Hindumal Balmukund Investment Co.Pvt.Ltd., Pune V. Deputy Commissioner of Income tax,

ITA 2939/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5180 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-12-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SABANA PARVEEN
• Assessee Lawyers: NITIN RANDER
• Section: 148; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.2938 AND 2939/PUN/2016 / ASSESSMENT YEARS : 2010-11 & 2011-12 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., LOHIA JAIN HOUSE, BHANDARKAR ROAD, PUNE 411 004 PAN : AAACH4226Q /APPELLANT VS. DCIT, CIRCLE-11, PUNE . / RESPONDENT / APPELLANT BY : SHRI NITIN RANDER / RESPONDENT BY : MS. SABANA PARVEEN / DATE OF HEARING : 10.10.2018 / DATE OF PRONOUNCEMENT: 10.10.2018 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF CIT(A)-1, PUNE, COMMONLY DATED 30-11-2016 INVOLVING ASSE SSMENT YEARS 2010-11 & 2011-12. 2. THE COMMON ISSUE RAISED IN THESE TWO APPEALS RELATE TO CONFIRMING OF PENALTY LEVIED BY THE AO U/S.271(1)(C) OF THE ACT BY THE CIT (A). THEREFORE, WE PROCEED TO ADJUDICATE THESE APPEALS IN THIS COMPOSITE OR DER. FOR THE SAKE OF FACTS, WE SHALL TAKE THE APPEAL ITA NO.2938/PUN/2016 FOR T HE A.Y. 2010-11 AS STANDARD ONE. ITA NOS.2938 & 2939/PUN/2016 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., 2 3. BRIEFLY STATED RELEVANT FACTS OF THE ASSESSEE INCLUDE T HAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOP ERS, OPERATING A BUSINESS CENTRE AND IT PARK AND TRADING IN SHARES. ASS ESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,51,06,479/-. ASSESSEE FILED THE RETURN OF INCOME ON 15-10-2010 DECLARING TOTAL INCOME OF RS.1,51,06,479/- AFTER CLAIMING DEDUCTION OF RS.1,51,06,508/- U/S.80IA(4)(III) OF THE ACT. AO NOTICED THAT AS PER COMPLETION CERTIFICATE ISSUED BY THE P MC ON 29-03-2006, ONLY 7 UNITS HAVE BEEN COMPLETED. THE REMA INING UNITS WERE BEEN COMPLETED BY 07-11-2007. THERE IS NO FRESH APPROV AL OBTAINED BY THE ASSESSEE FOR DELAY OF MORE THAN ONE YEAR. ASSESSEE HA S GIVEN 7 UNITS ON RENT TO IFLEX SOLUTIONS LTD. AND 7 UNITS TO IIFL REALITY LTD. AO OPINED THAT EACH UNIT HAS TO BE ALLOCATED TO EACH DISTINCT PARTY AS PER T HE CONDITION MENTIONED IN INDUSTRIAL PARK SCHEME 2002 UNIT WHICH MEANS SEPARATE AND DISTINCT ENTITY FOR THE PURPOSE OF ONE OR MORE STATE OR CENTRAL TAX LAWS. HOWEVER, THE ASSESSEE HAS GIVEN ITS PARK FOR TWO ENTITIES ONLY. ASSESS EE SUBMITTED ITS ELABORATE SUBMISSIONS AND RELIED ON VARIOUS DECISIONS APAR T FROM ITS OWN CASE FOR THE A.Y. 2009-10 WHERE DEDUCTION U/S.80IA(4) WAS ALLOWE D FOR THE FIRST TIME. REJECTING THE EXPLANATION AS WELL AS THE DECISIONS RE LIED ON BY THE ASSESSEE, THE AO DENIED CLAIM MADE BY THE ASSESSEE U/S.8 0IA(4) OF THE ACT. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT WERE INITIATED ON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND EVENTUALLY LEVIED PENALTY OF RS.51,34,702/-. SIMILARLY, PENALTY OF RS.26,22,143/- WAS LEVIED BY THE AO FOR THE A.Y. 2011-12. ITA NOS.2938 & 2939/PUN/2016 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., 3 THE ABOVE FACTS INDICATE THAT ASSESSEE MADE A CLAIM FOR THE FIRST TIME IN THE A.Y. 2009-10. AFTER DUE VERIFICATION OF THE CLAIM IN THE A .Y. 2009-10, THE SAME WAS ALLOWED. HOWEVER, IN THE A.YRS. 2010-11 AND 2011 -12, THE ALLOWABILITY OF THE CLAIM WAS AGAIN SCRUTINIZED BY THE AO AND THE SAME WAS DISALLOWED BY LEVYING PENALTY. IN THE FIRST APPELLATE PROC EEDINGS, THE CIT(A) CONFIRMED THE PENALTY FOR BOTH THE ASSESSMENT YEARS. AG GRIEVED WITH THE SAME, THE ASSESSEE FILED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ORDER OF TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS . 266 & 267/PUN/2015 ORDER DATED 24-08-2018 AND MENTIONED T HAT THE QUANTUM ADDITIONS WERE DELETED BY THE TRIBUNAL ON THIS VERY ISSUE , THEREFORE, THE PENALTIES ARISING THEREOF SHALL NOT SURVIVE. HE THEREFORE PR AYED FOR DELETION OF THE PENALTIES IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 5. WE HEARD BOTH THE SIDES ON THIS LIMITED ISSUE OF LEVYING PENALTY U/S.271(1)(C) OF THE ACT, PERUSED THE ORDERS OF THE REVENU E AND THE ORDER OF TRIBUNAL (SUPRA) DELETING THE QUANTUM ADDITIONS ON TECHNICA L GROUNDS. WE THEREFORE, PROCEED TO EXTRACT THE FINDING OF THE TRIBUNAL B ELOW FOR THE SAKE OF COMPLETENESS : 6. WE HEARD BOTH THE PARTIES ON THIS LEGAL ISSUE O F APPLICABILITY OF THE RATIO OF THE BINDING JUDGMENT OF HONBLE JURISDICTION HIGH COURT IN THE CASE OF CIT VS. PAUL BROTHERS (SUPRA). THE SAID JUDGMENT IS RELEVA NT FOR THE FOLLOWING PROPOSITION : 6. EITHER IN SECTION 80HH OR IN SECTION 80J , THERE IS NO PROVISION FOR WITHDRAWAL OF SPECIAL DEDUCTION FOR THE SUBSEQUENT YEARS FOR BREACH OF CERTAIN CONDITIONS. HENCE UNLESS THE RELI EF GRANTED FOR THE ASSESSMENT YEAR 1980-81 WAS WITHDRAWN, THE INCOME-TAX OFFICER COULD NOT HAVE WITHHELD THE RELIEF FOR THE SUBSEQUE NT YEARS. FROM THE ABOVE, IT IS EVIDENT THAT UNLESS THE RELIE F CLAIMED IN THE FIRST YEAR OF UNDERTAKING IS WITHDRAWN, THE AO CANNOT WITHHOLD TH E RELIEF FOR THE SUBSEQUENT YEARS. IN THE PRESENT CASE, THOUGH AN ATTEMPT IS M ADE TO WITHDRAW THE CLAIM OF ITA NOS.2938 & 2939/PUN/2016 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., 4 DEDUCTION THROUGH THE INVOKING OF THE PROVISIONS OF SECTION 148 OF THE ACT, THE SAME DID NOT FRUCTIFY FOR ONE REASON OR THE OTHER A ND THE JUDGMENT OF THE HONBLE HIGH COURT IN THE WRIT PROCEEDINGS EVIDENCES THE SA ME. IN EFFECT, THE CLAIM OF THE ASSESSEE U/S.80IA(4) OF THE ACT STANDS ALLOWED IN THE FIRST YEAR OF UNDERTAKING. CONSIDERING THE FACT THAT THE SAME IS ALLOWED IN TH E FIRST YEAR OF UNDERTAKING, THE AO CANNOT WITHDRAW THE DEDUCTION WHEN THE FACTS ARE IDENTICAL. THEREFORE, WE ARE OF THE OPINION THAT THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PAUL BROTHERS (SUPRA) STANDS AP PLICABLE TO THE FACTS OF THE PRESENT CASE LEGALLY. 7. FURTHER, FOR COMMENTING OUR VIEW ON THE ISSUE, W E ALSO PERUSED THE JUDGMENT IN THE CASE OF CIT VS. WESTERN OUTDOOR INT ERACTIVE PVT. LTD. REPORTED IN 349 ITR 309 (BOM.) WHEREIN THE HONBLE HIGH COURT H ELD AS UNDER: 6) WE HAVE CONSIDERED THE SUBMISSIONS. WE FIND THA T THE SUBMISSIONS MADE BY MR. PARDIWALLA ON THE BASIS OF THE DECISION OF THIS COURT IN THE MATTER OF PAUL BROTHERS (SUPRA) AND DIRECTOR OF INF ORMATION PVT. LTD. (SUPRA) MERITS ACCEPTANCE. THEREFORE, IN THIS CASE, IT IS NOT NECESSARY FOR US TO DECIDE WHETHER SEEPZ UNIT WAS SET UP/FORMED B Y SPLITTING UP OF THE FIRST UNIT. IN BOTH THE ABOVE DECISIONS, THIS COURT HAS HELD THAT WHERE A BENEFIT OF DEDUCTION IS AVAILABLE FOR A PARTICULAR NUMBER OF YEARS ON SATISFACTION OF CERTAIN CONDITIONS UNDER THE PROVIS IONS OF THE INCOME TAX ACT, THEN UNLESS RELIEF GRANTED FOR THE FIRST ASSES SMENT YEAR IN WHICH THE CLAIM WAS MADE AND ACCEPTED IS WITHDRAWN OR SET ASI DE, THE INCOME TAX OFFICER CANNOT WITHDRAW THE RELIEF FOR SUBSEQUENT Y EARS. MORE PARTICULARLY SO, WHEN THE REVENUE HAS NOT EVEN SUGGESTED THAT TH ERE WAS ANY CHANGE IN THE FACTS WARRANTING A DIFFERENT VIEW FOR SUBSEQ UENT YEARS. IN THIS CASE FOR THE ASSESSMENT YEARS 2000-01 AND 2001 02 THE RELIEF GRANTED UNDER SECTION 10A OF THE ACT TO SEEPZ UNIT HAS NOT BEEN WITHDRAWN. THERE IS NO CHANGE IN THE FACTS WHICH WE RE IN EXISTENCE DURING THE ASSESSMENT YEAR 2000 01 VIS A VIS THE CLAIM TO EXEMPTION UNDER SECTION 10A OF THE ACT. THEREFOR E, IT IS NOT OPEN TO THE DEPARTMENT TO DENY THE BENEFIT OF SECTI ON 10A FOR SUBSEQUENT ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2 002 03 AND 2003 04 AND 2004 05. BESIDES THAT, ON CONSIDERATION OF THE FACTS INVOLVED BOTH THE COMMISSIONER OF INCOME TAX (APPEA LS) AND THE TRIBUNAL HAVE RECORDED A FINDING OF FACT THAT THE SEEPZ UNIT IS NOT FORMED BY SPLITTING UP OF THE FIRST UNIT. 8. FURTHER, IN THE CASE OF M/S. YGYAN CONSULTING PV T. LTD. VS. DCIT IN ITA NO.65/PUN/2015 DATED 13-10-2017, THE PUNE BENCH OF THE TRIBUNAL OBSERVED AS UNDER : 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPR ESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. THE FIRST GROUND RAISED IN APPEAL BY ASSESSEE IS WITH RESPECT TO ASSESSEE'S ELIGIBILITY FOR CLAIMING DEDUCTION U/S. 10 A OF THE ACT . IT IS AN UNDISPUTED FACT THAT THE ASSESSEE COMPANY WAS INCORPORATED IN THE YEAR 1991. THE DOCUMENTS ON RECORD SHOW THAT THE ASSESSEE WAS GRAN TED STPI APPROVAL ON 30-03-2000. BEFORE GRANT OF APPROVAL THE ASSESSE E COULD NOT HAVE CLAIMED DEDUCTION U/S. 10 A OF THE ACT . THE LD. AR HAS STATED AT THE BAR THAT FIRST YEAR FOR CLAIMING DEDUCTION U/S. 10A WAS ASSESSMENT YEAR 2001-02. THOUGH THE LD. AR COULD NOT PLACE ON RECOR D ASSESSEE'S RETURN OF INCOME IN ASSESSMENT YEAR 2001-02 AND THE ASSESSMEN T ORDER FOR THE SAID ASSESSMENT YEAR, HOWEVER, THE ASSESSEE HAS FUR NISHED A COPY OF ITA NOS.2938 & 2939/PUN/2016 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., 5 ASSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05. A PER USAL OF THE SAID ASSESSMENT ORDER AT PAGES 30 TO 40 OF THE PAPER BOO K CLEARLY INDICATE THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 10A IN RESPECT OF PROFITS FROM STPI UNIT AND THE SAME HAS BEEN ALLOWED BY THE ASSESSING OFFICER IN SCRUTINY ASSESSMENT. ONCE HAVING ACCEPTED THE CL AIM OF ASSESSEE, THE REVENUE CANNOT QUESTION ASSESSEE'S ELIGIBILITY FOR CLAIMING SUCH DEDUCTION IN SUBSEQUENT ASSESSMENT YEARS. THE HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TA X VS. PAUL BROTHERS (SUPRA) HAS OBSERVED THAT THERE IS NO PROVISION FOR WITHDRAWAL OF SPECIAL DEDUCTION FOR THE SUBSEQUENT YEARS FOR BREACH OF CE RTAIN CONDITIONS. UNLESS THE RELIEF ITA NO. 65/PUN/2015, A.Y. 2005-06 GRANTED FOR THE INITIAL ASSESSMENT YEAR IS WITHDRAWN, THE ITO COULD NOT HAVE WITHHELD THE RELIEF FOR THE SUBSEQUENT YEARS. THUS, IN VIEW OF THE FACT THAT THE ASSESSEE'S CLAIM OF DEDUCTION U/S. 10A WAS NEVER QUESTIONED BY THE REVENUE IN INI TIAL ASSESSMENT YEAR, THE ASSESSING OFFICER CANNOT RAISE QUESTION OVER ASSESSEE'S ELIGIBILITY FOR CLAIMING DEDUCTION IN AN Y OF THE SUBSEQUENT ASSESSMENT YEARS. THE LD. DR HAS ALSO ACCEPTED THE FACT THAT IN ASSESSMENT YEAR 2004-05, ASSESSEE'S CLAIM O F DEDUCTION U/S. 10A WAS ALLOWED BY ASSESSING OFFICER IN SCRUTINY ASSESS MENT PROCEEDINGS. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE LAW LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT, GROUND NO. 1 RAI SED IN APPEAL BY THE ASSESSEE IS ALLOWED. CONSIDERING THE ABOVE, WE ARE OF THE CONSIDERED OPI NION, IN VIEW OF THE BINDING RATIO IN THE CASE OF CIT VS. PAUL BROTHERS (SUPRA) THAT THE ASSESSEE IS ENTITLED TO RELIEF FOR BOTH THE YEARS ON THIS LEGAL ISSUE ALONE. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON TECHNICALITIES, W E ARE OPINION THAT ADJUDICATION OF THE GROUNDS ON MERITS BECOMES AN ACADEMIC EXERCI SE. ACCORDINGLY, THE RELEVANT GROUNDS ARE DISMISSED. 5.1 CONSIDERING THE RELIEF GRANTED BY THE COORDINATE BENC H OF THE TRIBUNAL ON THE QUANTUM ADDITIONS, WE ARE OF THE OPINION THAT THE PENALTY LEVIED BY THE AO IN BOTH THE ASSESSMENT YEARS NEEDS TO BE DELETED A S THE BASIS FOR LEVYING THE PENALTY, STANDS DISMISSED. 6. EVEN OTHERWISE ALSO, THE ASSESSMENT ORDERS AS WELL AS PENALTY ORDERS IN THE YEARS UNDER CONSIDERATION SUFFER INFIRMITY. THE AO INITIA TED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT MENTIONING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME WHEREAS THE PENALTY IS LEVIED MENTIONING THAT THE ASSESSEE HAS COMMITTED DEFAULT CONSCIOUSLY WITH INTENTION TO DEFRAUD REVENUE BY CONCEALING INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF ITA NOS.2938 & 2939/PUN/2016 HINDUMAL BALMUKUND INVESTMENT CO. PVT. LTD., 6 THE I.T. ACT, 1961. IT IS A SETTLED LEGAL PROPOSITION THA T THE AO IS UNDER OBLIGATION TO SPECIFY THE CORRECT LIMB AT THE TIME OF INITIATIO N AS WELL AS AT THE TIME OF LEVY OF PENALTY. CONSIDERING THE BINDING JUDGMENTS IN THE CASE CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM.) AS WELL AS TH E JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MAN JUNATHA COTTON AND GINNING FACTORY 359 ITR 565, THE PENALTY LEVIED BY THE AO IS UNSUSTA INABLE IN LAW FOR BOTH THE ASSESSMENT YEARS. THEREFORE, WE DIRECT THE AO TO DELETE THE PENALTY IN BOTH THE ASSESSMENT YEARS. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE ASSESSMENT ARE ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED ORDER PRONOUNCED ON THIS 10 TH DAY OF OCTOBER, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 10 TH OCTOBER , 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-1, PUNE. 4. / THE PR. CIT-1, PUNE. 5. , , / DR B, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, / TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.