The Dy. CIT, Circle-1(2), Ahmedabad V. Progressive Mercantile Co. Operative Bank Limited, Ahmedabad

ITA 1447/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1123 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 14-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO.1447/AHD/2017 ( / ASSESSMENT YEAR : 2011-12) THE DCIT CIRCLE-1(2) AHMEDABAD / VS. PROGRESSIVE MERCANTILE CO- OPERATIVE BANK LTD. M.H. MARKET STATION ROAD OPP. KALUPUR RAILWAY STATION AHMEDABAD ./ ./ PAN/GIR NO. : AAAAP 6888 C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VINOD TANWANI, SR.DR / RESPONDENT BY : SHRI S.N. DIVATIA, AR / DATE OF HEARING 23/10/2019 !'# / DATE OF PRONOUNCEMENT 12/12/2019 / O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER : THE REVENUE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-10, AHMEDABA D [CIT(A) IN SHORT] DATED 14/03/2017 PASSED FOR ASSESSMENT YEAR (AY) 2011-12. ITA NO.1447 /AHD/2017 DCIT VS. PROGRESSIVE MERCANTILE CO-OP.BANK LTD. ASST.YEAR 2011-12 - 2 - 2. THE SOLITARY GRIEVANCE OF THE REVENUE THAT THE L D. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.1,28,88,043/- IMPOSED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A CO-OPERATIVE BANK. IT HAS FILED ITS RETURN OF INCOME ELECTRONIC ALLY ON 13/09/2011 DECLARING TOTAL LOSS OF RS.2,96,06,662/- AND ASSESS MENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 06/12/2013. LD.AO HAS DIS ALLOWED FOLLOWING CLAIMS MADE BY THE ASSESSEE. I) DISALLOWANCE OF PROVISION FOR INVESTMENT DEPREC IATION FUND RS.3,85,00,000/- II) ADDITION OF INTEREST ACCRUED ON NON PERFORMING ASSETS (NPA): RS. 21,58,875/- III) DISALLOWANCE OF THE GENERAL PROVISION AND RESE RVE RS. 10,50,000/- 4. THE LD.AO INITIATED PENALTY PROCEEDINGS AND ULTI MATELY IMPOSED A PENALTY OF RS.1,28,88,043/-. 5. DISSATISFIED WITH THE IMPOSITION OF PENALTY, ASS ESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). 6. THE LD. FIRST APPELLATE AUTHORITY HAS DELETED TH E PENALTY. 7. BEFORE US, LD.COUNSEL FOR THE ASSESSEE, AT THE V ERY OUTSET, SUBMITTED THAT THESE DISALLOWANCES WERE CHALLENGED BY THE ASS ESSEE AND DISPUTE TRAVELLED UPTO THE TRIBUNAL VIDE ITA NO.902/AHD/201 5 FOR AY 2011-12. ITA NO.1447 /AHD/2017 DCIT VS. PROGRESSIVE MERCANTILE CO-OP.BANK LTD. ASST.YEAR 2011-12 - 3 - THE TRIBUNAL HAS DELETED ALL THE THREE DISALLOWANCE S AND, THEREFORE, NO PENALTY IS IMPOSABLE UPON THE ASSESSEE. 8. THE LD.DR WAS UNABLE TO CONTROVERT THIS CONTENTI ON OF THE LD.COUNSEL FOR THE ASSESSEE. COPY OF THE TRIBUNAL ORDER HAS BEEN PLACED ON RECORD ON PAGE NO.33 TO 49 WITH THE PAPER-BOOK. 9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH RE GARD TO THE FACT THAT DISALLOWANCES ON WHICH PENALTY HAS BEEN COMPUTED BY THE ASSESSING OFFICER STANDS DELETED AT THE END OF THE ITAT IN TH E QUANTUM APPEAL. SUB-CLAUSE(III) OF SECTION 271(1)(C) PROVIDES A MEC HANISM FOR COMPUTATION OF PENALTY. THIS CLAUSE READS AS UNDE R: 271(1) IF THE [ASSESSING OFFICER] OR THE [COMMISSI ONER (APPEALS)] [OR THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER] IN THE CO URSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) XXXX (B) XXXX (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF [SUCH INCOME, OR] (D) XXXX [(II) XXZXX (III) IN THE CASES REFERRED TO IN CLAUSE(C) [OR CLA USE(D)], [IN ADDITION TO TAX, IF ANY, PAYABLE] BY HIM, A SUM WHICH SHALL NOT BE LES S THAN, BUT WHICH SHALL NOT EXCEED [THREE TIMES], THE AMOUNT OF TAX SOUGHT TO B E EVADED BY REASON OF THE ITA NO.1447 /AHD/2017 DCIT VS. PROGRESSIVE MERCANTILE CO-OP.BANK LTD. ASST.YEAR 2011-12 - 4 - CONCEALMENT OF PARTICULARS OF HIS INCOME [OR FRINGE BENEFITS] OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME [OR FRINGE BENEFITS]. 6. A BARE PERUSAL OF THIS CLAUSE WOULD INDICATE THA T IF AN ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS, THEN IN ADDITION TO THAT TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EX CEED THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT O F PARTICULARS OF HIS INCOME. THUS, THE COMPUTATION OF PENALTY IS DEPEND ENT UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. IN THE PRESENT CASE, THE ADDITIONS WHICH HAVE BEEN MADE BY MAKING DISALLOWANCES ON THR EE COUNTS STAND DELETED. THEREFORE, THE VERY BASIS FOR CALCULATING THE PENALTY STANDS EXTINGUISHED. NO PENALTY IS IMPOSABLE UPON THE ASS ESSEE. THUS, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE, IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 12-12- 2019 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 12/ 12 /2019 &.., .(../ T.C. NAIR, SR. PS ITA NO.1447 /AHD/2017 DCIT VS. PROGRESSIVE MERCANTILE CO-OP.BANK LTD. ASST.YEAR 2011-12 - 5 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-10, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 10.11.19(DICTATION-PAD 8- P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..12.12.2019 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.16.12.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16.12.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER