DM Corporation Private Limited, KOLHAPUR V. Assistant Commissioner of Income Tax, Central Circle, Kolhapur

ITA 284/PUN/2022

AI Insights

The case involves DM Corporation Private Limited, which appealed against penalties imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961, for the assessment years 2006-07 to 2009-10. The penalties were based on disallowances related to section 80IA deductions claimed during section 153A assessments following a search operation on August 25, 2011. The Tribunal examined whether the penalties were justifiably imposed given the circumstances under which the deductions were claimed. The Tribunal's decision was influenced by precedents that clarify the separateness of quantum and penalty proceedings and the admissibility of new deduction claims in section 153A assessments.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 135564 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-12-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2022
• Other Referred Cases: CIT Vs. Reliance Petro Products (2010) 322 ITR 158 (SC), PCIT Vs. JSW Steel Ltd. (2010) 422 ITR 1 (Bom.)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153A; 80IA; 13

Judgement Text

आयकर अपीलीय अिधकरण“B” ायपीठ पुणे म । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकरअपीलसं . / ITA Nos.282 to 285/PUN/2022 िनधा रणवष / Assessment Years: 2006-07 to 2009-10 DM Corporation Private Limited, 240/B, Mohite House, General Thorat Marg, Tarabai Park, Maharashtra-416003 PAN : AADCM6821H Vs ACIT, Central Circle, Kolhapur Appellant/ Assessee Respondent /Revenue Assessee by Shri Kishor Phadke Revenue by Shri Keyur Patel, CIT & Shri M.G. Jasnani Date of hearing 26-12-2022 Date of pronouncement 30-12-2022 आदेश / ORDER Per Bench : These assessee’s four appeals for assessment years 2006-09 to 2009-10, arise against the Commissioner of Income Tax, Pune-11’s separate Din and Order Nos.ITBA/APL/S/250/2021-22/1039762278(1), ITBA/APL/S/250/2021-22/1039763122(1), ITBA/APL/S/250/2021 - 22/1039763618(1) and ITBA/APL/S/250/2021-22/1039764256(1) all dated 15-02-2022, confirming the Assessing Officer’s identical action imposing penalty(ies) of Rs.1,29,19,973/-, Rs.87,49,716/-, Rs.57,54,325/- and Rs.2,85,73,986/-; respectively, in proceedings u/s.271(1)(c) of the Income-tax Act, 1961 in short ‘Act’. ITA Nos.282 to 285/PUN/2022 DM Corporation Private Limited 2 Heard both the parties. Case files perused. 2. It emerges during the course of hearing that the assessee’s instant four appeals involving the foregoing varying penalty sums (supra) hardly require us to delve deeper in the relevant factual matrix. Suffice to say, it is an admitted fact that the impugned penalties pertain to the quantum disallowances/additions made by the Assessing Officer regarding the assessee’s section 80IA deduction raised for the first time in section 153A assessments completed in furtherance to the search in issue dated 25-08-2011. Both the learned lower authorities admittedly hold that the said identical quantum disallowance indeed attracts the impugned penalty provision. This leaves the assessee aggrieved. 3. Mr. Jasnani at the outset filed before us this tribunal’s common quantum order dated 23-03-2018 allowing the corresponding Revenue’s appeals ITA Nos.1805 to 1811/PUN/2014 thereby restoring the Assessing Officer’s action making the impugned disallowance. We hardly find any reason to agree with the Revenue’s instant stand. A perusal of the said quantum discussion in para No.22 makes it clear that the learned coordinate bench had accepted the Revenue’s arguments for the sole reason that the assessee could not have claimed the impugned deduction in all these four years since involving unabated assessments u/s.153A of the Act. It had also rejected the Revenue’s cases in ITA Nos.282 to 285/PUN/2022 DM Corporation Private Limited 3 “abated” assessment at the same time thereby accepting the assessee’s very section 80IA deduction. It is for this precise technical reason that the Revenue has succeeded before the tribunal in quantum cases and the assessee has stated to have been pursuing its remedy before the hon’ble higher judicial forums. 4. Mr. Jasnani at this stage vehemently argued that the assessee’s act and conduct in raising the impugned section 80IA deduction claim in section 153A assessment proceedings itself forms a sufficient reason to hold that ‘it has concealed and furnished inaccurate particulars of its taxable income’. 5. We see no reason to accept the Revenue’s stand. We make it clear that the hon’ble Apex court’s landmark decision in CIT Vs. Reliance Petro Products (2010) 322 ITR 158 (SC) has settled the law long back that quantum and penalty proceedings are parallel in nature wherein each and every disallowance/addition made in the course of the former does not ipso facto attracts the latter provision. Hon’ble jurisdictional high court’s decision in PCIT Vs. JSW Steel Ltd. (2010) 422 ITR 1 (Bom.) also holds that an assessee can very well raise its deduction claim for the first time in section 153A assessment proceedings. Mr. Jasnani could not pinpoint any exception to this proposition in section 153A itself qua raising of such a claim in abated or unabated assessments. Be that as it may, we make it clear that we are dealing with penalty proceedings only. ITA Nos.282 to 285/PUN/2022 DM Corporation Private Limited 4 We thus conclude that both the lower authorities have erred in law and on facts in imposing these penalties in the impugned four assessment years before us. The same are directed to be deleted. The assessee succeeds in its instant identical sole substantive grievance therefore. 6. Delay of 13 days in filing of all these four appeals is condoned in the larger interest of justice. 7. These assessee’s four appeals are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 30 th December, 2022. Sd/- Sd/- (INTURI RAMA RAO) (S S GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दनांक / Dated : 30 th December, 2022 Satish आदेशक ितिलिपअ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. यथ / The Respondent. 3. The CIT(A) concerned. 4. The Pr. CIT concerned. 5. िवभागीय ितिनिध,आयकरअपीलीयअिधकरण, “B” ब च, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाड फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकरअपीलीयअिधकरण, पुणे/ITAT, Pune. ITA Nos.282 to 285/PUN/2022 DM Corporation Private Limited 5 S.No Details Date Initials Designation 1 Draft dictated on 28-12-2022 Sr. PS/PS 2 Draft placed before author 29-12-2022 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order