Income Tax Appellate Tribunal - Mumbai
Ruchi Soya Industries Ltd, Mumbai vs Assessee on 14 September, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "D", MUMBAI
BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM)
ITA No. 6453/MUM/2011
Assessment Year: 2004-05
Ruchi Soya Industries Limited, The DCIT, Central Circle- 40,
614, Tulsiani Chambers, Mumbai.
Nariman Point,
Mumbai- 400 021. Vs.
PAN: AAACR2892L
(Appellant) (Respondent)
Appellant by : Shri. Mihir C. Naniwadekar
Respondent by : Shri. Sumit Kumar
Date of Hearing: 09/09/2016
Date of Pronouncement: 14/09/2016
ORDER
PER RAM LAL NEGI, JM
This appeal has been preferred by the assessee against order dated 16/03/2011 passed by the Ld. CIT(Appeals)-38, Mumbai, for the Asst. year 2004-05 whereby the Ld CIT(A) dismissed the appeal filed by the assessee against penalty order u/s 271(1(c) of the Income Tax Act, 1961 (in short 'the Act') dated 15/03/2010.
2. Brief facts of the case are that the appellant/assessee company had been subjected to search and seizure action u/s 132(1) of the Act. Accordingly, AO concluded the assessment proceedings u/s 153A read with section 143(3) of the Act wherein the claim the assessee for exemption u/s 10A of the Act was disallowed holding that the assessee had not carried out any manufacturing 2 ITA No. 6453/MUM/2011 Assessment Year: 2004-05 activity during the relevant previous year rather it had been carrying out a trading activities. The action of AO was challenged before the CIT(A). However, the Ld. CIT(A) confirmed the disallowance of claim made u/s 10A of the Act. Accordingly, penalty proceeding was initiated and the assessee was levied penalty of Rs. 23,37,194/-. The penalty order was further confirmed by the Ld. CIT(A) in appeal. Aggrieved, the assessee is in appeal before the Tribunal.
3. The assessee has raised the following effective grounds of appeal:-
"1. That the learned Commissioner of Income Tax (appeals) 38 erred in law in confirming the penalty of Rs. 23,37,194/- u/s 271(1)(c) of the Act without appreciating the facts.
2. That the learned Commissioner of Income Tax appeals ought to have considered the proper facts of the case.
3. That merely disallowance of legal claim does not amount to concealment.
4. The penalty order so confirmed is quite illegal, arbitrary, unwarranted, unjustified and bad in law."
4. At the outset the Authorised Representative (AR) for the assessee submitted that in quantum appeal ITA No. 3565/Mum/2008 and cross appeal No. 3796/Mum/2008, the ITAT Mumbai, vide order dated 23/05/2012 has set aside the order passed by the Ld. CIT(A), to the file of A.O to decide the same afresh observing that the claim of the assessee has not been properly examined by the authorities below. The Ld. AR further submitted that since the quantum appeal has been set aside to the file of the AO for fresh adjudication, the impugned order is liable to be set aside being not sustainable. The Ld. DR on the other hand did not dispute the aforesaid sequence of facts.
3 ITA No. 6453/MUM/2011Assessment Year: 2004-05
5. We notice that in quantum appeal ITA No 3565/Mum/2008, General Foods Limited (earlier name of the assessee company) vs. ACIT, Central Circle Mumbai, the co-ordinate Bench of the Mumbai Tribunal has set aside the order passed by the first appellate authority to the file of AO holding as under:-
"9. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the claim of the assessee that it is engaged in the business of manufacturing i.e. converting Soyabean Meal to Soyabean Meal Super Grade which according to the assessee a distinct commodity from the raw material. It was further claimed that during the previous year relevant to the assessment year 2004-05 the assessee has set up a unit in Kandla SEZ and made exports and also claimed deduction u/s 10A of the Act. However, we find that the claim of the assessee has not been examined either by the A.O. or by the ld. CIT(A) despite the fact that the assessee, before the ld. CIT(A), has filed its written submissions appearing at page 3 to 5 of the order of the ld. CIT(A). The ld. CIT(A) without giving any cogent reason that the assessee is not engaged in the manufacturing activity has rejected the claim of the assessee by holding that it is not disputed that no manufacturing activities were undertaken by the appellant which is a prime pre-requisite for claiming deduction. It is not the case of the Revenue that the assessee is not converting Soyabean Meal to Soyabean Meal Super Grade or the said conversion does not amount to manufacturing activity. This being so, we are of the view that the issue has not been examined properly and hence, in the interest of justice, we consider it fair and reasonable that the matter should go back to the file of the A.O. and accordingly we set aside the order passed by the Revenue Authorities on this account and send back 4 ITA No. 6453/MUM/2011 Assessment Year: 2004-05 the matter to the file of the A.O. to decide the same afresh in the light of our above observations and according to law after providing reasonable opportunity of being heard to the assessee. The grounds taken by the assessee are, therefore, partly allowed for statistical purpose."
6. Since the quantum appeal has been set aside to the A.O., the penalty appeal does not survive. Accordingly, we set aside the orders of the tax authorities. However, we make it clear that the AO is at liberty to initiate penalty proceedings in the set aside proceedings, if it is considered to be necessary.
7. In the result appeal filed by the assessee for the A.Y. 2004-05 is allowed for statistical purpose.
Order pronounced in the open court 14th September, 2016.
Sd/- Sd/-
(B.R.BASKARAN) (RAM LAL NEGI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
मुंबई Mumbai; दनांक Dated:14/09/2016
5
ITA No. 6453/MUM/2011
Assessment Year: 2004-05
आदे श त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आय ु त(अपील) / The CIT(A)-
4. आयकर आय ु त / CIT
5. वभागीय त न!ध, आयकर अपील$य अ!धकरण, मब ुं ई / DR, ITAT, Mumbai
6. गाड' फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, स या पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ंु ई / ITAT, Mumbai Pramila