Income Tax Appellate Tribunal - Pune
Prima Paper & Engg. Pvt.Ltd, Pune vs Department Of Income Tax on 4 November, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench B, Pune
Before Shri Shailendra Kumar Yadav, Judicial Member
and Shri G.S. Pannu, Accountant Member
I.T.A. No. 1004 to 1007/PN/2010
A.Y. 2000-01 to 2003-04
Dy. CIT Cir. 10, Pune Appellant
Vs.
Prima Paper & Engg. Pvt. Ltd.,
T-73 MIDC, Bhosari,
Pune-411 026
PAN AABCP 1938 J Respondent
Appellant by: Ms. Neera Malhotra
Respondent by: Shri Sharad A. Shah
Date of hearing: 4-11-2011
Date of pronouncement : 29-11-2011
ORDER
PER SHAILENDRA KUMAR YADAV, JM
All these appeals pertain to the same assessee on the point of deletion of penalty levied by the Assessing Officer u/s 271(1)(c) of the Act for A.Y. 200-01 to 2003-04. So they are being disposed off by this consolidated order for the sake of convenience.
ITA No. 1004/PN/2010 for A.Y. 2000-012. In this appeal, the revenue has challenged the order of CIT(A)-V Pune dated 19-3-2010 in deleting the penalty of Rs. 40,06,000/- levied u/s 271(1)(c) of the Act. In this case, the assessment was completed u/s 143(3) on 31-3- 2003 accepting the returned income of Rs. 86,81,798/-.
2 ITA No. 1004 to 1007/PN/2010Prima Paper & Engg.
A.Y. 2000-01 to 2003-04 Thereafter, the case was reopened u/s 147 of the Act as according to the Assessing Officer, the claim of deduction u/s 80-IA of the Act had to be withdrawn. In appeal, the CIT(A) allowed partial relief against which the assessee went in appeal before the Tribunal and the Tribunal rejected the claim of the assessee. While completing the re-assessment, the Assessing Officer initiated penalty proceedings and levied penalty of Rs. 40,06,600/ u/s 271(1)(c) of the Act which was deleted by the CIT(A) in appeal.
3. After hearing both the parties and perusing the material on record, we find that the matter with respect to quantum addition against which the impugned penalty has been levied, was the subject matter of appeal before the Tribunal in ITA No. 519/PN/2008 where in vide its order dated 27-8-2010 the Tribunal has set aside the issue to the file of the CIT(A) for deciding the issue afresh, by observing as under:
"5. From the above, it is evident that the CIT(A) not only failed to adjudicate the issue on merits, but also failed to realize his own powers conferred on him by the Statute. He failed to realize that every ground in connection with the orders passed u/s 147 is covered by clause (b) of section 246A of the Act. In our opinion, the CIT(A) is grossly erred in declining to entertain the appeal and pass a well reasoned order as per the provision of section 250(6) of the Act. Therefore, we are of the considered opinion that the CIT(A) has power to deal with the impugned ground in appeal relating to the issue of validity of the re- opening of the case u/s 147 of the Act. He is also directed to pass the speaking order on every p\grounds raised by the assessee in form No. 35 filed before him. It goes without mentioning in detail, that the CT(A) shall grant reasonable opportunity of being heard to the assessee. Accordingly, the grounds are set aside to the file of the CIT(A)."3 ITA No. 1004 to 1007/PN/2010
Prima Paper & Engg.
A.Y. 2000-01 to 2003-04
4. In view of the fact that the matter with respect to quantum addition against which the present penalty has been levied by the Assessing Officer, has been set aside to the file of the CIT(A), the issue with respect to penalty levied u/s 271(1)(c) should also go back to the file of the CIT(A) to be decided in accordance with law and fact. We therefore, set aside this matter to the file of the CIT(A) with directions to be decided afresh in accordance with law and fact, after providing due opportunity of hearing to the assessee. In the result, the appeal of the Revenue is allowed for statistical purposes.
ITA No. 1005/PN/2010for A.Y. 2001-025. In this appeal, the revenue has challenged the action of the CIT(A) in deleting the penalty of Rs. 13,61,300/- levied u/s 271(1)(c) of the Act. In this case also, on similar set of facts as for the A.Y. 2000-01, the Assessing Officer has levied the penalty u/s 271(1)(c) of the Act, which was deleted by the CIT(A) in appeal.
6. After hearing both the parties and perusing the material on record, we find that the issue with respect to quantum addition against which the impugned penalty has been levied, was the subject matter of appeal before the Tribunal in ITA No. 1754/PN/2007 where in vide its order dated 8-10-2010 the Tribunal has deleted the addition made by the Assessing Officer, in respect of which the impugned penalty has been levied by the Assessing Officer. The relevant observations of the Tribunal read as under:
"We heard both the parties on this issue relating to validity of the impugned notice issued u/s 147 of the Act. In the light of the plethora of evidences mentioned above, we find no difficulty in coming to the conclusion that the issue of deduction u/s 80-IA was 4 ITA No. 1004 to 1007/PN/2010 Prima Paper & Engg.
A.Y. 2000-01 to 2003-04 subject matter of specific enquiry by the AO during the regular assessment proceedings. Considering the fact that the assessee furnished the requisite information on 29-4-2003 and there is entry in the order sheet to that extent, it is reasonable to infer that there exists an opinion on the subject while making the said regular assessment. In this factual matrix of the case, we are of the opinion that the reasons recorded and the notice issued u/s 147 for reopening of the assessment is not valid, thus, it is a case of 'change of opinion'. There is plethora of judgment on subject to support the assessee. Accordingly ground no. 1 is allowed."
7. In view of the fact that the matter with respect to quantum addition against which the present penalty has been levied by the Assessing Officer, has been decided in favour of the assessee by the Tribunal in its appeal in ITA No. 1754/PN/2007 vide its order dated 8-10-2010, the impugned penalty levied by the Assessing Officer, has also to be decided in favour of the assessee. We therefore, hold that the order of the CIT(A) in deleting the impugned penalty does not call for any interference at our hand. The same is upheld. In the result, this appeal of the Revenue is dismissed.
ITA No. 1006 and 1007/PN/2010 for A.Y. 2002-03 and 2003-04
8. In both these appeals, the revenue has challenged the action of CIT(A) in deleting the penalty of Rs. 17,99,700/- and Rs. 20,34,550/- levied u/s 271(1)(c) of the Act for A.Y. 2002-03 and 2003-04 respectively. On similar set of facts, for A.Y. 2000-01 and 2001-02 the Assessing Officer imposed penalty u/s 271(1)(c) of the Act which was confirmed by the CIT(A) in appeal.
9. After hearing both the parties and perusing the material on record, we find that the respective quantum additions against which the impugned penalty has been 5 ITA No. 1004 to 1007/PN/2010 Prima Paper & Engg.
A.Y. 2000-01 to 2003-04 levied, were deleted by the CIT(A). Moreover, the issue with respect to addition on which impugned penalty has been levied, is a debatable one. When the issue is debatable, penalty is not exigible as held by the Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT (2010) 231 CTR (Mad) 368. In this view of the matter, the order of the CIT(A) in deleting the penalty for the years under consideration does not call for any interference at our hand. The same is upheld. In the result, both the appeals of the revenue are dismissed.
10. To sum up, the appeal of the Revenue for A.Y. 2000-01 is allowed for statistical purposes, while appeals for A.Y. 2001-02 to 2003-04 are dismissed.
Pronounced in the open on 29th November 2011.
Sd/- sd/-
G.S. PANNU) SHAILENDRA KUMAR YADAV
Accountant Member Judicial Member
Pune dated the 29th November 2011.
Ankam
Copy of the order is forwarded to :
1. The Appellant
2. The Respondent
3. The CIT V Pune
4. CIT(A)-V Pune
5. The D.R, ITAT Pune Bench, Pune
6. Guard File
By order
Senior Private Secretary
Income Tax Appellate Tribunal
Pune Benches, Pune.