Assistant Commissioner of Income-tax, Circle - 1, Aurangabad V. M/s. BMR HVAC Ltd, Aurangabad

ITA 1676/PUN/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9793 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 04-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Set aside
• Section: 271(1)(c); 143(3); 207; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, J UDICIAL M EMBER . / ITA NO. 1674 /PUN/20 19 / ASSESSMENT YEAR : 2014 - 15 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, AURANGABAD. ....... / APPELLANT / V/S. M/S. BG LI IN ELECTRICALS LTD. M - 137, MIDC, WALUJ, AURANGABAD - 431 136 PAN : AABCB2400M / RESPONDENT . / ITA NO. 1676/PUN/2019 / ASSESSMENT YEAR : 2014 - 15 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, AURANGABAD. ....... / APPELLANT / V/S. M/S. BMR HVAC LTD. GUT NO.65, VILL. CHITEGAON, AURANGABAD - 431 105. PAN : AABCH9456K / RESPONDENT A SSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI S.P WALIMBE 2 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 / DATE OF HEARING : 2 7 .07.2021 / DATE OF PRONOUNCEMENT : 28 .07.2021 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THESE TWO APPEALS PREFERRED BY THE REVENUE EMANATES FROM THE DIFFERENT ORDERS OF THE LD. CIT(APPEALS) - 1, AURANGABAD DATED 09.08.2019 FOR THE ASSESSMENT YEAR 2014 - 15 AS PER THE FOLLOWING IDENTICAL GROUNDS OF APPEAL S ON RECORD: 1. THE LD. COMMISSIONER OF INCOME - TAX (A) - I ERRED IN PASSING THE ORDER BOTH ON T HE FACTS OF THE CASE AND IN LAW. 2. THE LD. COMMISSIONER OF INCOME - TAX (A) - I ERRED IN DELETING THE PENALTY LEVIED BY ASSESSING OFFICER U/S 27 1(1)(C ) FOR FURNISHING INACCURATE PARTICULARS OF ITS INCOME ON ACCOUNT OF DISALLOWANCE OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/ S 35 OF THE INCOME - TAX ACT, 1961. 3. THE LD. COMMISSIONER OF INCOME - TAX (A) - I ERRED IN DELETING THE PENALTY LEVIED BY ASSESSING OFFICER U/S 271(1)(C ) FOR FURNISHING INACCURATE PARTICUL ARS OF ITS INCOME ON ACCOUNT OF DISALLOWANCE OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 35 OF THE INCOME - TAX ACT, 1961 WHEN THE CENTRAL BOA RD OF DIRECT TAXES VIDE OFFICE MEMORANDUM DATED 21/09/2016 WITHDRAW NOTIFICATION GRANTING APPROVAL U/S 35(1)( II) OF THE I T. ACT, 1961 IN CASE OF M/S SCHOOL OF HUMAN GENETICS AND POPUL ATION HEALTH TO WHOM THE ASSESSEE CLAIMED TO HAVE DONATED SUM. 4. THE LD. COMMISSIONER OF INCOME - TAX (A) - I ERRED IN DELETING THE PENALTY LEVIED BY ASSESSING OFFICER U/S 27 1(1)(C ) FOR FUR NISHING INACCURAT E PARTICULARS OF ITS INCOME ON ACCOUNT OF DISALLOWANCE THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 35 OF TH E INCOME - TAX ACT, 1961 WHEN THE CENTRAL BOARD OF DIRECT TAXES VIDE OFF ICE MEMORANDUM DATED 21/09/2016 WITHDRAW NOTIFICATION GRANTING APPROVAL U/S 35(1)(II ) OF I.T. ACT, 1961 IN CASE OF M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEAL TH TO WHOM THE ASSESSEE HAS CLAIMED TO HAVE DONATED SUM AND THE ASSESSEE COMPAN Y ACCEPTED THE QUANTUM ADDITION MADE BY THE AO VIDE ORDER U/S 143(3) DA TED 08 /12/2016. 5. IN THIS CASE THE DEPART MENT LAUNCHED PROSECUTION FOR A Y 2014 - 15, THEREFORE THE CASE IS COVERED UNDER P ARA NO . 10 (F) OF CIRCULAR NO. 17/2018 DATED 11/07/201 8 SUBSEQUENTLY AMENDED ON 20/08/2018. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD BE VACATED AND THE ORDER OF THE AO BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUNDS OF APPEAL . 3 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 2. THE SOLITARY GRIEVANCE OF THE REVENUE IN BOTH THESE AP PEALS IS WITH REGARD TO THE DELETION OF PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BY THE LD. CIT(APPEALS). 3. AT THE VERY OUTSET, PARTIES HEREIN AGREED THAT BOTH THESE CASES HAVE SAME FACTS AND CIRCUM STANCES AND THAT THE ISSUES ARE IDENTICAL. AFTER HEARING THE PARTIES, THESE CASES WERE HEARD TOGETHER AND DISPOSED OF VIDE THIS CONSOLIDATED ORDER. 4. THE LD. DR SUBMITTED TAKING I TA NO.1674/PUN/2019 FOR THE ASSESSMENT YEAR 2014 - 15 AS LEAD CASE THAT THOUG H AS PER FINANCIAL LIMIT FOR FILING APPEALS BEFORE THE TRIBUNAL BY THE DEPARTMENT , THESE APPEALS ARE NOT MAINTAINABLE, H OWEVER, THE SUBJECT MATTER FALLS WITHIN THE EXCEPTION SINCE IN THESE CASES, PROSECUTION HAS BEEN LAUNCHED AND THEREFORE, THESE CASES ARE COVERED UNDER PARA 10(F) OF CIRCULAR NO.17/2018 DATED 11.07.2018 AND SUBSEQUENTLY AMENDED ON 20.08.2018 AND THEREFORE, NEEDS TO BE ADJUDICATED . ITA NO.1674/PUN/2019 A.Y. 2014 - 15 5. THE FACTS CONCERNING LEVY OF PENALTY, AS PER THE LEAD CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING, ASSEMBLING, PROCESSING, IMPORTING, EXPORTING, FABRICATING AND TRADING IN VARIOUS KINDS OF ELECTRICAL AND ELECTRONIC PARTS, COMPONENTS, INSTRUMENTS REQUIRED FOR AUTOMOBILE AND ENGINEERING IN DUSTRY. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014 - 15 ON 13 TH OCTOBER, 2014 DECLARING TOTAL INCOME OF RS.1,34,42,280/ - . THE ASSESSEE COMPANY HAD CLAIMED A DEDUCTION OF RS.26,25,000/ - U/S.35(1)(II) OF THE ACT BEING 175% OF THE AMOUNT OF RS.15,00,000/ - PAID TO SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHGPH) FOR UNDERTAKING SCIENTIFIC RESEARCH. THE SAID RETURN WAS ASSESSED 4 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 U/S.143(3) OF THE ACT AND THE ASSESSMENT ORDER DATED 08.12.2016 WAS PASSED DISALLOWING THE DEDUCTIO N ON THE GROUND THAT THE CENTRAL BOARD OF DIRECT T AXES VIDE OFFICE MEMORANDUM DATED 15 TH SEPTEMBER, 2016 HAD WITHDRAWN THE NOTIFICATION GRANTING APPROVAL U/S.35(1)(II) OF THE ACT. PENALTY PROCEEDINGS WERE ALSO INITIATED FOR FILING INACCURATE PARTICULARS OF INCOME AND LEVY OF PENALTY @ 100% BEING RS.8,51,681/ - WAS ALSO IMPOSED. 6. IT IS THE CASE OF THE ASSESSEE THAT SHGPH WAS APPROVED BY THE CENTRAL GOVERNMENT AS A NOTIFIED ORGANIZATION U/S.35(1)(II) OF THE ACT VIDE NOTIFICATION NO.4/2010 DATED 28 TH JANUARY, 2010. FURTHER APPROVAL IN PERPETUITY WAS ALSO GRANTED TO SHGPH BY THE INCOME TAX DEPARTMENT ON 12 TH DECEMBER, 2011. SHGPH WAS ALSO RECOGNIZED AS SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION (SIRO) BY THE MINISTRY OF SCIENCE AND TECHNOLOGY, GOV ERNMENT OF INDIA ON 25 TH APRIL, 2008. T HIS RECOGNITION WAS RENEWED BY THE GOVERNMENT OF INDIA ON 17 TH JUNE, 2010 AND 1 ST APRIL, 2013 . ON THE BASIS OF NOTIFICATIONS AND APPROVALS GRANTED BY THE VARIOUS ARMS OF THE GOVERNMENT AND THE INCOME TAX DEPARTMENT, T HE ASSESSEE PAID AN AMOUNT OF RS.15,00,000/ - TO SHGPH AND CLAIMED DEDUCTION U/S.35(1)(II) OF THE ACT ON THE BASIS OF THE SAME. 7. THEREAFTER, THE CASE OF THE ASSESSE COMPANY WAS SELECTED UNDER LIMITED SCRUTINY (CASS) AND ACCORDINGLY, SCRUTINY PROCEEDINGS WERE INITIATED. DURING THAT TIME VIDE NOTIFICATION NO.82/2016 DATED 15 TH SEPTEMBER, 2016, THE CENTRAL GOVERNMENT RESCINDED THE APPROVAL EARLIER GRANTED TO SHGPH. THE SAID NOTIFICATION READS THAT IT SHOULD BE DEEMED THAT THE SAID NOTIFICATION HAD NOT BEEN I SSUED FOR ANY TAX BENEFITS UNDER THE INCOME TAX A CT OR ANY OTHER LAW FOR THE TIME BEING IN FORCE. ACCORDINGLY, THE ASSESSING OFFICER VIDE HIS ORDER MADE ADDITION OF RS.26,25,000/ - BEING DEDUCTION CLAIMED U/S.35(1)(II) 5 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 OF THE ACT AND ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT FOR FILING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER IN HIS ORDER U/S.271(1)(C) OF THE ACT DATED 28 TH JUNE, 2017 HAD LEVIED PENALTY @ 100% BEING RS.8,51,681/ - FOR FURNISHING INACCURATE PARTICULARS OF INC OME. THIS WAS MERELY ON THE BASIS OF DISALLOWANCE MADE IN THE ASSESSMENT ORDER AND NON - APPEAL OF THE SAME BY THE ASSESSEE. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT THE CLAIM OF DEDUCTION U/S.35(1)(II) OF THE ACT HAD TO BE SEEN AT THE TIME OF FILING T HE RETURN OF INCOME DATED 13 TH OCTOBER, 2014 AND AT THE TIME OF FILING THE RETURN OF INCOME SHGPH WAS A DULY NOTIFIED ORGANIZATION U/S.35(1)(II) OF THE ACT. 8. THE LD. CIT(APPEALS) ON THIS ISSUE OBSERVED THAT THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME ON 13.10.2014 AND DURING THAT TIME SHGPH WAS AN APPROVED ORGANIZATION U/S.35(1)(II) OF THE ACT BY THE CENTRAL GOVERNMENT VIDE NOTIFICATION NO.4/2010 DATED 28 TH JANUARY, 2010. THAT FURTHER, THE CBDT VIDE ITS NOTIFICATION NO.4/2010 (F. NO.203/64/2009/ ITA - II) DATED 28.01.2010 HAD ALSO RECOGNIZED SHGPH AS AN APPROVED SCIENTIFIC RESEARCH ASSOCIATION /INSTITUTION FOR CLAIMING DEDUCTION U/S.35(1)(II) OF THE ACT. THE SAID ORGANIZATION WAS ALSO RECOGNIZED AS SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION (SI RO) BY THE MINISTRY OF SCIENCE AND TECHNOLOGY, GOVERNMENT OF INDIA ON 25 TH APRIL, 2008. THIS RECOGNITION WAS RENEWED BY THE GOVERNMENT OF INDIA ON 17 TH JUNE, 2010 AND 1 ST APRIL, 2013. ON THE BASIS OF NOTIFICATIONS AND APPROVALS GRANTED BY THE GOVERNMENT AN D CBDT, THE ASSESSEE PAID DONATION OF RS.15,00,000/ - TO SHGPH ON 26 TH MARCH, 2014 AND HAD CLAIMED DEDUCTION U/S.35(1)(II) OF THE ACT. IT WAS FURTHER OBSERVED BY THE LD. CIT(APPEALS) THAT ON THE FACTS OF THE PRESENT CASE, WHEN DONATION WAS MADE BY THE ASSES SEE TO SHGPH, IT WAS DONE TAKING INTO ACCOUNT ALL THE 6 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 APPROVALS AND NOTIFICATIONS ISSUED BY THE GOVERNMENT OF INDIA. WHEN THE ASSESSEE HAD FILED RETURN OF INCOME ON 13.10.2014, AT THAT POINT OF TIME, SHGPH WAS DULY NOTIFIED ORGANIZATION U/S.35(1)(II) OF TH E ACT. IT WAS ONLY ON 15 TH SEPTEMBER, 2016 THE CENTRAL GOVERNMENT HAD RESCINDED THE APPROVAL EARLIER GRANTED TO SHGPH. 9. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RAMDAS MENKLAL GANDHI VS. UNION OF INDIA, 241 ITR 437 ON THE SAME SET OF FACTS AND CIRCUMSTANCES HAS HELD THAT THE ASSESSEE WAS ENTITLED TO GET THE DEDUCTION ON THE BASIS OF CERTIFICATE GRANTED TO THE ASSESSEE BY PRESCRIBED AUTHORITY WHICH WAS VALID AND OPERATIVE IN THE PREVIOUS YEAR DESPITE WITHDRAWAL OF TH E SAME BY THE PRESCRIBED AUTHORITY SUBSEQUENTLY WITH RETROSPECTIVE EFFECT. THE LAW IS NOW WELL SETTLED THAT RETROSPECTIVE WITHDRAWAL OR CANCELLATION OF CERTIFICATE WILL HAVE NO EFFECT UPON THE ASSESSEE WHO HAD ACTED UPON IT WHEN IT WAS VALID AND OPERATIVE. THE HONBLE BOMBAY HIGH COURT HAD REFERRED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF STATE OF MAHARASHTRA VS. SURESH TRADING COMPANY, 109 STC 439 (SC) WHEREIN IT WAS HELD THAT RETROSPECTIVE CANCELLATION HAD NO EFFECT UPON ANY PERSON WHO HAD ACTED UPON THE STRENGTH OF A REGISTRATION CERTIFICATE WHEN IT WAS CURRENT. 10. REVERTING TO THE FACTS OF THE PRESENT CASE, WHEN THE ASSESSEE HAD FILED ITS RETURN CLAIMING DEDUCTION U/S.35(1)(II) OF THE ACT, AT THAT TIME, THE APPROVAL GRANTED BY THE CENT RAL GOVERNMENT TO SHGPH WAS VALID AND OPERATIVE AND THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF INCOME. IT WAS ALSO ANALYZED IN THE DETAILED FINDINGS OF THE LD. CIT(APPEALS) THAT WHEN THE DEDUCTION HAS BEEN CLAIMED IN THE RETUR N OF INCOME ON BONA - FIDE BELIEF , THEN SUBSEQUENTLY IF SUCH DEDUCTION IS NOT APPLICABLE BECAUSE OF REMOVAL OF GRANT OF APPROVAL BY THE PRESCRIBED 7 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 AUTHORITY, IT CANNOT BE SAID IN SUCH CIRCUMSTANCES THAT THE ACTIONS OF THE ASSESSEE WERE NOT BONA - FID E. IT WAS FURTHER HELD BY THE LD. CIT(APPEALS) THAT THE ASSESSING OFFICER MERELY LEVIED THE PENALTY DUE TO THE SOLE REASON THAT ADDITION S WERE MADE AND THE SAME WERE ALSO NOT CHALLENGED IN APPEAL BY THE ASSESSEE COMPANY WITHOUT CONSIDERING THE FACT THAT AS SESSMENT PROCEEDING S AND PENALTY PROCEEDING S ARE INDEPENDENT PROCEEDINGS. WITH THESE OBSERVATIONS, PENALTY LEVIED U/S.271(1)(C) OF THE ACT WAS CANCELLED AND RELIEF WAS PROVIDED TO THE ASSESSEE BY THE LD. CIT(APPEALS). 11. THE LD. DR FOR THE REVENUE HAS PL ACED STRONG RELIANCE ON THE ASSESSMENT ORDER. 12. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BHANUMATI MALRAJ KABALI VS. INCOME TAX OFFICER, WRIT PETITION NO. 3595 OF 2018 DATED 24 TH JANUARY, 2019. THERE ALSO, IT WAS WITH REGARD TO THE DONATION MADE TO SHGPH AMOUNTING TO RS.15,00,000/ - DURING THE ASSESSMENT YEAR 2011 - 12. THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD AND OBSERVED AS FOLLOWS: THIS INFORMATION IN CASE OF THE P ETITIONER, REFERS TO SUM OF RS. 15 LAKHS, ALLEGEDLY DONATED BY THE PETITIONER TO THE SAID TRUST. THUS, ON THE BASIS OF SUCH INFORMATION SUPPLIED BY THE INVESTIGATION WING IS FALSIFIED UPON PERUSAL OF THE RETURN FILED BY THE ASSESSEE. WE ALSO NOTICE THAT IN THE RETURN THE ASSESSEE HAD CLAIMED T O HAVE PAID THE DONATION OF RS. 20 LAKHS TO ONE SCIENTIFIC RESEARCH OF RURAL DEVELOPMENT. HOWEVER, THE INFORMATION SUPPLIED TO THE AO BY THE INVESTIGATION WING DOES NOT EVEN SUGGEST THAT THIS TRUST NAMELY SCIENTIFIC RESEARCH OF RURAL DEVELOPMENT WAS A DUBIOUS TRUST AND THE INVESTIGATION WING HAD MATERIAL TO BELIEVE THAT THE DONORS OF THIS TRUST WERE BENEFICIARIES OF THE BOGUS ENTRIES. IN THE RESULT, IMPUGNED NOTICE IS SET ASIDE - DECIDED IN FAVOUR OF ASSESSEE . 13. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE. H EREIN, THE PENALTY U/S.271(1)(C) OF THE ACT WAS IMPOSED BY THE ASSESSING OFFICER STATING THAT THE 8 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. HOWEVER, THE FACTS ON RECORD CLEARLY SPECIFIES THAT THE ASSESSEE HAD MADE DONATION TO SHGPH AND AT THE TIME OF FILING RETURN OF INCOME BY THE ASSESSEE, THE SAID SHGPH WAS NOTIFIED ORGANIZATION AND APPROVED BY THE GOVERNMENT OF INDIA AND EVEN RECOGNIZED AS SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION (SIRO) BY THE MINISTRY OF SCIENCE AND TECHNOLOGY, GOVERNMENT OF INDIA. WITH THESE PARTICULAR S EXISTING AND BEING VALID AT THE TIME OF FILING RETURN OF INCOME, THE ASSESSEE HAD CLAIMED DEDUCTION U/S.35(1)(II) OF THE ACT. THE BONA - FIDE ACTION OF THE ASSESSEE CANNOT BE DOUBT ED SINCE DONATION GIVEN DURING RELEVANT ASSESSMENT YEAR TO SHGPH AND AT THAT POINT OF TIME, IT WAS A RECOGNIZED ORGANIZATION. 14. T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. M/S. SAS PHAR MAC E UTICALS , 11 TAXMAN.COM 207 (DELHI) HAS HELD THAT . NO DOUBT, THE DISCREPANCIES WERE FOUND DURING THE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME BUT THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMIS ES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON - DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON - DISCLOSURE AS THE ASSESSEE HAD 9 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 MADE A COMPLETE DISCLOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. 15 . THAT FURTHER THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. , (2010) 322 ITR 158 (SC), THE VERY BASIS FOR IMPOSING PENALTY U/S .271(1)(C) OF THE ACT WAS ANALYS ED AND THE PRINCIPLE EMERGED WAS THAT THE ALLEGED CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE DETERMINED F ROM INCOME TAX RETURNED FILED BY THE ASSESSEE. THAT FURTHER PROCEEDINGS U/S.271(1)(C) OF THE ACT, IS A SEPARATE PROCEEDINGS THAN FROM THE ASSESSMENT PROCEEDINGS AND THE OMISSION OR ERROR I.E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS OF INCOME SHOULD COME OUT SPECIFICALLY FROM THE RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE DEPARTMENT. THERE IS NO SCOPE FOR ANY GUESS WORK OR SURMISES OR ANY HYPOTHETICAL SITUATION FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. 15.1 THE POSITION OF LAW FURTHER IS VERY MUCH CLEAR AS PER THE VARIOUS AFORESAID REFERRED JUDGMENTS THAT RETROSPECTIVE WITHDRAWAL OR CANCELLATION OF AN ENTITLEMENT WILL HAVE NO EFFECT UPON THE ASSESSEE WHO HAD ACTED UPON IT WHEN IT WAS VALID AND OPERATIVE. 16 . FURTHER, THE ASSESSING OFFICER HAS NOT BROUGHT OUT HIS CASE AS TO WHY PENALTY U/S.271(1)(C) OF THE ACT SHOULD BE LEVIED FOR FILING INACCURATE PARTICULARS OF INCOME IN THE CASE OF THE ASSESSEE . MERELY NOT CHALLENGING THE ADDITION S MADE IN THE ASSESSMENT ORDER IN AN APPEAL , CANNOT BE THE GROUND FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. THE REVENUE HAS ALSO NOT DISPUTED THE FACT THAT WHEN DEDUCTION WAS CLAIMED IN RETURN OF INCOME BY THE ASSESSEE AT THAT TIME SHGPH WAS A NOTIFIED ORGANIZATION BY GOVERN MENT OF 10 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 INDIA U/S.35(1)(II) OF THE ACT. THE LD. DR COULD NOT BRING ON RECORD ANY EVIDENCES CONTRARY TO THESE FACTS ON RECORD. IN SUCH SCENARIO, WE ARE OF THE CONSIDERED VIEW THAT THIS IS NOT A FIT CASE FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT AND THER EFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(APPEALS) AND RELIEF PROVIDED TO THE ASSESSEE IS HEREBY SUSTAINED. 17 . IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.1674/PUN/2019 FOR THE ASSESSMENT YEAR 2014 - 15 IS DISMISSE D. ITA NO.1676/PUN/2019 A.Y.2014 - 15 18 . B OTH THE PARTIES HEREIN SUBMITTED BEFORE THE BENCH THAT THE FACTS AND CIRCUMSTANCES AND ISSUES INVOLVED IN ITA NO.1676/PUN/2019 ARE ABSOLUTELY IDENTICAL AND SIMILAR TO ITA NO.1674/PUN/2019. THEREFORE, OUR DECISION RENDERED IN ITA NO.1674/PUN/2019 SHALL MUTATIS - MUTANDIS APPLY IN ITA NO.1676/PUN/2019 . 19 . IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.167 6 /PUN/2019 FOR THE ASSESS MENT YEAR 2014 - 15 IS DISMISSED. 20 . IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRO NOUNCED ON 28 TH DAY OF JULY , 20 2 1 . SD/ - SD/ - INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 28 TH JU LY , 202 1 SB 11 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, AURANGABAD. 4. THE PR. CIT - 1, AURANGABAD. 5. , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. / BY ORDER, // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE . 12 ITA NO. 1674/PUN/2019 ITA NO.1676/PUN/2019 A.Y. 2014 - 15 DATE 1 DRAFT DICTATED ON 2 7.07 .202 1 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 28 .07 .202 1 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER