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IN THE INCOME TAX APPELLATE TRIBUNAL "D " BENCH, MUMBAI
BEFORE HON'BLE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA,( JM)
.. , ,
MISC.APPLICATION No.387/Mum/2014
arising out of I.T(SS).A. No.16/Mum/2012
( / Block Period :1990-91 to 2001-02)
Ms.Rani R Mukerji, / Asstt.Commissioner of Income
701, Vidya Apartment, Vs. Tax CC 22,
Juhu Church Road, Aayakar Bhavan,
Mumbai-400049 M.K.Road,
Mumbai-400020
( /Applicant) .. ( / Respondent)
. / . / PAN/G IRNo.: AALPM8973B
/ Applicant by : Shri B V Zhaveri
/Respondent by : Shri Pavan Kumar Beerla
/ Date of Hearing
: 27.2.2015
/Date of Pronouncement : 4.3.2015
/ O R D E R
Per B.R.BASKARAN, Accountant Member:
The assessee has filed this miscellaneous application seeking
rectification of the order dated 31.7.2014 passed in IT(SS)A
No.16/Mum/2012.
2. The Ld Counsel appearing for the assessee submitted that the
Tribunal, in the above said order, has confirmed the penalty levied u/s
158BFA(2) of the Act on the addition of Rs.9.00 lakhs. He submitted that
the Tribunal had earlier confirmed the said addition in the quantum appeal
and the assessee has filed appeal before the Hon'ble High Court of
Bombay challenging the confirmation of addition of Rs.9.00 lakhs. He
submitted that the Hon'ble High Court has admitted the appeal and the
2 M A N o . 3 8 7 /Mum/20
said admission makes it clear that the addition is a debatable one and
hence the penalty cannot be sustained on that addition. The Ld A.R
submitted that, in support of this proposition, the assessee had placed
reliance on the decision of co-ordinate bench rendered in the case of M/s
Ekta Exports (IT(SS)A No.27/Mum/2011 dated 24.8.2012), wherein the
Co-ordinate bench of Tribunal had held that where a substantial question
of law has been admitted by the Hon'ble High Court against the addition
confirmed by the Tribunal, then no penalty can be imposed u/s 271(1)(c).
The Ld A.R submitted that the Tribunal, in the assessee's case, has held
that the decision in the case of Ekta Exports (supra) was rendered in the
context of the provisions of sec. 271(1)(c) of the Act. The Ld A.R, by
inviting our attention to the order of Ekta Exports, submitted that the co-
ordinate bench has only adjudicated the penalty levied u/s 158BFA(2) of
the Act. Accordingly, he submitted that the Tribunal has committed an
error in interpreting the order or M/s Ekta Exports (supra) and the same is
a mistake apparent from record. Accordingly he prayed that the impugned
order is required to be corrected.
3. The Ld A.R further submitted that the decision of the co-ordinate
bench of the Tribunal is binding on another co-ordinate bench of the
Appellate Tribunal as held by the Hon'ble Supreme Court in the case of
Sub Inspector Rooplal Vs. Ltd Governor (2000)(1 SCC 644 @ 654). He
submitted that the Hon'ble Apex Court, in the above cited case, has held
that if the subsequent bench of the Tribunal was of the opinion that the
earlier view taken by the Co-ordinate bench of the same Tribunal was
incorrect, then it ought to have referred the matter to a larger Bench so
that the difference of opinion between the two co-ordinate benches on the
same point could have been avoided. The Ld. A.R further submitted that
the Ld. Judicial Member was the same in both the benches and hence a
different view should not have been taken and the matter should have
been referred to the larger bench.
3 M A N o . 3 8 7 /Mum/20
4. On the contrary, the Ld D.R submitted that there is no mistake
apparent from record in the impugned order of the Tribunal, since the
Tribunal has only expressed the view that the question of debatable issue
would be relevant only in respect of penalty levied u/s 271(1)(c) of the Act
in view of the Explanation-1 given under sec. 271(1)(c) of the Act. Since
the said explanation cannot be extended to the penalty levied u/s
158BFA(2) of the Act, the Tribunal has held that the contention that
admission of substantial question of law by the Hon'ble High Court would
make the issue debatable shall not apply to the penalty levied u/s
158BFA(2) of the Act. Accordingly, the Ld D.R submitted that, since the
Tribunal has expressed a conscious view, the same will not fall in the
category of mistake apparent from record.
5. We have heard the parties and perused the record. A perusal of the
impugned order of the Tribunal, more particularly paragraph 12 of the
order, would show that the Tribunal has considered the decision rendered
by the co-ordinate bench in the case of Ekta Exports (supra). The Tribunal
has noted down that the Explanation 1 to sec. 271(1)(c) provides that an
assessee can escape from penalty levied u/s 271(1)(c) of the Act, if the
bonafides of the assessee are proved. The co-ordinate bench of Tribunal,
in the case of Ekta Exports (supra), had followed the decision rendered in
the case of Nayan Builders and Developers Pvt Ltd Vs. ITO (ITA
No.2379/Mum/2009 dated 18-03-2011), wherein it was held that the
admission of substantial question of law by the Hon'ble High
Court lends credence to the bona fides of the assessee.
6. This bench of the Tribunal noticed that the co-ordinate bench, in the
case of Ekta Exports (supra) did not examine about the applicability of
Explanation 1 given under sec. 271(1)(c) to the penalty levied u/s
158BFA(2) of the Act. However, in the present case, the Tribunal has
taken the view that the Explanation 1 given under sec. 271(1)(c) cannot
4 M A N o . 3 8 7 /Mum/20
be made applicable to the penalty levied u/s 158BFA(2) of the Act. This
bench of the Tribunal has also taken the view that the question of
examination of bona fides of the assessee shall arise only in respect of
penalty levied u/s 271(1)(c) of the Act, in view of the Explanation-1 given
under sec. 271(1)(c) of the Act. Since the provisions of sec. 158BFA(2)
does not contain any provision as that of Explanation 1 to sec. 271(1)(c) of
the Act, the Tribunal took the view that the contention that "bona fides of
the assessee" due to admission of substantial question of law by the
Hon'ble High Court is not applicable in respect of penalty levied u/s
158BFA(2) of the Act. On appreciation of these legal points, the Tribunal
did not follow the decision rendered by the co-ordinate bench in the case
of Ekta Exports (supra).
7. The Ld A.R contended that the decision rendered by one co-ordinate
bench is binding on another bench. However, we have pointed out earlier
that the co-ordinate bench, in the case of Ekta Exports (supra), did not
examine about the applicability of Explanation 1 given under sec.
271(1)(c) to the penalty levied u/s 158BFA(2) of the Act. Hence, we are
unable to agree with the contentions of the Ld A.R. If the co-ordinate
bench had considered the above said question and if it had taken the view
that the Explanation 1 to sec. 271(1)(c) is also applicable to sec.
158BFA(2) and hence "bona fides of the assessee" would relieve him from
the penalty levied u/s 158BFA(2) of the Act, then it can be said that the
said decision should have been followed by this bench of Tribunal.
8. Accordingly, we are of the view that the Tribunal has taken a
conscious view of the matter by duly considering all the relevant provisions
of the Act and accordingly we do not find any merit in the miscellaneous
application filed by the assessee. Accordingly we reject the same.
5 M A N o . 3 8 7 /Mum/20
9. In the result, the miscellaneous application filed by the assessee is
dismissed.
The above order was pronounced in the open court on 4th Mar, 2015.
4th Mar, 2015
sd sd
( /VIVEK VARMA) (.. / B.R. BASKARAN)
/Judicial Member / Accountant Member
Mumbai: 4th
Mar,2015.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
true copy
(Asstt. Registrar)
, /ITAT, Mumbai
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