Deputy Commissioner of Income-tax, Circle - 8, Pune V. M/s. Advik Hi-Tech Pvt.Ltd, Pune

ITA 38/PUN/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6070 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASHANT GUDEKAR
• Section: 271(1)(c); 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.38/PUN/2018 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 8, PUNE. . / APPELLANT. V/S M/S. ADVIK HI - TECH PVT. LTD., GAT NO.357/99, CHAKAN TALEGAON ROAD, TAL KHED, PUNE 410501. PAN : AACCA3106E. . / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH. REVENUE BY : SHRI PRASHANT GUDEKAR. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 6, PUNE DT.17.10.2017 FO R THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUS INESS OF MANUFACTURING OF AUTO COMPONENTS, GENERATION OF WIND POWER AND TRADING IN SHARES AND SECURITIES. ASSESSEE ELECTRONICALLY FILED ITS RET URN OF INCOME FOR A.Y. 2009-10 ON 31.10.2009 DECLARING TOTAL INCOME AT RS. NIL BY CLAIMING / DATE OF HEARING : 17.07.2019 / DATE OF PRONOUNCEMENT: 01.08.2019 2 DEDUCTION OF RS.2,55,94,534/- U/S 80IB(3)(II) OF THE ACT. THE C ASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAM ED U/S 143(3) OF THE ACT VIDE ORDER DT.03.12.2011 AND THE TOTAL INCOME WAS D ETERMINED AT RS.6,89,76,670/- WHEREBY THE CLAIM OF DEDUCTION U/S 80IB(3)(II) OF THE ACT WAS DENIED TO THE ASSESSEE AND WHILE DENYING THE CLAIM, AO RECORDED THE SATISFACTION ABOUT THE FILING OF INACCURATE PARTICULARS OF INCO ME BY THE ASSESSEE AND THEREFORE ASSESSEE BEING LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. ON THE AFORESAID DENIAL OF CLAIM, AO THEREAFTER VIDE PEN ALTY ORDER DT.27.03.2014 LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON ACCO UNT OF CONCEALMENT OF INCOME. AGGRIEVED BY THE ORDER OF AO, AS SESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.17.10.2017 (IN APP EAL NO.PN/CIT(A)-V/DCIT CIR-8/297/2014-15) ON THE MERITS OF THE CASE, DELETED THE PENALTY LEVIED BY THE AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY U/ S 271 (1)(C) OF THE I. T. ACT WHEN THE QUANTUM ADDITION U/S 80IB(3)(II) HAS BEEN UPHELD BY THE HON'BLE ITAT IN ITA NOS. 1743 & 1744/PN/2012 DATED 30.07.2014 ? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSEE T HOUGH INITIALLY ELIGIBLE TO AVAIL DEDUCTION NEVER LOSES THE QUALIFICATION OF EL IGIBILITY IN SUBSEQUENT YEARS? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ISSUE AT HAND IS COMPLEX AND VARIOUS INTERPRETATIONS ARISE EVEN THOUGH AS EXPLAI NED BY THE HON'BLE APEX COURT IN DCIT VS. ACE MULTI AXES SYSTEMS LTD. (CIVIL APPEAL NO. 20854 OF 2017) DATED 05.12.2017 THERE IS NO CONFLIC T WITH THE PRINCIPLE OF INTERPRETATION? 3. BEFORE US, LD. D.R. SUBMITTED THAT THOUGH THE REVENU E HAS RAISED VARIOUS GROUNDS BUT ALL THE GROUNDS ARE INTER-CONNECT ED AND THE SOLE CONTROVERSY IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 4. BEFORE US, LD. D.R. TOOK US THROUGH THE PENALTY ORDER OF AO AND 3 SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAN D, SUBMITTED THAT WHILE RECORDING SATISFACTION FOR PENALTY IN THE ASS ESSMENT ORDER AO HAS HELD THAT ASSESSEE HAD FURNISHED INACCURATE PARTICU LARS OF INCOME BUT WHILE PASSING THE PENALTY ORDER HAS LEVIED PENALTY FOR CONCEALMENT OF INCOME. HE THEREFORE SUBMITTED THAT ON ACCOUNT OF NOT RECORDING OF PROPER SATISFACTION, NO PENALTY U/S 271(1)(C) OF TH E ACT IS LEVIABLE AND FOR THE AFORESAID PROPOSITION, HE ALSO PLACED RELIA NCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SA MSON PERINCHERY REPORTED IN (2017) 392 ITR 4 (BOM). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CASE, PENALTY OF RS.1 ,04,66,833/- HAS BEEN LEVIED ON THE ALLEGED CONCEALED INCOME OF RS.3,48,89,44 3/-. THE PERUSAL OF ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT REVEALS THAT IN THE ASSESSMENT ORDER AO HAD RECORDED SATISFACTION FOR FURN ISHING OF INACCURATE PARTICULARS OF INCOME BUT THEREAFTER, IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT, AO HAD LEVIED PENALTY FOR CONCEALMENT OF INCOME. IT IS A SETTLED LAW THAT WHILE LEVYING PENALTY FOR CONCEALMENT OF IN COME, THE AO HAS TO RECORD SATISFACTION AND THEREAFTER COME TO A FINDING IN RESPECT OF ONE OF THE LIMBS, WHICH IS SPECIFIED UNDER SECTION 271(1)(C) OF THE ACT. THE FIRST STEP IS TO RECORD SATISFACTION WHILE COMPLETING THE ASSESSMENT AS TO WHETHER THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED ITS INCOME. THEREAFTER, NOTICE U/S 274 READ WITH SECTION 271 (1)(C) OF THE ACT IS TO BE ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER THER EAFTER HAS TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR NON-SATISFACTIO N OF EITHER OF THE LIMBS. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICE R HAS TO COME TO A FINDING AS TO WHETHER THE ASSESSEE COMPANY HAS CONCEALED ITS IN COME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE HONBLE BOMB AY HIGH COURT 4 IN CIT VS. SHRI SAMSON PERINCHERY REPORTED IN (2017) 39 2 ITR 4 (BOM) HELD THAT WHERE INITIATION OF PENALTY IS ONE LIMB AND THE LEVY OF P ENALTY IS ON OTHER LIMB, THEN IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO MERIT IN LEVY OF PENALTY. 6. CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMSON PERINCHE RY (SUPRA), WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE BASIC COND ITION FOR LEVY OF PENALTY HAS NOT BEEN FULFILLED AND THAT THE PENALTY ORDER SUFFERS FROM NON- EXERCISING OF JURISDICTION POWER AND THEREFORE IT IS NOT A FIT CASE TO IMPOSE PENALTY. WE THEREFORE UPHOLD THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 1 ST DAY OF AUGUST, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 1 ST AUGUST, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-6, PUNE. PR. CIT 5, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.