ACIT, Calicut V. M/s.Chandragiri constructions Co., Kasargode

MA 07/COCH/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6387 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 07-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: C B M WARRIER
• Keywords: Rectification of order; Reasonable cause; Difference of opinion; Corroborative evidences
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., JM M . P . NOS . 07 - 10 / COCH / 2015 (ARSG. OUT OF I.T.A. NOS. 260 TO 262/COCH/2012 & 56 9/COCH/2015) ASSESSMENT YEAR S : 2002 - 03 - 2005 - 06 M/S. CHANDRAGIRI CONSTRUCTION CO., PO THEKKIL, KASARAGODE. PAN: AABFC 7523K] VS. THE DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE-1, CALICUT. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI C.B.M. WARRIER, CA REVENUE BY SHRI A. DHANARAJ, SR. DR D ATE OF HEARING 06/04/2018 DATE OF PRONOUNCEMENT 25 / 0 4 /2018 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE MISCELLANEOUS PETITIONS ARE FILED BY THE ASSESSEE SEEKING RECALL/RECTIFICATION OF ORDER OF THE TRIBUNAL IN IT A NOS. 260 TO 262/COCH/2012 AND 569/COCH/2015 DATED 19/09/2014. 2. THE LD. AR SUBMITTED THAT FOR THE ASSESSMENT Y EAR 2002-03 WHILE THE ORIGINAL ASSESSMENT ORDER WAS PASSED U/S. 143 (3) O F THE ACT, THE ASSESSING M.A. NOS. 07-10//C/2015 2 OFFICER DETERMINED THE INCOME AT RS.1,65,69,800/-VI DE ORDER DATED 30/03/2005. LATER IN THE ASSESSMENT ORDER PASSED U/S. 143(3) R. W.S. 263 OF THE ACT, THE ASSESSING OFFICER FURTHER ADDED INCOME AT RS.4,91,2 6,096/- VIDE ORDER DATED 30.11.2007. CONSEQUENT TO THE RELIEF GIVEN BY THE CIT(A) VIDE ORDER DATED 12/04/2008, THE INCOME OF THE ASSESSEE WAS DETERMIN ED AT RS.1,76,09,820/- IN PLACE OF RS.4,91,26,096/- AS PER THE CONSEQUENTIAL ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 263 R.W.S. 250 OF THE ACT DATED 30//1 1/2007. ACCORDING TO HIM THE DIFFERENCE BETWEEN ORIGINAL ASSESSMENT ORDER AND TH IS ASSESSMENT ORDER IS A SMALL AMOUNT, THEREFORE, LEVY OF PENALTY IS NOT WAR RANTED. THIS ADDITION OF RS.9,31,795/- WAS FINALLY SUSTAINED BY THE CIT(A) ON ACCOUNT OF DIFFERENCE IN WORK-IN-PROGRESS ON ESTIMATED BASIS AFTER REDUCING THE GROSS PROFIT AT 15% ON THE BILLS RECEIVABLE. THIS ASPECT WAS NOT AT ALL C ONSIDERED BY THE TRIBUNAL. 2.1 FOR THE ASSESSMENT YEAR 2003-04, IT WAS SUBMIT TED THAT THE ASSESSMENT WAS COMPLETED U/S. 143(3) VIDE ORDER DATED 23/03/2006 A ND THE INCOME WAS DETERMINED AT RS.2,68,55,660/-. PURSUANT TO THE AS SESSMENT ORDER PASSED U/S. 143(3) R.W.S. 263 OF THE ACT, IT WAS DETERMINED AT RS. 7,77,00,310/- AND AGRICULTURAL INCOME AT RS.15 LAKHS. ON FURTHER APP EAL TO THE CIT(A), IT WAS DETERMINED BY THE ASSESSING OFFICER AT RS.2,77,40,4 0,946 /- VIDE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 263 DATED 30/06/200 8. ACCORDING TO THE LD. AR, THE DIFFERENCE IN THE INCOME WAS ONLY RS.8,85,286/- THEREFORE, LEVY OF PENALTY IS NOT WARRANTED. M.A. NOS. 07-10//C/2015 3 2.3 FOR THE ASSESSMENT YEAR 2004-05, THE ASSESSMENT WA S COMPLETED U/S. 143(3) VIDE ORDER DATED 29/12/2006 AND THE INCOME W AS DETERMINED AT RS.7,71,72,800/- AS AGAINST THE RETURNED INCOME OF RS.2,59,25,080/- AND AGRICULTURAL INCOME OF RS.40,53,371/- THE CIT(A) GA VE RELIEF TO THE ASSESSEE AND AS PER THE FINAL ORDER GIVING EFFECT TO THE ORDER O F CIT(A), THE ASSESSING OFFICER VIDE ORDER DATED 11/06/2013 DETERMINED THE INCOME A T RS.1,03,41,196/-. THE LD. AR SUBMITTED THAT THE ASSESSEES INCOME FINALLY DETERMINED IS LESS THAN THE RETURNED INCOME FILED BY THE ASSESSEE, THEREFORE LE VY OF PENALTY IS NOT WARRANTED. 2.4 FOR THE ASSESSMENT YEAR 2005-06, THE INCOME WA S DETERMINED AT RS. 15,51,72,050/- VIDE ORDER PASSED U/S. 143(3) OF THE ACT DATED 19/12/2007 AS AGAINST THE RETURNED INCOME OF RS. 3,17,45,820/- AN D AGRICULTURAL INCOME OF RS.22,31,760/- . THE CIT(A) VIDE ORDER DATED 22/05/ 2008 GAVE RELIEF TO THE ASSESSEE AT RS.10,37,38,526/-. 2.5 IT WAS SUBMITTED THAT THE ASSESSING OFFICER VIDE ORDER DATED 26/06/2008 DETERMINED THE INCOME AT RS.5,14,33,521/- AS AGAINS T THE ASSESSEES RETURN OF RS.3,17,45,818/- FOR THE ASSESSMENT YEAR 2005-06. THE LD. AR SUBMITTED THAT THE DIFFERENCE BETWEEN INCOME RETURNED AND INCOME A SSESSED WAS RS.1,96,87,703, THEREFORE PENALTY WAS NOT WARRANTED . ACCORDING TO THE LD. AR, THE PENALTY U/S. 271(1)(C) WAS CALCULATED ON AN I NCOME OF RS.3,36,14,376/-, THE AMOUNT OF MINIMUM PENALTY WAS RS.1,23,00,341/- AND THE CIT(A) FIXED THE M.A. NOS. 07-10//C/2015 4 PENALTY AT RS.1,23,00,341/- AFTER ADOPTING THE MINI MUM PENALTY AT 100%. THE ASSESSING OFFICER IMPOSED THE PENALTY AT 200% RS.2, 46,00,682/-. IT WAS SUBMITTED THAT THE DIFFERENCE IN INCOME RETURNED AN D THE INCOME ASSESSED IS ONLY RS.1,96,87,703/- AND THE ASSESSING OFFICER HAD COMPUTED THE PENALTY ON A HIGHER AMOUNT OF RS.3,36,14,376/- WHICH IS WRONG. ACCORDING TO THE LD. AR THE DIFFERENCE IN WIP AND BILLS RECEIVABLES AS PER ASSE SSMENT ORDER WAS ON ACCOUNT OF BILLS RECEIVABLE OF KARAPUZHA DAM AND THE AMOUNT OF THIS BILL WAS RS.8,57,16,674/-. THE LD. AR SUBMITTED THAT THE BI LLS AMOUNT IN RESPECT OF KARAPUZHA PROJECT AT RS.7,32,88,617/- WAS TAKEN AS BILLS RECEIVABLES IN THE ASSESSMENT ORDER BUT AS PER THE INFORMATION OBTAINE D UNDER RIGHT TO INFORMATION ACT ALL THE BILLS WERE PASSED ONLY SUBSEQUENT TO 31 .03.2005. HENCE, IT WAS SUBMITTED THAT THEY CANNOT BE TAKEN AS BILLS RECEIV ABLE BUT CORRESPONDING WIP WAS TO BE INCLUDED. 2.6 THE LD. AR FURTHER SUBMITTED THAT THE GROSS P ROFIT FIXED BY THE CIT(A) WAS 24.05% AND AFTER REDUCING THE GROSS PROFIT, THE BAL ANCE AMOUNT IS TO BE TAKEN AS WIP. SO, IT WAS SUBMITTED THAT THE TOTAL VALUE OF BILLS RECEIVABLE WILL BE REDUCED BY GROSS PROFIT INCLUDED IN THE BILLS RS.2,80,09,86 1/- (116465120 X 24.05%). ACCORDING TO THE LD. AR, IF THE ABOVE EFFECT IS GIV EN FOR THIS REDUCTION IN THE VALUE OF BILLS RECEIVABLE TO THE EXTENT OF GROSS PR OFIT, THE TOTAL INCOME WILL BE RS.2,34,23,662/- (RS.5,14,33,523/- LESS RS.2,80,09, 861/-). SINCE THE ASSESSABLE INCOME WAS LESS THAN THE RETURNED INCOME OF RS.3,17 ,45,818/-, IT WAS SUBMITTED M.A. NOS. 07-10//C/2015 5 THAT THE LEVY OF PENALTY U/S. 271(1)(C) WAS NOT JUS TIFIED. IT WAS SUBMITTED IN RESPECT OF THE WIP REGARDING KARAPUZHA PROJECT THAT THE DATE OF MEASUREMENT WAS SHOWN UPTO APRIL, MAY, JUNE, 2005 AND IN CASE T HE DATE OF MEASUREMENT IS IN JUNE, 2006, THESE BILLS ARE ALSO CONSIDERED AS B ILLS RECEIVABLE AS ON 31/03/2005. ACCORDING TO THE LD. AR, WIP AT RS.1,5 9,99,385/- WAS ADDED FOR VARIOUS ITEMS OF CONTRACT AS COMPLETED TO THE EXTEN T OF 50%, 25%, 10% ETC. ON AN ESTIMATED BASIS WITHOUT ANY SUPPORTING EVIDENCES , HENCE, THE ADDITION TO THE WIP WAS ONLY ON ESTIMATED BASIS. HENCE, IT WAS SUB MITTED THAT THE MISTAKE MAY BE RECTIFIED AND THE LEVY OF PENALTY MAY BE CANCELL ED. 2.7 IT WAS FURTHER SUBMITTED THAT THE FINDING OF THE TRIBUNAL IN PARA 7 AT PG. 19 WHICH READS AS FOLLOWS IS OPPOSED TO THE FACTS OF T HE CASE AND THE PENALTY WAS LEVIED ONLY ON THE BASIS OF THE ESTIMATED VALUE OF WORK IN PROGRESS BY THE ASSESSING OFFICER: 7. IN THIS CASE, THE MAIN CONTENTION OF THE LD AR OF THE ASSESSEE WAS THAT THE ADDITION MADE WAS ONLY AN ESTIMATION BASIS AND THERE IS NO MATERIAL BROUGHT ON RECORD DURING THE PENALTY PROCEEDINGS SO AS TO LEVY PENALTY. ACCORDING TO THE LD AR, THERE WAS A DIFFERENCE OF O PINION REGARDING THE ESTIMATION OF WORK-IN-PROGRESS AND BILLS RECEIVABLE S THEREBY ESTIMATED THE INCOME OF THE ASSESSEE; SINCE THE AO AND THE CIT(A) HAS CONSIDERED THE DIFFERENT ESTIMATION OF INCOME OF THE ASSESSEE. AC CORDING TO THE LD AO, IT WAS CONCEALMENT OF INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME SO AS TO LEVY PENALTY U/S. 271(1)(C) OF THE ACT BEC AUSE THERE WAS DIFFERENCE BETWEEN THE RETURNED INCOME AND THE ASSE SSED INCOME DUE TO DIFFERENCE OF OPINION ABOUT THE ESTIMATION OF WORK- IN-PROGRESS AND BILLS RECEIVABLE OR DETERMINATION OF AGRICULTURAL INCOME, WHICH WAS DISCLOSED BY THE ASSESSEE THAT CANNOT BE THE REASON TO LEVY OF P ENALTY U/S. 271(1)(C) OF THE ACT. BUT IN THE PRESENT CASE, THE ASSESSEE HAS NOT MAINTAINED ANY TRUE AND CORRECT ACCOUNT. THERE WAS NO DISCLOSURE OF CORRECT TURNOVER OR WORK-IN-PROGRESS AS MATERIAL BROUGHT ON RECORD SUGG ESTS THAT THOUGH THE M.A. NOS. 07-10//C/2015 6 ASSESSEE SUBMITTED THE BILLS TO THE PWD OFFICE FOR CLAIMING THE PAYMENTS THAT WAS NOT INCLUDED IN THE TURNOVER. EVEN OTHERWI SE, THE ASSESSEE HAS NOT SHOWN THAT PART OF WORK AS WORK-IN-PROGRESS. EI THER THE ASSESSEE HAS TO TREAT THE SAME AS SALE/TURNOVER AS SOON AS THE B ILLS ARE SUBMITTED TO THE PWD OR IF THE BILLS ARE GOT PENDING WITH PWD FO R APPROVAL; THIS SHOULD SHOWN AS WORK-IN-PROGRESS. THE ASSESSEE TACTFULLY A VOIDED THIS AND FURTHER THERE IS NO EVIDENCE TO SUGGEST THAT THE AS SESSEE IS HAVING AGRICULTURAL INCOME TO THE EXTENT DISCLOSED BY THE ASSESSEE. IT IS CLEARLY SHOWN THAT THE ASSESSEE NOT ONLY FURNISHED INACCURA TE PARTICULARS OF INCOME BUT ALSO CONCEALED THE PARTICULARS OF INCOME . EVEN THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT BONAFIDE SO AS NOT T O LEVY PENALTY. THE ARGUMENT OF THE ID COUNSEL IS TOTALLY MISCONCEIVED AND HAVING NO MERIT AND IT IS A BASELESS CONTENTION. THE ASSESSEE, IN T HIS CASE HAS NOT DISCLOSED TRUE TURNOVER OR TRUE PROFIT, WHICH CLEAR LY SHOWN THAT IT IS A CLEAR CASE FOR LEVY OF PENALTY AS THE ASSESSEE CONCEALED PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME TO A VOID TAX AND THEREFORE, THE PLEA OF THE ASSESSEE SHOULD BE REJECTED. 3. THE LD. DR RELIED ON THE ORDERS OF THE TRIBUNAL .. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE MAIN CONTENTION OF THE LD. AR IN THESE ASSESSMENT YEARS IS THAT THE PENALTY WAS LEVIED ON ACCOUNT OF ADDITIONS MADE DUE TO ESTIMATED UNDER STATEMENT OF WORK-IN- PROGRESS. ACCORDING TO THE LD. AR, THE ESTIMATED DI SALLOWANCE CANNOT BE A REASON FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE AC T. THIS FACT WAS NOT AT ALL CONSIDERED BY THE TRIBUNAL WHILE DISPOSING OF THE A PPEALS IN THIS CASE. THE LD. AR SUBMITTED THAT THE FINDING OF THE TRIBUNAL IN PA RA 7, PG. 19 WAS OPPOSED TO THE FACTS OF THE CASE AS THERE WAS NO SUPPRESSION O F TURNOVER OR OMISSION IN BILLS TO ACCOUNT OR OMISSION IN RECORDING THE WORK-IN-PRO GRESS. IN OUR OPINION, THE TRIBUNAL WHILE DISPOSING OF THE APPEALS, CONSIDERED THE ENTIRE FACTS AND M.A. NOS. 07-10//C/2015 7 CIRCUMSTANCES OF THE CASE AND CONFIRMED THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 5. NOW, THE CONSIDERATION OF THE ARGUMENT OF THE LD. COUNSEL WOULD AMOUNT TO REVIEW OF EARLIER ORDER OF THE TRIBUNAL FOR WHICH T HE TRIBUNAL HAS NO POWER. THE SCOPE U/S. 254(2) OF THE ACT IS VERY LIMITED. IT I S RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM RECORD. REVIEW OF THE ORDER IS NOT PERMITTED U/S. 254(2) OF THE ACT WHICH NECESSITATES RE-HEARING OF THE ENT IRE ISSUE BEFORE THE TRIBUNAL. HOWEVER, THE PROVISION TO RECALL THE ORDER OF THE T RIBUNAL IS PROVIDED UNDER RULE 24 AND 25 OF ITAT RULES, 1963, THAT TOO, IN CASES W HERE THE APPELLANT/RESPONDENT SHOWS REASONABLE CAUSE FOR BEI NG ABSENT AT THE TIME WHEN THE APPEAL WAS TAKEN UP AND DECIDED EXPARTE. IN VI EW OF THIS, WE ARE OF THE OPINION THAT THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDERS OF THE TRIBUNAL WHICH WARRANTS RECALL OF THE EARLIER ORDERS. ACCOR DINGLY, WE DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE LD. AR. HENCE, THE GROUNDS TAKEN BY THE ASSESSEE IN ALL THE MISCELLANEOUS PETITIONS ARE DISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS PETITIONS FIL ED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 25 TH APRIL, 2018. SD/- SD/- ( GEORGE GEORGE K.) (CHAN DRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER M.A. NOS. 07-10//C/2015 8 PLACE: DATED: 25 TH APRIL, 2018 GJ COPY TO: 1. M/S. CHANDRAGIRI CONSTRUCTION CO., PO THEKKIL, K ASARAGODE. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-1, CALICUT. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), KOZHIK ODE. 4. THE PR. COMMISSIONER OF INCOME-TAX CENTRAL, KOCH I 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGI STRAR) I.T.A.T., COCHIN