Assistant Commissioner of Income-tax, V. Patankar Wind Farms Pvt. Ltd., Satara

ITA 2072/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1873 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D N PARAKH
• Keywords: Depreciation; Wrong claim
• Section: 143(3); 263; 154

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.2072/PN/2013 ASSESSMENT YEAR : 2003-04 THE ASSTT. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA. . APPELLANT VS. PATANKAR WIND FARMS PVT. LTD., SHIKKA MANSION, A/P PATAN, TAL. PATAN, DIST. SATARA. PAN : AABCP1365R . RESPONDENT / APPELLANT BY : SHRI D. N. PARAKH / RESPONDENT BY : SHRI PRAYAG JHA & SHRI PRATEEK JHA / DATE OF HEARING : 12.05.2016 / DATE OF PRONOUNCEMENT: 12.05.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T THE ORDER OF CIT(A)-III, PUNE DATED 03.09.2013 RELATING TO ASSES SMENT YEAR 2003-04 PASSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. BY WAY OF THE PRESENT APPEAL, THE REVENUE HAS CH ALLENGED THE ACTION OF THE CIT(A) IN CANCELLING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEFLY STATED, THE RELEVANT FACTS CONCERNING TH E ISSUE RAISED BY THE REVENUE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF WIND POWER GENERATION, PURCHASE AND SAL E OF LAND AND LAND DEVELOPMENT. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE WHEREIN THE ASSESSEE INTER-ALIA CLAIMED DEDUCTION OF AN AMOUNT OF RS.61,51,318/- UN DER 2 ITA NO.2072/PN/2013 SECTION 80IA(4)(IV)(A) OF THE ACT FOR UNDERTAKING S ETOFF FOR THE GENERATION AND DISTRIBUTION OF POWER. THE DEDUCTION UNDER SECTION 80IA WAS ORIGINALLY ALLOWED BY THE ASSESSING OFFICER IN THE COURSE OF A SSESSMENT PROCEEDINGS. THEREAFTER AS STATED, THE CIT(A) INITIATED ACTION U NDER SECTION 263 FOR WITHDRAWAL OF THE AFORESAID DEDUCTION ON THE GROUND THAT THE LOSSES FROM THE ELIGIBLE UNIT FROM ASSESSMENT YEAR 1999-2000 ONWARD S WERE AVAILABLE TO TUNE OF RS.2,12,43,110/-. IT WAS PERCEIVED THAT WHILE D URING THE RELEVANT ASSESSMENT YEAR 2003-04, THE ASSESSEE HAD PROFIT OF RS.61,51,3 18/- FROM THE ELIGIBLE BUSINESS, THERE WOULD BE DEFICIT OF RS.1,50,91,873/ - WHEN LOSSES ARE SET OFF AGAINST THE PROFIT AS MUST BE DONE BY APPLYING SUB- SECTION (5) TO SECTION 80IA. THE MATTER WAS CARRIED BEFORE THE TRIBUNAL. THE CO -ORDINATE BENCH OF THE TRIBUNAL ISSUED DIRECTIONS TO THE ASSESSING OFFICER INTER-ALIA RECONSIDER THE ISSUE OF INITIAL ASSESSMENT YEAR TO THE COMPUTATI ON OF PROFIT UNDER SECTION 80IA AND COMPUTE THE TOTAL INCOME AND CARRY FORWARD OF LOSSES AS DEPRECIATION OF THE PROVISIONS OF THE ACT AFTER GIVING PROPER OP PORTUNITY OF HEARING TO THE ASSESSEE. PURSUANT TO THE DIRECTIONS OF THE TRIBUN AL, THE ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 254 OF THE ACT WAS FRAM ED WHEREIN THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.67,25,250/-. IN SHORT, THE DEDUCTION UNDER SECTION 80IA OF THE ACT OF RS.61,51,318/- WAS DENIED. CONSEQUENTLY, PENALTY FOR FURNISHING INACCURATE PARTICULARS OF IN COME UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSED FOR A SUM OF RS.22,60,610/- VIDE ORDER DATED 26.06.2012. THE PENALTY ORDER WAS CARRIED BEFORE T HE CIT(A). 4. THE CIT(A) GRANTED RELIEF TO THE ASSESSEE BY MAK ING FOLLOWING OBSERVATIONS :- 3.4 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHAL F OF THE APPELLANT AND EXAMINED THE FACTUAL MATRIX OF THE CASE VIS--VIS T HE LEGAL PRECEDENTS ON THE ISSUE. THE ISSUE IN DISPUTE RELATES TO THE INTERPRETATION OF INITIAL A.Y. FOR THE PURPOSE OF SEC.80IA(1). THE TERM INITIAL ASSESSMENT YEAR HAS NOT BEEN DEFINED IN THE IT ACT BUT WITH THE INTRODUCTION OF SEC. 80IA(2) W.E.F. 01.04. 2000, THE ASSESSEE WAS GIVEN AN OPTION TO CLAIM DEDUCTION U/S 80IA(1) FOR ANY 10 AS SESSMENT YEARS OUT OF 15 YEARS BEGINNING FROM THE YEAR THAT THE UNDERTAKING STARTS GENERATING ELECTRICITY. IN OTHER WORDS, WHERE AN ASSESSEE DOES NOT OPT FOR THE DEDUC TION IN THE INITIAL YEAR WHEN POWER WAS ACTUALLY GENERATED, THE PROVISION OF SUB SECTION (1) OF SEC 80IA WOULD NOT APPLY. THE APPELLANT HAS SUBMITTED THAT THE VIEW O F THE LEARNED CIT-III, PUNE AND THE ASSESSING OFFICER THAT THE DEPRECIATION AND LOS S INCURRED BY WIND MILL UNITS ARE NOTIONALLY AVAILABLE FOR SET OFF IN VIEW OF THE PRO VISION OF SEC. 80IA(5), HAS NOT BEEN 3 ITA NO.2072/PN/2013 APPROVED BY THE COURTS AND THE CLAIM MADE BY THE AP PELLANT IS IN CONSONANCE WITH THE MADRAS HIGH COURT DECISION IN THE CASE OF VELAY UDHASWAMY SPINNING MILLS (P) LTD. V. ACIT (231 CTR 368), WHICH IS SOLITARY HIGH COURT DECISION AVAILABLE ON THE SUBJECT. 3.5 THIS CONTENTION OF THE APPELLANT IS SEEN TO BE CORRECT. THERE HAS BEEN CONFLICTING JUDICIAL OPINION ON THE ISSUE WHETHER I RRESPECTIVE OF THE FACT THAT THE DEPRECIATION AND LOSS ON WIND MILLS WHICH HAVE ALRE ADY BEEN SET OFF AGAINST INCOME FROM OTHER HEADS IN THE RESPECTIVE ASSESSMENT YEARS , WERE STILL TO BE NOTIONALLY AVAILABLE FOR SET OFF IN SUBSEQUENT YEARS IN VIEW O F THE PROVISIONS OF SEC. 80IA(5) OR NOT. THE HONBLE ITAT, PUNE IN THE CASE OF SERUM I NTERNATIONAL LTD., HAS DECIDED TO DISREGARD THE DECISION OF THE SPECIAL BENCH, AHMEDA BAD GIVEN IN THE CASE OF GOLDMINE SHARES AND FINANCE PVT. LTD., ITS OWN DECI SION GIVEN IN THE CASE OF KHINVASARA INVESTMENT PVT. LTD. AND ALSO THE DECISI ON OF HYDERABAD BENCH OF ITAT GIVEN IN THE CASE OF HYDERABAD CHEMICALS SUPPLIES L TD. ON 21.1.2011 AFTER CONSIDERING THE DECISION OF THE MADRAS HIGH COURT G IVEN IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT. LTD. AS BINDING. THE HONBLE ITAT, PUNE IN THE ABOVE CASE HAS DEALT IN DETAIL THE PRINCIPLE OF BINDING PRECEDENT AND AFTER PLACING RELIANCE ON THE VIEW EXPRESSED BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. M/S VALS ON DYEING, BLEACHING & PRINTING WORKS, 2010-TIOL-710 HC-MUM-CX, IT WAS HEL D THAT EVEN A DECISION OF NON JURISDICTIONAL HIGH COURT IS A BINDING PRECEDEN T FOR THE TRIBUNAL UNTIL A CONTRARY DECISION IS GIVEN BY ANY OTHER COMPETENT H IGH COURT. IN CONSIDERATION OF THIS VIEW, THE HONBLE TRIBUNAL IN THE AFORESAID CA SE DECIDED TO FOLLOW THE DECISION OF THE MADRAS HIGH COURT GIVEN IN THE CASE OF VELAY UDHASWAMY SPINNING MILLS PVT. LTD. TREATING THE SAME AS A BINDING PRECEDENT. 3.6 THE APPELLANTS CASE IS THEREFORE SQUARELY COVE RED BY THE DECISION OF THE SUPREME COURT OF INDIA IN CIT VS. RELIANCE PETROPRO DUCTS (P) LTD. REPORTED IN 322 ITR 158 WHEREIN IT WAS HELD THAT THE REVENUE HAS TO ESTABLISH THAT THERE IS CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSE E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE BEFORE CONCEA LMENT PENALTY IS LEVIED U/S 271(1)(C). THE SUPREME COURT DISCUSSED ITS EARLIER DECISION IN DILIP N. SHROFF VS. JCIT WHEREIN IT WAS HELD THAT TO ATTRACT PENALTY U/ S 271(1)(C), MENS REA WAS NECESSARY, AS ACCORDING TO THE COURT THE WORD INAC CURATE SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WAS HELD THAT THE ASSESSEE MUST BE FOUND TO HAVE FAILED TO PROVE THAT THE EXPLANATION IS NOT ON LY NOT BONAFIDE BUT ALL THE FACT RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS INCOME WERE NOT DISCLOSED BY HIM. THE LEARNED JUDGES ALSO DISCUSSE D THEIR EARLIER DECISION IN DHARMENDRA TEXTILE PROCESSOR WHEREIN IT WAS HELD TH AT THE OBJECTIVE BEHIND ENACTMENT OF SEC.271(1)(C) R/W EXPLANATION INDICATE THAT THE SAID SECTION PROVIDED A REMEDY FOR LOSS OR REVENUE AND AS SUCH CONCEALMENT PENALTY WAS A CIVIL LIABILITY, UNLIKE WILLFUL CONCEALMENT WHICH IS ESSENTIAL FOR P ROSECUTION U/S 276C OF THE INCOME TAX ACT. NO FAULT WAS FOUND IN THE REASONING IN DI LIP N. SHROFF CASE WITH REGARD TO THE MEANING TO THE WORD CONCEAL AND INACCURATE WHILE OVERRULING THE DECISION THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR IMPOS ITION OF PENALTY U/S 271(1)(C). THE SUPREME COURT THUS HELD THAT IN A SITUATION WER E THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF HIS EXPENDITURE AS WELL AS INCOME IN HIS RETURNS, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE, IT COU LD NOT BE VIEWED AS CONCEALMENT OF INCOME ON ITS PART. IT WAS UPTO THE AUTHORITIES TO ACCEPT THE CLAIM IN THE RETURN OR NOT. MERELY, BECAUSE THE ASSESSEE HAS CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED, OR WAS NOT ACCEPTABLE TO THE REVENUE, THA T BY ITSELF WOULD NOT BE SUFFICIENT TO ATTRACT PENALTY U/S 271(1)(C). IF THE CONTENTIO N OF THE REVENUE IS ACCEPTED, THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT AC CEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/ S 271(1)(C), WHICH IS CLEARLY NOT THE INTENTION OF THE LEGISLATURE. 3.7 IN THE PRESENT CASE, THE APPELLANT HAS CLAIMED DEDUCTION U/S 80IA(4)(IV)(A) OF RS.61,51,318/- IN THE RETURN OF INCOME. THE BALANC E SHEET AND TAX AUDIT REPORTS IN 4 ITA NO.2072/PN/2013 FORM NO.3CB AND 3CD WERE FILED WITH THE RETURN. SI NCE ALL THE RELEVANT INFORMATION RELATING TO THE CLAIM OF DEDUCTION HAS BEEN FILED I N THE RETURN OF INCOME AND IT WAS NOT FOUND BY THE ASSESSING OFFICER THAT THERE IS AN Y PATENTLY FALSE CLAIM OR INACCURATE PARTICULARS MADE/FURNISHED BY THE APPELL ANT, MAKING AN INCORRECT CLAIM WOULD AN ITSELF NOT INVITE LEVY OF PENALTY U/S 271( 1)(C). IT HAS BEEN SO HELD BY THE BOMBAY HIGH COURT IN CIT VS. ROSHAN D. NARIMAN REPO RTED IN 169 TAXMAN 1 AND BY DELHI HIGH COURT IN THE CASE OF SHERVANI HOSPITA LITIES LTD. V. CIT 89 DTR 169. 3.8 IT ALSO SEEN FROM THE RECORD THAT THE ASSESSMEN T U/S 143(3) HAD BEEN COMPLETED BY THE ASSESSING OFFICER ON 21.10.2005 AL LOWING THE APPELLANT ITS CLAIM OF DEDUCTION OF U/S 80IA(4) ON THE BASIS OF ALL THE RE LEVANT PARTICULARS FURNISHED TO THE RETURN OF INCOME INCLUDING THE AUDIT REPORT IN FORM 10CCB. PENALTY PROCEEDINGS HAD ALSO BEEN INITIATED BUT WERE DROPPED VIDE ORDER DATED 17.04.2006. BASED ON THE OBSERVATION OF THE REVENUE AUDIT NOTICE U/S 154 WAS ISSUED ON 17.11.2006 PROPOSING TO WITHDRAW THE DEDUCTION ALLOWED U/S 80IA(4). HOW EVER, THE PROCEEDINGS U/S 154 WERE APPARENTLY NOT TAKEN TO THEIR LOGICAL CONCLUSI ON. SUBSEQUENTLY, ON THE BASIS OF THE RELEVANT MATERIAL ON RECORD THE CIT-III REVISED THE ASSESSMENT ORDER HOLDING THAT THE DEPRECIATION SET OFF IN THE EARLIER YEARS WAS T O BE TREATED AS NOTIONAL DEPRECIATION TO BE SET OFF AGAINST INCOME FROM THE ELIGIBLE UNIT IN THE SUBSEQUENT YEARS. THESE ACTIONS SHOW THAT THERE WAS PRIMA FAC IE AND BONAFIDE CASE ON THE PART OF THE APPELLANT TO CLAIM THE DEDUCTION U/S 80IA(4) AND THAT ALL THE NECESSARY PARTICULARS IN THIS REGARD HAD BEEN DISCLOSED IN TH E RETURN AND ALSO DURING ASSESSMENT PROCEEDINGS. IT IS ALSO SEEN THAT SIMIL AR PROCEEDINGS U/S 271(1)(C) WERE INITIATED BUT DROPPED BY THE ASSESSING OFFICER FOR THE A.Y. 2004-05 & 2006-7. SINCE THE FACTS AND CIRCUMSTANCES FOR THE IMPUGNED A.Y. A RE EXACTLY THE SAME, ON THIS ACCOUNT ALSO, THE PENALTY PROCEEDINGS U/S 271(1)(C) ARE HELD TO BE VITIATED. 3.9 BASED ON THE TOTALITY OF DISCUSSION AT PRECEDIN G PARAS 3.3 TO 3.8 ANTE, IT IS HELD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN LEVYING PENALTY U/S 271(1)(C). GROUNDS OF APPEAL NO.1 TO 5 ARE THUS ALLOWED. 5. AGAINST SAID RELIEF GRANTED BY THE CIT(A), THE R EVENUE IS IN APPEAL BEFORE US. 6. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY TH E LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THE ISSUE STANDS SQ UARELY COVERED IN ASSESSEES OWN CASE RELEVANT TO ASSESSMENT YEAR 2008-09 IN ITA NO.2227/PN/2013 QUANTUM APPEAL ORDER DATED 31.10.2014. THE LD. AR ALSO ADVERTED OUR ATTENTION TO CBDT CIRCULAR NO.1 OF 2016 DATED 15.02 .2016 WHICH IS REPRODUCED AS UNDER :- SUBJECT: CLARIFICATION OF THE TERM 'INITIAL ASSESS MENT YEAR' IN SECTION 80IA (5) OF THE INCOME-TAX ACT, 1961. SECTION 80IA OF THE INCOME-TAX ACT, 1961 ('ACT'), A S SUBSTITUTED BY THE FINANCE ACT, 1999 WITH EFFECT FROM 01.04.2000, PROV IDES FOR DEDUCTION OF AN AMOUNT EQUAL TO 100 % OF THE PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR ENTERPRISE FROM AN ELIGIBLE BUSINESS (AS REFERRED TO IN SUB-SECTION (4) OF THAT SECTION) IN ACCORDANCE WITH THE PRESCRIBED PROVISIONS. SUB-SECTION (2) OF SECTION 80IA FURTHER PROVIDES THAT THE AFORESAID DEDUCTION CAN BE CLAIME D BY THE ASSESSEE, AT HIS OPTION, FOR ANY TEN CONSECUTIVE ASSESSMENT YEARS OUT OF FIF TEEN YEARS (TWENTY YEARS IN CERTAIN 5 ITA NO.2072/PN/2013 CASES) BEGINNING FROM THE YEAR IN WHICH THE UNDERTA KING COMMENCES OPERATION, BEGINS DEVELOPMENT OR STARTS PROVIDING SERVICES ETC . AS STIPULATED THEREIN. SUB- SECTION (5) OF SECTION 80IA FURTHER PROVIDES AS UND ER- NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PR OVISION OF THIS ACT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROVISIONS OF SUB-SECTION (1) APPLY SHALL, FOR THE PURPOSES OF DETERMINING THE QU ANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUC CEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH T HE DETERMINATION IS TO BE MADE'. IN THE ABOVE SUB-SECTION, WHICH PRESCRIBES THE MAN NER OF DETERMINING THE QUANTUM OF DEDUCTION, A REFERENCE HAS BEEN MADE TO THE TERM 'INITIAL ASSESSMENT YEAR'. IT HAS BEEN REPRESENTED THAT SOME ASSESSING OFFICERS ARE INTERPRETING THE TERM 'INITIAL ASSESSMENT YEAR' AS THE YEAR IN WHICH THE ELIGIBLE BUSINESS/ MANUFACTURING ACTIVITY HAD COMMENCED AND ARE CONSIDERING SUCH FIR ST YEAR OF COMMENCEMENT/OPERATION ETC. ITSELF AS THE FIRST YEA R FOR GRANTING DEDUCTION, IGNORING THE CLEAR MANDATE PROVIDED UNDER SUB-SECTION (2) WH ICH ALLOWS A CHOICE TO THE ASSESSEE FOR DECIDING THE YEAR FROM WHICH IT DESIRE S TO CLAIM DEDUCTION OUT OF THE APPLICABLE SLAB OF FIFTEEN (OR TWENTY) YEARS. THE MATTER HAS BEEN EXAMINED BY THE BOARD. IT IS AB UNDANTLY CLEAR FROM SUB- SECTION (2) THAT AN ASSESSEE WHO IS ELIGIBLE TO CLA IM DEDUCTION U/S 80IA HAS THE OPTION TO CHOOSE THE INITIAL/ FIRST YEAR FROM WHICH IT MAY DESIRE THE CLAIM OF DEDUCTION FOR TEN CONSECUTIVE YEARS, OUT OF A SLAB OF FIFTEEN ( OR TWENTY) YEARS, AS PRESCRIBED UNDER THAT SUB-SECTION. IT IS HEREBY CLA RIFIED THAT ONCE SUCH INITIAL ASSESSMENT YEAR HAS BEEN OPTED FOR BY THE ASSESSEE, HE SHALL BE ENTITLED TO CLAIM DEDUCTION U/S 80IA FOR TEN CONSECUTIVE YEARS BEGINN ING FROM THE YEAR IN RESPECT OF WHICH HE HAS EXERCISED SUCH OPTION SUBJECT TO THE F ULFILLMENT OF CONDITIONS PRESCRIBED IN THE SECTION. HENCE, THE TERM 'INITIAL ASSESSMENT YEAR' WOULD MEAN THE FIRST YEAR OPTED FOR BY THE ASSESSEE FOR CLAIMING DEDUCTION U/ S 80IA. HOWEVER, THE TOTAL NUMBER OF YEARS FOR CLAIMING DEDUCTION SHOULD NOT T RANSGRESS THE PRESCRIBED SLAB OF FIFTEEN OR TWENTY YEARS, AS THE CASE MAY BE AND THE PERIOD OF CLAIM SHOULD BE AVAILED IN CONTINUITY. THE ASSESSING OFFICERS ARE, THEREFORE, DIRECTED TO ALLOW DEDUCTION U/S 80IA IN ACCORDANCE WITH THIS CLARIFICATION AND AFTER BEING SATISFIED THAT ALL THE PRESCRIBED CONDITIONS APPLICABLE IN A PARTICULAR CASE ARE DULY SATISFIED. PENDING LITIGATION ON ALLOWABILITY OF DEDUCTION U/S 80IA SHALL ALSO NOT B E PURSUED TO THE EXTENT IT RELATES TO INTERPRETING 'INITIAL ASSESSMENT YEAR' AS MENTIONED IN SUB-SECTION (5) OF THAT SECTION FOR WHICH THE STANDING COUNSELS/D.R.S BE SUITABLY I NSTRUCTED. THE ABOVE BE BROUGHT TO THE NOTICE OF ALL ASSESSING OFFICERS CONCERNED. SD/- (DEEPSHIKHA SHARMA) DIRECTOR TO THE GOVERNMENT OF INDIA 7. THE LD. AR SUBMITTED THAT THE CONFUSION REGARDIN G THE INTERPRETATION OF INITIAL ASSESSMENT YEAR STANDS SETTLED IN VIEW OF T HE SAID CIRCULAR (SUPRA) IN FAVOUR OF THE ASSESSEE. THE LD. AR ALSO SUBMITTED THAT THE QUANTUM APPEAL FOR THE ASSESSMENT YEAR 2003-04 ALSO HAS BEEN DECIDED B Y THE CIT(A) IN FAVAOUR OF THE ASSESSEE VIDE ORDER DATED 18.01.2016 AND THE REFORE NO BASIS IS LEFT FOR SUSTAINING THE PENALTY. 6 ITA NO.2072/PN/2013 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE ASSESSING OFFICE R AND COULD NOT CONTROVERT ANY OF THESE AVERMENTS MADE BY THE LD. AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE. 9. ON CAREFUL CONSIDERATION ON FACTS AND MATERIAL P LACED ON RECORD, WE FIND THAT THE CIT(A) HAS DECIDED THE QUANTUM APPEAL IN F AVOUR OF THE ASSESSEE. THE ISSUE IS ALSO CLARIFIED IN FAVOUR OF THE ASSESSEE B Y CBDT CIRCULAR (SUPRA) NOTED ABOVE. IN VIEW OF THE FACT THAT THE ADDITION ITSEL F CEASES TO SURVIVE, THE EDIFICE FOR PENALTY STANDS DEMOLISHED. THE PENALTY IMPOSED THUS IS UNSUSTAINABLE IN LAW. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF MAY, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 12 TH MAY, 2016. & ' () *+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE