ACIT, New Delhi V. Nath Bros. Exim International Ltd., New Delhi

CO 95/DEL/2013

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3690 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: ASHOK GOEL
• Keywords: Period of limitation; Revised return
• Section: 143(3); 14A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA.NO.5547/DEL./2012 ASSESSMENT YEAR 2008-2009 NATH BROS. EXIM INTERNATIONAL LTD., 102-A, BANGLASAHIB MARG (REAR SIDE), GOLE MARKET, NEW DELHI 110 001. PAN AAACN0495R VS THE ACIT, CIRCLE 13(1), NEW DELHI. (APPELLANT) (RESPONDENT) C.O.NO.95/DEL./2013 ARISING OUT OF ITA.NO.5547/DEL./2012 - ASSESSMENT YEAR 2008-2009 THE ACIT, CIRCLE 13(1), NEW DELHI. VS NATH BROS. EXIM INTERNATIONAL LTD., 102-A, BANGLASAHIB MARG (REAR SIDE), GOLE MARKET, NEW DELHI 110 001. PAN AAACN0495R (APPELLANT) (RESPONDENT) ITA.NO.6030/DEL./2015 ASSESSMENT YEAR 2008-2009 NATH BROS. EXIM INTERNATIONAL LTD., 102-A, BANGLASAHIB MARG (REAR SIDE), GOLE MARKET, NEW DELHI 110 001. PAN AAACN0495R VS THE DCIT, CIRCLE 13(1), NEW DELHI. (APPELLANT) (RESPONDENT) 2 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. FOR ASSESSEE : SHRI VED JAIN, ADVOCATE & SHRI ASHOK GOEL, C.A. FOR REVENUE : SHRI S.R. SENAPATI, SR. D.R. DATE OF HEARING : 19 .0 4 .2018 DATE OF PRONOUNCEMENT : 24 .04.2018 ORDER PER BHAVNESH SAINI, J.M. THIS ORDER SHALL DISPOSE OF ALL THE ABOVE MATTERS PERTAINING TO THE SAME ASSESSEE FOR THE SAME ASSESS MENT YEAR. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE CROSS- APPEALS ARE DECIDED AS UNDER. ITA.NO.5547/DEL./2012 ASSESSEES APPEALA.Y. 2008 -09 : C.O.NO.95/DEL.2013 REVENUES CROSS OBJECTIONA.Y. 2008-2009 : 3. THE APPEAL OF ASSESSEE AND CROSS OBJECTION BY REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. C IT(A)-XVI, NEW DELHI, DATED 17 TH AUGUST, 2012, FOR THE A.Y. 2008-2009. LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRESS GROU ND NOS. 4, 3 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. 5 AND 6 OF THE APPEAL OF ASSESSEE. THE SAME ARE DIS MISSED AS NOT PRESSED. 4. ON GROUND NOS. 1 AND 2, ASSESSEE CHALLENGED TH E ORDER OF THE LD. CIT(A) IN DENYING THE EXEMPTION UN DER SECTION 10B OF THE I.T. ACT IN A SUM OF RS.2,43,53,575/-. T HE REVENUE HAS ALSO RAISED THE CROSS OBJECTION ON THE SAME ISS UE STATING THEREIN THAT NO DEDUCTION UNDER SECTION 10B SHALL B E ALLOWED TO THE ASSESSEE AS RETURN OF INCOME WAS NOT FILED ON O R BEFORE THE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE I.T. ACT AND THAT THE LD. CIT(A) HAS NOT ADJUDICATED OTHER POINTS RAI SED BEFORE HIM. 5. THE A.O. DENIED THE EXEMPTION UNDER SECTION 10B OF THE I.T. ACT. IT WAS SUBMITTED THAT A.O. HAS DENIED THE EXEMPTION UNDER SECTION 10B OF THE I.T. ACT BECAUSE NO RETURN WAS FILED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE I.T. ACT BECAUSE ORIGINAL RETURN WAS FILED ON 31 ST DECEMBER, 2008. THE REQUISITE MANDATORY REPORT IN F ORM-56G DATED 09 TH MARCH, 2010 HAS BEEN FILED BY ASSESSEE, BUT, AS PE R 4 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. PROVISIONS OF THE INCOME TAX ACT, THIS REPORT SHOUL D HAVE BEEN PREPARED BEFORE DUE DATE OF FILING OF THE RETURN AN D THAT ASSESSEE HAS REGULARLY FURNISHED DECLARATION IN WRITING UNDE R SECTION 10B(8) IN A.YS. 2002-2003 TO 2006-2007 THAT THE PRO VISIONS OF THIS SECTION MAY NOT BE APPLICABLE TO HIM, THEREFOR E, IT APPLIES TO A.Y. 2008-2009 AS WELL. 5.1. THE SUBMISSIONS OF THE ASSESSEE WERE RECORDED IN THE APPELLATE ORDER CHALLENGING THE DENIAL OF DEDUCTION UNDER SECTION 10B OF THE I.T. ACT. THE ASSESSEE RELIED UP ON THE ORDER OF ITAT IN THE CASE OF ACIT VS. DHIR GLOBAL INDUSTR IAL PVT. LTD., (2010) 133 TTJ 580 (DEL.) IN WHICH IT WAS HELD THAT THESE PROVISIONS ARE DIRECTORY AND NOT MANDATORY. IT WAS SUBMITTED THAT DUE TO DISPUTE AMONG THE FAMILY MEMBERS, THERE WERE DELAY IN FILING THE RETURN OF INCOME. IT WAS FURTHER SUBM ITTED THAT OPTION OF CLAIM UNDER SECTION 10B OF THE I.T. ACT W AS ON YEAR TO YEAR BASIS SUBJECT TO THE SUNSET CLAUSE. IF IN A YE AR THERE IS NO PROFIT, THE QUESTION OF ACTUAL ALLOWANCE OF EXEMPTI ON UNDER SECTION 10B WOULD NOT ARISE. THE ASSESSEE-COMPANY H AS BEGAN 5 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. FUNCTION/COMMENCE COMMERCIAL PRODUCTION FROM THE A. Y. 2002-2003 AND IT HAD PROFIT IN A.YS. 2004-05, 2006- 07 AND 2007-08 AND LOSS IN EARLIER YEARS I.E., 2002-03, 20 03-04 AND 2005-06. 5.2. THE LD. CIT(A) NOTED THAT ASSESSEE HAS FILED DECLARATION UNDER SECTION 10B(8) IN EARLIER YEAR TH AT IT WOULD NOT AVAIL DEDUCTION UNDER SECTION 10B OF THE I.T. A CT, THEREFORE, IT APPLY TO THE ASSESSMENT YEAR UNDER APPEAL AS WEL L. ACCORDINGLY, THIS GROUND OF APPEAL ASSESSEE WERE DI SMISSED. 6. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISSUE OF FILING DECLARATION UNDER SECTION 10B(8) CA ME UP FOR CONSIDERATION IN SUCCEEDING YEARS IN WHICH LD. CIT( A) ALLOWED THE CLAIM OF ASSESSEE BY HOLDING THAT DECLARATION M ADE BY ASSESSEE UNDER SECTION 10B(8) OF THE ACT IS IN RESP ECT OF THE YEAR IN WHICH DECLARATION IS MADE BY THE ASSESSEE AND NO T FOR THE SUBSEQUENT YEAR. RELIANCE WAS PLACED UPON THE DECIS ION OF ITAT, DELHI BENCH IN THE CASE OF LEGATO SYSTEMS IND IA (P) LTD., VS. ITO (2005) 2 SOT 719 (DEL.) WHICH IS CONFIRMED BY THE 6 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LEG ATO SYSTEMS INDIA (P) LTD., (2006) 203 CTR 101. LEARNED COUNSEL FOR THE ASSESSEE, HOWEVER, FAIRLY SUBMITTED THAT SINCE ORIG INAL RETURN UNDER SECTION 139(1) HAVE NOT BEEN FILED WITHIN THE TIME PRESCRIBED BY LAW, THEREFORE, ASSESSEE WOULD NOT BE ENTITLED FOR DEDUCTION UNDER SECTION 10B OF THE I.T. ACT. THE RE VENUE HAS RAISED THE SAME POINT IN THE CROSS OBJECTION. 7. CONSIDERING THE FACTS OF THE CASE IN THE LIG HT OF SUBMISSIONS OF THE PARTIES AND PROVISIONS OF LAW, W E ARE OF THE VIEW THAT AUTHORITIES BELOW CORRECTLY DENIED THE EX EMPTION UNDER SECTION 10B OF THE I.T. ACT TO THE ASSESSEE B ECAUSE ORIGINAL RETURN UNDER SECTION 139(1) WAS NOT FILED WITHIN THE PERIOD PRESCRIBED UNDER SECTION 139(1) OF THE I.T. ACT. THEREFORE, PROVISIONS OF SECTION 10B(1) PROVISO (3) WILL APPLY AGAINST THE ASSESSEE. ON THIS GROUND ITSELF ASSESSEE WOULD NOT BE ENTITLED FOR DEDUCTION. THEREFORE, THERE IS NO NEED TO DECID E OTHER POINTS IN THE PRESENT ISSUE. GROUND NOS. 1 AND 2 OF THE AP PEAL OF 7 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. ASSESSEE ARE ACCORDINGLY DISMISSED. THE CROSS OBJEC TION OF THE DEPARTMENT IS ALLOWED. 8. ON GROUND NO.3, ASSESSEE CHALLENGED THE ORDERS OF THE AUTHORITIES BELOW IN DISALLOWING RS.2,66,614/- UNDER SECTION 14A OF THE I.T. ACT. IN THE WRITTEN SUBMISS IONS, ASSESSEE HAS STATED THAT IN THE OPINION OF THE A.O. IT WAS N OT NECESSARY TO ESTABLISH A DIRECT NEXUS BETWEEN THE EXEMPTED IN COME AND EXPENSES. THE A.O. CONCLUDED THAT TO EARN DIVIDEND INCOME OF RS.3,20,571/-, EXPENDITURE OF RS.2,66,614/- HAS BEE N INCURRED. THERE WAS NO DEFINITE FINDING ON INCURRIN G OF EXPENDITURE AND ONLY ON PRESUMPTIONS, DISALLOWANCE HAVE BEEN MADE. THE ASSESSEE STATED THAT THE EARNING OF THE D IVIDEND REQUIRED MINIMUM ACTIVITY ON BEHALF OF THE ASSESSEE -COMPANYS EMPLOYEES. THE TIME INVOLVEMENT WAS ALSO MINIMAL. T HE EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCL UDABLE IN THE TOTAL INCOME WAS APPLICABLE ONLY IF THE A.O. HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE WAS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF ASSESSEE IN RESPECT OF SUCH EXPENDI TURE OR NO 8 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. EXPENDITURE IN RELATION TO SUCH INCOME. THE ASSESSE E HAS NOT INCURRED ANY EXPENDITURE TO EARN EXEMPTED INCOME, T HEREFORE, NO DISALLOWANCE UNDER SECTION 14A BE MADE. THE LD. CIT(A), HOWEVER, NOTED THAT ASSESSEE MUST HAVE BEEN INCURRE D CERTAIN ADMINISTRATIVE EXPENDITURE, THEREFORE, THIS GROUND OF APPEAL OF ASSESSEE WERE DISMISSED. 9. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT OUT OF THE TOTAL ADDITION OF RS.2,66,614/-, A.O. MA DE ADDITION OF RS.2,19,561/- ON ACCOUNT OF INTEREST EXPENDITURE DE BITED TO THE P & L A/C AND RS.47,053/- ON ACCOUNT OF HALF PERCEN T OF THE AVERAGE VALUE OF INVESTMENTS. AS REGARDS THE ADDITI ON OF RS.2,19,561/-, LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT OWN FUNDS OF THE ASSESSEE-COMPANY ARE MORE THA N THE INVESTMENT MADE BY ASSESSEE. THEREFORE, DISALLOWANC E OF INTEREST UNDER SECTION 14A IS NOT CALLED FOR. HE HA S SUBMITTED THAT INVESTMENT MADE BY ASSESSEE IS OF RS.94,21,879 /-. HOWEVER, THE SHARE CAPITAL OF ASSESSEE HAS BEEN RS. 5.01 CRORE AND EQUITY SHARES OF RS.94,21,879. HE HAS SUBMITTED THAT IT IS 9 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. WELL SETTLED THAT AS ASSESSEE WAS HAVING OWN FUNDS WHICH WERE MORE THAN THE INVESTMENT MADE, THEREFORE, NO DISALL OWANCE UNDER SECTION 14A IS SUSTAINABLE. IN SUPPORT OF THE CONTENTION, HE HAS RELIED UPON THE DECISION OF ITAT, DELHI BENC H IN THE CASE OF GAGAN GOYAL DATED 2 ND AUGUST, 2016 AND DECISION OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MAX INDIA LTD., DATED 6 TH SEPTEMBER, 2016. 10. ON THE OTHER HAND, LD. D.R. RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT ADDITION OF RS.2,19,561/- IS NOT JUSTIFIE D. THE ASSESSEE HAS OWN SUFFICIENT FUNDS WHICH ARE MORE THAN THE IN VESTMENT MADE BY THE ASSESSEE. THEREFORE, NO INTEREST IS TO BE DISALLOWED. FURTHER, A.O. HAS NOT MADE OUT A CASE IF ANY BORROW ED FUNDS HAVE BEEN USED FOR THE PURPOSE OF MAKING INVESTMENT TO EARN EXEMPTED INCOME. IN THE ABSENCE OF ANY NEXUS BETWEE N THE BORROWED FUNDS AND THE FUNDS INVESTED TO EARN EXEMP T INCOME, THE DISALLOWANCE OF INTEREST IS NOT PERMISSIBLE. WE , ACCORDINGLY, 10 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE ADDITION OF RS.2,19,610/-. HOWEVER, AS REGARDS THE BALANCE AMOUNT OF RS.47,053/-, LEARNED COUNSEL FOR THE ASSE SSEE DID NOT MAKE FURTHER SUBMISSIONS CONSIDERING IT TO BE A SMALL AMOUNT. THIS PART OF GROUND IS ACCORDINGLY DISMISSE D. IN THE RESULT, ADDITION OF RS.2,19,561/- IS DELETED. THIS GROUND OF APPEAL OF ASSESSEE IS PARTLY ALLOWED. 12. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY AL LOWED WHEREAS, CROSS OBJECTION OF THE DEPARTMENT IS ALLOW ED. ITA.NO.6030/DEL./2015 ASSESSEES APPEAL A.Y. 20 08-2009 : 13. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF THE LD. CIT(A)-20, NEW DELHI, DATED 12 TH OCTOBER, 2015 FOR THE A.Y. 2008-2009, CHALLENGING THE LEVY O F PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961. 14. THE PENALTY WAS LEVIED BY THE A.O. ON ACCOUNT OF DENYING EXEMPTION UNDER SECTION 10B OF THE I.T. ACT AS NOTED ABOVE. THE ASSESSEE FILED RETURN DECLARING INCOME O F 11 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. RS.70,06,280/- ON 31 ST DECEMBER, 2008 WHICH WAS REVISED DECLARING -NIL- INCOME. THE ASSESSMENT WAS COMPLETE D UNDER SECTION 143(3) OF THE I.T. ACT ON 29 TH DECEMBER, 2010 AT THE INCOME OF RS.72,85,400/-. THE A.O. MADE ADDITIONS O N ACCOUNT OF DEDUCTION UNDER SECTION 10B OF THE I.T. ACT IN A SUM OF RS.2.43 CRORES AND ALSO MADE ADDITION ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A OF RS.2,66,614/-. TH E A.O. NOTED THAT ASSESSEE HAS FILED ORIGINAL RETURN OF IN COME AFTER DUE DATE OF FILING OF THE RETURN SPECIFIED UNDER SECTIO N 139(1) OF THE I.T. ACT. THEREFORE, REVISED RETURN COULD BE FILED IF THE ORIGINAL RETURN HAS BEEN FILED WITHIN THE PERIOD SPECIFIED U NDER SECTION 139(1) OF THE I.T. ACT. SINCE, REVISED RETURN WAS I NVALID, THEREFORE, CLAIM OF ASSESSEE UNDER SECTION 10B WAS REJECTED. A.O. APPLIED EXPLANATION-1 TO SECTION 271(1)(C) OF THE I.T. ACT AND NOTED THAT ONLY FEW PERCENTAGE OF RETURNS ARE T AKEN-UP FOR SCRUTINY AND IN CASE, ASSESSMENT HAD NOT BEEN TAKEN -UP FOR SCRUTINY ASSESSMENT, THE AMOUNTS WOULD NOT BE SUBJE CTED TO THE ADDITION. HE HAS RELIED UPON THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATIO N PVT. 12 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. LTD., 327 ITR 510 AND HELD THAT ASSESSEE HAS CONCEA LED AS ALSO FURNISHED INACCURATE PARTICULARS OF INCOME, THEREFO RE, PENALTY UNDER SECTION 271(1)(C) WAS LEVIED ON THE ADDITION MADE ON ACCOUNT OF DENIAL OF DEDUCTION UNDER SECTION 10B OF THE I.T. ACT. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE TH E LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUC ED IN THE APPELLATE ORDER. THE LD. CIT(A), HOWEVER, DISMISSED THE APPEAL OF ASSESSEE. 15. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T ASSESSEE IN THE ORIGINAL RETURN OF INCOME DID NOT C LAIM DEDUCTION UNDER SECTION 10B OF THE I.T. ACT AND DEC LARED ALL THE PARTICULARS. IN THE REVISED RETURN, ASSESSEE MADE C LAIM OF DEDUCTION UNDER SECTION 10B OF THE I.T. ACT AND DIS CLOSED ALL THE PARTICULARS OF INCOME. THE CLAIM OF ASSESSEE WAS HO WEVER, DENIED BECAUSE RETURN WAS FILED BEYOND THE PERIOD S PECIFIED UNDER SECTION 139(1) OF THE I.T. ACT. THE ASSESSEE THUS, DISCLOSED ALL THE FACTS IN THE ORIGINAL RETURN OF I NCOME AS WELL AS IN THE REVISED RETURN OF INCOME. THE CLAIM OF ASSES SEE WAS NOT 13 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. FOUND BOGUS AND SAME DEDUCTION WAS ALLOWED IN SUBSE QUENT YEARS BY THE LD. CIT(A). THE DECLARATION UNDER SEC TION 10B COULD BE MADE FOR EACH YEAR. HE HAS SUBMITTED THAT PENALTY MAY NOT BE IMPOSED MERELY ON TECHNICAL GROUND. 16. THE LD. D.R. RELIED UPON THE ORDERS OF THE AUT HORITIES BELOW. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN T HE INSTANT CASE, ASSESSEE FILED ORIGINAL RETURN OF INC OME BEYOND THE PERIOD OF LIMITATION IN WHICH THE ASSESSEE DID NOT MAKE ANY CLAIM OF DEDUCTION UNDER SECTION 10B OF THE I.T. AC T. SUBSEQUENTLY, RETURN WAS REVISED, IN WHICH, ASSESSE E MADE CLAIM OF DEDUCTION UNDER SECTION 10B OF THE I.T. AC T. THE CLAIM OF ASSESSEE WERE DENIED PRIMARILY ON THE REASON THA T RETURN WAS NOT FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE I.T. ACT. IT WAS ALSO NOTED THAT ASSESSEE HAS NOT F URNISHED CERTIFICATE UNDER SECTION 10B(8) OF THE I.T. ACT. S INCE REVISED RETURN WAS INVALID AS THE ORIGINAL RETURN WAS FILED BELATEDLY, THEREFORE, CLAIM OF ASSESSEE FOR DEDUCTION UNDER SE CTION 10B OF 14 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. THE I.T. ACT WERE DENIED. HOWEVER, THE CLAIM OF ASS ESSEE WAS NOT FOUND TO BE FALSE OR BOGUS. THE ASSESSEE DISCLOSED ALL THE PARTICULARS FOR CLAIMING DEDUCTION UNDER SECTION 10 B OF THE I.T. ACT IN THE RETURN OF INCOME AS WELL AS AT THE ASSES SMENT STAGE. IN THE LATER YEARS, THE CLAIM OF ASSESSEE UNDER SEC TION 10B HAVE BEEN ALLOWED BY THE LD. CIT(A), AGAINST WHICH, THE DEPARTMENT IS IN APPEAL IN DIFFERENT YEARS. THEREFORE, IN ASSE SSMENT YEAR UNDER APPEAL, THE CLAIM OF ASSESSEE FOR DEDUCTION U NDER SECTION 10B HAVE BEEN DENIED ON TECHNICAL REASONS. IN OUR V IEW, THE FACTS AND CIRCUMSTANCES OF THE CASE ARE CLEARLY SHO W THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY. THE HONBLE SUPR EME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 HEL D AS UNDER: WHERE THERE IS NO FINDINGS THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVITING THE PENA LTY U/SEC. 271(1)(C) OF THE ACT. A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT OF F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE 15 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO FURNISHING INACCURATE PARTICULARS OF INCOME. AS THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF ITS EXPEN DITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THE MSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY, BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, W HICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY U/SEC. 271(1)(C). IF WE ACCEPT THE CONTENTI ON OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAI M MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY RE ASON, THE ASSESSEE WILL INVITE PENALTY U/SEC. 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE'. 17.1. IT MAY ALSO BE NOTED HERE THAT IN THE ASSE SSMENT ORDER, A.O. WHILE INITIATING THE PENALTY PROCEEDING S HAS NOTED THAT HE IS SATISFIED THAT ASSESSEE HAS FURNISHED IN ACCURATE 16 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. PARTICULARS OF ITS INCOME AND HAS CONCEALED ITS COR RECT INCOME ON THIS ISSUE. HOWEVER, IN THE PENALTY ORDER, THE A .O. HAS RELIED UPON THE EXPLANATION-1 TO SECTION 271(1)(C) OF THE I.T. ACT WHICH IS RELEVANT TO THE CONCEALMENT OF INCOME ONLY. THE A.O. IN THE PENALTY ORDER HAS ALSO NOTED THAT HE IS SATISFIED T HAT ASSESSEE HAS CONCEALED AS ALSO FURNISHED INACCURATE PARTICUL ARS OF ITS INCOME. IN THE IMPUGNED ORDERS, THUS, THE A.O. DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, PENALTY HAVE BEEN LEVIED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS WELL SETTLED THAT PENALTY IS NOT AUTOMATIC AND NEED NOT BE IMPOS ED IN EACH AND EVERY CASE. THE FACTS AND CIRCUMSTANCES SHALL H AVE TO BE CONSIDERED. CONSIDERING THE FACTS OF THE CASE AND I N THE LIGHT OF ABOVE DISCUSSION, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY. WE, ACCORDINGLY, SET ASIDE THE ORD ERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. 17 ITA.NO.5547/D/2012, CO.NO.95/D/2013 & ITA.NO.6030/D /2015 NATH BROS. EXIM INTERNATIONAL LTD., NEW DELHI. 19. TO SUM-UP, APPEAL OF ASSESSEE IN ITA.NO.5547/DEL./2012 IS PARTLY ALLOWED, WHEREAS AP PEAL OF ASSESSEE IN ITA.NO.6030/DEL./2015 IS ALLOWED. THE C ROSS OBJECTION NO.95/DEL./2013 OF THE DEPARTMENT IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 24 TH APRIL, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.