Appeal Details
Counselvise Citation
[2013] 140 COUNSELVISE.COM (IT) 66926 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-05-2013
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
13-12-2012
Assessment Year
2000-2001
Appeal Filed On
12-09-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 102/PN/2009 (ASSESSMENT YEAR : 2001-02) HONEYWELL AUTOMATION INDIA LTD. ( FORMERLY KNOWN AS TATA HONEYWELL LTD. ) 56 & 57, HADAPSAR INDUSTRIAL ESTATE HADAPSAR, PUNE 411 013 PAN : AAACT3904F . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7, PUNE . RESPONDENT ITA NOS. 1041 TO 1043/PN/2011 (ASSESSMENT YEARS: 1999-2000, 2000-01& 2002-03) DY. COMMISSIONER OF INCOME TAX CIRCLE 7, PUNE . APPELLANT VS. HONEYWELL AUTOMATION INDIA LTD. 56 & 57, HADAPSAR INDUSTRIAL ESTATE HADAPSAR, PUNE 411 013 PAN : AAACT3904F . RESPONDENT ITA NOS. 1145 TO 1147/PN/2011 (ASSESSMENT YEARS: 1999-2000, 2000-01 & 2002-03) HONEYWELL AUTOMATION INDIA LTD. 56 & 57, HADAPSAR INDUSTRIAL ESTATE HADAPSAR, PUNE 411 013 PAN : AAACT3904F . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7, PUNE . RESPONDENT C.O. NOS. 66 TO 68/PN/2011 (ARISING OUT OF ITA NOS. 1041 TO 1043/PN/2011) (ASSESSMENT YEARS: 1999-2000, 2000-01 & 2002-03) HONEYWELL AUTOMATION INDIA LTD. 56 & 57, HADAPSAR INDUSTRIAL ESTATE HADAPSAR, PUNE 411 013 PAN : AAACT3904F . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7, PUNE . RESPONDENT ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. APPELLANT BY : MR. RAJAN VORA RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 08-05-2013 DATE OF PRONOUNCEMENT : 08-05-2013 ORDER PER BENCH THE CAPTIONED TEN APPEALS RELATE TO A SINGLE ASSES SEE AND INVOLVE A COMMON ISSUE WITH RESPECT TO PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT, 1961 (IN SHORT THE A CT) FOR THE ASSESSMENT YEARS 1999-2000, 2000-01& 2002-03. 2. SINCE IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES IN ALL THE APPEALS STAND ON AN IDENTI CAL FOOTING, APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001-02 VIDE ITA NO. 1 02/PN/2009 IS TAKEN UP AS A LEAD CASE TO FACILITATE APPRECIATION OF THE RE LEVANT FACTS. 3. ITA NO. 102/PN/2009 IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I II, PUNE DATED 07.11.2008 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 17.03.2008 PASSED BY THE ASSESSING OFFICER, UNDER SECTION 271(1)(C) O F THE ACT, PERTAINING TO THE ASSESSMENT YEAR 2001-02. 4. THE FACTS, IN BRIEF, ARE THAT FOR ASSESSMENT YEA R 2001-02 THE ASSESSEE COMPANY FILED A RETURN OF INCOME DECLARING TOTAL IN COME OF RS. 4,24,16,268/- WHICH INTER-ALIA CONTAINED A CLAIM OF DEDUCTION UNDER SECTION 10A O F THE ACT AMOUNTING TO RS. 11,95,79,294/- WITH RESPECT TO THE INCOME DERIVED FROM STP UNITS. IN THE COURSE OF THE ASSESSMENT FINALIZED UN DER SECTION 143(3) OF THE ACT DATED 19.03.2004 THE TOTAL INCOME WAS DETERMINE D AT RS. 4,65,59,710/- WHICH INTER-ALIA, ENTAILED RESTRICTING THE CLAIM OF DEDUCTION UNDER SECTION 10A OF THE ACT TO RS. 5,69,99,894/- AS AGAINST RS. 11,9 5,79,294/- CLAIMED IN THE RETURN OF INCOME. THUS, THE CLAIM OF DEDUCTION UNDE R SECTION 10A OF THE ACT ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. WAS PARTIALLY DISALLOWED AMOUNTING TO RS. 6,25,79,4 00/-. ON 29.12.2006, ON AN FILED APPEAL BY THE ASSESSEE, CIT(A) ALSO UPHELD TH E SAID DISALLOWANCE. SUBSEQUENTLY VIDE ORDER DATED 17.03.2008 THE ASSESS ING OFFICER HELD THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT QUA THE AFORESAID DISALLOWANCE AND PENALTY AMOUNTING TO RS. 3,71,25,228/- I.E. EQUIVALENT TO 150% OF THE TA X SOUGHT TO BE EVADED WAS LEVIED. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO HAS ALSO UPHELD THE LEVY BY WAY OF THE IMPUGNED ORDER. IN TH IS BACKGROUND, ASSESSEE IS IN AN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE OR DER OF THE CIT(A) DATED 05.11.2008 SUSTAINING THE PENALTY IMPOSED BY THE AS SESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 5. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IN TERMS OF THE ORDER PASSED BY THE TRIBUNAL I N ITA NOS. 401 & 402/PN/2007 DATED 07.09.2011 PERTAINING TO THE ASSE SSMENT YEARS 2001-02 AND 2002-03, THE MATTER RELATING TO THE DISALLOWANC E OF THE DEDUCTION UNDER SECTION 10A OF THE ACT HAS BEEN RESTORED BACK TO TH E FILE OF THE ASSESSING OFFICER TO BE CONSIDERED AFRESH. A COPY OF THE ORDE R OF THE TRIBUNAL DATED 07.09.2011 (SUPRA) IN THE QUANTUM APPEAL (I.E. ITA NOS. 401 & 402/PN/2007) FILED BY THE ASSESSEE BEFORE THE TRIBUNAL HAS ALSO BEEN PLACED ON RECORD. IN TERMS OF THE PARA 24 OF THE ORDER OF THE TRIBUNAL, WHICH IS A COMMON ORDER PASSED FOR ASSESSMENT YEARS 2001-02 AND 2002-03, TH E ISSUE OF ESTIMATION OF PROFIT OF THE STP UNITS FOR THE PURPOSES OF COMPUTI NG ELIGIBLE DEDUCTION UNDER SECTION 10A OF THE ACT HAS BEEN SET ASIDE TO THE FI LE OF THE ASSESSING OFFICER TO BE DONE AFRESH IN TERMS OF THE DIRECTIONS CONTAI NED THEREIN. IN THIS MANNER, IT IS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSE SSEE THAT SINCE THE QUANTUM APPEAL WAS ALLOWED INASMUCH AS THE MATTER WAS REMIT TED BACK TO THE FILE OF THE ASSESSING OFFICER, THE PENALTY PROCEEDINGS ARIS ING OUT OF THE VERY SAME OF THE ORDER OF THE ASSESSING OFFICER WOULD NOT SURVIV E ANY FURTHER. ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. 6. THE AFORESAID FACTUAL MATRIX HAS NOT BEEN CONTRO VERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVEN UE. 7. HAVING CONSIDERED THE MATTER IN THE AFORESAID LI GHT, WE FIND THAT THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASS ESSEE ARE JUSTIFIED. THE PENALTY IN QUESTION HAS BEEN LEVIED WITH RESPECT TO THE PARTIAL DENIAL OF DEDUCTION CLAIMED UNDER SECTION 10A OF THE ACT. THE TRIBUNAL VIDE ITS COMMON ORDER IN ITA NOS. 401 & 402/PN/2007 DATED 07.09.201 1 (SUPRA) FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 HAS SET ASIDE THE DISALLOWANCE ON ACCOUNT OF PARTIAL DENIAL OF DEDUCTION UNDER SECTIO N 10A OF THE ACT BACK TO THE FILE OF ASSESSING OFFICER. SINCE THE ISSUE IN QUANT UM PROCEEDINGS HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DETERMINATION AFRESH, THE IMPUGNED PENALTY PROCEEDINGS WOULD NOT SURVIVE AND ACCORDINGLY THE PENALTY LEVIED IS HEREBY DELETED. SO, HOWEVER IT MAY BE NOT ED THAT THE ASSESSING OFFICER SHALL BE AT LIBERTY TO PROCEED IN ACCORDANC E WITH LAW, AFTER DECIDING THE QUANTUM PROCEEDINGS, AFRESH. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 102/PN/2009 PERTAINING TO THE ASSESSMENT YEARS 2001-02 IS ALLOWED AS ABOVE . 9. WE MAY NOW TAKE UP THE APPEAL OF THE DEPARTMENT IN ITA NO. 1043/PN/2011 AND THE CROSS-OBJECTION OF THE ASSESSEE IN C.O. NO. 68/PN/2011 RELATING TO THE ASSESSMENT YEAR 2002-03. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COM MISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 31.12.2010 WHICH, IN TURN , HAS ARISEN FROM AN ORDER DATED 17.03.2008 PASSED BY THE ASSESSING OFFICER, U NDER SECTION 271(1)(C) OF THE ACT, PERTAINING TO THE ASSESSMENT YEAR 2002-03. 10. IN THIS CASE, THE ASSESSING OFFICER VIDE HIS OR DER DATED 17.03.2008 IMPOSED PENALTY OF RS. 4,48,14,391/- WITH RESPECT T O THE PARTIAL DISALLOWANCE OF DEDUCTION UNDER SECTION 10A OF THE ACT, WHICH WA S EQUIVALENT TO 150% OF ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. THE TAX SOUGHT TO BE EVADED. THE CIT(A) VIDE ITS OR DER DATED 31.12.2010 HAS SCALED DOWN THE PENALTY FROM 150% TO 100% OF THE TA X SOUGHT TO BE EVADED. AGAINST SUCH SCALING DOWN OF PENALTY, THE REVENUE I S IN APPEAL BEFORE US VIDE ITA NO. 1043/PN/2011, WHEREAS THE ASSESSEE BY WAY O F A CROSS-OBJECTION VIDE C.O. NO. 68/PN/2011 IS IN APPEAL CHALLENGING T HE SUSTENANCE OF PENALTY BY THE CIT(A) TO THE EXTENT OF 100% OF THE TAX SOUG HT TO BE EVADED. 11. IN THIS REGARD, IT WAS A COMMON POINT BETWEEN T HE PARTIES THAT BY WAY OF ORDER OF THE TRIBUNAL DATED 07.09.2011 (SUPRA) THE QUANTUM PROCEEDINGS RELATING TO THE PARTIAL DENIAL OF DEDUCTION UNDER S ECTION 10A OF THE ACT HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFF ICER FOR DETERMINATION AFRESH. THEREFORE, THE IMPUGNED PENALTY PROCEEDINGS WOULD ALSO NOT SURVIVE AND ACCORDINGLY THE PENALTY LEVIED IS HEREBY DELETE D. SO, HOWEVER IT MAY BE NOTED THAT THE ASSESSING OFFICER SHALL BE AT LIBERT Y TO PROCEED IN ACCORDANCE WITH LAW, AFTER DECIDING THE QUANTUM PROCEEDINGS, A FRESH. ACCORDINGLY, THE APPEAL OF THE DEPARTMENT IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AS ABOVE. 12. WE MAY NOW TAKE UP THE APPEAL OF THE DEPARTMENT IN ITA NO. 1042/PN/2011 RELATING TO THE ASSESSMENT YEA R 2000-01 AND THE CROSS- OBJECTION OF THE ASSESSEE VIDE C.O. NO. 67/PN/2011. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-III, PUNE DATED 31.12.2010 WHICH, IN TURN , HAS ARISEN FROM AN ORDER DATED 17.03.2008 PASSED BY THE ASSESSING OFFICER, U NDER SECTION 271(1)(C) OF THE ACT, PERTAINING TO THE ASSESSMENT YEAR 2000-01 . 13. IN THIS CASE, THE ASSESSING OFFICER VIDE HIS OR DER DATED 17.03.2008 IMPOSED PENALTY OF RS. 2,83,61,776/- WITH RESPECT T O THE PARTIAL DISALLOWANCE OF DEDUCTION UNDER SECTION 10A OF THE ACT, WHICH WA S EQUIVALENT TO 150% OF THE TAX SOUGHT TO BE EVADED. THE CIT(A) VIDE ITS OR DER DATED 31.12.2010 HAS SCALED DOWN THE PENALTY FROM 150% TO 100% OF THE TA X SOUGHT TO BE EVADED. ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. AGAINST SUCH SCALING DOWN OF PENALTY, THE REVENUE I S IN APPEAL BEFORE US VIDE ITA NO. 1042/PN/2011, WHEREAS THE ASSESSEE BY WAY O F CROSS-OBJECTION VIDE C.O. NOS. 67/PN/2011 IS IN APPEAL CHALLENGING THE S USTENANCE OF PENALTY BY THE CIT(A) TO THE EXTENT OF 100% OF THE TAX SOUGHT TO BE EVADED. 14. IN THIS REGARD, IT WAS A COMMON POINT BETWEEN T HE PARTIES THAT BY WAY OF ORDER OF THE TRIBUNAL DATED 10.08.2012 VIDE ITA NOS . 399 & 400/PN/2007, THE QUANTUM PROCEEDINGS RELATING TO THE PARTIAL DENIAL OF DEDUCTION UNDER SECTION 10A OF THE ACT FOR THE ASSESSMENT YEARS 1999-2000 A ND 2000-01 HAVE BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DETERMINATION AFRESH. THEREFORE, THE IMPUGNED PENALTY PROCEEDINGS WOULD A LSO NOT SURVIVE AND ACCORDINGLY THE PENALTY LEVIED IS HEREBY DELETED. S O, HOWEVER IT MAY BE NOTED THAT THE ASSESSING OFFICER SHALL BE AT LIBERTY TO P ROCEED IN ACCORDANCE WITH LAW, AFTER DECIDING THE QUANTUM PROCEEDINGS, AFRESH. ACC ORDINGLY, THE APPEAL OF THE DEPARTMENT IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AS ABOVE. 15. WE MAY NOW TAKE UP THE APPEAL OF THE DEPARTMENT IN ITA NO. 1041/PN/2011 RELATING TO THE ASSESSMENT YEA R 1999-2000 AND THE CROSS-OBJECTION OF THE ASSESSEE VIDE C.O. NO. 66/PN /2011. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-III, PUNE DATED 31.12.2010 WHICH, IN TURN , HAS ARISEN FROM AN ORDER DATED 17.03.2008 PASSED BY THE ASSESSING OFFICER, U NDER SECTION 271(1)(C) OF THE ACT, PERTAINING TO THE ASSESSMENT YEAR 1999-200 0. 16. IN THIS CASE, THE ASSESSING OFFICER VIDE HIS OR DER DATED 17.03.2008 IMPOSED PENALTY OF RS. 1,87,67,480/- WITH RESPECT T O THE PARTIAL DISALLOWANCE OF DEDUCTION UNDER SECTION 10A OF THE ACT, WHICH WA S EQUIVALENT TO 150% OF THE TAX SOUGHT TO BE EVADED. THE CIT(A) VIDE ITS OR DER DATED 31.12.2010 HAS SCALED DOWN THE PENALTY FROM 150% TO 100% OF THE TA X SOUGHT TO BE EVADED. AGAINST SUCH SCALING DOWN OF PENALTY, THE REVENUE I S IN APPEAL BEFORE US VIDE ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. ITA NO. 1041/PN/2011, WHEREAS THE ASSESSEE BY WAY O F CROSS-OBJECTION VIDE C.O. NO. 66/PN/2011 IS IN APPEAL CHALLENGING THE SU STENANCE OF PENALTY BY THE CIT(A) TO THE EXTENT OF 100% OF THE TAX SOUGHT TO BE EVADED. 17. IN THIS REGARD, IT WAS A COMMON POINT BETWEEN T HE PARTIES THAT BY WAY OF ORDER OF THE TRIBUNAL DATED 10.08.2012 (SUPRA) THE QUANTUM PROCEEDINGS RELATING TO THE PARTIAL DENIAL OF DEDUCTION UNDER S ECTION 10A OF THE ACT FOR THE ASSESSMENT YEAR 1999-2000 HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DETERMINATION AFRESH. THEREFO RE, THE IMPUGNED PENALTY PROCEEDINGS WOULD ALSO NOT SURVIVE AND ACCORDINGLY THE PENALTY LEVIED IS HEREBY DELETED. SO, HOWEVER IT MAY BE NOTED THAT TH E ASSESSING OFFICER SHALL BE AT LIBERTY TO PROCEED IN ACCORDANCE WITH LAW, AF TER DECIDING THE QUANTUM PROCEEDINGS, AFRESH. ACCORDINGLY, THE APPEAL OF THE DEPARTMENT IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AS ABOVE. 18. THE REMAINING THREE APPEALS, NAMELY ITA NOS. 11 45 TO 1147/PN/2011 PERTAINING TO THE ASSESSMENT YEARS 1999-2000, 2000- 01 & 2002-03 RESPECTIVELY HAVE BEEN FILED BY THE ASSESSEE AGAINS T THE COMMON ORDER OF THE CIT(A) DATED 31.12.2010. THE ISSUE RAISED IN THE AB OVE APPEALS IS SIMILAR TO THAT RAISED IN RESPECTIVE CROSS-OBJECTIONS DEALT WI TH BY US IN THE EARLIER PARAGRAPHS. THE ISSUE RAISED IN THE AFORESAID APPEA LS IS RENDERED ACADEMIC AND THE SAME HAVE ALSO BEEN FILED BELATEDLY. ACCORD INGLY, THE AFORESAID APPEALS ARE DISMISSED AS INFRUCTUOUS. 19. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN C OURT AT THE CONCLUSION OF THE HEARING ON 08 TH MAY 2013 IN THE PRESENCE OF BOTH THE PARTIES. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 08 TH MAY, 2013 ITA NO. 102/PN/2009 ITA NOS. 1041 TO 1043/PN/2011 ITA NOS. 1045 TO 1047/PN/2011 C.O. NOS. 66 TO 68/PN/2011 HONEYWELL AUTOMATION INDIA LTD. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY I.T.A.T., PUNE
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