HEERA PETROCHEMICALS PVT. LTD.,,DHULE vs. ASSISTANT COMMISSIONER OF INCOME-TAX,,

आदेश / ORDER आदेश आदेश आदेश

PER BENCH :

There are 4 appeals filed by the assessee under consideration involving Assessment Years 2003-04 and 2004-05. The appeals ITA Nos. 1981 and 1982/PUN/2014 filed by the assessee are the quantum appeals against the orders of CIT(A)-I, Nashik dated 22-09-2014 and the appeals ITA Nos. 1965 and 1983/PUN/2014 filed by the assessee relate to the penalty levied u/s.271(1)(c) of the I.T. Act, 1961.

First we proceed to adjudicate the quantum appeals pertaining to additions.

2 ITA No.1965 and 1981 to 1983/PUN/2014 Heera Petrochemicals Pvt. Ltd.,

ITA Nos. 1981 and 1982/PUN/2014 By Assessee – A.Yrs. 2003-04 and 2004-05 Assessments u/s.144 r.w.s148 of the Act

the assessee is a company and engaged in the business of

manufacturing of industrial solvent, mineral turpentine oil, paints,

solvents, etc. Assessee filed the returns of income on 01-12-2003 and

01-11-2004 for A.Yrs. 2003-04 and 2004-05 declaring loss of

Rs.32,35,445/- and Rs.6,67,957/- respectively. There was

investigation by the Sales Tax and Central Excise departments on the

assessee and the same resulted in seizure of incriminating documents

and books of account of the assessee. The sales-tax department was

of the view that the differential amount of inter-state and intra-state

sales have been evaded by the assessee and the same constitutes

undisclosed income of the assessee. Therefore, AO reopened the

assessments of the assessee and the reassessed income of the

assessee at Rs.3,01,13,406/- and Rs.2,95,84,459/- was determined

for A.Yrs. 2003-04 and 2004-05 respectively. Ld. AR for the assessee

submitted that non-availability of the documents created

insurmountable hurdles for the assessee in representing the cases

properly before the income-tax authorities. He further submitted that

proceedings before the sales-tax department are now pending before

the Sales Tax Appellate Tribunal. Ld. AR for the assessee submitted

that the additions made by the AO in both the years are on adhoc

basis and required to be deleted, in principle.

comparable to many other cases where there was allegation of

unaccounted production of Napthelene as well as the allegation of

adulteration of oils. Further, Ld. AR for the assessee filed a copy of the

3 ITA No.1965 and 1981 to 1983/PUN/2014 Heera Petrochemicals Pvt. Ltd.,

order of the Pune Bench of the Tribunal in the case of Shriram

Petroleum Industries Vs. ITO in ITA Nos. 293 & 294/PN/2012, order

dated 16-01-2014 and submitted that the present quantum appeals

under consideration needs to be set-aside to the files of the AO. He

drew our attention to the facts of the said case and submitted that

issues and the proceedings of the said case before the Sales-tax,

Central Excise and Income-tax authorities are identical to the case of

the assessee. He also submitted that, in the said case, there was CBI

raid also additionally. The fact that the documents necessary for

proper adjudication of the disputes were not readily available as they

are seized by the relevant authorities cited above. Same is the problem

with the assessee. Therefore, taking a cue from the said Tribunal

order, Ld. AR for the assessee submitted that assessments made

u/s.144 r.w.s.148 of the Act should be set-aside to the file of AO for

fresh adjudication. Ld. AR made a statement at BAR that he shall

cooperate with the proceedings meticulously and file required papers

to the AO. This is the reply of Ld. AR to the allegation of Ld. DR for the

Revenue that the assessee never cooperated to the reassessment

proceedings and never complied with the statutory notices issued to

him.

for the assessee for remanding the issues to the file of AO. We have

perused the order of the Tribunal in the case of Shriram Petroleum

Industries (supra) relied upon by the Ld. AR for the assessee and find

it relevant to extract the findings given by the Tribunal and the same

reads as under :

“4. The matter was carried before the CIT(A) on various counts who confirmed the order of the Assessing Officer. The stand of the assessee before us is that CIT(A) has erred in confirming reopening without appreciating the fact that the Assessing Officer has simply relied on

4 ITA No.1965 and 1981 to 1983/PUN/2014 Heera Petrochemicals Pvt. Ltd.,

information given by sales tax department without giving his own findings and applying his own mind and CIT(A) erred in relying on the documents and evidences obtained on the back of the assessee without giving any opportunity to rebut the same. This is violation of principles of natural justice. The CIT(A) also erred in rejecting books of accounts, without appreciating the fact that the books and all the documents/papers were not at all available with the assessee and were in custody of the CBI, and alternatively submitted that the CIT(A) failed to appreciate the fact that the Assessing Officer has not pointed out any specific defects in the books of accounts. The CIT(A) also failed to adjudicate ground No.6 to 15 which were on the merit. The CIT(A) also erred in confirming the addition of Rs.2,40,22,290/- being alleged sales tax evaded as per the Sales tax department. It was also pointed that the sales tax is sub judicious before concerned sales tax tribunal. The Assessing Officer has not justified in making addition based on account of evasion sales tax while the concerned documents were with the CBI. The learned Departmental Representative did not dispute the fact that the issue of additions based on sales tax evasion is sub judicious before the concerned sales tax department and documents were with the CBI at the relevant point of time. In view of above, we find that the assessee has not been provided due opportunity of hearing because he was not having the benefit of books of account at relevant point of time as the same were with the CBI at that time. Moreover, the issue of addition based on sales tax evasion is sub judicious before the concerned Sales Tax Tribunal. From the above facts, we are of the view that the assessee has not been provided due opportunity of hearing before making various additions against him on various counts, which is violation of principles of natural justice. So, in the interest of justice, we set aside the order of CIT(A) and restore the issue to the Assessing Officer with a direction to decide the same as per fact and law. The assessee will be at liberty to have the benefit of documents claimed to have been seized by the CBI at the relevant point of time and the Assessing Officer is also at liberty to look into the relevant findings of sales tax department touching the issue before him. The assessee is also directed to cooperate in the proceedings before the Assessing Officer, so that, the proper adjudication of the matter may be done. Since we are restoring the issue to the Assessing Officer on a preliminary issue, we are refraining from commenting on the merit of the issue at hand. As a result, the appeal filed by the assessee is allowed for statistical purposes.”

assessee, we are of the opinion that it is a fit case for remanding the

issues on merit to the file of AO for fresh adjudication.

the assessments u/s.144 r.w.s. 148 of the Act raised in Grounds of

appeal No.1 to 4 of both the years, Ld. AR for the assessee submitted

that they may be treated as ‘not pressed’. After hearing for the Ld. DR

for the Revenue on the legal issues, we proceed to dismiss Grounds of

appeal No. 1 to 4 in both the appeals as ‘not pressed.

5 ITA No.1965 and 1981 to 1983/PUN/2014 Heera Petrochemicals Pvt. Ltd.,

Grounds of appeal No. 6 to 11, we direct the AO to adjudicate these

issues afresh after obtaining relevant documents from the assessee for

both the years. Assessee is also directed to comply with the directions

of the AO in the remand proceedings. Even if some of the said details

are to be filed for the first time in the nature of additional evidences,

the AO is directed to admit the same and make use of those papers in

the interest of administration of justice. With these directions, we set

aside the orders of the AO/CIT(A) and remand the grounds raised

before us in both the appeals on merits for fresh consideration and for

want of a speaking order by the AO. AO shall grant reasonable

opportunity of being heard to the assessee in accordance with the set

principles of natural justice. Accordingly, grounds raised by the

assessee in both the years are partly allowed for statistical purposes.

statistical purposes.

ITA Nos. 1965 and 1983/PUN/2014 By Assessee – A.Yrs. 2003-04 and 2004-05 Penalty u/s.271(1)(c) of the Act

the Act, we find these penalty orders are relatable to the additions

made by the AO in the appeals discussed above in ITA Nos. 1981 and

1982/PUN/2014 for the A.Yrs. 2003-04 and 2004-05 respectively. In

Para No.9 above, we have remanded the grounds raised by the

assessee on merits for both the assessment years under consideration

to the file of AO for fresh adjudication and want of a speaking order on

each of the issues. We have accepted the plea of Ld. AR for the

assessee and dismissed the legal grounds raised by the assessee as

6 ITA No.1965 and 1981 to 1983/PUN/2014 Heera Petrochemicals Pvt. Ltd.,

‘not pressed’. Consequent to the same, we are of the opinion that the

penalty levied by the AO and confirmed by the CIT(A) in both the

assessment years under consideration are not sustainable in the

present form as the additions stands remanded to the file of the AO.

Therefore, we set aside the penalty orders passed by the AO.

Accordingly, the grounds raised by the assessee in these appeals also

allowed for statistical purposes.

statistical purposes.

assessee are partly allowed for statistical purposes and ITA Nos. 1965

and 1983/PUN/2014 filed by the assessee are allowed for statistical

purposes.

Order pronounced in the open court on this 24th day of January, 2018. Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) �याियक �याियक सद�य �याियक �याियक सद�य सद�य /JUDICIAL MEMBER लेखा सद�य लेखा लेखा सद�य लेखा सद�य सद�य / ACCOUNTANT MEMBER सद�य

पुणे Pune; �दनांक Dated : 24th January, 2018. सतीश आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत/Copy of the Order forwarded to : आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत

अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. 3. CIT(A)-I, Nashik 4. CIT-I, Nashik िवभागीय %ितिनिध, आयकर अपीलीय अिधकरण, “A Bench” 5. Pune; गाड� फाईल / Guard file. 6. आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार आदेशानुसार

स�यािपत �ित //True Copy// Senior Private Secretary //True Copy// आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune