DCIT, New Delhi V. M/s. Kamakhya Cosmetics and Pharmaceuticals Pvt. Ltd., Guwahati

ITA 3986/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9697 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIJAY KUMAR CHADHA
• Keywords: Question of law
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3986/DEL/2016 ASSESSMENT YEAR: 2009-10 DCIT, CIRCLE-17(1), NEW DELHI,. VS KAMAKHYA COSMETICS AND PHARMACEUTICALS PVT. LTD., BAMUNIMAINDAM, INDUSTRIAL AREA, GUWAHATI. PAN: AABCK5526F (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : DR. VIJAY KUMAR CHADHA, SR. DR DATE OF HEARING : 12.09.2019 DATE OF PRONOUNCEMENT : 24.09.2019 ORDER PER R.K. PANDA, AM: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22 ND APRIL, 2016 OF THE CIT(A)-5, NEW DELHI, RELATING TO ASSESSMENT YEAR 2009-10. 2. DELETION OF PENALTY OF RS.1,26,80,000/- LEVIED B Y THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT IS THE ONLY ISSUED RAISED BY T HE REVENUE IN THE GROUNDS OF APPEAL. ITA NO.3986/DEL/2016 2 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE, THEREFORE, WE PROCEEDED TO DECIDE THE APPEAL ON THE BASIS OF T HE MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. [[[[ 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF COSMETICS AND TOILETRIES PREPARATIONS, FRAGRANCES AND PERFUMERY PRODUCTS. IT FILED ITS RET URN OF INCOME ON 22 ND SEPTEMBER, 2009 DECLARING TOTAL INCOME OF RS.1,09,79,095/-. T HE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) ON 23 RD DECEMBER, 2011 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.4,82,84,180/- WHEREIN HE MADE AN ADDITION OF RS.3,73,05,083/- ON ACCOUNT OF PROVISION OF EXCISE DUTY OF RS.3,43,18,499/- AND EDUCATION CESS OF RS.29,86,584/-. 5. IN APPEAL, THE LD.CIT(A) UPHELD BOTH THE ADDITIO NS MADE BY THE ASSESSING OFFICER AND ON FURTHER APPEAL FILED BY THE ASSESSEE THE TRIBUNAL ALSO CONFIRMED BOTH THE ADDITIONS. THE ASSESSING OFFICER, THEREAF TER, INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. REJECTING VARIOUS EXPLAN ATIONS GIVEN BY THE ASSESSEE AND OBSERVING THAT THE ASSESSEE HAS CONCEALED THE PARTI CULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS, THE ASSESSING OFFICER LEVIE D PENALTY OF RS.1,26,80,000/- WHICH IS 200% OF THE TAX SOUGHT TO BE EVADED. 6. IN APPEAL, THE LD.CIT(A) CANCELLED THE PENALTY S O LEVIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS PREFERR ED APPEAL AGAINST THE ORDER OF THE TRIBUNAL WHICH HAS BEEN ADMITTED BY THE HON'BLE DEL HI HIGH COURT FOR ITA NO.3986/DEL/2016 3 DETERMINING THE QUESTION OF LAW. THEREFORE, FOLLOW ING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF LIQUID INVESTMENT AND TRADING CO., VIDE ITA NO.240/2009 WHEREIN IT HAS BEEN HELD THAT PENALTY CANNOT BE LEV IED IN A CASE WHERE AN APPEAL IS ADMITTED BY A HIGH COURT FOR DETERMINI NG THE QUESTION OF LAW, SHE CANCELLED THE PENALTY LEVIED ON ACCOUNT OF THE ADDI TION FOR PROVISION OF EXCISE DUTY. SO FAR AS THE PENALTY LEVIED ON ADDITION OF EDUCATION CESS IS CONCERNED, SHE NOTED THAT THE REFUND OF THE SAME HAS NOT BEEN GRAN TED BY THE EXCISE DEPARTMENT FROM THE YEAR 2004 ON THE BASIS OF THE FACT THAT TH E EDUCATION CESS IS NOT INCLUDED IN THE LIST OF DUTIES MENTIONED IN NOTIFICATION NO.32/ 1999. ALTHOUGH THE ASSESSEE HAS LOST BEFORE THE HON'BLE HIGH COURT, HOWEVER, ITS SL P HAS BEEN ADMITTED AND TAGGED ALONG WITH CIVIL APPEAL NO.6085 TO 6092/2010 BY THE HON'BLE SUPREME COURT. THIS, ACCORDING TO HER, SHOWS THAT THERE IS AN ARGU ABLE CASE THAT THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT IT IS ENTITLED TO THE REFUND OF EDUCAT ION CESS. THE LD.CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . AND VARIOUS OTHER DECISIONS TO SUPPORT THE PLEA O F THE ASSESSEE THAT THE FINDINGS OF THE ASSESSMENT PR OCEEDINGS CANNOT AUTOMATICALLY JUSTIFY THE IMPOSITION OF PENALTY AND JUST BECAUSE THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTED OR THE CLAIM MADE BY THE ASSESSEE IS N OT ACCEPTED BY THE ASSESSING OFFICER, IT CANNOT BE A CONCLUSIVE GROUND TO LEVY P ENALTY. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.3986/DEL/2016 4 8. WE HAVE HEARD THE LD. DR AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND CIT(A). WE FIND THE ASSESSING OFFICER, IN THE INSTANT CASE, LEVIED PENALTY OF RS.1,26,80,000/- U/S 271(1)(C) OF THE ACT BEING 200 % OF THE TAX SOUGHT TO BE EVADED ON ACCOUNT OF TWO ADDITIONS, NAMELY, PROVISI ON FOR EXCISE DUTY OF RS.3,43,18,499/- AND EDUCATION CESS OF RS.29,86,584 /-. BOTH TOTALING TO RS.3,73,05,083/-. WE FIND THE LD.CIT(A) CANCELED T HE PENALTY SO LEVIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE APPEAL FIL ED BY THE ASSESSEE ON THE ISSUE OF PROVISION FOR EXCISE DUTY HAS BEEN ADMITTED BY T HE HON'BLE GUWAHATI HIGH COURT AND, THEREFORE, IN VIEW OF THE DECISION OF TH E HON'BLE DELHI HIGH COURT IN THE CASE OF LIQUID INVESTMENT AND TRADING CO. (SUPRA), PENALTY CANNOT BE LEVIED IN A CASE WHERE AN APPEAL IS ADMITTED BY THE HIGH COURT FOR DETERMINING THE QUESTION OF LAW. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF AD DITION OF RS.29,86,584/- ON ACCOUNT OF EDUCATION CESS IS CONCERNED, SHE NOTED T HAT THE REFUND OF EDUCATION CESS HAS NOT BEEN GRANTED BY THE EXCISE DEPARTMENT FROM THE YEAR 2004 ON THE BASIS OF THE FACT THAT THE EDUCATION CESS IS NOT INCLUDED IN THE LIST OF DUTIES MENTIONED IN NOTIFICATION NO.32/1999. ALTHOUGH THE ASSESSEE HAS LOST ITS CASE BEFORE THE HON'BLE HIGH COURT, HOWEVER, THE SLP FILED BY THE A SSESSEE HAS BEEN ADMITTED BY THE HON'BLE SUPREME COURT WHICH IS PENDING. THEREF ORE, THE ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT IT IS ENTITLED TO THE REFUND OF THE ED UCATION CESS. 9. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) CANCELLING THE PENALTY SO LEVIED BY THE ASSESSING OFFICER U/S 271( 1)(C) OF THE ACT. AS MENTIONED ITA NO.3986/DEL/2016 5 EARLIER, THE LD.CIT(A) WHILE DELETING THE PENALTY L EVIED ON ACCOUNT OF ADDITION ON ACCOUNT OF PROVISION FOR EXCISE DUTY, HAS FOLLOWED THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF LIQUID INVESTMENT AND TRA DING CO. (SUPRA) THAT WHEN THE QUESTION OF LAW HAS BEEN ADMITTED BY THE HON'BLE HI GH COURT, PENALTY CANNOT BE LEVIED. 10. THE LD. DR COULD NOT CONTROVERT THE FACTUAL FIN DING GIVEN BY THE LD.CIT(A) THAT THE HON'BLE GUWAHATI HIGH COURT HAS ADMITTED T HE ASSESSEES APPEAL VIDE ITS ORDER DATED 13 TH JUNE, 2014 ON THE SUBSTANTIAL QUESTION OF LAW AS T O WHETHER THE TRIBUNAL WAS JUSTIFIED IN NOT PERMITTING THE ASSESS EE TO CLAIM DEDUCTION OF RS.3,43,18,499/- TOWARDS THE CENTRAL EXCISE REFUND DURING THE ASSESSMENT YEAR IN QUESTION. IN ABSENCE OF ANY DISTINGUISHABLE FEATUR E BROUGHT TO OUR NOTICE BY THE LD. DR AGAINST THE DECISION OF THE HON'BLE DELHI HIGH C OURT WHICH HAS BEEN FOLLOWED BY THE LD.CIT(A), WE DO NOT FIND ANY INFIRMITY IN T HE ORDER OF THE CIT(A) CANCELLING THE PENALTY SO LEVIED BY THE ASSESSING O FFICER ON ACCOUNT OF PROVISION FOR EXCISE DUTY OF RS.3,43,18,499/-. 11. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF PROV ISION FOR EDUCATION CESS IS CONCERNED, WE FIND THE LD.CIT(A) HAS GIVEN A CATEGO RICAL FINDING THAT THE REFUND OF THE SAME HAS NOT BEEN GRANTED BY THE EXCISE DEPARTM ENT FROM THE YEAR 2004 ON THE BASIS THAT THE EDUCATION CESS IS NOT INCLUDED IN TH E LIST OF DUTIES MENTIONED IN NOTIFICATION NO.32/1999. SHE HAS ALSO GIVEN A FACT UAL FINDING THAT THE SLP FILED BY THE ASSESSEE AGAINST THE HON'BLE HIGH COURT ORDER I S TAGGED ALONG WITH THE CIVIL ITA NO.3986/DEL/2016 6 APPEAL NO.6085 TO 6092/2010 BY THE HON'BLE SUPREME COURT. THE LD.CIT(A), FURTHER, FOLLOWED THE DECISION OF THE HON'BLE SUPRE ME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . AND THE DECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF IFCI LTD. AND BACARDI MARTINI INDIA LTD . TO THE PROPOSITION THAT THE FINDINGS OF THE ASSESSMENT PROCEEDINGS CANNOT AUTOM ATICALLY JUSTIFY THE IMPOSITION OF PENALTY AND JUST BECAUSE THE CONTENTION OF THE A SSESSEE IS NOT ACCEPTED OR THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER , IT CANNOT BE A CONCLUSIVE GROUND TO LEVY PENALTY. WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE CIT(A) CANCELLING THE PENALTY ON ACCOUNT OF ADDITION OF ED UCATION CESS. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE, T HEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) CANCELLING THE PENALTY S O LEVIED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDER OF THE CIT(A) IS U PHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 4.09.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED:24 TH SEPTEMBER, 2019 DK ITA NO.3986/DEL/2016 7 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI