RAJSHREE CREATIONS, MUMBAI v. ASST CIT 15(3),

ITA 5660/MUM/2014 | 2006-2007
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 566019914 RSA 2014
Assessee PAN ABAFS7819J
Bench Mumbai
Appeal Number ITA 5660/MUM/2014
Duration Of Justice 2 year(s) 20 day(s)
Appellant RAJSHREE CREATIONS, MUMBAI
Respondent ASST CIT 15(3),
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 30-09-2016
Date Of Final Hearing 27-07-2016
Next Hearing Date 27-07-2016
Assessment Year 2006-2007
Appeal Filed On 09-09-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.5660/MUM/2014 (ASSESSMENT YEAR: 2006-07) RAJSHREE CREATIONS 102 KARMA SANDESH-2 BEHIND POPULAR HOTEL OFF HINGWALA LANE GHATKOPAR (E) MUMBAI-77 VS ACIT 15(3) MUMBAI PAN : ABAFS7819J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MAYUR R MAHADIYA RESPONDENT BY SHRI B.S. BIST (CIT-DR) DATE OF HEARING : 26-09-2016 DATE OF PRONOUNCEMENT : 30 -09-2016 O R D E R PER ASHWANI TANEJA AM: THIS APPEAL IS AGAINST THE ORDER OF COMMISSIONER O F INCOME-TAX (APPEALS)- 26 MUMBAI [HEREINAFTER CALLED CIT(A)] DATED 09-06- 2014 PASSED AGAINST THE PENALTY ORDER U/S 271(1)(C) DATED 29-03-2012 FOR A. Y. 2006-07 ON THE FOLLOWING GROUNDS: L ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CONFIRM ING THE PENALTY U/S. 271 (1)(C) LEVIABLE ON THE FOLLOWING E XPENSES CLAIMED BY THE APPELLANT HOLDING THAT THE SAME ARE NOT GENUINE EXPENSES. A) ADVOCATE FEES RS. 30 000/- 2 I.T.A. NO.5660/MUM/2014 B) OFFICE MAINTENANCE RS. 25 870/- C) SALARY EXPENSES RS.3 00 000/- D) MEDICAL EXPENSES RS. 11 305/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. COMMISSIONER OF INCOME TAX (A) MOSTLY RELIED ON THE ORDER OF THE CIT(A) IN QUANTUM APPEAL AND FAILED TO APPRECIATE T HAT THE PENALTY PROCEEDINGS ARE DISTINCT THAN THE ASSESSMEN T PROCEEDINGS. 2. THE BRIEF BACKGROUND OF THE CASE IS THAT THE FOUR I TEMS AS MENTIONED ABOVE IN THE GROUNDS WERE DISALLOWED BY THE AO WHIC H WERE SUBSEQUENTLY CONFIRMED BY THE CIT(A) IN THE FIRST APPEAL. THERE AFTER PENALTY PROCEEDINGS WERE INITIATED BY THE AO AND BEING DISSATISFIED WIT H THE EXPLANATION OF THE ASSESSEE THE PENALTY WAS LEVIED BY THE AO. THE PE NALTY ORDER WAS CONTESTED BY THE ASSESSEE BEFORE THE LD. CIT(A) WHERE NO RELI EF WAS GIVEN AND PENALTY ORDER WAS CONFIRMED ON ALL THE ABOVE SAID FOUR ITEM S OF DISALLOWANCES. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING IT HAS BEEN CONTENDED BY THE LD. COUNSEL THAT THE DISALLOWANCES WERE MADE BY THE AO IN A ROU TINE MANNER BY FINDING OUT SOME DISCREPANCIES IN THE DETAILS AND EVIDENCES AND THE CLAIM OF THE ASSESSEE WAS NOT PROVED TO BE BOGUS OR FALSE. THERE WAS NO CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. IT WAS ALSO SUBMITTED TH AT RETURN WAS FILED AT A LOSS OF R.30 95 405 AND EVEN AFTER THE ADDITIONS THE INCOM E WAS STILL ASSESSED AT A LOSS OF RS.24 91 970 AND THUS APPARENTLY THERE WAS NO MOTIVE WITH THE ASSESSEE TO EVADE ANY TAX. THE ASSESSEE HAD NOT FILED SECOND A PPEAL AS THERE WAS NO TAX IMPLICATIONS INVOLVED IN THE QUANTUM APPEAL. BUT T HAT DOES NOT AUTOMATICALLY MEAN THAT IT WAS A CASE OF CONCEALMENT OF INCOME AN D THEREFORE PENALTY HAS BEEN WRONGLY LEVIED. HE DREW OUR ATTENTION ON THE DETAILED SUBMISSIONS MADE BEFORE THE CIT(A) WHICH WERE NOT PROPERLY CONSIDERE D BY HIM WHILE CONFIRMING THE PENALTY. IT WAS ALSO SUBMITTED THAT THE LD.CIT (A) HAS CONFIRMED THE PENALTY 3 I.T.A. NO.5660/MUM/2014 ORDER EXPARTE AND THE ORDER HAS BEEN PASSED WITHOUT PROPERLY DEAL ING WITH VARIOUS ARGUMENTS OF THE ASSESSEE. IT WAS ALSO SUB MITTED THAT PENALTY PROCEEDINGS ARE VERY SERIOUS AND THEREFORE THE LD . CIT(A) SHOULD NOT HAVE PASSED THE PENALTY ORDER IN A CASUAL MANNER EVEN IF THE SAME WAS PASSED EXPARTE. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED IN DETAIL EACH AND EVERY SUBMISSIONS OF THE ASSESSEE BEFORE CONFIRMING THE L EVY OF PENALTY. 4. PER CONTRA THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A). HE ALSO FAIRLY AGREED THAT PENALTY ORDER HAS BEEN CONFIRMED BY THE LD. CIT(A) EXPARTE IN SPITE OF THE FACT THAT WRITTEN SUBMISSIONS WERE ON RECORD BEFORE HIM AND THEREFORE HE ACCEPTED THAT THIS CASE MAY GO BACK T O THE CIT(A) FOR FRESH ADJUDICATION. 5. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHOR ITIES. IT IS NOTED FROM THE PERUSAL OF THE ORDERS PASSED BY THE LD. CI T(A) THAT WRITTEN SUBMISSIONS WERE ON RECORD BEFORE THE LD.CIT(A). T HE ORDER HAS BEEN PASSED EXPARTE. IT IS FURTHER NOTED THAT VARIOUS ARGUMENTS MADE B Y THE ASSESSEE IN THE WRITTEN SUBMISSION A COPY OF WHICH IS PLACED BEFOR E US ALSO HAVE NOT BEEN PROPERLY DEALT WITH BY THE LD. CIT(A). IT HAS BEEN SUBMITTED IN DETAIL IN THE WRITTEN SUBMISSION BY THE ASSESSEE THAT THOUGH COGE NT EVIDENCES WERE NOT AVAILABLE TO SUBSTANTIATE THE EXPENSES DISALLOWED B Y THE AO BUT THESE EXPENSES WERE NOT FALSE OR BOGUS. IN OUR OPINION ALL THESE SUBMISSIONS WERE TO BE PROPERLY DEALT WITH BEFORE CONFIRMING THE PENALT Y. THE ACTION OF CONFIRMATION OF PENALTY MAY FURTHER LEAD TO PROSECU TION OF THE ASSESSEE AND THEREFORE IN OUR CONSIDERED OPINION BEFORE SUCH A HARSH ACTION IS TAKEN THE ASSESSEE SHOULD BE GIVEN FULL OPPORTUNITY AND WELL REASONED ORDER SHOULD BE PASSED. THEREFORE KEEPING IN VIEWS ALL THE FACTS AND CIRCUMSTANCES OF THE CASE WE SEND THIS APPEAL BACK TO THE FILE OF THE LD. CIT (A) WITH A DIRECTION TO PASS FRESH ORDER AFTER GIVING ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 4 I.T.A. NO.5660/MUM/2014 THE LD. CIT(A) SHALL TAKE INTO ACCOUNT AND DEAL WIT H ALL THE SUBMISSIONS THAT MAY BE MADE BY THE ASSESSEE IN SUPPORT OF ITS CLAIM . THE LD. CIT(A) ALSO SHOULD KEEP IN MIND THE CLEAR POSITION OF LAW THAT PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS AND THER EFORE ANY ADDITION / DISALLOWANCE MADE IN THE ASSESSMENT ORDER DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY. THUS WITH THESE DIRECTIONS THIS APPE AL IS SENT BACK TO THE FILE OF THE CIT(A). 6. AS A RESULT THE APPEAL MAY BE TREATED AS ALLOWED F OR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON THIS 30 TH DAY OF SEPTEMBER 2016. SD/- SD/- (SANJAY GARG) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT : 30 TH SEPTEMBER 2016 PK/- COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE D -BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT MUMBAI BENCHES