M/s Agriculture Produce Market Committee, Kullu V. ITO, Kullu

ITA 171/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5455 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 171/CHD/2011 ASSESSMENT YEAR: 2008-09 M/S AGRICULTURE PRODUCE MARKET COMMITTEE, VS. THE I TO, WARD, KULLU (H.P.) KULLU PAN NO. AAALA0959N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY VAIDYA RESPONDENT BY: SHRI N.K.SAINI ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), SHIMLA DATED 11.1.2011 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE I.T. ACT, 1 961. 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST PENALTY LEVIED U/S 271 (1)(C) OF THE ACT AMOUNTING TO RS. 17,99,90 0/-. 3. THE LD. AR FOR THE ASSESSEE AT THE OUTSET POINTE D OUT THAT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF AGRICULTURE PRODUCE MARKET COMMITTEE, SOLAN VS. DCIT, PARWANOO RELATING TO ASSESSMENT YEAR 2006-07. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FURNISHED THE RETURN OF INCOME BY CLAIMING ITS STATUS AS LOCAL A UTHORITY AND 2 ACCORDINGLY COMPUTED THE INCOME IN THE STATUS OF AO P. THE ASSESSING OFFICER DENIED THE STATUS OF LOCAL AUTHORITY TO THE ASSESSEE AND HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS O F INCOME IN CLAIMING SAID STATUS AND ACCORDINGLY PENALTY U/S 271 (1)(C) OF THE ACT WAS INITIATED. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 17,99,9 00/- HOLDING THE ASSESSEE TO HAVE CONCEALED THE PARTICULARS OF INCOM E AND HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND UNDER THE PROV ISIONS OF SECTION 271 (1)(C) OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. ON THE PERUSAL OF RECORD, WE FIND THAT THE ISSUE STAND S COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF AGRICULTURE PRODUCE MAR KET COMMITTEE, SOLAN VS. DCIT, PARWANOO WHEREIN ON SIMILAR GROUNDS OF DE NIAL OF STATUS OF THE LOCAL AUTHORITY, PENALTY U/S 271 (1)(C) WAS LEVIED. THE TRIBUNAL IN THE CASE OF AGRICULTURE PRODUCE MARKET COMMITTEE, SOLAN VS. DCIT, PARWANOO IN ITA NO. 1229/CHD/2010 RELATING TO ASSES SMENT YEAR 2006-07 VIDE ORDER DATED 1.12.2010, HELD AS UNDER: - 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE HAD FILED THE RETURN OF INCOME UNDER T HE STATUS OF LOCAL AUTHORITY AND CLAIMED THE INCOME BEING EXE MPT. HOWEVER, THE ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED IN THE STATUS OF THE AOP AND THE SURPLUS OF THE ASSESSEE SOCIETY WAS BROUGHT TO TAX. THE AUTHORIT IES BELOW LEVIED THE PENALTY U/ 271(1)(C) OF THE ACT UPON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE CLAIM OF THE ASSESSEE BEFORE US WAS THAT IT HAD FURNISHED COMPLETE PARTICULARS OF ITS INCOME AND HAD MADE A BONAFIDE C LAIM MERELY BECAUSE THE SAID CLAIM WAS REJECTED DOES NO T TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME, JUSTIFYING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. WE FIND MERIT IN THE CLAIM OF THE ASSESSEE. IN SUCH CASES WHERE THE ASSESSEE HAD MADE A BONAFIDE CLAIM AND FURNISHE D COMPLETE PARTICULARS WITH REGARD TO ITS CLAIM, THE DISALLOWANCE OF SUCH A CLAIM ON ACCOUNT OF DIFFEREN CE OF 3 OPINION AND INTERPRETATION OF LAW DOES NOT TANTAMOU NT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. ME RE NON- ACCEPTABILITY OF A CLAM IN LAW DOES NOT JUSTIFY INV OKING EXPLANATION TO SECTION 271(1)(C) OF THE ACT AND, TH EREFORE, THE ASSESSING OFFICER / CIT(A) ERRED IN LEVYING THE PENALTY BASED ON THE SAID EXPLANATION. WE FIND SUPPORT FR OM THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CI T VS. RELIANCE PETRO PRODUCTS PVT LTD [322 ITR 158 (SC)] AND HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT VS. SHAH BAD COOPERATIVE SUGAR MILLS LTD [322 ITR 73 (P&H)]. ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS NOT LIABL E TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. THE GROUN DS OF APPEAL RAISED BY ASSESSEE ARE ALLOWED. 6. THE ISSUE BEFORE US IS IDENTICAL TO THE ISSUE RA ISED IN THE AGRICULTURE PRODUCE MARKET COMMITTEE, SOLAN (SUPRA) AND FOLLOWING THE RATIO LAID DOWN BY THE TRIBUNAL WE HOLD THAT THE AS SESSEE IS NOT EXIGIBLE TO THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. ACC ORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT. THE GROUND OF APPEAL THUS RAISED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF MAY, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MAY, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 4