ITO, WARD 8(1), PUNE, Pune V. AUDYOGIK TANTRA SHIKSHAN SANTHA, Pune

ITA 106/PUN/2010

• Counselvise Citation: 10624514 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 18-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R MORE
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 106/PN/2010 (ASSTT. YEAR : 2004-05) ITO, WARD 8(1), PUNE ... APPELLANT PRATYAKSHA KAR BHAVAN, DR. AMBEDKAR MARG, NEAR AKURDI RAILWAY STATION, AKURDI, PUNE-44 V. A UDYOGIK TANTRA SHIKSHAN RESPONDENT SANTHA C-II, MIDC CHINCHWAD, PUNE C.O. NO.04/PN/2011 (ARISING OUT OF ITA NO.106/PN/2010) (ASSTT. YEAR : 2004-05) AUDYOGIK TANTRA SHIKSHAN CROSS OBJECTOR SANTHA C-II, MIDC CHINCHWAD, PUNE V. ITO, WARD 8(1), PUNE ... RESPONDENT PRATYAKSHA KAR BHAVAN, DR. AMBEDKAR MARG, NEAR AKURDI RAILWAY STATION, AKURDI, PUNE-44 ASSESSEE BY : SHRI SUNIL GANOO DEPARTMENT BY : SHRI P.R. MORE ORDER PER I.C. SUDHIR, JM IN THE APPEAL, REVENUE HAS QUESTIONED ACTION OF T HE LD CIT(A) IN DELETING THE PENALTY ON RS. 8,69,000/- LEVIED U/S. 271(1)(C) OF THE ACT BY THE A.O. 2. THE ASSESSEE IN ITS CROSS OBJECTION, HAS OBJECTE D THE PENALTY LEVIED BY THE A.O WITH THIS CONTENTION THAT THE A.O HAS NO T RECORDED HIS SATISFACTION AGAINST THE ALLEGED DEFAULT OF FILING INACCURATE PARTICULARS OF INCOME AS CONTEMPLATED UNDER THE STATUTE IN THE A.Y . 2004-05 AND HAS ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 2 FAILED TO INITIATE THE PENALTY PROCEEDING DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE ALSO PRAYED FOR AWARDING THE COST U/S. 254(2B) OF THE ACT TO THE ASSESSEE. 3. AT THE OUTSET OF HEARING, THE LD. A.R. POINTED O UT THAT THE QUANTUM APPEAL I.E. ITA NO. 933/PN/2008 (A.Y. 2004-05), OR DER DATED 13 TH AUGUST 2017 HAS BEEN DECIDED IN FAVOUR OF THE ASSES SEE AS THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE REVENUE. THE LD. D. R., ON THE OTHER HAND, TRIED TO JUSTIFY THE PENALTY LEVIED BY THE A. O. CONSIDERING THE ABOVE SUBMISSION, ESPECIALLY DISMISSAL OF APPEAL P REFERRED BY THE REVENUE IN QUANTUM AGAINST THE RELIEF GRANTED BY TH E LD CIT(A) ON THE BASIS OF WHICH ADDITION MADE BY A.O PENALTY U/S. 27 1(1)(C) WAS LEVIED, WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST A PPELLATE ORDER WHEREBY THE LD CIT(A) HAS DELETED THE PENALTY LEVIED BY THE A.O U/S. 271(1)(C) OF THE ACT. WE FIND THAT THE LD CIT(A) IN PARA NO. 10 OF THE FIRST APPELLATE ORDER HAS OBSERVED THAT IN THE PRESENT CASE A.O HI MSELF HAS RIGHTLY TAKEN INTO ACCOUNT INVESTMENT IN BUILDING AND MACHINERY A S APPLICATION OF INCOME. LT CIT(A) HAS NOTED THAT APPLICATION OF I NCOME AS DETERMINED BY THE A.O IN THIS MANNER EXCEEDED 85% OF THE INCO ME OF THE TRUST FOR THE YEAR. THAT BEING THE CASE, THE LD CIT(A) REMAI NED OF THE VIEW THAT THE AMENDMENT TO SEC. 2(24) (IIA) HAD NO BEARING O N THE ASSESSEES CASE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIE W THAT THE LD CIT(A) HAS RIGHTLY HELD THAT IT IS NOT A FIT CASE FOR IMPO SITION OF PENALTY U/S. 271(1)(C ) OF THE ACT. THE FIRST APPELLATE ORDER I N THIS REGARD IS REASONED ONE. WE THUS DO NOT FIND INFIRMITY THEREIN. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. EVEN OTHERWISE, W E FIND THAT THE AMOUNT OF PENALTY IN QUESTION IS RS. 2,86,770/- WHI CH IS BELOW RS. 3,00,000/- AND HENCE IN TERMS OF THE CBDT INSTRUCTI ON NO. 3/2011 DT. 9.3.2011 DT. 9.2.2011 , THE REVENUE IS NOT SUPPOSE D TO PREFER APPEAL ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 3 BEFORE THE TRIBUNAL AGAINST THE FIRST APPELLATE ORD ER HAVING TAX EFFECT OR PENALTY AMOUNT BELOW RS. 3 LAKHS. THE APPEAL PREFE RRED BY THE REVENUE IS ALSO NOT MAINTAINABLE ON THIS ACCOUNT. 4. THE LD A.R. REFERRED CONTENTS OF ASSESSMENT ORD ER FILED WITH THE MEMO OF CROSS OBJECTION. 5. IN SUPPORT OF OBJECTION NO. 1 RAISED IN THE CROS S OBJECTION THAT THE A.O DID NOT RECORD HIS SATISFACTION DURING THE ASSE SSMENT PROCEEDINGS ABOUT THE ALLEGED DEFAULT OF FILING INACCURATE PART ICULARS OF INCOME AS CONTEMPLATED UNDER THE STATUTE PREVAILING IN THE A. Y. UNDER CONSIDERATION AND FURTHER THAT THE A.O HAS ALSO FAILED TO INITIAT E THE PENALTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . A.R CITED THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF CHIRANJILAL TAC V/S. UNION OF INDIA, 252 ITR 353 (RAJ.). 6. IN SUPPORT OF THE OBJECTION NO. 2, PRAYING FOR AWARDING COST U/S. 254(2B) OF THE ACT, THE LD. A.R. SUBMITTED THAT IT IS A FIT CASE TO AWARD THE COST BECAUSE THE A.O WAS NOT JUSTIFIED IN MAKI NG THE ADDITION IN QUESTION ESPECIALLY WHEN HE HIMSELF HAS TAKEN INTO ACCOUNT INVESTMENT IN BUILDING AND MACHINERY AS APPLICATION OF INCOME. AS LONG AS THE CONDITIONS SPECIFIED U/S. 11 ARE FULFILLED BY TRUST OR INSTITUTION, ANY RECEIPT , EVEN IF IT WERE TO BE NEWLY CITED WITHIN THE DE FINITION OF INCOME UNDER THE AMENDED SECTION 2(24) (IIA), WOULD STILL CONTIN UE TO ENJOY EXEMPTION U/S. 11. THE QUESTION OF EXEMPTION ARISES ONLY IF A RECEIPT IN THE FIRST INSTANCE PASSED WITHIN THE AMBIT OF INCOME. HE S UBMITTED FURTHER THAT FOR THE PURPOSE OF EXEMPTION, U/S. 11 & 12, THE NAT URE OF EXPENDITURE LIKE CAPITAL OR REVENUE DOES NOT MAKE ANY DIFFERENC E AS BOTH, EQUALLY ARE REGARDED AS APPLICATION OF INCOME. ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 4 6.1 HE ALSO POINTED OUT THAT COPY OF THE ASSESSME NT ORDER SUPPLIED TO THE ASSESSEE IS CONTENT WISE DIFFERENT FROM THE ASS ESSMENT ORDER FILED BY THE REVENUE ALONG WITH ITS MEMO OF THE APPEAL BEFOR E THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, HE PRAYED FOR AWARDING F OR COST AS IN HIS OPINION, THE ASSESSEE HAS UNNECESSARILY BEEN SUBJEC TED TO HARASSMENT INCLUDING COST OF LITIGATION. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF CHIRANJILAL TAC V/S. UNION OF INDIA & OTHERS (2001) 252 ITR 333 (RAJ.) A ND OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI SHANTARAM R. PATIL V. ITO, ITA NO. 308 AND 309/PN/2003 (A.YS. 1995-96 AND 1996-97) ORDER D ATED 30 TH JUNE 2004 (COPIES SUPPLIED). 6.2. IN VIEW OF THE ABOVE SUBMISSION, IT WAS SUBMI TTED THAT THOUGH IT IS A FIT CASE TO AWARD THE COST TO ASSESSEE BY THE TR IBUNAL, BUT ASSESSEE IS NOT MUCH INTERESTED THEREIN SINCE THE WHOLE PURPOS E OF THE ASSESSEE IS TO BRING THE HIGH HANDEDNESS OF THE DEPARTMENT AGAI NST THE ASSESSEE TO THE KNOWLEDGE OF THE TRIBUNAL, SO THAT REPETITION O F SUCH HARASSMENT BY THE DEPARTMENT SHOULD BE AVOIDED IN FUTURE. 6.3. THE LD. D.R. SUBMITTED THAT IN THE ASSESSMENT ORDER PLACED WITH THE MEMO OF THE APPEAL PREFERRED BY THE REVENUE IN PARA NO. 5 THEREOF, THE A.O HAS TALKED ABOUT INITIATION OF PENALTY U/S . 271(1)(C ) OF THE ACT AND AT THE BOTTOM OF THE ASSESSMENT ORDER, HE HAS M ENTIONED ABOUT ISSUANCE OF SHOW CAUSE NOTICE U/S. 274 READ WITH SE CTION 271(1)(C ) OF THE ACT. HE SUBMITTED FURTHER THAT AN OBJECTION RE GARDING ISSUANCE OF NOTICE U/S. 274 READ WITH SEC. 271(1)( C ) CANNOT B E RAISED AT THIS STAGE ESPECIALLY WHEN THE ASSESSEE HAS PARTICIPATED IN TH E PENALTY PROCEEDINGS, ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 5 AVAILING OPPORTUNITY OF PRESSING HIS CASE BEFORE TH E A.O. IN THIS REGARD, HE REFERRED PROVISIONS OF SEC. 292BB OF THE ACT REG ARDING ISSUANCE OF DIFFERENT ASSESSMENT ORDER FOR THE SAME A.Y., HE SU BMITTED THAT IT APPEARS TO BE MISTAKE OF HUMAN PROBABILITY. 8. AFTER HAVING GONE THROUGH THE COPIES OF ASSESSME NT ORDER THAT FILED WITH THE MEMO OF APPEAL PREFERRED BY THE REVENUE AN D THE OTHER ONE FILED WITH THE MEMO OF CROSS OBJECTION PREFERRED BY THE ASSESSEE, WE ARE SURPRISED TO NOTE THAT CONTENTS OF ASSESSMENT ORDER S MEANT FOR THE SAME A.Y. 2004-05 IN THE CASE OF THE SAME ASSESSEE, ARE DIFFERENT. BOTH THE ASSESSMENT ORDERS ARE STATED TO HAVE BEEN PASSED BY THE A.O ON 25 TH NOVEMBER 2006. THE DIFFERENCE IS THAT PARA NO. 5 OF THE ASSESSMENT ORDER FILED WITH THE MEMO OF APPEAL PREFERRED BY TH E REVENUE CONTENTS THE CONCLUDING SENTENCE IN THIS REGARD, ASSESSEE T RUST HAS NOT SUBMITTED ANY SUPPORTING DOCUMENT, EVIDENCE, HENCE PENALTY U/ S. 271(1)(C ) OF THE I.T. ACT 1961 IS INITIATED SEPARATELY. IN THE ASS ESSMENT ORDER FILED ALONG WITH MEMO OF CROSS OBJECTION, PARA NO. 5 OF THE AS SESSMENT ORDER DOES NOT CONTAIN THE SAID SENTENCE. SIMILARLY, AT THE B OTTOM OF THE ASSESSMENT ORDER FILED BY THE REVENUE, THE CONCLUDI NG SENTENCE IS ISSUE PENALTY, SHOW CAUSE NOTICE U/S. 274 R.W.S. 271(1)(C ) OF THE I.T. ACT 1961 IS MISSING IN THE ASSESSMENT ORDER FILED BY T HE ASSESSEE ALONG WITH MEMO OF CROSS OBJECTION PREFERRED BY IT. THE COPY OF ASSESSMENT ORDER FILED BY THE ASSESSEE WITH ITS CROSS OBJECTION IS A CERTIFIED TRUE COPY BY THE ITO AND FURTHER CERTIFIED AS TRUE COPY BY THE ASSESSEE. THE ABOVE STATED FACTS AND CIRCUMSTANCES SUGGEST THAT THE A.O HAS TRIED TO COVER UP ITS LAPSES IN NOT MENTIONING HIS SATISFACTION THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S. 271(1)(C) AND RECORDING OF THE INITIAT ION OF PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER, WHICH CANNOT I N ANY WAY BE ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 6 APPRECIATED. UNDER THESE CIRCUMSTANCES, THERE IS N O REASON TO DOUBT THE ALLEGATION OF THE ASSESSEE THAT THE A.O WAS ADAMANT TO HARASS THE ASSESSEE. THUS, IN OUR VIEW, IT IS A FIT CASE OF AWARDING COST U/S. 254(2B) OF THE ACT, BUT AT THE SAME TIME, WE APPRECIATE TH E APPROACH OF THE ASSESSEE AS DISCUSSED HEREINABOVE THAT THEY ARE NOT INTERESTED IN THE AWARDING OF THE COST BUT THEIR WHOLE PURPOSE IN MA KING SUCH REQUEST IN AWARDING THE COST IS ONLY TO BRING THE HIGH HANDEDN ESS OF THE A.O AGAINST THE ASSESSEE TO THE NOTICE OF THE TRIBUNAL. UNDER THE CIRCUMSTANCES, WE THOUGH RESTRAIN OURSELVES FROM AWARDING THE COST A S WISHED BY THE ASSESSEE, BUT AT THE SAME TIME, WE ARE INCLINED TO RECORD OVER HERE BEFORE PARTING WITH THE ORDER THAT A.O SHOULD HAVE CONFINED HIMSELF IN MAKING JUST AND PROPER ASSESSMENT ONLY, AS PER THE PROVISIONS OF THE LAW AND HARASSMENT OF THE ASSESSEE WHICH IS NOT PERMITT ED UNDER THE STATUTE SHOULD HAVE BEEN AVOIDED AT ALL COST. WE HOLD THAT THE PENALTY LEVIED U/S. 271(1)(C ) WAS ALSO NOT VALID SINCE THE A.O DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, HAD FAILED TO RECORD HIS SA TISFACTION THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISH ING INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE TOWARDS ADD ITION MADE BY THE A.O AND THE A.O HAD ALSO FAILED TO INITIATE PENALTY PRO CEEDINGS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD CIT(A) WA S THUS JUSTIFIED IN DELETING THE PENALTY. THE APPEAL PREFERRED BY THE REVENUE IS THUS DISMISS ED AND THE CROSS OBJECTION IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH J UNE 2011. SD/- SD/- ( G.S.PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH JUNE, 2011 ITA . NO 106/PN/2010 & C.O. 4 PN 2011 AUDYOGIK TANTRA SHIKSHAN SANSTHA. A.Y 2004-05 PAGE OF 7 7 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- V, PUNE 4. THE CIT(A)-V, NASHIK 5. THE D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE