Assistant Commissioner of Income-tax, V. M/s. Tulsi Developers, Pune

ITA 1846/PUN/2013

• Counselvise Citation: 184624514 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 11-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Wrong claim; Difference of opinion
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1846/PN/2013 (ASSESSMENT YEAR : 2007-08) ASSTT. COMMISSIONER INCOME TAX, CIRCLE- 2, PUNE. . APPELLANT VS. M/S TULSI DEVELOPERS, 428-A, SHOP NO.9, RANJEET COMPLEX, NEW MANGALWAR PETH, PUNE 411 001. PAN : AADFT2079H . RESPONDENT DEPARTMENT BY : SHRI P. S. NAIK ASSESSEE BY : SHRI PRAMOD SHINGTE DATE OF HEARING : 17-09-2014 DATE OF PRONOUNCEMENT : 14-11-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE D ATED 30.04.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.03.2012 PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE SOLITARY GRIEVANCE IS AGAINST THE AC TION OF THE CIT(A) IN DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 27 1(1)(C) OF THE ACT AMOUNTING TO RS.14,04,445/-. 3. BRIEFLY PUT, THE FACTS RELEVANT IN ORDER TO ADJU DICATE THE AFORESAID CONTROVERSY ARE AS FOLLOWS. THE RESPONDENT-ASSESSE E IS A PARTNERSHIP FIRM ITA NO.1846/PN/2013 ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND DEVELOPERS. THE ASSESSEE FIRM HAD UNDERTAKEN CONSTRUCTION OF A HOUS ING PROJECT, NAMED, GOKUL NAGARI AT PUNE AND THE PROFITS DERIVED THER EFROM DURING THE YEAR UNDER CONSIDERATION OF RS.41,72,478/- WERE CONSIDERED AS EXEMPT U/S 80IB(10) OF THE ACT. THE RETURN OF INCOME SO FILED BY THE ASSE SSEE WAS SUBJECT TO A SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT DATED 21. 12.2009 WHEREBY THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT OF RS.41, 72,478/- WAS DISALLOWED. SUBSEQUENTLY, THE ASSESSING OFFICER HELD THE ASSESS EE GUILTY OF CONCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULA R OF SUCH INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT QUA THE AFO RESAID DISALLOWANCE OF DEDUCTION U/S 80IB(10) OF THE ACT. ACCORDINGLY, TH E ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.14 ,04,455/- VIDE ORDER DATED 30.03.2012. THE CIT(A) HAS DELETED THE PENALTY ON THE GROUND THAT THE CLAIM OF THE ASSESSEE MADE IN THE RETURN OF INCOME WAS BO NA-FIDE AND MERE NON- ACCEPTANCE OF A CLAIM IN THE ASSESSMENT PROCEEDINGS DOES NOT RESULT IN LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. AGAINST THE AFOR ESAID ORDER OF THE CIT(A) DELETING THE PENALTY, REVENUE IS IN APPEAL BEFORE U S. 4. THE FACTUAL MATRIX PERTAINING TO THE DISALLOWANC E OF DEDUCTION U/S 80IB(10) OF THE ACT REVEALS THAT THE ASSESSING OFFI CER DISALLOWED THE CLAIM ON TWO GROUNDS. FIRSTLY, ACCORDING HIM, THE AREA OF P LOT ON WHICH THE HOUSING PROJECT WAS UNDERTAKEN WAS LESS THAN ONE ACRE, THER EBY VIOLATING THE PROVISIONS OF CLAUSE (B) TO SECTION 80IB(10) OF THE ACT. SECONDLY, ACCORDING TO THE ASSESSING OFFICER, THE CERTIFICATE OF COMPLETIO N OF CONSTRUCTION FOR THE LAST BUILDING WAS NOT OBTAINED BEFORE THE STIPULATED DAT E OF 31.03.2008, WHICH WAS VIOLATIVE OF THE PROVISIONS OF CLAUSE (A) TO SECTIO N 80IB(10) OF THE ACT. FOR THE SAID REASONS, THE CLAIM OF DEDUCTION U/S 80IB(10) W AS DISALLOWED. ITA NO.1846/PN/2013 5. IN THE ABOVE BACKGROUND, THE CIT(A) OBSERVED THA T THE DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT DOES NOT LEAD TO IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. AS PER THE CIT(A), ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS RELEVANT FOR I TS ASSESSMENT; THAT THE FACTS ON RECORD INDICATE THAT THERE IS A PRIMA-FACIE GENU INE DIFFERENCE OF OPINION BETWEEN THE VIEW TAKEN BY THE ASSESSEE AND THAT OF THE ASSESSING OFFICER REGARDING THE CLAIM OF DEDUCTION U/S 80IB(10) OF TH E ACT. ACCORDING TO THE CIT(A), SINCE THE ASSESSEE HAD MADE FULL DISCLOSURE OF ALL THE RELEVANT FACTS, ASSESSEE CAN BE SAID TO HAVE ACTED IN A BONA-FIDE M ANNER. APART FROM OTHER DECISIONS, CIT(A) HAS RELIED UPON THE DECISION OF T HE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S RAVIRAJ COMPAN Y ASSOCIATES VIDE ITA NO.1273/PN/2011 DATED 27.02.2013 FOR THE PROPOSITIO N THAT ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80IB(10) OF THE ACT W AS A DEBATABLE ISSUE AT THE RELEVANT POINT OF TIME, AND THUS NO PENALTY U/S 271 (1)(C) OF THE ACT IS IMPOSABLE. ACCORDINGLY, THE CIT(A) HAS FOUND IT FI T TO DELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF T HE ACT. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE RESPONDENT- ASSESSEE SUBMITTED THAT SO FAR AS THE PROCEEDINGS O F THE QUANTUM ASSESSMENT ARE CONCERNED, THE SAME WERE A SUBJECT-M ATTER OF CONSIDERATION BY THE TRIBUNAL IN ITA NOS.1394 TO 1396/PN/2010 & I TA NO.1796/PN/2012 DATED 30.07.2013. IN TERMS OF THE SAID DECISION TH E MATTER REGARDING THE ALLOWABILITY OF DEDUCTION U/S 80IB(10) OF THE ACT H AS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIO NS. HOWEVER, THE LD. REPRESENTATIVE FOR THE RESPONDENT-ASSESSEE HAS DEFE NDED THE IMPUGNED ORDER OF THE CIT(A) DELETING THE PENALTY BY POINTIN G OUT THAT A MERE DISAGREEMENT ON A CLAIM OF DEDUCTION U/S 80IB(10) O F THE ACT IS NOT JUSTIFIABLE GROUND TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. ITA NO.1846/PN/2013 7. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FO R THE REVENUE HAS, HOWEVER, CONTENDED THAT SINCE THE ASSESSEE HAD NOT OBTAINED THE COMPLETION CERTIFICATES IN RESPECT OF BUILDINGS E, F & G COMPR ISED IN THE HOUSING PROJECT GOKUL NAGARI, THE CLAIM OF DEDUCTION WAS JUSTIFIA BLY DENIED AND THEREFORE SUCH A WRONG CLAIM INVITES PENALTY U/S 271(1)(C) OF THE ACT. IN SUM AND SUBSTANCE, THE STAND OF THE LD. DEPARTMENTAL REPRES ENTATIVE IS THAT IT IS A CASE OF A WRONG CLAIM MADE FOR DEDUCTION U/S 80IB(1 0) OF THE ACT AND THEREFORE THE ASSESSING OFFICER WAS JUSTIFIED IN LE VYING PENALTY U/S 271(1)(C) OF THE ACT. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CONTROVERSY BEFORE US RELATES TO A LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT IN RELATION TO THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, WHICH W AS DISALLOWED BY THE ASSESSING OFFICER. THE GROUNDS ON WHICH THE CLAIM WAS DENIED HAVE BEEN ENUMERATED BY US IN PARA 4 OF THIS ORDER. IN SO FA R AS THE QUANTUM ASSESSMENT PROCEEDINGS ARE CONCERNED, THE ORDER OF THE ASSESSING OFFICER DATED 30.03.2012 (SUPRA), WHICH HAS FORMED THE BASI S FOR THE IMPUGNED LEVY OF PENALTY BY HIM U/S 271(1)(C) OF THE ACT, WAS FOU ND TO BE UNSUSTAINABLE AND THEREFORE THE MATTER HAS BEEN SET-ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS BY THE TRIBUNAL VID E ORDER DATED 30.07.2013 (SUPRA). A PERUSAL OF THE SAID ORDER REVEALS THAT SO FAR AS THE OBJECTIONS OF THE ASSESSING OFFICER REGARDING THE AREA OF THE PLOT BE ING LESS THAN ONE ACRE IS CONCERNED, THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AS PER FACTS AND LAW AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE. WITH RESPECT TO T HE SECOND OBJECTION OF THE ASSESSING OFFICER REGARDING THE NON-OBTAINING OF TH E CERTIFICATE OF COMPLETION OF CONSTRUCTION FOR THE LAST BUILDING BEFORE THE 31 .03.2008 THE TRIBUNAL NOTED THAT THE PROJECT OF THE ASSESSEE CONSISTED OF BUILD INGS A TO G AND THAT COMPLETION CERTIFICATE WAS NOT OBTAINED BY THE ASSE SSEE BEFORE THE STIPULATED ITA NO.1846/PN/2013 PERIOD WITH RESPECT TO THE BUILDINGS E, F & G. IN- FACT, THE TRIBUNAL HAS NOTED THAT ASSESSEE DID NOT PRESS THE CLAIM WITH REGARD T O THE BUILDING G EVEN BEFORE THE CIT(A). HOWEVER, THE TRIBUNAL NOTED AND APPROV ED THE ALTERNATIVE PLEA OF THE ASSESSEE TO THE EFFECT THAT ASSESSEE WAS ENTITL ED FOR DEDUCTION U/S 80IB(10) OF THE ACT WITH RESPECT TO THE PROFITS OF BUILDINGS A TO D WHICH WERE COMPLETED. ACCORDING TO THE TRIBUNAL, ASSESSEE WAS ENTITLED TO THE DEDUCTION U/S 80IB(10) OF THE ACT WITH RESPECT TO BUILDINGS A TO D, PROVIDED OTHER CONDITIONS ARE FULFILLED. WE ARE ONLY TRYING TO CU LL OUT THE AFORESAID FINDINGS OF THE TRIBUNAL FOR THE REASON THAT PRESENTLY, THE MAT TER WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IS A SUBJECT-MATT ER OF RE-APPRAISAL BY THE ASSESSING OFFICER AS A RESULT OF THE ORDER OF THE T RIBUNAL DATED 30.07.2013 (SUPRA). SO FAR AS THE PRESENT PROCEEDINGS ARE CON CERNED, THE PENALTY HAS BEEN IMPOSED BY THE ASSESSING OFFICER ON ACCOUNT OF HIS STAND IN THE ASSESSMENT ORDER DATED 30.03.2012 (SUPRA). QUITE C LEARLY, THE SAID ORDER HAS NOT BEEN FOUND SUSTAINABLE BY THE TRIBUNAL INASMUCH AS THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS. THEREFORE, PENALTY IMPOSED BY THE ASSESSING OFFICER ON THE STRENGTH OF THE ASSESSMENT ORDER DATED 30.03.2012 (SUPRA) IS UNSUST AINABLE BECAUSE SUCH AN ASSESSMENT ORDER ITSELF DOES NOT SURVIVE. SO HOWEV ER, SINCE THE MATTER RELATING TO THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IS STILL A SUBJECT-MATTER OF ADJUDICATION BY THE ASSESSING OFFICER IN THE REM AND PROCEEDINGS, HE SHALL BE AT LIBERTY TO INITIATE FRESH PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, IF SO ADVISED IN LAW AFTER PASSING AN ORDER CONSEQUENT TO THE REMAND BY THE TRIBUNAL. THUS, SO FAR AS THE PRESENT PROCEEDINGS ARE CONCERNED, IN VIEW OF OUR AFORESAID DISCUSSION, THE ULTIMATE CONCLUSION O F THE CIT(A) IN DELETING THE PENALTY U/S 271(1)(C) OF THE ACT, IS HEREBY AFFIRME D, ALBEIT ON A DIFFERENT GROUND. ITA NO.1846/PN/2013 9. RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMIS SED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 14 TH NOVEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE