ITO, CHITTORGARH V. M/s. Krishi Upaj Mandi Samiti, CHITTORGARH

ITA 115/JODH/2014

• Counselvise Citation: 11523314 RSA 2014
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: NIL
• Keywords: Wrong claim; Difference of opinion; Capital expenditure
• Section: 143(3); 37(1); 12A; 147

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 114 & 115 /JODH/2014 (A.Y. 200 4 - 05 & 2005 - 06 ) ITO , WARD - 1, VS. M/S. KRISHI UPAJ MANDI SAMITI, CHITTORGARH . POST - BEGUN, DISTRICT CHITTORGARH . PAN NO. AAALK 0483 F (APPELLANT) (RESPONDENT) ASSESSEE BY : NIL DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 23 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 25 /0 7 /201 4 . O R D E R PER N.K. SAINI, A.M TH ESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDER S EACH DATED 13 / 12 /2013 OF L D . CIT(A), UDAIPUR . COMMON ISSUE INVOLVED IN THESE APPEAL S RELATES TO THE DELETION OF PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) . 2 2 FOR THE SAKE OF CONVENIENCE, FACTS RELATING TO THE A.Y. 2004 - 05 IN I.T.A.NO . 114/JODH/2014 ARE DISCUSSED , THE FACTS IN BRIEF , ARE THAT THE ASSESSEE IS AN ELECTED BODY OF REPRESENTATIVES WHO ARE ELECTED BY ELECTION AMONG MEMBERS AND HAVE TO TAKE DECISION ACCORDING TO MAJORITY IN THE HOUSE ON ANY ISSUE REGARDING EXPENDITURE OR DEVELOPMENT EXPENSES . THE ASSESSING OFFICER FRAMED TH E ASSESSMENT U/S 147 R.W.S 143(3) OF THE ACT ON 20/12/2007 THEREBY MAKING THE FOLLOWING ADDITIONS: - 1. ON ACCOUNT OF INCOME FROM HOUSE PROPERTY RS. 58,444/ - 2. O N ACCOUNT OF DISALLOWANCE OF EXPENSES ON RENT A L INCOME RS. 2,296 / - 3. ON ACCOUNT OF DISALLOWANCE OF CAPITAL EXPENDITURE U/S 37(1) RS. 45,96,044/ - 3. THE ISSUE RELATING TO THE SAID ADDITION WAS REMANDED BACK BY THE ITAT TO THE LD. CIT(A), WHO AGAIN DISMISSED THE APPEAL OF THE ASSESSEE AND SUSTAINED THE ADDITIONS. AGAINST THE SAID ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE ITAT IN I.T.A.NO. 425/JU/2011 WHER EI N VIDE ORDER DATED 11/07/2012, THE ORDER OF THE LD. CIT (A) WAS UPHELD. THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 14,00,000/ - . THE SUBMISSIONS OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 147 R.W.S. 143(3) OF THE ACT WAS 3 THAT ITS INCOME MAY BE TREATE D AS EXEMPT TREATING IT TO BE CHARITABLE , HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE AS THE ASSESSEE WAS NOT REGISTERED U/S 12A OF THE ACT AT THE RELEVANT TIME AND ACCORDINGLY THE ADDITIONS MADE WERE TREATED AS CONSOLIDATED INCOME. T HE ASSESSING OFFICER ALSO LEVIED PENALTY U/S 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE EXPENSES INCURRED BY THE ASSESSEE HAD BEEN ACCEPTED VIDE VARIOUS DECISIONS OF THE ITAT AND THE HON'BLE RAJASTHAN HIGH COURT. THEREFORE, THERE WAS NO CONCEALMENT OF INCOME. IT WAS FURTHER STATED THAT THE ASSESSEE WAS REGISTERED U/S 12A OF THE ACT AND THERE WAS NO MALAFIDE INTENTION. 5. THE LEARNED CIT(A), AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE ASSESSING OFFICER LEVIED THE PENALTY PURELY ON THE BASIS THAT THE ADDITIONS / DISALL O WANCE MADE BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT WERE CONFIRMED BY THE APPELLATE AUTHORITIES, BUT THE SAME WAS NOT SUFFICIENT FOR IMPOSITION OF PENALTY WHICH IS QUASI CRIMINAL IN NATURE. HE FURTHER OBSERVED THAT THE ASSESSEE DECLARED THE SOURCE OF INCOME RECEIPTS AND FULLY DISCLOSED THE INCOME / RECEIPTS AND THAT THE 4 ASSESSING OFFICER HAD SIMPLY MADE DISALLOWANCE DUE TO DIFFERENCE OF OPINION. HE , THEREFORE, DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 6 . DURING THE COURSE OF HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE, THEREFORE, THIS APPEAL IS DECIDED EXPARATE QUA THE ASSESSEE AFTER HEARING THE LEARNED D.R. , OF COURSE , ON MERITS. 7 . LEARNED D.R. REITERATED THE OBSERVATIONS MADE BY THE ASSESSING OFFICER AND STRONGLY SUPPORTED THE PENALTY ORDER PASSED BY HIM . 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED D.R. AND PERUSED THE MATERIAL AVAILABLE ON THE REC O RD . IN THE PRESENT CASE , IT IS NOTICED THAT THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTE D DUE TO DIFFERENCE OF OPINION BY THE ASSESSING OFFICER AND THE PENALTY WAS LEVIED ONLY ON THIS BASIS THAT THE CLAIM WAS REJECTED AND THE ADDITION WAS MADE. ON A SIMILAR ISSUE, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. R ELIANCE PETR O PRODUCT (P) LTD. REPORTED IN (2010) 322 ITR 158 HAS HELD AS UNDER: - A GLANCE AT THE PROVISIONS OF SECTION 271(1) (C) OF THE INCOME - TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE 5 FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNIS HING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO B E INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAIL SUPPLIED BY THE ASSESSEE IN IT S RETURN ARE FOND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARD ING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. THEREFORE, IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT LEVIABLE ON ACCOUNT OF WRONG CLAIM MADE BY THE ASSESSEE IN HIS ORIGINAL RETURN OF INCOME . 9 . WE THEREFORE, KEEPING IN VIEW THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE AFORESAID CSE OF CIT VS. R ELIANCE PETR O PRODUCT (P) 6 LTD , DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) . ACCORDINGLY DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 10 . IN I.T.A.NO. 115/JODH/2014 FOR THE A.Y. 2005 - 06, THE FACTS ARE IDENTICAL AS WERE INVOLVED IN I.T.A.NO. 114/JODH/2014 FOR THE A.Y. 2004 - 05 (SUPRA) , THEREFORE, OUR FINDINGS GIVEN IN RESPECT OF THE SAID APPEAL SHALL APPLY MUTATIS - MUTANDIS IN I.T.A.NO. 115/JODH/2014 FOR THE A.Y. 2005 - 06 . 11 . IN THE RESULT, BOTH THE APPEAL S OF THE DEPARTMENT ARE DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 25 TH JULY , 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH JULY , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR .