DCIT CENTRAL CIRCLE 8 ( 2), MUMBAI V. GUPTA STEEL CORPORATION P.LTD, RAIPUR

MA 30/MUM/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8153 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 22-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Block assessment
• Section: 271(1)(c); 201; 274; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , G BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI PAVAN KUMAR GADALE , JM MA NO.30/MUM/2020 (ARISING OUT OF ITA NO. 3729 /MUM/ 20 17) ( ASSESSMENT YEAR : 201 0 - 11 ) THE DY. COMMISSI ONER OF INCOME - TAX, CENTRAL CIRCLE 8(2), ROOM NO.658, 6 TH FLOOR AAYAKAR BHAVAN MUMBAI VS. M/S. GUPTA STEEL CORPORATION PVT. LTD., RING ROAD NO.2, VILLAGE GOGAON, NEAR URLA TELEPHONE EXCHANGE, RAIPUR (CG) - 492001 PAN/GIR NO. AABCP5835C (APPELLANT ) .. (RESPO NDENT ) REVENUE BY SHRI VIJAYKUMAR SUBRAMANYAM ASSESSEE BY SHRI ANUJ KISNADWALA DATE OF HEARING 18 / 12 /2020 DATE OF PRONOUNCEMENT 12 / 01 /202 1 / O R D E R PER M. BALAGANESH (A.M) : BY VIRTUE OF THIS M ISCELLANEOUS A PPLICATIO N, THE REVENUE SEEKS TO RECALL THE ORDER PASSED BY THIS TRIBUNAL IN ITA NO.3729/MUM/2017 DATED 22/07/2019 FOR THE A.Y.2010 - 11 WHEREIN THE PENALTY LEVIED HAS BEEN DELETED BY THIS TRIBUNAL. M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 2 2. THE CORE GROUND ON WHICH REVENUE HAS SOUGHT THIS MISCELLANEOUS APPLICATION WAS THAT THERE WAS AN ERROR WHICH HAD OCCURRED IN THE ORDER OF THE TRIBUNAL IN RESPECT OF THE ACTION OF THE TRIBUNAL DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT ON THE GROUND THAT THE PENALTY SHOW - CAUSE NOTICE HAD NOT STRUCK OFF THE IR RELEVANT PORTION AND THE ASSESSING OFFICER HAD NOT SPECIFICALLY MENTIONED THE OFFENCE COMMITTED BY THE ASSESSEE AS TO WHETHER IT HAD CONCEALED THE PARTICULARS OF INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THIS IS THE ONLY GROUND ON WHICH THE REVENUE HAD PREFERRED MISCELLANEOUS APPLICATION BEFORE US. 3. BEFORE US, THE LD. DR SUBMITTED THAT THOUGH IT IS A FACT THAT IN THE SHOW - CAUSE NOTICE, THE ASSESSING OFFICER HAD NOT STRUCK OFF THE IRRELEVANT PORTION , BUT THE ASSESSING OFFICER HAD DULY HIGH LIGHTED THE OFFENCE OF ASSESSEE CONCEALING ITS PARTICULARS OF INCOME IN BOLD LETTERS IN THE SAID SHOW - CAUSE NOTICE WHICH AMOUNTS TO CORRECT ACTION ON THE PART OF THE ASSESSING OFFICER; THOUGH ASSESSEE WAS DULY INTIMATED OF HIS OFFENCE AND THAT NO PREJUDICE HAS BEEN CAUSED TO THE ASSESSEE IN THIS REGARD AS ASSESSEE HAD DULY PARTICIPATED IN THE PENALTY PROCEEDINGS AND HAD FILED RE PLY THEREON. HE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHIRISH MADHUKAR DALVI VS. ACIT REPORTED IN 156 TAXMAN 79 (BOM) STATING THAT THE MISTAKE OF THE ASSESSING OFFICER WOULD BE A CURABLE DEFECT IN TERMS OF SECTION 292B OF THE ACT AND THAT THE NOTICE PER SE WOULD NOT BECOME INVALID THEREON AS NO PREJUDICE WAS CAUSED TO THE ASSESSEE . 4. PER CONTRA, THE LD. AR SUBMITTED THAT THIS TRIBUNAL HAD CANCELLED THE LEVY OF PENALTY BOTH ON MERITS AS WELL AS ON THE LEGAL ISSUE. ON MERITS IN PARA 5, THIS TRIBUNAL HAD CATEGORICALLY HELD THAT THE LONG TERM CAPITAL LOSS CLAIMED BY THE ASSESSEE ON S ALE OF SHARES OF SKS ISPAT AND POWER M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 3 LTD., HAD NEVER BEEN SET OFF WITH FUTURE INCOME UP TO A.Y.2018 - 19 AND THAT THERE WAS ABSOLUTELY NO TAX EVASION AT ALL. AS THE LOSS WHICH WAS SUBJECT MATTER OF DISALLOWANCE HAD BEEN LAPSED, THIS FINDING GIVEN BY THIS TRI BUNAL IN PARA 5 TANTAMOUNT TO FINDING GIVEN ON MERIT AND ADJUDICATION OF THE ISSUE IN DISPUTE I.E. LEVY OF PENALTY ON MERITS. APART FROM THIS, THIS TRIBUNAL HAD ALSO CANCELLED THE LEVY OF PENALTY ON THE GROUND OF NON - STRIKING OF THE RELEVANT PORTION IN THE SHOW - CAUSE NOTICE BY PLACING RELIANCE ON THE CO - ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF RADHAKRISHNA ROADWAYS PVT. LTD., VS. ACIT IN ITA NO.3728/MUM/2017 DATED 14/03/2019, THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F SAMSON PERINCHARY IN ITA NO.1154/MUM/2014, DECISION OF HONBLE KARNATAKA HIGH COURT IN CIT VS MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN 359 ITR 565 AND THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF PCIT VS. SMT. BAISETTY RE VATHI REPORTED IN 398 ITR 88. THE LD. AR ALSO POINTED OUT THAT IN THE CASE OF ASSESSEES SISTER CONCERN I.E. RADHAKRISHNA ROADWAYS CASE WHICH HAS BEEN RELIED UPON BY THIS TRIBUNAL, THE REVENUE HAD PREFERRED A MISCELLANEOUS APPLICATION ON EXACTLY IDENTICAL GROUNDS AND THE SAME WAS DISMISSED BY THIS TRIBUNAL IN MA NO.464/MUM/2019 DATED 21/11/2019. IN THE INSTANT CASE BEFORE US ALSO THE LD. AR SUBMITTED THAT ASSESSEE HAD FILED A REPLY DATED 31/08/2013 BEFORE THE ASSESSING OFFICER IN RESPONSE TO SHOW - CAUSE NOTI CE ISSUED FOR LEVY OF PENALTY ON THE UNDERSTANDING THAT THE LD. AO HAD INITIATED PENALTY PROCEEDINGS FOR BOTH THE OFFENCES I.E. ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE LD. AR SUBMITTED THAT THE F ACTS OF THE INSTANT CASE ARE EXACTLY IDENTICAL TO THE FACTS IN THE CASE OF RADHAKRISHNA ROADWAYS WHERE REVENUES MISCELLANEOUS APPLICATION HAS BEEN DISMISSED BY THIS TRIBUNAL ON IDENTICAL GROUNDS. M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 4 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA LS AVAILABLE ON RECORD. WE FIND LOT OF FORCE IN THE ARGUMENT ADVANCED BY THE LD. AR. WE FIND THAT THE CASE LAW RELIED UPON BY THE LD. DR ON 156 TAXMAN 79 WAS RENDERED IN THE CONTEXT OF BLOCK ASSESSMENT PROCEEDINGS WHERE IT WAS HELD THAT EVEN IF THE NOTICE ISSUED U/S.158BC OF THE ACT SUFFERED FROM TECHNICAL DEFECTS, NO P REJUDICE WAS CA USED TO THE ASSESSEE IN THAT CASE AS THE ASSESSEE HAD FILED RETURN OF INCOME IN RESPONSE TO THE SAID NOTICES AND PARTICIPATED IN THE BLOCK ASSESSMENT PROCEEDINGS OFFERING SOME INCOME AND THE DEFECTS POINTED OUT IN THE FACTS OF THAT CASE WE RE CURABLE U/S.292B OF THE ACT, WHEREAS THE DEFECT IN THE PENALTY SHOW CAUSE NOTICE IN THE INSTANT CASE IS A JURISDICTIONAL DEFECT AND IS NOT CURABLE U/S 292B OF THE ACT AS HELD BY VARIOUS DECI SIONS OF HONBLE HIGH COURTS. 5.1. WE FIND THAT AT THE OUTSET THE SHOW - CAUSE NOTICE ISSUED U/S.274 R.W.S. 271(1)(C) OF THE ACT CLEARLY STIPULATES THAT THE ASSESSING OFFICER IS SUPPOSED TO STR IKE OFF THE IRRELEVANT PORTION AND SPECIF Y THE FOLLOWING: A . WHET HER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR B . WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR C . WHETHER THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. 5.2. THE OFFENCE ME NTIONED ABOVE IS MANDATORILY REQUIRED TO BE SPECIFIED IN THE SAID SHOW - CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER, SO THAT ASSESSEE WOULD BE ABLE TO REPLY IN RESPONSE TO THAT SPECIFIC OFFENCE THEREON. MERELY BECAUSE THE SHOW - CAUSE NOTICE HAD MENTIONED TH AT ASSESSEE HAD CONCEALED ITS PARTICULARS IN BOLD LETTERS THAT ALONE WOULD NOT SUFFICE THE REQUIREMENTS. THE ASSESSEE CANNOT BE EXPECTED TO KNOW OR M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 5 UNDERSTAND THE MIND OF THE ASSESSING OFFICER THAT THE ASSESSING OFFICER IS EXPECTING REPLY FROM THE ASSESSEE ONLY ON THE ASPECT OF ASSESSEE CONCEALING PARTICULARS OF INCOME. IN THAT BACKGROUND, THE ASSESSEE ON THE SAFE SIDE HAD GIVEN HIS ENTIRE SUBMISSIONS DATED 31/08/2013 DEFENDING THAT IT HAD NEITHER CONCEALED PARTICULARS OF INCOME NOR FURNISHED INACCURATE PAR TICULARS OF INCOME. THIS DOES NOT TANTAMOUNT TO MERE PARTICIPATION IN THE PENALTY PROCEEDINGS BY ACCEPTING TO THE MISTAKE COMMITTED BY THE ASSESSING OFFICER AND THE SAID MISTAKE DOES NOT GET CURED U/S 292B OF THE ACT . HENCE, THE CASE LAW RELIED UPON BY THE LD. DR FACTUALLY DISTINGUISHABLE WITH THAT OF THE ASSESSEE BEFORE US. 5.3. IN ANY CASE , WE FIND THAT THE ISSUE IN DISPUTE HAS BEEN ADJUDICATED IN THE CASE OF ASSESSEES SISTER CONCERN IN THE CASE OF DCIT VS. RADHAKRISHNA ROADWAYS PVT. LTD., IN SIMILAR MI SCELLANEOUS APPLICATION PROCEEDINGS IN MISCELLANEOUS APPLICATION NO.464/MUM/2019 DATED 21/11/2019 WHEREIN SIMILAR ARGUMENTS WERE ADVANCED BY THE LD. DR AND LD. AR AND THIS TRIBUNAL HAD DISMISSED THE MISCELLANEOUS APPLICATION OF THE REVENUE. THE RELEVANT PO RTION OF THE SAID MISCELLANEOUS APPLICATION ARE REPRODUCED HEREUNDER: - 2. THE LEARNED D.R. SUBMITTED THAT WHILE PASSING THE SAID ORDER DATED 14.03.2019, THE TRIBUNAL HELD THAT WHILE ISSUING THE NOTICE U/S.274 R.W.S.271 OF THE ACT DATED 28.03.2013, THE AO HAS NOT INDICATED ONE OF THE TWO LIMBS ON WHICH THE PENALTY WAS PROPOSED TO BE IMPOSED. THE LD DR. DURING THE COURSE OF HEARING TOOK THE BENCH THROUGH THE CONTENTS OF THE NOTICE AND SUBMITTED THAT THE AO HAS INDICATED THE LIMB BY HIGHLIGHTING THE RELEVANT PORTION WHEREAS THE REDUNDANT PORTION WAS NOT HIGHLIGHTED. THEREFORE, LEARNED D.R. PRAYED THAT THE SAID ORDER MAY KINDLY BE RECALLED AS HAVING PRIMA FACIE APPARENT MISTAKE. 3. THE LEARNED A.R. OF THE ASSESSEE ON THE OTHER HAND, STRONGLY OPPOSED THE ARGUM ENTS OF THE LEARNED D.R. BY STATING THAT THE SAID ARGUMENTS WERE NEVER RAISED DURING THE COURSE OF HEARING BEFORE THE BENCH AND FOR THE FIRST TIME WAS BEING RAISED BY WAY OF MISCELLANEOUS APPLICATION. REFERRING TO THE PROVISIONS OF SECTION 254(2) OF THE AC T, THE LEARNED A.R. OF THE ASSESSEE STATED M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 6 THAT THE SCOPE OF THE SECTION IS VERY LIMITED AND CERTAINLY TWO OPINIONS ARE POSSIBLE FROM THE FORMAT AND LANGUAGE USED IN THE NOTICE BY REFERRING TO THE NOTICE WHEREIN ONE PART IS HIGHLIGHTED AND THE OTHER IS NOT HIGHLIGHTED. THE LEARNED A.R. OF THE ASSESSEE TOOK US TO PAGE21 OF THE PAPER BOOK WHICH WAS A REPLY FILED BEFORE THE ADIT DATED 31.08.2013, RESPONDING TO THE NOTICE ISSUED U/S.274 R.W.S.271 OF THE ACT DATED 28.03.2013. THE LD AR SUBMITTED THAT AS IS CLEAR FROM THE REPLY TO THE SAID SHOW CAUSE NOTICE , THE ASSESSEE REPLIED FOR BOTH CHARGES NAMELY CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME AS APPEARING IN THE NOTICE. THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS U NDERSTOOD BOTH LIMBS AND RESPONDED ACCORDINGLY. THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE LEARNED D.R. WHO ARGUED THE MATTER BEFORE THE TRIBUNAL HAS UNDERSTOOD THE NOTICE IN THE SAME MANNER AND THEREFORE, THERE IS NO MISTAKE APPARENT FROM RECORD. THE LEARNED A.R. OF THE ASSESSEE FINALLY SUBMITTED THAT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE MAY KINDLY BE DISMISSED AS BEING DEVOID OF MERITS. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE OBSERV E THAT THE MISCELLANEOUS APPLICATION IS MOVED BY THE DEPARTMENT FOR RECALLING OF THE ORDER OF TRIBUNAL DATED 14.03.2019 WHEREBY THE COORDINATE BENCH OF THE TRIBUNAL ALLOWED THE APPEAL OF ASSESSEE BY DIRECTING TO DELETE THE PENALTY IMPOSED U/S.271(1)(C) OF THE ACT ON THE GROUND THAT THE AO HAS NOT APPLIED HIS MIND WHILE ISSUING THE NOTICE U/S.274 R.W.S.271 OF THE ACT DATED 28.03.2013. WE FIND THAT ONE OF THE TWO LIMBS HAVING CONCEALED PARTICULARS OF INCOME HAVE BEEN HIGHLIGHTED WHEREAS THE SECOND LIMB HAS NOT BEEN STRUCK OFF, AND THIS ARGUMENT HAS BEEN TAKEN FOR THE FIRST TIME BY WAY OF THIS MISCELLANEOUS APPLICATION ONLY . WE ALSO PERUSED THE REPLY OF THE ASSESSEE DATED 31.08.2013 WHEREIN THE ASSESSEE HAS UNDERSTOOD THE NOTICE TO MEAN THAT PENALTY PROCEEDI NGS HAS BEEN UNDERSTOOD BY THE ASSESSEE TO BE PROPOSED FOR BOTH THE LIMBS. THE RELEVANT PART OF THE REPLY IS REPRODUCED AS UNDER: - RADHAKRISHNA ROADWAY PRIVATE LIMITED (THE ASSESSEE OR THE COMPANY) IS IN RECEIPT OF YOUR NOTICE DATED 28TH MARCH,2013 U/S. 274 R.W.S.271 OF THE INCOME TAX ACT,1961, STATING AS TO WHY PENALTY U/S.271(1)(C) OF THE ACT SHOULD NOT BE LEVIED FOR HAVING CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IT IS CLEAR FROM THE ABOVE AS THE ASSESSEE HAS UNDERSTOOD THE NOTICE IN THE SAME MANNER IN WHICH IT WAS ISSUED BY THE AO AND UNDERSTOOD BY THE LEARNED D.R. ALSO. ACCORDINGLY, WE FIND THAT THERE ARE TWO VIEWS POSSIBLE ON EXAMINING THIS NOTICE ISSUED U/S.274 R.W.S.271 OF THE ACT DATED 28.03.2013. IN VIE W OF THE ABOVE DISCUSSION, WE HOLD THAT THERE IS NO MISTAKE APPARENT IN THE M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 7 ORDER OF THE TRIBUNAL DATED 14.03.2019 AND THE MISCELLANEOUS APPLICATION HAS NO MERIT AND IS DISMISSED . 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DI SMISSED. 5.4. RESPECTFULLY FOLLOWING THE SAME, THE MISCELLANEOUS APPLICATION PREFERRED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 12 / 01 /202 1 BY WAY OF PROPER MENT IONING IN THE NOTICE BOARD. SD/ - ( PAV AN KUMAR GADALE ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 01 / 202 1 KARUNA , SR.PS M A NO . 30/MUM/2020 M/S. GUPTA STEEL CORPORATION PVT. LTD., 8 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//