Telediagnosys Services Pvt. Ltd., Pune V. Income-tax Officer,

ITA 1081/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4213 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-05-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Section: 115JB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1079 TO 1081/PUN/2016 / ASSESSMENT YEARS : 2009-10 TO 2011-12 TELEDIAGNOSYS SERVICES PVT. LTD., LEVEL 2, CANNOUGHT PLACE, BUND GARDEN ROAD, NEAR WADIA COLLEGE, PUNE 411 001 PAN : AACCT1503A /APPELLANT VS. ITO, WARD-7(4), PUNE . /RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 30.10.2018 / DATE OF PRONOUNCEMENT: 31.10.2018 / ORDER PER R.S.SYAL, VP : THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE ORDERS PASSED BY THE LD. CIT(A) CONFIRMING THE IMPOSITION OF P ENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) IN RELATION TO THE ASSESSMENT YEARS 2009-10 TO 2 011-12. SINCE COMMON ISSUE IS RAISED IN ALL THESE APPEALS, WE ARE, THEREFO RE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1079/PUN/2016 - A.Y. 2009-10 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RET URN DECLARING TOTAL INCOME AT NIL. ON EXAMINATION OF THE COMPUTATION OF INC OME, IT WAS FOUND BY THE AO THAT THE ASSESSEE DECLARED TOTAL IN COME AT NIL AFTER ITA NOS.1079 TO 1081/PUN/2016 TELEDIAGNOSYS SERVICES PVT. LTD., 2 CLAIMING DEDUCTION U/S.10B FOR THE EQUAL AMOUNT. THE AO AP PLIED THE PROVISIONS OF SECTION 115JB OF THE ACT AND HELD THE ASSES SEE TO BE CHARGEABLE TO TAX ON THE TOTAL INCOME COMPUTED ON THE TOUCHSTONE OF SUCH PROVISION. THAT IS HOW, THE TOTAL INCOME OF RS.19,83,84 6/- WAS COMPUTED. THEREAFTER, PENALTY WAS IMPOSED ON THE GROUND THAT THE ASSESSEE DID NOT DECLARE INCOME U/S.115JB OF THE ACT. T HE LD. CIT(A) ECHOED THE VIEW CANVASSED BY THE AO IN LEVYING THE PENA LTY UNDER THIS PROVISION. THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF SUCH PENALTY. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELEVAN T MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSEE COMPUTED NIL INCOM E UNDER REGULAR PROVISIONS OF THE ACT BY SHOWING THE INCOME BEFORE THE DEDUCTION U/S.10B AT RS.20,28,471/- AND THEREAFTER CLAIMING DEDUCTION UNDER THIS PROVISION FOR THE EQUAL AMOUNT. THE AO HAS NO T DISPUTED THE CORRECTNESS OF THE TOTAL INCOME BEFORE OR THE OTHER WISE ELIGIBILITY OF THE ASSESSEE TO DEDUCTION U/S.10B ON SUCH AMOUNT. THE ONLY BASIS FOR IMPOSITION OF PENALTY IS THE COMPUTATION OF INCOME U/S.115JB OF THE ACT DE HORS THE COMPUTATION OF INCOME UNDER THE REGULAR PROVISIONS O F THE ACT. IN OUR CONSIDERED OPINION, THIS CANNOT BE A CASE FO R IMPOSITION OF PENALTY. 4. IT IS SEEN THAT THE ASSESSEE DID NOT OFFER INCOME U/S.115JB OF THE ACT IN THE BACKDROP OF THE FACT THAT ITS 100% INCOME WAS ELIGIBLE FOR DEDUCTION U/S 10B AND ON SUCH BASIS THE APPLICABILITY OF TH E PROVISIONS OF SECTION 115JB DID NOT RESULT INTO COMPUTATION OF ANY P OSITIVE `BOOK PROFIT AS PER THE PROVISIONS OF CLAUSES (F) AND (II) OF EXPLANATIO N 1 TO SECTION 115JB AS EXISTING BEFORE AMENDMENT BY THE FINANC E ACT, 2007 ITA NOS.1079 TO 1081/PUN/2016 TELEDIAGNOSYS SERVICES PVT. LTD., 3 W.E.F. 01-04-2008. IN SUCH PRE-AMENDMENT ERA, THE AMOUNT OF EXPENSES AND REVENUE RELATABLE TO THE INCOME COVERED U /S. 10B ETC. WERE LIABLE TO BE ADDED OR SUBTRACTED FROM THE AMOUNT O F NET PROFITS FOR COMPUTING `BOOK PROFIT U/S.115JB OF THE ACT, THEREBY NO T PRODUCING ANY POSITIVE `BOOK PROFIT UNDER THIS PROVISION DESPITE THE RE BEING EXCESS OF REVENUE OVER EXPENDITURE IN THE ELIGIBLE UNIT. IT WAS ON THE OMISSION, INTER ALIA, OF THE WORDS `SECTION 10B IN THE ABOVE TWO CLAUSES OF THE EXPLANATION 1 TO SECTION 115JB OF THE ACT THAT THE POS ITIVE `BOOK PROFIT CAME TO BE COMPUTED DESPITE 100% DEDUCTION U/S 10B OF THE ACT IN CASE OF EXCESS OF REVENUE OVER EXPENSES IN THE ELIGIBLE UNIT. THE ASSESSEE, AS IN THE PAST, WAS UNDER BONA FIDE PRESUMPTION THAT THE PRE-AMENDMENT POSITION WAS PREVALENT AND EVEN THE AUDI TOR DID NOT POINT OUT THE EFFECT OF AMENDMENT IN THE AUDIT REPORT GIVE N UNDER THE PROVISIONS OF SUB-SECTION (4) OF SECTION 115JB. THIS SHOWS T HAT THE AUDITOR, WHO WAS SUPPOSED TO COMPUTE THE CORRECT AMOU NT OF `BOOK PROFIT IN ACCORDANCE WITH EXPLANATION 1 TO SECTION 115JB(2 ) WAS OBLIVIOUS TO THE AMENDMENT AND DID NOT REPORT THE CORRE CT AMOUNT OF `BOOK-PROFIT. AS AND WHEN THE CORRECT POSITION WAS CONFR ONTED BY THE AO, THE ASSESSEE ACCEPTED THE POSITION WITHOUT CHALLENGING IT BEFORE THE FIRST APPELLATE AUTHORITY. 5. IT IS FURTHER RELEVANT TO NOTE THAT THE ASSESSEE DECLARED ALL THE RELEVANT PARTICULARS OF ITS INCOME AND NEVER INTENDED TO C ONCEAL OR FURNISH INACCURATE PARTICULARS OF ITS INCOME. IT WAS ON THE BASIS OF SUCH FACTS DECLARED BY THE ASSESSEE THAT THE AO CAME TO KN OW ABOUT THE APPLICABILITY OF SECTION 115JB OF THE ACT AND THE COMPUTATIO N OF POSITIVE `BOOK-PROFIT CHARGEABLE TO TAX. THE HONBLE SUPREME C OURT IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC ) HAS HELD THAT ITA NOS.1079 TO 1081/PUN/2016 TELEDIAGNOSYS SERVICES PVT. LTD., 4 WHEN THE ASSESSEE FURNISHES ALL THE RELEVANT DETAILS IN THE RETURN OF INCOME, WHICH ARE NOT FOUND TO BE INACCURATE, ANY ADDITIO N MADE THEREAFTER CANNOT BE VIEWED AS CONCEALMENT OF INCOME AND AS SUCH, NO PENALTY CAN BE IMPOSED U/S. 271(1)(C) OF THE ACT. THE MUMB AI BENCH OF THE TRIBUNAL IN ACIT VS. RAHAT INDUSTRIES LTD. (ITA NO.2543/MUM /2011) VIDE ITS ORDER DATED 10-02-2012 HAS DELETED THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT WHEN THE ASSESSEE DE CLARED NIL INCOME AFTER CLAIMING DEDUCTION U/S.80IC BUT THE AO COMPUT ED POSITIVE INCOME U/S.115JB OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY ANOTHER BENCH OF THE MUMBAI TRIBUNAL IN ACIT VS. TRENDS HOLDINGS & CONSULTANCY PVT. LTD. (ITA NO.7379/MUM/2013) VIDE ITS ORDER DATED 28- 02-2017. COPIES OF SUCH ORDERS OF TRIBUNAL HAVE BEEN PLACED ON RECOR D. 6. IN VIEW OF THE FOREGOING DISCUSSION AND RESPECTFULLY FO LLOWING THE PRECEDENTS, WE ARE OF THE CONSIDERED OPINION THAT THE PE NALTY WAS WRONGLY LEVIED AND CONFIRMED. WE, THEREFORE, OVERTURN THE IMPUGNED ORDER AND ORDER FOR DELETION OF PENALTY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ITA NOS.1080 & 1081/PUN/2016 - A.YRS. 2010-11 & 201 1-12 8. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS A ND CIRCUMSTANCES OF THESE APPEALS ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE APPEAL FOR THE A.Y. 2009-10. IN FACT, BOTH THE SIDES ADOPTED THE AR GUMENTS MADE BY THEM IN APPEAL FOR THE A.Y. 2009-10 AND NO SEPARATE SUBMISSION WAS PUT FORTH. FOLLOWING THE VIEW TAKEN HEREIN ABOVE, WE SET- ASIDE THE IMPUGNED ORDERS AND ORDER TO DELETE THE PENALTY. ITA NOS.1079 TO 1081/PUN/2016 TELEDIAGNOSYS SERVICES PVT. LTD., 5 9. IN THE RESULT, THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2018. SD/- SD/- (VIKAS AWASTHY) (R.S .SYAL) /JUDICIAL MEMBER / VICE PRESIDENT PUNE; DATED : 31 ST OCTOBER, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-5, PUNE. 4. / THE PR. CIT-4, PUNE 5. !'# $$ %& , %& , / DR B, ITAT, PUNE; 6. #'( ) / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // SENIOR PRIVATE SECRETARY %& , / ITAT, PUNE*