Asstt. Commissioner of Income tax, Wardha Circle Wardha, Wardha V. Ashtavinayak Nagri Sahakari Pat Sanshta Maryadit, Yavatmal

ITA 215/NAG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84682 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2012
• Court: TRIBUNAL
• Department Lawyers: NADRENDRA KANE
• Assessee Lawyers: M MANI
• Keywords: Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER .ITA NO.215/NAG/2012 ( AY: 2007 - 2008 ) ASST. COMMISSIONER OF INCOME TAX, WARDHA CIRCLE, WARDHA - 442001. / VS. ASHTAVINAYAKN AGARISAHAKARI PAT SANSTHAMARY ADIT, MAIN ROAD, NERPERSOPANT, DIST - YAVATMAL - 445102. ./ PAN: AABTA 8423 A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NADRENDRA KANE, SR. DR / RESPONDENTBY : SHRI M. MANI / DATE OF HEARING : 10.09.2014 / DATE OF PRONOUNCEMENT : 11 .09.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 12.6.2012 IS AGAINST THE ORDER OF THE CIT(A) - II, NAGPUR, DATED 16.2.2012 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT (A) - II, NAGPUR HAS ERRED IN GIVING RELIEF IN PENALTY U/S 271(1)(C) OF THE ACT, WHICH IS CONTRARY TO THE DECISION OF THE APEX COURT IN UCO BANK VS. CIT [1999] 237 ITR 889 (SC). 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT (A) - II, NAGPUR HAS ERRED IN NOT CONSIDERING THE BOARDS INSTRUCTION NO.17/2008 , DATED 26.11.2008. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AOP ENGAGED IN THE BUSINESS OF COOP ERATIVE CREDIT SOCIETY FILED THE RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 54,99,067/ - . ASSESSMENT WAS COMPLETED U/S 143(3) AND THE NET LOSS WAS DETERMINED AT RS. 16,09,176/ - AND AO MADE CERTAIN ADDITIONS VIDE HIS ORDER DATED 24.12.2009 AND ACCORDINGLY, THE PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF 2 INCOME AND CONCEALMENT OF INCOME VIDE ORDER DATED 30.6.2010. AGGRIEVED, ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) ALLOWED THE APPEAL. PARAS 5.0 AND 5.1 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD. AGGRIEVED WITH THE DECISION OF THE CIT (A), REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, LD DR RELIED ON THE ORDER OF THE AO. 6. ON THE OTHER HAND, SHRI M. MANI, LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE CIT (A)S ORDER IN GENERAL AND PARAS 5.0 AND 5.1 IN PARTICULAR, WE FIND THE SAME ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER AND CONSIDERING THE IMPORTANCE, TH E SAID PARAS 5.0 AND 5.1 OF CI T (A)S ORDER ARE REPRODUCED HERE WHICH READ AS UNDER: 5.0. AO HAS LEVIED PENALTY U/S 271(1)(C) ON THE APPELLANT FOR CLAIMED NOT ALLOWABLE AS CONTINGENT LIABILITY IN RETURN OF INCOME. A LOOK OF THE ASSESSMENT ORDER INDICATES THAT APPELLANT HIMSELF HAD DE CLARED ALL MATERIAL IN THE RETURN AND AO WENT ON TO DISALLOW THESE LIABILITIES BASED ON THE PROVISIONS OF LAW AND FOLLOWING CERTAIN JUDICIAL PRONOUNCEMENTS. HENCE, DISALLOWANCES WERE ACCEPTED BY THE APPELLANT. THE MOST IMPORTANT POINT IS WHETHER THESE FA CTS WARRANT LEVY OF PENALTY FOR CONCEALMENT? TO MY MIND ONCE THE APPELLANT HAS PLACED EVERYTHING ON RECORD BEFORE AO I.E., APPELLANT HAS NOT CONCEALED ANY MATERIAL FACTS FROM AO AND ONLY CERTAIN INACCURACIES CREPT IS DUE TO DIFFERENCE OF OPINION ON LEGAL ISSUES AND MAY BE EVEN SOME IGNORANCE ON THE PART OF APPELLANT. THIS WILL NOT QUALIFY AS CONCEALMENT OF MATERIAL FACTS OR CANNOT BE SAID TO BE FURNISHING OF INACCURATE PARTICULARS AS ALL RELEVANT PARTICULARS WERE GIVEN BY THE APPELLANT BEFORE AO. 5.1. I T CAN ALSO NOT BE SAID THAT THERE WAS CERTAIN DESIRE TO HIDE SOMETHING FROM AO AND AO DISCOVERED IT AFTER MAKING SOME ENQUIRIES. ALL MATERIAL FACTS FOR DETERMINATION OF INCOME WERE AVAILABLE BEFORE AO AND AO FOLLOWING CERTAIN JUDICIAL PRONOUNCEMENTS AND M ADE ADDITIONS AND HENCE THE CONCEALMENT TO THAT EXTENT IS NOT ESTABLISHED . AO HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT THERE WAS ANY DEFAULT ON PART OF THE APPELLANT TO CONCEAL THE FACT FROM AO. HENCE, THE LEVY OF PENALTY U/S 271(1)(C) BY AO CANNO T BE UPHELD. 8. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS PLACED ALL THE MATERIAL FACTS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. AS SUCH, NOTHING WAS DISCOVERED 3 BY THE AO TO SUBSTANTIATE THAT THE PARTICULARS FURNISHED BY THE ASSESSEE AMO UNTS TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. HENCE, T HE DISALLOWANCES MADE BY THE AO , BASED ON SOME JUDICIAL PRONOUNCEMENTS , CANNOT BE SUSTAINED. THEREFORE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE A ND DELETED THE PENALTY. WE FIND THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2014. SD/ - SD/ - (VIVEK VARMA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; 11 /09/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , ,NAGPUR/ DR, ITAT, NAGPUR. 6. / GUARD FILE . //TRUE COPY// / BY ORDER, (SR. PRIVATE SECRETARY) ITAT, NAGPUR