M/S. SCHENECTADY HERDILLIA LTD ( CHANGED TO SI GROUP-INDIA LTD), NAVI MUMBAI v. THE JT CIT RG 3(3), MUMBAI

ITA 4528/MUM/2007 | 2001-2002
Pronouncement Date: 07-05-2010 | Result: Dismissed

Appeal Details

RSA Number 452819914 RSA 2007
Assessee PAN AAACH7323L
Bench Mumbai
Appeal Number ITA 4528/MUM/2007
Duration Of Justice 2 year(s) 10 month(s) 24 day(s)
Appellant M/S. SCHENECTADY HERDILLIA LTD ( CHANGED TO SI GROUP-INDIA LTD), NAVI MUMBAI
Respondent THE JT CIT RG 3(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 07-05-2010
Date Of Final Hearing 03-05-2010
Next Hearing Date 03-05-2010
Assessment Year 2001-2002
Appeal Filed On 13-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI J BENCH MUMBAI BEFORE SHRI N.V. VASUDEVAN (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO.4528/MUM./2007 ASSESSMENT YEAR : 20012002 DATE OF HEARING 3.5.2010 SCHENECTADY HERDILLIA LIMITED (CHANGED TO SI GROUP INDIA LTD. PLOT NO.2/1 T.T.C. INDUSTRIAL AREA THANE BELAPUR ROAD NAVI MUMBAI 400 703 PAN AAACH7323L .. APPELLANT VS JT. COMMISSIONER OF INCOME TAX RANGE-3(3) AAYAKAR BHAVAN MAHARSHI KARVE MARG MUMBAI 400 020 RESPONDENT APPELLANT BY : MRS. MEENA JAIN RESPONDENT BY : SHRI L.K. AGRAWAL O R D E R PER PRAMOD KUMAR A.M. 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF COMMISSIONER (APPEALS)S ORDER DATED 13 TH MARCH 2007 CONFIRMING PENALTY OF ITA NO.4528/MUM./2007 SCHENECTADY HERDILLIA LIMITED [2 ] RS.9 00 000/- IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 (FOR SHORT THE ACT ) FOR THE ASSESSMENT YEAR 2001-02. 2. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE ISSUE IN APPEAL IS COVERED AGAINST THE ASSESSEE BY ORDER DATED 29 TH JANUARY 2010 PASSED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 1998-99. LEARNED COUNSEL FOR THE ASSESSEE HOWEVER CONTENDS THAT IN VIEW OF HON'BLE SUPREME COURTS DECISION IN THE CASE OF CIT VS RELI ANCE PETROPRODUCTS P. LTD. 230 CTR 320 TRIBUNALS DECISION IS NO LONGER GOOD LAW AND URGES US NOT TO BE INFLUENCED BY THE SAME. LEARNED COUNSEL FOR THE ASS ESSEE ALSO INVITES OUR ATTENTION TO THE FACT THAT IN THE ASSESSMENT YEAR 1995-96 AND 1996-97 ON THE SAME SET OF FACTS THE ASSESSING OFFICER HIMSELF HAD DROPPED TH E PROCEEDINGS. LEARNED COUNSEL FOR THE ASSESSEE ALSO TAKES US THROUGH THE ORDERS O F THE CO-ORDINATE BENCHES IN QUANTUM PROCEEDINGS TO DEMONSTRATE THAT THE FACTS AND CIRCUMSTANCES OF THE CASE DID NOT WARRANT IMPOSITION OF PENALTY U/S 271(1)(C) AND REITERATES THE CONTENTIONS BEFORE THE AUTHORITIES BELOW. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITS THAT ONCE A CO-ORDINATE BENCH HAS CON FIRMED THE PENALTY ON MATERIALLY IDENTICAL FACTS IT IS NOT OPEN TO US TO REVISIT OR RECONSIDER THE SAID DECISION. 3. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED THE APPLICABLE LEGAL POSITION AS AL SO THE FACTUAL MATRIX OF THE CASE. 4. WE HAVE NOTED THAT THE CO-ORDINATE BENCH WHILE CON FIRMING THE PENALTY U/S 271(1)(C) FOR THE ASSESSMENT YEAR 1998-99 HAS GIVE N A CATEGORICAL FINDING TO THE EFFECT THAT THE ASSESSEE HAS NOT DISCLOSED FULL FACTS RELATING TO THE CASE AND FOR THIS REASON CONFIRMED THE PENALTY. IT WAS ALSO NOTED BY THE CO-ORDINATE BENCH THAT IN THE PRESENT CASE IT HAS BEEN CLEARLY HELD BY THE T RIBUNAL THAT TRANSACTION OF SALE AND LEASE BACK WAS A SHAM TRANSACTION AND WAS NOT GENUI NE . THE SHORT QUESTION THAT WE HAVE TO REALLY DECIDE IS WHETHER IN THE WAKE OF THE SE FINDINGS DOES HON'BLE ITA NO.4528/MUM./2007 SCHENECTADY HERDILLIA LIMITED [3 ] SUPREME COURTS DECISION IN RELIANCE PETROPRODUCTS CASE (SUPRA) COMES TO ASSESSEES RESCUE. 5. WE DO NOT THINK RELIANCE PRTROPRODUCTS DECISION (SU PRA) DOES INDEED HELP THE ASSESSEE IN THE SITUATION BEFORE US. THAT WAS A CASE IN WHICH THEIR LORDSHIPS WERE DEALING WITH A SITUATION IN WHICH ACCORDING T O THE REVENUE AUTHORITIES THE PROPOSITION WAS THAT A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINAB LE IN LAW BY ITSELF WOULD AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. THE SHORT POINT ADJUDICATED BY THEIR LOR DSHIPS WAS WHETHER IN THIS CASE AS A MATTER OF FACT THE ASSESSEE HAD GIVEN I NACCURATE PARTICULARS. SPECIFICALLY POINTING OUT THAT THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY T HE ASSESSEE IN THE RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR F ALSE THEIR LORDSHIP HELD THAT A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCO ME OF THE ASSESSEE AND THAT SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. EVEN IS AS THEIR LORDSHIP HELD SO IT WAS ALSO ADDED THAT WE MUST HASTEN TO ADD HERE THAT IN THIS CASE THERE IS NO FINDING THAT ANY DETAILS SUP PLIED BY THE ASSESSEE IN THE RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. IT WOULD THUS FOLLOW THAT WHERE DETAILS SUPPLIED IN THE RETURN ARE FOUND TO BE INCO RRECT OR ERRONEOUS OR FALSE THE RATIO OF THE DECISION WOULD NOT APPLY. IT IS ALSO I MPORTANT TO BEAR IN MIND THE FACT THAT AS SPECIFICALLY OBSERVED BY THE HON'BLE SUPREM E COURT IN PARAGRAPH 9 OF THE JUDGMENT HON'BLE SUPREME COURT WAS NOT CONCERNED W ITH THE MENS REA AND THE ONLY ISSUE BEFORE THE HON'BLE SUPREME COURT WAS WHE THER OR NOT INACCURATE PARTICULARS ARE FURNISHED. TO SUGGEST THAT THIS JUD GMENT CAN SUPPORT THE PROPOSITION THAT PENALTY CANNOT BE IMPOSED FOR MAKI NG INCORRECT CLAIMS IS STRETCHING THE THINGS A BIT TOO FAR BECAUSE IN OU R HUMBLE UNDERSTANDING ALL THAT THIS JUDGMENT HOLDS IS THAT A MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW PER SE DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. THE CASE BEFORE US DOES NOT DEAL WITH A MERE INADMISSIBLE LEGAL CLAIM BUT A CLAIM WHICH IS MADE ON THE BASIS OF SHAM TRANSACTION WHICH IS FOUND TO BE NOT GENUINE BY THE TRIBUNAL. HON'BLE SUPREME COURTS DECISION IN RELIANCE PETROP RODUCTS (SUPRA) DOES NOT DEAL ITA NO.4528/MUM./2007 SCHENECTADY HERDILLIA LIMITED [4 ] WITH SUCH A SITUATION. QUITE TO THE CONTRARY THE J UDGMENT SPECIFICALLY DISASSOCIATES ITSELF WITH SUCH SITUATIONS. 6. FOR THE REASONS SET OUT ABOVE WE SEE NO MERITS IN CONTENTIONS OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISION OF TH E CO-ORDINATE BENCHES AND TAKING INTO ACCOUNT FINDINGS OF FACTS THEREIN WE APPROVE THE ORDERS OF THE AUTHORITIES BELOW AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT APPEAL IS DISMISSED. PRONOUNCED IN T HE OPEN COURT TODAY ON 7 TH DAY OF MAY 2010. SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI; 7 TH DAY OF MAY 2010 COPIES OF THE ORDER FORWARDED TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT MUMBAI (4) CIT(A) MUMBAI (5) DR J BENCH (6) GUARD FILE TRUE COPY BY ORDER ETC. ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PRADEEP J. CHOWDHURY MUMBAI BENCHES SR. PRIVATE SECRETARY ITA NO.4528/MUM./2007 SCHENECTADY HERDILLIA LIMITED [5 ] DATE INITIAL 1. DRAFT DICTATED ON 3.5.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 4.5.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4.5.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 4.5.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 4.5.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 7.5.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER