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Income Tax Appellate Tribunal, “C”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM
Date of Hearing : 11/08/2016 Date of Pronouncement: 07/09/2016 O R D E R PER PAWAN SINGH, JM: 1. These two appeals filed by two different assessee-company against the order of CIT(A)-17, Mumbai dated 24.05.2012 & 20.09.2013. The Pharmacia India Pvt. Ltd. (PIPL) is time barred for 493 days. The appeal is accompanied with an affidavit of Shri V. Kumar, Director of the assessee-company in support of application for condonation of delay. The contents of affidavit disclosed that assessment order u/s 143(3) was passed on 14.03.2005 wherein disallowance on account of depreciation of furniture and fixtures, depreciation of data processing, equipment, disallowance of ESI & PF and adhoc disallowance on promotional, manufacturing and other expenses were made. The assessee filed appeal before the CIT(A) wherein the assessee got partial relief. Thereafter a notice u/s 274 r.w.s. 271(C) dated 04.03.2011 was served upon the assessee. The assessee submitted detailed reply vide reply dated 25.03.2011. The AO passed the order of penalty u/s 271(1)(c) of the Act on 31.03.2011. While passing the order of penalty, the AO passed order considering the 2 & 7361/M/13 Pharmacia India Pvt. Ltd. addition/disallowance in case of a group companies of assessee viz. Pharmacia Healthcare Pvt. Ltd. (PHPL). Further, aggrieved by the order of penalty, the assessee filed appeal before the CIT(A). The AO issued a corrigendum order dated 18.05.2012 and ordered that notice issued to PIPL may be read as issued in the name of PHL. Considering the fact, the appeal filed by assessee was dismissed vide order dated 24.05.2012 observing that the assessee is allowed to withdraw the appeal, thus the assessee has not filed appeal before the Tribunal against the order dated 24.05.2012. However, the assessee challenged the order of corrigendum before the CIT(A). The appeal of the PHL was dismissed by CIT(A) holding that no appeal lies against the corrigendum vide order dated 20.06.2012, against which the appeal No. 7361/Mum/3013 is filed before us. After filing appeal by PHL, the present appeal is also filed before this Tribunal. Authorised Representative (AR) of the assessee argued that there is sufficient cause for condoning the delay in filing the present appeal as the confusion occurred before the lower authorities due to similarities in the name of the assessee and assessee in Appeal No. 7361/Mum/2013. AR of the assessee further argued that he has good case on merit and would suffer loss if the appeal is not condoned in filing the present appeal, moreover, the Revenue will not prejudice if they have any merit in their favour. Departmental Representative (DR) for Revenue argued that he left the issue on the discretion of the Court.
Considering the explanation offered in the affidavit which is self-explanatory and sufficient ground for condonation of delay. Hence, we deem it appropriate to condone the delay in the interest of justice instead of going on the merits and demerits of the grounds for condonation of delay.
First we shall discuss the AY on 31.10.2002. The case was selected for scrutiny and the assessment was completed u/s 143(3) on 21.03.2005. While framing the assessment, the AO made the addition on account of excess depreciation vide paragraph no. 4, excess depreciation of Rs. 26,31,798/-, disallowance on account of contribution of PF of Rs. 22,67,381/- vide paragraph no.5 of the order, adhoc disallowance on marketing expenses of Rs. 1,29,02,804/- vide paragraph no. 6 and adhoc disallowance of manufacturing, administration and personal expenses of Rs. 1,40,48,729/- as per paragraph no.7 of the order dated 31.03.2002. The assessee filed appeal before the CIT(A) against the quantum assessment wherein all the addition were upheld vide order dated 22.11.2006. After dismissal of the appeal by 3 & 7361/M/13 Pharmacia India Pvt. Ltd.
CIT(A), the AO issued notice of initiation of penalty on 04.03.2011. In response to the notice assessee submitted its reply vide reply dated 25.03.2011. However, the AO concluded that addition has been confirmed by ld. CIT(A), therefore, the reply of assessee is as good as no reply and levied a penalty of Rs. 52,00,000/- on account of concealment of inaccurate particulars of Rs. 14,68,000/-. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).
In the meantime, the assessee filed appeal against the order of CIT(A) on quantum assessment, before the ITAT wherein the addition regarding excess depreciation was restored to the file of AO and the disallowance on account of late payment of PF and marketing expenses was deleted and the adhoc disallowance on account of manufacturing, administration and personal expenses was reduced from Rs. 1.40 Lakhs to Rs. 70 Lakhs vide dated 28.08.2010.
The assessee brought in the notice of AO that in the penalty order, the facts pertaining to the different assessee’s i.e. PIPL, thus the AO issued corrigendum vide order dated 18.05.2012. In the corrigendum, the AO replace the name of PIPL to the PHL. The order of corrigendum was filed before the CIT(A) wherein the appeal of assessee was pending and CIT(A) after taking on record the corrigendum order instead of correct things in a proper manner hold that appeal filed against the order of PHL is no longer valid. The assessee was allowed to withdraw the appeal and the appeal of assessee was dismissed, thus was a glaring example of taking confusion/incorrect things on record. The assessee filed further appeal against the corrigendum order before the CIT(A) and the same was dismissed vide order dated 20.06.2012 holding that no appeal lie against the corrigendum order vide impugned order dated 20.06.2012 which is challenged before us in ITA No. 7361/Mum/2013. Similarly, the assessee also filed the present appeal before us along with the application for condonation of delay.
We have heard the AR of the assessee and DR for Revenue and perused the material available on record. Ld. AR of the assessee argued that AO abuse the process of law and pass order without considering and appreciating the fact before him. The AO while passing the penalty order in case of assessee (PIPL) considered the addition/disallowance in the case of different assessee i.e. PHL. AR of the assessee further argued that even on merit, no penalty is leviable either against the PIPL or against the PHL. Ld. AR of the assessee further argued that substantial addition made against both the assessee was deleted by the Tribunal. DR for Revenue on the other hand fairly conceded that the order of penalty