Narmada Chematur Petrochemicals Ltd., Bharuch V. Dy. CIT., Bharuch Circle, Bharuch

CO 5/AHD/2008

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4405 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-02-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-02-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 04-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : A HMEDABAD (BEFORE HONBLE SHRI G.D. AGRAWAL, VICE-PRESIDENT(A Z) & HONBLE SHRI T.K. SHARMA, J.M.) I.T.A. NOS. 3991 & 3992/AHD./2007 ASSESSMENT YEAR : 2001-2002 & 2002-2003 DEPUTY COMMISSIONER OF INCOME TAX, -VS. M/S. NA RMADA CHEMATUR PETROCHEMICALS LTD. BHARUCH CIRCLE, BHARUCH BHARUCH, GUJARA T (PAN : AAACN 6804 E) (APPELLANT) (RESPONDENT) & C.O. NOS. 4 & 5/AHD/2008 (ARISING OUT OF ITA NOS. 3991 & 3992/AHD/200 7) ASSESSMENT YEAR : 2001-2002 & 2002-2003 M/S. NARMADA CHEMATUR PETROCHEMICALS LTD. VS.- DEPUTY COMMISSIONER OF INCOME TAX, BARUCH, GUJARAT BHARUCH CIRC LE, BHARUCH. (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI SANJAY R. SHAH DEPARTMENT BY : SHRI GOVIND SINGHAL, S R. D.R. O R D E R PER BENCH : THESE APPEALS FILED BY THE REVENUE AND CROSS OBJEC TIONS BY THE ASSESSEE ARE AGAINST THE COMMON ORDER DATED 10.08.2007 OF LEARNED COMMISSION ER OF INCOME TAX(APPEALS)-VI, BARODA CANCELLING THE PENALTY OF RS.8,02,210/- AND RS.65,6 75/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 RESPECTIVELY. 2. BRIEFLY STATED THE FACTS ARE THAT FOR BOTH THE A SSESSMENT YEARS, THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE I NCOME TAX ACT ON THE GROUND THAT THE ASSESSEE HAS CLAIMED MORE DEDUCTION UNDER SECTION 80HHC THAN IT IS ALLOWABLE. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELLED THE PENALTY ON THE GROUND THAT THE ASSESSEE HAS ADOPTED A VIEW BAS ED ON THE DECISIONS OBTAINED AT THAT POINT OF TIME, WHEREAS THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ADOPTED A DIFFERENT VIEW ON THE SAME SET OF FACTS. IN THE IMPUGNED ORDER, THE LD. C.I.T(A) HAS OBSERVED THAT ITAT, SPECIAL BENCH, MUMBAI IN THE CA SE OF SYNCOME FORMULATIONS LTD. [108 TTJ 2 ITA NO. 3 991-3992/AHD/2007 & CO-4-5/AHD/2008 105 (MUMBAI) CONCLUDED THAT FOR THE PURPOSE OF 115J B, THE DEDUCTION UNDER SECTION 80HHC IS TO BE CALCULATED ON THE BASIS OF BOOK PROFIT. ON THAT BASIS, HE CANCELLED THE PENALTY. 3. AGGRIEVED BY THE IMPUGNED ORDER OF LEARNED COMMI SSIONER OF INCOME TAX(APPEALS) CANCELLING THE PENALTY OF RS.8,02,210/- AND RS.65,675/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE I.T. ACT FOR BOTH THE ASSESSMENT Y EARS RESPECTIVELY, THE REVENUE IS IN APPEALS BEFORE US. 4. AT THE OUTSET, SHRI SANJAY R. SHAH APPEARING ON BEHALF OF THE ASSESSEE PRODUCED THE DECISION DATED 06.02.2009 OF ITAT, A BENCH, AHME DABAD IN ITA NO. 1151/AHD/2006 FOR THE ASSESSMENT YEAR 2001-02, WHEREIN THE TRIBUNAL FOLLO WING THE DECISION OF ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF DCIT VS.- SYNCOME FORMULATIO NS (I) LTD. (2007) 106 ITR 93 (MUM.)(SB) HELD THAT DEDUCTION UNDER SECTION 80HHC IS CORRECTLY CLAIMED BY THE A.O. THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT IN THE ASS ESSMENT YEAR 2002-03 ALSO, ITAT, D BENCH, AHMEDABAD IN ASSESSEES OWN CASE IN ITA NO. 928/AHD /2006 VIDE ORDER DATED 12.12.2008 FOLLOWING THE DECISION OF ITAT, SPECIAL BENCH, MUMB AI IN THE CASE OF DCIT VS.- SYNCOME FORMULATIONS (I) LTD. (SUPRA) DIRECTED THE A.O. TO ALLOW THE DEDUCTION UNDER SECTION 80HHC AS CLAIMED BY THE ASSESSEE ON THE BASIS OF BOOK PROFIT . THE LD. COUNSEL OF THE ASSESSEE ACCORDINGLY SUBMITTED THAT SINCE THE ADDITION ON THE BASIS OF W HICH PENALTY IS LEVIED UNDER SECTION 271(1)(C) HAS BEEN DELETED BY THE TRIBUNAL, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT. IN SUCH CASES, NO PENALTY CAN SURVIVE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELL ING THE PENALTY UNDER SECTION 271(1)(C) FOR BOTH THE ASSESSMENT YEARS BE UPHELD. 5. SHRI GOVIND SINGHAL, SR. D.R. APPEARING ON BEHAL F OF REVENUE FAIRLY ADMITTED THAT FOR BOTH THE ASSESSMENT YEARS, THE TRIBUNAL HAS DELETED THE ADDITIONS, WHICH WERE MADE BY THE A.O. ON ACCOUNT OF RE-COMPUTATION OF DEDUCTION UNDER SEC TION 80HHC. THEREFORE, FOR BOTH THE ASSESSMENT YEARS, PENALTY UNDER SECTION 271(1)(C) I S NOT LEVIABLE. 6. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW AND THE DECISIONS DATED 06.02.2009 AND 12.12.2008 OF THE TRIBUNAL IN QUANTU M APPEALS IN ITA NOS. 1151/AHD/2006 AND 928/AHD/2006 RESPECTIVELY FOR BOTH THE ASSESSMENT Y EARS. ADMITTEDLY FOR BOTH THE ASSESSMENT YEARS, IN THE QUANTUM APPEALS, THE ADDITION ON THE BASIS OF PENALTIES UNDER SECTION 271(1)(C) FOR 3 ITA NO. 3 991-3992/AHD/2007 & CO-4-5/AHD/2008 BOTH THE ASSESSMENT YEARS WERE LEVIED, ARE DELETED. THEREFORE, THERE REMAINS NO BASIS FOR LEVYING PENALTY FOR CONCEALMENT. IN THESE CIRCUMSTANCES, NO PENALTY CAN SURVIVE. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELLING THE PENALTY FOR BOTH THE ASSESSMENT YEARS. THESE GROUNDS OF APPEALS OF REVENUE ARE DISMISSED. 7. THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE NOT BEEN PRESSED BY THE LD. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING. THEREFORE, THE SAM E ARE BEING DISMISSED AS NOT PRESSED FOR BOTH THE ASSESSMENT YEARS. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A S WELL AS CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 23.02.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 23 / 02 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.