ACIT, UDAIPUR V. The Udaipur Mahila Urban Co-op. Bank Ltd., UDAIPUR

ITA 295/JODH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1594 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: S C AJMERA SHRI ARUN SARUPRIA
• Keywords: Wrong claim; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 295/JU/2012 ASSESSMENT YEAR: 2008-09 THE A.C.I.T VS. UDAIPUR MAHILA URBAN CO-OP BANK CIRCLE - 1 LTD., MAHAVEER BHAWAN, UDAIPUR ASHWINI BAZAR, UDAIPUR PAN NO. AABAT 5419 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.C. AJMERA SHRI ARUN SARUPRIA DEPARTMENT BY : SHRI G.R. KOKANI, DR DATE OF HEARING : 11.02.2013 DATE OF PRONOUNCEMENT : 14.02.2013 ORDER PER HARI OM MARATHA, J.M:- THIS APPEAL OF THE REVENUE FOR A.Y. 2008-09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 22.0 5.2012. 2 2. THIS APPEAL EMANATES FROM A PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] DATED 24.6.201 1 BY THE ACIT, CIRCLE 1, UDAIPUR. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN THE BUSI NESS OF BANKING AND PROVIDING CREDIT FACILITIES AND ALSO OT HER ALLIED ACTIVITIES. FOR THE YEAR UNDER CONSIDERATION , THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.9.2008 DE CLARING TAXABLE INCOME OF RS. 2,74,660/- AFTER CLAIMING DED UCTION U/S 80P(2)(D) OF THE ACT AMOUNTING TO RS. 76,16,622 /-. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN ON 30.11.2009 DECLARING TAXABLE INCOME OF RS. 78,91,28 0/- BY WAY OF WITHDRAWING DEDUCTION ORIGINALLY CLAIMED AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 13.12.2010 AT A TOTAL INCOME OF RS. 78,91,280/- AS DISCLOSED IN THE REVISED RETURN. LATER, THE A.O. I SSUED PENALTY NOTICE U/S 274 R.W.S U/S 271(1)(C) OF THE A CT ON THE REASONING THAT THE ASSESSEE HAS CONCEALED THE 3 PARTICULAR OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND SOUGHT ASSESSEES EXPLANA TION IN THIS REGARD. THE ASSESSEE SUBMITTED THAT THIS DEDU CTION WAS CLAIMED AS IT WAS ALLOWABLE TO THE ASSESSEE BAN K UPTO A.Y. 2006-07 IN RESPECT OF INTEREST/DIVIDEND EARNED FROM OTHER CO-OPERATIVE SOCIETIES/BANKS. HOWEVER, AN AMENDMENT VIDE FINANCE ACT, 2006 W.E.F. 1.4.2007 WA S MADE TO THE EFFECT THAT DEDUCTION U/S 80P(2)(D) IS TO BE RESTRICTED TO ONLY PRIMARY AGRICULTURE CO-OPERATIVE SOCIETY AND PRIMARY CO-OPERATIVE AGRICULTURE AND RURAL DEVELOPMENT BANK BY INSERTION OF SUB-SECTION 4 OF S ECTION 80P OF THE ACT. AS PER THE ASSESSEE, THIS AMENDMEN T CAME TO ITS KNOWLEDGE ONLY DURING THE ASSESSMENT PROCEED INGS FOR A.Y. 2007-08 AND THEREAFTER, IMMEDIATELY THE AS SESSEE REVISED ITS ORIGINAL RETURN WITHDRAWING CLAIM U/S 8 0P(2)(D) ON 30.11.2009 I.E. BEFORE THE COMMENCEMENT OF PROCEEDINGS OF ASSESSMENT FOR THIS YEAR. BUT STILL THE A.O. AFTER REJECTING THE ENTIRE SUBMISSIONS OF THE ASSES SEE, IMPOSED PENALTY WHICH HAS BEEN DELETED BY THE LD. C IT(A). NOW THE REVENUE IS AGGRIEVED. 4 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BE FORE WE CONSIDER THE FACTUAL MATRIX OF THIS CASE TO ASCERTA IN AS TO WHETHER IN THE EYES OF THE PROVISIONS OF THE ACT AS EXPLAIN ED BY NUMEROUS JUDICIAL PRONOUNCEMENTS, PENALTY CAN BE LEVIED IN T HIS CASE OR NOT, WE WOULD LIKE TO DISCUSS IN NUT SHELL THE RELEVANT LEGAL POSITION REGARDING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND AS TO HOW AND WHEN SUCH PENALTY CAN BE LEVIED UNDER THIS SECT ION. THERE ARE NO TWO OPINIONS ABOUT THE SETTLED POSITION OF LAW THAT REGULAR ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO ENTIRELY DIFFERENT SUBJECTS WHICH OPERATE IN DISTINCT AND SEPARATE SPHERES SO MUCH SO THAT ENTIRELY DIFFERENT PARAMETERS ARE A PPLICABLE FOR MAKING QUANTUM ADDITION AND FOR LEVYING PENALTY UND ER SECTION 271(1)(C) OF THE ACT. THERE CAN BE NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT UNDER SECTION 271(1)(C) PENALT Y CAN BE LEVIED ONLY IF EITHER THE ACT OF 'CONCEALMENT OF PARTICUL ARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' IS FOUND TO HAVE BEEN COMMITTED BY THE ASSESSEE. THESE ARE TWO DIFFE RENT OMISSIONS OR DEFAULTS ALBEIT THEY REFER TO DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR NEGLIGENCE WOULD NOT C ONSTITUTE A 5 DELIBERATE ACT OF EITHER SUPPRESSIO VERI OR SUGGEST IO FALSY. BY THE MERE REASON OF SUCH CONCEALMENT OR OF FURNISHING OF INACCURATE PARTICULARS ALONE, THE ASSESSEE DOES NOT, IPSO FACT O, BECOME LIABLE TO A PENALTY. IMPOSITION OF PENALTY IS NOT AT ALL AUTOMATIC. MEANING THEREBY, ANY ADDITION IN QUANTUM WOULD NOT LEAD TO AUTOMATIC LEVY OF PENALTY AND THIS IS ALSO TRUE IN RESPECT OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME. NOT ONLY IS THE LEVY OF PENA LTY DISCRETIONARY IN NATURE BUT THE DISCRETION HAS TO BE EXERCISED KE EPING THE RELEVANT FACTORS IN MIND AND THE APPROACH OF THE TA XMAN MUST BE FAIR AND OBJECTIVE. THIS SUBJECT HAS BEEN A MATTER OF GREAT CONTROVERSY. FINALLY, AFTER REFERRING TO THE DECIS IONS IN THE CASE OF DILIP N. SHROFF VS JCIT & ANOTHER, 291 ITR 519, UN ION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS [2008] 13 SCC 369, AS WELL AS UNION OF INDIA VS RAJASTHAN SPG. & WVG. MILLS [2009] 13 S CC 448, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANC E PETROPRODUCTS PVT. LTD, 322 ITR 158, HAS RECENTLY HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF 6 HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS' U SED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF T HE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETUR N IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS . IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETUR N FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271 (1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. 7 5. ADVERTING TO THE FACTS OF THE CASE, WE HAVE FOUN D IT FOR A FACT THAT NO SOONER DID THE CHANGE IN LAW CAM E TO THE KNOWLEDGE OF THE ASSESSEE, IT FILED A REVISED R ETURN AND THAT TOO BEFORE THE COMMENCEMENT OF PROCEEDINGS FOR THE A.Y. 2008-09. IT IS ALSO A FACT THAT ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF THE REVISED RETURN SO FIL ED BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE TH AT REVISED RETURN WAS NOT FILED SUO MOTTO IN WHICH ORIGINALLY CLAIM MADE HAS NOT BEEN WITHDRAWN. IN OUR CONSIDERE D OPINION, THE ASSESSEES CLAIM OF DEDUCTION U/ 80P(2 )(E) OF THE ACT IN THE ORIGINAL RETURN WAS ITS BONAFIDE EXE RCISE AND NOT A MALAFIDE ONE. THE LAW ON THE ISSUE IS BY NOW SETTLED THAT EVEN IN CASE AN ASSESSEE MAKES A WRONG CLAIM W HICH IS NOT ALLOWABLE UNDER THE LAW, IT WILL NOT LAND HI M IN THE SOUP OF PENALTY PROVISIONS. THE ABOVE MENTIONED LE GAL POSITION SUPPORTS OUR ABOVE DECISION. THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. [SUPRA] IS MORE SPECIFIC IN THIS REGARD. ACCORDINGLY, WE CONFIRM THE DELETION OF THE IMPUGNED PENALTY AND DISMISS THE APPEAL OF THE REVE NUE. 8 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 14.02.2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14 TH FEBRUARY, 2013 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR