Asst. Commissioner of Income Tax, Circle-1(1), Panaji V. M/s Sesa Goa Ltd., Panaji

ITA 187/PAN/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84804 (ITAT-PANAJI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHA DESAI
• Assessee Lawyers: VIJAY GUPTA VP TAXATION; BENECIO MENEZES AGM TAXATION
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 187/PNJ/2014 : (ASST. YEARS : 2009 - 10) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI, GOA. (APPELLANT) VS. M/S. SESA GOA LTD., SESA GHOR, 20, EDC COMPLEX, PATTO, PANAJI, GOA (RESPONDENT) PAN : AACCS7101B ASSESSEE BY : VIJAY GUPTA, VP (TAXATION) & BENECIO MENEZES, AGM (TAXATION) REVENUE BY : SMT. ASHA DESAI, DR DATE OF HEARING : 13/11/2014 DATE OF PRONOUNCEMENT : 28 /11/2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 17.2.2014 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 2) THE LD CIT(A) HAS ERRED IN DELETING PENALTY U/S 271(1)(C) ON THE GROUND THAT HON'BLE ITAT ALLOWED THE APPEAL IN ASSESSEES QUANTUM APPEAL ON THE ISSUE OF THE CLAIM OF DEDUCTION U/S 10B W HEREAS IN FACT THE HON'BLE ITAT HAS REMANDED BACK THE CASE TO RECONSIDER THE CLAIM OF DEDUCTION U/S 10B AND REWORK THE AMOUNT OF SUCH DEDUCTION AS THE ASSESSEE HAS ADOPTED THE CRUDE ORE VALUE TRANSFERRED FROM THEIR OWN DIVISION WHICH IS MUCH LESSER THAN TH E MARKET VALUE OR THE VALUE PAID TO THE OTHER PARTIES. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO LEVIED PENALTY U/S 271(1)(C) VIDE HIS ORDER DT. 28.12.2012 FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN 2 ITA NO. 187/PNJ/2014 (A.Y. : 2009 - 10) RESPECT OF DEDUCTION CLAIMED U/S 10B OF THE INCOME TAX ACT BY HOLDING AS UNDER : IN VIEW OF THE AFORESAID FACTS, REASONS AND FOLLOWING THE RATIO OF DECISIONS DISCUSSED ABOVE, I AM SATISFIED THAT THIS IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) FOR FU RNISHING INACCURATE PARTICULARS OF INCOME. WHEN AN ASSESSEE CONSCIOUSLY MAKE A CLAIM OF DEDUCTION, KNOWING FULLY WELL THAT IT IS NOT ENTITLED FOR SUCH DEDUCTION, IT AMOUNTS TO FURNISHING INACCURATE PARTICULARS OF INCOME LEADING TO CONCEALMENT OF INCOME AN D MAKES IT A DELIBERATE ATTEMPT TO EVADE DUE TAXES TO THE GOVERNMENT. IT MAY BE MENTIONED HERE THAT THERE ARE A NUMBER OF BIG COMPANIES IN THE STATE OF GOA, SUCH AS CHOWGULE & CO. LTD., V.M. SALGAOCAR & BROTHERS PVT. LTD., SALGAOCAR MINING INDUSTRIES PVT. LTD. ETC. WHO ARE ENGAGED IN SIMILAR ACTIVITIES OF EXTRACTION, PROCESSING AND EXPORT OF IRON ORE. HOWEVER, EXCEPT 3 - 4 COMPANIES/CONCERNS, OTHER COMPANIES ARE NOT CLAIMING DEDUCTION U/S 10B. SINCE THE ASSESSEE COMPANY IS THE LARGEST EXPORTER OF IRON ORE FROM GOA AND CLAIMED 100% OF ITS BUSINESS PROFIT FROM ITS CODLI, AMONA AND CHITRADURGA PLANTS INVOLVING TOTAL CLAIM OF RS.451,27,84,122/ - IS UTTER DISREGARD AND VIOLATION OF SUPREME COURT DECISION IN ITS OWN CASE, THIS IS A CASE FIT FOR IMPOSITION OF PENAL TY HIGHER THAN THE MINIMUM PENALTY U/S 271(1)(C). THE AMOUNT OF TAX ON THE DISALLOWANCE OF CLAIM OF DEDUCTION OF RS.451,27,84,122/ - U/S 10B ON ITS THREE AFORESAID PLANTS WHICH HAS ALSO CONFIRMED BY CIT(A) COMES TO RS.153,38,95,323/ - . THE MINIMUM PENALTY U/S 271(1)(C) IS EQUIVALENT TO @100% OF THE TAX WORKS OUT TO RS.153,38,95,323/ - AND THE MAXIMUM PENALTY @ 300% OF SUCH TAX COMES TO RS.460,16,85,969/ - . THEREFORE, AFTER CONSIDERING THE ASSESSEES EXPLANATION AND OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND FOLLOWING THE RATIO OF VARIOUS DECISIONS DISCUSSED ABOVE, I HEREBY LEVY PENALTY OF RS.200,00,00,000/ - U/S 271(1)(C) OF INCOME TAX ACT, 1961 FOR A.Y 2009 - 10 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. WHEN THE MATTER WENT BEFORE THE CIT(A), T HE ASSESSEE CHALLENGED THE ORDER ON MERIT AS WELL AS ON LEGALITY AND ULTIMATELY THE CIT(A) DELETED THE PENALTY BY HOLDING AS UNDER : 6. I HAVE GONE THROUGH THE PENALTY ORDER AND THE SUBMISSION OF THE APPELLANT. THE A.O LEVIED PENALTY BECAUSE IN DEPARTMENTS VIEW THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 10B AND IT HAD WRONGLY MADE THE SAID CLAIM. THE CLAIM WAS DENIED MAINLY ON THREE COUNTS : I) THE THREE EOU UNITS WERE NOT ENGAGED IN MANUFACTURE OR PRODUCTION OF AN ARTICLE OR THING AND THEREFORE NOT ENTITLED FOR EXEMPTION U/S 10B. II) THE THREE UNITS WERE NOT NEW UNITS. III) THE APPELLANT DID NOT MAINTAIN SEPARATE BOOKS OF ACCOUNTS IN RES PECT OF 100% EOUS. 3 ITA NO. 187/PNJ/2014 (A.Y. : 2009 - 10) ALL THE THREE ISSUES WERE EXAMINED BY THE HON'BLE ITAT AND THE DECISION HAS COME IN FAVOUR OF THE APPELLANT. IN MY OPINION, SINCE THE ITAT HAS SET ASIDE THE DISALLOWANCE MADE BY THE A.O ON THE BASIS OF WHICH PENALTY PROCEEDINGS U/S 271 (1)(C) WAS INITIATED AND PENALTY WAS LEVIED AND HAS ALLOWED 10B CLAIM OF THE APPELLANT IN RESPECT OF ALL THE 100% EOUS, IT CAN NOT BE SAID THAT THE APPELLANT EITHER CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, THE A.O IS DIR ECTED TO DELETE THE PENALTY IMPOSED U/S 271(1)(C) AMOUNTING TO RS.200,00,00,000/ - ACCORDINGLY. 4. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THIS IS A FACT THAT THE TRIBUNAL HAS SET ASIDE THE DISALLOWANCE MADE BY THE AO IN RESPECT OF WHICH PENALT Y U/S 271(1)(C) WAS LEVIED AND HAS ALLOWED THE CLAIM OF THE ASSESSEE U/S 10B VIDE ITS ORDER IN ITA NO. 72/PNJ/2012 DT. 8.3.2013. IN VIEW THIS FACT, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A). WE ACCORDINGLY CONFIRM THE ORDER OF CIT (A) DELETING THE PENALTY LEVIED U/S 271(1)(C). 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 /11/2014. S D / - S D / - (D.T.GARASIA) JUDICIAL MEMBER (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 2 8 /11/2014 SSL COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER