ACIT , Cochin V. M/s.Victory Tourist home & Central Hotel & Bar, Kannur

MA 36/COCH/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0174 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 01-03-2013
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: N S RAJAGOPAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM M.P. NO. 36/COCH/2013 (ARSG. OUT OF I.T.(SS)A. NO.60/COCH/2008) ASSESSMENT YEAR : 1990-91 TO 2000-01 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), RANGE- 2, TRICHUR. VS. M/S. VICTORY TOURIST HOME & CENTRAL HOTEL AND BAR, SEENA NIVAS, DHARMASALA, KANNUR. [PAN: AACFV 2397P] (REVENUE -APPELLANT) (ASSESSEE-R ESPONDENT) REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR ASSESSEE BY SHRI N.S. RAJAGOPAL, CA DATE OF HEARING 19/04/2013 DATE OF PRONOUNCEMENT 26/04/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE REVENUE HAS FILED THIS MISCELLANEOUS APPLIC ATION WITH THE PLEA THAT THE TRIBUNAL, IN ITS ORDER DATED 08-06-2012 IN THE APPEAL REFERRE D SUPRA, HAS NOT GIVEN A CLEAR FINDING ON THE GROUND NO.2 URGED BY THE REVENUE BEFORE THE TRIBUNAL. 2. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY U/S 158BFA(2) OF THE ACT ON THE ADDITIONS SUSTAINED BY THE TRIBUNAL IN RESPECT OF THREE ITEMS, VIZ., SALES SUPPRESSION OF LIQUOR, SALES SUPPRESSION OF FOOD AN D EXCESS CASH COLLECTION. THE AO LEVIED PENALTY ON THE ABOVE SAID ADDITIONS AT TWO T IMES OF TAX LEVIABLE. HOWEVER, IN THE APPEAL PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT (A), THE FIRST APPELLATE AUTHORITY CONFIRMED THE PENALTY IN RESPECT OF SALES SUPPRESS ION OF LIQUOR, REDUCED THE QUANTUM OF PENALTY IN RESPECT OF SALES SUPPRESSION OF FOOD AND DELETED THE PENALTY IN RESPECT OF EXCESS CASH COLLECTION. THE LD CIT(A) ALSO REDUC ED THE QUANTUM OF PENALTY TO ONE TIME OF TAX LEVIABLE. BOTH THE ASSESSEE AS WELL AS THE REVENUE PREFERRED APPEALS BEFORE M.P. NO.36 /COCH/2013 2 THE HONBLE TRIBUNAL CHALLENGING THE ORDER PASSED B Y LD CIT(A). THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE ASSESSEE AND PART LY ALLOWED THE APPEAL FILED BY THE REVENUE. IN ITS APPEAL, THE REVENUE HAS, INTER ALI A, CHALLENGED THE DECISION OF THE LD. CIT(A) IN RESTRICTING THE PENALTY TO ONE TIME OF TA X LEVIABLE ON THE UNDISCLOSED INCOME. HOWEVER, THE TRIBUNAL DID NOT ADJUDICATE THE SAID G ROUND, THOUGH IT HAS REVERSED THE DECISION OF LD. CIT(A) IN CANCELLING THE PENALTY O N EXCESS CASH COLLECTION. THE LD D.R ACCORDINGLY SUBMITTED THAT THE TRIBUNAL DID NOT GIV E A CLEAR FINDING ABOUT THE QUANTUM OF PENALTY TO BE LEVIED. 3. THE LD. AR SUBMITTED THAT THE LD. CIT(A) CONFIRM ED THE PENALTY IN RESPECT OF THE ADDITION RELATING TO SALES SUPPRESSION OF LIQUOR AND REDUCED THE QUANTUM OF PENALTY IN RESPECT OF THE ADDITION RELATING TO SALES SUPPRESS ION OF FOOD. THE LD CIT(A) ALSO RESTRICTED THE QUANTUM OF PENALTY TO ONE TIME OF TA X LEVIABLE IN RESPECT OF THE ABOVE SAID TWO ADDITIONS. THE DECISION RENDERED BY LD. C IT(A) IN RESPECT OF THE ABOVE SAID TWO ADDITIONS WAS CONFIRMED BY THE TRIBUNAL AND ACC ORDINGLY, THE DECISION OF LD CIT(A) IN RESTRICTING THE QUANTUM OF PENALTY TO ONE TIME O F TAX LEVIABLE ALSO STANDS CONFIRMED BY THE TRIBUNAL. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE SAME VIEW SHOULD BE TAKEN IN RESPECT OF ADDITION RELATING TO EXCESS CASH COL LECTION ALSO. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER HAS LEVIED PENALTY AT TW O TIMES OF TAX LEVIABLE IN RESPECT OF THE FOLLOWING THREE ADDITIONS,: (A) SALES SUPPRESSION OF LIQUOR. (B) SALES SUPPRESSION OF FOOD. (C) EXCESS CASH COLLECTION. THE LD. CIT(A) SUSTAINED THE PENALTY IN RESPECT OF THE SALES SUPPRESSION OF LIQUOR, PARTIALLY SUSTAINED PENALTY IN RESPECT OF SALES SUP PRESSION OF FOOD AND DELETED PENALTY IN RESPECT OF EXCESS CASH COLLECTION. THE LD. CIT( A) ALSO REDUCED THE QUANTUM OF PENALTY TO ONE TIME OF TAX LEVIABLE. AGGRIEVED BY HIS ORDER; BOTH THE PARTIES CAME ON APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL CONFIRMED THE DECISION TAKEN THE LD. CIT(A) ON THE PENALTY LEVIED IN RESPECT OF SALES SUPPRESS ION OF LIQUOR AND SALES SUPPRESSION M.P. NO.36 /COCH/2013 3 OF FOOD. THE TRIBUNAL, HOWEVER, REVERSED THE DECI SION OF THE LD. CIT(A) IN CANCELLING THE PENALTY LEVIED ON EXCESS CASH COLLECTION. HO WEVER, AS POINTED OUT BY THE REVENUE, THE TRIBUNAL HAS NOT CLEARLY SPELT OUT ITS DECISION ON THE QUANTUM OF PENALTY. HOWEVER, IT IS PERTINENT TO NOTE THAT THE TRIBUNAL HAS CONFIRMED THE DECISION OF LD CIT(A) IN RESPECT OF THE PENALTY LEVIABLE ON THE AD DITIONS RELATING TO SALES SUPPRESSION OF LIQUOR AND SALES SUPPRESSION OF FOOD AND ACCO RDINGLY, THE DECISION OF LD CIT(A) IN RESTRICTING THE PENALTY EQUAL TO THE AMOUNT OF TAX STANDS IMPLIED UPHELD. 5. HOWEVER, IN ORDER TO GIVE CLARITY ON THE IMP UGNED ISSUE, WE CARRY OUT FOLLOWING MODIFICATIONS IN THE IMPUGNED ORDER DATED 08-06-201 2. (A) THE EXISTING PARAGRAPH NO. 7 SHALL BE RENUMBERED AS 8. (B) THE FOLLOWING PARAGRAPH SHALL BE INSERTED AFTER P ARAGRAPH NUMBER 6. 7. THE REVENUE IS ALSO ASSAILING THE DECISION OF LD CIT(A) IN RESTRICTING THE QUANTUM OF PENALTY TO ONE TIME OF TAX LEVIABLE. FR OM THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER, WE NOTICE THAT THE AO HAS LEVIED PENALTY AT TWO TIMES OF THE TAX LEVIABLE. HOWEVER, THE LD CIT (A) REDUCED THE SAME TO ONE TIME OF TAX LEVIABLE WITH THE OBSERVATION THAT THE SAME WOULD MEET THE ENDS OF JUSTICE. THE PROVISIONS OF SEC. 158BFA(2) PROVIDES THAT THE ASSESSING OFFICER MAY DIRECT THAT A PERSON SHALL PAY BY WAY O F PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVIABLE BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF T HE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE (C ) OF SECTION 158BC. THUS, DISCRETION IS GIVEN TO THE ASSESSING OFFICER UNDER THIS SECTION TO DETERMINE THE QUANTUM OF PENALTY. THE AO, IN THE INSTANT CASE, H AS DETERMINED THE QUANTUM OF PENALTY AT TWO TIME OF TAX LEVIABLE ON T HE UNDISCLOSED INCOME AND THE LD CIT(A) HAS REDUCED THE SAME TO ONE TIME OF T AX LEVIABLE WITH THE REASONING THAT THE SAME WOULD MEET THE ENDS OF JUST ICE. SINCE THE STATUTE PROVIDES DISCRETION TO THE TAX AUTHORITIES IN THE M ATTER OF DETERMINATION OF QUANTUM OF PENALTY AND SINCE THE QUANTUM OF PENALTY DETERMINED BY THE M.P. NO.36 /COCH/2013 4 ASSESSING OFFICER HAS BEEN REDUCED BY THE LD CIT(A) WITH THE REASONING THAT THE SAME WOULD MEET THE ENDS OF JUSTICE AND SINCE N O OTHER MATERIAL WAS PLACED BEFORE US IN ORDER TO COMPEL US TO DISTURB T HE VIEW TAKEN BY LD CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH THIS DECISION ON THIS ISSUE. ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A) IN SU STAINING PENALTY TO ONE TIME OF TAX LEVIABLE. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS ALLOWED. PRONOUNCED ACCORDINGLY ON 26-04-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 26TH APRIL, 2013 GJ COPY TO: 1. M/S. VICTORY TOURIST HOME & CENTRAL HOTEL AND BA R, SEENA NIVAS, DHARMASALA, KANNUR. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(1), RANGE-2, TRICHUR 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, CALICUT 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN