Deputy Commissioner of Income-tax, V. M/s. Shewale & Sons, Pune

ITA 1636/PUN/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6272 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-07-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 28-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MALVIYA
• Keywords: Wrong claim; Reassessment proceedings
• Section: 271(1)(c); 80IB; 153; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 1 636 /PUN/201 6 / ASSESSMENT YEAR : 20 08 - 09 DY. COMMISSIONER OF INCOME TAX, CIRCLE 3, PUNE ....... / APPELLANT / V/S. M/S. SHEWALE & SONS, S. NO. 10/7, SHAHU COLONY, MAHARSHI KARVE NAGAR, PUNE 411052 PAN : ABFGS0958L / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : SHRI ALOK MALVIYA / DATE OF HEARING : 0 7 - 09 - 2020 / DATE OF PRONOUNCEMENT : 24 - 0 9 - 2020 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18 - 04 - 2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , PUNE [CIT(A)] FOR ASSESSMENT YEAR 20 08 - 09 WHEREIN HE DELETED THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT . 2 ITA NO . 1636/PUN/2016, A.Y. 2008 - 09 2. GROUND NOS. 1 TO 3 RAISED BY THE REVENUE CHALLENGING THE ACTION OF CIT(A) IN DELETING THE PENALTY LEVIED BY THE AO U/S. 271(1)(C) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS RELATING TO THE CASE ON HAND ARE THAT THE ASSESSEE IS A FIRM AND CONDUCTS ITS BUSINESS UNDER THE NAME AND STYLE OF M/S. SHEWALE & SONS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER . THE ASSESSEE HAS SHOWN TURNOVER OF RS.613.19 LAKHS AND REPORTED PROFIT OF RS.236.88 LAKHS. THE AO DISALLOWED AN AMOUNT OF RS.12,47,664/ - U/S. 80IB(10) OF THE ACT VIDE ITS ORDER DATED 27 - 12 - 2011. THEREAFTER, THE AO FOUND THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT AND ACCORDINGLY ASSESSMENT MADE ABOVE WAS REOPENED. DURING SUCH REOPENING PROCEEDINGS, THE AO BASING ON THE ORDER FOR A.Y. 2009 - 10 DISALLOWED ENTIRE DEDUCTION TO AN EXTENT OF RS.2,36,87,505/ - VID E ITS ORDER DATED 28 - 03 - 2013. 4. AS MATTER STOOD THUS THE AO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ON THE GROUND THAT THE SAID DISALLOWANCE TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AND IMPOSED A PENALTY OF RS.80,51, 381/ - VIDE ITS ORDER DATED 27 - 09 - 2013. IN CHALLENG E BEFORE THE CIT(A) , THE ASSESSEE CONTENDED THAT THE ASSESSEE FURNISHED ALL DETAILS AND CLAIMED DEDUCTION U/S. 80IB ( 10) OF THE ACT . THE AO EXAMINED EVERY DETAILS CONCERNING THE CLAIM AND DISALLOWED ENTIRE CLAIM IN REASSESSMENT PROCEEDINGS. WRONG CLAIM DOES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE CIT(A) HELD THAT THE ASSESSEE SUBMITTED ALL THE DETAILS BEFORE THE AO BUT THE AO FOUND THE SAME WERE WRONG AND INACCURATE. THE CIT(A) BY PLACING RELIANCE IN THE CASE OF RELIANCE 3 ITA NO . 1636/PUN/2016, A.Y. 2008 - 09 PETROPRODUCTS (P) LTD. REPORTED IN 322 ITR 158 (SC) WHICH HELD MERELY MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS AND HELD THE PENALTY IMPOSED THEREON CANNOT BE SUSTAI NED. THE RELEVANT PORT IN PARA 3.3 OF CIT(A) IS REPRODUCED HERE - IN - BELOW : 3.3 IT IS SEEN THAT THE APPELLANT HAD DISCLOSED THE RELEVANT MATERIAL AND PARTICULARS DURING THE ASSESSMENT PROCEEDING. THE ASSESSING OFFICER HAS NOT FOUND THE DETAILS THAT WERE SUBMITTED AS INACCURATE. THEREFORE, FOLLOWING THE DECISION OF THE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS, 322 ITR 158(SC), WHERE NO DETAILS, NO INFORMATION SUBMITTED IN THE RETURN OR LATER HAS BEEN FOUND TO BE INCORRECT OR INACCURATE THEN MERELY MA KING AN INCORRECT CLAIM IN LAW IS NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS, THE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS CANNOT BE SUSTAINED. LIKEWISE THE JURISDICTIONAL ITAT IN KANBAY SOFTWARE, 119 ITD 153 HAS HELD THAT IN THE SCHEM E OF THINGS UNLESS IT IS FOUND BY THE ASSESSING OFFICER THAT THE DETAILS FURNISHED BY THE ASSESSEE WERE WRONG, INACCURATE, FALSE OR INCORRECT, THEN RAISING A LEGAL CLAIM, EVEN IF IT IS FOUND ULTIMATELY TO BE INCORRECT, DOES NOT TRIGGER THE CHARGE OF FURNIS HING OF INACCURATE PARTICULARS. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE SUPREME COUR T AND JURISDICTIONAL I TAT, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE PENALTY U/S . 271(1)(C) IN RESPECT OF A.Y. 2008 - 09. 4. ON PERUSAL OF THE ABOVE , THE PUNE BENCH OF TRIBUNAL IN THE CASE OF KANBAY SOFTWARE HELD THAT IF THE AO FINDS THE DETAILS FURNISHED BY THE ASSESSEE WERE WRONG, INACCURATE, FALSE OR INCORRECT WHICH ITSELF DOES NOT TRIGGER THE CHARGE OF FURNISHING OF INACCURATE PARTICULARS. I N THE PRESENT CASE, THE AO COMPLETED THE ASSESSMENT IN THE YEAR 2011, AGAIN IT WAS REOPENED BASING ON THE ORDER FOR A.Y. 2009 - 10, BASING ON WHICH CLAIM U/S. 80IB(10) OF THE ACT WAS DENIED, IN OUR OPINION, DENIAL OF CLAIM DOES NOT AMOUNT TO FURNISHING OF IN ACCURATE PARTICULARS, THAT TOO, HAVING EXAMINED THE CLAIM IN DETAIL. THEREFORE, WE COMPLETELY AGREE WITH THE REASONS ACCORDED BY THE CIT(A) IN DELETING THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT AND THE ORDER PASSED BY THE CIT(A) IS JUSTIFIED . THUS, GROUND NOS. 1 TO 4 RAISED BY THE REVENUE ARE DISMISSED. 4 ITA NO . 1636/PUN/2016, A.Y. 2008 - 09 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER, 2020 . SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 24 TH SEPTEMBER, 2020. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) - 3 , PUNE 4. THE PR. CIT - 2 , PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE