ACIT CORPORATE CIRCLE 2 , COIMBATORE V. M/S TNSTC COIMBATORE LTD, COIMBATORE

ITA 1519/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3283 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AR SREENIVASAN
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1519/CHNY/2018 ( / ASSESSMENT YEAR: 2013-14) THE ACIT, CORPORATE CIRCLE -2, COIMBATORE. VS M/S. TNSTC COIMBATORE LTD., 37, METTUPALAYAM ROAD, COIMBATORE 641 043. PAN: AAACC9092M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI A.R. SREENIVASAN, JCIT / RESPONDENT BY : NONE /DATE OF HEARING : 27.12.2018 /DATE OF PRONOUNCEMENT : 15.02.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-1, COIMBATORE, DATED 19.02.2018 IN APPEAL NO.113/16-17 FOR THE ASSESSMENT YEAR 2013-14 PASSED U/S. 250(6) R.W.S. 271(1)(C) OF THE ACT. AT THE TIME OF HEARING THE LD.AR WAS NOT PRESENT BEFORE THE BENCH, HOWEVER ON PERUSING THE FILE AND THE SUBMISSION OF THE LD.DR THE BENCH DECIDED TO HEAR THE APPEAL EX-PARTE ON MERITS. 2 ITA NO.1519/CHNY /2018 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE LD.AO U/S.271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A STATE GOVERNMENT UNDERTAKING REGISTERED AS LIMITED COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ELECTRONICALLY ON 28.09.2013 DECLARING NIL INCOME. INITIALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 03.09.2014. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 26.03.2016 WHEREIN THE LD.AO MADE SEVERAL ADDITIONS. THEREAFTER THE LD.AO HAD INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND LEVIED MINIMUM PENALTY OF RS.2,10,83,569/- BY STATING THAT THE ASSESSEE HAD WILLFULLY CONCEDED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS. ON APPEAL THE LD.CIT(A) DELETED THE PENALTY LEVIED BY THE LD.AO. 3 ITA NO.1519/CHNY /2018 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE FOLLOWING DISCREPANCIES WERE OBSERVED BY THE LD.AO AND THEREAFTER ADDITIONS WERE MADE, PENAL PROVISIONS U/S.271(1)(C) OF THE ACT WAS INITIATED AND SUBSEQUENTLY PENALTY WAS LEVIED:- I. FROM THE ANNUAL REPORT FILED FOR THE FINANCIAL YEAR 2012-13, IT WAS OBSERVED BY THE LD.AO THAT THE ACTUAL PAYMENT MADE TOWARDS PENSION FUND WAS SHOWN AS RS.41,09,03,186/- WHILE AS THE ASSESSEE HAD CLAIMED DEDUCTION FOR RS.44,52,96,991/-. ON QUERY IT WAS EXPLAINED THAT CHEQUE AMOUNTING TO RS.3,43,93,805/- TOWARDS PF CONTRIBUTION WAS SUBSEQUENTLY CANCELLED AND THE ASSESSEE AGREED FOR ADDITION OF THE SAME. ACCORDINGLY ADDITION WAS MADE. SUBSEQUENTLY IN THE PENALTY PROCEEDINGS, THE LD.AO OBSERVED THAT THE ASSESSEE BEING A STATE GOVERNMENT UNDERTAKING WHICH IS AUDITED AND ADVISED BY QUALIFIED CHARTERED ACCOUNTANTS HAD FAILED TO FURNISH THE CORRECT PARTICULARS OF INCOME AND THEREFORE LEVIED PENALTY INVOKING THE PROVISIONS OF SECTION 271(1)(C) READ WITH EXPLANATION 1B OF THE ACT. 4 ITA NO.1519/CHNY /2018 II. IT WAS FURTHER NOTICED BY THE LD.AO THAT THE ASSESSEE HAD CLAIMED EXPENDITURE AMOUNTING TO RS.3,04,35,849/- WHICH PERTAINS TO PRIOR PERIOD. THEREFORE THE LD.AO DISALLOWED THE SAME AND INVOKED THE PENAL PROVISIONS U/S.271(1)(C) OF THE ACT. SUBSEQUENTLY THE LD.AO LEVIED PENALTY FOR THE SAME, BY STATING THAT, HAD THE CASE NOT COME UNDER SCRUTINY, THE CLAIM OF INELIGIBLE DEDUCTION WOULD NOT HAVE NOT BEEN DETECTED. III. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD RECEIVED INTEREST U/S.244A OF THE ACT AMOUNTING TO RS.1,52,839/- AND THE SAME WAS NOT ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE HAD AGREED FOR THE ADDITION. HOWEVER THE LD.AO INVOKED THE PENAL PROVISION U/S.271(1)(C) OF THE ACT. SUBSEQUENTLY THE LD.AO LEVIED PENALTY ON THE ASSESSEE U/S.271(1)(C) OF THE ACT BECAUSE THE ASSESSEE HAD NOT VOLUNTARILY DISCLOSED THE SAME IN ITS RETURN OF INCOME. 5. ON APPEAL THE LD.CIT(A) DELETED THE PENALTY BY RELYING IN THE DECISION OF THE HONBLE APEX COURT IN THE CASE CIT V. RELIANCE PETRO PRODUCTS REPORTED IN 322 ITR 158 WHEREIN IT WAS HELD THAT 5 ITA NO.1519/CHNY /2018 MERE DISALLOWANCE OF ANY EXPENDITURE PER SE DOES NOT CONSTITUTE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD.CIT(A) FURTHER OBSERVED IN HIS ORDER THAT THE LD.AO HAD MADE ADDITION FROM THE FACTS AVAILABLE FROM THE ANNUAL REPORT FURNISHED BY THE ASSESSEE AND FURTHER DUE TO INADVERTENT MISTAKES. THE LD.CIT(A) ALSO GAVE A FINDING THAT THE ASSESSING OFFICER HAD NOT SUCCEEDED IN ESTABLISHING THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETURN FILED. 6. ON PERUSING THE FACTS OF THE CASE AND HEARING THE SUBMISSIONS OF THE LD.DR, WE FIND MERIT IN THE ORDER OF THE LD.CIT(A). THE ASSESSEES REPRESENTATIVE HAD SUBMITTED BEFORE THE LD.AO THAT IT WAS A STATE GOVERNMENT UNDERTAKING AND HAD TO MEET CERTAIN NORMS SET BY THE STATE GOVERNMENT AUDIT DEPARTMENT WHILE PREPARING ITS PROFIT & LOSS ACCOUNT. THE LD.AR HAD ALSO SUBMITTED BEFORE THE LD.AO THAT THE ASSESSEE COMPANY HAD TO FOLLOW CERTAIN PROCEDURES LAID BY THE STATE GOVERNMENT WHILE PREPARING ITS ACCOUNTS DUE TO WHICH THERE WERE SOME DIFFERENCES OF OPINION BY THE LD.REVENUE AUTHORITIES. THE LD.AR HAD ALSO RELIED IN THE DECISION OF THE HONBLE APEX COURT IN THE CASE CIT VS. RELIANCE PETRO PRODUCTS CITED SUPRA. CONSIDERING 6 ITA NO.1519/CHNY /2018 THESE FACTS AND ALSO THE FACT THAT MOST OF THE DISCREPANCIES WERE OBSERVED BY THE LD.AO FROM THE ANNUAL REPORT SUBMITTED BY THE ASSESSEE WE ARE ALSO OF THE CONSIDERED VIEW THAT ASSESSEE HAS NOT FURNISHED ANY INCORRECT PARTICULARS OF INCOME OR CONCEALED INCOME IN ORDER TO INVOKE THE PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT. HENCE WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) WHO HAD DECIDED THE CASE OF THE ASSESSEE IN JUDICIOUS MANNER. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 15 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 15 TH FEBRUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER