The ACIT,(OSD)Circle-5, Ahmedabad V. Prasad International Ltd., Ahmedabad

ITA 3090/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6725 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 18-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH K DAS
• Assessee Lawyers: J M TRIVEDI
• Keywords: Wrong claim; Difference of opinion
• Section: 80HHC; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 29.4.11 DRAFTED ON: 29.4 .11 ITA NO.3090/AHD/2010 ASSESSMENT YEAR : 2007-08 THE ACIT (OSD) CIRCLE-5 AHMEDABAD VS. PRASAD INTERNATIONAL LTD. 601/2, SURYARATH OPP.WHITE HOUSE PANCHVATI, AHMEDABAD PAN/GIR NO. : AAACP 9394 B ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI RIGNESH K.DAS, D.R. RESPONDENT BY: SHRI J.M. TRIVEDI O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -XVI, AHMEDABAD DATED 01/09/2010 AND THE ONLY SUBSTANTIVE GROUND IS IN RESPECT OF DELETION OF PENALTY OF RS.2,43,000/- LEVIED U/S.271 (1)(C) OF THE ACT. 2. FACTS IS BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE ACT DATED 13/03/2009 AN D ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 26/12/2006 WERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTURIN G AND EXPORT OF CHEMICAL, DYES, AND PIGMENTS. THE ONLY REASON FOR THE IMPOSITION FOR THE IMPUGNED PENALTY WAS ON ACCOUNT OF ALLEGED WRONG CLAIM OF ITA NO.3090/AHD /2010 ACIT VS. PRASAD INTERNATIONAL LTD. ASST.YEAR 2004-05 - 2 - DEDUCTION U/S.80HHC OF THE I.T.ACT. THE EXPLANATI ON OF THE ASSESSEE WAS THAT THE DEDUCTION U/S.80HHC WAS CLAIM ED ON THE BASIS OF A CERTIFICATE ON FORM NO.10CCAC ISSUED BY A CHAR TERED ACCOUNTANT. HOWEVER, THE AO WAS NOT CONVINCED AND PENALTY WAS IMPOSED. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LD.CIT(A) HAS FOLLOWED A DECISION PRONOU NCED IN ASSESSEES OWN CASE BY THE TRIBUNAL IN QUANTUM APPE AL AND ON THAT BASIS DELETED THE PENALTY. RELEVANT PARAGRAPH REPR ODUCED BELOW:- 2.1. IN THE PENALTY ORDER, THE AO HAS STATED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 30/10/2004 AND TH E ASSESSMENT WAS COMPLETED UNDER SECTION 143[3] WHERE BY THE DEDUCTION UNDER SECTION 80HHC HAS BEEN REDUCED FROM RS.863845 TO RS.182711 AND THE PENALTY UNDER SEC. 2 71(1)(C) WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME THEREBY CONCEALING THE INCOME. THE LEARNED CIT(APP EALS) HAS CONFIRMED THE ADDITION AND THEREFORE A SHOW-CAU SE NOTICE WAS ISSUED AS TO WHY THE PENALTY BE NOT LEVIED. TH E ASSESSEE REPLIED TO THE AO THAT THE DEDUCTION WAS CLAIMED O N THE BASIS OF THE CERTIFICATE GIVEN BY THE CHARTERED ACCOUNTAN T IN FORM NO.10CCAC AND THEREFORE THE CLAIM WAS BONA FIDE. T HE ASSESSEE FURTHER STATED THAT IN THEIR OWN CASE ON S IMILAR ISSUE FOR A.Y. 2000-01, THE ITAT HAS DELETED THE PENALTY IN ITA NO.2761/AHD/2005 READ WITH MISCELLANEOUS APPLICATIO N NO.210/AHD/2008. THE AO DID NOT ACCEPT THIS EXPLA NATION AND STATED THERE WAS LOSS AND AFTER REDUCING FROM T HAT 90% OF EXPORT INCENTIVE, THE ASSESSEE HAD CLAIMED DEDUCTIO N UNDER SECTION 80HHC OF RS.863845. WHEN THERE IS NEGATIVE BUSINESS PROFIT THE DEDUCTION IS NOT AVAILABLE AND IN THIS REGARD THE AO RELIED ON SEVERAL DECISIONS OF VARIO US HIGH COURT. HE THEREFORE, LEVIED THE PENALTY FOR MAKING THE WRONG CLAIM LEADING TO CONCEALMENT OF INCOME. ITA NO.3090/AHD /2010 ACIT VS. PRASAD INTERNATIONAL LTD. ASST.YEAR 2004-05 - 3 - . 2.3. IN HAVE CONSIDERED THE SUBMISSION MADE BY T HE APPELLANT AND OBSERVATION OF THE AO. IT IS CLEAR T HAT THE HONORABLE ITAT HAS ALLOWED ASSESSEES APPEAL AND DE LETED THE PENALTY UNDER SE.271(1)(C) FOR ASSESSMENT YEAR 2000-01 AS STATED ABOVE. THE FACTS IN CURRENT YEAR ARE SAME A ND HENCE FOLLOWING THE DECISION OF HONORABLE ITAT IN THE APP ELLANTS OWN CASE THE PENALTY FOR THIS YEAR IS ALSO DELETED. 3. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTICED THAT IN ASSESSEES OWN CASE FOR A.Y.2000-01 A PENA LTY U/S.271(1)(C) WAS DELETED BY THE RESPECTED CO-ORDINATE BENCH D AHMEDABAD IN ITA NO.2761/AHD/2005 ORDER DATED 22/08/2008 TITL ED AS PRASAD INTERNATIONAL PVT.LTD. VS. ITO IN THE FOLLOWING MAN NER:- 2. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESS EE, SHRI J.M.TRIVEDI, APPEARED AND PRODUCED COPY OF THE DECI SION OF THE ITAT AHMEDABAD D BENCH IN ITA NO.1482/AHD/200 4 DATED 29-7-2008 FOR A.Y. 2000-2001 IN THE ASSESSEE S OWN CASE, WHEREIN THE TRIBUNAL RESTORED THE ISSUE REGAR DING COMPUTATION OF DEDUCTION UNDER SECTI9ON 80HHC, BACK TO THE FILE OF AO. LEARNED COUNSEL OF THE ASSESSEE FURTHE R CONTENDED THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 8 0HHC ON THE BASIS OF CERTIFICATE IN FORM NO.10CCAC ISSUED B Y THE CHARTERED ACCOUNTANT. IN THESE CIRCUMSTANCES, ON A CCOUNT OF DIFFERENCE OF OPINION, NO PENALTY UNDER SECTION 271 (1)(C) IS LEVIABLE. FOR THIS RELIANCE WAS PLACED ON THE DECI SION OF PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS . DEEP TOOLS PVT., 274 ITR 603 AND CONTENDED THAT FACTS OF THE ASSESSEE ARE IDENT6ICAL WITH THAT OF PUNJAB AND HAR YANA HIGH ITA NO.3090/AHD /2010 ACIT VS. PRASAD INTERNATIONAL LTD. ASST.YEAR 2004-05 - 4 - COURT (SUPRA), THEREFORE, LEVY OF PENALTY BY THE AO AND SUSTAINED THE SAME BY THE CIT(A) BE CANCELLED. 4. RESPECTFULLY FOLLOWING THE ABOVE DECISION AS ALS O CONSIDERING THE CIRCUMSTANCES OF THE CASE, WE HEREBY UPHOLD THE VIEW TAKEN BY THE LD.CIT(A) AND DISMISS THIS GROUND OF THE REVENU E. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 29/ 4 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 29/ 04 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XVI, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.3090/AHD /2010 ACIT VS. PRASAD INTERNATIONAL LTD. ASST.YEAR 2004-05 - 5 - 1. DATE OF DICTATION..29.4.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.4.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S29.4.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.4.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER