Snacko Bisc Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 3043/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4934 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 03-04-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 28-10-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: G S D BABU RETD IRS
• Keywords: Revised return
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' . #$ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.3043/MDS/2016 ( / ASSESSMENT YEAR: 2005-06) M/S. SNACKO BISC PVT. LTD., INDIA LAND TECH PARK, TOWER B, 5 TH FLOOR, III MAIN ROAD, AMBATTUR INDUSTRIAL ESTATE, NO.23, TEMPLE STREET, CHENNAI 600 028. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE VI(3), NUNGAMBAKKAM, CHENNAI 34. PAN: AABCS5170P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI G.S.D. BABU, RETD. IRS /RESPONDENT BY : MR. A.V. SREEKANTH, JCIT /DATE OF HEARING : 03.04.2017 ! /DATE OF PRONOUNCEMENT : 07.04.2017 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-15 , CHENNAI DATED 21.03.2016 IN ITA NO.188/CIT(A)-15/13-14 PASSED U/S .250(6) R.W.S. 271(1)(C) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERR ED IN CONFIRMING THE 2 ITA NO.3043/MDS/2016 PENALTY OF RS.3,36,622/- LEVIED BY THE ASSESSING OF FICER U/S.271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACT URING AND SELLING OF BISCUITS, FILED ITS RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2005-06 ON 31.10.2005 AND SUBSEQUENTLY FILED REVISED RETURN ON 22.02.2006. THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS AND F INALLY ORDER U/S. 143(3) WAS PASSED ON 14.12.2007 WHEREIN THE LD.AO M ADE ADDITION OF RS.9,19,921/-, SINCE THE ASSESSEE HAS NOT TAKEN INT O ACCOUNT OF THE SAME WHICH IS REFLECTED IN THE TDS CERTIFICATE ISSU ED BY M/S. BRITANNIA INDUSTRIES LIMITED, BANGALORE IN THE NAME OF THE AS SESSEE AS PAYMENT TO CONTRACTORS. THEREAFTER PENALTY PROCEEDINGS WERE INITIATED. IN THE PENALTY PROCEEDINGS, IT WAS EXPLAINED BY THE ASSESS EE THAT THE AMOUNT OF RS.9,19,921.89 RECEIVED BY THE ASSESSEE FROM M/S . BRITANNIA INDUSTRIES LIMITED, BANGALORE WAS NOTHING BUT REIMB URSEMENT OF THE AMOUNT PAID TO THE EMPLOYEE OF THE ASSESSEE COMPANY WHO WAS ASSIGNED TO WORK FOR M/S. BRITANNIA INDUSTRIES LIMI TED BANGALORE. HENCE, THE ASSESSEE HAD NOT ENJOYED ANY INCOME OUT OF THE TRANSACTION BECAUSE THE ENTIRE AMOUNT OF RS.9,19,92 1.89 RECEIVED BY THE ASSESSEE WAS PAID TO THE EMPLOYEE OF THE ASSESS EE AS SALARY. HOWEVER, THE LD.AO REJECTING THE CONTENTION OF THE ASSESSEE AND 3 ITA NO.3043/MDS/2016 LEVIED PENALTY INVOKING SECTION 271(1)(C) OF THE AC T BY STATING AS UNDER:- DURING THE COURSE OF PENALTY PROCEEDINGS AS AUTHOR IZED REPRESENTATIVE APPEARED AND FILED A LETTER DATED 17 /06/2008. IN IT, IT WAS CONTENDED THAT IF THE DEPARTMENT WISHES TO TAX RS.9,19,921.90 AS INCOME, THEN THE CORRESPONDING EXPENDITURE SHOULD A LSO BE ALLOWED. ALLOWING OR NOT ALLOWING THE CORRESPONDING EXPENDIT URE IS NOT THE ISSUE ON HAND. NOW AS FAR AS THIS PENALTY PROCEEDI NGS ARE CONCERNED, IN FACT BY CONTENDING THAT IF THE DEPART MENTS WISHES TO TAX THE INCOME .... ASSESSEE IMPLIEDLY HAS ADMITTED THAT THE INCOME IS OMITTED TO BE INCLUDED IN THE RETURN OF INCOME. AS I AM CONVINCED THAT THE ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF THE CONTRACT RECEIPTS TO THE EXTENT OF RS.9,19,921.89 AND HENCE BY INVOKING SEC 271(1)(C) I LEVY THE LESS OR OF FOLLOWING PENALTY. 100% OF TAX SOUGHT TO BE ADDED 3,21,973 + SC + CESS 300% -DO- 9,65,9 18+ SC + CESS IN VIEW OF THE COOPERATION EXTENDED BY THE ASSESSEE IN FILING DETAILS CALLED FOR BY THE DEPARTMENT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE MINIMUM PENALTY VIZ.L00% OF THE TAX SOUGHT TO BE EVADED RS.3,36,622/- IS LEVIED. 4 ITA NO.3043/MDS/2016 4. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW AND OBSERVING AS UNDER:- NO CLAIM OF EXPENDITURE CAN BE ENTERTAINED DURING THE PENALTY PROCEEDINGS. THE APPELLANT WAS IN THE KNOWLEDGE OF THE TDS CERTIFICATE ISSUED BY THE ASSOCIATE CONCERN AND CHO SE TO CLAIM ITS CREDIT BUT NEITHER OFFERED INCOME NOR ANY EXPLANATI ON. THE ACTION OF AO IN LEVYING PENALTY U/S 271(1)(C) OF THE IT ACT I S CONFIRMED. THESE GROUNDS OF APPEAL ARE DISMISSED. 5. BEFORE US THE LD.AR REITERATED THE SUBMISSION MA DE BEFORE THE REVENUE AUTHORITIES ON THE EARLIER OCCASIONS AND TH E LD.DR COULD NOT CONVINCINGLY CONTROVERT TO THE SUBMISSION OF THE LD .AR ON MERITS. 6. AT THE OUTSET, WE FIND MERIT IN THE SUBMISSION O F THE LD.AR. IT IS NOT DISPUTED THAT THE AMOUNT OF RS.9,19,921/- RECEI VED BY THE ASSESSEE FROM M/S. BRITANNIA INDUSTRIES LIMITED, BA NGALORE IS NOTHING BUT REIMBURSEMENT OF SALARY PAID TO THE ASSESSEES EMPLOYEE WHO HAD RENDERED SERVICE TO M/S. BRITANNIA INDUSTRIES LIMIT ED, BANGALORE. BY MATCHING THE RECEIPT OF RS.9,19,921/- WITH THE PAYM ENT OF SALARY OF THE SAME AMOUNT TO THE EMPLOYEE OF THE ASSESSEE THERE I S NO INCOME ACCRUING TO THE ASSESSEE COMPANY. THEREFORE PRIMA FACIE ON MERITS, WE FIND THAT THE REVENUE DOES NOT HAVE A CASE. WE ALSO FAIL TO UNDERSTAND AS TO WHY THE ASSESSEE COMPANY HAS NOT C ARRIED THE 5 ITA NO.3043/MDS/2016 MATTER ON APPEAL BEFORE THE APPELLATE AUTHORITIES. HOWEVER IN THIS SITUATION, WE DO NOT FIND IT APPROPRIATE FOR INVOKI NG THE PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE HAS NEITHER FURNISHED INCORRECT PARTIC ULARS OF ITS INCOME OR CONCEALED ITS INCOME. THEREFORE WE HEREBY DIREC T THE LD.AO TO DELETE THE PENALTY OF RS.3,36,622/- LEVIED BY HIM. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THE 07 TH APRIL, 2017. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) ' #$ /JUDICIAL MEMBER #$ / ACCOUNTANT MEMBER %' /CHENNAI, &# /DATED 07 TH APRIL, 2017 JR # () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. /1 /GF