ITO, WD-2(1), KOLKATA, Kolkata V. M/s Pecon Software Pvt. Ltd., Kolkata

ITA 1043/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5884 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHERJEE
• Keywords: Competent authority

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1043 / KOL / 20 16 ASSESSMENT YEAR :2011-12 INCOME TAX OFFICER, WARD-2(1), P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, ROOM NO.21, KOLKATA-69 V/S . M/S PECON SOFTWARE PVT. LTD., EN-27, 2 ND FLOOR (ADVANTAGE TOWER), SECTOR- V, SALT LAKE, KOLKATA-91 [ PAN NO.AACCP 5314 M ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI A. BHATTACHERJEE, ADDL. CIT-DR /BY RESPONDENT NONE /DATE OF HEARING 09-07-2018 /DATE OF PRONOUNCEMENT 27-07-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 C HALLENGES CORRECTNESS OF COMMISSIONER OF INCOME TAX (APPEALS) -1, KOLKATAS ORDER DATED 11.03.2016, PASSED IN CASE NO.734/CIT(A)-1/W- 2(1)/2014-15, REVERSING THE ASSESSING OFFICERS ACTION IMPOSING PENALTY OF 22,06,701/- LEVIED IN HIS ORDER DATED 31.07.2014, INVOLVING PROCEEDINGS U/S.2 71(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. LEARNED DEPARTMENTAL REPRESENTATIVE FIRST OF ALL TAKES US TO CIT(A)S FOLLOWING FINDINGS UNDER CHALLENGE DELETING THE IMP UGNED PENALTY AS UNDER:- THE SUBMISSIONS AND MATERIAL ON RECORD WAS CAREFULL Y CONSIDERED. THE FINDING OF THE AO WAS THAT CLAIM OF DEDUCTION U/S. 10A OF THE IT A CT CAN BE TAKEN ONLY AFTER GETTING RENEWAL LETTER OF PERMISSION FROM THE APPROPRIATE A UTHORITY, FOR STP AND THE APPELLANT COMPANY FILED ITS INCOME TAX RETURN WITHOUT GETTING LOP FROM THE APPROPRIATE AUTHORITY, HOLDING THAT THE INTENTION WAS TO REDUCE ITS TOTAL INCOME AFTER GETTING WRONG DEDUCTION U/S 10A OF THE IT ACT. ITA NO.1043/KOL/2016 A.Y.2011-12 ITO WARD-2(1), KOL. VS. M/S PECON SO FTWARE PVT. LTD. PAGE 2 IT IS OBSERVED THAT THE ALLOWABILITY OF EXEMPTION U /S. 10A WAS A DEBATABLE ISSUE AS DUE APPLICATION WAS FILED BEFORE THE STPI AU9THORIT Y FOR RENEWAL OF ELIGIBILITY OF EXEMPTION AVAILABLE FOR SEZ/STDPI U/S/A 10A AND THE CERTIFICATE IN FORM NO. 56F WAS ADMITTEDLY FILED ALONG WITH THE RETURN OF INCOME U NDER A BONA FIDE BELIEF THAT THE CLAIM FOR EXEMPTION WOULD BE AVAILABLE TO THE APPEL LANT AS THE COMPANY WAS REGISTERED UNDER STPI IN EARLIER YEARS AND IT WAS A SIMPLE RENEWAL FOR THE SUCCEEDING YEARS. FURTHER, THE AR OF THE APPELLANT HAS SUBMITT ED THAT WHEN IT CAME TO THE KNOWLEDGE OF THE APPELLANT COMPANY THAT THE DEFICIE NCY OF THE CLAIM OF EXEMPTION U/S. 10A, A REVISED COMPUTATION OF INCOME WAS FILED VOLUNTARILY AND PAID THE I. TAX ACCORDINGLY AND ACCEPTED THE POSITION AS PER LAW. I T IS INFERRED FROM THE ABOVE DISCUSSION IT WAS ESTABLISHED THAT THE INTENTION OF THE APPELLANT COMPANY WAS NOT TO CONCEAL THE INCOME OR INACCURATE PARTICULARS OF INC OME IN ORDER TO EVADE THE TAX. THE APPELLANT COMPANY HAS DISCLOSED ALL THE MATERIAL FA CTS AND PAID THE DUE TAX ON THE DISALLOWANCE MADE U/S. 10A OF THE IT ACT. THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS IN RE SPECT OF ITS TOTAL INCOME AND HAS ALSO OFFERED PLAUSIBLE EXPLANATIONS ON ALL THE ISSU ES AND THE ASSESSEE HAD NEITHER CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED I NACCURATE PARTICULARS OF INCOME AS ALL DETAILS AND EVIDENCES IN RESPECT OF THE QUER IES RAISED AT THE TIME OF ASSESSMENT WERE SUBMITTED AND ALL THE DETAILS AND E VIDENCES WERE ON RECORDS AND THERE WAS NO INFORMATION WHICH CAME IN POSSESSION F ROM ANY EXTERNAL SOURCE BY THE ASSESSING OFFICER, WHICH CAN BE TERMED AS CONSCIOUS AND DELIBERATE INTENTION NOT TO DISCLOSE ANY INCOME. MOREOVER, THE MAKING OF A WRON G CLAIM, CAN IN NO WAY FALL WITHIN THE MISCHIEF OF CONSCIOUSLY AND DELIBERATELY CONCEALING THE PARTICULARS OF INCOME OR SUBMISSION OF INACCURATE PARTICULARS OF I NCOME. THE HON'BLE JURISDICTIONAL HIGH COURT OF CALCUTTA HAS HELD IN THE CASE OF CIT VS. CALCUTTA CREDIT CORPORATION 166 ITR 29 (CAL) AS FOLLOWS:- IT IS SETTLED LAW THAT MERE ADDITION TO TAXABLE IN COME DOES NOT AUTOMATICALLY LEAD TO AN ORDER OF PENALTY. FURTHER INVESTIGATIONS AND FINDINGS IS NECESSARY BEFORE PENALTY CAN BE IMPOSED. IN THE INSTANT CASE, THE CASE OF THE ASSESSEE THAT HE HAD NOT DELIBERATELY CONCEALED HIS INCOME O R DELIBERATELY FURNISHED INACCURATE PARTICULARS OR THAT HE IS GUILTY OF FRAU D OR WILLFUL NEGLECT SUPPORTED BY EVIDENCED ADDUCED HAS BEEN ACCEPTED BY THE TRIBU NAL ON FACTS FOUND BY THE TRIBUNAL WHICH REMAIN UNCHALLENGED. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT TH E PENALTY IMPOSED BY THE AO OF RS.22,06,701/- IS NOT JUSTIFIED. HENCE, I DIRECT TH E AO TO DELETE THE PENALTY IMPOSED BY THE AO OF RS.22,06,701/-. THIS GROUND IS ALLOWED . THE REVENUES VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT ASSESSING OFFICER HAD RIGHTLY IMPOSED THE IMPUGNED PENALTY SINCE THE ASSESSEE RAISED ITS CLAIM OF SECTION 10A DEDUCTION WITHOUT GETTING THE REQUISITE APPROVAL FROM SOFTWARE TECHNOLOGY PART OF INDIA STPI. ITS CASE THEREFORE IS THAT CIT(A) HAS ERRED IN LAW AS WELL A S ON FACTS IN REVERSING THE IMPUGNED PENALTY. WE SEE NO SUBSTANCE IN REVENUES INSTANT ARGUMENT. THERE IS NO DISPUTE THAT ASSESSEE HAD INDEED CLAIME D SECTION 10A DEDUCTION QUA ITS STPI UNDERTAKING WITHOUT GETTING THE REQUISITE APPROVAL. THE FACT HOWEVER REMAINS THAT IT HAD VERY WELL FILED ALL THE REQUIRED DOCUMENTS BEFORE THE COMPETENT AUTHORITY TO THIS EFFECT DURING THE R ELEVANT PREVIOUS YEAR. IT ITA NO.1043/KOL/2016 A.Y.2011-12 ITO WARD-2(1), KOL. VS. M/S PECON SO FTWARE PVT. LTD. PAGE 3 RATHER TRANSPIRES FROM THE CASE RECORDS THAT THE AS SESSEES INITIAL APPROVAL WAS ABOUT TO EXPIRE ON 29.3.2010. PAGE 2 OF CIT(A) S ORDER AS CONTAINS ASSESSEES ALL RELEVANT DETAILS INDICATING A LIST O F CORRESPONDENCE WITH THE COMPETENT AUTHORITY IN THIS REGARD. THE SAME MAKES IT SUFFICIENTLY CLEAR THAT ASSESSEES CLAIM OF IMPUGNED DEDUCTION SECTION 10A OF THE ACT AS TREATED BY THE ASSESSING OFFICER TO BE CASE OF FORMING WRONG DEDUCTION, WAS NOT ALTOGETHER A FALSE ONE SINCE ITS RELEVANT PROCESS W AS PENDING BEFORE THE COMPETENT AUTHORITY UPTO THE ENTIRE PERIOD OF RELEV ANT PREVIOUS YEAR AS WELL AS THE DATE OF FLING RETURN I.E 30.09.2011. WE QUOTE H ON'BLE APEX COURTS LANDMARK DECISION IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD .(2010) 322 ITR 158 (SC) THAT THE QUANTUM PENALTY ARE PARALLEL PROCEEDINGS W HEREIN EACH AND EVERY DISALLOWANCE / ADDITION MADE IN THE COURSE OF FORME R DOES NOT IPSO FACTO ATTRACT THE LATTER PROVISION. WE THEREFORE SEE NO REASON TO INTERFERE WITH THE CIT(A)S ABOVE EXTRACT FINDINGS DELETING THE IMPUGN ED PENALTY OF 22,06,701/- AS IMPOSED BY THE ASSESSING OFFICER. 3. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 27/07/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 27 / 07 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-INCOME TAX OFFICER, WARD-2(1), P-7, CHOWR INGHEE SQUARE, 7 TH FL, RM NO.21, KOLKATA-69 2. /RESPONDENT-M/S PECON SOFTWARE PVT.LTD.,EN-27, 2 ND FL(ADVANTAGE TOWER)SECTOR-V, SALT LAKE, KOL-91 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,