ITO, New Delhi V. M/s. J.C. Infosoft Technologies Ltd., New Delhi

ITA 3413/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4001 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JASPAL SINGH SETHI
• Keywords: Wrong claim
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-3413/DEL/2014 ( ASSESSMENT YEAR: 2009-10) ITO WARD 4(1) NEW DELHI VS J.C. INFOSOFT TECHNOLOGIES LTD. 13/30, EAST PATEL NAGAR, NEW DELHI. AAACJ8986B ASSESSEE BY SH. JASPAL SINGH SETHI, ADV. REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE OR DER DATED 28.03.2014 IN APPEAL NO. 0045/2012-13 PASSED BY TH E LD. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, NEW DELHI (HEREINAFTE R FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLOWING GROUNDS OF APPE AL: 1. WHETHER IN THE FACT AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE PENALTY OF RS. 13,47,914/ - IMPOSED BY THE AO U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME. 2. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS A ND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. DATE OF HEARING 21.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 3413/DEL/2014 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AFTER, A MEND OR FORGO ANY GROUNDS OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSMENT U/S 143(3) FOR THE AY 2009-10 IN THIS MATTER WAS COMPLETED ON 27.12.2011 AT AN INCOME OF RS. 1,07,97,833/- AS AGAINST THE NIL INCOME WRITTEN BY THE ASSESSEE. DURING THE ASSESSMENT THE AO FOUND THAT THE ASSESSEE COMPA NY CLAIMED A DEDUCTION OF RS. 1,09,82,482/- U/S 10A OF THE INCOM E TAX ACT, 1961 (FOR SHORT CALLED AS THE ACT) AND SHOWED THE INCOME AS NIL, WHEREAS THE ASSESSEE WAS REQUIRED TO COMPUTE THE INCOME U/S 115 JB AND SHOULD HAVE SHOWN THAT INCOME AS WORKED OUT IN TERMS OF TH E PROVISIONS OF THAT SAID SECTION. THE AO FURTHER FOUND THAT THE ASSESS EE CLAIMED EXCESS DEDUCTION U/S 10A OF THE ACT TO THE EXTENT OF RS. 1 ,95,852/- ON THE INCOME OF RS. 6,48,443/- EARNED ON ACCOUNT OF FLUCTUATION IN THE VALUE OF FOREIGN CURRENCY BUT WAS EXCLUDED BY THE ASSESSEE FORM THE TOTAL TURNOVER IN THE COMPUTATION FORMULA. AO ASSESSED THE INCOME OF THE ASSESSEE AT 1,07,97,833/- UNDER 115JB AND RS. 1,95,852/- UNDER NORMAL PROVISIONS. PENALTY PROCEEDINGS ARE INITIATED AND PENALTY OF RS . 12,25,000/- WAS LEVIED. IN APPEAL ON VERIFICATION OF THE RECORD RE LATING TO THE DETAILS OF THE INCOME TAX ASSESSMENTS OF THE ASSESSEE FOR THE LAS T 10 YEARS, LD. CIT(A) FOUND THAT THE ASSESSEE WAS OF THE IMPRESSIO N THAT, SINCE HIS BUSINESS WAS COVERED UNDER STPI ACT AND EXEMPT U/S 10A OF THE ACT FOR 3 ITA NO. 3413/DEL/2014 10 YEARS STARTING FROM 2000-01, THERE IS NO NEED TO PAY ANY TAX ON NORMAL PROVISION OR MAT TAX, BUT WHEN THE INCOME WAS DETER MINED BY THE AO U/S 143(3) OF THE ACT THE ASSESSEE PAID THE SAME. HOLDING THAT THE ASSESSEE WAS LABORING UNDER A BONA FIDE BELIEF THAT THEY ARE NOT REQUIRED TO PAY ANY TAX WITHIN THE 10 YEARS HOLIDAY YEARS CO VERED UNDER STPI ACT, THE LD. CIT (A) DELETED THE PENALTY. HENCE, THE RE VENUE IS IN APPEAL. 3. IT IS THE ARGUMENT OF THE LD. DR THAT FOR THE RE LEVANT ASSESSMENT YEAR THE EXEMPTION IS NOT AVAILABLE TO THE ASSESSEE , AS SUCH, THE ASSESSEE CANNOT PLEAD THAT THE PENALTY IS UNJUSTIFI ABLE. HE FURTHER SUBMITTED THAT IN SO FAR AS THE PROCEEDINGS U/S 271 (1)(C ) ARE CONCERNED MENS REA IS NOT REQUIRED. PER CONTRA, IT IS THE ARGUMENT OF THE LD. AR THAT IN THIS MATTER ONLY A WRONG CLAIM WAS PREFERRED BY THE ASSESSEE UNDER MISTAKEN IMPRESSION THAT SINCE THEIR BUSINESS IS CO VERED UNDER STPI ACT AND EXEMPT U/S 10A OF THE ACT FOR LONG 10 ASSESSMEN T YEARS COMMENCING FROM 2000-01, THERE WAS NO NEED TO PAY ANY TAX ON N ORMAL PROVISION OR MAT TAX, BUT AS A MATTER OF FACT THERE IS NEITHER C ONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS THEREOF AN D NOTHING WAS UNEARTHED BY THE AO DURING THE COURSE OF ASSESSMENT THAT WAS NOT FURNISHED BY THE ASSESSEE. HE, THEREFORE, WHILE PLACING RELIANCE ON THE DECISION REPORTED 4 ITA NO. 3413/DEL/2014 IN CIT VS. RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SC) PLEADED THAT PENALTY CANNOT BE SUSTAINED. 4. WE HAVE PERUSED THE MATERIAL PAPERS ON RECORD IN THE LIGHT OF THE ARGUMENTS ADDRESSED ON EITHER SIDE. IT IS AN ADMITT ED FACT THAT NOTHING WAS UNEARTHED DURING THE ASSESSMENT PROCEEDINGS THA T WAS NOT PRODUCED BY THE ASSESSEE. IT IS ONLY A MATTER OF DISALLOWAN CE OF EXEMPTION. THE FINDING OF THE LD. CIT(A) ON THIS ASPECT IS VERY RE ASONABLE IN AS MUCH AS HE FOUND THAT THE ASSESSEE WAS LABORING UNDER MISTA KEN BELIEF THAT FOR THE RELEVANT ASSESSMENT YEAR ALSO HE NEED NOT PAY ANY T AX ON NORMAL PROVISION OR MAT TAX IN AS MUCH AS THE BUSINESS OF THE ASSESSEE WAS COVERED UNDER STPI ACT AND EXEMPT U/S 10A OF THE AC T FOR 10 YEARS STARTING FROM THE AY 2000-01. FURTHER, IN THE ABSE NCE OF THE REQUIREMENT OF THE AO BEING SATISFIED THAT THERE IS EITHER CONC EALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, MERE DISALLOW ANCE BY THE AO DOES NOT AUTOMATICALLY NEED TO THE LEVY OF PENALTY. WHILE R ESPECTFULLY FOLLOWING THE DECISION REPORTED IN RELIANCE PETRO PRODUCTS CASE ( SUPRA), WE HOLD THAT THE PENALTY CANNOT BE SUSTAINED IN THIS MATTER. WE , THEREFORE, WHILE UPHOLDING THE FINDINGS OF THE LD.CIT (A) DISMISSED THE GROUNDS OF APPEAL. 5 ITA NO. 3413/DEL/2014 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (N.K. SAINI) (K.N. CHARY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 3413/DEL/2014