ISMT Limited., Pune V. Assistant Commissioner of Income-tax,

ITA 913/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9190 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 12-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: PARAG I PATWA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 913/PUN/2015 / ASSESSMENT YEAR : 2003-04 ISMT LIMITED, 2 ND FLOOR, LUNKAD TOWERS, PUNE NAGAR ROAD, VIMAN NAGAR, PUNE 411 014 PAN : AAACJ9917A . / APPELLANT V/S AC IT, CENTRAL CIRCLE - 2(1 ), PUNE . / RESPONDENT SSESSEE BY : SHRI PARAG I PATWA REVENUE BY : SHRI MUKESH JHA, JCIT / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-12, PUNE DATED 02-03-2015 FOR THE ASSESSMENT YEAR 2003- 04 IN CONNECTION WITH THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF SEAMLES S HOLLOWS AND TUBES AND COLD ROLLED RINGS. ASSESSEE FILED THE RETURN OF IN COME ON 27-11-2003 DECLARING LOSS OF RS.78,45,36,121/-. AO ASSESSED T HE LOSS AT RS.73,65,54,454/-. / DATE OF HEARING :12.07.2017 / DATE OF PRONOUNCEMENT: 12.07.2017 2 ITA NO.913/PUN/2015 3. ASSESSEE RAISED A LEGAL ISSUE STATING THAT THE PE NALTY ORDER OF THE AO DATED 31-03-2012 WAS PASSED WITHOUT HAVING VALID JU RISDICTION OVER THE ASSESSEE. WITHOUT GOING INTO THE MERITS, IN CONNECT ION WITH THE SAID LEGAL ISSUE, LD. COUNSEL FOR THE ASSESSEE INFORMED US THA T THIS IS THE CASE WHERE THE ASSESSEES CASE WAS TRANSFERRED U/S.127 OF THE ACT TO THE ACIT, CENTRAL CIRCLE-2 (1), PUNE BY THE CIT-10, MUMBAI VIDE HIS O RDER DATED 15-11-2011. THIS ORDER WAS MADE FOR ADMINISTRATIVE CONVENIENCE AND COORDINATED INVESTIGATION. MEANWHILE, ACIT-10(1), MUMBAI PASSE D THE PENALTY ORDER DATED 31-03-2012 LEVYING MINIMUM PENALTY OF RS.70 L AKHS. CIT(A) CONFIRMED THE PENALTY VIDE HIS ORDER DATED 02-03-20 15. OF COURSE, THE ASSESSEE RAISED THE AFORESAID LEGAL ISSUE VIDE GROU ND NO.1 BEFORE THE CIT(A). CIT(A) DISMISSED THE SAID LEGAL ISSUE AS PER THE DI SCUSSION GIVEN IN PARA NO.2.1.11 OF HIS ORDER. WHILE DISMISSING, CIT(A) GA VE A REASONING THAT THE ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM BY FURNIS HING THE COPIES OF THE CIT U/S.127 OF THE ACT. 4. AGGRIEVED WITH THE SAME ASSESSEE IS IN APPEAL WI TH THE LEGAL GROUND NO.1 WHICH READS AS UNDER : THE LD. AO ACIT-10(1), MUMBAI HAS ERRED IN PASSING ORDER U/S.271(1)(C) OF THE I.T. ACT, 1961 ON 31-03-2012, THE DATE ON WHICH THE ASSESSEE DOES NOT FALL UNDER THE JURISDICTION OF THE SAID LD. AO. TH E ORDER U/S.271(1)(C) BEING PASSED WITHOUT JURISDICTION IS BAD IN LAW AND THE S AME BE SET ASIDE. 5. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE AS SESSEE BROUGHT OUR ATTENTION TO PAGE 5 OF THE PAPER BOOK AND SUBMITTED THAT PAGE NO.5 CONSTITUTES THE ORDER OF THE CIT-10, MUMBAI DATED 1 5-11-2011 AND MENTIONED THAT THE CASE OF THE ASSESSEE, I.E. M/S. ISMT LTD. BEARING PAN NO. AAACJ9917A STANDS TRANSFERRED WITH IMMEDIATE EFFECT (I.E. ON 15-11-2011) FROM THE ACIT-10(1), MUMBAI TO ACIT, CENTRAL CIRCLE -2(1), PUNE UNDER THE CHARGE OF CIT CENTRAL, PUNE. THEREFORE, THE ACIT-1 0(1), MUMBAI WHO 3 ITA NO.913/PUN/2015 PASSED THE IMPUGNED PENALTY ORDER DOES NOT HAVE THE JURISDICTION OVER THE ASSESSEE AFTER THE SAID DATE. CONSEQUENTLY, THE PE NALTY ORDER DATED 31-03- 2012 BEING SUBSEQUENT IN TIME PASSED BY THE ACIT-10 (1), MUMBAI IS WITHOUT ANY VALID JURISDICTION. 6. WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN THIS REGARD WHO MENTIONED THAT THE PROCEDURAL ISSUES SUC H AS, MIGRATION, PAN, DRAFTING OF THE TRANSFER MEMO AND PHYSICAL TRANSFER OF FILES FROM MUMBAI TO PUNE ETC. WOULD CAUSE DELAY, THEREFORE, THE ORDER P ASSED BY THE AO (ACIT- 10 (1), MUMBAI) ON 31-03-2012 IS VALID. 7. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH SIDES A ND FIND RELEVANT TO EXTRACT THE ORDER OF THE CIT-10, MUMBAI, DT. 15-11- 2011 PASSED U/S.127 OF THE ACT AND THE SAME READS AS UNDER : DATE 15-11-2011 ORDER IN EXERCISE OF THE POWERS CONFERRED BY SUB-SECTION (2) OF SECTION 127 OF THE INCOME TAX ACT, 1961 AND ALL OTHER POWERS EN ABLING ME IN THIS BEHALF, I, THE COMMISSIONER OF INCOME TAX-10, MUMBAI HEREBY DIRECT THAT THE POWERS CONFERRED ON THE ASSESSING OFFICER MENTIONED IN COLUMN NO. (4) OF THE SCHEDULE HERETO ANNEXED ORDER OF THE INCOME TAX ACT, SHALL BE EXERCISED BY THE ASSESSING OFFICER MENTIONED IN COL UMN NO.(5) IN RESPECT OF THE CASE OF M/S. ISMT GROUP, THE PARTICULARS OF WHI CH ARE MENTIONED IN COLUMN NO.(2) THEREOF. SCHEDULE SL.NO. NAME OF THE ASSESSEE PAN FROM TO UNDER THE CHARGE 1. 2. 3. 4. 5. 6. 1 M/S. ISMT LTD., AAACJ9917A ACIT-10(1) MUMBAI ACIT CENTRAL CIRCLE-2(1), PUNE CIT (CENTRAL), PUNE 2 SHRI BALDEVRAJ TOPANRAM TANEJA AAAPT6769K ACIT-10(1) (NEW) ACIT CENTRAL CIRCLE-2(1), PUNE CIT (CENTRAL), PUNE 2. THIS ORDER IS MADE FOR ADMINISTRATIVE CONVENIENC E AND COORDINATED INVESTIGATION AND SHALL TAKE EFFECT IMMEDIATELY . 4 ITA NO.913/PUN/2015 8. WE HAVE ALSO CONSIDERED THE SAID UNDISPUTED FACT S THAT THE ACIT-10 (1), MUMBAI PASSED THE PENALTY ORDER ON 31-03-2012 MUCH AFTER THE ORDER U/S.127 OF THE ACT WAS PASSED. THE MOOT QUESTION I S IF THE ACIT-10 (1), MUMBAI CONTINUE TO HOLD JURISDICTION OVER THE ASSES SEE EVEN AFTER 15-11- 2011, THE DATE OF THE PASSING OF THE ORDER U/S.127O F THE ACT. IN OUR OPINION, THE ANSWER IS NEGATIVE AND IN FAVOUR OF THE ASSESSE E. IT IS NOT THE CASE OF THE REVENUE THAT THE SAID ORDER IS NOT OPERATIVE AT ALL FOR ANY REASON. FURTHER, LD. DR FOR THE REVENUE DID NOT DEMONSTRATE THAT THE ORDER OF THE CIT-10, MUMBAI DATED 15-11-2011 STANDS CANCELLED OR WITHDRAWN FOR ANY VALID REASONS. FURTHER, IT IS ALSO NOT DEMONSTRATE D THAT THE ACIT- CENTRAL CIRCLE -2(1), PUNE HAS NOT ASSUMED CHARGE/JURISDICT ION OVER THE ASSESSEE. THEREFORE, CONSIDERING THE ABOVE EVIDENCES, WE ARE OF THE VIEW THAT PENALTY ORDER PASSED BY THE AO ON 31-03-2012 BY THE OLD AO, I.E. ACIT-10 (1), MUMBAI, WHICH IS DIVESTED OF THE JURISDICTION ON TH IS ASSESSEE IS WITHOUT ANY JURISDICTION. ACCORDINGLY, THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED AND IN FAVOUR OF THE ASSESSEE. THEREFORE, ADJUDICA TION OF OTHER GROUNDS RAISED WITHOUT PREJUDICE BY THE ASSESSEE BECOMES AN ACADEMIC EXERCISE, THEREFORE, GROUND NO.2 IS DISMISSED AS ACADEMIC. 9. GROUNDS 3 AND 4 ARE GENERAL AND CONSEQUENTIAL, T HEREFORE, THE SAME ARE DISMISSED AS SUCH. ACCORDINGLY, 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JULY, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 12 TH JULY, 2017. 5 ITA NO.913/PUN/2015 / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - 12 , PUNE 4. THE CIT - 12, PUNE 5 . DR, ITAT, A BENCH PUNE; 6 . / GUARD FILE.