M/s Orissa State Police Housing & Welfare Corporation Ltd, Bhubaneswar V. DCIT, Bhubaneswar

CO 10/CTK/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8697 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 10-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 06-02-2013
• Court: TRIBUNAL
• Department Lawyers: N K NEB
• Assessee Lawyers: DILIP KR MOHANTY
• Keywords: Depreciation; Reasonable cause; Revised return
• Section: 273B; 143(3); 139(5); 148

Judgement Text

1 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 IN THE INCOME TAX APPELLATE TRIBUNAL: CUTTACK BENCH : CUTTTACK (BEFORE SHRI K. K. GUPTA, AM & SHRI GEORGE MATHAN, JM) ITA NOS. 07 & 08/CTK/2013 ASSESSMENT YEARS: 2004-05 & 2005-06 DEPUTY COMMISSIONER OF INCOME-TAX, VS. ORISSA STAT E POLICE HOUSING & CIRCLE-2(2), BHUBANESWAR WELFARE CORPORATION LTD . (PAN:AABCT7853N) (APPELLANT) (RESPONDENT) & C.O. NOS. 09 & 10/CTK/2013 IN ITA NOS. 07 & 08/CTK/2013 ASSESSMENT YEARS: 2004-05 & 2005-06 ORISSA STATE POLICE HOUSING & WELFARE VS. DY. CO MMISSIONER OF INCOME-TAX, CORPORATION LTD. CIRCLE-2(2), BHUBANES WAR (CROSS OBJECTOR) (RESPONDENT) & ITA NOS. 339 & 340/CTK/2013 ASSESSMENT YEARS: 2004-05 & ITA NOS. 341 & 342/CTK/2013 ASSESSMENT YEARS: 2005-06 DEPUTY COMMISSIONER OF INCOME-TAX, VS. ORISSA ST ATE POLICE HOUSING & CIRCLE-2(2), BHUBANESWAR WELFARE CORPORATION LTD . (APPELLANT) (RESPONDENT) DATE OF HEARING: 10TH JUNE, 2013 DATE OF PRONOUNCEMENT: 10TH JUNE, 2013 REVENUE BY: SHRI N. K. NEB, SR. DR ASSESSEE BY: SHRI DILIP KR. MOHANTY, AR ORDER PER BENCH: THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDERS OF THE CIT(A)- II, BHUBANESWAR AGAINST THE CANCELLATION OF PENALTI ES U/.S. 271(1)(B) AND 271(1)(C) OF THE ACT FOR AYS. 2004-05 AND 2005-06. THE COS A RE THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE IN SUPPORT OF THE ORDER OF CIT( A). 2 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 2. SHRI N. K. NEB APPEARED FOR THE REVENUE AND SHRI DILIP KR. MOHANTY APPEARED FOR THE ASSESSEE. 3. IT WAS THE SUBMISSION BY THE LD. DR THAT IN REGA RD TO THE LEVY OF PENALTY U/S. 271`(1)(B) OF THE ACT, THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INCOME FOR AY 2004-05 ON 01.11.2004 ON THE BASIS OF PROVISIONAL A CCOUNTS. FOR THE AY 2005-06, THE ASSESSEE HAD FILED ITS ORIGINAL RETURN ON 31.10 .2005. IT WAS THE SUBMISSION THAT NOTICE U/S. 148 OF THE ACT CAME TO BE ISSUED ON THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ON 17.03.2009. IT WAS THE SUBMISSION THAT TH ERE WAS NO COMPLIANCE TO THE SAID NOTICE U/S. 148 OF THE ACT AND REMINDERS HAD BEEN S ENT TO THE ASSESSEE ON 12.08.2009, 21.10.2009 AND 23.10.2009. IT WAS THE SUBMISSION THAT THE RETURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT WAS SUBS EQUENTLY FILED ON 17.11.2009 DECLARING A MUCH HIGHER INCOME THAN WHAT WAS DECLAR ED IN THE ORIGINAL RETURN. IT WAS THE SUBMISSION THAT THE INCOME AS DECLARED IN T HE RETURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT HAD BEEN ACCEPTED IN THE COURSE OF ASSESSMENT. IT WAS THE SUBMISSION THAT ON ACCOUNT OF THE NON-COOPERATION B Y THE ASSESSEE IN REGARD TO THE FILING OF THE RETURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT THE AO HAD LEVIED THE PENALTIES U/S. 271(1)(B) OF THE ACT. IT WAS TH E SUBMISSION THAT THE LD. CIT(A) HAD DELETED THE PENALTY BY TAKING RECOURSE TO THE P ROVISIONS OF SECTION 273B OF THE ACT BY HOLDING THAT THERE WAS REASONABLE CAUSE FOR THE DELAY. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE R EVERSE. 4. IN REPLY, THE LD. AR VEHEMENTLY SUPPORTED THE OR DER OF CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PENALTY ORDER PASSED U/S. 271(1)(B) OF THE ACT AS ALSO THE ORDER OF THE LD. CIT(A) IN PARA 6.6 CLEARLY SHOWS THAT THE LD. CIT(A) HAS TAKEN INTO CO NSIDERATION THE FACT THAT THE AO HAS NEVER REFUTED THE PLEA OF THE ASSESSEE THAT THE APPELLANT HAD FILED FIRST RETURN ON A PROVISIONAL ACCOUNT AND IT WAS BEYOND THE CONTROL O F THE CORPORATION TO INFLUENCE THE CAG TO COMPLETE THE AUDIT BEFORE THE DUE DATE O F FILING THE RETURN. IT IS FURTHER UNDISPUTED THAT THE REOPENING HAD BEEN DONE ONLY FO R A SMALL ISSUE OF DEPRECIATION, WHICH WAS TAKEN FROM THE FORM 3CD FILED BY THE ASSE SSEE ON THE BASIS OF THE 3 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 ORIGINAL PROVISIONAL RETURN. ADMITTEDLY, IN THE RE TURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT MUCH HIGHER INCOME WAS DISCLOSED WHI CH IS ON THE BASIS OF CAG REPORT, WHICH WAS NOT EVEN IN THE KNOWLEDGE OF THE AO. THE CAG REPORT ADMITTEDLY WAS RECEIVED BY THE ASSESSEE ON 24.03.20 08. A PERUSAL OF THE ORDER OF THE LD. CIT(A) FURTHER SHOWS THAT THE TAX AUDIT REP ORT WAS OBTAINED FROM THE TAX AUDITORS ONLY ON 06.06.2008. FURTHER, A PERUSAL OF THE ASSESSMENT ORDER IN THE PRESENT CASE ALSO CLEARLY SHOWS THAT FOR BOTH THE A SSESSMENT YEARS THE ASSESSMENT HAS BEEN PASSED U/S. 143(3) OF THE ACT. ONCE, AN A SSESSMENT ORDER IS PASSED U/S. 143(3) OF THE ACT THAT TOO ACCEPTING THE RETURNED I NCOME, IT IS PRESUMED THAT THE AO HAS CONDONED THE ACTION OF THE DELAY IN FURNISHING OF THE RETURNS IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. UNDER THESE CIRCUMSTAN CES, WE ARE OF THE VIEW THAT CANCELLATION OF THE PENALTY LEVIED U/S. 271(1)(B) O F THE ACT BY THE LD. CIT(A) IS ON A RIGHT FOOTING BY ACCEPTING THE REASONABLE CAUSE AND CALLS FOR NO INTERFERENCE. 6. IN THE RESULT, THE ORDER OF THE LD. CIT(A) CANCE LLING THE LEVY OF PENALTY U/S. 271(1)(B) OF THE ACT STANDS UPHELD AND THE APPEALS OF REVENUE STAND DISMISSED. 7. IN RESPECT OF THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT, IT WAS SUBMITTED BY THE LD. DR THAT THERE WAS A VAST DIFFERENCE BETWEEN THE ORIGINAL RETURN AND THE INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. IT WAS THE SUBMISSION THAT THE ORIGINAL RETURN HAD BEE N FILED FOR THE AY 2004-05 ON 01.11.2004 AND FOR AY 2005-06, THE ORIGINAL RETURNS HAVE BEEN FILED ON 31.10.2005. IT WAS THE SUBMISSION THAT THE CAG REPORT WAS OBTAI NED ON 24.03.2008 AND NO ATTEMPT WAS MADE BY THE ASSESSEE TO FILE ANY REVISE D RETURN. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD DELETED THE PENALTY BY ACCE PTING THE REASONABLE CAUSE AND REFERRING TO THE PROVISIONS OF SECTION 273B OF THE ACT. IT WAS THE SUBMISSION THAT THE PROVISIONS OF SECTION 273B OF THE ACT DID NOT I NCLUDE THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IT WAS THE SUBMISSION THAT C ONSEQUENTLY, THE ORDER OF LD. CIT(A0 IS LIABLE TO BE REVERSED. 8. IN REPLY, THE LD. AR SUBMITTED THAT UNDOUBTEDLY THE ORIGINAL RETURN FOR AY 2004-05 WAS FILED ON 01.11.2004 AND FOR AY 2005-06 ON 31.10.2005. IT WAS THE 4 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 SUBMISSION THAT AS BOTH THE RETURNS WERE RETURNS U/ S. 139(1)OF THE ACT THE TIME LIMIT FOR FILING THE REVISED RETURN U/S. 139(5) OF THE AC T EXPIRED FOR THE AY 2004-05 ON 31.03.2006 AND FOR AY 2005-06 ON 31.03.2007. IT WA S THE SUBMISSION THAT THE CAG REPORT WAS MADE AVAILABLE TO THE ASSESSEE ON 24 .03.2008 BY WHICH TIME THE TIME FOR FILING THE REVISED RETURN HAS ALREADY EXPI RED. IT WAS THE SUBMISSION THAT THOUGH THE REVENUE HAD NO INFORMATION IN RESPECT OF THE CAG REPORT AND THE INCOME THAT WAS QUANTIFIED AS PER THE CAG REPORT IN THE CA SE OF THE ASSESSEE, THE ASSESSEE HAD PAID ITS TAXES AND HAD FILED ITS RETURN IN RESP ONSE TO THE NOTICE U/S. 148 OF THE ACT. IT WAS THE SUBMISSION THAT THE HIGHER INCOME HAD BEEN DISCLOSED BY THE ASSESSEE VOLUNTARILY. IT WAS THE SUBMISSION THAT T HE AO HAD REOPENED THE ASSESSMENT OF THE ASSESSEE BY ISSUING NOTICE U/S. 1 48 OF THE ACT IN RESPECT OF A MINOR DEPRECIATION ISSUE. IT WAS THE SUBMISSION TH AT THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT HAD B EEN ACCEPTED BY THE AO WITHOUT ANY TINKERING. IT WAS THE SUBMISSION THAT THE ORDE R OF THE CIT(A) WAS LIABLE TO BE UPHELD. 9. WE HAVE HEARD RIVAL SUBMISSIONS. ADMITTEDLY THE LD. CIT(A) HAS REFERRED TO THE PROVISIONS OF SECTION 273B OF THE ACT IN HIS OR DER. THE ORDER OF THE CIT(A) IS A CONSOLIDATED ORDER FOR BOTH SECTION 271(1)(B) AS AL SO SECTION 271(1)(C) OF THE ACT. IT IS AN ADMITTED FACT THAT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT IS NOT INCLUDED IN THE PROVISIONS OF SECTION 273B OF THE ACT. THIS IS BECAUSE THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ITSELF PROVIDES FOR RE ASONABLE CAUSE IN EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT. ADMITTEDLY, THE L D. CIT(A) IN PARA 6.6 OF HIS ORDER ALSO RECOGNIZED THE FACT THAT THE ASSESSEE HAS AFTE R COMPLETION OF THE STATUTORY AUDIT BY THE CAG HAD TRUTHFULLY COME FORWARD AND HAD FILE D THE DETAILS OF THE TRUE INCOME AND EVEN BEFORE FILING OF THE RETURN THE CORRESPOND ING TAXES HAVE BEEN PAID. THE FINDING OF THE LD. CIT(A) THAT THE AO HAD NO IDEA R EGARDING THE NATURE AND QUANTUM OF TRUE INCOME OF THE ASSESSEE BEFORE THE R ETURN WAS FILED BY THE ASSESSEE HAS ALSO NOT BEEN DISLODGED BY THE REVENUE. ADMITT EDLY, BY THE TIME THE ASSESSEE HAD RECEIVED THE REPORT OF THE CAG, THE STATUTORY T IME FOR FILING THE REVISED RETURN FOR BOTH THE ASSESSMENT YEARS HAD EXPIRED. FURTHER , A PERUSAL OF THE ASSESSMENT 5 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 ORDER CLEARLY SHOWS THAT THE INCOME RETURNED BY THE ASSESSEE IN ITS RETURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT HAS ALSO BEEN ACC EPTED BY THE AO WITHOUT ANY TINKERING THERETO. IN THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF ITS INCOME OR HAS FURN ISHED ANY INACCURATE PARTICULARS OF INCOME. FURTHER, A PERUSAL OF THE PENALTY ORDER PASSED U/S. 271(1)(C) OF THE ACT CLEARLY SHOWS THAT THE ASSESSEE HAS GIVEN A DETAILE D EXPLANATION FOR THE VARIATION IN ITS INCOME INSOFAR AS THE ORIGINAL RETURN HAD BEEN FILED ON THE BASIS OF THE PROVISIONAL ACCOUNTS AND THE RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT WAS FILED ON THE BASIS OF THE CAG AUDITED ACCOUNTS. TH IS SUBMISSION OF THE ASSESSEE HAS ALSO NOT BEEN SHOWN TO BE FALSE OR IMPOSSIBLE EXPLA NATION. THE FACT THAT THE AO HAS ACCEPTED THE RETURNED INCOME AS PER THE RETURN FILE D IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT FURTHER FORTIFIES THE EXPLANATION GI VEN BY THE ASSESSEE AND EVEN ON THIS GROUND THE PENALTY U/S. 271(1)(C) OF THE ACT C ANCELLED BY THE LD. CIT(A) IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENC E. 10. IN THE RESULT, APPEAL OF THE REVENUE AGAINST TH E PENALTY U/S. 271(1)(C) OF THE ACT DELETED BY THE CIT(A) STANDS DISMISSED. 11. THE CROSS OBJECTIONS ARE IN SUPPORT OF THE ORDE R OF THE LD. CIT(A) CANCELLING THE PENALTIES LEVIED U/S. 271(1)(B) AND 271(1)(C) OF THE ACT. AS WE HAVE ALREADY UPHELD THE ORDER OF CIT(A) CANCELING THE LE VY OF PENALTIES U/S. 271(1)(B) AND 271(1)(C) OF THE ACT THE CROSS OBJECTIONS FILED BY THE ASSESSEE BECOMING INFRUCTUOUS AND THE SAME ARE DISMISSED. 12. IN THE RESULT, ALL THE APPEALS OF THE REVENUE A ND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 13. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- (K.K.GUPTA) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 10TH JUNE, 2013 (JD) SR. P.S 6 ITA NO. 07&08/CTK/2013 & CONO.9&10/CTK/2013 & ITA NOS. 339 TO 342/CTK/2013 ORISSA STATE POLICE HOUSING & WELFARE CORPN. LTD. AYS 2004-05 & 2005-0 6 COPY FORWARDED TO :- 1. APPELLANT DCIT, CIRCLE-2(2), BHUBANESWAR 2. RESPONDENT- M/S. ORISSA STATE POLICE HOUSING & WELF ARE CORPORATION LTD., JANAPATH, VANI VIHAR, BHUBANESWAR, 3. CIT(A)-II, BHUBANESWAR. 4. CIT, BHUBANESWAR 5. DR, ITAT, CUTTACK TRUE COPY BY ORDER SR. PVT. SECY. ITAT, CUTTACK