The ACIT,(OSD), Range-1, Ahmedabad V. Deep Industries Limited, Ahmedabad

ITA 2080/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85700 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 23-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO. 2080/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2004-2005 ACIT(OSD) RANGE-1, AHMEDABAD. VS DEEP INDUSTRIES LTD. 6 TH FLOOR, ASTRON TOWER, OPP: FUND REPUBLIC CINEMA S.G.HIGHWAY, AHMEDABAD. PAN : AAACD 6951 E +, / (APPELLANT) -. +, / (RESPONDENT) REVENUE BY : SHRI M.K. SINGH, SR. DR. ASSESSEE(S) BY : SHRI SAKAR SHARMA / DATE OF HEARING : 13/02/2015 / DATE OF PRONOUNCEMENT: 20/02/2015 // O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER O F INCOME-TAX (APPEALS)-VI, AHMEDABAD DATED 14.6.2011. 2. THE SOLE GROUND TAKEN BY THE REVENUE READS AS UN DER: 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS IN DELETING THE PENALTY U/S.271(1)(C) LEVIED BY AO ON ACCOUNT OF FO REIGN TRAVEL EXPENSES OF RS.10,72,714/-. 3. THE APPEAL FILED BY THE REVENUE IS BARRED BY LIM ITATION BY 21 DAYS. THE REVENUE HAS FILED A CONDONATION PETITION REQUESTING FOR CONDONATION OF DELAY AND ADMISSION OF APPEAL FOR HE ARING. WE ARE SATISFIED THAT THERE WAS REASONABLE CAUSE FOR NOT P RESENTING THE APPEAL ITA NO.2080/AHD/2011 2 BEFORE THE TRIBUNAL IN TIME. HENCE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES, AND MATERIALS AVAILABLE ON RECOR D. IN THE INSTANT CASE, THE PENALTY UNDER SECTION 271(1)(C) OF THE AC T OF RS.10,72,714/- WAS LEVIED BY THE AO ON THE GROUND OF DISALLOWANCE OF FOREIGN TRAVEL EXPENSES IN THE ASSESSMENT MADE UNDER SECTION 143(3 ) OF THE ACT. 4. ON APPEAL, THE CIT(A) DELETED THE AFORESAID LEVY OF PENALTY BY OBSERVING AS UNDER: ON THE THIRD ADDITION OF DISALLOWANCE OF FOREIGN T RAVEL EXPENSES, ASSESSING OFFICER LEVIED PENALTY, THOUGH IT WAS NOT INITIATED IN THE ASSESSMENT ORDER, ON THE GROUND THAT APPELLANT WAS NOT ABLE TO SUBSTANTIATE THE CLAIM. HOWEVER APPELLANT SUBMITTED IN DETAIL THE PURPOSE OF FOREIGN TRAVEL, DETAILS OF EXPENSES, BOA RD RESOLUTION, FOREIGN SUPPLIERS, AND COPY OF FOREIGN TOUR REPORTS OF DIRECTORS. APPELLANT EXPLAINED IN DETAIL THE PURPOSE OF FOREIG N TRAVEL WHICH IS RELATING TO THE BUSINESS OF THE APPELLANT I.E. SURV EY OF EQUIPMENTS RELATED TO GAS COMPRESSION, RISK ETC. CONSIDERING T HESE DETAILS, IT CANNOT BE SAID THAT APPELLANT WAS NOT ABLE TO SUBST ANTIATE THE CLAIM OF FOREIGN TRAVEL EXPENSES MADE BY IT. IN ANY CASE MER E DISALLOWANCE OF EXPENSE WILL NOT AUTOMATICALLY RESULT IN LEVY OF PE NALTY. THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF RELIANCE PE TRO PRODUCTS PRIVATE LTD, 322 ITR 158 IS CLEARLY APPLICABLE ON T HE ISSUE. RESPECTFULLY FOLLOWING THE SAME, THE PENALTY LEVIED BY THE ASSESSING OFFICER ON THIS ISSUE IS ALSO DELETED. 5. BEFORE US, THE DR SUBMITTED THAT IN THE QUANTUM APPEAL, THE TRIBUNAL HAS CONFIRMED PART OF DISALLOWANCE AND IN RESPECT OF REMAINING PART, RESTORED THE MATTER BACK TO THE FILE OF CIT(A ) FOR FRESH ADJUDICATION, AND THEREFORE, THE PENALTY ORDER ALSO SHOULD BE RESTORED TO THE FILE OF THE CIT(A). 6. ON THE OTHER HAND, AR VEHEMENTLY SUPPORTED THE O RDER OF THE CIT(A). ITA NO.2080/AHD/2011 3 7. WE FIND THAT DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE CIT(A) IN DELETING THE PENALTY. WE FIND THAT THE DR COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A) THAT NO PENAL TY UNDER SECTION 271(1)(C) OF THE ACT WAS INITIATED DURING THE COURS E OF ASSESSMENT PROCEEDINGS IN RESPECT OF DISALLOWANCE OF FOREIGN T RAVEL EXPENSES. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD RE ASON TO INTERFERE WITH THE ORDER OF THE CIT(A). THUS, THIS GROUND OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 20 TH FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER