The Mantola Cooperative Thrift & Credit Society, New Delhi V. ITO, New Delhi

ITA 2834/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2741 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL SENIOR
• Keywords: Question of law; Wrong claim; Difference of opinion; Right to appeal; Set aside
• Section: 271(1)(c); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO.2830/DEL./2015 (ASSESSMENT YEAR : 2004-05) ITA NO.2831/DEL./2015 (ASSESSMENT YEAR : 2005-06) ITA NO.2832/DEL./2015 (ASSESSMENT YEAR : 2006-07) ITA NO.2833/DEL./2015 (ASSESSMENT YEAR : 2007-08) ITA NO.2834/DEL./2015 (ASSESSMENT YEAR : 2009-10) THE MANTOLA COOPERATIVE THRIFT & VS. ITO, WARD 38 (4), CREDIT SOCIETY, NEW DELHI. 541, MANTOLA, PAHARGANJ, NEW DELHI 110 055. (PAN : AAAJT1976A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GAURAV JAIN, ADVOCATE MS. DEEPIKA AGARWAL, ADVOCATE SHRI ARPIT GOYAL, CA REVENUE BY : MS. NAINA SOIN KAPIL,SENIOR DR DATE OF HEARING : 30.05.2019 DATE OF ORDER : 12.06.2019 O R D E R PER BENCH : ITA NOS.2830 TO 2834/DEL./2015 2 SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN ALL THE AFORESAID APPEALS, THE SAME ARE BEING DI SPOSED OFF BY WAY OF COMPOSITE ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. APPELLANT, THE MANTOLA COOPERATIVE THRIFT & CRED IT SOCIETY, (HEREINAFTER REFERRED TO AS THE ASSESSEE ), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORD ER DATED 27.02.2015 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- XX, NEW DELHI, AFFIRMING THE PENALTY ORDER DATED 03 .01.2014 PASSED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (F OR SHORT THE ACT), QUA THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08 & 2009-10 ON THE IDENTICAL GROUNDS, EXCEPT THE DIFFERENCE IN PENALTY AMOUNT, INTER ALIA THAT :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) ERRED IN LAW IN NOT APPRECIATING T HE PENALTY ORDER DATED 03.01.2014 PASSED BY THE ASSESS ING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX A CT, 1961 ('THE ACT') IMPOSING PENALTY (RS.30,05,960/-, RS.26,24,503/-, RS.23,53,217/-, RS.20,91,892/- & RS.51,96,443/- FOR AYS 2004-05, 2005-06, 2006-07, 2007-08 & 2009-10 RESPECTIVELY), SINCE THE SAID ORD ER IS WITHOUT JURISDICTION, BAD IN LAW AND VOID-AB-INITIO IN AS MUCH AS THE PENALTY PROCEEDINGS WERE INITIATED WITH OUT VALID SATISFACTION BEING RECORDED IN THE ASSESSMENT ORDER. 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN LAW IN HOLDING THAT VALID SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. ITA NOS.2830 TO 2834/DEL./2015 3 WITHOUT PREJUDICE 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT HAD CONCEALED AND FURNIS HED INACCURATE PARTICULARS OF INCOME QUA CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT ON INTEREST INCOME EARNED FROM FIXED DEPOSITS WITH BAN KS, WARRANTING IMPOSITION OF PENALTY UNDER SECTION 271 (L)(C) OF THE ACT. 2.1 THAT ON, THE CIT(A) ERRED ON THE FACTS AND IN LAW IN NOT APPRECIATING THAT ALL MATERIAL FACTS/ PARTIC ULARS RELATING TO AFORESAID CLAIM WERE TRULY, FULLY AND ACCURATELY FURNISHED AND DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME AND ACCOMPANYING DOCUMENTS, AS ALSO DURING THE COURSE OF THE ASSESSMENT PROCEEDING S. 2.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLATE HAD FURNISHED INACCURATE PARTICULARS IN VIEW OF THE DECISION OF THE APEX COU RT IN THE CASE OF TOTGAR'S COOPERATIVE SALE SOCIETY: 322 ITR 383 WHEREIN THE INTEREST INCOME DERIVED FROM DEPOSI TS MADE IN SCHEDULED BANKS HAVE BEEN TREATED AS 'INCOM E FROM OTHER SOURCE'. 2.3 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THAT THE DISALLOWANCE OF DEDU CTION MADE UNDER SECTION 80P OF THE ACT, MADE IN THE QUANTUM PROCEEDINGS WAS DEBATABLE IN NATURE AND PREDICTED ON BONAFIDE DIFFERENCE OF OPINION BETWEEN THE APPELLANT AND THE ASSESSING OFFICER. 3. WITHOUT PREJUDICE, THAT THE CIT(A) ERRED ON FACT S AND IN LAW IN UPHOLDING THE AMOUNT OF PENALTY (RS.30,05,960/-, RS.26,24,503/-, RS.23,53,217/-, RS.20,91,892/- & RS.51,96,443/- FOR AYS 2004-05, 2005-06, 2006-07, 2007-08 & 2009-10 RESPECTIVELY) IMPOSED BY THE ASSESSING OFFICER, WITHOUT APPRECIAT ING THAT SINCE THE APPELLANT WAS ALTERNATIVELY ELIGIBLE FOR DEDUCTION UNDER SECTION 80P, IN TERMS OF SUB-SECTIO N (2)(D) AND SUB-SECTION (4) THEREOF, THE ENTIRE DEDU CTION WAS NOT INADMISSIBLE AND CONSEQUENTLY THE AMOUNT OF PENALTY IMPOSED WAS ALSO INCORRECT. ITA NOS.2830 TO 2834/DEL./2015 4 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE IS A COOPERA TIVE THRIFT AND CREDIT SOCIETY PROVIDING CREDIT FACILITY TO ITS MEM BERS. ON THE BASIS OF ASSESSMENTS FRAMED UNDER SECTION 143 (3)/147 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) FOR ASSESSMENT YEA RS 2004-05, 2005-06, 2006-07 & 2007-08 AND ASSESSMENT FRAMED U /S 143 (3) OF THE ACT FOR AY 2009-10, PENALTY PROCEEDINGS HAVE BE EN INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY CLAI MING DEDUCTIONS U/S 80P OF THE ACT WHICH WAS DISALLOWED BY THE AO A ND ALLOWED BY THE LD. CIT (A), HOWEVER THE TRIBUNAL HAS REVERSED THE ORDER OF THE CIT (A) CONFIRMING THE DISALLOWANCE MADE BY THE AO. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, AO LEVIED THE P ENALTY OF RS.30,05,960/-, RS.26,24,503/-, RS.23,53,217/-, RS. 20,91,892/- & RS.51,96,443/- FOR AYS 2004-05, 2005-06, 2006-07, 2007-08 & 2009-10 RESPECTIVELY @ 100% OF THE TAX SOUGHT TO BE INVADED U/S 271(1)(C) OF THE ACT. 4. ASSESSEE CHALLENGED THE PENALTY ORDER BY WAY OF APPEALS BEFORE THE LD. CIT (A) WHO HAS AFFIRMED THE PENALTY ORDERS BY DISMISSING THE APPEALS. FEELING AGGRIEVED, THE ASS ESSEE HAS COME UP BEFORE THE TRIBUNAL BY CHALLENGING THE PENALTY O RDERS PASSED U/S 271(1)(C) OF THE ACT. ITA NOS.2830 TO 2834/DEL./2015 5 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED INTER ALIA THAT THE PENALTY CANNOT BE LEV IED WHERE THERE IS DEBATABLE/VEXED LEGAL ISSUE; THAT ASSESSEE HAS DISC LOSED THE FACTS FULLY AND TRULY AND AS SUCH, DISALLOWANCE OF DEDUCT ION CLAIMED DOES NOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT; THAT TOTGARS COOPERATIVE SALE SOCIETY 322 ITR 283 CASE RELIED UPON BY THE AO FOR LEVYING PENALTY IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND RELIED UPON THE DECIS IONS CITED AS GUTTIGEDARARA CREDIT COOPERATIVE SOCIETY LTD. VS. C IT 377 ITR 464 (KAR) , CIT VS. SHREE SIDDESHWAR SOUHARDHANA SAHAKARI NIYAMIT ITA NO.5019/2012 (KAR.), TUMKUR MERCHANTS S OUHARDA CREDIT COOPERATIVE LTD. VS. CIT 230 TAXMAN 309 (KAR .), ITO VS. VIDARBHA PREMIER COOPERATIVE HOUSING SOCIETY 184 TT J 145 (NAG ITAT), CIT VS. DEVSONS LOGISTICS (P) LTD. 329 ITR 483 (DEL.), CIT VS. NALWA SONS INVESTMENTS LTD. 327 ITR 543 (DEL.), CIT VS. DEBAN INTERNATIONAL LTD. ITA NO.496 OF 2009 , ACIT VS. DELHI INTERNATIONAL AIRPORT (P.) LTD. (2018) 89 TAX MANN.COM 326 (DELHI TRIB.), GANESH LAND ORGANISATION VS. CIT 1 68 ITR 527, ITA NOS.2830 TO 2834/DEL./2015 6 CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 15 8, PCIT VS. SAMTEL LTD. ITA NO.43 OF 2017 & CIT VS. AMIT JAIN 3 51 ITR 74 . 7. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE IN ORDER TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE AO/LD. CIT (A) AND CON TENDED INTER ALIA THAT TOTGARS COOPERATIVE SALE SOCIETYS CASE (SUPRA) IS SQUARELY APPLICABLE TO THIS CASE; THAT WHEN ASSESSEE HAS MAD E A WRONG CLAIM OF DEDUCTION IT TANTAMOUNTS TO CONCEALMENT AND RELIED UPON THE DECISIONS OF CIT VS. ESCORTS FINANCE LTD. 328 ITR 44, STEEL INGO TS LTD. VS. CIT 296 ITR 228, CIT VS. ZOOM COMMUNICATIO N (P.) LTD. 327 ITR 510 (DELHI), CIT VS. GATES FOAM & RUBBER CO . 91 ITR 467, CIT VS. INDIA SEAFOOD 105 ITR 708 & M/S. NEW H OLLAND TRACTOR (INDIA) (2014) 49 TAXMANN.COM 573 (DELHI) . 8. UNDISPUTEDLY, THE ASSESSEE HAS BROUGHT ON RECORD FULL AND TRUE FACTS WHILE CLAIMING DEDUCTION U/S 80P OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT HONBLE HIGH COURT UPHELD THE DISALLOW ANCE OF DEDUCTION CLAIMED U/S 80P(2)(A)(I) ON INTEREST INCO ME EARNED FROM COMMERCIAL BANK BUT HAS SET ASIDE THE MATTER BACK T O CIT (A) TO DECIDE UPON THE ALTERNATIVE PLEA OF ASSESSEE QUA DE DUCTION OF INTEREST INCOME EARNED OF DEPOSITS MADE WITH COOPERATIVE BAN KS/SOCIETIES U/S 80P(2)(D) OF THE ACT AND NETTING OFF OF PROPORTIONA TE EXPENSES AGAINST THE INTEREST. IT IS ALSO NOT IN DISPUTE THAT AGAIN ST THE ORDER OF HONBLE ITA NOS.2830 TO 2834/DEL./2015 7 HIGH COURT, ASSESSEE APPROACHED THE HONBLE SUPREME COURT BY WAY OF FILING SPECIAL LEAVE PETITION IN WHICH LEAVE HAS BEEN GRANTED VIDE ORDER DATED 18.09.2017, ORDER AVAILABLE AT PAGE 37 OF THE PAPER BOOK. 9. IN THE BACKDROP OF THE UNDISPUTED FACTS, ARGUMEN TS ADDRESSED BY THE LD. AUTHORIZED REPRESENTATIVES TO THE PARTIE S TO THE PRESENT APPEALS, THE FIRST QUESTION ARISES FOR DETERMINATIO N IN THIS CASE IS :- AS TO WHETHER PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE WHEN ISSUE IS STILL DEBATABLE BY VI RTUE OF SPECIAL LEAVE PETITION PENDING DISPOSAL IN THE HON BLE SUPREME COURT IN WHICH LEAVE HAS BEEN GRANTED AS CONTENDED BY THE ASSESSEE? 10. FIRST OF ALL, WHEN WE EXAMINE THE FACTUAL MATRI X OF THIS CASE WHEREIN DEDUCTION CLAIMED BY THE ASSESSEE WAS DISAL LOWED BY THE AO, BUT ACCEPTED AND ALLOWED BY LD. CIT (A) BUT SUB SEQUENTLY THE TRIBUNAL AND HONBLE HIGH COURT REVERSED THE ORDER PASSED BY THE LD. CIT (A) AND RESTORED THE ORDER OF AO QUA DISALLOWA NCE OF DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P AND THEN LEAVE HAS ALREADY BEEN GRANTED BY HONBLE SUPREME COURT IN SLP FILED BY THE ASSESSEE, IT APPARENTLY APPEARS THAT THE QUESTION IS DEBATABL E. 11. HONBLE DELHI HIGH COURT IN CASE CITED AS CIT VS. DEVSONS LOGISTICS (P) LTD. (SUPRA) HELD THAT :- (V) THAT DIVERGENT VIEWS AMONGST DEPARTMENTAL AUTHORITIES IN RESPECT OF BOTH THE ADDITIONS POSITI VELY INDICATED THAT IT WOULD BE UNSAFE TO INFER THAT THE ITA NOS.2830 TO 2834/DEL./2015 8 ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. 12. HONBLE DELHI HIGH COURT FURTHER HELD WITH THE CAVEAT OF COURSE IS THAT THE ASSESSEE MUST HAVE PLACED ALL HI S CARDS ON THE TABLE BY DISCLOSING EACH AND EVERY FACT TO THE DEPARTMENT AL AUTHORITIES OR THE COURT CONCERNED. IF THE ASSESSEE DOES SO THEN MERELY BECAUSE THE DEPARTMENTAL AUTHORITIES CONCERNED OR THE HIGH COUR T CONCERNED DOES NOT CONCUR WITH THE LEGAL STAND ADOPTED BY THE ASSESSEE, THAT WILL NOT BE REASON ENOUGH TO HOLD THAT THE ASSESSEE IS G UILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE D ETAILS. 13. BUT, IN THE INSTANT CASE, THE ASSESSEE IS ON MO RE SOUND FOOTING BECAUSE THE ORDER PASSED BY THE HONBLE HIGH COURT QUA DISALLOWANCE OF DEDUCTION U/S 80P(2)(A)(I) OF THE A CT HAS BEEN CHALLENGED BY WAY OF FILING SLP IN WHICH LEAVE HAS BEEN GRANTED VIDE ORDER DATED 18.09.2017 UNDER ARTICLE 136 OF TH E CONSTITUTION OF INDIA. 14. HONBLE GUJARAT HIGH COURT IN CASE CITED AS GANESH LAND ORGANISATION (SUPRA) HELD THAT SPECIAL LEAVE IS GRANTED BY THE HONBLE APEX COURT IN EXCEPTIONAL CASES WHERE SUBST ANTIAL AND GRAVE INJUSTICE IS SHOWN TO HAVE BEEN DONE. IN OTHER WOR DS, THE GRANT OF SPECIAL LEAVE DEPENDS ON WHETHER THERE IS SUBSTANTI AL QUESTION OF LAW OF PUBLIC INTEREST. SO, WE ARE OF THE CONSIDERED V IEW THAT WHEN ITA NOS.2830 TO 2834/DEL./2015 9 SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS CAS E QUA DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80P OF THE ACT, PENALTY CANNOT BE LEVIED. 15. SO FAR AS QUESTION OF APPLICABILITY OF TOTGARS COOPERATIVE SALE SOCIETYS CASE (SUPRA) AS RELIED UPON BY THE AO AS WELL AS LD . DR FOR THE REVENUE IS CONCERNED, WE ARE OF THE CONS IDERED VIEW THAT WHEN SUBSTANTIAL QUESTION OF LAW HAS BEEN ARISEN IN THIS PARTICULAR CASE TO BE DECIDED BY THE HONBLE APEX COURT IN THE SLP FILED BY THE ASSESSEE CHALLENGING THE ORDER PASSED BY THE HONBL E DELHI HIGH COURT, PROVISIONS CONTAINED U/S 271(1)(C) OF THE AC T BY APPLYING TOTGARS COOPERATIVE SALE SOCIETYS CASE (SUPRA) ARE NOT ATTRACTED BECAUSE ISSUE IN QUESTION IS STILL DEBATABLE. 16. SPECIAL LEAVE TO APPEAL IS GRANTED BY HONBLE A PEX COURT IN RAREST OF RARE CASE AS IN THE ORDINARY CIRCUMSTANCE S ASSESSEE HAS NO RIGHT TO APPEAL. SO, WE ARE OF THE CONSIDERED VIEW THAT WHEN ISSUE AS TO THE DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASS ESSEE U/S 80P IS PENDING ADJUDICATION BEFORE THE HONBLE APEX COURT, THE ASSESSEE CANNOT BE FASTENED WITH THE LIABILITY FOR CONCEALME NT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 27(1)(C) OF THE ACT. 17. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT WHEN ISSUE AS TO DEDUCTION CLA IMED BY THE ASSESSEE U/S 80P OF THE ACT HAS NOT YET ATTAINED FI NALITY BEING PENDING ITA NOS.2830 TO 2834/DEL./2015 10 ADJUDICATION BEFORE THE HONBLE APEX COURT, PENALTY LEVIED U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80P OF THE ACT IS NOT SUSTAINAB LE IN THE EYES OF LAW, HENCE PENALTY LEVIED BY THE AO AND CONFIRMED B Y THE LD. CIT (A) IS ORDERED TO BE DELETED. CONSEQUENTLY, APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2019. SD/- SD/- (ANADEE NATH MISSHRA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT (A)-XX, NEW DELHI 4.CIT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.