ACIT 2(3), MUMBAI V. TATA SONS LTD, MUMBAI

ITA 1423/MUM/2013

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7982 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 19-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MANJUNATHA SWAMY
• Keywords: Wrong claim; Set aside
• Section: 143(3)

Judgement Text

1 ITA 1423/MUM/2013 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) ITA NO. 1423/MUM/2013 (ASSESSMENT YEAR : 2004-05) ACIT-2(3), MUMBAI VS M/S TATA SONS LTD BOMBAY HOUSE, 24, HOMI MODY STREET FORT, MUMBAI PAN : AAACT4060A APPELLANT RESPONDEDNT APPELLANT BY SHRI R MANJUNATHA SWAMY RESPONDENT BY SHRI AARTI VISSANJI DATE OF HEARING 11-07 -2019 DATE OF PRONOUNCEMENT 11-07-2019 O R D E R PER PAWAN SINGH, JM : THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME-TAX(APPEALS)-6, MUMBAI DATED 17-12-2012 FOR AY 2004-05. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C1T(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED BY THE AO U/S, 27I(L)(C) AMOUNTING TO RS. 73,91,60,858/-, IGNORING THE FACT THAT THE ASSE SSING OFFICER HAD NOT LEVIED 2 ITA 1423/MUM/2013 PENALTY ON ALL THE ADDITIONS CONFIRMED BY THE CIT(A ), BUT ONLY IN RESPECT OF FALSE CLAIMS MADE BY THE ASSESSEE IN RESPECT OF EXP ENSES OF PROVISION FOR PAYMENT TO EMPLOYEES WHICH WAS NOT A STATUTORY OBLI GATION, PREMIUM PAID AS PENALTY FOR FAILURE TO COME OUT WITH PUBLIC ISSUE O F SHARES AND PRIOR PERIOD EXPENSES, WHICH WERE CLAIMED BY FURNISHING INACCURA TE PARTICULARS OF INCOME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S.271(L)(C) WITHOUT APPRECIATING THE FACT THAT THE QUANTUM ADDITION IN RESPECT OF WHICH PENALTY IMPOSE D HAS BEEN UPHELD BY THE LD. CIT(A). 4. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S.271(L)(C) IGN ORING THE PROVISIONS OF SECTION 271(L)(C) OF THE I.T. ACT, READ WITH EXPLANATION WH ICH INDICATE THE ELEMENT OF STRICT LIABILITY ON THE PART OF THE ASSESSEE THAT W HILE FILING THE RETURN OF INCOME, THE ASSESSEE HAS TO DISCLOSE THE TRUE AND CORRECT P ARTICULARS OF INCOME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S.271(L)(C) BY HOLDING THAT IT IS ONLY A CASE OF INADMISSIBLE CLAIM, WHEN THE CLAIM WAS ITSELF FA LSE AND IN THE PROCESS, OVERLOOKED THE CRUCIAL FACT THAT THE RATIO OF HON'B LE SUPREME COURT'S DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. 322 1TR 118 WAS NOT APPLICABLE. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE, FILED ITS RETURN OF INCOME FOR AY 2004-05 ON 29- 10-2004 DECLARING TOTAL INCOME AT RS.21,99,34,573. THE RETURN WAS SELECTED FOR SCRUTINY. THE ASSESSMENT ORDER WAS PASSED ON 27-12 -2006 WHEREIN THE AO MADE VARIOUS ADDITIONS AND DISALLOWANCE. THE AO, W HILE PASSING THE ASSESSMENT ORDER, INITIATED PENALTY PROCEEDINGS ON VARIOUS DISALLOWANCE. THE AO, AFTER SERVING THE SHOW CAUSE NOTICE LEVIED PENA LTY OF RS.73,91,60,858 BEING 100% OF TAX SOUGHT TO BE EVADED ON THE TOTAL DISALL OWANCE OF RS.206,03,73,698. HOWEVER, ON APPEAL BEFORE CIT(A), THE ENTIRE PENALT Y WAS DELETED. THUS, AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS F ILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 3 ITA 1423/MUM/2013 3. AT THE OUTSET OF HEARING, THE LD.AR OF THE ASSES SEE SUBMITS THAT THE ASSESSMENT ORDER DATED 27-12-2006 ON THE BASIS OF W HICH THE PENALTY WAS INITIATED HAS BEEN SET ASIDE BY TRIBUNAL IN ITA NO. 2519/MUM/2009 DATED 11- 03-2019. THE LD.AR FURTHER SUBMITS THAT THE ASSESS MENT ORDER WAS SET ASIDE BY THE TRIBUNAL HOLDING THAT THE AO HAS NO POWER TO PA SS THE ASSESSMENT ORDER IN ABSENCE OF ORDER U/S 120(4)(B) AS WELL AS U/S 127(1 ). THEREFORE, THE PENALTY ON SUCH ASSESSMENT ORDER WOULD NOT SURVIVE. THE LD.AR , ON MERIT, OTHERWISE SUPPORTED SUPPORTED THE ORDER OF CIT(A). 4. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ER OF ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED ORDER OF LOWER AUTHORITIES. WE HAVE ALSO GONE THROUGH THE O RDER OF TRIBUNAL DATED 11- 03-2019 IN ITA NO.2519/MUM/2009, WHEREIN THE ASSESS MENT ORDER DATED 27- 12-2006 PASSED BY ADDL.CIT, RANGE-2(3) U/S 143(3) H AS BEEN QUASHED / ANNULLED. THEREFORE, NO PENALTY ORDER WOULD SURVIV E. 6. IN THE RESULT THE APPEAL OF THE REVENUE DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11-07-2019. SD/- SD/- (G MANJUNATHA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 11 TH JULY, 2019 PK/- 4 ITA 1423/MUM/2013 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI