE PREFERRED APPEAL UNDER SECTION 260A OF THE ACT. 10. THE LEARNED AR SUPPORTED THE ORDER OF THE CIT( A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFU LLY PERUSED THE MATERIALS AVAILABLE ON RECORD. AS RIGHTLY POINTED O UT BY THE LEARNED AR, THE QUANTUM ASSESSMENT HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE AND THEREFORE, THE PENALTY IMPOSED BASED ON THE ASSESSME NT DOES NOT HAVE THE SUBSTRATUM TO STAND AND HENCE, WE HOLD THAT THE CIT (A) IS JUSTIFIED IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. IN THE LIGHT OF THE SAME, WE UPHOLD THE ORDER OF THE CIT(A) AS C ORRECT AND IS IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED F OR. IT IS ORDERED ACCORDINGLY. PAGE 4 OF 4 ITA NOS.796 TO 801/B ANG/2011 4 12. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (GEORGE GEORGE K) (JASON P BOAZ) JUDICIAL MEMBER A CCOUNTANT MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNE D. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BANGALORE.