CFL Pharmaceuticals Limited, Panaji V. Assistant Commissioner of Income Tax, Circle - 1(1), Panaji

ITA 188/PAN/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6330 (ITAT-PANAJI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2014-2015
• Appeal Filed On: 16-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJAN KUMAR
• Keywords: TDS
• Section: 37; 271(1)(c); 143(3); 14A; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER I.T.A. No.188/PAN/2019 Assessment Year: 2014-15 CFL Pharmaceuticals Ltd., 5 th Floor, Dempo Tower, Patto Plaza, Panaji, Goa – 403 001. PAN: AAACC7387H Vs. ACIT, Circle 1(1), Panaji, Goa. Appellant Respondent Date of Hearing 16.06.2022 Date of Pronouncement 17.06.2022 Assessee by None Department by Shri Ranjan Kumar, CIT, DR & Shri Mayur Kamble, Sr. DR ORDER PER C.M. GARG, JM: This appeal has been filed by the assessee against the order of the CIT(A), Panaji-1, dated 11.02.2019 for assessment year 2014-15. 2. Facts of the case, in brief, are that the assessee is carrying on the business of manufacturing of pharmaceutical products and filed e-return declaring a business loss of Rs.8,06,48,367/- and short-term capital loss of Rs.45,87,410/-. The assessment was 2 ITA No.188/PAN/2019 CFL Pharmaceuticals Limited vs. ACIT completed u/s 143(3) of the Act assessing the total loss at Rs.5,95,91,757/- by making the following additions:- i) Disallowance of interest expenses u/s 14A - Rs.54,401/- ii) Disallowance of interest on delayed payment of income tax and TDS u/s 37 (1) - Rs.2,46,97,656/- Total - Rs.2,56,44,031/-. 3. Penalty proceedings u/s 271(1)(c) of the Act was initiated and a penalty of Rs.83,20,205/- was imposed. In appeal, the learned CIT(A) sustained the penalty. 4. When the appeal was taken up for hearing, it was noticed that the assessee has filed the detailed submissions along with the copy of the notice issued by the Assessing Officer for initiation of penalty u/s 274 of the Act. On being asked by the Bench, the learned Sr. DR, in all fairness, submitted that the issue is covered in favour of the assessee. In view of the above, we proceed to adjudicate the appeal on the basis of material available on record along with written submissions and other documentary evidence filed by the assessee after hearing the arguments of learned Sr. DR on behalf of the Revenue. 5. The learned counsel for the assessee, in the written submissions filed along with the appeal, placing reliance on various decisions including the decision of the Hon'ble Karnataka High in the case of CIT vs. Manjunath Cotton & Ginning Factor (2013) 359 ITR 565 (Kar), submitted that the penalty has wrongly been imposed by 3 ITA No.188/PAN/2019 CFL Pharmaceuticals Limited vs. ACIT the Assessing Officer and sustained by the CIT(A). Further, in the notice issued u/s 274 r.w.s. 271(1)(c) dated 29.12.2016, it has not been specifically mentioned whether the penalty was being imposed for concealment of income or furnishing of inaccurate particulars of income. 6. The learned Departmental Representatives heavily relied on the orders of the authorities below. However, they could not controvert the arguments made by the learned counsel for the assessee in its written submission. 7. Having considered the rival arguments and perusing the material available on record, we find the issue is squarely covered by the decision of the Hon'ble Karnataka High in the case of CIT vs. Manjunath Cotton & Ginning Factor (2013) 359 ITR 565 (Kar). Further, in the notice issued u/s 274 r.w.s. 271 of the IT Act, the irrelevant part has not been struck off and it has not been made clear whether the penalty was being imposed for concealment of income or furnishing of inaccurate particulars of income, which is a mandatory requirement under the law. The said notice is reproduced below for ready reference:- 4 ITA No.188/PAN/2019 CFL Pharmaceuticals Limited vs. ACIT 8. In view of the above written submissions of the learned counsel which have not been controverted by the learned Departmental Representatives, we are of the considered opinion that the penalty in the instant case has wrongly been imposed and sustained by the Assessing Officer and the learned CIT(A) respectively. Therefore, the Assessing Officer is directed to cancel the impugned penalty u/s 271(1)(c) of the Act imposed on the assessee. 5 ITA No.188/PAN/2019 CFL Pharmaceuticals Limited vs. ACIT 9. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 17 th June, 2022. Sd/- Sd/- (Girish Agrawal) (C.M. Garg) Accountant Member Judicial Member Dated: 17.06.2022 dk Copy of the order forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. Pr. CIT 5. DR, ITAT, Panaji, Goa. 6. Guard File True Copy By Order Sr. Private Secretary, ITAT Panaji Bench, Panaji (On Tour)