Annpurna Pulses (P) Ltd., Kanpur V. Income Tax Officer-5(1), Kanpur

ITA 119/LKW/2014

• Counselvise Citation: 11923714 RSA 2014
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARE BEING DISPOSED OF
• Section: 80IB; 148; 154; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.119 & 120/LKW/2014 A.YRS.:2003 - 04 & 2005 - 06 M/S ANNAPURNA PULSES (P) LTD., D - 41, PANKI INDUSTRIAL STATE, SITE NO. 2, KANPUR. PAN:AADC1531G VS. INCOME TAX OFFICER - 5(1), KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT(A) - II, KANPUR DATED 18/11/2013 FOR THE ASSESSMENT YEARS 2003 - 2004 AND DATED 14/11/2014 FOR THE ASSESSMENT YEAR 2005 - 06. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THE YEARS, THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE ONLY ISSUE INVOLVED IS REGARDING CON FIRMATION OF PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT OF RS.1,01,910/ - IN ASSESSMENT YEAR 2003 - 04 AND RS.1,71,670/ - IN ASSESSMENT YEAR 2005 - 06. 3. LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE ISSUE REGARDING ALLOWABILITY OF DED UCTION U/S 80IB IS A DEBATABLE ISSUE AND THEREFORE, PENALTY APPELLANT BY SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI PUNEET KUMAR D. R. DATE OF HEARING 11/02/2015 DATE OF PRONOUNCEMENT 1 7 /03/2015 2 U/S 271(1)(C) IS NOT JUSTIFIED. HE PLACED RELIANCE ON A JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF KARAN RAGHAV EXPORTS PVT. LTD. VS. CIT, ITA 1152/2011 DATED 14/03/2012. HE SU BMITTED THAT THE COPY OF THIS JUDGMENT IS AVAILABLE ON PAGES 19 TO 34. ONE MORE CONTENTION WAS RAISED BY HIM THAT AS PER THE NOTICE ISSUED BY ASSESSING OFFICER U/S 274 READ WITH SECTION 271 DATED 04/06/2007, COPY OF WHICH IS AVAILABLE ON PAGE NO. 11 OF TH E PAPER BOOK, THE ASSESSING OFFICER HAS NOT SPECIFIED AS TO WHETHER HE IS ALLEGING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE, THE PENALTY ORDER IS NOT VALID. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED BY HIM ON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT AND ANOTHER VS. MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 (KAR). 4. AS AGAINST THIS, LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE ALSO SUBMITTED THAT CIT(A) HAS FOLLOWED A JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. ZOOM COMMUNICATION P. LTD. [2010] 327 ITR 510 (DEL) AND ALSO THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF LONDU LAL RABHUBIR PRASAD VS. CIT [2008] 298 ITR 37 (ALL). HE PLACED RELIANCE ON THESE TWO JUDGMENTS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING OF PULSES AND FOOD GRAINS . THE ASSESSEE CLAIMED DEDUCTION U/S 80IB OF THE ACT IN ALL THE YEARS I.E. ASSESS MENT YEAR 2001 - 02 TO 2005 - 06. IN COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2004 - 05, THE ASSESSING OFFICER RAISED A QUERY REGARDING ADMISSIBILITY OF DEDUCTION U/S 80IB OF THE ACT. IT IS THE CLAIM OF THE ASSESSEE THAT AT THIS JUNCTURE , LEGAL OPI NION WAS OBTAINED AND IT WAS OPINED THAT DEDUCTION U/S 80IB MAY NOT BE ADMISSIBLE AND IN ORDER TO BUY PEACE AND TO AVOID LITIGATION, THE ASSESSEE COMPANY HAS WITHDRAWN ITS CLAIM U/S 80IB IN THAT YEAR I.E. ASSESSMENT YEAR 2004 - 05 AND ALSO FILED APPLICATION U/S 154 OF THE ACT 3 FOR ASSESSMENT YEAR 2001 - 02, 2002 - 03, 2003 - 04 AND 2005 - 06 AND IN THOSE YEARS ALSO, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB WAS WITHDRAWN. THE ASSESSING OFFICER INSTEAD OF RECTIFYING THE ASSESSMENT ORDER FOR THOSE YEARS U/S 154, ISSUED NOTICE U/S 148 AND REOPENED THE ASSESSMENT FOR ASSESSMENT YEAR 2002 - 03 TO 2005 - 06 EXCEPT 2004 05 . IN OUR CONSIDERED OPINION, WHETHER THE DEDUCTION U/S 80IB IS ALLOWABLE OR NOT IN RESPECT OF THE ASSESSEE COMPANY FOR PROCESSING OF PULSES AND FOOD GRAINS , IT IS NO DOUBT A DEBATABLE ISSUE BECAUSE THE ISSUE REGARDING ALLOWABILITY OF DEDUCTION U/S 80IB IN SIMILAR FACTS HAS REACHED EVEN UP TO APEX COURT IN SEVERAL CASES AND HENCE, IT HAS TO BE ADMITTED THAT IN THE FACTS OF THE PRESENT CASE, THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80IB IS DEBATABLE ISSUE. THIS IS ADMITTED LEGAL POSITION THAT IN RESPECT OF DEBATABLE ISSUE, PENALTY U/S 271(1)(C) IS NOT JUSTIFIED. IN THE CASE OF KARAN RAGHAV EXPORTS PVT. LTD. (SUPRA), IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT WHEN THE ASSESSEE IS ABLE TO SHOW THAT THE CLAIM MADE BY THE ASSESSEE WAS A PLAUSIBLE CLAIM BUT THE ASSESSEE DID NOT SUCCEED ON LEGAL INTERPRETATION, PENALTY IS NOT JUSTIFIED. IN OUR CONSIDERED OPINION, THE ISSUE INVOLVED IN THE PRESENT C ASE IS COVERED IN FAVOUR OF THE ASSESSEE BY THIS JUDGMENT OF HON'BLE DELHI HIGH COURT BECAUSE IN THE PRESENT CASE ALSO, IT CANNOT BE SAID THAT THE CLAIM OF THE ASSESSEE WAS FALSE AND LEGALLY UNTENABLE. IN OUR CONSIDERED OPINION, IN THE PRESENT CASE, THE C LAIM OF THE ASSESSEE WAS DEBATABLE AND PLAUSIBLE CLAIM AND ALTHOUGH THE CLAIM HAS BEEN WITHDRAWN BY THE ASSESSEE ON ENQUIRY BY THE ASSESSING OFFICER, IT CANNOT BE SAID THAT PENALTY IS JUSTIFIED. 6. REGARDING THE RELIANCE PLACED BY LEARNED D.R. OF THE REVEN UE ON A JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF LONDU LAL RABHUBIR PRASAD (SUPRA), THE FACTS WERE DIFFERENT. IN THAT CASE, THE CLAIM OF THE ASSESSEE WAS FOUND FALSE BY THE TRIBUNAL WHEREAS IN THE PRESENT CASE, IT CANNOT BE SAID TH AT THE EXPLANATION OF THE ASSESSEE IS FALSE AND THEREFORE, IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. REGARDING THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE 4 OF ZOOM COMMUNICATION P. LTD. ( SUPRA), WE FIND THAT IN THE CASE OF KARAN RAGHAV EXPORTS PVT. LTD. (SUPRA), PENALTY WAS CONFIRMED BY THE TRIBUNAL BY FOLLOWING THIS JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATION P. LTD. (SUPRA) AND HENCE, EVEN AFTER CONSIDERING THI S JUDGMENT, THE HON'BLE DELHI HIGH COURT HAS HELD THAT IF IT IS FOUND THAT THE CLAIM OF THE ASSESSEE WAS NOT FALSE AND NOT LEGALLY UNTENABLE, PENALTY IS NOT JUSTIFIED. HENCE, THIS LATE R JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF KARAN RAGHAV EXPO RTS PVT. LTD. (SUPRA) IS APPLICABLE AND THE EARLIER JUDGMENT IN THE CASE OF ZOOM COMMUNICATION P. LTD. (SUPRA) IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE IN OUR OPINION . 7. AS PER ABOVE DISCUSSION, WE FIND THAT THE ISSUE IN THE PRESENT CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF KARAN RAGHAV EXPORTS PVT. LTD. VS. CIT, ITA 1152/2011 DATED 14/03/2012 AND RESPECTFULLY FOLLOWING THIS JUDGMENT, WE HOLD THAT THE PENALTY IS NOT JUSTIFIED. SINCE WE HAVE FOUND THAT THE PENALTY IS NOT JUSTIFIED ON MERIT , WE DO NOT ENTER INTO OTHER ASPECTS RAISED BY THE ASSESSEE THAT THE PENALTY ORDER IS NOT JUSTIFIED AND VALID BECAUSE NO CLEAR CUT FINDING WAS GIVEN BY THE ASSESSING OFFICER IN THE PENALTY NOTICE. WE DELETE THE PENALTY IN BOTH THE YEARS. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STAND ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K . GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 7 /03/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR