M/s. Bhawani Casting Pvt. Ltd., Punjab V. DCIT, New Delhi

ITA 1754/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1159 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; TDS; Set aside
• Section: 271(1)(c); 40(a)(ia); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.1754/DEL./2016 (ASSESSMENT YEAR : 2011-12) M/S. BHAWANI CASTINGS PRIVATE LTD., VS. DCIT, CIRCL E 2 (1), Z 35, LOHA MANDI, NARAINA, NEW DELHI. NEW DELHI. (PAN : AAACB4622Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI KUMAR, ADVOCATE REVENUE BY : MS. RINKU SINGH, SENIOR DR DATE OF HEARING : 22.08.2019 DATE OF ORDER : 13.09.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. BHAWANI CASTINGS PRIVATE LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 29.12.2015 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, NEW DELHI AFFIRMING THE PENALTY ORDER DATED 22.08.2014 PASSED U/S 271(1)(C) OF THE INCOME -TAX ACT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2011 -12 ON THE GROUNDS INTER ALIA THAT :- ITA NO.1754/DEL./2016 2 1. THAT THE ORDER OF THE LEARNED C.I.T.(A) IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 3. THAT THE ASSESSEE HAS NOT CONCEALED ANY .PARTICULARS OF INCOME DURING THE YEAR. EVEN OTHERW ISE THE ASSESSED LOSS WAS RS.1,17,52,220/- AND THERE CO ULD BE NO INTENTION TO CONCEAL THE INCOME. THE DISALLOWANCE OF INTEREST WAS MADE ONLY ON ACCOUNT O F DEEMING PROVISION U/S 40(A)(IA) OF THE INCOME TAX A CT, 1961. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING PENAL TY OF RS.4,32,290/- ON THE DISALLOWANCE OF INTEREST U/S. 40(A)(IA). 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ON THE BASIS OF ASSESSMENT FRAMED UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AT T HE LOSS OF RS.1,31,95,685/- MAKING DISALLOWANCE OF RS.13,01,39 4/- ON ACCOUNT OF NON-DEDUCTION OF TDS ON THE INTEREST PAYMENT, PENAL TY PROCEEDINGS HAVE BEEN INITIATED U/S 271(1)(C) OF THE ACT. DECL INING THE CONTENTIONS RAISED BY THE ASSESSEE, ASSESSING OFFICER (AO) LEVI ED THE PENALTY OF RS.4,32,290/- @ 100% FOR FURNISHING INACCURATE PART ICULARS OF INCOME. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED ITA NO.1754/DEL./2016 3 BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, ASSESSEE HAS FAILED TO DEDUCT TDS ON THE INTEREST PAYMENT ON ALL SECURED AND UNSECURED LOANS OF RS.13 ,01,394/- MADE TO VARIOUS NBFCS. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSMENT ORDER PASSED IN THIS CASE HAS SINCE ATTAINED FINALITY. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER AUTHORITIES AND ARGUMENTS ADDRESSED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS? 7. FROM THE IMPUGNED ASSESSMENT ORDER AS WELL AS OR DER PASSED BY THE LD. CIT (A), IT IS PROVED THAT THE ASSESSEE HAS COME UP WITH CONSISTENT PLEA THAT UNDER BONAFIDE PLEA, THE ASSES SEE HAS NOT DEDUCTED ANY TDS ON INTEREST PAYMENT MADE TO NBFCS AND THAT THERE WAS NO REASON ON THE PART OF THE ASSESSEE TO FURNISH INACC URATE PARTICULARS AS IT DID NOT AFFECT THE TAXABILITY NOR THERE WAS ANY SUC H MOTIVE TO CLAIM THE EXPENDITURE. 8. ISSUE IN CONTROVERSY HAS ALREADY BEEN SET AT RES T BY THE HONBLE GUJARAT HIGH COURT IN NAYAN C. SHAH VS. ITO (2016) 386 ITR 304 (GUJARAT) AND COORDINATE BENCH OF THE TRIBUNAL IN N EW HORIZON INDIA ITA NO.1754/DEL./2016 4 LTD. VS. DCIT (2011) 12 ITR (T) 332 (DELHI) BY DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE THAT MERELY SUBMITTING INCOR RECT CLAIM IN LAW FOR EXPENDITURE WOULD NOT AMOUNT TO FURNISHING INACCURA TE PARTICULARS OF INCOME. 9. IN THE INSTANT CASE, AO HAS LEVIED THE PENALTY F OR FURNISHING INACCURATE PARTICULARS BY THE ASSESSEE FOR NOT MAKI NG DISALLOWANCE U/S 40(A)(IA) OF THE ACT. IT IS THE CASE OF THE ASSESS EE THAT UNDER BONAFIDE BELIEF, NO TDS IS REQUIRED TO BE DEDUCTED FOR INTER EST PAYMENT TO NBFCS AND AS SUCH, THERE IS NO QUESTION OF FURNISHING INA CCURATE PARTICULARS OF INCOME BY THE ASSESSEE. EVEN OTHERWISE, IN THE AUD ITED FINANCE, THE ENTIRE PAYMENT HAS BEEN QUANTIFIED AS INADMISSIBLE U/S 40(A)(IA) OF THE ACT. FURTHERMORE, WHEN THE ASSESSEE HAS BROUGHT ON RECORD ALL THE NECESSARY FACTS AS TO MAKING THE PAYMENT OF INTERES T TO THE NBFCS AND ALSO BROUGHT ON RECORD THE FACT THAT THERE WAS BONA FIDE BELIEF THAT NO TDS WAS REQUIRED TO BE DEDUCTED ON THE AMOUNT, IT W OULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME BY A NY STRETCH OF IMAGINATION EVEN. 10. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT DECID ED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- ITA NO.1754/DEL./2016 5 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 11. FOLLOWING THE DECISIONS RENDERED BY HONBLE SUPREME COURT IN THE CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), ORDER OF COORDINATE BENCH OF THE TRIBUNAL IN NEW HORIZON INDIA LTD. (SUPRA) AND HONBLE GUJARAT HIGH COURT IN NAYAN C. SHAH (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS FAILE D TO MAKE OUT THE ITA NO.1754/DEL./2016 6 CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE TO LEVY PENALTY BECAUSE AT NO POINT OF TIME, THE ASSES SEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME RATHER MADE THE CL AIM UNDER BONAFIDE BELIEF THAT NO TDS IS REQUIRED TO BE DEDUCTED ON TH E PAYMENT OF INTEREST TO NBFCS, HENCE PENALTY LEVIED BY AO U/S 271(1)(C) OF THE ACT AND CONFIRMED BY LD. CIT (A) IS ORDERED TO BE DELETED A ND CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF SEPTEMBER , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-2, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.