Income Tax Appellate Tribunal - Panji
Assistant Commissioner Of ... vs M/S. Jayalaxmi Casting & Alloys Pvt. ... on 31 October, 2017
आयकर अपीलीय अिधकरण,
अिधकरण पुणे यायपीठ "ए
ए" पुणे म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
ी डी.
डी क णाकरा राव , लेखा सद य
एवं ी िवकास अव थी,
अव थी याियक सद य के सम
BEFORE SHRI D.KARUNAKARA RAO, AM
AND SHRI VIKAS AWASTHY, JM
आयकर अपील सं. / ITA No.1590/PUN/2015
िनधा रण वष / Assessment Year : 2009-10
ACIT, Circle-1, Aurangabad .... अपीलाथ /Appellant
Vs.
M/s. Jailaxmi Casting & Alloys Pvt. Ltd.,
Gut No.75, Farola Village,
Paithan Road, Aurangabad
Pan : AABCJ4567F .... यथ / Respondent
अपीलाथ क ओर से / Appellant by : Shri Ajay Modi
थ की ओर से / Respondent by : None
सुनवाई क तारीख / घोषणा क तारीख /
Date of Hearing : 25.10.2017 Date of Pronouncement: 31.10.2017
आदेश / ORDER
PER D. KARUNAKARA RAO, AM :
This appeal is filed by the Revenue against the order of CIT(A)-I, Aurangabad, dated 25-09-2015 for the A.Y. 2009-10. The appeal relates to the penalty u/s.271(1)(c) of the Act amounting to Rs.11,25,247/-. The said penalty is relatable to the adhoc additions made by the AO in the assessment u/s.143(3) r.w.s.144 of the Act. This is a case connected to the other cases where there is allegation of clandestine removal of goods from premises with the intension to evade Excise Duty and Income Tax. As such, no clear cut evasion of income tax or excise duty was detected in this case per se.
2. There is none to represent the case of the assessee despite the notices to the respondent. However, considering the smallness of the tax as well as the partly covered nature of the issues, we are of the opinion that, with the help of 2 ITA No. 1590/PUN/2015 M/s. Jailaxmi Casting & Alloys Pvt. Ltd., Ld. DR for the Revenue and the material available on record, the appeal can be adjudicated.
3. Briefly stated relevant facts are that the assessee is a company engaged in the business of manufacturing of M.S. Billets and Rolled products. Assessee company filed the original return of income on 29-09-2009 declaring total income of Rs.3,95,52,401/- u/s.115JB of the Act. Apart from the admission of the unaccounted production and the clandestine business transactions, AO arrived at the unaccounted production based on the Electricity consumption. AO estimated the unrecorded production and made addition of Rs.2,26,27,192/-. The discussion given at Para 6 and 6.1 of the assessment order are relevant. The estimation based addition made by the AO includes that portion of the income of Rs.36,41,578/- offered by the assessee. Ground barring this segment of income is relevant. Rest of the estimated addition was deleted by the CIT(A). The same is in tune with the finding of the Tribunal vide ITA No.1525/PUN/2012 dated 15- 07-2015 on the quantum appeal. Consequently, the appeal of the assessee on the penalty order of the AO was also discussed by the CIT(A) holding that the penalty is not exigible in cases of estimated additions.
4. CIT(A) ignored the fact that the said estimation of Rs.2,26,27,192/-, there is a portion of Rs.36,41,578/- which was offered by the assessee on the income relatable to the unreported sale/production. (Ref. Ground No.4 of this appeal of the assessee for the year).
5. Aggrieved with the order of CIT(A) the Revenue is in appeal before us with the following grounds :
"1. On the facts & in the circumstances of the case, the Ld. CIT(A), Aurangabad has erred in deleting the penalty of Rs. 11,25,247/- imposed u/s 271
(l)(c) of the Act.
2. On the facts & in the circumstances of the case, the Ld. CIT(A), Aurangabad has erred in not following his own orders wherein he has confirmed the fact of suppressed production in the Order of quantum appeal of the assessee for AY under consideration.3 ITA No. 1590/PUN/2015
M/s. Jailaxmi Casting & Alloys Pvt. Ltd.,
3. On the facts & in the circumstances of the case, the Ld. CIT(A), Aurangabad has erred in not following his own orders wherein he had estimated the profit @ 4% of the estimated sale value of suppressed production which was nothing but concealed income. Under such circumstances, he should have confirmed the penalty
4. On the facts & in the circumstances of the case, the Ld. CIT(A), Aurangabad should have confirmed the penalty at least to the extent of Rs. 36,41,578/-, the income offered by the assessee during the assessment proceedings which was nothing but concealed income.
5. On the facts & in the circumstances of the case, the order of the Ld. CIT(A), Aurangabad be quashed and that the Order of the AO be restored.
6. The appellant prays leave to adduce such further evidence to substantiate its case as the occasion may demand."
6. Ld. DR for the Revenue explained the facts and relied heavily on the order of the AO and the argumentative grounds raised by the Revenue in this appeal. Without prejudice to the ground No.1 of this appeal, Ld. DR submitted that the addition confirmed by the CIT(A), i.e. Rs.36,41,578/- attracts the penalty u/s.271(1)(c) of the Act. Referring to the order of CIT(A), Ld. DR highlighted the obvious absence of adjudication on this part of the segment of penalty relatable to the confirmed addition of Rs.36,41,578/-. Ld. DR submitted for remanding this part of the Ground No.4 for want of speaking order from the CIT(A).
7. We heard the Ld. DR for the Revenue and perused the material available on record. We have gone through the elaborate discussion given by the CIT(A) while deleting the penalty levied by the AO (Para Nos. 5 to 5.2 are relevant). However, for the sake of completeness, we proceed to extract operational Para 5.2 of the CIT(A) order and the same reads as under :
"5.2 . . . . . . . .If the tax payable under the normal provisions is higher, such amount is the total income of the assessee, otherwise, the book profits are deemed as the total income of the assessee in terms of section 115JB of the Act. Where the income computed in accordance with the normal procedure is less than the income determined by legal fiction, namely, the book profits under section1 15JB of the Act and the income of the assessee is assessed under section 115JB and not under the normal provisions, the tax is paid on the income assessed under section 115JB of the Act. Concealment of income would have no 4 ITA No. 1590/PUN/2015 M/s. Jailaxmi Casting & Alloys Pvt. Ltd., role to play and would not lead to tax evasion. Therefore, penalty cannot be imposed on the basis of disallwoances or additions made under the regular provisions. In the present case, even after the partial addition had been confirmed by the CIT(A), the figures of tax payable had not changed as per the tax payable by way of MAT was still higher. Hence taking cognizance of the above decision, penalty u/s.271(1)(c) was not leviable. Accordingly, I direct the AO to cancel the order levying penalty of Rs.11,25,247/- u/s.271(1)(c) of the I.T. Act."
8. From the above finding, it is evident that the CIT(A) granted relief and deleted the penalty considering the fact that entire addition was deleted by the Tribunal in the quantum appeal (supra). In the process, there is no adjudication by him on the confirmed addition of Rs.36,41,578/-. He is also under the wrong presumption that the entire addition made based on the estimations stand deleted. It is also relevant to mention that tax paid under the MAT provisions do not attract penalty again in view of the deemed profits in view of judgment of Hon'ble Delhi High Court in the case of CIT Vs. Nalwa Sons Invest Ltd. 327 ITR
543. However, the order of CIT(A), does not contain the adjudication on the amount of addition, duly offered by the assessee during the assessment proceedings. Therefore, we confirm the deletion of penalty relatable to the addition deleted by the CIT(A)/ITAT and remand the segment of portion relatable to the sum of Rs.36,41,578/- to the file of the CIT(A) for want of a speaking order. CIT(A) is directed to pass a speaking order on this part of the Ground No.4 after granting reasonable opportunity of being heard to the assessee.
9. In the result, the appeal of the Revenue is partly allowed for statistical purposes.
Order pronounced in the open court on this 31st day of October, 2017.
Sd/- Sd/-
(VIKAS AWASTHY) (D. KARUNAKARA RAO)
याियक सद य /JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
पुणे Pune; दनांक Dated : 31st October, 2017.
सतीश
5
ITA No. 1590/PUN/2015
M/s. Jailaxmi Casting & Alloys Pvt. Ltd.,
आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2.
यथ / The Respondent
3. The CIT(A)-I, Aurangabad
4. CIT -I, Aurangabad
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, "A Bench"
Pune;
6. गाड फाईल / Guard file.
आदेशानुसार/ BY ORDER,स
स यािपत ित //True Copy// Senior Private Secretary
आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune