ACIT CEN CIR 3, THANE V. AKSHAR DEVELOPERS, NAVI MUMBAI

ITA 2831/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0186 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Search and seizure; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 153A; 80IB; 191; 139(1); 13; 22; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 2831 /MUM./201 9 ( ASSESSMENT YEAR : 20 09 10 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3 , THANE . APPELLANT V/S AKSHAR DEVELOPERS 225, BIG SPLASH PLOT NO.78 79 NEAR NAVRATNA HOTEL, SECTOR 17 VASHI, MUMBAI 400 705 PAN AAKFA0455B . RESPONDENT REVENUE BY : SHRI BRAJENDRA KUMAR ASSESSEE BY : MS. RITIKA AGARWAL DATE OF HEARING 28 . 0 1.202 1 DATE OF ORDER 11.03.2021 O R D E R PER S. RIFAUR RAHMAN, A.M. THE AFORESAID APPEAL HA S BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 11 TH FEBRUARY 2019, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 11, PUNE, DELETING PENALTY OF ` 2,09,76,344, IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ), FOR THE ASSESSMENT YEAR 2009 10. 2 AKSHAR DEVELOPERS 2. FACTS IN BRIEF : A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED ON 29 TH SEPTEMBER 2011, IN ASSESSEES CASE. THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION FILED RETURN OF INCOME ON 30 TH SEPTEMBER 2009, DECLARING TOTAL INCOME OF ` 6,78,84,609. A RETURN U /S 153A WAS ALSO FILED 22 ND SEPTEMBER 2019, SHOWING NIL INCOME AFTER CLAIMING DEDUCTION OF ` 6,78,84,610. T HE ASSESSING OFFICER COMPLETED ASSESSMENT ON 28 TH MARCH 2014, UNDER SECTION 143(3) R/W SECTION 154A DETERMINING TOTAL INCOME OF ` 6,78,84,610, OBSERVING THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10). ACCORDINGLY, THE ASSESSING OFFICER MADE VARIOUS ADDITIONS WHICH SUBSEQUENTLY RESULTED IN INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). MEANWHILE, DURING THE FIRST ROUND OF LITIGATION BEFORE T HE FIRST APPELLATE AUTHORITY, THE LEARNED COMMISSIONER (APPEALS) CONFIRMED THE ADDITIONS MADE IN THE ASSESSMENT ORDER ON ACCOUNT OF DISALLOWANCE UNDER SECTION 80IB AMOUNTING TO ` 6,78,84,610 , OBSERVIN G THAT THE INCOME WAS BROUGHT TO TAX AS A RESULT OF SEARCH ACTION UNDER SECTION 132. HE OBSERVED THAT H AD THERE BEEN NO SEARCH PROCEEDINGS, THERE WOULD NOT HAVE BEEN ANY ADDITION ON ACCOUNT OF THIS INCOME. SINCE THE QUANTUM ADDITION WAS CONFIRMED BY THE LE ARNED COMMISSIONER (APPEALS), THE ASSESSING OFFICER IMPOSED PENALTY OF ` 2,09,76,344, U /S 271(1)(C). THE ASSESSEE BEING UNSUCCESSFUL IN LITIGATION BEFORE THE ASSESSING OFFICER AGAIN FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY . 3 AKSHAR DEVELOPERS 3. T HE LEARNED COMMISSIONER (APPEALS) EXAMINED THE ISSUE OF DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 80IB (10) OF THE ACT WHICH RESULT ED IN IMPOSITION OF PENALTY IN THE LIGHT OF THE IDENTICAL ISSUE DECIDED BY THE TRIBUNAL, VIDE ORDER DATED 28 TH FEBRUARY 2018, PASSED IN ITA NO.6242/MUM./2016, WHEREIN THE TRIBUNAL HAS DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT FOR THE PROJECT SHREEJI HEIGHTS. THE LEARNED COMMISSIONER (APPEALS) RELYING UPON CERTAIN J UDICIAL PRONOUNCEMENTS HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80IB OF THE ACT. THE RELEVANT OBSERVATION S MADE BY THE LEARNED COMMISSIONER (APPEALS) ARE REPRODUCED BELOW: 9. FURTHER, THE REASON FOR NOT CLAIMING DEDUCTION IN THE ORIGINAL RETURN FILED, AS INDICATED ABOVE, APPEARS TO BE A SATISFACTORY EXPLANATION AND THEREFORE, THE APPELLANTS ATTEMPT TO CLAIM THE SAID DEDUCTION U/S 153A RETURN FOR ASSESSMENT YEAR 2009 - 10 CANNOT BE HELD AGAINST HIM FOR LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT FOR CONCEALMENT OF PARTICULARS OF INCOME. MOREOVER BECAUSE ALL THE DETAILS HAVE BEEN SUBMITTED BY THE APPELLANT IN ITS RETURN OF INCOME, BOTH U/S 139(1) AND U/S 153A. 10. THE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT LTD 322 HR 158 (SC) 2010 HAVE HELD THAT MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. IN RELIANCE PETRO PRODUCTS (SUPRA) THE APEX COURT HAS HELD AS UNDE R: THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, 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 ACCEP T ITS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF 4 AKSHAR DEVELOPERS WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER S. 271 (1)!CJ. IF WE ACCEPT TH E CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER S. 271(1J). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE.' SIMILAR JUDGEMENTS HAVE PASS ED BY SEVERAL OTHER COURTS UNDER SIMILAR FACTS: I) WALTER SAIDHANA VS DCIT (2011) 44 SOT 26 (MUM) (TRIB) II) CHANDRAPAL BAGGA VS ITAT (2003) 261 HR 67(RAJ) III) DEVSONS P. LTD V CIT (2011) 196 TAXMAN 21 (DEL) 11. THE ASSESSEE IN THE PRESENT CASE HAD MADE A BONA - FIDE CLAIM AND HENCE FOLLOWING THE APEX COURT JUDGEMENT AND OTHER COURTS AS ABOVE, IT IS HELD THAT PENALTY U/S 271(1)(C) OF THE I.T. ACT IS NOT LEVIABLE IN THIS CASE. 12. THE CLAIM OF THE AO IN THE ORDER U/S 271(1)(C) THAT THE ASSESSEE NEITHER INCLUDED THIS INCOME IN THE PROFIT AND LOSS ACCOUNT/ COMPUTATION OF INCOME NOR PAID TAXES IN RESPECT OF THE ABOVE UNDISCLOSED INCOME DOES NOT BEAR OUT FROM THE FACTS OF THE CASE AND HENCE, IS HELD TO BE MISPLACED. 13. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEVY OF PENAL TY U/S 271(1)(C) BY THE AO ON ACCOUNT OF CONCEALMENT OF PARTICULARS OF INCOME IS DIRECTED TO BE DELETED. 4. SINCE THE QUANTUM ADDITION WAS DELETED BY THE LEARNED COMMISSIONER (APPEALS), CONSEQUENTLY, THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER BECAM E INFRUCTUOUS. T HEREFORE, THE LEARNED COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE PENALTY. THE REVENUE, B EING NOT SATISFIED WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), CARRIED THE ISSUE OF DELETION OF PENALTY BEFORE THE TRI BUNAL. 5 AKSHAR DEVELOPERS 5. B EFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT . T HE LEARNED COMMISSIONER (APPEALS) HELD THAT NO NEW AND FRESH CLAIM CAN BE MADE IN THE RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT. HE SUBMITTED THAT THE ASSESSEE NEITHER INCLUDED THIS INCOME IN THE PROFIT & LOSS ACCOUNT NOR IN THE COMPUTATION OF INCOME AND ALSO NOT PAID TAX IN RESPECT OF THE UNDISCLOSED INCOME. HE SUBMITTED THAT THE INCOME WAS BRO UGHT TO TAX AS A RESULT OF SEARCH UNDERTAKEN UNDER SECTION 132 OF THE ACT AND, THEREFORE, THE ASSESSEE WAS DEFAULTED WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE DECISION OF THE HONBLE DELHI HIG H COURT IN CIT V/S ZOOM COMMUNICATION PVT. LTD., [2010] 191 TAXMAN 179 (DEL.) FOR THE PROPOSITION THAT IF THE ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW, BUT IS ALSO WHOLLY WITHOUT ANY BASIS AND EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM WHICH IS NOT FOUND TO BE BONA FIDE, PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT WOULD COME INTO PLAY AND THE ASSESSEE WILL BE LIABLE F O R PENALTY. HE SUBMITTED THAT THE ASSESSEES CASE IS IDENTICAL TO THE AFORESAID DECISION OF THE HON BLE DELHI HIGH COURT , HENCE, THE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND PRAYED FOR UPHOLDING THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. 6 AKSHAR DEVELOPERS 6. THE LEANED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND RELIE D UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) AND PRAYED FOR UPHOLDING THE SAME. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS IT APPEARS FROM THE RELEVANT MATERIAL AVAILABLE BEFORE US THAT THE ASSESSEE HAD DERIVED PROFIT FROM THE PROJECT NAMED SHREEJI HEIGHTS . WE NOTICE THAT THE LEARNED COMMISSIONER (APPEALS) OBSERVED THAT THE ASSESSEE DID NOT MAKE THE SAID CLAIM IN THE RETURN OF INCOME SINCE THE ASSESSEE W AS UNDER MISTAKEN UNDERSTANDING OF THE LAW THAT SINCE IT HAS CONSTRUCTED COMMERCIAL UNITS, IT CANNOT CLAIM BENEFIT UNDER SECTION 80IB(10) OF THE ACT. FURTHER THE LEARNED COMMISSIONER (APPEALS) NOTICE D THAT THE ASSESSEES HOUSING PROJECT WAS APPROVED ON 16 TH APRIL 2004, THEREFORE, THE PROJECT WAS ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80IB OF THE ACT WHICH FACT IS IN CONFORMITY WITH THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S BRAHMA ASSOCIATES , 51 DTR 298 (BOM.) , WHEREIN IT HAS B EEN HELD THAT THE CLAIM IS FULLY ALLOWABLE IN CASE THE PROJECT WAS APPROVED PRIOR TO THE AMENDMENT MADE IN LAW W.E.F. 1 ST APRIL 2005. IN VIEW OF THESE OBSERVATIONS, THE LEARNED COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTI ON UNDER SECTION 80IB OF THE ACT . FURTHER, WE OBSERVE THAT THE CO ORDINATE BENCH HAS ALLOWED THE CLAIM OF ASSESSEE UNDER SECTION 80IB OF THE ACT FOR THE ASSESSMENT 7 AKSHAR DEVELOPERS YEAR 2010 11 AND 2012 13 EVEN THOUGH THESE CLAIMS WERE ALSO MADE FIRST TIME BEFORE THE ASSES SING OFFICER. THE CLAIM OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 10 WAS REJECTED. JUST BECAUSE THE CLAIM FOR THIS A.Y. 2009 10 WAS REJECTED, THE PENALTY CANNOT BE IMPOSED CONSIDERING THE FACT THAT THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT INFORMATION DURING THE ASSESSMENT PROCEEDINGS AND ALSO ALL THE RELEVANT INFORMATION RELATING TO THIS CLAIM WAS AVAILABLE ON RECORD. THERE IS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IN THIS CASE. CONSEQUENTLY, WE ARE IN AGREEMENT WITH THE OBSERVATIONS O F THE LEARNED COMMISSIONER (APPEALS) WHO WAS INDEED JUSTIFIED IN DIRECTING TO DELET E THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. THE DECISION OF THE HONBLE DELHI HIGH COURT IN ZOOM COMMUNICATION PVT. LTD. (SUPRA) RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THE FACTS OF WHICH CASE ARE DISTINGUISHABLE TO THE FACTS OF THE PRESENT CASE HENCE NOT APPLICA BLE HERE . THEREFORE, THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DIRECTING TO DELETE THE PENALTY. WITH THESE OBSERVATIONS, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND THE SAME IS HEREBY UPHELD BY DISMISSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8 AKSHAR DEVELOPERS 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONO UNCED OPEN COURT ON 11.03.2021 SD/ - RAVISH SOOD JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN, ACCOUNTANT MEMBER MUMBAI, DATED: 11.03.2021 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI