M/s. Backbone Enterprise JV, Backbone Project Ltd., RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Circle-1, RAJKOT-GUJARAT

ITA 357/RJT/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2364 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 30-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: DM RINDANI
• Keywords: Wrong claim; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , , ! BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.357/RJT/2013 ( / ASSESSMENT YEAR : 2001-02) M/S.BACKBONE ENTERPRISE JV BACKBONE PROJECT LTD. 417, SHIVAM COMPLEX DR.YAGNIK ROAD RAJKOT / VS. THE ASST.CIT CIRCLE-I, RAJKOT & ./ ./ PAN/GIR NO. AAAAB 1532 F ( &( / APPELLANT ) .. ( )&( / RESPONDENT ) &( * / APPELLANT BY : SHRI D.M. RINDANI, C.A. )&( + * / RESPONDENT BY : SHRI C.S. ANJARIA, SR.DR ,-. + / DATE OF HEARING 10/12/2015 /0 + / DATE OF PRONOUNCEMENT 20/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-II, RAJKOT [CIT(A) IN SHORT] DATED 29/8/2013 PERTAINING TO ASSESSMENT YEAR (AY) 2001-02. THE ASSESSEE HAS RAISED THE FOLLOWING SOLITARY GROUND O F APPEAL:- ITA NO.357/RJT/ 2013 M/S.BACKBONE ENTERPRISE JV BACKBONE PROJECT LT D. VS. ACIT ASST.YEAR 2001-02 - 2 - (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II , RAJKOT HAS ERRED IN DISMISSING THE APPEAL AND WHEREBY UPHOLDIN G THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC. 271(1)(C ) OF THE ACT, LEVYING PENALTY OF RS.5,80,098/- IS UNWARRANTED, UN JUSTIFIED AND BAD IN LAW. YOUR APPELLANT RESERVE THE RIGHT IN ADDITION OR ALT ERATION IN THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSING OFFICER (AO IN SHORT) OBSERVED THAT THE ASSESSEE HAD CLAIMED DE DUCTION U/S.80IA OF THE ACT. HOWEVER, THE STATUS OF THE ASSESSEE IS AN AOP. ONE MEMBER OF THE AOP IS A FIRM AND OTHER IS A COMPANY. THERE FORE, THE ASSESSEE WAS NOT ENTITLED DEDUCTION U/S.80IA OF THE ACT. THE AO ISSUED A NOTICE U/S.154 OF THE ACT, CALLING UPON THE ASSESSEE AS TO WHY THE DEDUCTION U/.80IA SHOULD NOT BE DISALLOWED. SUBSEQUENT TO TH E SERVICE OF THE NOTICE, THE ASSESSEE FILED A REVISED RETURN ON 15/0 3/2003 VIDE RECEIPT NO.741 IN WHICH THE CLAIM OF DEDUCTION U/S.80IA HA S BEEN WITHDRAWN AND THE REFUND CLAIMED WAS REDUCED TO RS.6,56,714/- AS AGAINST RS.11,71,543/- CLAIMED IN THE ORIGINAL RETURN. T HE AO ASSESSED THE INCOME U/S.143(3) OF THE ACT ON BASIS OF THE ORIGIN AL RETURN AND TREATED THE REVISED RETURN AS NOT A VALID RETURN. THE AO WHILE FRAMING THE ASSESSMENT ALSO INITIATED PENALTY PROCEEDINGS U/S.2 71(1)(C) OF THE ACT AND SUBSEQUENTLY IMPOSED A PENALTY ON THE DISALLOWANCE OF RS.14,66,747/- MADE ON ACCOUNT OF WRONG CLAIM OF DEDUCTION U/S.80I A OF THE ACT. THE ASSESSEE WAS IMPOSED A PENALTY OF RS.5,80,098/- ON THE SUM OF ITA NO.357/RJT/ 2013 M/S.BACKBONE ENTERPRISE JV BACKBONE PROJECT LT D. VS. ACIT ASST.YEAR 2001-02 - 3 - RS.14,66,747/-. THE ASSESSEE BEING AGGRIEVED BY THE PENALTY ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUE D THAT THE RETURN WAS REVISED WITHIN THE PRESCRIBED TIME WHEN IT CAME TO THE NOTICE OF THE ASSESSEE, THAT THE CLAIM WAS WRONGLY MADE. HE FURT HER SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED SUCH DEDUCTION U/S.80IA OF THE ACT IN EARLIER YEARS, THEREFORE THE INFERENCE OF THE LD.CIT(A) TH AT THE MISTAKE WAS NOT BONAFIDE. HE FURTHER SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN TREATING THE REVISED RETURN AS INVALID RETURN. WHEN THE RET URN WAS DULY FILED WITHIN THE PRESCRIBED TIME, UNDER THE FACTS, HE SUB MITTED THAT THE LEVY OF PENALTY WAS NOT JUSTIFIED. 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD.CIT(A) HAS FOLLOWED VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF HIS DECISION. LD.SR.D R HAS RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ZOOM COMMUNICATIONS REPORTED AT (2010) 233 CTR 465(DEL.) . 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW ITA NO.357/RJT/ 2013 M/S.BACKBONE ENTERPRISE JV BACKBONE PROJECT LT D. VS. ACIT ASST.YEAR 2001-02 - 4 - AS WELL AS THE DECISION RELIED UPON BY THE LD.SR.D R. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE REVISED ITS RETURN WIT HIN THE PRESCRIBED TIME AND OFFERED THE INCOME FOR TAX WHICH WAS CLAIMED AS DEDUCTION U/S.80IA OF THE ACT. THE DEFENCE OF THE ASSESSEE IS THAT TH E CLAIM OF DEDUCTION WAS BONAFIDE AND, THEREFORE, HE RELIED ON THE JUDGEMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. RELIANCE PETR OPRODUCTS (P.) LTD. REPORTED AT (2010) 322 ITR 158(SC). AFTER CONSIDER ING THE TOTALITY OF THE FACTS OF THE PRESENT CASE AND THE SUBMISSIONS OF TH E PARTIES, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIE D IN CONFIRMING THE PENALTY. THE LD.CIT(A) INFERRED THAT THE MISTAKE W AS NOT BONAFIDE, HOWEVER THE FACTS ON RECORD SPEAKS OTHERWISE. IT I S NOT INITIAL YEAR WHERE THE ASSESSEE HAS MADE CLAIM U/.80IA OF THE ACT. HA D THE INTENTION OF THE ASSESSEE TO CLAIM A WRONG DEDUCTION THIS COULD HAVE BEEN DONE IN EARLIER YEARS ALSO. MOREOVER, THE ASSESSEE IN THE AUDIT R EPORT FURNISHED ALONG WITH INCOME-TAX RETURN, STATED THAT ADMISSIBLE DEDU CTION UNDER CHAPTER VI-A AT RS.NIL. THE AO HAS RECORDED THAT IN THE IM MEDIATELY PRECEDING YEAR, O SUCH CLAIM WAS MADE U/S.80IA OF THE ACT. T HEREFORE, HAD THE INTENTION OF THE ASSESSEE TO CLAIM A WRONG DEDUCTIO N, IT COULD HAVE BEEN DONE IN EARLIER YEAR ALSO. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY. THUS, GROUND RAISED BY THE ASSESSEE IS HE REBY ALLOWED. ITA NO.357/RJT/ 2013 M/S.BACKBONE ENTERPRISE JV BACKBONE PROJECT LT D. VS. ACIT ASST.YEAR 2001-02 - 5 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 20 TH DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/ 01 /2016 ..,, -. ,../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )&( / THE RESPONDENT. 3. 4 5 / CONCERNED CIT 4. 5 ( ) / THE CIT(A)-II, RAJKOT 5. 7-8 , , , /DR,ITAT, RAJKOT 6. 8CD E. / GUARD FILE. / BY ORDER, )7 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION .. 22.12.15 (DICTATION-PAD 10- -- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..4.1.2016 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.20.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER