The DCIT, Circle-1(1), Now Circle-1(1)(1), Vadodara V. Gujarat Urja Vikas Nigam Ltd., Baroda

ITA 2330/AHD/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6668 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 06-08-2015
• Court: TRIBUNAL

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 2330/AHD/2015 ( ASSESSMENT YEAR : 2006-07) THE DCIT CIRCLE-1(1)(1), VADODARA NOW DCIT, CIRCLE-1(1), BARODA / VS. GUJARAT URJA VIKAS NIGAM LTD. SARDAR PATEL VIDYUT BHAVAN, RACE COURSE CIRCLE, BARODA 390007 ./ ./ PAN/GIR NO. : AACCG2861L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI L. P. JAIN, SR. DR / RESPONDENT BY : SHRI MANISH J. SHAH, A.R. DATE OF HEARING 28/02/2019 !'# / DATE OF PRONOUNCEMENT 28/02/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-1, VADODARA (CIT(A) IN SHORT), DATED 08 .05.2015 ARISING IN THE PENALTY ORDER DATED 30.07.2014 PASSE D BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE IN COME TAX ACT, 1961 (THE ACT) CONCERNING AY 2006-07. ITA NO. 2330/AHD/15 [DCIT VS. GUJARAT URJA VIKAS NIGAM LTD.] A.Y. 2006-07 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE R EAD AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD.CIT(A) WAS CORRECT BY DELETING THE PENALTY W HICH WAS LEVIED ON ADDITIONS AS PER INCOME TAX ACT, 1961? 2. THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME FOR WHICH PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 I S LEVIABLE AND THE ASSESSEE HAS DELIBERATELY TRIED TO PAY LESS TAX BY FURNISHING INACCURATE PARTICULARS OF INCOME, THEREBY MAKING IT A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961? 3. THE SOLITARY ISSUE INVOLVED IN THE PRESENT APPEA L IS TOWARDS IMPOSITION OF PENALTY OF RS.54,70,000/- UNDER S. 27 1(1)(C) OF THE ACT. 4. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED DR FOR THE REVENUE RELIED UPON THE PENALTY ORDER PASSED BY THE AO ON THE VARIOUS DISALLOWANCES MADE. 5. THE LEARNED AR FOR THE ASSESSEE, ON THE OTHER H AND, REFERRED TO THE ASSESSMENT ORDER AT THE OUTSET AND SUBMITTED TH AT THE PENALTY HAS BEEN IMPOSED ON ACCOUNT OF CERTAIN ADDITIONS/DI SALLOWANCES MADE WHILE COMPUTING THE TAXABLE INCOME UNDER THE N ORMAL PROVISIONS WHEREAS THE ASSESSMENT HAS BEEN ULTIMATE LY CARRIED OUT UNDER SPECIAL PROVISIONS OF SECTION 115JB OF THE AC T WHERE THE BOOK PROFIT WAS FOUND TO BE SUBSTANTIALLY HIGHER. THE LEARNED AR FOR THE ASSESSEE THUS SUBMITTED THAT WHERE THE TAX PAYABLE AS PER THE MAT PROVISION EXCEEDS QUA THE TAX LIABILITY UND ER NORMAL PROVISIONS, NO CONCEALMENT CAN BE ENVISAGED UNDER S . 271(1)(C) OF THE ACT. FOR THIS PROPOSITION, THE LEARNED AR RELI ED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. NALWA SONS INVESTMENTS LTD. [2010] 327 ITR 543 (DEL .). THE ITA NO. 2330/AHD/15 [DCIT VS. GUJARAT URJA VIKAS NIGAM LTD.] A.Y. 2006-07 - 3 - LEARNED AR ALSO RELIED UPON THE DECISION OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE FER TILIZERS & CHEMICALS LTD. [2013] 36 TAXMANN.COM 533 (GUJARAT) FOR THE PROPOSITION THAT WHERE THE TAX REQUIRED TO BE PAID AS PER SECTION 115JB OF THE ACT REMAINED THE SAME, THE PENALTY IMP OSED UNDER S. 271(1)(C) OF THE ACT WAS RIGHTLY DELETED. THE LEARN ED AR NEXT SUBMITTED THAT EXPLANATION (4) TO SECTION 271(1)(C) HAS BEEN MODIFIED BY FINANCE ACT, 2015 AND IS APPLICABLE FRO M AY 2016- 17 ONWARDS TO COVER SUCH SITUATION FOR IMPOSITION O F PENALTY. SUCH AMOUNT IS PROSPECTIVE IN NATURE. THE LEARNED AR THUS CONTENDED THAT THE CIT(A) HAS RIGHTLY APPRECIATED T HE LAW AND FACTS IN PERSPECTIVE AND DELETED THE PENALTY WITH W HICH NO INTERFERENCE IS CALLED FOR. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE SHORT CONTROVERSY IN ISSUE IS WHETHER UNDER S.271(1 )(C) OF THE ACT CAN BE IMPOSED ON THE ALLEGED CONCEALMENT OF INCOME BY THE ASSESSEE QUANTIFIED WITH REFERENCE TO THE AMOUNT OF TAX SOUGHT TO BE EVADED AS PER THE NORMAL PROVISIONS OF THE ACT W HERE THE TAX LIABILITY HAS ULTIMATELY ARISEN ON THE ASSESSEE AT DEEMED INCOME AS PER THE SPECIAL PROVISIONS OF SECTION 115JB OF T HE ACT. A REFERENCE TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NALWA SONS INVESTMENTS LTD. (SUPRA) HAS BEE N MADE ON BEHALF OF THE ASSESSEE WHICH SQUARELY COVERS THE IS SUE IN FAVOUR OF THE ASSESSEE. THE SUBSEQUENT AMENDMENT TO THE EXPL ANATION (4) OF SECTION 271(1)(C) ALSO SUGGESTS THE PURPORT OF T HE EXISTING PROVISIONS AS APPLICABLE IN THE RELEVANT ASSESSMENT YEAR. THEREFORE, WE FIND MERIT WITH THE APPEAL OF THE ASS ESSEE. THE AO IS ACCORDINGLY DIRECTED TO DELETE THE PENALTY IMPOS ED UNDER ITA NO. 2330/AHD/15 [DCIT VS. GUJARAT URJA VIKAS NIGAM LTD.] A.Y. 2006-07 - 4 - NORMAL PROVISION WHEN THE TAX LIABILITY HAS BEEN FA STENED ON THE ASSESSEE UNDER THE SPECIAL PROVISIONS OF SECTION 11 5JB OF THE ACT. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 28/02/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 28/02/20 19