M/s Puneet Fashion Pvt. Ltd., Ludhiana V. DCIT, Central Circle I, Ludhiana

ITA 974/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5291 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PANKAJ BHALLA
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANTMEMBER ITA NO.974/CHD/2017 (ASSESSMENT YEAR : 2011-12) M/S PUNEET FASHION PVT. LTD., VS. THE DCIT, C/O M/S V.V. BHALLA & CO., CENTRAL CIRCLE-1, E-64, RISHI NAGAR, LUDHIANA LUDHIANA PAN NO. AAECP1579L ITA NO.975/CHD/2017 (ASSESSMENT YEAR : 2011-12) SH. PUNEET BEDI, VS. THE DCIT, PROP. M/S NIKHIL EXPORTS LTD., CENTRAL CIRCLE-1, C/O V.V.BHALLA & CO, LUDHIANA E-64, RISHI NAGAR, LUDHIANA LUDHIANA PAN NO. AGAPB9766C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PANKAJ BHALLA RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 22.01.2018 DATE OF PRONOUNCEMENT: 06.02.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEE AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX 2 (APPEALS), [HEREINAFTER REFERRED TO AS CIT(APPEALS )] BHATINDA, DATED 22.03.2017. 3. AT THE OUTSET, IT WAS COMMON GROUND BETWEEN BOTH THE PARTIES THAT IN THE ABOVE CASES COMMON FACTS & ISSUES ARE I NVOLVED. THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. IT WAS FURTHER STATED BY THE LD. REPRESENTATIVES OF THE PARTIES THAT ALL THE ISSUES RAISED IN THESE APP EALS ARE AGAINST THE LEVY OF PENALTY U/S 271AAA READ WITH SECTION 274 O F THE INCOME-TAX ACT. THAT THE FACTS AS WELL ISSUES INVOLVED ARE SQU ARELY COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE C ASE OF ASSESSEE & OTHERS IN ITA NO. 976/CHD/2017 FOR ASSESSMENT YEAR 2011-12 & ITA NOS. 1343 TO 1345CHD/2016 RELATING TO ASSESSMENT YE ARS 2008-09 TO 2010-11, ORDER DATED 10.08.2017, WHEREIN THAT TRIBU NAL AFTER DELIBERATING UPON THE ISSUES HAS RESTORED THE MATTE R TO THE CIT(A) WITH A DIRECTIONS TO PASS SPEAKING ORDER ON ALL THE GROUNDS RAISED BY THE ASSESSEE. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON GOING THROUGH THE SAID DETAILED ORDER PASSED BY THE THIS BENCH OF THE TRIB UNAL DATED 10.08.2017 IN THE CASE OF ASSESSEE & OTHERS IN ITA NO. 1343 TO 1345/CHD/2017, IT IS OBSERVED THAT THE ISSUES RAISE D BY THE ASSESSEE IN PRESENT APPEALS ARE IDENTICAL TO THAT OF THE ISS UES ALREADY DELIBERATED UPON BY THE TRIBUNAL. THE RELEVANT PAR T OF THE ORDER OF THE TRIBUNAL DATED 10.08.2017 IS REPRODUCED HEREUND ER:- 3 7. DURING THE COURSE OF HEARING BEFORE US LD. COUNSEL FOR ASSESSEE POINTED OUT THAT THE ISSUE INVOLVED AND THE FACTS IN THE PRESENT APPEAL WERE IDENTICAL TO THAT IN THE GROUP OF APPEALS DECIDED B Y THE ITAT CHANDIGARH BENCH ON 26.7.2017 WITH THE APPEAL TILAK RAJ BEDI VS DCIT IN ITA NO.1346/CHD/2016 BEING THE LEAD CASE. LD.COUNSEL POINTED OUT THAT THE ITAT IN THOSE CASES HAD RESTOR ED THE APPEALS TO THE CIT(A) SINCE IT WAS FOUND THAT T HE CIT(A) HAD NOT DEALT WITH THE GROUND CHALLENGING TH E ASSUMPTION OF JURISDICTION TO PASS THE PENALTY ORDE R AND ALSO THAT THE CIT(A) HAD NOT DEALT WITH THE GROUNDS RAISED BY THE ASSESSEE. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT AS IN THE SAID CASE, IN T HE PRESENT CASE ALSO THE LD.CIT(APPEALS) HAD FAILED TO ADDRESS THE LEGAL GROUND RAISED BEFORE HIM BY THE ASSESSEE, OF ASSUMING JURISDICTION TO LEVY OF PENAL TY WITHOUT OBTAINING THE NECESSARY APPROVAL OF THE PRESCRIBED AUTHORITY AS PROVIDED UNDER THE LAW. LD COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO GROU ND NO.7 OF THE GROUNDS OF APPEAL RAISED BEFORE THE LD.CIT(A) IN FORM NO.35 WHICH READ AS UNDER; 7. THAT THE AO HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE BY IMPOSING PENALTY U/S 271AAA ON THE BASIS OF AN ORDER MADE AS ON 26.05.2014,WITHOUT OBTAINING THE APPROVAL OF THE APPROPRIATE AUTHORITY, AS REQUIRED UNDER LAW. 8. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE LD.CIT (APPEALS) HAD NOT DEALT WITH THIS GROUND RAI SED BY THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT AS PER THE PROVISIONS OF SECTION 2 74 SUB-SECTION (2), NO ORDER IMPOSING PENALTY COULD BE MADE BY THE ASSISTANT COMMISSIONER WHERE THE PENALT Y EXCEEDS RS.20,000/- EXCEPT WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER. LD COUNSEL FOR THE ASSESEE POINTED OUT THAT IN THE PRESENT CASE, PENALTY AMOUN TING TO RS.2,90,41,890/- HAD BEEN LEVIED BY THE DEPUTY COMMISSIONER OF INCOME TAX. THE LD. COUNSEL FOR THE ASSESSEE THEREAFTER DREW OUR ATTENTION TO THE DECIS ION OF THE COORDINATE BENCH OF THE I.T.A.T. IN THE CASE OF LATE SHRI GYAN CHAND JAIN VS. ITO IN ITA NO.53/JP/2011 DATED 7.3.2014 WHEREIN THE NECESSITY OF OBTAINING APPROVAL FROM THE REQUISITE AUTHORITY UNDER SECTION 274 WAS UPHELD AND IN THE ABSENCE OF THE SAME THE PENAL TY ORDER WAS HELD NOT TO BE A LEGAL ORDER IN THE EYES OF LAW. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, PRAYED THAT THE MATTER BE RESTORED TO THE LD.CIT (APPEALS) FOR RECONSIDERATION. 4 9. THE LD. D.R. FAIRLY ADMITTED THAT THE LD.CIT (APPEALS) HAD NOT DEALT WITH THE AFORESAID GROUNDS RAISED BY THE ASSESSEE IT. 10. WE HAVE HEARD BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE ORDER OF THE ITAT IN GROUP OF CASE S WITH THE LEAD CASE IN ITA NO.1346/CHD/2016 DATED AND FIND THAT ON IDENTICAL SET OF FACTS THE I.T.A.T . HAD RESTORED THE APPEAL BACK TO THE LD.CIT (APPEALS) FO R PASSING A SPEAKING ORDER ON ALL THE GROUNDS RAISED BY THE ASSESSEE SINCE IT WAS FOUND THAT THE ASSESSEES APPEAL HAD BEEN SUMMARILY DISMISSED BY THE CIT(A), WITHOUT DEALING SPECIFICALLY WITH ALL THE GROUNDS RAISED BY THE ASSESSEE AND MORE PARTICULARLY NOT DEALING WITH THE JURISDICTIONAL GROUND RAISED BY THE ASSESSEE OF ASSUMING JURISDICTION UNDER SECTION 147 WITHOUT OBTAINING NECESSARY APPROVAL FROM THE JCIT AS REQUI RED BY THE STATUTE UNDER SECTION 274 OF THE ACT. THE RELEVANT FINDINGS OF THE I.T.A.T. AT PARAS 10 AND 1 1 OF ITS ORDER ARE AS UNDER: 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. UNDOUBTEDLY IN THE PRESENT CASE PENALTY U/S 271(1)(C) AMOUNTING TO RS.1,48,53,626/- HAS BEEN LEVIED BY THE DCIT. SECTION 274 OF THE ACT, MANDATES APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX, WHERE PENALTY LEVIED BY THE DCIT EXCEEDS 20,000/-.THE ASSESSEE ,WE FIND, HAD RAISED THE GROUND BEFORE THE CIT(A) CHALLENGING THE ASSUMPTION OF JURISDICTION BY THE DCIT TO LEVY PENALTY. THE LD CIT(A) ,WE FIND, DISMISSED THE ASSESSEES APPEAL WITHOUT DEALING WITH THE LEGAL GROUND RAISED BEFORE IT. INTERESTINGLY WE FIND THA T THE LD.CIT(A) HAS MADE A PASSING REFERENCE TO THIS ISSUE IN HIS ORDER AT PARA 5,WHILE NARRATING THE FACTS OF THE CASE, STATING THAT APPARENTLY THE STATUTORY APPROVAL WAS TAKEN AFTER THE PASSING OF THE ORDER IMPOSING PENALTY WHICH EVIDENTLY WAS INCORRECTLY DATED. THE RELEVANT PORTION OF THE ORDE R IS AS UNDER: PENALTY OF RS.1,48,53,626/-WAS, THUS, LEVIED VIDE ORDER DATED 27/05/2014,EVEN THOUGH IT IS STATED THAT APPROVAL FOR THE SAID ORDER WAS ACCORDED BY THE ADDITIONAL COMMISSIONER ON 30/05/2014. EVIDENTLY, THE AO HAS DATED HIS PENALTY ORDER INCORRECTLY. 11. THE AFORESAID OBSERVATION OF THE LD.CIT(A), WITHOUT CORROBORATING THE FACTS OF THE CASE FROM TH E RECORDS, DOES NOT TANTAMOUNT TO ADJUDICATING THE ISSUE OF ASSUMPTION OF JURISDICTION. FURTHER WE FI ND 5 THAT THE LD.CIT(A) DISMISSED THE ASSESSEES APPEAL SUMMARILY WITHOUT DEALING WITH THE SPECIFIC GROUNDS, NUMBERING IN ALL TO 12, RAISED BY THE ASSESSEE. WE THEREFORE CONSIDER IT FIT THAT THE APPEAL BE RESTORED BACK TO THE LD.CIT (APPEALS) FOR PASSING A SPEAKING ORDER DEALING WITH ALL THE GROUNDS RAISED BY THE ASSESSEE. WE FURTHER DIRECT THAT THE ASSESSEE BE GIVEN DUE OPPORTUNITY OF HEARING. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. SINCE THE FACTS AND CIRCUMSTANCES IN THE PRESEN T CASE ARE IDENTICAL TO THAT IN ITA NO.1346/CHD/2016, THE DECISION RENDERED THEREIN WILL SQUARELY APPLY TO TH E PRESENT CASE ALSO FOLLOWING WHICH WE RESTORE THE AB OVE APPEALS TO THE LD.CIT (APPEALS) WITH DIRECTIONS TO PASS SPEAKING ORDER ON ALL THE GROUNDS RAISED BY THE ASS ESSEE AND AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. SINCE THE FACTS AND CIRCUMSTANCES INVOLVED IN TH E CAPTIONED APPEALS ARE IDENTICAL TO THAT OF ALREADY DECIDED BY THE TRIBUNAL VIDE ORDER DATED 10.08.2017 IN ITA NO. 1343 TO 1345/CHD/2017, HENCE, THE IMPUGNED ORDER OF THE CIT(A) IS HEREBY SET ASI DE AND THE MATTER IS RESTORED TO THE FILE OF CIT(A) WITH SIMILAR DIRE CTIONS TO PASS SPEAKING ORDER ON ALL THE GROUNDS RAISED BY THE ASS ESSEE. 6. IN THE RESULT BOTH THE APPEALS ARE TREATED AS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.02.20 18 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 06.02.2018 *RKK* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6