Jt.CIT(OSD)/Dy.Commissioner of Income Tax-6, Kanpur V. M/s. Rave Entertainment (P)Ltd., Kanpur

ITA 125/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83416 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 16-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Rule of consistency; Bonafide belief; Initiation of penalty proceedings; Wrong claim; Agreed addition; Revised return
• Section: 80IB

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 NO.125/LKW/2012 ASSESSMENT YEAR:2006 - 07 JT.C.I.T.(OSD)/ DCIT - 6, KANPUR VS. M/S RAVE ENTERTAINMENT (P) LTD., 2, SARVODAYA NAGAR, JAGRAN BUILDING, KANPUR. PAN:AABCR5768A (APPELLANT) (RESPONDENT) C.O. NO.25/LKW/2012 (IN ITA NO.125/LKW/2012) ASSESSMENT YEAR:2006 - 07 M/S RAVE ENTERTAINMENT (P) LTD., 2, SARVODAYA NAGAR, JAGRAN BUILDING, KANPUR. PAN:AABCR5768A VS. JT.C.I.T.(OSD)/ DCIT - 6, KANPUR (OBJECTOR) (RESPONDENT) REVENUE BY SHRI ALOK MITRA, D. R. ASSESSEE BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 11/09/2014 DATE OF PRONOUNCEMENT 2 8 /11/2014 O R D E R PER A. K. GARODIA, A.M. THIS APPEAL IS FILED BY THE REVENUE, WHICH IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) - I, KANPUR DATED 15/12/2011 FOR ASSESSMENT YEAR 2006 - 07 AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 2 1. THAT THE LD. COMMISSIONER OF INCOME TAX (A) - II, KANPUR, HAS ERRED IN LAW AND ON FACTS IN CANCELING THE PENALTY OF RS.70,00,000/ - IMPOSED BY THE FACT THAT THE ASSESSEE FAILED TO SUBMIT PROVE THA T THE THEATER COMPLEX IN CONSTRUCTED AFTER 01.04.2002. BUT THE ASSESSEE HAD ALREADY STARTED HIS THEATER COMPLEX IN 2001. NOW IT IS CRYSTAL CLEAR THAT THE MULTIPLEX THEATER IN THE CASE HAD ALREADY BEEN STARTED IN 2001. THUS THE CONDITION AS ENVISAGED IN SEC TION 80IB(7) OF THE I.T. ACT, 1961 DID NOT FULFILL BY THE ASSESSEE. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS AS HELD THAT THE 'PRINCIPLE OF CONSISTENCY' IS APPLICABLE IN THE CASE WITHOUT APPRECIATING THE FACT THAT THE FACT OF THE CASE FOR A.Y. 2006 - 07 IS NOT IDENTICAL WITH THE CASE OF A.Y. 2002 - 03 AS HELD IN PENALTY ORDER BY THE A.O. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX(APPEALS) BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDE R OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEF FACTS, TILL THE ASSESSMENT STAGE, ARE NOTED BY CIT(A) IN PARA 2 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - IN THE RETURN OF INCOME FILED BY THE ASSESSEE ON 29/11/2006, IT HAD CLAIMED DEDUCTION U/S.80IB AT RS.1,82,57,048/ - . IN SUPPORT OF ITS CLAIM THE ASSESSEE HAD ALSO ENCLOSED AN AUDIT REPORT IN FORM NO.10CCBA. THIS FACT HAS ALSO BEEN MENTIONED IN THE TAX AUDIT REPORT IN PARA - 26 TO THE FORM NO.3CD. THE A.O DISALLOWED SU CH CLAIM OF THE ASSESSEE BY OBSERVING IN THE ASSESSMENT ORDER: - 'THE ASSESSES HAS CLAIMED DEDUCTION U/S.80 I B OF THE I.T.ACT, 1961 @50% OF THE NET INCOME AMOUNTING TO RS.1,82,57,048/ - . IN THIS REGARD, THE ASSESSES WAS REQUIRED TO JUSTIFY THE CLAIM OF DEDUCTION U/S.80IB IN VIEW OF THE FACT THAT THE ASSESSEE COMPANY DOES NOT QUALIFY THE ELIGIBILITY CONDITIONS FOR CLAIMING THESE DEDUCTIONS IN VIEW OF THE FACT THAT IT HAD COMMENCED ITS BUSINESS BEFORE 3 01/04/2002. THE ASSESSEE AFTER DISCUSSION CONCEDED T HE ISSUE PARTICULARLY IN VIEW OF THE FACT THAT THE MATTER HAD ALREADY BEEN DECIDED IN FAVOUR OF THE DEPARTMENT BY LD.CIT(A) - II , KANPUR WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2002 - 20 03 AND AGAINST THIS ORDER, THE ASSESSEE HAS NOT PREFERRED ANY AP PEAL BEFORE THE HON'BLE ITAT. VIDE THE SAID APPELLATE ORDER, THE HON'BLE CIT(A) HAS HELD THAT THE ASSESSEE DOES NOT QUALIFY THE CONDITIONS FOR CLAIMING THE DEDUCTION U/S.80 I B. HENCE, THE CLAIM OF DEDUCTION U/S.80IB AMOUNTING TO RS.1,82,57,048/ - WAS DISALLO WED.' 4. AS SEEN ABOVE, IN QUANTUM PROCEEDINGS , THE ASSESSEE HAS NOT PREFERRED ANY APPEAL BEFORE THE TRIBUNAL EVEN IN ASSESSMENT YEAR 2002 - 03 AND ACCORDINGLY , FOR THE PRESENT YEAR ALSO, NO APPEAL WAS PREFERRED BY THE ASSESSEE EVEN BEFORE CIT(A) ON THIS IS SUE. AGAINST THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO DELETED THE PENALTY AND NOW THE REVENUE IS IN APPEAL BEFORE US. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE PENALTY ORDER. H E ALSO SUBMITTED THAT ALTHOUGH THE RETURN WAS FILED BY THE ASSESSEE FOR THE PRESENT YEAR ON 30/11/2006 AND THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 IS DATED 18/12/2006 I.E. AFTER THE FILING OF RETURN OF INCOME BY THE ASSESSEE IN THE PRESENT YEAR BUT SINCE THE ORDER OF CIT(A) WAS ACCEPTED BY THE ASSESSEE IN ASSESSMENT YEAR 2002 - 03 AND NO APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL AGAINST THIS ORDER OF CIT(A) IN THAT YEAR, THE ASSESSEE COULD HAVE REVISED THE RETURN IN THE PRESENT YEAR AND TIM E FOR FILING REVISED RETURN WAS AVAILABLE WITH THE ASSESSEE TILL 31/03/2008 BUT THE ASSESSEE HAS CHOSEN NOT TO FILE REVISED RETURN AND THEREFORE, THE PENALTY IMPOSED BY THE ASSESSING OFFICER IS JUSTIFIED AND SHOULD BE CONFIRMED AND ACCORDINGLY THE ORDER OF CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. 4 6. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT THE DEDUCTION U/S 80IB WAS CLAIMED AS PER THE AUDIT ORS CERTIFICATE IN FORM - 3CCBA, AS AVAILABLE ON PAGES 2 TO 4 OF PAPER BOOK. HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ( I ) CIT VS. M/S TUDER KNITTING WORKS PVT. LTD. IN I.T.A. NO.122 OF 2012 (O&M) (PUNJAB & HARYANA HIGH COURT) ( II ) COMMISSIONER OF INCOME - TAX VS RE LIANCE PETRO PRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC) ( III ) CIT VS. BENNETT COLEMAN & CO. LTD. [2013] 259 CTR (BOM) 383 ( IV ) COMMISSIONER OF INCOME - TAX VS SIDHARTHA ENTERPRISES [2010] 322 ITR 80 (P&H) ( V ) CIT VS. GEM GRANITES (KARNATAKA), CHENNAI IN TAX CASE (APPEAL) NO. 504 OF 2009 (MADRAS HIGH COURT) ( VI ) COMMISSIONER OF INCOME - TAX VS INTERNATIONAL AUDIO VISUAL CO. [2007] 288 ITR 570 (DEL) ( VII ) COMMISSIONER OF INCOME - TAX VS NATH BROS. EXIM INTERNATIONAL LTD. [2007] 288 ITR 670 (DEL) ( VIII ) T. ASHOK PAI VS COMMISSIONER OF INCOME - TAX [2007] 292 ITR 11 (SC) ( IX ) ORDER OF I.T.A.T. MUMBAI IN THE CASE OF SHRI SAMSON PERINCHERY VS. ACIT, IN I.T.A. NO.4630/M/2013 FOR ASSESSMENT YEAR 2003 - 04 & 2008 - 09 ( X ) HINDUSTAN STEEL LTD. VS STATE OF ORISSA [1972] 83 ITR 26 (SC) ( XI ) BANARAS TEXTORIUM VS COMMISSIONER O F INCOME - TAX [1988] 169 ITR 782 (ALL) ( XII ) MOTILAL PADAMPAT SUGAR MILLS CO. LTD. VS STATE OF UTTAR PRADESH [1979] 118 ITR 326 (SC) ( XIII ) CIT VS. SHRI BHATARA RAJIV IN I.T.A. NO.428 OF 2009 (O&M) (PUNJAB & HARYANA HIGH COURT) ( XIV ) CIT VS. SOCIETEX [2013] 259 CTR (DEL) 325 ( XV ) COMMISSIONER OF INCOME - TAX VS LAKHANI INDIA LIMITED [2010] 324 ITR 73 (P&H) ( XVI ) COMMISSIONER OF INCOME - TAX V. MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 (KAR.) ( XVII ) CEMENT MARKETING CO. OF INDIA LTD. VS ASST. CST [1980] 124 ITR 15 (SC) 5 7. IN HIS REJOINDER, LEARNED D.R. OF THE REVENUE HAS PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ( I ) SANGHVI SWISS REFILLS (P) LTD. VS. ACIT & ANR. [2013] 255 CTR 251 ( II ) COMMISSIONER OF INCOME - TAX VS ZOOM COMMUNICATION P. LTD. [2010] 327 ITR 510 (DEL) ( III ) SHANTI LOGISTICS (P.) LTD. VS. ACIT [2012] 208 TAXMAN 41 ( IV ) KILLICK NIXON LTD. VS. DY. CIT [2012] 208 TAXMAN 45 (BOMBAY) ( V ) UNION OF INDIA VS DHARAMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 (SC) 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ADMITTEDLY TH E RETURN OF INCOME FOR THE PRESENT YEAR WAS FILED BY THE ASSESSEE ON 30/11/2006 I.E. BEFORE THE ORDER OF CIT(A) IN ASSESSMENT YEAR 2002 - 03 AS PER WHICH HE REJECTED THE CLAIM OF THE ASSESSEE REGARDING ITS ELIGIBILITY FOR DEDUCTION U/S 80IB AND THE SAME HAS BECOME FINAL BECAUSE NO APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL AGAINST THIS ORDER OF CIT(A) BUT IT IS ALSO TRUE THAT THE ASSESSEE COULD HAVE REVISED THE RETURN OF INCOME FOR THE PRESENT YEAR TILL 31/03/2008 AND IN THAT SITUATION, THERE COULD NOT HAVE BEEN ANY OCCASION TO LEVY ANY PENALTY BUT THE ASSESSEE HAS CHOSEN NOT TO DO SO AND HENCE, WE FIND FORCE IN THE CONTENTION OF LEARNED D.R. OF THE REVENUE AND ALSO IN THE STAND TAKEN BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CONCEALED ITS INCOM E AND THEREFORE, PENALTY IS JUSTIFIED UNDER THESE FACTS. 9. IN THE LIGHT OF ABOVE FACTS, WE NOW EXAMINE THE APPLICABILITY OF VARIOUS JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE. 9.1 THE FIRST JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGM ENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF M/S TUDER KNITTING WORKS PVT. LTD. (SUPRA). IN THIS CASE , WE FIND THAT THE PENALTY WAS DELETED BY HON'BLE PUNJAB & HARYANA ON THE BASIS THAT WHE THER DEDUCTION U/S 80IB IS ALLOWABLE OR NOT ON THE SURRENDERED AMOUNT WAS A 6 DEBATABLE ISSUE AND THEREFORE, PENALTY IS NOT JUSTIFIED. BUT IN THE PRESENT CASE, THIS IS NOT THE CASE OF THE ASSESSEE THAT CLAIMING OF DEDUCTION U/S 80IB AND NOT FILING THE REVISED RETURN WAS FOR THE REASON THAT THE ISSUE WAS DEBATABLE AND HENCE, IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.2 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF RELIA NCE PETRO P RODUCTS PVT. LTD. (SUPRA). IN THIS CASE , IT WAS HELD BY HON'BLE APEX COURT THAT MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF INTEREST EXPENDITURE, WHICH HAS NOT BEEN ACCEPTED BY REVENUE, PENALTY U/S 271(1)(C) IS NOT ATTRACTED. IN THE PRESENT CASE, THE ISSUE IS NOT REGARDING CLAIMING DEDUCTION OF ANY EXPENDITURE. THE ISSUE IS REGARDING CLAIMING DEDUCTION U/S 80IB AND IT IS SEEN THAT THE ASSESSEE WAS NOT ELIGIBLE FOR SUCH DEDUCTION AS PER THE ORDER OF LEARNED CIT (A) IN QUANTUM PROCEEDINGS FOR A.Y. 2002 03 WHEN THE DEDUCTION U/S 80IB WAS CLAIMED FOR THE FIRST TIME AND THE ASSESSEE ALSO ACCEPTED THIS POSITION ON RECEIVING THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 ON 18/12/2006 BECAUSE NO APPEAL WAS FILED BEFORE TRIBUNAL IN THAT YEAR BUT STILL, THE ASSESSEE DID NOT FILE REVISED RETURN FOR THE PRESENT YEAR ALTHOUGH THE ASSESSEE WAS HAVING TIME FOR REVIS ING THE RETURN TILL 31/03/2008 AND HENCE, IN THE FACTS OF THE PRESENT CASE, AS DISCUSSED ABOVE, THIS JUDGMENT OF HON'BLE APEX COURT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.3 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF BENNETT COLEMAN & CO. LTD. (SUPRA). IN THIS CASE, IT WAS HELD BY HON'BLE BOMBAY HIGH COURT THAT WHEN INCOME HAS BEEN DISCLOSED IN COMPUTATION OF INCOME AND THERE IS ONLY CHANGE OF HEAD OF INCOME AND IN ABSENCE OF ANY FACT THAT THE CLAIM OF THE ASSESSEE WAS NOT BONAFIDE, PENALTY CANNOT BE IMPOSE D U/S 7 271(1)(C) OF THE ACT. IN THE PRESENT CASE, THE FACTS ARE TOTALLY DIFFERENT BECAUSE IN THE PRESENT CASE , THE DISPUTE IS NOT REGARDING HEAD OF INCOME BUT THE DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION U/S 80IB AND IT WAS ACCEPTED BY THE ASSESSEE A LSO IN DECEMBER 2006 THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB BUT STILL , THE ASSESSEE DID NOT FILE THE REVISED RETURN ALTHOUGH TIME WAS AVAILABLE WITH THE ASSESSEE TILL 31/03/2008 AND THEREFORE, UNDER THESE FACTS , IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.4 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF SIDHARTHA ENTERPRISES (SUPRA). IN THIS CASE, IT WAS HELD THAT THE PENALTY FOR CONCEALMENT CAN BE LEVIED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT AND NOT A MERE MISTAKE. IN THE PRESENT CASE, NOT FILING THE REVISED RETURN OF INCOME BETWEEN DECEMBER 2006 TO MARCH 2 008 EVEN AFTER ACCEPTING THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB HAS TO BE CONSIDERED AS A DELIBERATE DEFAULT AND THEREFORE, IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.5 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF GEM GRANITES (KARNATAKA) (SUPRA). IN THAT CASE , IT WAS NOTED BY THE TRIBUNAL THAT THE CO NTENTION OF THE ASSESSEE THAT THERE MAY BE MISTAKE IN RECORDING THE RATE AND THERE MAY BE POSSIBILITY THAT THE RATE OF TWO FLATS ARE MERGED AND RECORDED, CANNOT BE RULED OUT AND THEREFORE, THE DEPARTMENT WAS REQUIRED TO PROVE THAT THERE WAS CONCEALMENT AND SINCE THIS WAS NOT DONE BY THE DEPARTMENT, THE TRIBUNAL DELETED THE PENALTY. ON FURTHER APPEAL BY THE DEPARTMENT, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT THIS FINDING OF FACT GIVEN BY THE TRIBUNAL CANNOT BE DISTURBED BY THE HIGH COURT. IN THE PRESE NT 8 CASE, THIS IS NOT THE CASE OF THE ASSESSEE THAT THERE WAS ANY POSSIBILITY OF ANY WRONG ENTRY OR WRONG CLAIM PARTICULARLY WHEN THERE IS NO BONAFIDE REASON GIVEN BY THE ASSESSEE FOR ITS FAILURE TO FILE THE REVISED RETURN OF INCOME WHEN A PERIOD OF 15 MONT HS WAS AVAILABLE WITH THE ASSESSEE TO REVISE ITS RETURN OF INCOME AFTER ACCEPTING THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 DATED 18/12/2006. HENCE, IN THE FACTS OF THE PRESENT CASE, IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.6 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF INTERNATIONAL AUDIO VISUAL CO. (SUPRA). IN THIS CASE, IT WAS HELD THAT THERE HAS BEEN NO CONCEALMENT OF PRIMARY FACTS AND THE ASSESSEE IS NOT LIABLE FOR PENALTY U/S 271(1)(C) FOR MAKING A CLAIM U/S 80HHC, WHICH IS NOT ADMISSIBLE. IN THE PRESENT CASE, WE HAVE ALREADY SEEN THAT THE ASSESSEE HAS CHOSEN NOT TO FILE REVISED RETURN OF INCOME EVEN A FTER ACCEPTING THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB AND IN SPITE OF THIS, A TIME OF 15 MONTHS WAS AVAILABLE FOR FILING THE REVISED RETURN AND HENCE, IN THE FACTS OF THE PRESENT CASE, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.7 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF NATH BROS. EXIM INTERNATIONAL LTD. (SUPRA). IN THIS CAS E , IT WAS HELD THAT THE ASSESSEE HAVING DISCLOSED ALL THE MATERIAL FACTS, IS NOT LIABLE FOR PENALTY U/S 271(1)(C) FOR MAKING ERRONEOUS CLAIM OF DEDUCTION U/S 80HHC. FOR THE SAME REASON THAT THE ASSESSEE HAS WILLFULLY CHOSEN NOT TO FILE REVISED RETURN IN S PITE OF AVAILABILITY OF 15 MONTHS TIME AND IN SPITE OF ACCEPTING THE POSITION THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9 9.8 THE NEXT JU DGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE TRIBUNAL DECISION OF I.T.A.T. BOMBAY RENDERED IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA). IN THIS CASE , THE ISSUE WAS DECIDED BY THE TRIBUNAL ON TECHNICAL GROUND AND THE TRIBUNAL DID NOT ENTER INTO ADJUDICATION OF THE PENALTY ON MERIT AND THEREFORE, THIS TRIBUNAL DECISION IS NOT APPLICABLE IN THE PRESENT CASE AS NO SUCH TECHNICAL ISSUE HAS BEEN RAISED BY THE ASSESSEE. 9.9 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA). IN THIS CASE , IT WAS HELD THAT PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILT Y OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. IN THE FACTS OF THE PRESENT CASE, THIS JUDGMENT IS IN FACT SUPPORTING THE CASE OF THE REVENUE BECAUSE AS DISCUSSED ABOVE, WE HAVE SEEN THAT THE ASSESSEE IS GUILTY OF FAILURE TO PERFORM STATUTORY OBLIGATION BECAUSE WHEN THE ASSESSEE HAS ACCEPTED THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 2002 - 03 THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB , IT WAS THE OBLIGATION OF THE ASSESSEE TO FILE REVISED RETURN FOR THE P RESENT YEAR BECAUSE SUFFICIENT TIME WAS AVAILABLE WITH THE ASSESSEE FOR FILING THE REVISED RETURN BUT THE ASSESSEE HAS CHOSEN NOT TO DO SO. THEREFORE, THIS JUDGMENT IS SUPPORTING THE CASE OF THE REVENUE AND NOT THE CASE OF ASSESSEE. 9.10 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF BANARAS TEXTORIUM (SUPRA). IN THIS CASE , THE HON'BLE HIGH COURT HAS CONSIDERED THE EXPLANATION INSERTED IN SECTION 271(1)(C) OF THE ACT BY THE A CT NO. 5 OF 1964 WHICH WAS NOT CONSIDERED BY THE TRIBUNAL. IT WAS HELD BY HON'BLE HIGH COURT THAT THE TRIBUNAL WAS BOUND IN LAW TO EXAMINE THE APPLICABILITY OF THE EXPLANATION TO THE CASE AND NON CONSIDERATION THEREOF HAS RESULTED IN MISCARRIAGE OF JUSTIC E AND THE MATTER WAS REMANDED BACK TO THE TRIBUNAL. IN 10 THE PRESENT CASE, THIS IS NOT THE CASE OF THE ASSESSEE THAT ANY EXPLANATION U/S 271(1)(C) IS REQUIRED TO BE CONSIDERED AND AS PER THE SAME , THE PENALTY IS NOT JUSTIFIED. HENCE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. 9.11 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO. LTD. (SUPRA). IN THIS CASE , THE ISSUE WAS ALTOGETHER DIFFERENT. THE ISSUE WAS REGARDING DOCTRINE OF PROMISSORY ESTOPPELS AND NOT REGARDING LEVY OF PENALTY. IT IS ALSO SEEN THAT THIS JUDGMENT IS IN RESPECT OF SALES TAX ACT AND NOT INCOME TAX ACT. WE, THEREFORE, FIND THAT THIS JUDGM ENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.12 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF SHRI BHATARA RAJIV (SUPRA). IN THIS CASE , PENALT Y WAS DELETED BY THE TRIBUNAL ON THE BASIS THAT THE ASSESSEE HAD FURNISHED A CERTIFICATE FROM SUB DIVISIONAL ENGINEER MAINTENANCE SUB DIVISION TO THE EFFECT THAT DISTANCE FROM SONEPAT MUNICIPAL COMMITTEE TO VILLAGE KAMASPUR, TEHSIL AND DISTRICT SONEPAT WAS 8.2 KMS AND THEREFORE, THE LAND IN QUESTION WAS TO BE CONSIDERED AGRICULTURAL LAND. ALTHOUGH ULTIMATELY IT WAS FOUND THAT THE DISTANCE OF SUCH LAND IS LESS THAN 8 KM AND THEREFORE, TAX WAS PAYABLE. BUT S INCE THE CLAIM OF THE ASSESSEE WAS ON THE BASIS OF A CERTIFICATE FROM SUB DIVISIONAL ENGINEER, IT CANNOT BE SAID THAT A FALSE CLAIM WAS MADE BY THE ASSESSEE OR THAT THERE WAS DELIBERATE CONCEALMENT BY THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAS CHOSEN NOT TO FILE REVISED RETURN IN SPITE OF THIS F ACT THAT THE ASSESSEE ITSELF HAS ACCEPTED IN DECEMBER, 2006 THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB AND ALTHOUGH TIME WAS AVAILABLE TO FILE REVISED RETURN , THE ASSESSEE HAS DELIBERATELY CHOSEN NOT TO FILE THE REVISED RETURN AND THEREFORE, IN OUR CONSIDERED OPINION, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 11 9.13 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF SOCIETEX (SUPRA). IN T HIS CASE, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT NO PENALTY CAN BE LEVIED U/S 271(1)(C) WHEN NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE WAS GUILTY OF FILING INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE, IT IS NOT THE CLAIM OF THE ASSESSEE THAT THE SATISFACTION WAS NOT RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HENCE, THIS JUDGMENT IS NOT RELEVANT IN THE FACTS OF THE PRESENT CASE AND IN OUR CONSIDERED OPINION, THIS JU DGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.14 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF LAKHANI INDIA LIMITED (SUPRA). IN THAT CASE, IT WAS HELD THAT IN VIEW OF THE CONCURRENT FINDING RECORDED BY THE CIT(A) AND THE TRIBUNAL THAT THERE WAS NO CONCEALMENT OR MISREPRESENTATION BY THE ASSESSEE, PENALTY IS NOT JUSTIFIED. IN THE PRESENT CASE, THE FACTS ARE DIFFERENT. IN THE PRESENT CASE, TH E ASSESSEE FAILED TO FILE REVISED RETURN EVEN AFTER ACCEPTING THAT IT IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB AND IN SPITE OF AVAILABILITY OF SUFFICIENT TIME OF MORE THAN 15 MONTHS AND HENCE, THERE IS CONCEALMENT OF INCOME IN OUR CONSIDERED OPINION . THEREFO RE , THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. 9.15 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUP RA). IN THIS CASE, IT WAS HELD THAT MERELY BECAUSE THE ASSESSEE AGREED FOR AN ADDITION AND ACCORDINGLY ASSESSMENT ORDER WAS PASSED ON THE BASIS OF THE AGREED ADDITION AND WHEN THE ASSESSEE HAS PAID THE TAX AND THE INTEREST THEREON IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SHOW THE CONCEALMENT OF INCOME, IT CANNOT BE INFERRED 12 THAT THE SAID ADDITION IS ON ACCOUNT OF CONCEALMENT SO AS TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CASE, THE FACTS ARE TOTALLY DIFFERENT. IN THE PRESENT CASE, THERE I S NO AGREED ADDITION. IN FACT , IN THE PRESENT CASE, THE ASSESSEE CLAIMED SUCH DEDUCTION IN ASSESSMENT YEAR 2002 - 2003 FOR THE FIRST TIME WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER AND THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO DECIDED THE APPEAL AGAINST THE ASSESSEE AND ASSESSEE IN THE PRESENT YEAR HAS NOT REVISED ITS RETURN OF INCOME ALTHOUGH TIME WAS AVAILABLE WITH THE ASSESSEE TILL 31 ST MARCH, 2008 AND THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. 9.16 THE LAST JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF CEMENT MARKETING CO. OF INDIA LTD. (SUPRA). IN THAT CASE , IT WAS HELD THAT WHERE THE ASSESSEE DOES NOT INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER SHOWN IN THE RETURNS, THE AUTHORITIES WERE NOT JUSTIFIED IN IMPOSING PENALTY ON THE ASSESSEE. ON THIS BASIS , THE PENALTY IN THAT CASE WAS DELETED BY HON'BLE APEX C OURT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT BEEN ABLE TO SHOW ANY BONAFIDE BELIEF FOR NOT FILING THE REVISED RETURN IN SPITE OF AVAILABILITY OF TIME FOR DOING SO. HENCE, THIS JUDGMENT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. 9.17 AS PER AB OVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE JUDGMENTS CITED IS RENDERING ANY HELP TO THE ASSESSEE. WE, THEREFORE, REVERSE THE ORDER OF LEARNED CIT (A) AND RESTORE THAT OF THE A.O. 10. NOW WE TAKE UP THE CROSS OBJECTION OF THE ASSESSEE I.E. C.O.NO.25/LKW/2012. IN THIS CROSS OBJECTION , THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT IT WAS NOT OPEN FOR THE ASSESSEE/RESPONDENT TO CHALLENGE LEVY OF PENALTY, ON THE GROUND OF NON - 13 MAINTAINABILITY OF ASSESSMENT ORDER ITSELF, GIVING RISE TO THE INITIATION OF PENALTY PROCEEDINGS. 2. BECAUSE VARIOUS CASE LAWS AS HAVE BEEN REFERRED TO BY THE LD. CIT(A) IN ARRIVING AT THE AFORESAID CONCLUSION, ARE DISTINGUISHABLE ON FACTS. 3. BECAUSE TH ERE WAS INHERENT LACK OF JURISDICTION AT THE END OF THE DY. CIT - 6, KANPUR IN PASSING THE PENALTY ORDER DATED 30.03.2011 AND THE ISSUE OF SUCH INHERENT LACK OF JURISDICTION COULD BE RAISED AT ANY STAGE AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE LD. C IT(A) - I, KANPUR IS WHOLLY ERRONEOUS. 4. BECAUSE NO SPECIFIC SATISFACTION HAVING BEEN RECORDED WITH REFERENCE TO THE DISALLOWANCE UNDER SECTION 80 - IB, WITH REFERENCE TO WHICH PENALTY HAD BEEN LEVIED BY THE DY. CIT - 6, KANPUR VIDE HIS ORDER DATED 30.03.2011, THE SAID PENALTY ORDER ITSELF WAS INVALID AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE LD. CIT(A) IS WHOLLY ERRONEOUS. 11. REGARDING GROUND NO. 1 TO 3, THE LEARNED A.R. OF THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS GUPTA (M.K.) [1978] 113 ITR 473 (ALL) . REGARDING GROUND NO. 4, LEARNED A.R. OF THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF COMMISSION ER OF INCOME - TAX VS G. M. EXPORTS [2013] 359 ITR 565 (KAR) . 12. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW ON THESE ISSUES. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARDING GROUND NO. 1 TO 3, WE FIND THAT APART FROM PLACING RELIANCE ON THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT, NO ARGUMENT WAS ADVANCED BY LEARNED A.R. OF THE 14 ASSESSEE THAT HOW THE ASSESSMENT ORDER IS NOT MAINTAINABLE. REGARDING THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT, WE FIND THAT IN THAT CASE , IT WAS NOTED THAT THE ASSESSEE WAS REQUIRED TO FILE RETURN IN FORM NO. 2 BUT THE RETURN WAS FILED BY THE ASSESSEE IN FORM NO. 4. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN OF INCOME IN FORM NO. 2 DECLARING INCOME OF RS.43,930/ - AS AGAIN ST INCOME DECLARED BY HIM AT RS.21,680/ - AS PER RETURN FILED IN FORM NO. 4 EARLIER. UNDER THESE FACTS, IT WAS HELD THAT THE ORIGINAL RETURN OF INCOME FILED IN FORM NO. 4 WAS NOT A VALID RETURN AND THEREFORE, FOR ANY ADDITION MADE ON THE BASIS OF SUCH RETU RN, NO PENALTY IS JUSTIFIED. IN THAT CASE, IN THE REVISED RETURN OF INCOME, INCOME ON ACCOUNT OF PRIVATE PRACTICE WAS DECLARED BY THE ASSESSEE AT RS.40,000/ - WHEREAS THE ASSESSING OFFICER ASSESSED SUCH INCOME AT RS.64,014/ - BUT IN QUANTUM APPEAL , THE INCO ME WAS REDUCED BY CIT(A) BY RS.9,000/ - AND ON FURTHER APPEAL, THE TRIBUNAL REDUCED THE INCOME FROM PRIVATE PRACTICE TO RS.40,000/ - WHICH WAS AT PAR WITH SUCH INCOME DECLARED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME. UNDER THESE FACTS, THE PENALTY W AS DELETED. IN THE PRESENT CASE, THIS IS NOT THE CASE OF THE ASSESSEE THAT THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS A DEFECTIVE RETURN AND THEREFORE, THE ASSESSEE FILED REVISED RETURN. IN FACT , WHILE DECIDING THE APPEAL OF THE REVENUE, WE HAVE HELD THAT THE FAILURE OF THE ASSESSEE TO FILE REVISED RETURN IS WITHOUT ANY BONAFIDE REASON AND HENCE, FOR SUCH FAILURE , PENALTY IS JUSTIFIED. SINCE IN THE PRESENT CASE, NO D EFECT COULD BE SHOWN BY THE ASSESSEE IN THE RETURN FILED BY IT , THIS JUDGMENT IS NOT R ENDERING ANY HELP TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 TO 3 ARE REJECTED. 14. REGARDING GROUND NO. 4 ALSO, APART FROM PLACING RELIANCE ON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF G. M. EXPORTS (SUPRA), NO OTHER ARGUMENT WAS ADVA NCED BY LEARNED A.R. OF THE ASSESSEE. IN THAT CASE , IT WAS HELD BY HON'BLE KARNATAKA HIGH COURT THAT CONCEALMENT WAS DISCOVERED IN APPELLATE PROCEEDINGS AND THEREFORE, PENALTY PROCEEDINGS 15 WAS TO BE INITIATED BY APPELLATE AUTHORITY AND ON THIS BASIS , IT WAS HELD THAT THE ORDER OF PENALTY BY THE ASSESSING OFFICER WAS NOT VALID. IN THE PRESENT CASE, THE FACTS ARE TOTALLY DIFFERENT AND THEREFORE, THIS JUDGMENT IS NOT RENDERING ANY HELP TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 4 IS ALSO REJECTED. 15. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESSEE STANDS DISMISSED. 16. IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE IS ALLOWED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (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: 2 8 /11/2014. *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