Income Tax Appellate Tribunal - Mumbai
Epic Enzymes Pharmaceuticals & Indl ... vs Acit 10(3), Mumbai on 28 August, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL "E", BENCH MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER IT A No.2973/M um/2014 (Assessment Year :2009-10) Epic Enzymes Pharmaceuticals & Vs. ACIT-10(3) Industrial Chemicals Ltd. Room No.451, 4 t h Floor 514, Persepolis, Sector-7 Aaykar Bha wan Navi Mumbai- 400 703 M.K.Road Mumbai-400 020 PAN/GIR No.AAACE1137H Appellant) .. Respondent) Assessee by V.M.Chavda Revenue by Vijay Kumar Soni Date of Hearing 08/08/2019 Date of Pronouncement 28/08/2019 आदेश / O R D E R PER G.MANJUNATHA (A.M):
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-22, Mumbai dated 27/02/2014 and it pertains to the Assessment Year 2009-10.
2. The assessee has raised the following grounds of appeal:-
1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT (A) has erred in confirming the penalty imposed on the Appellant under Section 271(l)(c) of the Act, without appreciating the fact that no tax was payable by the Appellant for the A.Y. 2009-10 relevant to PY 2008-09 inasmuch as the assessment was completed u/s, 143(3) of the Act by determining a loss of Rs.1,24,78,505/- as against the loss of Rs,l,71,28,808/-declared by the Appellant {by virtue of Assessment Order dated 28.12.2011 issued by the Respondent herein};2 ITA No.2973/Mum/2014
Epic Enzymes Pharmaceuticals & Industrial Chemicals Ltd.
2. Whether on the facts and in the circumstances of the case and in law, the Ld.C1T (A) has erred in passing the impugned order ex parte without affording a fair opportunity of hearing to the Appellant herein, in breach of the principles of natural justice, despite the Appellant having placed on record the fact of an untimely demise of the Chairman & Managing Director of the Appellant Company;
3. Whether on the facts and in the circumstances of the case and in law, the Ld, CIT (A) has erred in confirming the penalty imposed on the Appellant under Section 271(l)(c) of the Act, without appreciating that it is a settled law that mere claim of expenditure in law, incorrect or otherwise, cannot tantamount to furnishing inaccurate particulars in the manner contemplated in Section 271(1)(c) of the Act;
4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) ought to have appreciated that the penal proceedings under Section 271(l)(c) of the Act could riot have been initiated when, the penal proceedings initiated on the similar grounds under Section 271D and Section 271E relating to A,Y. 2009-10 have been dropped by the Respondent herein by virtue of its Order dated 02.03.2012
5. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the penalty imposed on the Appellant under Section 271(l)(c) of the Act, without appreciating that contrary documentary and oral evidence referred in the Assessment Order dated 29.12.2011 issued by the Respondent herein;
6. Appellant prays that the impugned order of CIT (A) be quashed and set aside and the consequent penalty imposed on the Appellant under Section 271(l)(c) of the Act, be deleted;
7. Appellant craves leave to alter or amend the above grounds and/or add a new ground, as may be deemed fit and necessary.
3. The brief facts of the case are that the assessment in this case was completed u/s 143(3) of the I.T.Act, 1961, determining the total loss at Rs. 1,24,78,505/-, as against, the loss declared at Rs. 1,71,28,808/- by making additions towards disallowances of certain payments u/s 40A(2)(b) and disallowances of cash payments u/s 40A(3) of the I.T.Act, 1961. Thereafter, penalty proceedings u/s 3 ITA No.2973/Mum/2014 Epic Enzymes Pharmaceuticals & Industrial Chemicals Ltd. 271(1)(c) has been initiated and after considering relevant submission of the assessee and also taken note of material available on record, levied penalty of Rs. 13,94,989/- under Explanation-1 to Section 271(1)(c) of the I.T.Act, 1961. The assessee carried the mater in appeal before the Ld.CIT(A). During the course of appellate proceedings, the Ld.CIT(A) had given six dates of hearing to the assesee, as mentioned in his appellate order at para 2.2, for which, the assessee neither appeared nor filed any details. Therefore, the Ld.CIT(A) dismissed appeal filed by the assessee and upheld penalty levied u/s 271(1)(c) of the I.T.Act, 1961, on the ground that the facts of the case clearly indicates that the assessee had no explanation to offer for some of the expenditure and also was not in a position to substantiate the claim with material evidences, to prove the bonafide nature of the transactions. Aggrieved by the CIT(A) order, the assessee is in appeal before us.
4. The Ld.AR for the assesee, submitted that the Ld.CIT(A) has dismissed appeal filed by the assessee, ex-parte for non appearance as on the dates fixed for hearing, but such non appearance before the AO is neither deliberate nor any intention to derive undue advantage. The assessee could not appear before the AO due to various reasons beyond his control, otherwise it was 4 ITA No.2973/Mum/2014 Epic Enzymes Pharmaceuticals & Industrial Chemicals Ltd. ready with explanations to offer, in respect of penalty levied u/s 271(1)(c) of the I.T.Act, 1961 and therefore, the issue may be set aside to the file of the CIT(A) to give one more opportunity of hearing to the assessee. The Ld. DR on the other hand, strongly supporting order of the Ld.CIT(A) submitted that the conduct of the assessee clearly proves that it is non cooperative to the proceedings before the appellate commissioner, which is evident from the fact that the Ld.CIT(A) had given six opportunities of hearing to the assessee, for which no compliance has been filed. Therefore, the Ld.CIT(A) had rightly dismissed appeal filed by the assessee and his order should be upheld.
5. We have heard both the parties and perused material available on record. We find that the Ld.CIT(A) had dismissed appeal filed by the assessee ex-parte for non prosecution by the assessee, even though various notices were issued fixing the case for hearing as narrated by the Ld.CIT(A) in his appellate order at Para 2.2 on pages
2. We further noted that although, the Ld.CIT(A) had dismissed appeal filed by the assessee ex-parte, but decided the issue of levy of penalty u/s 271(1)(c) on merit by discussing the issue, in light of facts brought out by the AO. But, fact remains that the Ld.CIT(A) has decided appeal behind the back of the assessee, without hearing 5 ITA No.2973/Mum/2014 Epic Enzymes Pharmaceuticals & Industrial Chemicals Ltd. from the aggrieved party. Further, no litigant would derive any benefit by not prosecuting its appeal filed before the appellate authorities, rather it would cause inconvenience to the aggrieved party, in case appeal is dismissed for non prosecution. Therefore, when the party is not appear for hearing, there should be some compelling reasons, beyond the control of the assessee, which prevented from appearance before the authorities to explain the case. In this case, the Ld.AR for the assessee submitted that the assessee could not appear before the AO, due to the reasons beyond its control. Therefore, considering the facts and circumstances of this case and also to give reasonable opportunity of hearing to the assessee, we deem it appropriate to restore the appeal to file of the Ld.CIT(A) and direct him to decide the appeal on merits after affording an opportunity of hearing to the assessee. Needless to say, the assessee shall appear before the Ld.CIT(A) without seeking further adjournments.
6. In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on this 28 /08/2019 6 ITA No.2973/Mum/2014 Epic Enzymes Pharmaceuticals & Industrial Chemicals Ltd.
Sd/- Sd/-
(SANDEEP GOSAIN) (G. MANJUNATHA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated 28/08/2019
Thirumalesh Sr.PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A), Mumbai.
4. CIT
DR, ITAT, Mumbai
5.
BY ORDER,
6. Guard file.
स यािपत ित //True Copy//
(Asstt. Registrar)
ITAT, Mumbai