M/s Vardhman Cotton Corporation,, Surendranagar v. The Deputy Commissioner of Income Tax, Surendranagar Circle,, Surendranagar

ITA 929/RJT/2009 | 1995-1996
Pronouncement Date: 16-12-2010 | Result: Allowed

Appeal Details

RSA Number 92924914 RSA 2009
Bench Rajkot
Appeal Number ITA 929/RJT/2009
Duration Of Justice 1 year(s) 4 month(s) 15 day(s)
Appellant M/s Vardhman Cotton Corporation,, Surendranagar
Respondent The Deputy Commissioner of Income Tax, Surendranagar Circle,, Surendranagar
Appeal Type Income Tax Appeal
Pronouncement Date 16-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 16-12-2010
Date Of Final Hearing 13-12-2010
Next Hearing Date 13-12-2010
Assessment Year 1995-1996
Appeal Filed On 31-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI D.T. GARASIA (JM) I.T.A. NO. 929/RJT/2009 (ASSESSMENT YEAR 1995-96) M/S VARDHAMAN COTTON CORPN VS DCIT SURENDRANAGAR CIRCLE MEHTA MARKET SURENDRANAGAR SURENDRANAGAR PAN :AADFV5567A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DR ADHIA REVENUE BY : SHRI AVINASH KUMAR O R D E R A.L. GEHLOT : THIS APPEAL FOR ASSESSMENT YEAR 1995- 96 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XVI AHMED ABAD DATED 18-05-2009 WHEREBY HE CONFIRMED THE PENALTY OF RS. 1 92 000 IM POSED U/S 271(1)(C) OF THE ACT. 2. THE EFFECTIVE GROUND RAISED IN THE APPEAL IS IN RESPECT OF IMPOSITION OF PENALTY U/S 271(1) AT RS.1 92 000. THE ASSESSEE H AS ALSO RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING THE PENALTY ORDER PASS ED BY THE ASSESSING OFFICER WAS TIMEBARRED. AFTER HEARING THE LEARNED REPRESEN TATIVES OF THE PARTIES THE ADDITIONAL GROUND IS ADMITTED. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSING PROCEEDINGS THE ASSESSING OFFICER MADE ADDITION OF RS.4 80 000 TOWA RDS AGRICULTURAL PRODUCE MARKETING FEES EXPENDITURE PAID FOR LOOSE COTTON TO APMC ON 31-03-1995. THE ASSESSEE DID NOT PRODUCE EVIDENCE IN SUPPORT OF THE PAYMENT TO APMC. THEREFORE THE ASSESSING OFFICER DISALLOWED THE EXP ENSES OF RS.4 80 000. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A ) VIDE ORDER DATED 30-01- 2002 DIRECTED THE ASSESSING OFFICER TO VERIFY THE P AYMENT FROM ORIGINAL RECEIPT ITA NO.929/RJT/2009 2 AND ALLOW THE SAME AS PER LAW. ON ENQUIRY WITH A PMC BOTAD THE ASSESSING OFFICER FOUND THAT NO SUCH PAYMENT WAS MADE. THE A SSESSING OFFICER DISALLOWED THE SAID AMOUNT. HOWEVER WHILE GIVING EFFECT TO T HE ORDER OF CIT(A) ORDER DATED 02-05-2003 THE ASSESSING OFFICER WRONGLY DROPPED PE NALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT VIDE ORDER DATED 30-09-200 2. THE CIT INVOKED JURISDICTION U/S 263 AND FOUND THAT THE ORDER DROPP ING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS PREJUDICIAL TO THE INTERES T OF THE REVENUE. THE CIT VIDE ORDER DATED 20 TH AUGUST 2004 U/S 263 SET ASIDE THE ORDER OF ASSESS ING OFFICER DROPPING THE PENALTY. THE CIT DIRECTED THE ASSESSING OFFICER TO PASS FRESH ORDER. AGGRIEVED BY THE ORDER OF CIT U/S 263 THE A SSESSEE FILED APPEAL BEFORE ITAT. THE ITAT VIDE ITS ORDER IN ITA NO.664/RJT/20 04 DATED 17-01-2008 HAS DISMISSED THE ASSESSEES APPEAL. IN VIEW OF THE OR DER OF ITAT THE ASSESSING OFFICER VIDE NOTICE DATED 28 TH MARCH 2008 AFFORDED OPPORTUNITY TO THE ASSESSEE T O PRODUCE EVIDENCE AS DIRECTED BY ITAT. THE ASSESSE E WAS REQUIRED TO PRODUCED RECEIPT OF PAYMENT OF RS.4 80 000. HOWEVER NO SUC H RECEIPT WAS PRODUCED FOR VERIFICATION. THE ASSESSING OFFICER THEREFORE LEVI ED PENALTY OBSERVING THAT THAT THE ASSESSEE HAS COMMITTED DEFAULT OF CONCEALMENT OF IN COME OF RS.4 80 000. THE ASSESSING OFFICER LEVIED MINIMUM PENALTY OF RS.1 92 000 U/S 271(1)(C) OF HE ACT. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFF ICER APPLYING THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF DHARMENDRA TEXTIL E PROCESSORS 306 ITR 277 (SC). 4. WE HAVE HEARD LEARNED REPRESENTATIVES OF THE PAR TIES RECORD PERUSED. SOME IMPORTANT FACTS OF THE CASE AS NOTED FROM THE PENALTY ORDER ARE THAT THE ASSESSING OFFICER MADE ORIGINAL ASSESSMENT U/S 143( 3) DATED 29-03-1996. THE ASSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) VI DE ORDER DATED 30-01-1992 DIRECTED THE ASSESSING OFFICER TO VERIFY THE PAYMEN T OF RS.4 80 000 FROM ORIGINAL RECEIPT AND ALLOW AS PER LAW. THE ASSESSING OFFICE R DROPPED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT INITIATED DURING THE ORIGI NAL ASSESSMENT ORDER DATED 29- 03-1996. SINCE THIS ORDER OF CIT(A) HAS BEEN SET A SIDE ON THE ISSUE THE PENALTY PROCEEDINGS INITIATED IN ORIGINAL ASSESSMENT HAD NO LEGAL IMPACT AS THE BASE OF ITA NO.929/RJT/2009 3 THE PENALTY PROCEEDINGS ITSELF NO MORE EXISTED. TH E IMPUGNED PENALTY ORDER U/S 271(1)(C) SPRINGS FROM THE PROCEEDINGS INITIATED DU RING THE ORIGINAL ASSESSMENT PROCEEDINGS THE BASIS OF WHICH NO MORE EXISTED WIT H THE SETTING ASIDE OF THE ASSESSMENT ORDER BY THE CIT(A) AND THE CONSEQUENT D ROPPING OF PENALTY PROCEEDINGS U/S 271(1)(C) BY THE ASSESSING OFFICER WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED PENALTY ORDER AS PER LAW H AS NO LEG TO STAND. WE MAY ALSO STATE THAT ACTION OF THE COMMISSIONER U/S 263 OF THE ACT AND THE ORDER OF ITAT CONFIRMING THE ACTION OF THE COMMISSIONER ARE TOTALLY IN DIFFERENT CONTEXT. IN FACT THE ITAT WHILE CONFIRMING THE ACTION OF CIT O BSERVED AS UNDER: WE ALSO FIND FROM THE ORDER OF THE CIT THAT CIT HA S DIRECTED THE AO TO PASS A FRESH ORDER AND THE ASSESSEE WILL GET FURTHER OPPORTUNITY TO REPRESENT THE CASE AGAINST IMPOSITIO N OF THE PENALTY AS STATED ABOVE THE IMPUGNED PENALTY ORDER PASSED BY THE ASSESSING OFFICER IS NOT ON THE BASIS OF EFFECT ORDER DATED 02-05-2003 P ASSED BY THE ASSESSING OFFICER. THIS FACT IS CLEAR FROM THE FACTS RECORDE D BY THE ASSESSING OFFICER AT PARAGRAPH 3 WHICH READS AS BELOW: 3. THE ASSESSEE FILED APPEAL BEFORE THE C.I.T.(APP EALS). THE C.I.T.(APPEALS) VIDE ORDER DATED 30-01-2002 DIREC TED THE ASSESSING OFFICER TO VERIFY THE PAYMENT FROM THE OR IGINAL RECEIPT AND ALLOW THE SAME AS PER LAW. THE ASSESSEE FAILED TO PRODUCE ORIGINAL RECEIPT BEFORE THE A.O. IN RESPECT OF PAYM ENT OF FEES OF RS.4 80 000/- BEFORE THE A.O. ON INQUIRY WITH THE APMC BOTAD IT WAS INFORMED THAT NO SUCH PAYMENT OF RS.4 80 000/- WAS PAID BY VARDHMAN COTTON CORPORATION. CONSIDERING THE FATS EXPENSES OF RS.4 80 000/- IS DISALLOWED WHILE GIVING EFFECT TO THE ORDER OF THE C.I.T.(APPEALS) VIDE ORDER DATED 02-05-2003. HOWEV ER THE A.O. WRONGLY DROPPED PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT VIDE ORDER DATED 30-09-2002. THE ORDER U/S 271(1) OF T HE ACT BEING PREJUDICIAL TO THE INTEREST OF THE REVENUE THE COM MISSIONER OF INCOME TAX VIDE ORDER U/S 263 DATED 20-08-2004 SET -ASIDE THE ORDER U/S 271(1)(C) PASSED BY THE ASSESSING OFFICER AND DIRECTED TO PASS FRESH ORDER. 5. IN THE LIGHT OF ABOVE FACTS WE FIND THAT PENALTY LEVIED ON THE BASIS OF AN ORDER WHICH HAS BEEN SET ASIDE BY THE CIT(A) IS NOT SUSTAINABLE. THEREFORE WE ITA NO.929/RJT/2009 4 CANCEL THE PENALTY OF RS. 1 92 000 LEVIED BY THE AS SESSING OFFICER U/S 271(1)(C) OF THE ACT. WE MAY MENTION THAT WE ARE NOT EXPRESSING ANY OPINION ON THE OTHER CONTENTIONS OF THE ASSESSEE INCLUDING ADDITIONAL GR OUND AS THE APPEAL IS DECIDED IN FAVOUR OF ASSESSEE AS DISCUSSED ABOVE. 6. IN THE RESULT APPEAL IS ALLOWED AS INDICATED A BOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 16-12-2010 . SD/- SD/- (D.T. GARASIA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : 16 TH DECEMBER 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-XVI AHMEDABAD 4. THE CIT-V AHMEDABAD 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT