DCIT CENTRAL CIRCLE-17, DELHI V. HAVELLS INDIA LTD., DELHI

ITA 1247/DEL/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Central Circle-17, New Delhi as the appellant and M/s. Havells India Ltd as the respondent. The dispute arose from the assessment year 2011-12, where the DCIT appealed against the CIT(A)'s decision to delete the penalty imposed on M/s. Havells India Ltd concerning the Arm's Length Price of Corporate Guarantee Fees and the disallowance of Education Cess. The Tribunal examined whether the CIT(A) was justified in deleting the penalty, considering the nature of the additions made during the assessment and the subsequent appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 303101 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Other Referred Cases: Sesa Goa Ltd vs JCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RANJIT JAIN
• Keywords: Transfer pricing; Wrong claim
• Section: 143(3); 271(1)(c); 115JB

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1247/Del/2022 (Assessment Year: 2011-12) DCIT, Central Circle-17, New Delhi Vs. M/s. Havells India Ltd, 904, 9th Floor, Surya Kiran Building, KG Marg, Connaught Place, New Delhi (Appellant) (Respondent) PAN:AAACH0351E Assessee by : Shri Ranjit Jain, CA Shri Akshat Jain, CA Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 05/03/2025 Date of pronouncement 16/04/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.1247/Del/2022 for AY 2011-12, arises out of the order of the Commissioner of Income Tax (Appeals)-27, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 22/10011/2018-19 dated 31.01.2022 against the order of assessment passed u/s 143(3)/ 144C(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 29.04.2015 by the Assessing Officer, DCIT, Circle-1, LTU, New Delhi (hereinafter referred to as ‘ld. AO’). 2. The only issue to be decided in this appeal of the revenue is as to whether the ld CIT(A) was justified in deleting the penalty u/s 271(1)(c ) of the Act in the facts and circumstances of the instant case. ITA No. 1247/Del/2022 M/s. Havells India Ltd Page | 2 3. We have heard the rival submissions and perused the materials available on record. The assessee had filed its original return of income for the assessment year 2011-12 on 16-9-2011 declaring total income of Rs. 184,37,13,894/- under normal provisions of the Act and Book Profit of Rs 311,91,25,374/- under section 115JB of the Act. The assessee is engaged in the business of manufacturing of electrical items and bath fittings viz industrial and domestic switchgears, capacitors, cable and wires, compact fluorescent lamps and related components, electrical fans, electric motors, electrical wire accessories and luminaries lighting fixtures during the year. The assessment was completed under section 143(3) r.w.s. 144C(1) of the Act on 29.4.2015 determining total income at Rs 204,44,55,222/- under normal provisions of the Act and Book Profit of Rs 311,91,25,374/- under section 115JB of the Act. Various additions were made which travelled upto the level of this Tribunal. This Tribunal in the quantum proceedings in ITA No. 1258/Del/2017 dated 11.10.2023 deleted 5 additions and sustained only the following additions:- a) Transfer Pricing Adjustment on account of Corporate Guarantee Fee wherein Arm’s Length Price (ALP) was determined at an estimated rate of 0.5%. b) Disallowance of Education Cess and Higher Education Cess – Not Pressed by the assessee in the quantum proceedings. 4. Penalty under section 271(1)(c ) of the Act stood levied on the assessee on the aforesaid two additions / disallowances, which is in dispute before us. The ld CIT(A) deleted the penalty on the addition made on account of ALP of Corporate Guarantee Fee by holding that the same is a debatable issue and there was no false claim made by the assessee in the return of income in any manner whatsoever on this issue. We do not find any infirmity in the said order of the ld CIT(A) as ultimately the ITA No. 1247/Del/2022 M/s. Havells India Ltd Page | 3 quantum addition was made on an estimated basis to determine the ALP of Corporate Guarantee Fees and there was no furnishing of inaccurate particulars of income or concealment of income on the part of the assessee in that regard. 5. With regard to disallowance of Education Cess and Secondary Higher Education Cess is concerned, the ld CIT(A) held that all the material facts relating to the claim of the assessee was placed on record and there is no suppression of facts or furnishing of inaccurate particulars of income on the part of the assessee qua the same. This issue was not pressed by the assessee in the quantum proceedings before this Tribunal. But that does not automatically lead to levy of penalty under section 271(1)(c) of the Act. Infact the assessee had come forward not to press this disallowance in the quantum proceedings before this Tribunal, only to save from the levy of penalty, eventhough the issue was decided in favour of the assessee by the Hon’ble Bombay High Court in the case of Sesa Goa Ltd vs JCIT reported in 117 taxmann.com 96 (Bom HC). Hence we hold that this is not a fit case for levy of penalty and we do not find any infirmity in the action of the ld CIT(A) deleting the penalty. Accordingly, the grounds raised by the revenue are dismissed. 6. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 16/04/2025. -Sd/- -Sd/- (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16/04/2025 A K Keot Copy forwarded to ITA No. 1247/Del/2022 M/s. Havells India Ltd Page | 4 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "