ALLIANCE FINSTOCK LTD, MUMBAI V. ASST CIT CEN CIR 29, MUMBAI

MA 628/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8958 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 16-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV K GUBJOTRA
• Section: 271(1)(c); 143(3); 27

Judgement Text

P A G E | 1 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A. NO. 628/MUM/2018 (ARISING OUT OF ITA NO.1990/MUM/2016) (ASSESSMENT YEARS: 2006 - 07 ) M/S ALLIANCE FINSTOCK LTD. PRAKASH CHAMBERS, 73/77, NAGINDAS MASTER ROAD, FORT, MUMBAI - 400 001 VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29, MUMBAI PAN AADCA9058Q (APPLICANT) (RESPONDENT) APPLICANT BY: SHRI PRAKASH JHUNJHUNWALA , A.R RESPONDENT BY: SHRI RAJEEV K. GUBJOTRA , SR. D.R DATE OF HEARING: 29 .03 .2019 DATE OF PRONOUNCEMENT: 1 9 .06.2019 O R D E R PER RAVISH SOOD, JM : THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ON 16.10.2018 ARISES FROM THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE VIZ. ALLIANCE FINSTOCK LTD. VS. ACIT, CENTRAL CIRCLE - 29, MUMBAI (ITA NO.1990/MUM/2016, DAT ED 19.09.2018) . 2. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE SUBMITTED , THAT THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE, VIDE ITS ORDER DATED P A G E | 2 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 19.09.2018 SUFFERED FROM CERTAIN MISTAKES, WHICH THEREIN HAD RENDERED THE SAME AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC.254 OF THE INCOME - TAX ACT, 1961 (FOR SHORT ACT). THE LD. A.R TOOK US THROUGH THE MISCELLANEOUS APPLICATION, WHEREIN IT WAS CLAIMED BY THE ASSESSEE THAT THE ORDER PASSED BY THE TRIBUNAL SUFFERED FROM THE FOLLOWING MISTAKES: (A) THE HON BLE ITAT INCORRECTLY HELD THAT THE NOTICE DATED 28/01/2013 (COPY ENCLOSED) WAS THE SHOW NOTICE U/S.274 R,W.S.271(1)(C) WHICH INTACT WAS A MERE NOTICE OF HEARING WHICH ALSO DOES NOT CONTAI N ANY ALLEGATION OF 'CONCEALMENT OF INCOME' OR 'FURNISHING INACCURATE PARTICULARS OF INCOME'; (B) THE HON'BTE ITAT DID NOT ADJUDICATE THE ISSUE THAT THE ASSESSMENT ORDER U/S.143(3) DID NOT SPECIFY THE LIMB UNDER WHICH THE PENALTY U/S.271(1)(C) IS INITIATED SINCE THE SATISFACTION RECORDED IS DISCLOSED AS 'PENALTY PROCEEDINGS U/S 27 1(1)(C) OF THE I.T. ACT, 1961 ARE INITIATED SEPARATELY'; (C) THE HONBLE ITAT DID NOT ADJUDICATE THE ISSUE THAT THE PENALTY ORDER INITIALLY ALLEGED AT PARA - 2 OF FURNISHING INACCURATE PARTICULARS OF INCOME WHEREAS ULTIMATE LEVY PARA - 3.4 IS ON ALTOGETHER DIFFERENT FOOTING OF CONC EAL MENT OF INCOME; (D) THE HONBLE ITAT DID NOT CONSIDER THE JUDICIAL DECISION OF HONBL E JURISDICTIONAL AND OTHER HIGH COURTS WHILE DECIDING THE MATTER. 3. IT WAS SUBMITTED BY THE LD. A.R THAT THE TRIBUNAL HAD ERRONEOUSLY OBSERVED THAT THOUGH ANOTHER S HOW CAUSE NOTICE UNDER SEC. 274 R.W.S. 271(1)(C) OF THE ACT, DATED 28.01.2013 WAS ISSU ED TO THE ASSESSEE, HOWEVER, NEITHER THE COPY OF THE SAID SHOW CAUSE NOTICE , DATED 28.01.2013 WAS PLACED ON RECORD NOR ANY CONTENTION HAD BEEN ADVANCED AS REGARDS ANY FAILURE ON THE PART OF THE A.O TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE BODY OF TH E SAID NOTICE. IT WAS SUBMITTED BY THE LD. A.R , THAT THE NOTICE DATED 28.01.2013 WAS NOT A S HOW CAUSE NOTICE UNDER SEC. 274 R.W.S 271(1)(C), AND WAS MERELY A NOTICE INTIMATING THE NEXT DATE OF HEARING OF THE MATTER, WHEREIN THE ASSESSEE BY WAY OF A REMINDER WAS ONCE AGAIN CALLED UPON TO SHOW CAUSE AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE LEVIED IN ITS CASE. IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID NOTICE DATED 28.01.2013 DID NOT CONTAIN ANY ALLEGATION OF CONCEALMENT OF INCOME P A G E | 3 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN ORDER TO FORTIFY HIS AFORESAID CLAIM THE LD. A.R HAD DRAWN OUR ATTENTION TO THE AFORESAID NOTICE DATED 28.01.2013. IN SUM AND SUBSTANCE , IT WAS SUBMITTED BY THE LD. A.R THAT THE S HOW CAUSE NOTICE, DATE D 30.12.2010, WAS THE ONLY EFFECTIVE NOTICE ISSUED BY THE A.O WHEREIN THE DEFAULTS VIZ. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME WERE FOUND MENTIONED . IT WAS SUBMITTED BY THE LD. A.R, THAT IN THE ABSENCE OF ANY MENTION O F THE AFORESAID DEFAULTS IN THE SUBSEQUENT NOTICE DATED 28.01.2013, THERE WAS NO OCCASION FOR THE ASSESSEE TO HAVE ADVANCED ANY CONTENTION AS REGARDS ANY FAILURE ON THE PART OF THE A.O TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE CONTEXT OF THE SAID NOTIC E, WHICH AS A MATTER OF FACT WAS SIMPLY A REMINDER LETTER CALLING UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE IMPOSED ON IT. IT WAS THUS SUBMITTED BY THE LD. A.R , THAT AS THE TRIBUNAL HAD PROCEEDED WITH ON THE BASIS OF MI SCONCEIVED FACTS, THEREFORE, THE ORDER PASSED BY IT WHILE DISPOSING OFF THE APPEAL WAS SUFFERING FROM A MISTAKE APPARENT FROM RECORD , WHICH THEREIN RENDERED IT AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC. 254 OF THE ACT. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) OBJECTED TO THE AFORESAID CONTENTIONS ADVANCED BY THE COUNSEL FOR THE ASSESSEE. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE TRIBUNAL HAD DISPOSED OFF THE APPEAL BY WAY OF A REASONED ORDER AND THERE WAS NO MIS TAKE APPARENT FROM RECORD, THEREFORE, THE APPLICATION FILED BY THE ASSESSEE SEEKING RECTIFICATION OF THE SAID ORDER WAS NOT MAINTAINABLE AND WAS LIABLE TO BE DISMISSED. 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE, IT WAS OBSERVED BY US P A G E | 4 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 THAT THOUGH THE ASSESSEE HAD ASSAILED THE VALIDITY OF THE S HOW CAUSE NOTICE, DATED 30.12.2010, HOWEVER, NO SUCH CONTENTION WAS ADVANCED IN CONTEXT OF THE VALIDITY OF A SUBSEQUENT S HOW CAUSE NOTICE ISSUED UNDER SEC. 274 R.W.S 271(1)(C), DATED 28.01.2013. HOWEVER, A PERUSAL OF THE NOTICE DATED 28.01.2013 REVEALS THAT THE SAME WAS NOT A S HOW CAUSE NOTICE ISSUED UNDER SEC. 274 R. W.S 271(1)(C), BUT AS CORRECTLY CLAIMED BY THE ASSESSEE , IT WAS A SIMPLE NOTICE /LETTER , WHEREIN THE A.O BY WAY OF A REMINDER HAD CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE IMPOSED ON IT. THE NOTICE DATED 28.01.201 3 ISSUED BY THE A.O, READS AS UNDER (RELEVANT EXTRACT): NO. ACIT/C.C - 29/PEN/2012 - 13 28 TH JANUARY, 2013 TO THE PRINCIPAL OFFICER ALLIANCE FINSTOCK LTD., G - , COURT CHAMBERS, GRD FLOOR, V THAKERSEY ROAD, 35, NEW MARINE LINES CHURCHGATE, MUMBAI PAN : AADCA9058Q SUB: PENALTY U/S 271(1)(C) OF IT ACT, 1961 FOR A.Y 2006 - 07 PLEASE RE F ER TO THE ABOVE IN YOUR CASE, ASSESSMENT WAS COMPLETED U/S 143(3) FOR A.Y 2006 - 07, WHEREIN PENALTY U/S 271(1)( C) WAS INITIATED. YOUR CASE HAS ALSO BEEN DECIDED UPON BY THE LD. CIT(A) - 40 VIDE ORDER DATED 14.06.2011. IN THIS CONNECTION, YOU ARE GIVEN ONCE AGAIN AN OPPORTUNITY TO FURNISH YOUR WRITTEN SUBMISSION AND SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) SHOULD N OT BE LEVIED IN YOUR CASE. YOUR CASE IS NOW FIXED FOR HEARING ON 05.02.2013 AT 10.30 A.M . PLEASE NOTE THAT IN CASE OF NON - COMPLIANCE, THE PROCEEDINGS WILL BE DECIDED ON MERITS. SD/ - [LAXMAN SINGH GURJAR] ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 29, MUMBAI. P A G E | 5 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 6 . IN THE BACKDROP OF THE AFORESAID FACTS, IN OUR CONSIDERED VIEW, WHILE DISPOSING OFF THE G ROUNDS OF APPEAL NO S . 2 AND 3 THAT WERE RAISED BY THE ASSESSEE IN ITS APPEAL BEFORE US, WE HAD INADVERTENTLY PROCEEDED WITH ON THE MISTAKEN BELIEF THAT THE NOTICE DATED 28.01.2013 WAS A S HOW CAUSE NOTICE ISSUED UNDER SEC. 274 R.W.S 271(1)(C) . ACCORDINGLY, OUR ORDER PASSED WHILE DISP OSING OFF THE APPEAL OF THE ASSESSEE VIZ. ALLIANCE FINSTOCK LTD. VS. ACIT, CENTRAL CIRCLE - 29, MUMBAI (ITA NO.1990/MUM/2016, DATED 19.09.2018), SUFFERS FROM THE AFORESAID MISTAKE WHICH MAY HAVE A BEARING ON THE ADJUDICATION OF THE GROUNDS OF APPEAL NO S . 2 A ND 3 THAT WERE RAISED BY THE ASSESSEE IN ITS APPEAL BEFORE US. 7 . WE THUS ARE OF THE CONSIDERED VIEW THAT OUR ORDER PASSED WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE I.E ALLIANCE FINSTOCK LTD. VS. ACIT, CENTRAL CIRCLE - 29, MUMBAI (ITA NO.1990/MUM/2016 ) FO R A.Y. 2006 - 07 SUFFERS FROM A MISTAKE WHICH IS APPARENT FROM RECORD. ACCORDINGLY, IN TERMS OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE AFORESAID ORDER, DATED 19.09.2018 DISPOSING OFF THE APPEAL OF THE ASSESSEE REQUIRES TO BE RECALLED FOR THE LIMITED PURPOSE OF RE - ADJUDICATING T HE GROUNDS OF APPEAL NO S . 2 & 3 THAT WERE RAISED BY THE ASSESSEE IN ITS APPEAL BEFORE US, AFTER EXPUNGING THE AFORESAID MISTAKE. 8 . THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. THE REGISTRY IS DIRECTED TO RE - FIX THE MATTER FOR THE AFORESAID LIMITED PURPOSE OF RE - ADJUDICATING T HE GROUND S OF APPEAL NO S . 2 & 3 THAT WERE RAISED BY THE ASSESSEE IN ITS APPEAL FILED BEFORE US. 9 . THE MISCELLANEOUS APPLIC ATION FILED BY THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. P A G E | 6 M.A. NO.628/MUM/2018 AY. 2006 - 07 (ARISING OUT OF ITA NO.1990 /MUM/2016) M.S ALLIANCE FINSTOCK LTD. VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 ORDER PRO NOUN CED IN THE OPEN COURT ON 1 9 .06.201 9 S D / - S D / - ( G.MANJUNATHA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI ; 19. 06.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI .