DCIT 9(2), MUMBAI V. NIRLON LTD, MUMBAI

ITA 1349/MUM/2011

• Counselvise Citation: 134919914 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-08-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 15-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Assessee Lawyers: NITESH JOSHI

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI . . . . . . . . , ! ! ! ! '!! '!! '!! '!! ! ! ! ! , # # # # BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 1349/MUM/2011 (ASSESSMENT YEAR: 2004-05) DY COMMISSIONER OF INCOME TAX -9(2), AAYAKAR BHAVAN, R. NO. 218, 2 ND FLR., M K ROAD, MUMBAI -400 020 VS M/S NIRLON LIMITED, WESTERN EXPRESS HIGHWAY PHADI, VILLAGE, GOREGAON, MUMBAI -400 063 $ .: PAN: AAACN 4042 N $& (APPELLANT) '($& (RESPONDENT) APPELLANT BY : SHRI PAVAN KUMAR BEERLA RESPONDENT BY : SHRI NITESH JOSHI )! * +, /DATE OF HEARING : 13-11-2014 -. * +, / DATE OF PRONOUNCEMENT : 05-12-2014 0 0 0 0 O R D E R '!! '!! '!! '!! ! ! ! ! , : :: : PER VIVEK VARMA, JM: INSTANT APPEAL IS FILED BY THE DEPARTMENT AGAINST THE OR DER OF CIT(A) 20, MUMBAI, DATED 02.12.2010, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING PENALTY IMP OSED U/S 271(1)(C) OF RS. 40,53,865/- OF RS. 40,53,865/- IGN ORING THE FACT THAT THE ADDITION WITH REFERENCE TO WHICH PENALTY W AS IMPOSED STANDS CONFIRMED IN APPEAL AND THE PENALTY IS WARRA NTED TO CONFORMITY WITH THE DECISION OF THE APEX COURT IN T HE CASE OF DHARMENDRA TEXTILE PROCESSORS & OTHERS (306 ITR 277 ). 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE SOLITARY ISSUE IS CANCELING THE PENALTY LEVIED AT RS. 40,53,865/-. 3. THE FACTS ARE THAT THE AO FOUND THAT THE ASSESSEE HAD NOT DEPOSITED THE CONTRIBUTION OF PF TO THE TUNE OF RS. 1,12,9 9,975/- M/S NIRLON LIMITED ITA 1349/M/2011 2 WITHIN THE TIME PRESCRIBED U/S 43B. THIS ACCORDING TO THE AO FELL IN THE CATEGORY OF FURNISHING OF INACCURATE PARTICULAR OF INC OME AND THEREFORE, PENALTY EQUIVALENT TO TAX EVADED WAS LEVIED. 4. THE ASSESSEE APPROACHED THE CIT(A), WHO OBSERVED, 4. I HAVE CONSIDERED THE DISPUTE. THE APEX COURT I N CIT VS ATUL MOHAN BINDAL, 317 ITR 1 (SC) HAS HELD THAT FOR APPL ICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST E XIST. THE CONDITIONS ARE THAT THE APPELLANT SHOULD HAVE CONCE ALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME BEFORE THE PENALTY U/S 271(1)(C) COULD BE LE VIED. THIS HAS BEEN REITERATED IN A RECENT DECISION OF THE APEX CO URT IN CIT V RELIANCE PETRO PRODUCTS P LTD, 322 ITR 15, WHEREIN HONBLE APEX COURT INTERPRETED THE MEANING OF THE EXPRESSIO NS, CONCEALMENT, INACCURATE, AND PARTICULARS USED IN CLAUSE (C) OF SECTION 271(1) AND HELD THAT EVERYTHING WOULD DE PEND UPON THE RETURN OF INCOME FILED BECAUSE THAT WAS THE ONL Y DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF I NCOME. THE APEX COURT HELD THAT WHEN THE ASSESSEE FURNISHED AL L DETAILS OF EXPENDITURE AS WELL AS INCOME IN ITS RETURN WHICH D ETAILS IN THEMSELVES WERE NOT FOUND TO BE INACCURATE NOR COUL D BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART, IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T AND MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE WH ICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVEN UE AS THE SAME WAS NOT SUSTAINABLE IN LAW, THAT BY ITSELF WOU LD NOT ATTRACT THE PENALTY UNDER SECTION 271(1)(C). THE AP EX COURT HELD THAT WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURA TE, UNTRUE OR FALSE, THE LIABILITY OF PENALTY WOULD ARISE. 4.2 IN THE INSTANT CASE, IT IS SEEN THAT THE APPELL ANT HAD NOT CONCEALED ANY INCOME AS REGARD ADDITIONS MADE OF RS . 1,12,99,975/- ON DENYING DEDUCTION ON ACCOUNT OF DE LAYED PAYMENT OF CONTRIBUTIONS OF PF. IT IS NOT THE CASE OF THE AO THAT THE APPELLANT CLAIMED DEDUCTION BASED ON PARTICULAR S WHICH WERE FOUND TO BE INACCURATE OR FALSE. THE APPELLANT HAD MADE CLAIM WHICH WAS HELD NOT SUSTAINABLE IN LAW. THE PA RTICULARS OF CLAIM WERE NOT FOUND TO BE INACCURATE, INCORRECT OR FALSE AND ONLY THE CLAIM WAS SAID TO BE NOT PERMISSIBLE UNDER THE LAW. AS HELD IN THE CASE OF RELIANCE PETRO (SUPRA) A MERE M AKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW WILL NOT AMOU NT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE CO NDITIONS PRESCRIBED IN SECTION 271(1)(C) DO NOT EXIST IN REL ATION TO THE ADDITION OF THE AFORESAID SUM. I, THEREFORE, CANCEL THE PENALTY LEVIED OF RS. 40,53,865/-. 5. THE CIT(A), THEREFORE, CANCELLED THE PENALTY, AS LEVIED BY THE AO. 6. AGAINST THIS ORDER OF THE CIT(A), DEPARTMENT IS IN APPEA L BEFORE THE ITAT. M/S NIRLON LIMITED ITA 1349/M/2011 3 7. BEFORE US THE DR ARGUED THAT NON DEPOSIT OF PF ATTR ACTED THE DISALLOWANCE AND THE CLAIM OF SUCH AN EXPENSE IS FURNISH ING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE, THE ORDE R OF THE AO, LEVYING THE PENALTY WAS CORRECT IN LAW. 8. THE AR ON THE OTHER HAND SUPPORTED THE ORDER OF THE CIT(A). 9. WE HAVE HEARD THE ARGUMENTS AND HAVE PERUSED THE MATERIAL ON RECORD AND THE ORDER OF THE REVENUE AUTHO RITIES. THE CIT(A) HAS APPLIED THE RATIO, THAT EVEN IF THE CLAIM WAS NOT ALLOWABLE, BUT SINCE THE ASSESSEE HAD FURNISHED ALL THE DETA ILS, IT WOULD NOT FALL IN THE CATEGORY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE FACT THAT THE ASSESSEE HAD DECLARED THE MONTH-WISE PAYMENT SCHEDULE, IN AN ANNEXURE TO TAR IS NOT DISPUTED BY THE AO/DR, OR IT HAS NOT EVEN BEEN HELD BY THE AO/DR THAT EVEN THE DETAILS WERE IN CORRECT. 10. HE, THEREFORE, APPLIED THE RATIO LAID DOWN BY THE HONB LE SUPREME COURT IN THE CASE OF CIT VS ATUL MOHAN BINDAL ( SUPRA ) AND CIT VS RELIANCE PETROPRODUCTS LTD ( SUPRA ), WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT IN CASE OF DISCLOSURE OF CLAIM, WHICH MAY NOT OTHERWISE BE ALLOWABLE, SHALL NOT ATTRACT PENAL PROCEEDINGS. 11. WE, THEREFORE, DO NOT FIND ANY REASON TO DISTURB THE DECISION, AS ARRIVED AT BY THE CIT(A), WHICH WE SUSTAIN. CONSEQUENTIALLY, THE APPEAL FILED BY THE DEPARTMENT IS REJECTED. 12. IN THE RESULT, THE APPEAL AS FILED BY THE DEPARTMENT IS DISMISSED. M/S NIRLON LIMITED ITA 1349/M/2011 4 ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH DECEMBER, 2014. SD/- SD/- ( . . . . . . . . ) ( '!! '!! '!! '!! ! ! ! ! ) (R C SHARMA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 5 TH DECEMBER, 2014 '+/ COPY TO:- 1) $& / THE APPELLANT. 2) '($& / THE RESPONDENT. 3) THE CIT -20, MUMBAI. 4) THE CIT-9, MUMBAI/ CIT -9, MUMBAI. 5) '!34 '+) G , , / THE D.R. G BENCH, MUMBAI. 6) 45 6 COPY TO GUARD FILE. 0) / BY ORDER / / TRUE COPY / / 7 / 8 9 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *;<8) !.). *CHAVAN, SR.PS