The ACIT, Circle-8, Ahmedabad V. M/s. Trisuns Chemicals Inds. Ltd., Ahmedabad

ITA 309/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62983 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-08-2012
• Assessment Year: 1992-1993
• Appeal Filed On: 01-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH SR DR
• Section: 143(3); 80HHC; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.309-310/AHD/2010 ASSESSMENT YEARS :1992-93 & 1996-97 ACIT, CIRCLE-8, AHMEDABAD V/S . TRISUNS CHEMICALS INDUSTRIES LTD., 601, ANURAG AAPRTMENT, B/H VIDHYA MANDIR SCHOOL, USMANPURA, AHMEDABAD [ PAN NO.AAACT 7086N ] / APPELLANT .. / RESPONDENT) /BY ASSESSEE NONE /BY REVENUE SHRI D.K. SINGH, SR-DR /DATE OF HEARING 24-08-2012 ! /DATE OF PRONOUNCEMENT 05-10-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THESE ARE TWO APPEALS FILED BY THE REVENUE DIRECTE D AGAINST THE COMMON ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS) -XIV, AHMEDABAD (CIT(A) FOR SHORT) DATED 20-11-2009 FOR THE ASSES SMENT YEARS 1992-93 & 1996-97. THE REVENUE HAS RAISED COMMON GROUND EXCEP T FIGURE IN DELETING PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). ALL THESE ARE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.309-310/AHD/2010 A.YS. 92-93 & 96-97 ACIT, CIR-8, ABD V. TRISUNS CHEMICALS INDS. LTD. P AGE 2 2. BRIEF FACTS ARE THAT ASSESSEE IS ENGAGED IN BUSI NESS OF CHEMICAL. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.11,06,080/- ALONG WITH AUDITED ACCOUNTS REPORT U/S. 44AB OF THE ACT. SUBSEQUENTLY THE ASSESSMENT WAS REOPENED U/S. 143(3) R.W.S. 147 OF T HE ACT. THE PENALTY PROCEEDINGS WERE ALSO INITIATED AND PENALTY WAS IMP OSED ON THE BASIS THAT DISALLOWANCE WAS MADE U/S. 80HHC FOR CLAIMING EXCES S DEDUCTION U/S. 80HHC OF THE ACT. THE ASSESSEE FEELING AGGRIEVED BY THIS ORDER FILED APPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISS IONS OF ASSESSEE DELETED THE PENALTY LEVIED BY ASSESSING OFFICER. 3. NOW THE REVENUE FILED THIS APPEAL BEFORE US FOR DISALLOWANCE. 4. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE THOUGH NOTICE WAS SERVED UPON THE ASSESSEE THROUGH REGISTE RED POST. HENCE, WE PROCEED TO DISPOSE OFF THE APPEAL AFTER HEARING LD. DR OF THE REVENUE. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA LS AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) DELETED THE PENALTY LEVIED BY ASSESSING OFFICER AT PAGES 5 & 6 OF HIS ORDER, WHICH IS REPRODUCED HE REINBELOW:- WITH DUE REGARDS TO ALL THE CASES RELIED ON BY THE AO THE FACTS OF THE APPELLANT CANNOT BE REASONED WITH THE RATIO OF THOS E CASE LAWS. IN FACT, THE APPELLANT DURING THE APPELLATE PROCEEDINGS, HAS GIVEN DIRECT JUDGEMENT APPLICABLE IN THE CASE OF APPELLANT. DECI SION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PAWAN KR. JAIN (2008) 298 ITR 443 AND CIT VS. SHRI RAM HONDA POWER EQUIPMENT (2007) 289 ITR 475 CLEARLY SHOWS THAT NEETING OF INTEREST WITH ESTABLI SHMENT OF NEXUS IN RESPECT OF CLAIM OF DEDUCTION U/S. 80HH OF THE ACT ARE STILL DEBATABLE IN THE FACTS AND CIRCUMSTANCES OF THEREFORE, CASES. HO NBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. RAJASTHAN SPINNING & GINNNING MILLS (2009) 224 CTR (SC) 1 EXPLAINED ITS EARLIER DECISION OF U.O.I. VS. DHARMENDRA TEXTILES PROCESSORS (2008) 219 CTR (SC) 617 WHICH IS MAINLY RELATED TO MANDATORY PENALTY PROCEEDINGS IN RESPECT OF SECTION 11 AC OF CENTRAL EXCISE ACT. IT WAS HELD THAT PENAL TY PROCEEDINGS ARE SEPARATE THAN ASSESSMENT PROCEEDINGS AND IN THE CAS E OF INCOME TAX PROCEEDINGS, THESE PENALTY PROCEEDINGS ARE NOT AUTO MATIC. THE HONBLE ITAT AHMEDABAD C BENCH IN THE CASE OF DCIT VS. JAY CHEMICAL INDUSTRIES LTD . ( ITA NO.2515/AHD/2006 A.Y. 2001-02) VIDE ITS ORDER DT: ITA NO.309-310/AHD/2010 A.YS. 92-93 & 96-97 ACIT, CIR-8, ABD V. TRISUNS CHEMICALS INDS. LTD. P AGE 3 27-02-2009 AT PARA 6 HELD IN RESPECT OF DISALLOWANC E MADE U/S. 80HGHC AND PENALTY IMPOSED FOR THE SAME THAT SINCE ISSUE INVOLVED FOR DISALLOWANCE IS DEBATABLE (DPB ELIGIBILITY OF D EDUCTION) HENCE PENALTY CANNOT BE IMPOSED. THIS BEING A DIRECT JUDG EMENT WHOSE RATIO IS SQUARELY IN THE CASE OF APPELLANT. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. S. DHANABAL (2009) 309 ITR 268 HELD IN RESPECT OF PENALTY IMPOSED FOR DISALLOWANCE U/S. 80HHE THAT EX PLANATION OFFERED BY APPELLANT IS BONA FIDE SINCE APPELLANT CLAIMED D EDUCTION ON THE BASIS OF AUDITOR AS PER STATUTORY REQUIREMENT AND FURTHER APPELLANT DISCLOSED ALL MATERIAL FACTS, HENCE PENALTY IS NOT APPLICABLE . TAKING INTO CONSIDERATION ALL THESE CASE LAWS, THE PENALTY IN T HE CASE OF APPELLANT FOR DEBATABLE VIEW ABOUT DISALLOWANCE U/S.80HHC IS NOT SUSTAINABLE IN THE EYES OF LAW. THE PENALTIES SO IMPOSED FOR BOTH HE YEARS, THEREFORE, DIRECTED TO BE DELETED. THE APPELLANT WILL GET RELI EF OF RS.13,48,022/- AND RS.11,07,237 FOR A.YS. 1992-93 & 1996-97 RESPECTIVE LY. WE DO NOT FIND ANY INFIRMITY INTO THE ORDER OF LD. CIT(A) AS HE HAS CONSIDERED ALL ASPECTS OF THE MATTER AND RETURNED A FINDING TH AT THE ASSESSEE HAD DISCLOSED ALL MATERIAL PARTICULARS. THIS IS NOT CON TROVERTED BY REVENUE. THEREFORE, THE ORDER OF LD. CIT(A) IS HEREBY CONFIR MED AND THE APPEALS OF THE REVENUE ARE REJECTED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY REVENUE AR E DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP '#$- 05/10/2012 *+, - . . . . //0 //0 //0 //0 10 10 10 10 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. #,#/4 5 / CONCERNED CIT 4. 5- / CIT (A) 5. 0 78 ///4, /4!, *+, / DR, ITAT, AHMEDABAD 6. 8;< => / GUARD FILE. ITA NO.309-310/AHD/2010 A.YS. 92-93 & 96-97 ACIT, CIR-8, ABD V. TRISUNS CHEMICALS INDS. LTD. P AGE 4 BY ORDER/ . , /TRUE COPY/ ?/* # /4!, *+, - STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 03/10 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 04/10 4) DATE OF CORRECTION 04/10 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 05/10 7) ORDER UPLOADED ON 05/10 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 05/10