NESCO LTD, MUMBAI v. DCIT 9(2), MUMBAI

ITA 984/MUM/2012 | 2002-2003
Pronouncement Date: 03-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 98419914 RSA 2012
Assessee PAN AAACN1222E
Bench Mumbai
Appeal Number ITA 984/MUM/2012
Duration Of Justice 1 year(s) 4 month(s) 20 day(s)
Appellant NESCO LTD, MUMBAI
Respondent DCIT 9(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 03-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 03-07-2013
Date Of Final Hearing 03-07-2013
Next Hearing Date 03-07-2013
Assessment Year 2002-2003
Appeal Filed On 13-02-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . / BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER /AND . SHRI D.KARUNAKARA RAO ACCOUNTANT MEMBER . / ITA NO.984/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2002-03 M/S. NESCO LTD. NESCO ESTATE WESTERN EXPRESS HIGHWAY GOREGAON (EAST) MUMBAI - 400 063. ! ! ! ! / VS. THE DCIT 9(2) MUMBAI. # ./ $% ./ PAN/GIR NO. : AAACN 1222E ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: NONE '(#& * ) / RESPONDENT BY : SHRI PARESH JOHRI ! * + / DATE OF HEARING : 03/07/2013 -' * + / DATE OF PRONOUNCEMENT : 03/07/2013 . / O R D E R PER I.P.BANSAL J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-20 MUMBAI DATED 22/12/2011 FO R ASSESSMENT YEAR 2002-03. GROUNDS OF APPEAL READ AS UNDER: (I) ON OPPORTUNITY - (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 20 MUMBAI [REFERRED AS CIT (A)] ERRED IN DISMISSING . / ITA NO.984/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2002-03 2 APPEAL WITHOUT GIVING PROPER AND SUFFICIENT OPPORTU NITY IN THE INTEREST OF PRINCIPLES OF NATURAL JUSTICE. (2) THE LEARNED CIT(A) ERRED IN DISMISSING THE SAID APPEAL INTER-ALIA ON THE GROUND THAT EVEN AFTER THE HONBLE ITATS PASSED I N 26/11/2010 THE APPELLANT CHOSE TO FILE THE APPEAL BEFORE THE UNDERSIGNED ON 13/04/2011... WITHOUT AFFORDING ANY OPPORTUNITY ON HIS OBSERVATION OTHERW ISE THERE WAS REASON FOR KEEPING SILENCE ON THIS ISSUE. (II) ON DISMISSAL OF THE APPEAL - (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING THE BONA FIDE & GENUINE REASON FOR THE DELAY IN FILING THE APPEAL. (2) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT YO UR APPELLANT UNDER THE WRONG NOTION HAD FILED APPEAL AGAINST THE IMPUGNED PENAL TY ORDER U/S. 271(1)(C) DIRECTLY BEFORE THE HONBLE ITAT WITHIN THE SPECIFI ED TIME LIMIT U/S. 253(3) AFTER PAYMENT OF THE REQUISITE FILING FEE OF RS.10 000/- INSTEAD OF RS.500/- U/S. 253(6) OF THE ACT. (3) ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT YOUR APPELLANT THOUGH UNDER WRONG NOTION HAD FILED APPEAL BEFORE THE HONBLE ITAT WELL WITHIN THE TIME AND THEREFORE IF IT HAD CORRECTLY BEEN ADVISED THEN THERE WAS NO REASON TO DELAY IN FILING THE FIR ST APPEAL BEFORE HIM AS THERE WAS NO CONCEALMENT WITHIN THE MEANING OF THE PROVIS IONS OF SECTION 271(1)(C) OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT (A) OUGHT TO HAVE CONDONED THE DELAY INSTEAD OF MERELY FOLLOWING THE OLD MAXIM THAT LAW FOURS THE VIGILANT. 5. ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THERE WAS NO OBJECTION WHILE ACKNOWLEDGING RECEIPT OF APPEAL BY THE REGISTRY OF THE HONBLE ITAT OTHERWISE THE BONAFIDE MISTAKE COU LD HAVE BEEN RECTIFIED THAT TIME ONLY BY FILING APPEAL BEFORE THE APPROPRIATE F ORUM AND COULD HAVE AVOIDED THE HARDSHIP. (6) ON THE FACTS AND CIRCUMSTANCES YOUR APPELLANT PRAYS IN THE INTEREST OF JUSTICE THAT AN APPROPRIATE ORDER MAY BE PASSED. IF DEEMED FIT ALLEGED DELAY MAY BE CONDONED AND AN APPROPRIATE DIRECTION IN THE INTERE ST OF JUSTICE MAY BE GIVEN TO THE LEARNED CIT(A) TO ADJUDICATE THE APPEAL ON MERI TS OF THE CASE. (III) ON PENALTY OF RS. 14 29 784/- U/S. 271(1)(C) - (1) ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE CONCEALMENT PENALTY OF RS. 14 29 784 /- BY DISMISSING ON THE PRELIMINARY GROUND OF ADMISSION OF THE SAID APPEAL. (2) ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE HONBLE BENCH OF THE TRIBUNAL MAY APPRECIATE THAT THE LEARNED DY. CIT-9(2) MUMBA I [REFERRED AS DCIT] ERRED . / ITA NO.984/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2002-03 3 IN IMPOSING THE PENALTY ON THE AMOUNTS DISALLOWED U NDER THE PROVISIONS OF SECTION 438 OF THE ACT. (3) ON THE FACTS AND CIRCUMSTANCES AND IN LAW YOUR HONOURS MAY APPRECIATE THAT THERE COULD BE NO CONCEALMENT ON MERE DISALLOWANCE OF ANY DEBATABLE ISSUE. (4) ON THE FACTS AND CIRCUMSTANCES AND IN LAW YOUR HONOURS MAY APPRECIATE THAT THE IMPUGNED PENALTY ORDER WOULD NOT STAND IN VIEW OF THE FACT THAT THE ALLEGED PAYMENTS WERE MADE BEFORE FILING OF THE RETURN FOR THE YEAR UNDER CONSIDERATION AND THEREFORE IN VIEW OF THE JUDGMENT OF THE APEX COURT IN CASE OF IN CASE OF CIT V. ALOM EXTRUSION LTD. [319 ITR 306] ALL SUCH ALLE GED CLAIMS ARE ALLOWABLE AND THEREFORE IN CASE OF YOUR APPELLANT ALL SUCH WOULD BE ALLOWABLE. (5) ON THE FACTS AND CIRCUMSTANCES AND IN LAW YOUR APPELLANT PRAYS THAT THE IMPUGNED PENALTY ORDER MAY BE QUASHED & OBLIGE. 2. NOTICE OF HEARING WAS SENT TO THE ASSESSEE. HOW EVER NONE WAS PRESENT ON BEHALF OF THE ASSESSEE ON THE FIXED DATE OF HEARING THEREFORE WE PROCEED TO DECIDE THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE ON MERITS. 3. LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE BY NOT CONDONING THE DELAY WHICH ACCORDING TO LD. CIT(A) WAS BELATED BY FOUR YEARS. IT WAS THE CONTENTION OF THE ASSESSEE THAT UNDER WRONG ADVICE THE ASSESSE E HAD FILED THE APPEAL DIRECTLY BEFORE ITAT AGAINST CONCEALMENT PENALTY ORDER AND THE PROPER COURSE WAS TO FILE AN APPEAL BEFORE LD. CIT(A). THE ITAT DISMISSED SUCH APPEAL VIDE ORDER DATED 26 TH NOV.2010 WITH THE OBSERVATION THAT THE APPEAL IS DI SMISSED BEING NOT PRESSED BUT LIBERTY IS GIVEN TO THE ASSESSEE TO PURSUE THE REME DY OPEN TO THE ASSESSEE IN LAW. COPY OF SUCH ORDER IS ALSO PLACED ON RECORD. HOWEV ER LD. CIT(A) DID NOT ACCEPT THE SUBMISSION. LD. CIT(A) OBSERVED THAT EVEN AFTER OR DER PASSED BY ITAT THERE WAS FURTHER DELAY IN FILING THE APPEAL AS THE APPEAL HAS BEEN FILED ONLY ON 13/4/2011. IT IS ON THAT GROUND LD. CIT(A) DID NOT ADMIT THE AP PEAL FILED BY THE ASSESSEE. THE ASSESSEE IS AGGRIEVED HENCE HAS FILED THE AFOREM ENTIONED GROUNDS OF APPEAL. 4. THE FIRST CASE OF THE ASSESSEE AS PER GROUND OF APPEAL IS THAT LD. CIT(A) DID NOT GIVE SUFFICIENT AND PROPER OPPORTUNITY WHICH IS RE QUIRED TO BE GIVEN AS PER RULES OF NATURAL JUSTICE. IT IS ALSO THE CASE OF THE ASSESS EE THAT LD. CIT(A) DID NOT APPRECIATE THAT UNDER THE WRONG ADVICE THE APPEAL WAS DIRECTLY FILED BEFORE ITAT WITHIN THE SPECIFIED TIME LIMIT AND AFTER MAKING PAYMENT OF RS .10 000/- INSTEAD OF RS.500/- PAYABLE AS APPEAL FEE TO BE FILED BEFORE LD. CIT(A ) AND THUS IT IS THE CASE OF THE . / ITA NO.984/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2002-03 4 ASSESSEE THAT DELAY SHOULD HAVE BEEN CONDONED BY LD . CIT(A). ON MERITS IT IS THE CASE OF THE ASSESSEE THAT ALL THE PAYMENTS WHICH H AVE BEEN DISALLOWED WERE MADE BEFORE DUE DATE OF FILING THE RETURN AND ALL THE OF THEM ARE ALLOWABLE AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALLOM EXTRUSIONS LTD. 319 ITR 306(SC). WHEN ACCORDING TO LAW EXPLAINED BY HONBLE SUPREME COURT DISALLOWANCE ITSELF IS BAD IN LAW PENALTY CANNOT BE LEVIED FOR THE SAID DISAL LOWANCE. 5. ON THE OTHER HAND IT IS THE CASE OF THE DEPARTM ENT THAT DISALLOWANCE HAS BEEN UPHELD THEREFORE AO WAS RIGHT IN IMPOSING THE PEN ALTY. LD. CIT(A) HAS RIGHTLY DISMISSED THE APPEAL FILED BY THE ASSESSEE AS ASSES SEE COULD NOT SUBSTANTIATE THE SUBSTANTIAL DELAY IN FILING THE APPEAL BEFORE LD. C IT(A). 6. WE HAVE CAREFULLY GONE THROUGH THE ASSESSMENT OR DER PENALTY ORDER AND ORDER PASSED BY LD. CIT(A). WE HAVE ALSO CAREFULLY GONE THROUGH THE OTHER PAPERS AVAILABLE ON OUR RECORD. AS PER ASSESSMENT ORDER THE ASSESSE E COMPANY IS A BIFR COMPANY. DURING THE COURSE OF HEARING OF CONCEALMENT PENALT Y PROCEEDINGS IT WAS THE SUBMISSION OF THE ASSESSEE THAT APPEAL WAS FILED BE FORE ITAT THEREFORE PENALTY PROCEEDINGS SHOULD BE KEPT IN ABEYANCE. HOWEVER AO HAS PROCEEDED TO LEVY CONCEALMENT PENALTY. LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE GROUND THAT THERE IS A CONSIDERABLE DELAY EVEN AFTE R ORDER PASSED BY ITAT IN FILING THE APPEAL. IN THIS REGARD IT IS OBSERVED THAT THE DEL AY WHICH HAS BEEN COUNTED BY LD. CIT(A) IS FROM THE DATE OF THE ORDER WHICH IS DATE D 26/11/2010. THE ORDER OF LD. CIT(A) IS SILENT ABOUT THE DATE ON WHICH THAT ORDE R WAS SERVED. THE LIMITATION WILL START FROM THE DATE OF SERVICE OF THE ORDER. 6.1 IT IS NOT A CASE WHERE ASSESSEE CAN BE SAID TO BE CARELESS OR NEGLIGENT BUT IT IS A CASE WHERE ASSESSEE HAS AVAILED WRONG REMEDY AS I T HAS FILED AN APPEAL AGAINST CONCEALMENT PENALTY ORDER WITHIN THE PRESCRIBED TIM E. THE BONAFIDE OF THE ASSESSEE CANNOT BE DOUBTED AS IT HAD PAID AN APPEAL FILING FEE OF RS.10 000/- AGAINST RS.500/- WHICH WAS PAYABLE WAS PAYABLE IF THE APPEAL WAS TO BE FILED BEFORE LD. CIT(A). THEREFORE IT CANNOT BE SAID THAT IT WAS NOT A FIT CASE FOR CONDONATION OF DELAY AS SOUGHT BY THE ASSESSEE. THERE WAS ACCEPTABLE MERIT IN THE CONDONATION OF DELAY. THERE IS ALSO MERIT IN THE CONTENTION OF THE ASSES SEE THAT IF THE PAYMENTS ARE MADE . / ITA NO.984/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2002-03 5 BEFORE DUE DATE OF FILING THE RETURN THEN THEY CAN NOT BE DISALLOWED IN VIEW OF THE AFOREMENTIONED DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALLOM EXTRUSIONS (SUPRA). HOWEVER IT IS A MATTER OF EXA MINATION AND VERIFICATION. THEREFORE CONSIDERING THE OVER ALL FACTS AND CIRCU MSTANCES OF THE CASE WE ARE OF THE OPINION THAT IT WILL SERVE THE INTEREST OF JUSTICE IF THE ISSUE REGARDING THE LEVY OF CONCEALMENT PENALTY IS RESTORED BACK TO THE FILE OF AO FOR RE-ADJUDICATION AS PER LAW. NEEDLESS TO OBSERVE THAT THE AO WILL AFFORD REAS ONABLE AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO SHOW CAUSE WHY THE PENALTY SHOULD NOT BE LEVIED. WITH THESE DIRECTIONS WE RESTORE THIS APPEAL TO THE FILE OF A O FOR RE-ADJUDICATION OF THE ISSUE REGARDING LEVY OF CONCEALMENT PENALTY AS PER PROVIS IONS OF LAW. 7. IN THE RESULT FOR STATISTICAL PURPOSES THE APPE AL OF THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 03/07/2013 . * -' / 0!1 03/07/2013 - * 2 3 SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0! DATED 03/07/2013 . . . . * ** * '+45 '+45 '+45 '+45 65'+ 65'+ 65'+ 65'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+! / DR ITAT MUMBAI 6. 2 9 / GUARD FILE. .! .! .! .! / BY ORDER (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) / ITAT MUMBAI . ! . ./ VM SR. PS