The ACIT, B.K. Circle, Palanpur V. M/s. Banpal Oil Chem Ltd., Palanpur

ITA 3025/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9233 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 18-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Assessment record
• Section: 80HHC; 80IB

Judgement Text

ITA NO. 3025 /AHD/201 3 A SSESSMENT Y EAR: 20 0 7 - 08 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] ITA NO. 3025 /AHD/201 3 ASSESSMENT Y EAR : 200 7 - 08 ASSISTANT COMMISSIONER OF INCOME, B.K. CIRCLE, PALANPUR . .... ............. APPELLANT V S. BANPAL OILCHEM LIMITED, ... ..... . RESPONDENT 5, GIITANJALI COMPLEX, PALACE ROAD, OPP. JILLA PANCHAYAT, AT - PALANPUR 385 001. DIST. BANASKANTHA. [PAN: AAA C B 8589 Q ] APPEARANCES BY: DINESH SINGH , FOR THE APPELLANT TUSHAR HEMANI , FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 14.02. 201 7 DATE OF PRONOUNCING THE ORDER : 17 . 0 2 .2017 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 3 RD OCTOBER , 201 3 , PASSED BY THE LEARNED CIT(A), DELETING PENALTY OF RS.1 2 , 0 0,0 00 / - IMPOSED ON THE ASSESSEE U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 200 7 - 08. 2. GRIEVANCE S RAISED BY THE APPELLANT ARE AS FOLLOWS : - 1A). THE LD. COMMISSIONER OF INCOME - TAX (AP PEALS) - X X, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.1 2,00,000/ - LEVIED U/S. 271(1)(C) OF THE ACT , WHEN ASSESSEE S EXPLANATION FOR FILING INCORRECT CLAIM WAS FOUND TO BE NOT BONAFIDE . 1B). THE LD. COMMISSIONER OF INCOME - TAX (AP PEALS) - X X , AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE EXPLANATION 1 TO SECTION 271(1) (C) OF THE ACT, ITA NO. 3025 /AHD/201 3 A SSESSMENT Y EAR: 20 0 7 - 08 PAGE 2 OF 5 WHICH LAYS DOWN THAT SUBMISSION OF INACCURATE PARTICULARS OF INCOME WAS LIABLE TO LEVY OF CONCEALMENT PENALTY U/S. 271(10 OF THE ACT. 2). O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISS IONER OF INCOME - TAX (APPEALS) - XX , AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (AP PEALS) - X X , AHMEDABAD MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE RELEVANT QUANTUM DISALLOWANCE OF RS.34, 8 1,679/ - W A S FAR EXCESSIVE CLAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF DEPB INCOME AND DFCE BENEFITS. THE ASSESSIN G OFFICER ALSO IMPOSED PENALTY UNDER SECTION 271(1)(C) FOR CONCEALING INCOME TO THE EXTENT OF RS.34,81,679/ - BY CLAIMING EXCESSIVE DEDUCTION U/S. 80IB . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) WHO DELETED THE PENALTY BY OBSERVING , INTER ALIA, AS FOLLOWS : - 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. IN THIS CASE, PENALTY HAS BEEN LEVIED BY THE A.O. ON THE EXCESSIVE CLAIM OF DEDUCTION U/S.80IB ON DEPB INCOME AND DFCE BENEFITS. ON ACCOUNT OF THESE TWO RECEIP TS DEDUCTION U/S. 80IB WAS D ISALLOWED BY THE A.O. TO THE TUNE OF RS.34,81,679/ - AND ADDED TO THE TO T AL INCOME. T HE PENALTY WAS LEVIED FOR THE REASON THAT THE APPELLANT HAS CONCEALED ITS INCOME TO THE EXTENT OF RS.34,81,679/ - BY CLAIMING EXCESS DEDUCTION U /S.80IB OF THE ACT. HENCE PENALTY FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS LEVIED TREATING THE DELIBERATE AND WILLFUL ATTEMPT BY THE APPELLANT. 5.4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE A.R. OF THE APPEL LANT SUB MITTED THAT ON IDENTICAL ISSUE IN APPELLANT'S OWN CASE IN A.Y. 2006 - 07 THE HON'BLE ITAT, AHMEDABAD HAS CONFIRMED THE ORDER OF THE CIT(A) DELETING THE PENALTY LEVIED AND DISMISSED THE REVENUE APPEAL. THE ISSUE WAS WITH REGARD TO THE EXCESS CLAIM OF 80IB DEDUCTION ON THE DEPB INCOME AND OTHER DFCE BENEFIT WHICH IS SIMILAR TO THE BENEFIT OF DEPB ON WHICH NO DEDUCTION U/S.80IB IS ALLOWABLE FOR THE REASON THAT MERE DISALLOWANCE ON LEGAL CLAIM DOES NOT ATTRACT PENALTY AND FURTHER THE ISSUE HAS TRAVELLED T HROUGH SUPREME COURT SHOWS THAT THE ISSUE WAS A DEBATABLE. HENCE THE APPELLANT COULD NOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. THE WORKING OF THE DEDUCTION U/S.80IB AND THE DETAILS OF INCOME ON ACCOUNT OF DEPB AND DFCE WERE VERY MUCH AVAILABLE ON RECORD IN THE RETURN OF INCOME AND THE CERTIFICATE OF THE C.A. IN THE FORM OF AUDIT REPORT FOR DEDUCTION U/S.80IB. HENCE THE SAME CANNOT BE SAID TO BE FURNISHING OF INACCURATE PARTICULARS SO AS TO LEVY CONCEALMENT OF PENALTY. IN THIS REGARD FO LLOWING JUDGMENTS ARE ALSO IMPORTANT TO BE DISCUSSED. ITA NO. 3025 /AHD/201 3 A SSESSMENT Y EAR: 20 0 7 - 08 PAGE 3 OF 5 (L) ACIT VS. CARRIER AIRCON LTD. [172 TAXMAN 173 ] (DELHI) [2008 ] 'SECTION 271( 1 )(C) OF THE INCOME - TAX ACT, 1961 - PENALTY - FOR CONCEALMENT OF INCOME - ASSESSMENT YEAR 1996 - 97 - ASSESSEE - COMPANY - WAS ENGAGED IN MANUFACTURE OF AIR CONDITIONERS AT ITS UNITS SITUATED AT GURGAON AND SILVASSA AND MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR BOTH UNITS. IT CLAIMED DEDUCTION UNDER SECTION 80 - IA IN RESPECT OF INCOM E FROM SILVASA UNIT AND DEDUCTION UNDER SECTION 8 0 - 1 IN RESPECT OF INCOM E FROM GURGAON UNIT - ASSESSING OFFICER PARTLY DISALLOWED ASSESSEE'S CLAI M ON GROUND THAT ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS UNDER SECTION 80 - 1 AND 8Q - IA - HE ALSO IMPOSED PENALTY UNDER SECTION 271(1) (C) UPON IT HOLDING THAT BY CLAIMING EXCESSIVE DEDUCTIONS UNDER SECTIONS 80 - 1 AND 80 - IA, ASSESSEE HAD CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF - WHETHER SINCE ASSESSEE HAD FURNISHED ALL FACTS RELATING TO DEDUCTION UNDER SECTION 80 - IA BEFORE ASSESSING OFFICE R IN RETURN AS ALSO IN ACCOUNTS SUBMITTED ALONG WITH RETURN, IT COULD BE SAID THAT THERE WAS NO ATTEMPT ON PART OF ASSESSEE TO CONCEAL ITS INCOME BY INFLATING PROFITS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IA AND, THEREFORE, NO PENALTY UNDER SECTION 271(L )(C) WAS IMPOSABLE UPON IT IN RESPECT OF CLAIM UNDER SECTION 80 - IA - HELD, YES - WHETHER SINCE AT TIME WHEN ASSESSEE FILED RETURN OF INCOME, LEGAL POSITION WITH REGARD TO CLAIM OF DEDUCTION UNDER SECTION 80 - 1 WAS NOT SETTLED AND ISSUE WAS QUITE DEBATABLE, ASSESSEE COULD NOT BE FAULTED FOR PLACING ITS OWN INTERPRETATION ON PROVISIONS OF SECTION 80 - 1 AND BY CLAIMING DEDUCTION UNDER SECTION 80 - 1 IN RESPECT OF COMMISSION INCOME AND INTEREST INCOME, IT COULD NOT BE SAID TO HAVE CONCEALED ITS INCOME - HELD , YES. (2) HCIL ARSSPL TRIVENI (JV) VS. ASSISTANT COMMISSIONER OF INCOME - TAX CIRCLE - 38(1) - 16 TAXMANN.COM 384 (DELHI) [2011] 'SECTION 271(L)(C), READ WITH SECTION 80 - IA, OF THE INCOME - TAX ACT, 1961 - PENALTY - FOR CONCEALMENT OF INCOME - ASSESSMEN T YEAR 2007 - 08 - WHETHER MERE ERRONEOUS CLAIM IN ABSENCE OF ANY CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS, CAN BE GROUND FOR LEVYING PENALTY - HELD, NO - ASSESSEE, A CIVIL CONTRACTOR, CLAIMED DEDUCTION UNDER SECTION 80IA IN TERMS OF REPORT IN FORM NO.LOCCB - ASSESSING OFFICER NOTICING THAT ASSESSEE DID NOT EXECUTE WORK ON ITS OWN, DISALLOWED CLAIM FOR DEDUCTION UNDER SECTION 80 - IA WHILE REFERRING TO EXPLANATION BELOW SECTION 80 - IA(13) AND ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(10(C) - ASSESSEE CONTENDED THAT AMENDMENT TO PROVISIONS OF SECTION 80 - IA VIDE FINANCE ACT, 2007 WITH EFFECT FROM DATED 1 - 4 - 2000 WAS MADE JUST BEFORE DATE OF FILING OF RETURN AND ESCAPED ATTENTION OF ASSESSEE AND AUDITORS, AND FURTHER DEDUCTION HAVING BEEN CLAIMED ON STRENGTH OF PRESCRIBED REPORT OF CA, NO PENALTY COULD BE LEVIED - ASSESSING OFFICER DID NOT ACCEPT ASSESSEE 'S CONTENTION AND LEVIED PENALTY WHICH WAS UPHELD BY COMMISSIONER (APPEALS) - WHETHER WHEN CLAIM FOR DEDUCTION UNDER SECTION 80 - IA WAS DULY SUPPO RTED BY CERTIFICATE OF CHARTERED ACCOUNTANT IN PRESCRIBED FORM, NO FAULT COULD BE FOUND WITH CLAIM OF ASSESSEE THAT IT HAD CLAIMED DEDUCTION IN A BONAFIDE MANNER - HELD, YES WHETHER MERE FACT THAT REPORT PREPARED BY CA IN FORM 10CCB WAS NOT IN ACCORDANCE WITH PROVISIONS OF SECTION 80 - IA(7) WAS ENOUGH TO HOLD THAT MISTAKE ITA NO. 3025 /AHD/201 3 A SSESSMENT Y EAR: 20 0 7 - 08 PAGE 4 OF 5 WAS NOT BONA FIDE - HELD, NO - WHETHER THERE BEING NOTHING ON RECORD TO SHOW THAT ANY MATERIAL PARTICULARS WERE CONCEALED OR INACCURATE PARTICULARS WERE FURNISHED, LEVY OF PENALTY WAS UNJ USTIFIED IN INSTANT CASE - HELD, YES' (3) CHEMFILT VS. ASSTT. COMMISSIONER OF INCOME - TAX - 25 TAXMANN .C OM 1 45 (AHD) [2012] . 'HAVING HEARD THE SUBMISSIONS OF BOTH SIDES AND CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE AS DISCUSSED HEREINABOV E, SINCE THE BASIS OF REVISION OF THE CALCULATION OF DEDUCTION UNDER SECTION 80HHC OF THE INCOME - TAX ACT WAS VERY MUCH BEFORE THE ASSESSING OFFICER AND THAT REVISION WAS BASED UPON THE FACTS AND THE FIGURES ALREADY AVAILABLE ON THE ASSESSMENT RECORD, THERE FORE, THERE WAS NO OCCASION TO ALLEGE THAT ' THERE WAS CONCEALMENT OF FACTS ON THE PART OF THE ASSESSEE. MOREOVER, THE ASSESSEE HAS ALSO DEMONSTRATED THE REASON FOR THE SAID REVISION WHICH APPEARED TO BE LOGICAL, HENCE, EVEN OTHERWISE THIS IS NOT THE CASE OF FURNISHING OF INACCURATE PARTICULARS SO AS TO LEVY CONCEALMENT PENALTY. IN THE RESULT, FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT DECISION IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS P. LTD, REPORTED AT [2010] 322 ITR 158 (SC), WE HEREBY HOLD THAT THE IMPUGNED PENALTY WAS WRONGLY LEVIED. WE HEREBY DIRECT TO DELETE THE PENALTY. (4) GEETA (RINGS) (P) LTD. ACIT (2012) 247 CTR 620 (GUJ.) T HE PREPOSITIONS OF THE ABOVE CASES ARE APPLICABLE OVER THE FACTS OF THE CASE. SO FROM THE VARIOUS JUDGEMENT S IT IS APPARENT THAT PENALTY U/S.271( 1)(C) CANNOT BE LEV IED ON THE DISALLOWANCE OF THE LEGAL CLAIMS OF DEDUCTION. IN APPELLANT'S OWN CASE FOR A.Y. 2006 - 07, THE HON'BLE ITAT HAS DELETED THE PENALTY ON THE SAME FACTS. FOLLOWING THE SAME, PENALTY LEVIED BY THE A.O. IS UNWARRANTED, SAME IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. THE ASSESSING OFFICER IS AGGRIEVED AND IN APPEAL BEFORE ME. 5 . I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN TH E LIGHT OF THE APPLICABLE LEGAL POSITION. 6. I SEE NO REASONS TO INTERFERE IN THE WELL REASONED CONCLUSIONS ARRIVED AT BY THE LEARNED C IT(A) . THE CLAIM OF THE ASSESSEE MAY BE INCORRECT BUT IT WAS NOT DEVOID OF ANY MERITS AT ALL. THE ISSUE PERTAINING TO Q UANTUM ADDITIONS HAD TRAVELLED RIGHT UPTO HON BLE SUPREME COURT BEFORE IT GOT SETTLED. THE ASSESSEE CANNOT BE IMPOSED CONCEALMENT PENALTY FOR MAKING SUCH A CLAIM AND THAT TOO IN A FAIR AND TRANSPARENT MANNER. I, ITA NO. 3025 /AHD/201 3 A SSESSMENT Y EAR: 20 0 7 - 08 PAGE 5 OF 5 THEREFORE, APPROVE THE CONCLUSION ARRIVE D AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7 . IN THE RESULT , THE APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF FEBRUARY, 2017 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 17 TH DAY OF FEBRUARY , 2017 . PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD