M/s.Persource , Ahmedabad V. The ITO, Ward-3(3)(4), Ahmedabad

ITA 1126/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5759 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Section: 271(1)(c); 143(3); 274; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT ./ ITA.NO.1126/AHD/2018 / ASSTT. YEAR: 2011-2012 M/S.PERSOURCE C/O. NETLINK INDIA 51, NEW YORK TOWER-A S.G. HIGHWAY THALTEJ, AHMEDABAD 380 054. PAN : AALFP 1825 H VS ITO, WARD-3(3)(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI N.K.GOEL, SR.DR / DATE OF HEARING : 14/02/2020 / DATE OF PRONOUNCEMENT: 17/02/2020 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-3, AHMEDABAD DATED 28.2.2018 PASSED FOR T HE ASSTT.YEAR 2011-12. IN THIS APPEAL, ASSESSEE IS CHALLENGING CONFIRMATIO N OF PENALTY IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT OF RS.2,87,907/-. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED E-RETURN OF INCOME ON 29.9.2011 DECLARING TOTAL INCOME AT RS.NIL. THE AS SESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 18.2.2014 AND TO TAL INCOME OF RS.4,33,710/- WAS DETERMINED. WHILE DETERMINING TH E TOTAL INCOME, THE LD.AO HAS DISALLOWED DEDUCTION UNDER SECTION 10A OF THE A CT OF RS.9,15,557/- IN RESPECT OF CONVERTIBLE FOREIGN EXCHANGE. THEREAFTE R, THE LD.AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME FOR WRONGFUL CLAIM OF DEDUCTION UNDER ITA NO.1126/AHD/2018 2 SECTION 10A OF THE ACT AMOUNTING TO RS.9,15,557/- A ND ISSUED AND SERVED NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE AC T. AFTER HEARING THE ASSESSEE, THE LD.AO IMPOSED IMPUGNED PENALTY, WHICH WAS CONFIRMED BY THE LD.CIT(A). AGAINST THIS CONFIRMATION OF PENALTY, TH E ASSESSEE IS NOW BEFORE THE TRIBUNAL. 3. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE SUBMI TTED BY WAY OF WRITTEN SUBMISSION THAT THE ASSESSEE HAS CHALLENGED DISALLO WANCE OF DEDUCTION UNDER SECTION 10A BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER IN ITA NO.826/AHD/2015 DATED 9.8.2018 ALLOWED CLAIM OF THE ASSESSEE IN PRINCIPLE AND DIRECTED THE AO TO VERIFY WHETHER EXPORT PROCEE DS HAVE BEEN RECEIVED WITHIN TWELVE MONTHS FROM THE DATE OF EXPORT IN TUN E WITH MASTER CIRCULAR. THEREAFTER, THE LD.AO VIDE ORDER DATED 6.5.2019 GAV E EFFECT TO ORDER OF THE ITAT. IN OTHER WORDS, THE CLAIM OF THE ASSESSEE FO UND TO BE ADMISSIBLE AND INCOME OF THE ASSESSEE WAS ACCORDINGLY REWORKED OUT BY THE AO AS PER THE DIRECTION OF THE ITAT. HE PLACED ON RECORD COPY OF THE ORDER OF THE TRIBUNAL AS WELL AS ORDER GIVING EFFECT TO THE ORDER OF THE ITAT BY THE LD.AO DATED 6.5.2019. IT IS THEREFORE SUBMITTED THAT SINCE DISA LLOWANCE ON WHICH PENALTY HAS BEEN IMPOSED STANDS CANCELLED, PENALTY UNDER SE CTION 271(1)(C) OF THE ACT DOES NOT SUSTAIN, AND THEREFORE EXTINGUISHES AUTOMA TICALLY. THE LD.DR, ON THE OTHER HAND, DID NOT DISPUTE FACTUAL POSITION OF THE MATTER. 4. AFTER HEARING LD.DR AND A PERUSAL OF THE MATERIA L AVAILABLE ON RECORD, W E FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) P ROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN , BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE ITA NO.1126/AHD/2018 3 QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. IN THE PRESENT CASE, THE D ISALLOWANCE HAS BEEN CANCELLED BY THE TRIBUNAL VIDE ORDER DATED 9.8.2018 CITED (SUPRA), AND THEREFORE PENALTY UNDER SECTION 271(1)(C) OF THE AC T HAS NOT LIMB TO STAND. THEREFORE, ORDER OF PENALTY UNDER SECTION 2 71(1)(C) IS CANCELLED AND GROUND OF RAISED IN THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULTS, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 17 TH FEBRUARY, 2020 AT AHMEDABAD. SD/- (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 17/02/2020