PRAVIN PHARMA, MUMBAI V. ITO 23(3)(1),

ITA 804/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1407 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEET MITTAL
• Keywords: Corroborative evidences
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 804/MUM/2015 (ASSESSMENT YEAR: 2006-07) M/S. PRAVIN PHARMA VS. INCOME TAX OFFICER - 23(3)(1) 244/245, GOVIND UDYOG BHAVAN, BAL RAJESHWAR ROAD MODEL TOWN, MULUND (W) MUMBAI 400080 MUMBAI PAN AAAFP6446K APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI RAJEET MITTAL DATE OF HEARING: 30.03.2017 DATE OF PRONOUNCEMENT: 05.04.2017 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 40, MUMBAI DATED 13.01.2015 FOR A.Y. 2006-07 CONFIR MING THE LEVY OF PENALTY OF ` 14,82,221/- UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT, 1961 (IN SHORT 'THE ACT') BY THE ITO WARD 23(3)(1) MUMBAI. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THI S APPEAL ARE AS UNDER: - 1) YOUR APPELLANT HAD FILED A RETURN OF INCOME DEC LARING A INCOME OF RS.29,757/- 2) THE CASE WAS SELECTED UNDER SCRUTINY AND AN ORDE R WAS PASSED U/S 143(3) OF INCOME-TAX ACT, 1961. THE NEW CAPITAL INTRODUCED AND A NEW LOAN TAKEN AMOUNTING TO RS.7,10,500/- AND RS.36,93,011/- RESPECTIVELY WERE ADDED TO INCOME AS UNEXPLAINED INCOME. 3) THE SAID ADDITION WAS CONFIRMED BY THE COMMISSIO NER OF INCOME- TAX APPEAL. 4) YOUR APPELLANT HAD REQUESTED THE HONOURABLE COMM ISSIONER OF INCOME TAX TO KEEP THE PENALTY PROCEEDINGS IN ABEYA NCE TILL THE ITA NO. 804/MUM/2015 M/S. PRAVIN PHARMA 2 PRINCIPAL APPEAL IS BEING HEARD. IN VIEW OF THE TIM E BARRING FACTOR AN ORDER IS BEING PASSED. 3. THE CASE WAS FIXED FOR HEARING A NUMBER OF TIMES AN D THE CASE WAS RE-POSTED ON ACCOUNT OF NONE BEING PRESENT FOR THE ASSESSEE NOR ANY ADJOURNMENT BEING SOUGHT ON ITS BEHALF. ON TWO OCCA SIONS WHEN THE BENCH DID NOT FUNCTION, THE CASE WAS ADJOURNED BY NOTICE/ INTIMATION THROUGH THE NOTICE BOARD. EVEN ISSUE OF NOTICES BY PRAD ON MORE THAN ONE OCCASION HAS NOT ELICITED ANY RESPONSE FROM THE ASSESSEE. WE ALSO OBSERVE THAT THE IMPUGNED ORDER OF THE LEARNED CIT(A) HAS ALSO BEEN PASSED EXPARTE. IN THESE CIRCUMSTANCES, WE ARE CONSTRAINED TO FORM THE OPINION THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THIS APPEAL. ON THE OTHER HAND, THE LEARNED D.R. FOR REVENUE WAS PRESENT AND READY TO A RGUE THE MATTER. WE, THEREFORE PROCEED TO DISPOSE OFF THIS APPEAL WITH T HE ASSISTANCE OF THE LEARNED D.R. FOR REVENUE AND THE MATERIAL ON RECORD . 4.1 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM T HE DETAILS ON RECORD IT IS SEEN THAT THE ASSESSEE FILED ITS RETURN OF INCOME F OR A.Y. 2006-07 ON 26.10.2006 DECLARING INCOME OF ` 29,757/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) OF THE ACT VIDE ORDER DATED 05.12.2008 WHEREIN THE ASSESSE ES INCOME WAS DETERMINED AT ` 74,70,255/-. PENALTY PROCEEDINGS UNDER SECTION 271( 1)(C) OF THE ACT WAS ALSO INITIATED SIMULTANEOUSLY IN RESPEC T OF UNEXPLAINED CAPITAL INTRODUCED AMOUNTING TO ` 41,35,106/- AND UNEXPLAINED NEW LOANS AMOUNTING TO ` 29,38,136/- TAKEN FROM VARIOUS PERSONS DURING THE Y EAR. ON APPEAL BY THE ASSESSEE, THE LEARNED CIT(A) IN HI S ORDER SUSTAINED THE ADDITION OF ` 41,35,106/- ON ACCOUNT OF UNEXPLAINED CAPITAL TO TH E EXTENT OF RS.7,10,500/- AND ENHANCED THE ADDITION MADE ON ACC OUNT OF UNEXPLAINED NEW LOANS TAKEN BY ASSESSEE FROM ` 29,38,136/- TO ` 36,93,011/-. 4.2 IN PENALTY PROCEEDINGS, THE EXPLANATIONS PUT FO RTH BY THE ASSESSEE FIRM DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER (AO). THE AO HELD THAT THE ASSESSEE HAD COMMITTED THE ABOVE DEFAULTS AND T HEREFORE RENDERED ITSELF LIABLE FOR LEVY OF PENALTY AND PROCEEDED TO LEVY PENALTY OF ITA NO. 804/MUM/2015 M/S. PRAVIN PHARMA 3 ` 14,82,221/- @100% OF TAX SOUGHT TO BE EVADED ON UNE XPLAINED CAPITAL INTRODUCTION OF ` 7,10,500/- AND UNEXPLAINED NEW LOANS OF ` 36,93,001/-. 4.3 IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS C ONSIDERED AND UPHELD THE LEVY OF PENALTY OF ` 14,82,221/- UNDER SECTION 271(1)(C) OF THE ACT FOR A.Y. 2006-07 AS UNDER: - 4.1 DURING APPELLATE PROCEEDINGS, LI IS SEEN THAT DESPITE SPECIFICALLY BEING ASKED TO FILE WRITTEN SUBMISSION ON MERITS, A S APPEAL AGAINST PENALTY CANNOT BE KEPT ILL INDEFINITELY ONLY BECAUS E THE ASSESSEE HAS PREFERRED SECOND APPEAL BEFORE THE ITAT, ABSOLUTELY NOTHING HAS BEEN SUBMITTED FROM THE SIDE OF THE APPELLANT. THERE IS NOTHING ON RECORD TO THROW LIGHT ON THE GROUNDS OF APPEAL RAISED, EXCEPT THE FOLLOWING MENTIONED IN STATEMENTS OF FACTS. 1) YOUR APPELLANT HAS FILED RETURN OF INCOME ON 26. 10.2006 DECLARING AN INCOME OF RS. 29,7571-. 2) AN ORDER WAS PASSED U/S 143(1)(A) & IT WAS SELEC TED FOR SCRUTINY U/S 142(1) OF THE INCOME TAX ACT, 1961. 3) THE LEARNED ITO OFFICER HAD COMPLETED AN ASSESSM ENT ON THE GROUND THAT THE FEW DETAILS WERE NOT SUBMITTED AND HAVE ADDED: - A) CAPITAL INTRODUCED BY PARTNERS RS.41,35,106.00 B) NEW LOANS INTRODUCED RS.29,38,136.00 C) AD HOC ADDITION OF ADMINISTRATIVE EXPENSES RS.1, 33,358.00 D) PACKING EXPENSES RS.38,971.00 E) CASH DEPOSIT U/S 269(SS) 4) YOUR APPELLANT HAD PREFERRED HAD PREFERRED AN APPEAL WITH CIT(A) AND LEARNED C1T(A) HAD SUSTAINED (A) NEW CAPITAL INTRODUCED RS.7,10,500 (B) NEW LOAN INTRODUCED RS.36,93,011 5) YOUR APPELLANT HAD PREFERRED AN APPEAL WITH APPELLA TE TRIBUNAL OF INCOME TAX. THE MATTER IS YET TO BE HEA RD. 6) SUBJECT TO THE PENDENCY OF HEARING AT APPELLATE TRI BUNAL OF INCOME TAX, ON ACCOUNT OF TIME BARRING FACTOR, THE LEARNED INCOME TAX OFFICER HAVE LEVIED A PENALTY U/S 271(I) (C) OF INCOME TAX ACT, 1961 AMOUNTING TO RS. 14,82,221. 7) YOUR APPELLANT STATES THAT THE SAID ADDITION IS ON ACCOUNT OF NON REFERRING TO ONE MORE BANK A/C OF PARTNERS AND NON REFERRING BALANCE SHEET OF LOANEE. 8) YOUR APPELLANT STATES THAT IF GIVEN A OPPORTUNITY T HE CREDIT- WORTHINESS OF CREDITORS AND GENUINENESS OF TRANSACT ION CAN BE PROVED. FURTHER AN APPEAL OF PRINCIPAL ORDER IS YET TO BE HEARD. UNDER SUCH CIRCUMSTANCES THE LEVY OF PENALTY IS UNJ USTIFIED ITA NO. 804/MUM/2015 M/S. PRAVIN PHARMA 4 4.2 I HAVE CONSIDERED THE STATEMENTS OF FACTS MENTI ONED BY THE APPELLANT IN THE APPEAL MEMO AND THE ORDER OF THE AO. IT IS SEEN THA T ON THE BASIS OF FACTS AND SUPPORTING EVIDENCES PROD UCED BY THE ASSESSEE, THE CIT(A) HAS SUSTAINED THE ADDITION ON ACCOUNT OF NEW CAPITAL INTRODUCED AT THE LEVEL OF RS. 7,10,500/-, AND ALLOWED SUBSTANTIAL RELIEF FROM THE ADDITION OF RS. 41,35,1 06/- MADE BY THE AO IN THIS REGARD. ON THE OTHER HAND, IN RESPECT OF THE ADDITION FOR NEW LOANS TREATED AS UNEXPLAINED AT RS. 29,38,136/-, T HE CIT(A) HAS ENHANCED THIS ADDITION TO THE LEVEL AT RS. 36,93,011 /- . THUS ALL THE FACTS AND EVIDENCES SUBMITTED BY THE APPELLANT HAVE BEEN DULY CONSIDERED BY THE AO AND THE CIT(A) AND THE ADDITIO NS SUSTAINED/ENHANCED ARE BASED THEREON. DURING PENALT Y PROCEEDINGS, NO VALID EXPLANATION WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED TO HIM. NO EXPLANATION HAS BEEN FURNISHED DURING THE COURSE OF APPELLATE PROCE EDINGS ALSO TO JUSTIFY THE GROUNDS OF APPEAL RAISED AND TO EXPLAIN THE ASSESSEE'S STAND ALONG WITH EVIDENCES IN RESPECT OF THE ADDITI ONS MADE. HENCE IN VIEW OF EXPLANATION 1 TO SECTION 271(1)(C), SINCE N O VALID AND COGENT EXPLANATION HAS BEEN SUBMITTED BY THE ASSESSEE IN R ESPECT OF THE ADDITIONS MADE, THE ASSESSEE IS CLEARLY LIABLE FOR PENALTY U/S 271(1)(C). EVEN ON MERITS, THE ADDITIONS MADE ATTRA CT PENALTY U/S 271(1)(C). THERE IS NOTHING ON RECORD TO INTERFERE WITH THE ORDER OF THE AO, WHICH IS PRIMA FACIE CORRECT. 5. IN VIEW OF ALL THE ABOVE, THE PENALTY LEVIED BY THE AO U/S 271 (1)(C) TO THE EXTENT OF RS. 14,82,221/- IS FOUND TO BE COR RECT AND IS HEREBY UPHELD. GROUNDS OF APPEAL LACK MERIT AND ARE HEREBY DISMISSED. 4.4 AFTER CAREFUL CONSIDERATION OF THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO CONTROVERT THE FINDIN GS OF THE LEARNED CIT(A) IN SUSTAINING THE PENALTY OF ` 14,82,221/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY THE AO AND THEREFORE DECLINE TO INTERFER E THEREIN. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) SUS TAINING THE LEVY OF PENALTY OF ` 14,82,221/- UNDER SECTION 271(1)(C) OF THE ACT FOR A.Y. 2006-07 AND CONSEQUENTLY DISMISS THE GROUNDS RAISED BY ASSE SSEE. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2006- 07 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2017. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 5 TH APRIL, 2017 ITA NO. 804/MUM/2015 M/S. PRAVIN PHARMA 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -40, MUMBAI 4. THE CIT - 29, MUMBAI 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.