Gujarat State Electricity Corporation Ltd., Baroda V. The Dy.CIT, Circle-1(1), Baroda

ITA 1778/AHD/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4459 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: M K PATEL
• Section: 271(1)(c); 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMB ER GUJARAT STATE ELECTRICITY CORPORATION LTD., SARDAR PATEL VIDYUT BHAVAN, RACE COURSE CIRCLE, BARODA-390007 PAN: AAACG6864F (APPELLANT) VS THE DY. CIT, CIRCLE-1(1), VADODARA-390007 (RESPONDENT) REVENUE BY: SHRI O.P. SHARMA, CIT-D.R. ASSESSEE BY: SHRI M.K. PATEL, A.R. DATE OF HEARING : 22-09-2021 DATE OF PRONOUNCEMENT : 30-09-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2007-08, ARISES FRO M ORDER OF THE CIT(A)-1, VADODARA DATED 19-05-2017, IN PROCEEDINGS UNDER SE CTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 1778/AHD/2017 ASSESSMENT YEAR 2007-08 I.T.A NO. 1778/AHD/2017 A.Y. 2007-08 PAGE NO GUJARAT STATE ELECTRICITY CORPORATION LTD. VS. DY. CIT 2 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE PENALTY LE VIED U/S. 271(1)(C) ON THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF RS. 11, 92,00,000/- UNDER THE NORMAL PROVISION OF THE INCOME TAX ACT. 3. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RET URN OF INCOME ON 24 TH OCTOBER, 2007 DECLARING TOTAL INCOME OF RS. NIL. THE CASE W AS SUBJECT TO SCRUTINY ASSESSMENT. DURING THE COURSE OF ASSESSMENT, THE A SSESSING OFFICER NOTICED THAT ASSESSEE HAS ACCOUNTED INTEREST EXPENSES OF RS. 11, 92,00,000/- TWICELY. THEREFORE, THE SAME WAS DISALLOWED AND ADDED TO THE TOTAL INCO ME OF THE ASSESSEE UNDER THE NORMAL PROVISION AND IN BOOK PROFIT U/S. 115JB OF T HE ACT. THE ASSESSING OFFICER HAS ALSO LEVIED PENALTY U/S. 271(1)(C) OF THE ACT F OR FURNISHING INACCURATE PARTICULARS OF INCOME. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL HAS FILED PAPER BOOK COMPRISING DETAIL AND COPY OF DOC UMENT FILED BEFORE THE ASSESSING OFFICER AND LD. CIT(A). THE LD. COUNSEL HAS SUBMITTED THAT ASSESSEE HAD ACCOUNTED THE PROVISION FOR INTEREST TWICE BY MISTA KE AND ON REALIZING THE MISTAKE RECTIFICATION ENTRIES WERE PASSED IN THE SUBSEQUENT YEAR AND SAME WAS SHOWN AS INCOME. THE LD. COUNSEL HAS ALSO ENCLOSED THE COP IES OF DOCUMENT AND INCOME TAX RETURN IN THE PAPER BOOK SHOWING THAT THE SAME WAS SHOWN AS INCOME IN THE SUBSEQUENT YEAR. THE LD. COUNSEL HAS ALSO PLEADED THAT ASSESSEE IS STATE OWNED PUBLIC SECTOR UNDERTAKING AND THE MISTAKE OCCURRED WAS DULY CORRECTED AND RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 AFTER SHO WING INCOME OF RS. 11.90 CRORES WAS FILED BEFORE DETECTING THE DISCREPANCY U NDER SCRUTINY ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT CANNOT BE STATED TO BE THAT ASSESSEE HAS TAKEN REMEDIAL ACTION AFTER DETECTING THE MISTAKE B Y THE ASSESSING OFFICER. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISIO N OF 322 ITR 158 (SC) RELIANCE I.T.A NO. 1778/AHD/2017 A.Y. 2007-08 PAGE NO GUJARAT STATE ELECTRICITY CORPORATION LTD. VS. DY. CIT 3 PETRO-PRODUCTS PVT. LTD. & 348 ITR 306 (SC) PRICE W ATERCOOPERS PVT. LTD. THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE O RDER OF LOWER AUTHORITIES AND CONTENDED THAT ASSESSEE IS A PUBLIC SECTOR UNDERTAK ING AND ITS ACCOUNTS ARE ADDED. 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS NOTICED TH AT ASSESSEE HAS ACCOUNTED INTEREST EXPENSES TWICE OF RS. 11.90 CRORES, THEREF ORE, THE SAME WAS DISALLOWED AND ALSO LEVIED PENALTY OF RS. 1,46,48,271/- U/S. 2 71(1)(C) OF THE ACT ON THE COMBINED AMOUNT OF DISALLOWANCE U/S. 14A AND DISALL OWANCE OF INTEREST. AFTER PERUSAL OF THE MATERIAL ON RECORD, IT IS UNDISPUTED FACT THAT AFORESAID EXPENDITURE WAS TWICELY REFLECTED IN THE ANNUAL ACCOUNT OF THE YEAR UNDER CONSIDERATION AND DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCE EDINGS THE ASSESSEE HAS BROUGHT TO THE NOTICE OF THE LOWER AUTHORITIES THAT SAME WAS RECTIFIED BY SHOWING THE SAID EXPENDITURE AS PRIOR PERIOD INCOME IN THE SUBSEQUENT YEAR. THE ASSESSEE HAS ALSO PLACED COPY OF INCOME TAX RETURN FOR ASSES SMENT YEAR 2008-09 WHICH WAS FILED ON 30 TH SEP, 2008 DEMONSTRATING THAT THE SAME WAS SHOWN AS INCOME IN THE SUBSEQUENT YEAR AND NOT IN SEP, 2009 AS CONTENDED B Y LD. DEPARTMENTAL REPRESENTATIVE. IN THE LIGHT OF THE ABOVE FACT AND CIRCUMSTANCES, WE HAVE ALSO GONE THROUGH JUDICIAL PRONOUNCEMENTS REFERRED BY TH E LD. COUNSEL DECISION OF 322 ITR 158 (SC) RELIANCE PETRO-PRODUCTS PVT. LTD. & 34 8 ITR 306 (SC) PRICE WATERCOOPERS PVT. LTD. WHEREIN IT IS HELD MERELY BECAUSE ASSESSEE HAD CLAIMED EXPENDITURE WHICH CLAIM WAS NOT ACCEPTED OR WAS NO T ACCEPTABLE TO REVENUE THAT BY ITSELF WOULD NOT ATTRACT PENALTY U/S. 271(1)(C) OF THE ACT. WE HAVE ALSO GONE THROUGH THE JUDICIAL PRONOUNCEMENT OF PRICE WATERHO USE COOPERS (P) LTD. WHEREIN THE HONBLE SUPREME COURT HELD THAT ASSESSEE FIRM F ILED ITS RETURN OF INCOME. IT WAS A BONAFIDE AND INADVERTENT ERROR. ASSESSEE WAS NOT GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME, IMPOSITION OF PENALTY WAS UNJUSTIFIED. IN THE LIGHT OF THE ABOVE FACTS A ND FINDINGS, WE OBSERVED THAT I.T.A NO. 1778/AHD/2017 A.Y. 2007-08 PAGE NO GUJARAT STATE ELECTRICITY CORPORATION LTD. VS. DY. CIT 4 ASSESSEE HAD ACCOUNTED THE PROVISION FOR INTEREST T WICE BY MISTAKE ON WHICH THE ASSESSING OFFICER HAS LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HOWEVER, IT IS NOTICED THAT ASSESSEE ITSEL F SHOWN THE SAID EXPENDITURE AS INCOME IN THE SUBSEQUENT ASSESSMENT YEAR 2009-10 AN D DEMONSTRATED FROM THE COPY OF RETURN THAT THE SAME WAS FILED ON 30 TH SEP, 2008 BEFORE DETECTING THE DISCREPANCY UNDER SCRUTINY ASSESSMENT. THEREFORE, NECESSARY CORRECTION HAS ALREADY BEEN DONE BY THE ASSESSEE BEFORE DETECTING THE MISTAKE POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION. LOOKING TO THE FACTS AND FINDINGS OF JUDICIAL PRONO UNCEMENTS AS REFERRED ABOVE, WE CONSIDER THAT DECISION OF LD. CIT(A) IN SUSTAINI NG THE IMPUGNED PENALTY IS NOT JUSTIFIED. THEREFORE, WE DIRECT THE ASSESSING OFFI CER TO DELETE THE IMPUGNED PENALTY. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-09-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 30/09/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,