ACIT, Ludhiana V. The Ludhiana Distt Coop Milk Producers Union Limited, Ludhiana

ITA 131/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5457 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 131/CHANDI/2011 ASSESSMENT YEAR: 2005-06 A.C.I.T, CIRCLE VI, LUDHIANA V THE LUDHIANA DISTT COOP MILK PRODUCERS UNION LTD, JAGRAON ROAD, LUDHIANA PAN: AAACT 6191 L APPELLANT BY: SMT. SARITA KUMARI RESPONDENT BY: SHRI HARI OM ARORA ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 6.12.2010 BY WHICH HE H AS CANCELLED THE PENALTY AMOUNTING TO RS.2,63,240/- LEVIED BY THE AO U/S 271(1)(C), WI TH THE FOLLOWING OBSERVATIONS:- I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS OF THE APPELLANT AND ALSO PERUSED THE RELEVANT ASSESSMENT RECORD. THOUGH THE AO HAS L EVIED PENALTY ON AMOUNT OF RS.8,39,280/- CONFIRMED BY THE LD. CIT(A)-II, LUDHI ANA VIDE HIS ORDER DATED 31.3.2008 VIDE APPEAL NO. 209/IT/CIT(A)-II/LUDHIANA /07-08 OUT OF TOTAL DISALLOWANCE OF RS.68,91,718/- ON THE GROUND THAT T HE APPELLANT HAS FULL KNOWLEDGE OF THE DISALLOWANCE WARRANTED U/S 14A OF INCOME-TAX ACT AND THE SAME NOT CORRECTLY SHOWN WHILE FILING OF RETURN AND THE APPELLANT HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS HAS CONTESTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2004-05 PENALTY PROCEEDINGS U/S 271(1)(C) OF INCOME-TAX ACT WERE INITIATED FOR DISA LLOWANCE OF RS.55,53,656/- HOWEVER AFTER THE ORDER DATED 20.2.2008 OF THE LD. CIT(A) GIVING RELIEF OF RS.46,73,644/- NO FURTHER ACTION WAS TAKEN FOR LEVY OF PENALTY U/S 271(1)(C) OF INCOME-TAX ACT. FURTHER SUBMITTED THAT THE PENALTY PROCEEDINGS WERE INITIATED FOR ASSESSMENT YEAR 2005-06 U/S 271(1)(C) OF INCOME-TAX ACT WHEREIN DISALLOWANCE OF RS.8,39,280/- HAS BEEN CONFIRMED AFTER GIVING RE LIEF OF RS.60,52,438/- HOWEVER PENALTY HAS BEEN LEVIED U/S 271(1)(C) OF INCOME-TAX ACT ALTHOUGH UNDER SIMILAR CIRCUMSTANCES FOR IMMEDIATE PRECEDING YEAR, THE ACT ION ALTHOUGH PROPOSED INITIALLY WAS NO CARRIED FURTHER IN THE MATTER, AS THE DISALL OWANCE WAS CONFIRMED ON ESTIMATE BASIS. THE COUNSEL ALSO PLACED HIS RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS (P) LTD. REPORTED IN 2010322 ITR 158. KEEPING IN VIEW THE ABOVE FACTUAL POSITION, I AM INCLINED WITH THE OBSERVATIONS OF THE APPELLANTS COUNSEL EXPRESS ED DURING APPELLATE PROCEEDINGS AND FOUND THAT THE PENALTY LEVIED INCOR RECTLY IN THE APPELLANTS CASE. THEREFORE, THE PENALTY LEVIED U/S 271(1)(C) OF INC OME-TAX ACT AMOUNTING TO RS. 2,63,240/- IS HEREBY DELETED AND GROUNDS OF APPEAL OF THE APPELLANT ARE ALLOWED. 2. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. THE IMPUGNED PENALTY HAS BEEN LEVIED BY THE AO ON THE B ASIS OF MERE DISALLOWANCE OF EXPENSES BASED ON THE FACTS DISCLOSED BY THE ASSESS EE. THE ASSESSEE HAS NEITHER CONCEALED NOR FURNISHED INACCURATE PARTICULARS OF I TS INCOME OR OTHERWISE ACTED MALA-FIDE. IT IS WELL SETTLED POSITION THAT MERE DISALLOWANCE OF EXPENSES DOES NOT AUTOMATICALLY ATTRACT THE PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT. THE ORDER PASSED BY THE LD. THE LUDHIANA DISTT COOP MILK PRODUCERS UNION 131/CHANDI/2011 2 2 CIT(A) IS QUITE REASONABLE ON THE FACTS OF THE CASE . WE, THEREFORE, ENDORSE THE DECISION OF THE LD. CIT(A) IN THIS BEHALF. APPEAL FILED BY T HE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON APRIL, 2011 (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE APRIL, 2011 SURESH COPY TO: 1. THE APPELLANT, AC.I.T. CIRCLE-VI, LUDHIANA 2. THE RESPONDENT, THE LUDHIANA DISTT COOP MILK PRO DUCERS UNION LTD. LUDHIANA 3. THE CIT(A)-II, LUDHIANA 4. THE LD. CIT, LUDHIANA 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH