Appeal Details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 4453 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-05-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
C
Assessment Year
2010-2011
Appeal Filed On
25-04-2017
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER 1. ./ I.T.A. NO.999/AHD/2017 2. ./ I.T.A.NO.1000/AHD/2017 3. ./ I.T.A.NO.1001/AHD/2017 (ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12 RESP ECTIVELY ) THE DCIT (EXEMPTIONS) CIRCLE-2 AHMEDABAD / VS. BARODA CRICKET ASSOCIATION BCA HOUSE 78, HARI BHAKTI EXTENSION RACE COURSE VADODARA 390 007 # ./ ./ PAN/GIR NO. : ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : MS.APARNA M.AGARWAL, CIT-DR SHRI L.P. JAIN, SR.DR '#& )( / RESPONDENT BY : SHRI NIRMIT MEHTA, AR *+ ), / DATE OF HEARING 26/02/2019 -./0 ), / DATE OF PRONOUNCEMENT 21/ 05/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTA NCE OF THE REVENUE AGAINST THE SEPARATE ORDERS OF THE COMMISSI ONER OF INCOME TAX(APPEALS)-9, AHMEDABAD [CIT(A) IN SHORT] DATED 03/02/2017, ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 2 - 06/02/2017 & 07/02/2017 IN THE MATTER OF ASSESSMENT ORDERS UNDER S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS 'THE ACT') & 143(3) OF THE ACT DATED 27/02/2014 , 29/03/2013 & 17/02/2014 RELEVANT TO ASSESSMENT YEARS (AY) 2009-1 0, 2010-11 & 2011-12 RESPECTIVELY. 2. SINCE ALL THE THREE APPEALS INVOLVES COMMON ISS UE I.E. IMPOSITION OF PENALTY OF VARIED AMOUNTS UNDER S.271(1)(C) OF T HE ACT FLOWING FROM DENIAL ON EXEMPTION UNDER S.11 & 12 OF THE ACT TO T HE INCOME/LOSS GENERATED BY THE ASSESSEE FROM THE ACTIVITY OF PROM OTING THE GAME OF CRICKET AND HOSTING CRICKET TOURNAMENTS. 3. FOR THE PURPOSES OF APPRECIATING THE FACTS, WE S HALL FIRST TAKE UP REVENUES APPEAL IN ITA NO.999/AHD/2017 CONCERNING AY 2009-10 AS A LEAD CASE, WHEREIN THE REVENUE RAISED THE FOLLOWING EFFECTIVE GROUND OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD.CIT(A) JUSTIFIED IN DELETING THE PENALTY OF RS.1 ,25,31,670/- LEVIED BY THE A.O. U/S.271(1)(C) OF THE ACT. 4. THE ASSESSEE IS STATED TO BE AN AOP (TRUST) ENGA GED IN THE ACTIVITY OF PROMOTING THE GAME OF CRICKET. IT FILED ITS RET URN OF INCOME FOR AY 2009- 10 IN QUESTION DECLARING TOTAL INCOME IN THE NEGATI VE AT RS.(-)1,57,21,610/- AND THEREAFTER FILED THE REVISE D RETURN ON 31/03/2011 SHOWING REVISED TOTAL INCOME IN NEGATIVE AT RS.(-) 4,50,00,000/-. THE ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 3 - ASSESSMENT WAS FINALIZED UNDER S.143(3) R.W.S.147 O F THE ACT DETERMINING TOTAL INCOME IN POSITIVE AT RS.5,67,32,540/-. THE ASSESSING OFFICER ALLEGED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS WRONGLY CLAIMED EXEMPTION UNDER S.11 & 12 O F THE ACT WHICH IS NOT ENTITLED TO THE CRICKET ASSOCIATION ON THE NATU RE OF INCOME GENERATED, BY IT. IT WAS INTER ALIA OBSERVED THAT THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) CLEARLY DEBARS THE INCOME FROM ACT IVITY IN THE NATURE OF BUSINESS TRADE OR COMMERCE TOWARDS ADVANCEMENT OF O BJECT OF GENERAL PUBLIC UTILITYFROM EXEMPTION UNDER S.11 & 12 OF THE ACT IN THE HANDS OF RECIPIENT. IT WAS INTER ALIA OBSERVED THAT THE RECEIPTS FROM CARRYING OUT ACTIVITIES IN THE NATURE OF TRADE/COMMERCE/BUSINESS AS SPECIFIED IN PROVISO TO S.2(15) OF THE ACT IS EXCLUDED FROM THE PURVIEW OF SECTION 11 & 12 IN VIEW OF SECTION 13(8) OF THE ACT. THE ASSESSING OF FICER ACCORDINGLY IMPOSED PENALTY OF RS.1,75,30,355/- ON WRONG CLAIM OF EXEMPTION UNDER S.11 & 12 OF THE ACT IN DEFIANCE OF LAW. 5. AGAINST AFORESAID ACTION OF THE ASSESSING OFFICE R, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE BY DELETING THE PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT BROADLY ON THE GROUND THAT THERE IS A DIFFERENCE OF OPINION REGARDING APPLICABILITY OF PROVISO TO SECTION 2(15) R.W.S. 13 (8) OF THE ACT IN RESPECT OF SUCH CRICKET BODIES AND CONSEQUENTLY THE ACTION OF THE ASSESSEE IS TO BE REGARDED AS BONAFIDE. THE CIT(A) ALSO OBSERVED TH AT THE ASSESSEE HAD ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 4 - DISCLOSED FULL FACTS AND SINCE ITS IS REGISTERED UN DER S.12A, THE PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT IS NOT SUSTAI NABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER FOR READY REFERENCE: 6. I HAVE CAREFULLY CONSIDERED RIVAL CONTENTIONS , CASE LAW RELIED UPON AND OBSERVATIONS MADE BY THE A.O. IN THE PENALTY O RDER. IT IS SEEN FROM THE ORDER OF PENALTY THAT APPELLANT HAD FILED RETUR N OF INCOME ON 30/09/2009 DECLARING TOTAL INCOME AT RS.(-) 1,57,21 ,610/- AND THEREAFTER FILED THE REVISED RETURN ON 31/03/2011 REFLECTING T OTAL INCOME AT RS.(-) 4,50,00,000/-. THE ASSESSMENT WAS FINALIZED U/S.14 3(3) R.W.S. 147 OF THE ACT ON 27/02/2014 DETERMINING TOTAL INCOME AT RS.5, 67,32,540/-. DURING THE ASSESSMENT PROCEEDINGS, THE BENEFIT OF EXEMPTIO N U/S.11 & 12 OF THE ACT WAS DENIED BY THE A.O. BY INVOKING PROVISIONS O F SECTION 13(8) OF THE ACT. THE SAID AMENDMENT WAS INSERTED BY FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 01-04-2009. THUS, ACCORDI NG TO THE APPELLANT AT THE TIME OF FILING OF RETURN ON 30/09/2009 OR ON 31/03/2011, THE CHANGES THAT WERE BROUGHT OUT WITH RETROSPECTIVE EF FECT DID NOT EXIST. FURTHER APPELLANT HAS ALSO ARGUED BEFORE THE A.O. T HAT WHERE A DEBATABLE, CONTROVERSIAL OR DEBATABLE DEDUCTION IS CLAIMED, THE CLAIM CANNOT SAID TO BE FALSE. OTHERWISE IT WOULD BECOME IMPOSSIBLE FOR ANY ASSESSEE TO RAISE ANY CLAIM OR DEDUCTION WHICH MIGH T BE DEBATABLE. THEREFORE, ACCORDING TO APPELLANT, PENAL PROVISIONS WOULD NOT BE APPLICABLE FOR SUCH CLAIMS. HOWEVER, A.O. HAS NOT A CCEPTED THE ARGUMENTS OF THE APPELLANT AND HAS PROCEEDED TO LEV Y PENALTY U/S.271(1 )(C) OF THE ACT. 7. DURING THE APPELLATE PROCEEDINGS APPELLANT HA S RELIED UPON THE DECISION OF CIT V/S. YAHOO INDIA (P) LTD. (2013) 33 TAXMANN.COM 332 (BOMBAY HC) ON THE ISSUE OF RETROSPECTIVE AMENDMENT AND HOW PENAL PROVISIONS ARE NOT APPLICABLE. FURTHER WITH REGARD TO FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE APPELLANT SUB MITTED THAT A.O. HAS NOT POINTED OUT THAT THE INFORMATION SUBMITTED WAS WRONG. REGARDING THE CLAIM MADE BY THE APPELLANT IT HAS RELIED UPON THE JUDGMENT OF ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 5 - HON'BLE SUPREME COURT IN THE CASE OF CIT V/S. RELIA NCE PETROPRODUCTS P.LTD. 230 CTR 320. FURTHER, IT HAS ALSO RELIED UPO N THE JUDGRNENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SARABHAL CHEMICALS P.LTD. V/S. CIT 257 ITR 355 (GUJ.). 8. I HAVE GONE THROUGH THE VARIOUS CASE LAW RELI ED UPON BY THE APPELLANT AS WELL AS SUBMISSIONS MADE BY THE APPELL ANT ON THE MERITS OF THE CASE. IT CANNOT BE DENIED THAT ASSESSMENT PROCE EDINGS AND PENAL PROCEEDINGS ARE SEPARATE PROCEEDINGS. IT IS APPAREN T THAT THERE IS DIFFERENCE OF OPINION REGARDING APPLICABILITY OF PR OVISO TO SECTION 2(15) R.W.S. 13(8) OF THE ACT. IT IS THE OPINION OF A.O. THAT PROVISO TO SECTION 2(15) IS ATTRACTED BECAUSE OF THE NATURE OF ACTIVIT IES UNDERTAKEN BY THE APPELLANT. CIT(A) HAS CONFIRMED THE ADDITIONS/DISA LLOWANCES MADE BY THE A.O. BASED ON THE BONAFIDE BELIEF THAT ITS ACTI VITIES ARE NOT COVERED BY PROVISO TO SECTION 2(15) OF THE ACT, APPELLANT H AS CLAIMED BENEFIT OF SECTION 11 & 12 OF THE ACT. APPELLANT HAS DISELOSEC LALL THE FACTS WITH REGARD TO THE ACTIVITIES UNDERTAKEN BY IT. NOWHERE IN THE ORDER OF ASSESSMENT AS WELL AS PENALTY ORDER, THE A.O. HAS Q UESTIONED THE GENUINENESS OF THE ACTIVITIES OF THE APPELLANT AS W ELL AS CORRECTNESS OF THE FACTS SUBMITTED. WHEN APPELLANT HAS DISCLOSED FULL FACTS, IT CANNOT BE SAID THAT APPELLANT HAD DISCLOSED INCORRECT/WRON G FACTS WITH REGARD TO ITS ACTIVITIES. APPELLANT WAS WELL WITHIN RIGHTS TO CLAIM THE BENEFIT OF EXEMPTION U/S.11 & 12 OF THE ACT WHEN IT IS REGISTE RED U/S.12A OF THE ACT. THUS, IT IS APPARENT THAT CLAIM MADE BY THE AP PELLANT IS LEGAL CLAIM AND IS A DEBATABLE ISSUE. DISALLOWANCE OF SUCH LEGA L CLAIM OF THE- APPELLANT CANNOT RENDER THE APPELLANT LIABLE FOR LE VY OF PENALTY U/S.271(1)( C) OF THE ACT. I FULLY AGREE WITH THE R ELIANCE PLACED BY THE APPELLANT IN THE CASE OF CIT V/S. RELIANCE PETROPRO DUCTS P.LTD. (SUPRA) AND OTHER CASE LAW. IN THE LIGHT OF ABOVE, I AM OF THE CONSIDERED OPINION THAT A.O. WAS NOT JUSTIFIED IN LEVYING PENALTY OF R S. 1,75,30,355/- U/S.271(1)(C) OF THE ACT. THE SAME IS DIRECTED TO B E CANCELLED. THE GROUND NOS.1 & 2 RAISED BY THE APPELLANT ARE THUS H EREBY ALLOWED. 9. THE GROUND NO. 3 RAISED BY THE APPELLANT IS GENE RAL IN NATURE WHICH DOES NOT REQUIRE ADJUDICATION. FOR STATISTICAL PURP OSE, THE SAME IS TREATED AS DISMISSED. ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 6 - 10. THE LAST GROUND OF APPEAL RAISED BY THE APPELLA NT IS RESIDUARY IN NATURE. THE ASSESSEE HAS NOT AVAILED THIS GROUND OF APPEAL. ACCORDINGLY THIS GROUND OF APPEAL IS TREATED AS DISMISSED. THE CIT(A) ACCORDINGLY REVERSED THE ACTION OF THE A SSESSING OFFICER AND DELETED PENALTY ON ERRONEOUS CLAIM OF E XEMPTION UNDER S.11&12 OF THE ACT. 6. THE REVENUE HAS IMPUGNED THE AFORESAID ACTIO N OF THE CIT(A) BEFORE THE TRIBUNAL. 7. THE LD.DR FOR THE REVENUE, RELIED UPON THE PE NALTY ORDER OF THE ASSESSING OFFICER AND CONTENDED THAT THE ACTIVITIES OF THE ASSOCIATION ARE IN THE NATURE OF TRADE AND COMMERCE IN THE CATEGORY REFERRED TO IN PROVISO TO SECTION 2 (15) AND THUS THE ASSESSEE HAS MADE WR ONG CLAIM OF EXEMPTION UNDER S.11 & 12 OF THE ACT AND CONSEQUENT LY LIABLE FOR PENALTY UNDER S.271(1)(C) OF THE ACT AS A REMEDY FOR THE LO SS OF POSSIBLE REVENUE. 8. THE LD.AR, ON THE OTHER HAND, RELIED UPON THE OR DER OF THE CIT(A) AND POINTED OUT THAT THE EXCLUSION PROVIDED UNDER S .13(8) TO DENY EXEMPTION UNDER S.11 & 12 OF THE ACT HAS BEEN INSER TED BY FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 01/04/2009. IT WAS THUS SUBMITTED THAT WITHOUT PREJUDICE TO ALL OTHER SUBMISSIONS, TH E ASSESSEE CANNOT BE CHARGED WITH ANY DEFIANCE OF LAW PER SE WHEN THE SECTION 13(8) ITSELF ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 7 - WAS NOT IN EXISTENCE AT THE TIME OF FILING OF THE R ETURN OF INCOME AND WAS ENACTED WITH RETROSPECTIVE EFFECT AT A LATER STAGE BY FINANCE ACT, 2012. THE LD.AR FURTHER SUBMITTED THAT THE ISSUE AS TO WH ETHER THE CASE OF THE ASSESSEE FALLS WITHIN THE AMBIT OF PROVISO TO SECTI ON 2(15) ITSELF IS HIGHLY COMPLEX AND DEBATABLE AND THEREFORE IT IS NOT POSS IBLE FOR ANYBODY TO READILY INFER THE CORRECT POSITION OF LAW. FOR SUC H A CLAIM WHERE SEVERAL JUDICIAL PRONOUNCEMENTS HAVE BEEN RENDERED IN FAVOU R OF ASSESSEE, THE ACTION OF THE ASSESSEE CANNOT BE SEEN AS MALAFIDE O F ANY SORT. THE AR REFERRED TO THE DECISION OF COORDINATE BENCH IN GUJ ARAT CRICKET ASSOCIATION VS. JCIT (EXEMPTION) AHMEDABAD AND ORS. IN ITA NO.1257/AHD/2013 AND ORS ORDER DATED 24/01/2019 TO CONTEND THAT AFTER A VERY DETAILED AND LENGTHY DISCUSSION ON THE VERY SUBJECT, THE COORDINATE BENCH HAS CONCLUDED THAT PROVISO TO SECTION 2(15) I S NOT APPLICABLE TO THE NATURE OF INCOME GENERATED BY ASSESSEE AND CONSEQUE NTLY ASSESSEE IS ENTITLED TO EXEMPTION UNDER S.11 & 12 OF THE ACT. THE LD.AR SUBMITTED THAT ON THE FACE OF MERITS ITSELF, IMPOSITION OF P ENALTY UNDER S.271(1)(C) OF THE ACT IS FARFETCHED. IT WAS THUS SUBMITTED T HAT CIT(A) HAS CORRECTLY TAKEN NOTE OF THE POSITION OF LAW AND DELETED THE P ENALTY. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE ARE CALLED UPON TO ADDRESS THE CONTROVERSY AS TO WHETHER ANY P ENAL ACTION UNDER S.271(1)(C) OF THE ACT CAN BE BROUGHT AGAINST THE A SSESSEE ON ACCOUNT OF DENIAL OF EXEMPTION UNDER S.11 & 12 OF THE ACT HAVI NG REGARD TO ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 8 - INTERPRETATION OF PROVISO TO SECTION 2(15) OF THE A CT. AN INCIDENTAL QUESTION ALSO ARISES AS TO WHETHER PENALTY ACTION C AN BE TAKEN AGAINST THE ASSESSEE WHILE FASTENING LIABILITY TO TAX AS A RESU LT OF ANY RETROSPECTIVE AMENDMENT IN LAW ESPECIALLY WHEN THE ASSESSEE COULD NOT FORESEE SUCH LAW AT THE TIME OF FILING OF RETURN OF INCOME. 9.1. WE STRAIGHT AWAY NOTICE THAT THE COORDINATE BENCH IN A DETAILED AND VOLUMINOUS ORDER IN GUJARAT CRICKET ASSOCIATIO N (SUPRA) AFTER TAKING NOTE OF SEVERAL JUDICIAL DECISIONS HOLDING THE FIEL D IN THIS REGARD CAME TO THE CONCLUSION THAT PROVISO TO SECTION 2(15) HAS BE EN WRONGLY INVOKED AGAINST SUCH CRICKET BODIES. THUS, WHERE THE ISS UE TOWARDS APPLICABILITY OF PROVISO TO SECTION 2(15) WHICH SEEKS TO RESTRICT AND EXCLUDE THE EXEMPTION UNDER S.11 & 12 OF THE ACT ITSELF HAS BEE N APPROVED IN FAVOUR OF ASSESSEE, ONE CANNOT SAY THAT THE ISSUE IS FREE FROM DOUBT, TO SAY THE LEAST. 9.2. THIS APART, A QUESTION ARISES AS TO WHETHER AN ASSESSEE CAN BE IMPUTED WITH CLAIRVOYANCE WHERE SOME AMENDMENT HAS BEEN BROUGHT WITH RETROSPECTIVE EFFECT WHEREBY TAX LIABILITY IS SOUGHT TO BE IMPOSED ON ASSESSEE. IN THE INSTANT CASE, SECTION 13(8) OF TH E ACT HAS BEEN ENACTED BY FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 01/04/2009. AS PER AFORESAID ENACTMENT, BENEFIT OF SECTION 11 & 12 WI LL NOT BE AVAILABLE TO THE ASSESSEE WHERE SUCH ASSESSEE IS IN RECEIPT OF INCOME WHICH FALLS ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 9 - UNDER PROVISO TO CLAUSE (15) OF SECTION 2 OF THE A CT. ADMITTEDLY, THE AFORESAID AMENDMENT SEEKING TO DENY BENEFIT OF S.11 TO THE ASSESSEE WAS NOT IN EXISTENCE AT THE TIME OF FILING OF RETURN OF INCOME. 9.3. THE LAW IN THIS REGARD IS LOUD AND CLEAR. I N CIT VS. HINDUSTAN ELECTRO GRAPHITES LTD. (2000) 160 CTR(SC) 8 : (200 0) 243 ITR 48 (SC) IN THE CONTEXT OF APPLICABILITY OF THE PROVISIONS O F SECTION 28(IIIB) OF THE ACT, THE APEX COURT QUOTED. 'AN ASSESSEE CANNOT BE IMPUTED WITH CLAIRVOYANCE. W HEN THE RETURN WAS FILED, THE ASSESSEE COULD NOT POSSIBLY HAVE KNOWN T HAT THE DECISION ON THE BASIS OF WHICH CASH COMPENSATORY SUPPORT HAD BE EN CLAIMED AS NOT AMOUNTING TO THE ASSESSEE'S INCOME CEASED TO BE OPE RATIVE BY REASON OF RETROSPECTIVE LEGISLATION. FURTHER, ARTICLE 20(1) OF THE CONSTITUTION OF INDIA PROVIDES CERTAIN PROTECTION IN THIS REGARD WHICH STATES THAT NO PERS ON CAN BE CONVICTED FOR ANY OFFENCE EXCEPT FOR A VIOLATION OF A LAW IN FORC E AT THE TIME OF ACTION CHARGED AN OFFENCE, NOR BE SUBJECTED TO A PENALTY G REATER THAN THAT WHICH MIGHT HAVE BEEN INFLICTED UNDER THE LAW IN FORCE AT THE TIME OF OFFENCE. THEREFORE, WHERE THE TAXPAYER COMPLIES WITH THE LAW AS ACTUALLY EXISTED AT THE EARLIER POINT OF TIME PRIOR TO THE RETROSPEC TIVE CHANGE AND FILES RETURN IN ACCORDANCE WITH LAW AS IT EXISTED AT THAT DATE, IMPOSITION OF PENALTY ON THE GROUNDS OF RETROSPECTIVE AMENDMENT W OULD BE UNJUSTIFIED. ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 10 - 9.4. SIMILAR ISSUE CAME UP FOR CONSIDERATION BE FORE THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. YAHOO INDI A PVT. LTD. (2013) 33 TAXMANN.COM 332 (BOM.). IN THIS CASE, THE ASSESSE E (YAHOO INDIA), WAS HIRED BY AN INDIAN MEDIA AGENCY TO DISPLAY ADVERTIS EMENT ON THE WEBSITE OF YAHOO HONG KONG. ACCORDINGLY, THE ASSESSEE PAID YAHOO HONG KONG FOR UPLOADING AND DISPLAY OF BANNER ADVERTISEMENT O N ITS WEBSITE PORTAL. THE TAX AUTHORITIES CONSTRUED SUCH PAYMENT TO YAHOO HONG KONG TAXABLE AS ROYALTY INCOME U/S 9(1) (VI) OF THE ACT AND ACCORDINGLY, DISALLOWED THE SAME FOR NON-DEDUCTION OF TAX AT SOU RCE U/S 40A(I). FURTHER, PENALTY U/ 271(1) (C) FOR CONCEALMENT OR F URNISHING OF INACCURATE PARTICULARS OF INCOME WAS ALSO IMPOSED UPON THE ASS ESSEE. ON APPEAL BEFORE THE HIGH COURT, THE REVENUE SOUGHT TO JUSTIF Y THE DISALLOWANCE AND PENALTY BY PLACING RELIANCE ON EXPLANATION 5 IN TRODUCED TO SECTION 9 OF THE ACT BY THE FINANCE ACT, 2012 WITH RETROSPECT IVE EFFECT FROM 1ST JUNE, 1976 TO TAX ROYALTY INCOME. THE HIGH COURT WHILE DISMISSING THE REVENUE APPEAL HELD THAT NO PENALTY U/S 271(1)(C) C AN BE IMPOSED UPON THE ASSESSEE ON ACCOUNT OF DISALLOWANCE MADE DUE TO RETROSPECTIVE AMENDMENT MADE IN THE ACT. IT WAS OBSERVED BY THE H IGH COURT THAT THE FACT THAT THE LAW HAS BEEN AMENDED WITH RETROSPECTI VE EFFECT CLEARLY SHOWS THAT THE ISSUE WAS DEBATABLE. FURTHER IN THE ABSENCE OF ANY FAILURE TO DISCLOSE MATERIAL FACTS NECESSARY FOR THE PURPOS E OF ASSESSMENT, PENALTY UNDER SECTION 271(1) (C) OF THE ACT CANNOT BE LEVIED. ACCORDINGLY THE PENALTY U/S 271(1) (C) WAS DELETED. ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 11 - 10. IN THE LIGHT OF ABOVE DISCUSSION, THE ACTION OF THE ASSESSING OFFICER FAILS ON BOTH COUNTS, NAMELY; (I) THE PENALTY IS RI GHTLY HELD TO BE NOT APPLICABLE WHERE THE ISSUE INVOLVED IS SO COMPLEX A ND DEBATABLE AND THE ASSESSEE HAD ADOPTED A VIEW WHICH IS QUITE PLAUSIBL E AND ENDORSED FAVOURABLY BY JUDICIAL PRECEDENTS AT MANY INSTANCES . (II) THE INCOME ARISING ON RETROSPECTIVE APPLICABILITY OF SECTION 1 3(8) INSERTED BY FINANCE ACT, 2012 I.E. AT A TIME WHEN THE RETURNS FOR ALL T HE ASSESSMENT YEARS IN QUESTION WERE ALREADY FILED BY ASSESSEE CANNOT ATTR ACT PENALTY BY ANY STRETCH OF IMAGINATION. WE THUS, FIND NO INFIRMITY IN THE ACTION OF THE CIT(A) IN DELETING THE PENALTY IN ALL THE THREE APP EALS OF THE REVENUE. WE THUS DECLINE TO INTERFERE. 11. IN THE RESULT, ALL THE THREE APPEALS OF THE REV ENUE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 21/ 05/2019 SD/- SD/- ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/ 05 /2019 4..*,.*../ T.C. NAIR, SR. PS ITA NOS.999, 1000, 1001/AHD/2017 DCIT (E) VS. BARODA CRICKET ASSOCIATION ASST.YEARS 2009-10, 2010-11 & 2011-12 - 12 - !'!# / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)- 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 5.5.2019(DICTATION-PAD 20- PAG ES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.5.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 21.5.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.5.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER
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