M/s Arvind Alloys (P) Ltd., Bangalore V. ACIT, Bangalore

ITA 837/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1648 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1992-1993
• Appeal Filed On: 24-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Keywords: Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SMT P. MADHAVI DEVI, JM AND SHRI A. MOHAN ALANKAMONY, AM I.T.A. NO.837(BANG.)/2010 (ASSESSMENT YEAR : 1992-93) M/S ARVIND ALLOYS (P) LTD., SB-44, 1 ST CROSS, 1 ST STAGE, PEENYA INDL. AREA, BANGALORE APPELLANT VS THE ASST. COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-4(1), BANGALORE RESPONDEN T APPELLANT BY : SHRI S. PARTHASARATHI, ADVOCATE RESPONDENT BY : SMT JACINTA ZIMIK VASHAI, ADDL.CIT O R D E R PER SMT. P. MADHAVI DEVI, JM; THIS IS AN APPEAL BY THE ASSESSEE FOR THE ASSESSME NT YEAR : 1992-93, WHEREIN THE ASSESSEE IS AGGRIEVED BY THE O RDER OF CIT(A),DISMISSING THE ASSESSEES APPEAL AGAINST THE ORDER OF AO IN LEVYING THE PENALTY U/S 271(1)(C) OF THE IT ACT. 2. THIS APPEAL BEFORE US IS BARRED BY LIMITATION BY 177 DAYS AND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDO NATION OF DELAY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, PRIVATE LTD., COMPANY FILED ITS RETURN OF INCOME ON 31-12-1 992 DECLARING ITA.NO.837(B)/10 2 A LOSS OF RS.4,86,237/-. DURING THE ASSESSMENT PRO CEEDINGS U/S 143(3), THE ASSESSEE DID NOT PARTICIPATE AND THEREF ORE, AN ORDER U/S 144 OF THE ACT WAS PASSED DETERMINING THE TAXAB LE INCOME OF THE ASSESSEE AT RS.3,91,610/-. 4. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO SET ASIDE THE ORDER WITH A D IRECTION TO AO TO RE-DO THE ASSESSMENT AFTER AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. CONSEQUENTLY, THE ASSESSEE WAS ISSUED A NOTICE U/S 143(2) AND A FURTHER NOTICE WAS ALSO ISSUED. SINCE THERE WAS NO RESPONSE FROM THE ASSESSEE AND NONE-APPEARED, AGAIN ASSESSMENT U/S 144 OF THE IT ACT WAS COMPLETED BASED ON THE IN FORMATION COLLECTED AND EXAMINED DURING THE EARLIER SET ASIDE PROCEEDINGS AND ACCORDINGLY, THE AO ARRIVED AT TAXABLE INCOME A S NIL. AFTER DISLLOWING THE SITE EXPENSES OF RS.6.00 LACS, CONSU LTANCY CHARGES OF RS.1,22 LACS AND POWER AND FUEL CHARGES AMOUNTIN G TO RS.1,50 LACS AND AFTER SET OFF OF BROUGHT FORWARD LOSSES. T HE TAXABLE INCOME ARRIVED AT WAS RS.NIL. 5. AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO DELETED MOST OF THE ADDITIONS AND AGAINST THE SAME, THE REVENUE PREFERRED AN APPEAL BEFORE TH E TRIBUNAL. THE B BENCH OF THE TRIBUNAL IN ITA NO.939(B)/2010 , OBSERVED ITA.NO.837(B)/10 3 THAT THE ASSESSEE FILED THE APPEAL BEFORE THE CIT(A ) BELATEDLY ON 17-10-2005 WITH A DELAY OF 7 YEARS AND 5 MONTHS AND THE CIT(A) HAS NOT GIVEN ANY REASON FOR CONDONING THE LONG DEL AY OF 7 YEARS AND 5 MONTHS AND THEREFORE, THE TRIBUNAL SET ASIDE AND RESTORED THE FILE TO THE CIT(A) FOR A PROPER ADJUDICATION, A FTER GIVING ASSESSEE AN OPPORTUNITY OF HEARING. THEREAFTER, TH E CIT(A) RE- CONSIDERED THE ISSUE OF DELAY AND HELD THAT THE ORD ER PASSED BY THE AO U/S 144 R.W.S.250 OF THE IT ACT DATED 26-03- 1998, WAS RECEIVED BY THE ASSESSEE ONLY ON 15-09-2005 AND THA T IT WAS ALSO INDICATED THAT SINCE HE DID NOT RECEIVE THE RELEVAN T ORDER TILL A LONG TIME, HE HAD FILED AN APPLICATION BEFORE THE AO ON 20-04-2005 IN RESPONSE TO WHICH A COPY OF THE ORDER WAS GIVEN TO HIM ON 15-09- 2005 AND HENCE, THE APPEAL IS IN TIME AND THERE IS NO NEED FOR ANY CONDONATION OF DELAY. MEANWHILE, THE AO ALSO LEVIED PENALTY U/S 271(1)(C) OF THE IT ACT AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO DISMISSED THE SAME HO LDING IT BE BARRED BY LIMITATION AS IT WAS FILED AFTER NEARLY 7 YEARS AND NO EXPLANATION WAS OFFERED BY THE ASSESSEE. AGAINST T HIS ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, WE FIND THAT THERE IS A DELAY OF 177 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL ALSO AND THAT THE ASSESSEE HAS ITA.NO.837(B)/10 4 FILED AN APPLICATION TO CONDONE THE DELAY. THE LEA RNED COUNSEL FOR THE ASSESSEE SHRI S.PARTHASARATHI, WHILE DRAWING OU R ATTENTION TO THE AFFIDAVIT FILED BY SHRI B.R.NIRANJAN, MD OF THE ASSESSEE COMPANY IN SUPPORT OF CONDONATION OF DELAY SUBMITT ED THAT SINCE THE CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE, THE AS SESSEE WAS UNDER THE IMPRESSION THAT THE PENALTY PROCEEDINGS ALSO WO ULD BE WIPED OUT AND THERE WAS NO NECESSITY FOR FILING ANY APPEA L, AND IT WAS ONLY AFTER HE HAS APPROACHED THE COUNSEL THAT IT WA S POINTED OUT TO HIM THAT APPEAL HAS TO BE FILED AGAINST THE PENA LTY AND THEREFORE, THE ASSESSEE HAS FILED AN APPLICATION BE FORE THE TRIBUNAL WHICH CAUSED A DELAY OF 177 DAYS. THE LEARNED COUNS EL THUS PRAYED THAT THIS DELAY MAY BE CONDONED. THE LEARNED DR HOWEVER, OPPOSED THE SAID CONDONATIO N OF DELAY. 7. HAVING HEARD BOTH THE PARTIES, WE ARE OF THE OPI NION, THAT THE ASSESSEE SEEMS TO HAVE BEEN UNDER A BONAFIDE IM PRESSION THAT THE ADDITIONS BEING DELETED BY THE CIT(A), THERE WA S NO NEED FOR FILING AN APPEAL AGAINST THE PENALTY ORDER. THEREF ORE, WE ARE INCLINED TO CONDONE THE DELAY OF 177 DAYS AND HEAR THE APPEAL ON MERITS. ITA.NO.837(B)/10 5 8. COMING TO THE MERITS OF THE APPEAL, LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT RE CEIVED THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER AND T HEREFORE, THE ASSESSEE HAD TO MAKE AN APPLICATION TO THE AO WHERE BY, THE ASSESSMENT ORDER WAS FURNISHED TO THE ASSESSEE ON 1 5-09-2005 AND THE PENALTY ORDER WAS FURNISHED TO THE ASSESSEE ON 18-09- 2005 AND IMMEDIATELY THEREAFTER, THE ASSESSEE PREFE RRED THE APPEALS BEFORE THE CIT(A) IN TIME. FOR THIS PURPOS E, HE PLACED RELIANCE UPON THE ORDER OF CIT(A)DATED 27-07-2010, WHEREIN THE CIT(A) HAS OBSERVED THAT THE APPEAL AGAINST QUANTUM ADDITIONS IS WITH IN TIME. HE FURTHER SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS REMANDED TO THE CIT(A) TO VERIFY THE DATE S OF RECEIPT OF THE ORDER BY THE ASSESSEE AND TO RE-CONSIDER THE IS SUE OF PENALTY ON MERITS. THE LEARNED DR ON THE OTHER HAND, SUPPORTED THE ORD ER OF CIT(A). 9. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RIVAL CONTENTIONS, WE FIND THAT THE ASSESSMENT ORDE R WAS FURNISHED TO THE ASSESSEE ONLY ON 15-09-2005, AS HELD BY THE CIT(A) IN HIS ORDER DATED 22-07-2010. IN SUCH CIRCUMSTANCES, WE ARE INCLINED TO AGREE WITH THE LEARNED COUNSEL FOR THE ASSESSEE THAT EVEN ITA.NO.837(B)/10 6 PENALTY ORDER WOULD HAVE BEEN SERVED ON THE ASSESSE E ONLY THEREAFTER, AND IF SUCH IS THE CASE THERE WOULD NOT BE ANY DELAY IN FILING THIS APPEAL BEFORE THE CIT(A). 10. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE CIT(A) TO RE-CONSIDER THE ISSUE OF DELAY IN FILING THE APPEAL BY TAKING INTO ACCOUNT THE DAT ES SERVICE OF THE PENALTY ORDER ON THE ASSESSEE AND IF IT IS FOUND TO HAVE BEEN SERVED ON 18-09-2005 THEN TO CONSIDER THE ISSUE OF PENALTY DE NOVO BOTH ON THE ISSUE OF DELAY AS WELL AS ON MERIT S. 11. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE (A. MOHAN ALANKAMONY) (SMT. P. MADH AVI DEVI) ACCOUNTANT MEMBER JUDI CIAL MEMBER PLACE: BANGALORE DATED: 2011. AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF (BLORE) BY ORDER AR, ITAT, BANGALORE