Yeast Alco Enzymes Ltd.,, Ahmedabad v. The Income tax Officer, Ward-8(4),, Ahmedabad

ITA 4267/AHD/2007 | 2004-2005
Pronouncement Date: 13-08-2010 | Result: Allowed

Appeal Details

RSA Number 426720514 RSA 2007
Assessee PAN AAACY0144K
Bench Ahmedabad
Appeal Number ITA 4267/AHD/2007
Duration Of Justice 2 year(s) 8 month(s) 10 day(s)
Appellant Yeast Alco Enzymes Ltd.,, Ahmedabad
Respondent The Income tax Officer, Ward-8(4),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 13-08-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 2004-2005
Appeal Filed On 03-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL V.P. (AZ) & HON BLE SHRI T.K. SHARMA J.M. ) I.T.A. NOS. 4265 & 4266/AHD./2007 ASSESSMENT YEAR : 2002-2003 YEAST ALCO ENZYMES LTD. AHMEDABAD VS.- INCOME TAX OFFICER WARD-8(4) AHMEDABAD (PAN : AAACY 0144 K) (APPELLANT) (RESPONDENT) & I.T.A. NOS. 4267 & 4268/AHD/2007 ASSESSMENT YEAR : 2004-2005 YEAST ALCO ENZYMES LTD. AHMEDABAD -VS.- INCOME T AX OFFICER WARD-8(4) AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASUTOSH P. NANA VATY RESPONDENT BY : SHRI K.M. MAHESH SR. D.R. O R D E R PER BENCH : THESE FOUR APPEALS WERE FILED BY THE SAME ASSESSEE HEARD ON THE SAME DATE ARGUED BY COMMON LD. REPRESENTATIVE THEREFORE THESE ARE DECID ED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE I.T.A. NO. 4266/AHD/2007 FOR THE ASSESSMENT YEAR 2002-03. THIS APPEAL IS AGAINST THE ORDER DATED 03.09.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD IN APPEAL NO. CIT(A.)-X IV/WD. 8(4)/295/2006-07 CONFIRMING THE PENALTY OF RS.40 000/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT 1961. 2.1. IN RESPECT OF THIS APPEAL SHRI ASUTOSH P. NAN AVATY LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE FAIRLY ADMITTED THAT THERE WAS NON-COMPLIA NCE OF NOTICES ISSUED BY THE ASSESSING OFFICER. HOWEVER HE SUBMITTED THAT IN THE ASSESSME NT YEAR 2003-04 ALSO THERE WAS NON- COMPLIANCE PENALTY OF RS.50 000/- WAS LEVIED. THIS WAS DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD VIDE ORDER 16 .10.2008. FURTHER THE LD. COUNSEL OF THE ASSESSEE ALSO FILED AN AFFIDAVIT OF DIRECTOR SHRI R AMKUMAR P. JADEJA EXPLAINING THE REASONS FOR NON-ATTENDANCE OF HEARING IN ASSESSMENT PROCEEDINGS . APART FROM THIS THE LD. COUNSEL OF THE 2 ITA NOS . 4265-4268/AHD/2007 ASSESSEE PRODUCED THE DECISION DATED 18.12.2009 OF ITAT C BENCH AHMEDABAD IN ITA NOS.748 & 975/AHD/2008 FOR THE ASSESSMENT YEAR 2003 -04 WHEREIN TRIBUNAL HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THERE IS A REASONABLE CAU SE FOR NON-COMPLIANCE AND RESTORE THE EX-PARTE ASSESSMENT TO THE FILE OF ASSESSING OFFICER FOR GIV ING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO DECIDE THE ISSUE AFRESH IN ACCORDANCE W ITH LAW. ON THIS BASIS THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE FOR MAKING COMPLIANCE OF NOTICES ISSUED BY THE ASSESSING OFFIC ER /LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THEREFORE PENALTY OF RS.40 000/- LEV IED BY THE ASSESSING OFFICER BE CANCELLED. 3. ON THE OTHER HAND SHRI K.M. MAHESH LD. SR. D.R . APPEARING ON BEHALF OF THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE. 4. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AFFIDAVIT OF DIRECTOR SHRI RAMKUMAR P. J ADEJA READS AS UNDER :- AFFIDAVIT I UNDERSIGNED SHRI RAMKUMAR SON OF PRAVINSINHJI JADEJA ADULT AND DIRECTOR OF M/S. YEAST ALCO ENZYMES LTD. SINCE 1994 HAVING ITS OFFICE AT 1 ST MOOR DIVYA APARTMENT NEAR MITHAKHALI GARNALA NAVRANGPURA AH MEDABAD -380009. 1 IN MY CAPACITY AS DIRECTOR OF SAID M/S. YEAST ALCO ENZ YMES LTD. AM LOOKING AFTER RAW-MATERIALS PROCUREMENT; FUEL SUPPLIES PRODUCTIO N DISPATCH FINANCE AND ALL FINANCE RELATED ISSUES AND I AM AWARE OF ALL MATTER S PERTAINING TO SAID M/S. YEAST ALCO ENZYMES LTD. THE AUDIT AND TAXATIONS MATTERS OF THE COMPANY HENC E BEING DEALT BY M/S. HARISH PATEL & CO. A SENIOR CHARTERED ACCOUNTANT OF THE STATE. THE COMPANY IS A SICK UNIT. IT IS BEING REVIVED VIDE ORDER OF T HE SCHEME OF THE COMPROMISE U/S. 391 OF THE COMPANIES ACT 1956 AND THE PRESENT MANA GEMENT OF COMPRISING OF BOARD OF DIRECTOR IS BOUND BY TERMS OF THE SCHEME S TIPULATED BY HIGH COURT. SHRI HARISH PATEL IS ASSOCIATED WITH MATTER PERTAINING T O ACCOUNTS AND INCOME TAX OF COMPANY SINCE 1980. HE HAS DISCHARGED HIS AIL FUNCT IONS ON HIS PART AS THE AUDITOR AND TAXATION CONSULTANT VERY ABLY ALL THE L IME AND SINCE 2002 HE FACED UNPRECEDENTED ORDEAL OF HEALTH SOCIAL FAMILY AND PERSONAL PROBLEMS TO BY WHICH HE HIMSELF COULD NOT ATTEND HIS DAILY RITUALS AND OFFICIAL WORK REGULARLY INCLUDING HIS OFFICE THEREFORE OUR MOST OF MATTER P ERTAINING TO AND WITH TAXATION DEPARTMENT ARE BEING REMAINED UNATTENDED. HIS SUCH ORDEALS HAS COME IN WAY OF HIS WORK WHICH RITUALS CONSTRAINED LO BE UNATTENDED CAUSING STATUS OF OUR COMPANY WITH YOUR DEPARTMENT UNCOOPERATIVE AND NON ATTENTIVE. UNDER THE CIRCUMSTANCE WE SUBMIT YOUR HONOR TO TAKE INTO CONS IDERATION CIRCUMSTANTIAL VICTIMIZATION OF OUR COMPANY. WE HAVE NO INTENTION TO BE NON-COOPERATIVE. M/S. YEAST ALCO ENZYMES LTD. WAS SICK COMPANY AND WE TOO K OVER IN THE COURSE OF 3 ITA NOS . 4265-4268/AHD/2007 SCHEME BEFORE HIGH COURT U.S. 391 OF THE COMPANIES ACT 1956. INSPITE OF VARIOUS DIRECTIONS IN SCHEME BY HIGH COURT; CREDITORS LIKE GSFC GIIC AND OTHERS CONTINUE TO INTERPRET TERMS OF SCHEME IN THE MANNER MOST SUITABLE TO THEM AND UNFAIRLY TO US. SUCH INTERPRETATION HAS RESULTED IN TO VARIOUS LITIGATION LEADING TO FINANCIAL LOSS AND INVOLVING US INTO UNPRODUCTIVE L OSS OF TIME AND ATTENTION. OUR COMPANY ALSO AVAILED SALES TAX DEFERMENT SCHEME AND INITIALLY GOVERNMENT HAS NOT FIXED DEFERMENT AMOUNT IN CONSONANCE WITH SPIRIT OF SCHEME AND SAID DEFERMENT WAS FIXED IN CONSONANCE WITH SCHEME IN 1998. HENCE AS SPIRIT OF MAKING OUR COMPANY FINANCIALLY VIABLE LOST ON VARIOUS UNPRODUC TIVE LITIGATIONS. HENCE OUR SICKNESS HAS CONTINUED IN ONE FORM OR OTHER AND FIN ANCIALLY OUR COMPANY CAN NOT BECOME HEALTHY. IT IS SIGNIFICANT TO NOTE THAT OUR COMPANY COULD NOT CARRY ON PRODUCTION CONTINUOUSLY DUE TO FINANCIAL STRINGENCY TOR SOME TIMES IN SOME OF THE YEARS . THUS OUR CONTINUED FINANCIAL WEAKNESS COUPL ED WITH INABILITY OF OUR CHARTERED ACCOUNTANT HAS RESULTED INTO NON APPEARAN CE. SUCH NON APPEARANCE IS NOT DUE TO NON COOPERATION OR ABDICATION OF OUR OBL IGATION TO INCOME TAX DEPARTMENT. OUR ACCOUNTS ARE AUDITED. THERE IS NO ADVERSE COM MENT IN AUDITORS REPORT UPON ACCOUNTS. MAJORITY OF EXPENSES TOR WHIC H DETAILS ARE CALLED ARE REQUIRED TO PAID BY ACCOUNT PAYEE CHEQUE AND IN FAC T OUR MAJORITY PAYMENTS ARE MADE BY CHEQUES. WE ARE REGULAR IN LAX DEDUCTION AT SOURCE. WE ARE ONE OF THE LARGEST COMPANY ENGAGED IN PRODUCTION OF INDUSTRIAL ALCOHOL IN GUJARAT. OUR RAW-MATERIALS IS MOLLASSES. OUR FINISHED PRODUCT IS SUBJECT TO EXCISE. OUR FINISHED PRODUCTS AS WELL AS RAW-MATERIALS BEING INTOXICANT IS STRICTLY REGULATED BY GOVERNMENT UNDER PROHIBITION ACT. WE PROCURE FUEL B EING LIGNITE FROM GUJARAT MINERAL DEVELOPMENT CORPORATION GOVERNMENT OF GUJA RAT ENTERPRISE AND ALSO RECEIVE POWER FROM GUJARAT ELECTRICITY BOARD THUS OUR APPROXIMATELY 80% OF EXPENDITURE LIKE RAW-MATERIALS FUEL POWER ARE PAI D TO GOVERNMENT AND ARE HIGHLY REGULATED AND OTHER PAYMENTS ARE PAID BY ACC OUNT PAYEE CHEQUES. UNDER THE CIRCUMSTANCES IT IS SUBMITTED THAT ALL PENALTI ES ARE WITHOUT REASONABLE CAUSE AND DISPROPORTIONATE TO PURPOSE AND EXCESSIVE BECAU SE THOUGH FACTS RECORD NON APPEARANCE AND FACTS OF REASONS AND GENERAL KNOWLED GE ABOUT FUNCTIONING IS IGNORED WITHOUT ANY REASON AND JUSTIFICATION. 4.1. IT IS PERTINENT TO NOTE THAT AFTER CONSIDERING THE AFORESAID AFFIDAVIT ITA NOS. 748 & 975/AHD/2008 FOR THE ASSESSMENT YEAR 2003-04 (SUPRA ) TRIBUNAL HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE ASSESSEE WAS PREVENTED BY SUFFICI ENT CAUSE IN COMPLYING WITH THE NOTICES ISSUED BY THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES W E ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO LEVY THE PENALTY UNDER SECTION 271(1)(B) OF THE INC OME TAX ACT. THIS VIEW IS ALSO SUPPORTED BY FACT THAT IN THE ASSESSMENT YEAR 2004-05 PENALTY A MOUNTING TO RS.50 000/- UNDER SECTION 271(1)(B) WAS LEVIED WHICH WAS CANCELLED BY THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD VIDE ORDER DATED 05.09. 2007 IN APPEAL NO. CIT(A.)- XIV/WD.8(4)/139/2007-08 AND THE COPY OF THE SAID DE CISION IS PLACED ON RECORD. IT IS ALSO ADMITTED BY BOTH THE SIDES THAT THE DEPARTMENT HAS ACCEPTED THE SAID DECISION. IN VIEW OF THIS 4 ITA NOS . 4265-4268/AHD/2007 PENALTY OF RS.40 000/- LEVIED BY THE ASSESSING OFFI CER UNDER SECTION 271(1)(B) AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER IS HEREBY CANCELLED. RESULTANTLY THIS GROUND OF APPEAL IS ALLOWED. 5. ITA NO. 4267/AHD/2007 THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 05.09.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD IN APPEAL NO. CIT(A.)-XIV/WD. 8(4)/139/2007-08 CONFIRMING THE PENALTY OF RS.50 00 0/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT FOR THE AS SESSMENT YEAR 2004-05. 5.1. WE HAVE HEARD BOTH THE SIDES. FOR THIS APPEAL SIMILAR ARGUMENTS AS WERE RAISED IN ITA NO. 4266/AHD/2007 FOR THE ASSESSMENT YEAR 2002-03 WERE RAISED. THE FACTS AND CIRCUMSTANCES IN THE ASSESSMENT YEAR UNDER APPEAL ARE ALSO SAME A S IN THE ASSESSMENT YEAR 2002-03. WE THEREFORE RESPECTFULLY FOLLOWING OUR DECISION IN I TA NO. 4266/AHD/2007 FOR THE ASSESSMENT YEAR 2002-03 (SUPRA) CANCEL THE PENALTY OF RS.50 00 0/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT 1961. 5.2. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED. 6. ITA NO. 4265/AHD/2007 THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 05.09.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD IN APPEAL NO. CIT(A.)-XIV/WD. 8(4)/296/2007-08 CONFIRMING THE PENALTY OF RS.1 00 000/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271B FOR THE ASSESSMENT YEAR 2002-03. 6.1. WE HAVE HEARD BOTH THE SIDES. WHILE ADJUDICATI NG THE APPEAL OF THE ASSESSEE IN ITA NO. 4266/AHD/2007 FOR THE ASSESSMENT YEAR 2002-03 (SUPR A) WE HAVE HELD THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN COMPLYING WITH VAR IOUS NOTICES ISSUED BY THE ASSESSING OFFICER AS WELL AS LEARNED COMMISSIONER OF INCOME TAX(APPEA LS). IN THAT ASSESSMENT YEAR WE HAVE ALSO CANCELLED THE PENALTY OF RS.40 000/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271B. THE PRESENT APPEAL OF THE ASSESSEE AGAINST THE ORDER LE VYING PENALTY UNDER SECTION 271B WAS DECIDED 5 ITA NOS . 4265-4268/AHD/2007 BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) EX-PARTE QUO THE ASSESSEE. SINCE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE WE SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND DIRECT HIM TO RE-DECIDE THE APPEAL OF THE ASSESSEE AFGER GIVING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6.2. IN THE RESULT FOR STATISTICAL PURPOSES THE A PPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 7. ITA NO. 4268/AHD/2007 THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 05.09.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XIV AHMEDABAD IN APPEAL NO. CIT(A.)-XIV/WD. 8(4)/230/2006-07 CONFIRMING THE VARIOUS ADDITIONS/ DISALLOWANCES MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER ON 20.10.2006 UNDER SECTION 143 (3) READ WITH SECTION 144 FOR THE ASSESSMENT YEAR 2004-05. 7.1. IN RESPECT OF THIS APPEAL THE LD. COUNSEL OF THE ASSESSEE FAIRLY ADMITTEDLY THAT THERE WAS NON-COMPLIANCE OF NOTICES BEFORE BOTH THE DEPARTMEN TAL AUTHORITIES BELOW. HE ALSO POINTED OUT THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) DECIDED THE APPEAL EX-PARTE QUO THE ASSESSEE. AS THE ASSESSEE WAS PREVENTED BY SUFFICIE NT CAUSE IN APPEARING BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THEREFORE THE IMPUGNED ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE SET ASIDE AN D HE BE DIRECTED TO DECIDE THE APPEAL AFRESH IN ACCORDANCE WITH LAW. THE LD. COUNSEL OF T HE ASSESSEE ASSURED THAT WHENEVER THE APPEAL WAS FIXED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PROPER REPRESENTATION WILL MAKE. 7.2. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE. 7.3. AFTER CONSIDERING RIVAL SUBMISSIONS WE ARE CO NVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN APPEARING BEFORE THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS). FOR THE ASSESSMENT YEAR 2003-04 ON IDENTICAL FACTS ITAT C BENCH AHMEDABAD IN ITA NOS. 748 & 975/AHD/2008 FOR THE ASSESSMENT YEAR 2003-04 VIDE O RDER DATED 18.12.2009 HELD THAT THERE WAS REASONABLE CAUSE FOR NON-COMPLIANCE. ACCORDINGLY AL L THE ADDITIONS MADE IN THAT YEAR WERE 6 ITA NOS . 4265-4268/AHD/2007 RESTORED TO THE FILE OF ASSESSING OFFICER FOR GIVIN G AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. WE THEREFORE FOR THIS ASSESSMENT YEAR ALSO SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TH AT THE ASSESSING OFFICER WILL RE-DECIDE ALL THE ADDITIONS/ DISALLOWANCES AFRESH AFTER GIVING FRESH OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. RESULTANTLY FOR STATISTICAL PURPOSES THIS APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 8. IN THE RESULT THE APPEALS BEING ITA NOS. 4266 & 4267/AHD/2007 FILED BY THE ASSESSEE ARE ALLOWED. THE APPEALS BEING ITA NOS. 4265 & 4268 /AHD/2007 FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON 13.08.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 13 / 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.