ISCRA INIDA TOUR OPERATOR P. LTD, MUMBAI v. ITO 6(1)2, MUMBAI

ITA 1137/MUM/2011 | 2007-2008
Pronouncement Date: 07-04-2014 | Result: Dismissed

Appeal Details

RSA Number 113719914 RSA 2011
Bench Mumbai
Appeal Number ITA 1137/MUM/2011
Duration Of Justice 3 year(s) 2 month(s)
Appellant ISCRA INIDA TOUR OPERATOR P. LTD, MUMBAI
Respondent ITO 6(1)2, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 07-04-2014
Date Of Final Hearing 07-04-2014
Next Hearing Date 07-04-2014
Assessment Year 2007-2008
Appeal Filed On 07-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH MUMBAI BEFORE S/SHRI I.P. BANSAL (JM) AND RAJENDRA (AM) . . ./I.T.A. NO.1137/MUM/2011 ( / ASSESSMENT YEAR : 2007-08) M/S ISCRA INDIA TOUR OPERATOR PVT LTD. 203 SAI PRASAD COMMERCIAL COMPLEX 4 TH ROAD OPP.KHAR RAILWAY STATION KHAR (W) MUMBAI-400052. / VS. INCOME TAX OFFICER 6(1)2 MUMBAI. ( $ / APPELLANT) .. ( %&$ / RESPONDENT) ./ ./PAN/GIR NO. : AABC13603D $ / APPELLANT BY : NONE %&$ ) /RESPONDENT BY : SHRI ASHOK SURI ) / DATE OF HEARING : 7.4.2014 ) /DATE OF PRONOUNCEMENT : 7.4.2014 / O R D E R PER I.P.BANSAL JM: THIS APPEAL IS FILED BY THE ASSESSEE. IT IS DIREC TED AGAINST THE ORDER PASSED BY LD. CIT(A) DATED 20.9.2010 FOR ASSESSMENT YEAR 200 7-08. 2. GROUNDS OF APPEAL TAKEN BY ASSESSEE READ AS UNDE R : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN UPHOLDING THE PENALTY AMOUNTING TO RS.1 00 000/- IMPOSED BY THE AO U/S 271BA OF THE INCOME TAX ACT 1961 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN UPHOLDING THAT THE APPELLANT COMPANY CO ULD NOT FURNISH THE REPORT FROM THE ACCOUNTANT AND THE DOCUMENTS FOR THE INTER NATIONAL TRANSACTIONS ENTERED BY THE APPELLANT COMPANY ON DUE DATES WITH OUT APPRECIATING THE FACT THAT TRANSFER PRICING PROVISIONS/DOCUMENTATION REFE RRED IN SECTION 92E OF THE INCOME TAX ACT 1961 MAY NOT BE STRICTLY MADE APPLI CABLE TO THE APPELLANT COMPANY. I.T.A. NO.1137/MUM/2011 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN APPRECIATING THE FACT THAT THE APPELLANT COMPANY HAD IN FACT SUBMITTED THE REPORT ON 29.12.2009 I.E. ON AND BEFO RE COMPLETION OF THE ASSESSMENT PROCEEDINGS WHICH WAS NOT CONSIDERED BY THE AO. THE AO HAD EARLIER ERRED IN PASSING PENALTY ORDER ON 17.12.200 9 I.E. BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS WITHOUT WAITING FOR THE REP ORT AND RELATED DOCUMENTS AS REFERRED UNDER SECTION 92E AND 92D OF THE ACT TO GET FILED. 4. THE APPELLANT COMPANY CLAIMS THAT STATUTORY PROV ISIONS OF LEVY OF PENALTY U/S 271BA OR ANY OTHER RELEVANT SECTIONS OF THE INC OME TAX ACT 1961 SHOULD NOT BE CONSTRUED AS MANDATORY PROVISION TO BE ENFOR CEABLE AGAINST EACH AND EVERY DEFAULTERS FOR MERE TECHNICAL NON-COMPLIANCE. THE LEVY OF PENALTY IS DISCRETIONARY IN NATURE AND MAY BE DISPENSED WITH I N CASE OF GENUINE AND REGULAR TAX PAYERS AND ONE TIME ALLEGED NON-COMPLIA NCE. THE PROVISIONS FOR LEVY OF PENALTY ARE FOR ACTUAL OR HABITUAL DEFAULTE RS. THIS HAS BEEN HELD BY SUPREME COURT IN NUMBER OF CASES PENALTY IS NOT TO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO AND THAT IT SHOULD NO T BE IMPOSED IF THERE IS ONLY A TECHNICAL OR VENIAL BREACH OF LAW. 5. IN THE CONTEXT THE APPELLANT COMPANY PRAYS BEFO RE YOU FOR WAIVER OF PENALTY LEVIED. 3. THE ASSESSEE IN THE PRESENT CASE IS AGGRIEVED B Y LEVY OF PENALTY OF RS.1 00 000/- UNDER THE PROVISIONS OF SECTION 271BA OF THE INCOME TAX ACT 1961(THE ACT) WHICH HAS BEEN UPHELD BY LD. CIT(A). THE ASS ESSEE COMPANY IS A RESIDENT COMPANY WHICH HAS FILED ITS RETURN OF INCOME AT A S UM OF RS.1 93 324/- ON 30.10.2007. THE ASSESSMENT HAS BEEN COMPLETED UNDER THE PROVISI ONS OF SECTION 143(3) OF THE ACT AFTER GRANTING HEARING TO THE ASSESSEE ON VARIOUS 9 DATES WHICH ARE MENTIONED AT PAGE ONE OF THE ASSESSMENT ORDER. THE IMPUGNED PENALT Y HAS BEEN LEVIED VIDE ORDER DATED 17.12.2009 FOR THE CONTRAVENTION OF PROVISIONS OF S ECTION 92E OF THE ACT. SECTION 92E HAS CASTED AN OBLIGATION ON EVERY PERSON WHO HAS EN TERED INTO AN INTERNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION DURIN G A PREVIOUS YEAR SHALL OBTAIN A REPORT FROM AN ACCOUNTANT AND FURNISH SUCH REPORT ON OR BE FORE THE SPECIFIED DATE IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED IN THE PRE SCRIBED MANNER BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCR IBED. IN OTHER WORDS IF ANY PERSON IS ENTERED INTO AN INTERNATIONAL TRANSACTION OR SPE CIFIED DOMESTIC TRANSACTION WHICH IS TO BE EVALUATED FOR THE PURPOSE OF TRANSFER PRICING P ROVISIONS IS UNDER AN OBLIGATION TO OBTAIN AUDIT REPORT AND FURNISH THE SAME BEFORE T HE DUE DATE OF FILING THE REPORT. ACCORDING TO THE IMPUGNED PENALTY ORDER THE ASSES SEE WHO HAS ENTERED INTO AN INTERNATIONAL TRANSACTIONS HAS FAILED TO DISCHARGE THE OBLIGATION PRESCRIBED UNDER SECTION 92E AND THEREFORE IS EXIGIBLE TO PENALTY U/S 271BA WHICH DESCRIBES THAT IF A PERSON FAILS TO FURNISH SUCH REPORT AS IS REQUIRED TO BE FURNIS HED U/S 92E OF THE ACT THEN AO MAY I.T.A. NO.1137/MUM/2011 3 DIRECT SUCH PERSON TO PAY BY WAY OF PENALTY A SUM O F RS.1 00 000/-. IT IS IN THIS MANNER THE PENALTY HAS BEEN LEVIED BY AO ON THE A SSESSEE. 4. DURING THE COURSE OF PENALTY PROCEEDINGS IT IS DESCRIBED BY THE ASSESSEE THAT THERE IS NO INTERNATIONAL TRANSACTION BETWEEN THE A SSESSEE AND ITS FOREIGN PRINCIPAL AS CONTEMPLATED UNDER SECTION 92B OF THE ACT EXCEPT FOR RE-IMBURSEMENT OF ALL EXPENSES INCURRED BY ISCRA INDIA AND ANNUAL FEE OF RS.1 8 0 000/- RECEIVED BY ISCRA INDIA FOR ACTING AS AN COLLECTION AGENT FOR AND ON BEHALF O F ISCRA VIAGGI ITALY. IT WAS FURTHER SUBMITTED THAT ANNUAL FEE RECEIVED BY ASSESSEE FOR SUPPORT SERVICES IS MORE THAN NORMAL FEE WHICH IS NORMALLY EXPECTED TO ACCRUE I N SUCH BUSINESS AS COLLETING AGENT. THE AO BEING OF THE VIEW THAT THE ASSESSEE HAS EN TERED INTO AN INTERNATIONAL TRANSITION WITHIN THE MEANING OF SECTION 92B OF THE ACT AND SINCE NO EXCEPTION HAS BEEN PROVIDED IN THE STATUTE FOR CONSIDERING THE MONIES RECEIVED ON ACCOUNT OF REIMBURSEMENT OF EXPENSES OR ANNUAL FEES BY THE AS SESSEE THE ASSESSEE DOES NOT COME UNDER ANY EXCEPTION AND HENCE IS LIABLE FOR LE VY OF PENALTY. IT IS IN THIS MANNER PENALTY HAS BEEN IMPOSED UPON THE ASSESSEE. 5. IT IS FURTHER NOTICED THAT IN THE ASSESSMENT OR DER WHICH IS SUBSEQUENT TO PASSING THE PENALTY ORDER AND IS DATED 29.12.2009 THERE IS NO MENTIONED OF ANY INTERNATIONAL TRANSACTION HAVING BEEN ASSESSED IN T HE HANDS OF THE ASSESSEE AND THERE IS NO MENTIONED ABOUT THE INQUIRY OR DETAILS REFERRED WITH RESPECT TO THE INTERNATIONAL TRANSACTIONS. IT IS NOT CLEAR FROM THE ASSESSMENT ORDER THAT WHETHER OR NOT ASSESSEE HAS ENTERED INTO AN INTERNATIONAL TRANSACTIONS THERE FORE IT CAN BE PRESUMED THAT EITHER THE AO WAS SATISFIED THAT THE PROFIT EARNED BY THE ASS ESSEE ON INTERNATIONAL TRANSACTIONS WAS AT ARMS LENGTH AND DID NOT MAKE ANY ADJUSTMENT OR THE ASSESSEE DID NOT INVOLVE IN ANY INTERNATIONAL TRANSACTION. HOWEVER THE FACT REMAINS THAT THERE IS NO ADJUSTMENT ON ACCOUNT OF TRANSFER PRICING. THE LD. CIT(A) HAS CON FIRMED THE LEVY OF PENALTY ON THE GROUND THAT THE ASSESSEE WAS UNDER AN OBLIGATION T O FURNISH THE REPORT AS REQUIRED U/S 92E OF THE ACT. THE ASSESSEE HAVING BEEN FAILED TO COMPLY WITH THE STATUTORY REQUIREMENT IS LIABLE FOR PENALTY U/S 271BA OF THE ACT. 6. ASSESSEE IS AGGRIEVED AGAINST THE AFOREMENTIONED ORDER OF LD. CIT(A) HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 7. THE APPEAL FILED BY THE ASSESSEE IS BELATED BY 1 1 DAYS AND NO APPLICATION FOR CONDONATION OF DELAY HAS BEEN PLACED ON RECORD. TH E DEFECT WAS COMMUNICATED TO ASSESSEE VIDE NOTICE DATED 4.1.2013. THERE WAS ANO THER DEFECT IN THE APPEAL FILED BY I.T.A. NO.1137/MUM/2011 4 ASSESSEE I.E. NON-SIGNATURE BY THE MANAGING DIREC TOR OF THE ASSESSEE-COMPANY. BOTH THESE DEFECTS HAVE NOT BEEN REMOVED DESPITE REGISTE RED NOTICE SENT TO THE ASSESSEE. HOWEVER THE APPEAL FILED BY THE ASSESSEE WAS FIXED FOR HEARING ON 24.2.2014 FOR WHICH THE NOTICE WAS SENT THROUGH RPAD. SUCH NOTICE HAS B EEN RECEIVED BACK WITH THE REMARK OF POSTAL AUTHORITIES LEFT NOT KNOWN. THEREFORE TO GIVE ANOTHER CHANCE TO THE ASSESSEE THE APPEAL WAS ADJOURNED TO 7.4.2014 WITH A DIRECTION TO ISSUE NOTICE THROUGH RPAD AGAIN. THE SAID NOTICE HAS ALSO BEEN RECEIV ED BACK WITH THE SIMILAR REMARK OF POSTAL AUTHORITIES 8. IN VIEW OF ABOVE POSITION THE APPEAL FILED BY THE ASSESSEE IS DISMISSED FOR THE FOLLOWING REASONS : I) IT IS TIME BARRED BY 11 DAYS AND NO REQUEST F OR CONDONATION OF DELAY IS MADE; II) THE APPEAL ITSELF IS A DEFECTIVE APPEAL AS IT IS NOT SIGNED BY MANAGING DIRECTOR OF THE ASSESSEE COMPANY. 9. SINCE NOTICE COULD NOT BE SERVED UPON THE ASSE SSEE AS THE ASSESSEE HAS LEFT THE ADDRESS WHICH IS GIVEN IN FORM NO.36 WE CONSIDER I T JUST AND PROPER TO DISMISS THE APPEAL FILED BY ASSESSEE ON THE ABOVE MENTIONED GRO UNDS. HOWEVER WE GIVE LIBERTY TO THE ASSESSEE TO APPROACH THE TRIBUNAL FOR REVIVAL OF THIS APPEAL IF ASSESSEE FURNISHES APPLICATION FOR CONDONATION OF DELAY AND SUBMIT PR OPER FORM NO.36. ON SUBMISSION OF THESE DOCUMENTS THE APPEAL FILED BY THE ASSESSEE M AY BE REVIVED BY THE TRIBUNAL TO BE CONSIDERED FOR CONDONATION OF DELAY AND THEREAFTER ADJUDICATION ON MERITS IF THE DELAY IS CONDONED AND DEFECTS ARE REMOVED. WITH THESE OBS ERVATIONS THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7TH APRIL 2014. 0 1 7TH APRIL 2014 ) SD/- SD/- ( / RAJENDRA) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: . . ./ SRL SR. PS I.T.A. NO.1137/MUM/2011 5 / COPY OF THE ORDER FORWARDED TO : 1. $ / THE APPELLANT 2. %&$ / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- CONCERNED 4. 6 / CIT CONCERNED 5. 7 %9 9 / DR ITAT MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER TRUE COPY (ASSTT. REGISTRAR) 9 /ITAT MUMBAI