ASIA INVESTMENTS Private LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX RANGE 2(1), MUMBAI

MA 482/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5635 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 09-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reassessment proceedings; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER M.A. NO.482/MUM/2018 (ARISING OUT OF ITA NOS.4779/MUM/2014) ASSESSMENT YEAR: 2003-04 M/S. ASIA INVESTMENTS PRIVATE LIMITED, 4TH FLOOR, MAGNET HOUSE, N.M. MARG, BALLARD ESTATE, MUMBAI 400 038 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, RANGE-2(1), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI-400020 ( /ASSESSEE) ( / REVENUE) P.A. NO. AAACA4539K / DATE OF HEARING : 03/05/2019 / DATE OF ORDER: 14/05/2019 / O R D E R PER G. MANJUNATHA (ACCOUNTANT MEMBER) THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON U/S 254(2) OF THE INCOME TAX ACT, 1961 AND REQUESTED TO RECALL ORDER PASSED BY THE ITAT, MUMBAI A BENCH IN ITA NOS.4779/MUM/2014 DATED 23/02/2018 FOR AYS 2003 -04. 2. THE ASSESSEE HAS NARRATED FACTS AND MISTAKES ST ATED TO BE APPARENT FROM THE ORDER OF THE TRIBUNAL, MUMBAI, DATED 23/02 /2018 IN ITA NO.4779/MUM/2014. / ASSESSEE BY SHRI H.P. MAHAJANI / REVENUE BY SHRI CHAITANYA ANJARIA 2 MA NO.482/MUM/2018 THE RELEVANT CONTENTS OF THE MISCELLANEOUS APPLICAT ION FILED BY THE ASSESSEE FOR AY 2003-04 ARE REPRODUCED HEREUNDER:- 4779/M/2014 (APPELLANT'S APPEAL IN RESPECT OF PENA LTY PROCEEDING) 1) THE CAPTIONED APPEAL BY THE APPLICANT WAS AGAINS T ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) AND THE SAM E WAS DISPOSED OF BY THE HONORABLE TRIBUNAL, BY ITS COMBINED ORDER DA TED 23RD FEBRUARY 2018 ALONG WITH QUANTUM APPEAL FILED BY THE ASSESSE E AND (ITAA NO.7539/M/2013 AND DEPARTMENTAL APPEAL ITA NO 62/M/ 2014. 2) INASMUCH AS IN THE OPINION OF THE APPLICANT-ASSE SSEE THE SAID ORDER SUFFERS FROM CERTAIN MISTAKES THAT ARE APPARENT FRO M THE RECORD THE APPLICANT-ASSESSEE HEREBY PRAYS FOR RECTIFICATION T HEREOF. 3) THE AO HAD IMPOSED A PENALTY OF RS. 1,79,91,239 ON THE BASIS OF ADDITIONS CONFIRMED BY THE CIT(A). IN THE APPLIC ANT-ASSESSEE'S APPEAL TO THE TRIBUNAL THERE AGAINST THE ADDITIONS WITH REFERENCE TO WHICH PENALTY WAS LEVIED BY THE AO WERE SET ASIDE T O THE AO FOR FRESH ADJUDICATION. THE CIT(A), WHILE DECIDING THE APPEAL AGAINST THE ORDER LEVYING PENALTY HELD THAT THERE WAS CONCEALMENT OF INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME BUT THA T THE AO SHOULD RE- COMPUTE THE AMOUNT OF PENALTY IN THE LIGHT OF PROVI SIONS OF S 275(1A) TAKING INTO ACCOUNT THE ORDER OF THE TRIBUNAL IN QU ANTUM PROCEEDINGS PASSED SUBSEQUENT TO THE ORDER PASSED BY THE AO LEV YING PENALTY. 4) THE APPELLANT BEING AGGRIEVED BY THE ORDER OF CO MMISSIONER OF INCOME TAX (APPEALS) 4 HAD FILED AN APPEAL WITH TRI BUNAL RAISING THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT REVERSING THE PENALTY O RDER PASSED BY THE ASSESSING OFFICER (AO). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE APPELLANT HAS NOT FURNISHED INACCURATE PARTICULARS OF ITS INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT WAS LEVIED WAS SET ASIDE BY THE INCOME TAX APPELLATE TRIBUNAL AND IN T HE REASSESSMENT PROCEEDINGS THE AO HAS NOT INITIATED PENALTY PROCEE DINGS AND THEREFORE NO PENALTY COULD SURVIVE IN SUCH CASE. 4. THE ORDER LEVYING PENALTY BE CANCELLED. YOUR APP ELLANT RESERVES THE RIGHT TO ADD, ALTER OR AMEND ANY OF THE ABOVE GROUN DS, IF NECESSARY. 5) DURING THE APPELLATE PROCEEDINGS THE ATTENTION O F THE HON'BLE MEMBERS WAS DRAWN TO THE FACT THAT THE AO HAD PASSE D ORDER UNDER SECTION 143(3) ON 24TH MARCH 2006 AND HAD LEVIED PE NALTY UNDER SECTION 271(1)(C) VIDE ITS ORDER DATED 5TH MARCH 20 10. THE HON'BLE 3 MA NO.482/MUM/2018 TRIBUNAL DURING FIRST ROUND OF LITIGATION VIDE ORDE R DATED 15' JULY 2011 HAD SET ASIDE THE ORDER OF CIT(A) AND HAD REMITTED THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO EXAMINE THE ENTI RE FACTS OF THE CASE AND DECIDE THE ISSUE AFRESH. IT WAS FURTHER SUBMITT ED THAT ONCE THE ASSESSMENT WAS SET ASIDE BY THE TRIBUNAL THE PENALT Y ORDER PASSED BY AO CANNOT SURVIVE IN THE EYES OF LAW. 6) YOUR HONOUR WHILE CONCLUDING THE APPEAL (PARA 23 PAGE 14 OF THE ORDER) HAS RIGHTLY NOTED AS FOLLOWS: 'ONCE THE ADDITION ON WHICH PENALTY HAS BEEN LEVIED IS SET ASIDE TO THE AO FOR FRESH CONSIDERATION, IT IS AS GOOD AS THERE IS NO ADDITION FOR LEVY OF PENALTY UNDER SECTION 271(1)(C). IF AT ALL PENAL TY CAN BE LEVIED, THE AO SHALL TAKE UP PENALTY PROCEEDINGS AFTER RECEIPT OF ORDER OF THE ITAT MODIFYING THE ASSESSMENT AS PER THE DIRECTIONS OF T HE ITAT' 7) THEREAFTER, YOUR HONOURS HAVE DISCUSSED THE APPL ICABILITY OF PROVISION OF SECTION 275(IA) OF THE ACT AND DIRECTE D THAT THE ISSUE NEEDS TO BE EXAMINED BY THE AO IN THE LIGHT OF PROV ISIONS OF SECTION 275(1A) OF THE ACT AND ACCORDINGLY SET ASIDE THE IS SUE TO THE FILE OF AO WITH A DIRECTION TO RECONSIDER THE ISSUE IN ACCORDA NCE WITH OBSERVATIONS OF CIT(A) AND PROVISIONS OF SECTION 275(1A) OF THE ACT. 8) THE MISTAKE THAT IS APPARENT FROM THE RECORD IS THAT, AFTER CONCLUDING THAT THERE WAS NO ADDITION FOR LEVY OF P ENALTY (IMPLYING THEREBY THAT THE PENALTY ORDER IS UNCALLED FOR) (PA RA 23 PAGE 14 OF THE ORDER), YOUR HONOURS HAVE ALSO INADVERTENTLY RESTOR ED THE ISSUE TO THE FILE OF AO FOR THE LIMITED PURPOSE OF DECIDING THE MATTER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 275(1A) OF THE ACT. 9) THE MISTAKE THAT IS APPARENT FROM THE RECORD IS THAT YOUR HONORS HAVE NOT ADJUDICATED THE ISSUE WHETHER THE APPELLAN T-ASSESSEE HAS IN FACT CONCEALED ITS INCOME OR FURNISHED INACCURATE P ARTICULARS THEREOF RAISED VIDE GROUND NOS. 1 & 2. SECTION 275(1A) DEAL S WITH ONLY THE ISSUE OF QUANTIFICATION OF THE PENALTY AND NOT WHET HER PENALTY WAS IN FACT LEVIABLE ON THE FACTS OF THE CASE. 10) IN THE LIGHT OF THE MISTAKES APPARENT FROM THE RECORD AS POINTED OUT AT PARAS 8 AND 9 HEREIN ABOVE (AND MARKED IN BOLD F OR THE SAKE OF READY REFERENCE), IT IS PRAYED THAT THE ORDER OF TH E HONORABLE TRIBUNAL IN SO FAR AS DIRECTION TO THE AO FOR ADJUDICATION U NDER SECTION 275(1A) (VIDE PARA NO 23 ON PAGE NO 14 AND 15 OF THE ORDER) NEEDS TO BE RECALLED FOR ADJUDICATION OF GROUND NO 2 ON MERITS . IN THE ABOVE CIRCUMSTANCES, WE WOULD REQUEST YOUR H ONORS TO PLEASE CONSIDER THIS MISCELLANEOUS APPLICATION SYMPATHETIC ALLY AND PASS SUCH ORDER THEREON AS WOULD MEET THE ENDS OF JUSTICE AFT ER GIVING THE APPLICANT A REASONABLE OPPORTUNITY OF BEING HEARD I N THE MATTER. FOR THIS ACT OF KINDNESS WE SHALL EVER REMAIN GRATE FUL TO YOUR HONORS. 4 MA NO.482/MUM/2018 3. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE T RIBUNAL HAS SET-ASIDE APPEAL TO THE AO TO DECIDE THE ISSUE OF LEVY OF PENALTY U/ S 271(1)(C) OF THE ACT ,BY OBSERVING THAT ONCE ADDITION ON WHICH PENALTY HAS BEEN LEVIED IS SET-ASIDE TO THE AO FOR FRESH CONSIDERATION, IT IS AS GOOD AS THAT THERE IS NO AD DITION FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IF AT ALL PENALTY CAN BE LEVIED, THE AO SHALL TAKE UP PENALTY PROCEEDINGS AFTER RECEIPT OF ORDER OF THE ITAT MODIFYING THE AS SESSMENT AS PER THE DIRECTIONS OF THE ITAT. THE LD. AR FURTHER REFERRING TO THE MISCELLAN EOUS APPLICATION SUBMITTED THAT THE FINDINGS OF TRIBUNAL IN SO FAR AS SET-ASIDE THE APP EAL TO THE FILE OF THE LD. AO IS PERFECTLY ALRIGHT, BUT THE TRIBUNAL WENT ON TO FURT HER OBSERVE THE APPLICABILITY OF PROVISION OF 275(1A) OF THE ACT AND DIRECTED THE AO TO RE-EXAMINE THE ISSUE IN LIGHT OF PROVISION OF SECTION 275(1A) OF THE ACT. THE ABOVE OBSERVATIONS OF THE TRIBUNAL CONSTITUTES A MISTAKES APPARENT FROM THE RECORD THA T AFTER CONCLUDING THAT THERE WAS NO ADDITION FOR LEVY OF PENALTY, THERE IS NO NEED T O GIVE FURTHER FINDING OF APPLICABILITY OF PROVISIONS OF 275(1A) OF THE ACT. THEREFORE, SUCH M ISTAKE CONSTITUTE MISTAKE APPARENT ON RECORD, WHICH CAN BE RECTIFIED U/S 254(2) OF THE ACT. ACCORDINGLY, THE ORDER OF THE TRIBUNAL MAY BE RECALLED. 4. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT TH E ASSESSEE HAS FAILED TO MAKE OUT A CASE OF MISTAKES APPARENT ON RECORD IN THE OR DER OF THE TRIBUNAL AND WHAT THE ASSESSEES COUNSEL SEEKS IS REVIEW THE JUDGMENT OF THE TRIBUNAL, WHICH IS NOT PERMISSIBLE U/S 254(2) OF THE ACT. THEREFORE, THE M ISCELLANEOUS APPLICATION FILED BY THE ASSESSEE MAY BE DISMISSED. 5 MA NO.482/MUM/2018 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ALONG WITH ORDER OF THE TRIBU NAL IN ITA NO.4779/MUM/2014, DATED 23/02/2018, FOR AYS 2003-04. WE FIND THAT THE TRIBUNAL HAS DISCUSSED THE ISSUE THREADBARE IN LIGHT OF FACTS BROUGHT OUT BY THE LOW ER AUTHORITIES AND EVIDENCES FILED BY THE ASSESSEE IN PARA 16 TO 23 ON PAGES 10 TO 15 OF THE ORDER, DATED 23/02/2018. WE FURTHER NOTED THAT THE TRIBUNAL HAS SET-ASIDE THE A PPEAL TO THE FILE OF THE AO TO DECIDE THE ISSUE OF LEVY OF PENALTY U/S 271(1)(C) OF THE A CT, FOR THE REASON THAT THE ADDITIONS MADE BY THE AO IN QUANTUM PROCEEDINGS HAS BEEN SET- ASIDE TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH. ACCORDINGLY, IT WAS NOTED THAT ONCE ADDITIONS ON WHICH PENALTY HAS BEEN LEVIED IS SET-ASIDE TO THE FILE OF THE AO THEN, IT IS AS GOOD AS THAT NO ADDITIONS IS MADE FOR THE PURPOSE OF LEVY OF PENALT Y U/S 271(1)(C) OF THE ACT. THE TRIBUNAL FURTHER OBSERVED THAT SINCE, THE AO HAS LE VIED PENALTY U/S 271(1)(C) WITHOUT WAITING FOR OUTCOME OF THE ORDERS OF THE APPELLATE AUTHORITIES, IT HAS DIRECTED TO AO TO EXAMINE THE APPLICABILITY OF PROVISIONS OF SECTION 275(1A) OF THE ACT, BECAUSE, THE SAID PROVISION IS APPLICABLE WHEN THE PENALTY IS LEVIED WITHOUT WAITING FOR OUTCOME OF THE ORDER OF THE APPELLATE AUTHORITIES IN QUANTUM PROCE EDING AND IN QUANTUM PROCEEDINGS, THE ORDER OF THE AO IS MODIFIED WHICH RESULTS INTO INCREASE OR DECREASE IN ASSESSED INCOME, THEN THE AO IS REQUIRED TO MODIFY THE PENAL TY LEVIED U/S 271(1)(C) OF THE ACT, AS PER THE PROVISIONS OF SECTION 275(1A) OF THE ACT . WE FIND THAT THE ABOVE SAID FINDING OF THE TRIBUNAL IS BASED ON THE FACTS OF THE PRESEN T CASE AND HENCE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ERROR IN THE ORDER OF THE TRIBUNAL WHICH COULD BE 6 MA NO.482/MUM/2018 RECTIFIED U/S 254(2) OF THE ACT. THEREFORE, THERE I S NO MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE AND HENCE THE SAM E IS DISMISSED. 6. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/05/2019. SD/- SD/- ( C.N. PRASAD ) (G. MANJUNATHA) ! ' /JUDICIAL MEMBER # ' / ACCOUNTANT MEMBER MUMBAI; DATED : 14/05/2019 F{X~{T? F{X~{T? F{X~{T? F{X~{T? P.S P.S P.S P.S / /. /./. /. !.. %!&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT (RESPECTIVE ASSESSEE) 2. '#$ ! / THE RESPONDENT. 3. %$ %$ & ( ) / THE CIT, MUMBAI. 4. %$ %$ & / CIT(A)- , MUMBAI, 5. ()* $ ' + , %$ $ +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI