DCIT Corporate Circle -3(2), Chennai V. Rajeshs Corporation, Chennai

ITA 130/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2155 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 10-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.130/CHNY/2018 /ASSESSMENT YEAR: 2013-14 THE DY. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-3(2), CHENNAI. VS. M/S.RAJESH CORPORATION, NO.27, BARNABY STREET, KILPAUK, CHENNAI-600 010. [PAN: AAAFR 0831 N ] ( ) /APPELLANT) ( *+) /RESPONDENT) DEPARTMENT BY : MR. R.CLEMENT RAMESH KUMAR, ADDL.CIT ASSESSEE BY : MR. D.ANAND, ADV. - /DATE OF HEARING : 05.08.2019 - /DATE OF PRONOUNCEMENT : 05.08.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI, I N ITA NO.173/CIT(A)-11/2016-17 DATED 25.10.2017 FOR THE AY 2013-14. 2. SHRI R.CLEMENT RAMESH KUMAR, ADDL.CIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI D.ANAND, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.130/CHNY/2018 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.DR THAT THE ASSESSEE HA D ORIGINALLY FILED ITS RETURN OF INCOME ADMITTING INCOME OF RS.4,00,89 ,300/-. THE ASSESSEE HAD CLAIMED DEDUCTION U/S.35(1)(II) OF THE ACT AT 1 75% IN RESPECT OF THE DONATIONS OF RS.20.00 LAKHS GIVEN TO M/S.HERBICURE HEALTHCARE BIO HERBAL RESEARCH FOUNDATION (IN SHORT M/S.HHBHRF). IT WAS A SUBMISSION THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WITHDREW THE CLAIM OF DEDUCTION U/S.35(1)(II) OF THE ACT. THE ASSESSMENT WAS ACCORDINGLY COMPLETED AND PENALTY PROCEEDINGS HAD BEEN INITIATE D U/S.271(1)(C) OF THE ACT. A SHOW CAUSE NOTICE WAS ISSUED ON THE ASSESSEE ON 17.02.2016 AND THE ASSESSEE HAD EXPLAINED THAT THE ASSESSEE HAD FU LLY COOPERATED IN THE ASSESSMENT PROCEEDINGS AND THE TAXES HAVE ALREADY B EEN PAID. IT WAS A SUBMISSION THAT THE AO DID NOT ACCEPT THE CONTENTIO N OF THE ASSESSEE AND PROCEEDED TO LEVY THE PENALTY U/S.271(1)(C) OF THE ACT TO THE EXTENT OF 300% OF THE TAX SOUGHT TO BE EVADED. ON APPEAL, THE LD.CIT(A) HAD DELETED THE PENALTY BY FOLLOWING THE PRINCIPLES LAI D DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF REPORT ED IN 291 ITR 519, WHEREIN, THE HONBLE SUPREME COURT HAD HELD THAT TH E INAPPROPRIATE WORDS AND PARAGRAPHS WERE NOT DELETED IN THE NOTICE ISSUED SHOWED THE NON-APPLICATION OF MIND BY THE AO. THE LD.CIT(A) A LSO FOLLOWED THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY & OTHERS, REPORTED IN 35 9 ITR 565, WHEREIN, THE SAME PRINCIPLES HAD BEEN FOLLOWED. IT WAS A SU BMISSION THAT THE ASSESSEES CLAIM OF DEDUCTION U/S.35(1)(II) OF THE ACT WAS A FALSE CLAIM AND ITA NO.130/CHNY/2018 :- 3 -: THE PENALTY WAS LIABLE TO BE CONFIRMED. IT WAS A PR AYER THAT THE ORDER OF THE LD.CIT(A) IS LIABLE TO BE REVERSED. 4. IN REPLY, THE LD.AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT(A). IT WAS A FURTHER SUBMISSION THAT NO EVI DENCE HAD BEEN FOUND IN THE COURSE OF THE ASSESSMENT PROCEEDINGS TO SHOW THAT THE ASSESSEE HAD MADE A BOGUS CLAIM. IT WAS A FURTHER SUBMISSIO N THAT THE ASSESSEE HAD BEEN SHOWN THE SWORN STATEMENT RECORDED FROM ON E OF THE DIRECTORS OF M/S.HHBHRF THAT ONE MR.KISHAN BHAWASINGKA, A BRO KER, HAD BEEN DOING BOGUS TRANSACTIONS IN THE NAME OF M/S.HHBHRF. IT WAS A SUBMISSION THAT THERE WAS NO EVIDENCE LINKING THE A SSESSEES DONATION NOR WAS THE ASSESSEES TRANSACTIONS IDENTIFIED AS A BOG US TRANSACTION. IT WAS A SUBMISSION THAT IN ANY CASE, EVEN ON MERITS, PENA LTY U/S.271(1)(C) OF THE ACT WAS NOT LEVIABLE ON THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. A PERUSAL OF THE FACTS IN THE CASE OF THE ASSESSEE CLEARLY SHOWS THAT THE LD.CIT(A) HAS FOLLOWED THE JUDICIAL DISCIPLINE BY FOLLOWING THE PRINCIPLES LAID DOWN IN THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY & OTHERS A S ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SHRI DILIP N. SHROFF. EVEN ON MERITS, THE REVENUE HAS NOT BEEN ABLE TO SHOW THAT THE ASSESSEE HAS WITH MALA FIDE INTENTION CONCEALED ANY PARTICULARS OF IT S INCOME OR FURNISHED ITA NO.130/CHNY/2018 :- 4 -: INACCURATE PARTICULARS OF ITS INCOME. THUS, EVEN O N MERITS, FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT I N THE CASE OF M/S.RELIANCE PETROPRODUCTS PVT. LTD., REPORTED IN 3 22 ITR 158 (SC), AS IT IS NOTICED THAT IT IS ONLY A CLAIM OF THE ASSESSEE WHI CH HAS BEEN WITHDRAWN, NO PENALTY U/S.271(1)(C) OF THE ACT IS LEVIABLE. I N THESE CIRCUMSTANCES, EVEN ON MERITS, IT IS HELD THAT NO PENALTY IS LEVIA BLE ON THE FACTS OF THE ASSESSEES CASE. IN THESE CIRCUMSTANCES, THE ORDER OF THE LD.CIT(A) IS UPHELD AND THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT STANDS CANCELLED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 05 TH AUGUST, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED: 05 TH AUGUST, 2019. TLN - *34 54 /COPY TO: 1. ) /APPELLANT 4. 6 /CIT 2. *+) /RESPONDENT 5. 4 * /DR 3. 6 ( ) /CIT(A) 6. /GF