ECHJAY FORGINGS P.LTD, MUMBAI v. DCIT CEN CIR 45, MUMBAI

ITA 215/MUM/2014 | 2008-2009
Pronouncement Date: 01-11-2017 | Result: Allowed

Appeal Details

RSA Number 21519914 RSA 2014
Assessee PAN AAACE1902A
Bench Mumbai
Appeal Number ITA 215/MUM/2014
Duration Of Justice 3 year(s) 9 month(s) 23 day(s)
Appellant ECHJAY FORGINGS P.LTD, MUMBAI
Respondent DCIT CEN CIR 45, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted E
Tribunal Order Date 01-11-2017
Date Of Final Hearing 27-02-2017
Next Hearing Date 27-02-2017
First Hearing Date 27-02-2017
Assessment Year 2008-2009
Appeal Filed On 08-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH E MUM BAI BEFORE SHRI B.R.BASKARAN ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO.215/MUM/2014 (ASSESSMENT YEAR- 2008-09) M/S.ECHJAY FORGINGS PVT. LTD. 603/604 RAHEJA CHAMBERS 213 BACKBAY RECLAMATION NARIMAN POINT MUMBAI 400 021. PAN: AAACE1902A VS. DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-45 AYAKAR BHAVAN M.K.ROAD MUMBAI 400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIRAG M.SHAH. (AR) REVENUE BY : SHRI V.JUSTIN (DR) DATE OF HEARING : 01.11.2017 DATE OF PRONOUNCEMENT : 01.11.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE U/S.253 OF THE IN COME TAX ACT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (AP PEALS)-38 MUMBAI DATED 16.12.2013. THE ASSESSEE HAS RAISED SOLITARY GROUN D OF APPEAL THAT COMMISSIONER OF APPEAL AND IN CONFIRMING THE PENALTY ORDER OF AS SESSING OFFICER U/S.271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING OF STEEL FORGINGS AND AUTOMOBILE PART S FILED RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR 26.09.2008 DECLARING T OTAL INCOME OF RS.9 86 73 480/-. THE ASSESSMENT WAS COMPLETED ON 24.12.2010 U/S.143(3) OF 2 ITA NO.215/M/2014 M/S.ECHJAY FORGINGS PVT.LTD THE ACT. THE ASSESSING OFFICER WHILE PASSING THE A SSESSMENT ORDER MADE THE DISALLOWANCE OF CLAIM FIXED ASSETS WRITTEN OFF OF RS.17 87 602/- AND INITIATED PENALTY. THE ASSESSING OFFICER ISSUED NOTICE DATED 15.06.2010 U/S.274 R.W.271(C) OF THE ACT. THE ASSESSEE FILED ITS REPL Y VIDE REPLY DATED 20.06.2011. IN THE REPLY THE ASSESSEE CONTENDED THAT THE ASSES SEE HAS NEITHER CONCEALED INCOME NOR FURNISHED INACCURATE PARTICULARS. THE A DDITION ON ACCOUNT OF FIXED ASSETS WRITTEN-OFF REMAINED TO BE DISALLOWED IN THE COMPUTATION OF INCOME DUE TO INADVERTENCE AND OMISSION. 2.1 THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT THE ORIGINAL R ETURN OF INCOME WAS FILED ON 29.06.2008 WHICH WAS REVISED LATER ON 31.03.2010 B UT THE ASSESSEE HAS NOT TAKEN CARE TO ADD BACK THE ADDITION ON ACCOUNT OF F IXED ASSET WRITTEN OFF. WHEN THE ASSESSEE WAS CONFRONTED THE ASSESSEE FILED LETT ER DATED 31.12.2010 AND THE ASSESSEE OFFERED THE SAME. THE ASSESSING OFFICER L EVIED THE PENALTY @ 100% OF TAX SOUGHT TO BE EVADED. THE ASSESSING OFFICER WOR KED OUT THE PENALTY OF RS.6 07 606/- VIDE ORDER DATED 30.06.2011. ON APPE AL BEFORE THE LD.CIT(A) THE ORDER OF ASSESSING OFFICER WAS CONFIRMED. FURTHER AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS FILED THE PRESENT APPEAL B EFORE US. 3. WE HAVE HEARD LD.AR OF THE ASSESSEE AND LD. DR F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD.A R OF THE ASSESSEE ARGUED THAT THE ASSESSEE VOLUNTARILY OFFERED FIXED ASSETS WRITT EN OFF VALUE DURING THE 3 ITA NO.215/M/2014 M/S.ECHJAY FORGINGS PVT.LTD ASSESSMENT; THE ASSESSEE HAS PAID TAX ON THE ADDITI ON. THE ASSESSEE HAS NOT CONCEALED INCOME NOR FURNISHED INACCURATE PARTICULA RS OF INCOME. THE FIXED ASSET WRITTEN OFF WAS REMAINED TO BE DISALLOWED IN COMPUT ATION DUE TO OMISSION. THERE WAS NO DELIBERATE ACT ON THE PART OF THE ASSE SSEE. IN SUPPORT OF HIS SUBMISSIONS THE LD AR RELIED ON THE DECISION IN PRI CE WATERHOUSE COOPERS PVT LTD VS CIT (2012) 348 ITR 306(SC). ON THE OTHER HA ND THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. THE LD. DR FOR THE REVENUE RELIED UPON THE DECISION OF DELHI HIGH COURT IN CAS E OF CIT VS. ZOOM COMMUNICATION PRIVATE LTD. (2011) 191 TAXMAN 179 (D ELHI). 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE MAT ERIAL AVAILABLE ON THE RECORD. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OF FICER MADE AN ADDITION OF RS.17 87 602/- ON ACCOUNT OF FIXED ASSETS WRITTEN O FF. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. WE HAVE NOTED THAT THE ASSESSING OFFICER WHILE INITIATING PENALTY HAS NOT SPECIFIED UNDER WHICH LIMB OF SECTION 271(1) (C) OF THE ACT THE PENALTY WAS INIT IATED. THE ASSESSING OFFICER SIMPLY NOTED PENALTY PROCEEDINGS U/S.271(1)(C) IS BEING INITIATE D . THE ASSESSING OFFICER AGAIN WHILE PASSING ORDER OF PE NALTY HAS NOT SPECIFIED THE LIMB UNDER WHICH PENALTY IS LEVIED IF IT WAS CONCE ALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS. IN OUR VIEW THE AO HAS NOT APPLIED HIS MIND WHILE INITIATING THE PENALTY PROCEEDINGS UNDER SECT ION 271(1)(C) OF THE ACT. THE 4 ITA NO.215/M/2014 M/S.ECHJAY FORGINGS PVT.LTD HONBLE APEX COURT IN THE CASE OF T. ASHOK PAI V. C IT REPORTED IN [2007] 292 ITR 11 (SC) AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CO NNOTATIONS. THE GUJARAT HIGH COURT IN THE CASE OF CIT V. MANU ENGINEERING WORKS REPORTED IN [1980] 122 ITR 306 (GUJ) AND THE DELHI HIGH COURT IN THE CASE OF C IT V. VIRGO MARKETING P. LTD. REPORTED IN [2008] 171 TAXMAN 156 (DELHI) HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. HENCE THE GROUN D OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. IN THE RESULT APPEAL FILED BY ASSESSEE IS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST DAY OF NOVEMBER 2017. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) VICE-PRESIDENT JUDICIAL MEMBER MUMBAI; DATED 01/11/2017 S.K.PS 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/