Shriram EPC Ltd., CHENNAI V. DCIT, CHENNAI

ITA 2262/CHNY/2014

• Counselvise Citation: 226221714 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R SIVARAMAN
• Keywords: Revised return
• Section: 147; 148; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2262 & 2263/MDS/2014 ( )( / ASSESSMENT YEARS : 2007-08 & 2008-09 M/S SHRIRAM EPC LTD., 18/03, RUKMANI LAKSHMIPATHY ROAD, 1 ST FLOOR, R.A. BUILDING, EGMORE, CHENNAI - 600 008. PAN : AAFCS 1410 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(2), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI R. SIVARAMAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 1 / 2% / DATE OF HEARING : 15.10.2015 3') / 2% / DATE OF PRONOUNCEMENT : 18.12.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNAI, DATED 30.06.2014, CONFIRMING THE PENALTY L EVIED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT') FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. SINCE CO MMON ISSUE 2 I.T.A. NOS.2262 & 2263/MDS/14 ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HE ARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI R. SIVARAMAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSEE ENGAGED ITSELF IN THE B USINESS OF EPC CONTRACT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ADMITTING A TOTAL INCOME OF ` 18,53,76,780/-. THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF THE EXPEND ITURE UNDER SECTION 35D OF THE ACT. THE ASSESSING OFFICER SUBS EQUENTLY REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE AC T BY ISSUING A NOTICE UNDER SECTION 148 OF THE ACT ON 10.09.2009. IN THE RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 14 8 OF THE ACT, THE ASSESSEE HAS NOT CLAIMED THE EXPENDITURE UNDER SECT ION 35D OF THE ACT. THE ASSESSING OFFICER FOUND THAT THERE WAS CO NCEALMENT OF INCOME IN RESPECT OF THE EXPENDITURE CLAIMED UNDER SECTION 35D OF THE ACT AND LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(APPEALS) HAS ALSO CONFIRMED THE PENALTY. ACCOR DING TO THE LD. COUNSEL, THE ASSESSEE FURNISHED ALL THE PARTICULARS IN THE ORIGINAL ASSESSMENT AND CLAIMED EXPENDITURE OF ` 70,41,431/- AS ALLOWABLE EXPENDITURE UNDER SECTION 35D OF THE ACT. AFTER IS SUING NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE VOLUNTAR ILY OFFERED THE 3 I.T.A. NOS.2262 & 2263/MDS/14 SAME AS INCOME. THEREFORE, IT IS NOT A CASE OF CON CEALMENT OF INCOME. ACCORDING TO THE LD. COUNSEL, AT THE BEST, IT CAN BE SAID THAT THE ASSESSEE CLAIMED THE EXPENDITURE WHICH IS NOT OTHERWISE ALLOWABLE UNDER SECTION 35D OF THE ACT. REFERRING TO THE JUDGMENT OF APEX COURT IN CIT V. RELIANCE PETROPRODUCTS (P) LTD. (2010) 322 ITR 158, THE LD.COUNSEL SUBMITTED THAT CLAIMING AN EXPENDITURE IN THE RETURN OF INCOME AFTER FURNISHING ALL THE PARTI CULARS OF INCOME DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S. THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE PEN ALTY LEVIED BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 35D OF THE ACT IN THE ORIGINAL RETURN THOUGH IT IS NOT ALLOWABLE. THEREFORE, TO THAT EXTENT, THE ASSESSEE FILED INACCURATE PARTICULARS AND DELIBERATELY REDUCED THE TAX LIABIL ITY, THEREFORE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS AND LEVIED PENALTY UNDER SECTION 271(1) (C) OF THE ACT. THE LD. D.R. FURTHER SUBMITTED THAT HAD THE RETURN NOT BEEN TAKEN UP FOR SCRUTINY, THE INACCURATE PARTICULARS OF INCOME COULD NOT HAVE COME TO LIGHT. THEREFORE, ACCORDING TO THE LD. D.R ., THE ASSESSING 4 I.T.A. NOS.2262 & 2263/MDS/14 OFFICER HAS RIGHTLY LEVIED PENALTY AND THE CIT(APPE ALS) HAS ALSO RIGHTLY CONFIRMED THE PENALTY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ORIGINAL RETURN WAS FILED DISCLOSING ALL THE PARTIC ULARS OF INCOME AND THE ASSESSEE ALSO CLAIMED DEDUCTION UNDER SECTION 3 5D OF THE ACT. THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT AND CONSEQUENT TO THE NOTICE ISSUED UNDE R SECTION 148 OF THE ACT, THE ASSESSEE FILED THE REVISED RETURN IN W HICH THE ASSESSEE HAS NOT CLAIMED DEDUCTION IN RESPECT OF THE EXPENDI TURE UNDER SECTION 35D OF THE ACT. THE MAIN CONTENTION OF THE REVENUE IS THAT BY CLAIMING DEDUCTION UNDER SECTION 35D, THE ASSESS EE INTENTIONALLY REDUCED THE INCOME TO THE EXTENT OF EXPENDITURE CLA IMED FOR DEDUCTION UNDER SECTION 35D OF THE ACT. THE QUESTI ON ARISES FOR CONSIDERATION IS WHEN THE ASSESSEE CLAIMED EXPENDIT URE WHILE FILING THE RETURN OF INCOME AND WHICH WAS EITHER DISALLOWE D BY THE ASSESSING OFFICER HIMSELF OR THE ASSESSEE ACCEPTED THE DISALLOWANCE BEFORE THE ASSESSING OFFICER, CAN WE S AY THAT THERE WAS CONCEALMENT OF INCOME? AN IDENTICAL SITUATION WAS EXAMINED BY THE APEX COURT IN RELIANCE PETROPRODUCTS (P) LTD . (SUPRA). THE 5 I.T.A. NOS.2262 & 2263/MDS/14 APEX COURT FOUND THAT MERELY BECAUSE A CLAIM WAS MA DE AND THE SAME WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT ITSELF WOULD NOT ATTRACT PENALTY UNDER SECTION 271( 1)(C) OF THE ACT. IN FACT, THE APEX COURT OBSERVED AS FOLLOWS AT PARA 12 OF ITS ORDER:- .IT WAS, THEREFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUS ION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCT IONS KNOWING THAT THEY ARE INCORRECT; IT AMOUNTED TO CON CEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSE HOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS ; (I) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY ; (II) AN IT EM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATED AMOU NT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXABL E INCOME AND, THEREFORE, BOTH TYPES AMOUNT TO CONCEAL MENT OF PARTICULARS OF ONE'S INCOME AS WELL AS FURNISHING O F INACCURATE PARTICULARS OF INCOME. WE DO NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPEND ITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THE MSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WH ICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF WE ACCEPT THE CON TENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE T HE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR A NY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECT ION 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT A MERE CLAIM MADE BY THE ASSESSEE UNDE R SECTION 35D 6 I.T.A. NOS.2262 & 2263/MDS/14 OF THE ACT CANNOT BE CONSIDERED TO BE FURNISHING IN ACCURATE PARTICULARS OF INCOME. IN VIEW OF THE ABOVE, WE AR E UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEV IED UNDER SECTION 271(1)(C) OF THE ACT IS DELETED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 18 TH DECEMBER, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH DECEMBER, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-VI, CHENNAI 4. 1 92 /CIT-VI, CHENNAI 5. 7: -2 /DR 6. ( ; /GF.