Shivom Cotspin Limited, Kala Amb V. DCIT, Circle, Parwanoo

ITA 299/CHANDI/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1101 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Keywords: Bonafide belief; Condonation of delay
• Section: 80IC; 80IC

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH , !' #$ % & ' ($ , )* BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS. 298 & 299/CHD/2019 / ASSESSMENT YEARS : 2012-13 & 2014-15 M/S SHIVAM COTSPIN LIMITED, VILALGE KHERI, KALA AMB, TRILOKPUR ROAD, SIRMOUR HIMACHAL PRADESH THE DCIT, CIRCLE, PARWANOO ./PAN NO: AAJS9111L / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI ROHIT GOEL, CA ' ! / REVENUE BY : SHRI ARVIND SUDERSHAN, SR. DR # $ % /DATE OF HEARING : 28.11. 2019 &'() % / DATE OF PRONOUNCEMENT : 28.11.2019 )+/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEE AGAINST THE COMMON ORDER DATED 30.01.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS), SHIMLA. [HEREINAFTER REFERRED TO A S CIT(A)]. 2. SINCE THE ISSUE INVOLVED REGARDING THE LEVY OF P ENALTY U/S 271 (1)(C) INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') IN BOTH THE APPEALS IS ITA NOS. 298 & 299/CHD/2019- M/S SHIVAM COTSPIN LIMITED, SIRMOUR 2 IDENTICAL, HENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 3. BOTH THE APPEALS ARE TIME BARRED BY 344 DAYS. SE PARATE APPLICATIONS FOR CONDONATION OF DELAY HAVE BEEN FIL ED WHICH ARE FURTHER SUPPORTED WITH THE AFFIDAVIT OF THE DIRECTOR OF THE COMPANY NAMELY SHRI PAWAN SINGLA, WHEREIN, IT HAS BEEN DEPOSED THAT EA RLIER THE MATTERS WERE ENTRUSTED TO ANOTHER CHARTERED ACCOUNTANT AND THE ASSESSEE COMPANY WAS UNDER BONAFIDE BELIEF THAT THE APPEALS HAVE BEEN FILED AND WILL BE PROSECUTED BY THE SAID CHARTERED ACCOUNTAN T ENGAGED BY THE COMPANY. HOWEVER, WHEN THE ASSESSEE COMPANY CONTA CTED THE PRESENT C.A. NAMELY SHRI ROHIT GOEL, THEN IT CAME TO KNOW T HAT INADVERTENTLY THE APPEAL REMAINED TO BE FILED IN THE ABOVE CASES. THAT THE DELAY IN FILING THE CAPTIONED APPEALS IS NOT INTENTIONAL. TH AT THE ASSESSEE CONTESTED ALL AROUND THIS MATTER. THAT EVEN THE QU ANTUM APPEALS TRAVELLED UP TO THE LEVEL OF THE HIGH COURT AND THE RE WAS NO REASON WITH THE ASSESSEE NOT TO FILE THE PRESENT APPEALS AGAINS T LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT EVEN IN THE QUANTUM APPEAL, PART RELIEF HAS BEEN GRANTED TO THE ASSESSEE. CONSIDERING THE ABOVE SUBMISSIONS, THE DELAY IN FIL ING THE PRESENT APPEALS IS HEREBY CONDONED. 4. NOW COMING TO THE MERITS OF THE CASE, WHEREIN, I DENTICAL CONTENTIONS HAVE BEEN MADE IN BOTH THE APPEALS, FI RSTLY, IN RESPECT OF ITA NOS. 298 & 299/CHD/2019- M/S SHIVAM COTSPIN LIMITED, SIRMOUR 3 THE INTEREST RECEIVED ON DELAYED PAYMENTS BY THE AS SESSEE AND FURTHER CLAIMED AS EXEMPT U/S 80 IC OF THE I.T. ACT. THE S ECOND ISSUE ON WHICH THE ADDITION WAS MADE AND FURTHER CONFIRMED IS REGA RDING THE INTEREST ON FDRS. 5. SO FAR AS THE ADDITION MADE BY THE ASSESSING OFF ICER IN RESPECT OF DELAYED PAYMENT OF INTEREST IS CONCERNED, THE LD. C OUNSEL HAS INVITED OUR ATTENTION TO THE ORDER OF THE HON'BLE JURISDICT IONAL HIGH COURT OF HIMACHAL PRADESH IN THE OWN CASE OF THE ASSESSEE DA TED 19.3.2019 PASSED IN ITA NO. 5 OF 2018 RELATING TO THE QUANTUM PROCEEDINGS, WHEREBY, THE HON'BLE HIGH COURT HAS DECIDED THE ISS UE REGARDING THE ALLOWABILITY OF INTEREST ON DELAYED PAYMENT IN FAVO UR OF THE ASSESSEE VIDE PARA 4 OF THE SAID DECISION. SINCE THE QUANTUM ADDITIONS ON THIS ISSUE STAND DELETED, HENCE, THE VERY BASIS FOR LEVY OF PENALTY ON THIS ISSUE HAS CEASED TO EXIST, HENCE, THE PENALTY LEVIE D BY THE ASSESSING OFFICER U/S 271 (1)(C) OF THE ACT IN RESPECT OF ADD ITIONS MADE IN RESPECT OF CLAIM OF DELAYED PAYMENT IS NOT SUSTAINABLE IN T HE EYES OF LAW AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 6. SO FAR AS THE CLAIM OF INTEREST ON FDRS IS CONCE RNED, THOUGH THE ISSUE IN THE QUANTUM PROCEEDINGS HAS BEEN DECIDED A GAINST THE ASSESSEE, HOWEVER, IT HAS BEEN SUBMITTED BEFORE US THAT HE SA ID CLAIM WAS MADE BY THE ASSESSEE UNDER BONAFIDE BELIEF. THAT THERE WAS NEITHER ANY INTENTION OF THE ASSESSEE TO FURNISH INACCURATE PARTICULARS OF INCOME NOR TO ITA NOS. 298 & 299/CHD/2019- M/S SHIVAM COTSPIN LIMITED, SIRMOUR 4 CONCEAL ITS INCOME . THE LD. COUNSEL HAS FURTHER SU BMITTED THAT THE FDRS WERE MADE WITH THE BANK AS A GUARANTEE FOR OBT AINING LOAN FOR WORKING CAPITAL UPON WHICH THE ASSESSEE IN TURN HAS PAID INTEREST TO THE BANK WHICH HAS ALSO BEEN ALLOWED AS EXPENDITURE TO THE ASSESSEE. WE ARE OF THE VIEW THAT THE ASSESSEE UNDER BONAFID E BELIEF NETTED THE INTEREST RECEIVED WITH THE EXPENDITURE TO MAKE A CLAIM U/S 80IC OF THE ACT. HOWEVER, THE SAID CLAIM OF THE ASSESSEE HA S NOT BEEN ACCEPTED. IN OUR VIEW, THIS IS NOT A CASE OF FURNISHING OF IN ACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME WARRANTING LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. IT HAS BEEN SETTLED TIME AND AG AIN THAT EACH AND VERY DISALLOWANCE MADE BY THE INCOME TAX AUTHORITIES DOE S NOT IPSO FACTO WARRANTS LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. IN VIEW OF THIS, THE PENALTY LEVIED BY THE ASSESSIN G OFFICER IN BOTH THESE COUNTS IS ORDERED TO BE DELETED. 7. AT THIS STAGE, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT FOR THE ASSESSMENT YEAR 2014-15, THE PENALTY HAS AL SO BEEN LEVIED ON ACCOUNT OF DISALLOWANCE CLAIMED BY THE ASSESSEE U/S 80IC ON DUTY DRAW BACK. THIS ISSUE IS SETTLED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S LIBERTY INDIA VS CIT [2009] 3 17 ITR 218 (SC) VIDE ORDER DATED 31.8.2019. SINCE THE ISSUE WAS ALREADY SETTLED, HENCE, IN OUR VIEW, THERE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSEE TO CLAIM THE DEDUCTION ON DUTY DRAW BACK AS EXEMPT U/S 80IC OF THE ACT. ITA NOS. 298 & 299/CHD/2019- M/S SHIVAM COTSPIN LIMITED, SIRMOUR 5 THE PENALTY LEVIED BY THE ASSESSING OFFICER IN RESP ECT OF THE CLAIM OF DUTY DRAWBACK IS, THEREFORE, CONFIRMED. IN VIEW OF OUR FINDINGS GIVEN ABOVE, THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2012-13 IS HEREBY ALLOWED, WHEREAS, THE APPEAL FOR ASSESSMENT YEAR 2014-15 IS TREATED AS PARTLY ALLOW ED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- SD/- ( % & ' ($ / ANNAPURNA GUPTA) )* / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 25.11.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR