Kaira Dist.Co.Op.Milk Producers Union Ltd., Anand V. The ACIT.,Anand Circle, Anand

ITA 1546/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5898 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-03-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S ANJAY R SHAH JAMES KURIAN

Judgement Text

ITA NO. 1546 /AHD/2014 ASSESSMENT YEAR : 1998 - 99 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDBAD [CORAM: PRAMOD KUMAR AM AND S.S. GODARA JM ] ITA NO. 1546 /AHD/2014 ASSESSMENT YEAR : 1998 - 99 KA IRA DIST. CO - OP. MILK PRODUCERS UNION LTD., .. .. .. . .....APPELLANT AMUL DAIRY ROAD, ANAND 388 001. [PAN: AA A AK 8694 F ] VS. ASSTT. COMMISSIONER OF INCOME TAX ANAND CI R CLE, ANAND . .. ..................RESPONDENT APPEARANCES BY: S ANJAY R. SHAH F OR THE A PPELLANT JAMES KURIAN FOR THE RESPONDENT DATE OF CONCLUDIN G THE HEARING : 09.03.2017 DATE OF PRONOUNCING THE ORDER : 22 .05. 2017 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 28 TH FEBRUARY 2014, PASSED BY THE LEARNED CIT(A) , IN THE MATTER OF PENALTY OF RS.13,59,500/ - IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT , 1961, FOR THE ASSESSMENT YEAR 1998 - 99. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS : - 1. THE PENALTY ORDER PASSED BY TH E LEARNED CIT(A) U/S 271( 1 )(C) IS BAD IN LAW AND THEREFORE REQUIRES TO BE QUASHED. 2. THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ORDER OF AO AND INVOKING PENALTY PROVISIONS OF SECTION 271( 1 )(C) OF THE ACT, AS THE APPELLANT HAS NEITHER HAS CONCEAL ED ANY INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME. 2.1 THE CIT(A) ERRED IN NOT DEALING WITH THE ASPECT THAT THERE WAS NO DEFAULT COMMITTED BY THE APPELLANT AS ENVISAGED U/S 271( 1 )(C) OF THE ACT PARTICULARLY ITA NO. 1546 /AHD/2014 ASSESSMENT YEAR : 1998 - 99 PAGE 2 OF 4 WHEN THE FIRST APPEAL OF THE APPELLAN T WAS ALLOWED BY CIT(A) ON THE QUANTUM OF ADDITION MADE. IT IS SUBMITTED THAT IT BE SO HELD NOW. 3. THE LEARNED CIT(A) GROSSLY ERRED IN CONCLUDING THAT THE EXPLANATIONS FILED BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS ARE FA LSE ON THE BASIS OF THE OBSERVATION OF HON'BLE ITAT IN QUANTUM PROCEEDINGS. IT BE SO HELD NOW AND THE PENALTY CONTINUED ON THE BASIS OF SUCH INCORRECT FINDINGS BE DELETED. 3.1 THE LEARNED CIT(A) FAILED TO CONSIDER THAT THE AMOUNT ADDED BY AO AND CONTINUED BY HON'BLE ITAT WAS ALREADY OFFERED IN A.Y. 2001 - 02. HENCE, THERE WAS NO CONCEALMENT OF INCOME AND THAT THE HON'BLE ITAT ADDED THE AMOUNT OF PRICE DIFFERENCE IN THE YEAR UNDER CONSIDERATION BUT THEN ALSO DIRECTED TO GRANT CONSEQUENTIAL RELIEF TO THE APPEL LANT IN A.Y. 2001 - 02 IN WHICH INCOME HAS BEEN OFFERED TO TAX. IT IS SUBMITTED THAT IN SUCH A CASE, PENALTY U/S. 271( 1 )(C) IS NOT LEVIABLE. 3.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT MERE ADDITION OR CONFIRMATION OF ADDITION WOULD NOT ATT RACT PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. IT IS SUBMITTED IT BE SO HELD NOW. 4. THE LEARNED CIT(A) ERRED IN CONTINUING PENALTY BY CONCLUDING THAT APPELLANT S CASE FALLS UNDER CLAUSE (A) OF EXPLANATION 4 TO SECTION 271(1)( C ) OF THE ACT ON THE BASIS THAT AMOUNT OF INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS ARE FURNISHED HAS THE EFFECT OF REDUCING THE LOSS WHEREAS IN EFFECT THE APPELLANT S CASE FALLS UNDER SUB PARA (C) OF EXPLANATION 4 TO SECTION 271(1)((C) OF THE ACT AND THERE BEING NO TAX SOUGHT TO BE EVA DED, THERE CANNOT BE ANY PENALTY LEVIABLE U/S.271(1)( C ) OF THE ACT. 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING MILK MANUFACTURING , MILK PRODUCTS AND ALLIED A CTIVITIES. ON 21 ST JULY 1998, THE ASSESSEE HAD RAISED AN INVOICE OF RS.38,95,821/ - , IN RESPECT OF MILK SUPPLIED TO ONE M/S VIDYA DAIRY, AND THIS INCOME WAS ACCORDINGLY ACCOUNTED FOR. HOWEVER, AS VIDYA DAIRY REPUDIATE D THIS CLAIM, VIDE LETTER DATED 10 TH DECEMBER 1998, THE ASSESSEE REVERSED THE ENTRY ON ACCOUNT OF APPREHENSIONS ABOUT NON - REALIZATION OF RELATED DUES. THESE APPREHENSIONS, HOWEVER, TURNED OUT TO BE INCORRECT AND THE AMOUNT WAS REALIZED IN THE FINANCIAL YEAR ENDED 31 ST MARCH 2001. THE ASSESS EE, ACCORDINGLY, OFFERED THE SAID INCOME TO TAX IN THE A SSESSMENT Y EA R 2001 - 02. THE ASSESSING OFFICER, HOWEVER, DID NOT AGREE WITH THIS ACCOUNTING TREATMENT. HE WAS OF THE VIEW THAT THE INCOME OF RS.38,95,821/ - SHOULD ITA NO. 1546 /AHD/2014 ASSESSMENT YEAR : 1998 - 99 PAGE 3 OF 4 HAVE BEEN BROUGHT TO TAX IN THE ASSE SSMENT YEAR 1998 - 99 ONLY, AND, ON THIS BASIS, AN ADDITION OF RS.38,95,821/ - WAS MADE TO THE INCOME RETURNED BY THE ASSESSEE . AGGRIEVED, ASSESSEE CARRIED THE MA T TER IN APPEAL BEFORE THE LEARNED C IT(A) WHO UPHELD THE STAND OF THE ASSESSEE, AND DELETED THE S AID ADDITION . THIS SUCCESS OF THE ASSESSEE, HOWEVER, WAS SHORT LIVED AS, IN REVENUE S APPEAL, TRIBUNAL REVERSED THE A CTION OF THE LEARNED CIT (A) A ND REINSTATED THE ADDITION OF RS.38,95, 821/ - . THE MATTER DID NOT END HERE. THE ASSESSING OFFICER HAS IMPOSE D THE PENALTY OF RS.13,59,500/ - UNDER SECTION 271(1) (C) BY OBSERVING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 5. WE FIND THAT IN THE PRESENT CASE THE DISPUTE IS ESSE NTIALLY CONFINED TO THE YEAR OF TAXABILITY OF INCOME AND, AS SUCH, THERE IS NO CONCEALMENT OF INCOME OR EVEN FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE YEAR OF TAXABILITY OF INCOME MAY NOT BE ACCEPTA BLE IN THE COURSE OF ASSESSMENT PROCEEDINGS , BUT THERE IS NOT EVEN A WHISPER ABOUT FALSITY OR LACK OF BONAFIDES O F THE EXPLANATION. IN OUR CONSIDERED VIEW, THE EXPLANATION FURNISHED BY THE ASSESSEE, WITH RESPECT TO YEAR OF TAXABILITY, IS A REASONABLE EXPL ANATION WHICH OUGHT TO HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE CONTEXT OF PENALTY PROCEEDINGS. ACCORDINGLY , IN OUR CONSIDERED VIEW, IT WAS NOT A FIT CASE OF IMPOSITION OF IMPUGNED PENALTY. ITA NO. 1546 /AHD/2014 ASSESSMENT YEAR : 1998 - 99 PAGE 4 OF 4 6. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING I N MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY OF RS.13,59,500/ - . WE ORDER SO. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE O PEN COURT TODAY ON THE 22 ND DAY OF MAY , 2017. SD/ - SD/ - S.S. GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , DATED THE 22 ND DAY OF MAY , 201 7 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD