Appeal Details

RSA Number 377919914 RSA 2010
Assessee PAN AADCS9860J
Bench Mumbai
Appeal Number ITA 3779/MUM/2010
Duration Of Justice 1 year(s) 6 month(s) 10 day(s)
Appellant M/S SPECTRUM COAL AND POWER LTD.(FORMERLY M/S ST-CLI COAL WASHERIES LTD.) MCH NO. 6-3-1089/1/1,FLAT NO. 203, PAVANI AVENUE,RAJBHAVAN ROAD SOMAJIGUDA,HYDERABAD,
Respondent ACIT,CIR1(3),
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted J
Tribunal Order Date 21-11-2011
Date Of Final Hearing 21-11-2011
Next Hearing Date 21-11-2011
Assessment Year 2001-2002
Appeal Filed On 11-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI D.K. AGARWAL (JM) & SHRI B. RAMAKOTAIAH (AM) I.T.A. NOS.3778 3779 & 3780/MUM/2010 (A.YS. 2000-01 2001-02 & 2002-03) M/S. SPECTRUM COAL & POWER LTD. (FORMERLY M/S.ST-CLI COAL WASHERIES LTD.) MCH NO.6-3- 1089/1/1 FLAT NO.203 PAVANI AVENUE RAJBHAVAN ROAD SOMAJIGUDA HYDERABAD-500 082. (ANDHRA PRADESH). PAN: AADCS9860J. VS. ASSTT. COMMR. OF INCOME-TAX CIRCLE 3 ROOM NO.529 AAYKAR BHAVAN 5 TH FLOOR M.K. ROAD MUMBAI-400 020. APPELLANT RESPONDENT APPELLANT BY SHRI SALIL KAPOOR. RESPONDENT BY SHRI D .S. SUNDER SINGH. DATE OF HEARING 21 - 11 - 2011 DATE OF PRONOUNCEMENT 21 - 1 1 - 2011 O R D E R PER BENCH: THESE THREE APPEALS PREFERRED BY THE ASSESSEE ARE D IRECTED AGAINST THE SEPARATE ORDERS DATED 22-02-2010 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2000-01 2001-02 AND 2002-03. SINCE FACTS ARE IDENTICAL AND COMMON ISSUE IS INVOLVED ALL THESE APPEALS ARE DISPOSED O F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 2 2. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO.3778/MUM/2010 FOR ASSESSMENT YEAR 2000-01 ARE THAT THE ASSESSEE COMPA NY IS ENGAGED IN THE BUSINESS OF COAL BENEFICATION. AFTER PROCESSING OF THE RETURN U/S.143(1) THE AO RE-OPENED THE ASSESSMENT U/S.148 AND COMPLETED THE ASSESSMENT AT A LOSS OF RS.4 24 43 864/- VIDE ORDER DATED 30-03-2005 PASSED U/S.143(3) READ WITH SEC. 147 OF THE ACT. ON APPEAL THE LD. CIT(A) VIDE ORD ER DATED 27-02-2006 UPHELD THE ORDER OF THE AO. ON FURTHER APPEAL BEFORE THE T RIBUNAL THE TRIBUNAL SET ASIDE THE ASSESSMENT AND DIRECTED THE AO TO DECIDE AFRESH AS TO WHETHER THE AMOUNT RECEIVED AS PER PACER AGREEMENT IS A LOAN OR ASSIST ANCE. PURSUANT TO THE ORDER OF THE TRIBUNAL THE AO AGAIN COMPLETED THE ASSESS MENT DETERMINING THE LOSS UNDER NORMAL PROVISIONS OF THE ACT AT RS.4 24 43 86 4/- AND BOOK PROFIT U/S.115J OF THE ACT AT RS.5 84 494/- VIDE ORDER DATED 25-08- 2009 PASSED U/S.143(3) READ WITH SEC. 254 OF THE ACT. WHILE COMPLETING THE ASSE SSMENT THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. ACCOR DINGLY A SHOW CAUSE NOTICE WAS ISSUED AS TO WHY PENALTY U/S.271(1)(C) SHOULD N OT BE IMPOSED. THE AO AFTER CONSIDERING THE ASSESSEES REPLY WHILE RELYING ON THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. GOLD COIN HEAL TH FOODS PVT. LTD. AND UNION OF INDIA & ORS VS. DHARMENDRA TEXTILE PROCESSORS & OTHERS (2008) 306 ITR 277 (SC) HELD THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME AND THUS CONCEALED THE INCOME TO THAT EXTENT AND ACCORDINGLY IMPOSED PENALTY OF RS.55 61 988/- VIDE ORDER DATED 31-08-2009 PASSED U/S.271(1)(C) OF THE ACT. 3. ON APPEAL BEFORE THE LD. CIT(A) THE LD. CIT(A) OBSERVED THAT THE FORM OF APPEAL STATEMENT OF FACTS AND GROUNDS OF APPEAL R EVEALED THAT THE SAME HAVE BEEN SIGNED AND VERIFIED BY THE DIRECTOR OF THE COM PANY WHEREAS AS PER RULE 45(2) AND SECTION 140(C) THE SAME HAS TO BE SIGNED BY THE MANAGING DIRECTOR OF THE COMPANY. ACCORDINGLY A SHOW CAUSE NOTICE WAS G IVEN BY THE LD. CIT(A) ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 3 PROPOSING TO TREAT THE APPEAL AS INVALID. IN RESPON SE THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS. IT WAS INTER ALIA SUBMITTED THAT THE MG. DIRECTOR OF THE COMPANY WAS TRAVELLING TO VARIOUS SITES OF THE COMP ANY AND HENCE HE COULD NOT SIGN THE APPEAL. IN SUPPORT RELIANCE WAS ALSO PLAC ED ON THE DECISION IN THE CASE OF PRIME SECURITIES LTD. REPORTED IN 28 DTR 119 (BO M) AND REMFRY & SONS REPORTED IN 276 ITR 1 (DEL). THE LD. CIT(A) WHILE DISTINGUISHING THE DECISIONS RELIED ON BY THE ASSESSEE DID NOT ACCEPT THE ASSES SEES EXPLANATION. HE OBSERVED THAT WHAT THE ASSESSEE IS STATING IS A MATTER OF C ONVENIENCE WHICH CAN NEITHER SUPERSEDE NOR BYPASS THE REQUIREMENT OF LAW. FIRSTL Y IF THIS WAS A BONA FIDE CONTENTION THIS FACT OUGHT TO HAVE BEEN MENTIONED IN THE APPEAL DOCUMENTS WHICH IS NOT THERE THEREFORE THE CONTENTION IS AN AFTERTHOUGHT. MOREOVER NO EVIDENCE OF TRAVELLING OF MG. DIRECTOR HAS BEEN FIL ED. WHETHER ON THE DATE ON WHICH THE VERIFICATION HAS BEEN DONE THE MG. DIREC TOR WAS NOT IN TOWN OUGHT TO HAVE BEEN BROUGHT ON RECORD. EVEN IF THE MG.DIRECTO R WAS NOT IN TOWN AT THIS POINT OF TIME THE ASSESSEE HAD SUFFICIENT TIME ST ILL LEFT FOR FILING THE APPEAL I.E. 7 DAYS THEREFORE THE UNAVOIDABLE REASONS MENTIONE D IN SEC. 140 OF THE ACT IS NOT ATTRACTED AND ACCORDINGLY HE TREATED THE APPE AL AS NOT A VALID APPEAL AND DISMISSED THE SAME. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE VALIDI TY OF THE ORDER PASSED BY THE LD. CIT(A) IN HOLDING THE APPEAL TO BE NON-EST AND NOT VALID WITHOUT PROVIDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND SUSTENANCE OF PENALTY IMPOSED BY THE AO. 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS THAT ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE THE HONBLE ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 4 JURISDICTIONAL HIGH COURT IN THE CASE OF TILAKNAGAR INDUSTRIES LTD. VS. CIT & ORS. [WRIT PETITION NO.(L) 2792 & 2793/2010 DATED 14-12- 2010] HAS QUASHED THE ORDER OF THE LD. CIT(A) AND REMANDED BACK THE APPEA L TO THE FILE OF THE LD. CIT(A) FOR DECISION ON MERITS IN ACCORDANCE WITH LAW. HE A LSO PLACED ON RECORD COPY OF THE SAID JUDGMENT. HE FURTHER SUBMITS THAT IN THIS CASE THE DATE OF HEARING BEFORE THE LD. CIT(A) WAS FIXED FOR 03-02-2010.THE ASSESS EE SOUGHT ADJOURNMENT ON THE GROUND THAT THE QUANTUM APPEALS AGAINST THE ASS ESSMENT ORDER U/S.143(3) ARE PENDING BEFORE THE LD. CIT(A). THEREFORE IT WA S REQUESTED TO KEEP THE HEARING OF THE APPEAL IN ABEYANCE TILL THE QUANTUM APPEALS ARE DISPOSED OF. HE FURTHER SUBMITS THAT AS PER PROVISIONS OF SEC. 140 OF THE ACT IN CASE IF THE MG. DIRECTOR OF THE COMPANY IS NOT ABLE TO SIGN THE APP EAL DOCUMENTS IT CAN BE SIGNED BY ANY DIRECTOR THEREOF. HE THEREFORE SUBM ITS THAT THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE AND THEREFORE THE ORDER PASSED BY THE LD. CIT(A) BE SET ASIDE AND THE MATTER MAY BE RESTORED BACK TO H IS FILE TO DECIDE THE APPEAL AFRESH. 6. ON THE OTHER HAND THE LD. D.R. SUPPORTS THE ORD ER OF THE LD. CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT BEFORE T HE LD. CIT(A) THE ASSESSEE IN SUPPORT HAS ALSO RELIED ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRIME SECURITIES LTD. (SUPRA). THE LD. CIT(A) WHILE DISTINGUISHING THE DECISION HELD IN PARA 14 OF HIS ORDER THAT THE DEC ISION OF HONBLE BOMBAY HIGH COURT REQUIRES A FRESH LOOK IN A PROPER PERSPECTIV E. IN THIS REGARD IT IS NECESSARY TO TAKE NOTE OF THE DECISION OF HONBLE MADHYA PRAD ESH HIGH COURT IN THE CASE OF ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 5 NATIONAL TEXTILE CORPORATION LTD. (M.P.) VS. CIT ( 2011) 338 ITR 371 (M.P.) WHEREIN IT HAS BEEN HELD (HEADNOTE) : HELD ACCORDINGLY THAT THE TRIBUNAL HAD NO JURISDI CTION TO COMMENT UPON THE DECISION OF THE JURISDICTIONAL HIG H COURT AND IN PARTICULAR THE MANNER IN WHICH IT WAS RENDER ED NOR HAD JURISDICTION TO IGNORE THE DECISION. IT WAS FOR THE REASON THAT FIRSTLY IT WAS A DECISION RENDERED BY THE JU RISDICTIONAL HIGH COURT. SECONDLY THE TRIBUNAL WAS FUNCTIONING IN THE SAME STATE AND SUBORDINATE TO THE HIGH COURT. THIRD LY THE TRIBUNAL HAD NO JURISDICTION TO HOLD THAT THE DECIS ION OF THE HIGH COURT WAS PER INCURIAM. THOUGH THE TRIBUNAL D ID NOT SAY SO IN SO MANY WORDS IN EFFECT IT AMOUNTED TO SU CH A DECLARATION. FOURTHLY THE TRIBUNAL HAD ALSO NO JUR ISDICTION TO FIND FAULT WITH THE DECISION OF THE JURISDICTION AL HIGH COURT SO AS TO AVOID ITS BINDING EFFECT. 8. WE FURTHER FIND THAT THE ISSUE BEFORE US IS SQU ARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF TILAKNAGAR INDUSTRIES LTD. (SUPRA) WHEREIN IT HAS BEEN OBSERVE D AND HELD AS UNDER : 1. THESE TWO PETITIONS ARE FILED AGAINST THE ORDER S PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WHEREBY THE APPEALS FILED BY THE PETITIONER AGAINST THE REGULAR ASSESSMENT ORDERS HAVE BEEN DISMISSED ON THE GROUND THAT THE APPEAL MEMO WAS NOT SIGNED BY THE AUTHORIZED OF FICER OF THE PETITIONER-COMPANY. 2. THIS COURT IN THE CASE OF PRIME SECURITIES LIMI TED V/S. VARINDER MEHTA ASSISTANT COMMISSIONER OF INCOME-TA X REPORTED IN (2009) 317 ITR 27 (BOM) AND COMMISSIONE R OF CUSTOMS V/S. CANNON SHIPPING COMPANY PRIVATE LIMITE D REPORTED IN 250 ITR 347 HAS HELD THAT SIGNING OF TH E APPEAL MEMO BY A PERSON NOT AUTHORIZED IS ONLY AN IRREGULA RITY AND THE SAME CAN BE RECTIFIED. ALTHOUGH THE COMMISSION ER OF INCOME TAX (APPEALS) HAS TRIED TO DISTINGUISH THE J UDGMENT OF THIS COURT IN THE CASE OF PRIME SECURITIES LIMI TED (SUPRA) WE SEE NO MERIT IN SUCH DISTINCTION SOUGHT TO BE MA DE. IN THIS VIEW OF THE MATTER THE LEARNED COUNSEL FOR TH E REVENUE FAIRLY STATES THAT THE IMPUGNED ORDERS BE QUASHED A ND SET ASIDE AND THE APPEALS BE REMANDED BACK TO THE COMMISSIONER OF INCOME TAX (APPEALS) ON MERITS IN ACCORDANCE WITH LAW. ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 6 IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT (SUPRA) AND THE OTHER DECISIONS CITED THEREIN SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMAND BACK THE MATTER TO HIS FILE T O DECIDE THE APPEAL ON MERITS IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.3779/M/2010 FOR AY 2001-02 & 3780/M/2010 FO R AY 2002-03: 9. AT THE TIME OF HEARING IT HAS BEEN AGREED BY BO TH THE PARTIES THAT THE FACTS OF THE ABOVE CASE AND THE GROUNDS ARE SIMILAR TO THE CASE FOR ASSESSMENT YEAR 2000-01 THEREFORE THE PLEA TAKEN BY THEM IN THAT APPEAL MAY BE CONSIDERED WHILE DECIDING THE ABOVE APPEALS. 10. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY DISTINGUISHING FEA TURE BROUGHT ON RECORD BY THE REVENUE WE KEEPING IN VIEW OF OUR FINDING RECORDE D IN THE APPEAL FOR ASSESSMENT YEAR 2000-01 HEREINABOVE SET ASIDE THE ORDERS PASSED BY THE LD. CIT(A) AND REMAND THE MATTER BACK TO HIS FILE TO DE CIDE THE SAME AFRESH AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE TH EREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT THE ASSESSEES APPEALS STAND PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 7 ORDER PRONOUNCED IN THE OPEN COURT ON THE 21 ST DAY OF NOVEMBER 2011. SD/- SD/- (B. RAMAKOTAIAH) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 21 ST NOVEMBER 2011. NG: COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A) CONCERNED. 4 CIT CONCERNED. 5.DR J BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR ITAT MUMBAI. ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 8 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 21-11-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 21-11-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER