Sukanto Roy Developers, Pune V. Income-Tax Officer ,

ITA 2457/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1037 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Wrong claim
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2457 /P U N/201 6 / ASSESSMENT YEAR : 20 09 - 10 SUKANTO ROY DEVELOPERS, B - 201, RUNWAL REGENCY, SADHU VASWANI CHOWK, PUNE 411001 PAN : AAYFS9277R ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 4(4), PUNE / RESPONDENT ASSESSEE BY : SHRI SANKET JOSHI REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 06 - 09 - 2018 / DATE OF PRONOUNCEMENT : 29 - 11 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 13 - 07 - 2016 CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR THE ASSESSMENT YEAR 2009 - 10. 2 ITA NO . 2457/PUN/2016, A.Y. 2009 - 10 2. SHRI SANKET JOSHI APPEARIN G ON BEHALF OF THE ASSESSEE CHALLENGING LEVY OF PENALTY SUBMITTED THAT IN SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM OF DEDUCTION OF RS.8,37,808/ - U/S. 80IB(10) OF THE ACT. THE ASSESSEE HAD EARNED INTEREST INCOME OF RS.8,37,808/ - AND HAD CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT ON THE AFORESAID INCOME ALONG WITH THE PROFITS OF HOUSING PROJECT. THE ASSESSING OFFICER AFTER DISALLOWING DEDUCTION U/S. 80IB(10) ALSO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) IN RESPEC T OF ABOVE DISALLOWANCE. THE LD. AR FURTHER POINTED THAT W HILE RECORDING SATISFACTION FOR INITIATING PENALTY PROCEEDINGS THE ASSESSING OFFICER MENTIONED BOTH THE LIMBS OF SECTION 271(1)(C) BY USING THE EXPRESSION, CONCEALED THE INTEREST INCOME BY FURNISH ING INACCURATE PARTICULARS . IN THE NOTICE ISSUED U/S. 274 R.W.S. 271(1)(C) THE IRRELEVANT LIMB OF SECTION 271(1)(C) WAS NOT STUCK OFF AND HENCE , THE NOTICE CONTAINED BOTH THE CHARGES OF SECTION 271(1)(C) I.E. CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE ORDER LEVYING PENALTY U/S. 271(1)(C) DATED 25 - 06 - 2016 THE ASSESSING OFFICER LEVIED PENALTY FOR CONCEALING INTEREST INCOME. HOWEVER, WHILE CONCLUDING THE PENALTY ORDER THE ASSESSING OFFICER MENTIONED THA T THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME HENCE PENALTY OF RS.2,56,700/ - U/S. 271(1)(C) IS LEVIED. A PERUSAL OF ASSESSMENT ORDER AND PENALTY ORDER SHOWS THAT THERE WAS AMBIGUITY IN THE MIND OF ASSESSING OFFICER WITH RESPECT TO THE CHAR GE FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. 2.1 ON THE MERITS OF ADDITION THE LD. AR SUBMITTED THAT SINCE THE ASSESSEE HAD ALREADY DISCLOSED ALL THE RELEVANT DETAILS AT THE TIME OF FILING OF RETURN OF INCOME THERE IS NO QUESTION OF CONCEALMENT. T HE LD. AR 3 ITA NO . 2457/PUN/2016, A.Y. 2009 - 10 CONTENDED THAT THERE WAS AMBIGUITY REGARDING ADMISSIBILITY OF DEDUCTION U/S. 80IB(10) ON THE INTEREST INCOME, THEREFORE, ON DEBATABLE ISSUE NO PENALTY CAN BE LEVIED. THE LD. AR FURTHER CONTENDED THAT NO PENALTY IS LEVIABLE ON WRONG CLAIM OF DEDU CTION IF CLAIM IS MADE AFTER FULL DISCLOSURE. TO BUTTRESS IS ARGUMENTS, THE LD. AR RELIED ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS (P) LTD. REPORTED AS 322 ITR 158 (SC). 3. ON THE OTHER HAND SHRI M.K. VERMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. THE LD. DR SUBMITTED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF INTEREST INCOME, WHEREAS, NO DEDUCTION IS ADMISSIBLE ON INTEREST INCOME. 4. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSEE IS A BUILDER AND DEVELOPER. THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) IN RESPECT OF ITS HOUSING PROJECT SURABHI REGENCY. WHILE CLAIMING DEDUCTION U/S. 80IB(10) ON THE PROFITS OF AFORESAID PROJECT THE ASSESSEE ALSO CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF INTEREST INCOME RS.8,37,8 08/ - . THE ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED ON INTEREST INCOME AND INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C). A PERUSAL OF ASSESSMENT ORDER DATED 27 - 11 - 2011 SHOWS THAT WHILE INITIATING PENALTY THE ASSESSING OFFICER RECORDED SATISFACTI ON AS UNDER : AS THE ASSESSEE HAS CONCEALED THE INTEREST INCOME BY FURNISHING INACCURATE PARTICULARS, PENALTY PROCEEDINGS U/S. 271(1)(C) ARE INITIATED. 4 ITA NO . 2457/PUN/2016, A.Y. 2009 - 10 5. THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) VIDE ORDER DATED 25 - 06 - 2012. WHILE LEVYING PENALTY THE ASSESSING OFFICER HELD AS UNDER : 6. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, I AM CONVINCED THAT THE ASSESSEE HAS CONCEALED INTEREST INCOME OF RS.8,37,808/ - BEING THE AMOUNT OF INTEREST INCOME FROM FIXED DEPOSIT. HENCE, IT IS A FIT CASE FOR LEVYING PENALTY U/S. 271(1)(C) OF THE I.T. ACT, 1 961. ACCORDINGLY PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 ARE ATTRACTED IN THE CASE OF THE ASSESSEE. XXXXXXXXXX XXXXXXXXXX IN VIEW OF THE FACT THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME I LEVY A PENALTY OF RS.2,56 ,700/ - U/S. 271(1)(C) OF THE I.T. ACT, 1961. 6. THE MANNER IN WHICH SATISFACTION HAS BEEN RECORDED AND THEREAFTER , PENALTY HAS BEEN LEVIED CLEARLY SHOWS THAT THERE WAS AMBIGUITY AND VAGUENESS IN THE MIND OF ASSESSING OFFICER WHILE RECORDING SATISFACTION AS WELL AS AT THE TIME OF LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE ASSESSING OFFICER WAS NOT CLEAR AS TO WHETHER PENALTY IS TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OR FOR CONCEALMENT OF INCOME. THE ASSESSING OFFICER HAS INVOKED BOTH THE CHARGES OF SECTION 271(1)(C) BY USING DIFFERENT EXPRESSIONS AT THE TIME OF RECODING SATISFACTION AND FOR LEVY OF PENALTY. WHERE THERE IS AMBIGUITY OF CHARGE WHILE LEVYING PENALTY U/S. 271(1)(C), THE PENALTY DOES NOT SURVIVE. THUS, THE PENALTY LEVIED U/S. 271(1)(C) IS LIABLE TO BE QUASHED ON THIS LEGAL GROUND ITSELF. 7. EVEN ON MERITS , THE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. THE ASSESSEE WHILE FILING RETURN OF INCOME HAD FILED COMPUTATION OF INCOME. IN COMPUTATION OF INCOME THE ASSESSEE HAS SEPARATELY MENTIONED INTEREST INCOME ON FIXED DEPOSITS AND ALSO THE FACT THAT THE DEDUCTION U/S. 80IB(10) HAS BEEN CLAIMED ON THE SAID INTEREST INCOME. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSION ER 5 ITA NO . 2457/PUN/2016, A.Y. 2009 - 10 OF INCOME TAX VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) HAS HELD THAT INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. WE FURTHER OBSERVE THAT SINCE , THE ISSUE WAS DEBATABLE NO PENALTY COULD HAVE BEEN LEVIED ON SUCH ADD ITION/DISALLOWANCE. WE FIND MERIT IN THE APPEAL OF ASSESSEE. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 29 TH DAY OF NOVE MBER, 2018 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 29 TH NOVEMBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, P UNE 4. / THE PR. CIT - 4 , PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE