Alpha Foods & Chemicals Pvt. Ltd., Kolkata V. ITO, Ward - 10(2), Kolkata, Kolkata

ITA 1274/KOL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9384 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 21-06-2010
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH RAJHANS
• Assessee Lawyers: S BANDYOPADHYAY
• Keywords: Wrong claim
• Section: 143(3); 80HHC

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI D.K.TYAGI, JUDICIAL MEMBER. !' !' !' !' /AND . .. . . .. .! !! ! , # SHRI C.D.RAO, ACCOUNTANT MEMBER '$ '$ '$ '$ / ITA NO . 1274/KOL/2010 %&' !()/ ASSESSMENT YEAR : 2001-02 (+, / APPELLANT ) M/S.ALPHA FOODS & CHEMICALS PVT.LTD. (PAN: AACCA 1187 F) - !& - - VERSUS - . (.+,/ RESPONDENT ) THE I.T.O., WARD-10(2)/ KOLKATA +, / 0 / FOR THE APPELLANT: SHRI S.BANDYOPADHYAY .+, / 0 / FOR THE RESPONDENT: SHRI ASHUTOSH RAJHANS 1 / ORDER ( (( ( . .. . . .. .! !! !) )) ), , , , # PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 22.01.2010 OF THE CIT(A)-XXXII, KOLKATA PERTAINING TO A.YR. 2001-02. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS RELATIN G TO CONFIRMATION OF PENALTY IMPOSED U/S 271(1)(C) OF THE ACT 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE AO HAS L EVIED PENALTY OF RS.90,057/- BY OBSERVING AS UNDER :- DURING THE COURSE OF SCRUTINY IT WAS FOUND OUT THA T THE REMITTANCE ON ACCOUNT OF SALES OF MANGOES TO EE & BRIAN SMITH (1928) LTD. , UK WAS NEVER RECEIVED TILL THE DATE OF ASSESSMENT THOUGH THE SAME WAS INC LUDED IN THE TOTAL TURNOVER OF EXPORT BUSINESS AND CORRESPONDING DEDUCTION U/S 80H HC WAS CLAIMED IN THE RETURN AND OTHER DOCUMENTS ENCLOSED THEREWITH. ON DEDUCTION OF THE ABOVE FACT, A FRESH FORM NO.10 CCAC WAS FILED BY THE AUDITORS OF THE COMPANY REVISING THE EARLIER CL AIM OF RS.2,59,184/- TO RS.30,571/- U/S 80HHC DURING THE COURSE OF THE SAID ASSESSMENT PROCEEDINGS. DURING THE APPELLATE STAGE THE ABOVE DOWNWARD REVI SION WAS CONFIRMED BY THE CIT(A) IN HIS AFORESAID ORDER. DURING THE CO URSE OF THE PRESENT PROCEEDINGS THE ASSESSEE COMPANY HAD PLEADED INTER ALIA THAT THE SAID 2 DOWNWARD REVISION OF 80HHC CLAIM DID NOT COME WITHI N THE PURVIEW OF CONCEALMENT AS ENVISAGED IN THE SECTION. THE ABOVE CONTENTION OF THE ASSESSEE IS NOT ACCEPT ABLE ON THE GROUNDS THAT THERE HAD INDEED BEEN A CASE OF FURNISHING INA CCURATE PARTICULARS OF INCOME BY CLAIMING EXCESS DEDUCTION U/S 80HHC WHEN IT WAS APPARENT TO THE ASSESSEE COMPANY THAT NO REMITTANCE ON ACCOUNT OF THE SAID E XPORTS HAVE BEEN RECEIVED AT ALL. IT WAS A PLOY ON THE ASSESSEES PART TO SHO W LOWER PROFITS AFTER CLAIMING EXCESS DEDUCTION AND THEREBY PAYING LESSER TAX THAN WHAT IT WAS LEGALLY ENTITLED TO DO. THUS, THE ELEMENT OF CONCEALMENT IS INHERENT IN THE ACTION OF THE ASSESSEE COMPANY WHICH CLAIMED HIGHER DEDUCTION U/S 80HHC BY FURNISHING INACCURATE PARTICULARS IN THE 10CCAC FILED ALONG WITH THE RETU RN OF INCOME. SUBSEQUENTLY, AFTER DETECTION FACTS DURING THE COU RSE OF ASSESSMENT, THE ASSESSEE HAD FILED A REVISED 10CCAC ADMITTING THE S AME. FURTHER, IN RESPONSE TO THE NOTICE OF HEARING, THE A/R VIDE HIS LETTER DATED 16/05/07 AGAIN ADMITTED THE FACT THAT ASSESSE E FURNISHED RETURN OF INCOME CLAIMING HIGHER REBATE U/S 80HHC (RS.2,59,184/-) WH ICH DURING THE ASSESSMENT PROCEEDINGS WAS REVISED WITH A MUCH LOWER CLAIM U/S 80HHC RS.30,751/-. 3.1. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT IN THE INSTANT CASE IT HAS BEEN ADMITTED BY THE AS SESSEE THAT SALE PROCEEDS OF SOME OF THE GOODS EXPORTED BY IT HAD NOT BEEN RECEI VED IN OR BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE SPECIFIE D PERIOD, STILL THE ASSESSEE CHOOSE TO CLAIM DEDUCTION U/S 80HHC IN HIS RETURN O F INCOME IN RESPECT OF SUCH EXPORTS. IT WAS ONLY WHEN THE A.O. DETECTED THE FAU LT IN SUCH CLAIM, DID THE ASSESSEE ADMIT THAT ITS CLAIM OF DEDUCTION U/S 80HH C TO THE TUNE OF RS,.2,59,184/- WAS INCORRECT AND THAT THE SAME MAY BE RESTRICTED TO RS.30,571/-. THE ADMISSION OF INCORRECT CLAIM OF DEDUCTION U/S 8 0HHC WAS NOT VOLUNTARY. THE ABOVE FACTS CLEARLY SHOW THAT THE EXCESSIVE CLA IM OF DEDUCTION U/S 80HHC IN ITS RETURN OF INCOME BY THE ASSESSEE WAS NOT ON ACCOUNT OF MY INADVERTENT MISTAKE RATHER THE SAME WAS MADE WITH FULL KNOWLEDG E OF THE SAME BEING INCORRECT AND WRONG. 3.2. AND FURTHER DISCUSSING THE PROVISION OF EXPLAN ATION TO SECTION 271(1)(C) OF THE ACT HE CONCLUDED THAT THE FACTS OF THE CASE, AS ALREADY DISCUSSED IN THE PROCEEDING PARAS, SHOW THAT THE ASSESSEE IN ITS RETURN OF INCOME HAD FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN AS MUCH AS IT HAD MADE EXCESSIVE CLAIM OF DEDUCTION U/S 80HHC. WHEN THE AO CONFRONTED THE ASSESSEE WITH THE FAULT IN ITS CLAIM U/S 80HHC, THE ASSESSEE OFFERED NO EXPLANATION FOR SUCH WRONG CLAIM AND ADMITTED THAT THE ACTUAL DEDUCTION AVAILABLE TO IT UNDER THAT SECTION WAS MUCH LOWER THAN THAT CLAIMED. THUS, THE CASE OF THE ASSESSEE CLEARLY FAL LS WITHIN THE PURVIEW OF CLAUSE (A) OF THE EXPLANATION-I BELOW SECTION 271(1 ). 3. 3 . AGGRIEVED BY THIS THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3 4. AT THE TIME OF HEARING, THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND FURTHER CONTENDED THAT IN THIS CASE THE ASSESSEE HAS SIMPLY RELIED ON THE CERTIFICATE BY ITS CHARTERED ACCOUNTANT AND THUS HE HAS MADE NEITHER INACCURATE PARTICULARS NOR CLAIMED EXEMPTION INTENTIONALLY. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DELETE THE PENALTY LEVIED ON IT. FO R THIS PROPOSITION HE RELIED ON SEVERAL CASE LAWS. 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER CONTENDED THAT IN THIS CASE THE ASSESSEE IN ADDITION TO FILING OF INACCURATE PARTICULARS BEFORE THE REVENUE AUTHORITIES HE MISGU IDED ITS CHARTERED ACCOUNTANT BY FURNISHING INACCURATE PARTICULARS. THEREFORE, HE AG AIN TOOK A PLEA THAT BECAUSE OF THE MISTAKE OF THE PROFESSIONAL THE ASSESSEE CANNOT BE PENALIZED. THEREFORE HE REQUESTED TO UPHOLD THE SAME. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL CONSIDERATION OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT IN THE ORI GINAL ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) DATED 27.02.2004 WHICH WAS PLACED AT PAGES 19 TO 21 OF THE PAPER BOOK DURING THE COURSE OF SCRUTINY IT WAS FOUND OUT THAT REMITTANCE OF RS.6,37,537/- IN RESPECT OF THE CONSIGNMENT OF PROCESSED MANGOES TO ONE M/S.EE & BRIAN SMITH (1928) LTD. WAS NEVER RECEIVED FROM THEM. IT WAS S TATED THAT THE ENTIRE CONSIGNMENT WAS REJECTED BY THE AFORESAID CONCERN ON THE GROUND S OF INFERIOR QUALITY. HOWEVER, NO DOCUMENTARY EVIDENCE IN RESPECT OF THE SAME COUL D BE PRODUCED. THIS ALONG WITH CERTAIN OTHER MISTAKES INHERENT IN THE COMPUTATION OF DEDUCTION U/S 80HHC VIDE FORM NO.10CCAC DATED 10/8/2001 WAS POINTED OUT TO THE A/ RS WHO INCIDENTALLY WERE THE AUDITORS FOR THE SAID COMPANY AND AN EXPLANATION W AS SOUGHT THERE FROM. ON 27/11/2003 THE A/R AND AUDITORS OF THE SAID COMPANY FILED REVISED COMPUTATION ALONG WITH FORM NO.10CCAC DATED 27/11/03 RE-COMPUTING TH E DEDUCTION U/S 80HHC AT RS.30,571/- IN PLACE OF THE ORIGINAL CLAIM FOR RS.2 ,59,184/-. 6.1. ON CAREFUL PERUSAL OF THE SAID OBSERVATIONS AL ONG WITH THE FINDINGS OF THE LD. CIT(A) WE ARE OF THE CONSIDERED VIEW THAT THE ASSES SEE IS WELL AWARE THAT THE SALE 4 PROCEEDS OF SOME OF THE GOODS EXPORTED BY IT HAD NO T BEEN RECEIVED IN OR BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE SP ECIFIC PERIOD, STILL THE ASSESSEE CHOOSE TO CLAIM DEDUCTION U/S 80HHC IN HIS RETURN O F INCOME IN RESPECT OF SUCH EXPORTS. IT WAS ONLY WHEN THE AO DETECTED THE FAULT IN SUCH CLAIM, THE ASSESSEE HAS ADMITTED THAT THE CLAIM OF DEDUCTION U/S 80HHC TO T HE TUNE OF RS.2,59,184/- WAS INCORRECT. THE ADMISSION OF INCORRECT CLAIM OF DEDU CTION U/S 80HHC WAS NOT VOLUNTARY. THE ASSESSEE CANNOT TAKE A PLEA THAT THE CLAIM WAS MADE ON THE BASIS OF THE ADVICE OF THE CHARTERED ACCOUNTANT SINCE BECAUSE TH E ASSESSEE HAS MISGUIDED EVEN THE CHARTERED ACCOUNTANT AS RIGHTLY CONTENDED BY THE LD . DR IN RESPECT OF THE NON RECEIPT OF SALE PROCEEDS OF SOME OF THE EXPORT GOODS. KEEPI NG IN VIEW OF THIS SPECIFIC FACT WE FIND NO INFIRMITY IN THE ORDER OF THE REVENUE AUTHO RITIES. THEREFORE WE CONFIRM THE PENALTY IMPOSED BY THE REVENUE AUTHORITIES. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISM ISSED. 6 1 7 8& 69 6 1 7 8& 69 6 1 7 8& 69 6 1 7 8& 69 ORDER PRONOUNCED IN THE COURT ON 02.02.2011. SD/- SD/- . .. . . .. . , , , , % % % % D.K.TYAGI, JUDICIAL MEMBER . .. . . .. .! !! !, ,, , # # # # , C.D.RAO, ACCOUNTANT MEMBER. ( (( (# # # #) )) ) DATE: 02.02.2011. 1 / .%%: ;:(<- COPY OF THE ORDER FORWARDED TO: 1. M/S. ALPHA FOODS AND CHEMICALS PVT. LTD., SHRI RAJB IR SINGH, C/O P.K.MATHUR, ADVOCATE, 1-MEREDITH STREET, KOLKATA-700072. 2 THE I.T.O., WARD-10(2), KOLKATA 3. THE CIT, 4. THE CIT(A)-XXXII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA : .%/ TRUE COPY, 1&8/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 5