M/s. SPL Industries Ltd., New Delhi V. DCIT, New Delhi

ITA 4328/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6735 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-11-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 22-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SARKAR
• Assessee Lawyers: R K MEHRA
• Keywords: Set aside
• Section: 271(1)(c); 80HHC; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.4328/DEL/2010 ASSESSMENT YEAR : 2001 - 02 SPL INDUSTRIES LTD., 5/66, KC HOUSE, PADAM SINGH ROAD, KAROL BAGH, NEW DELHI. PAN : AAACS0343R VS. DCIT, CIRCLE 9 (1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. MEHRA, CA & SHRI MANISH KUMAR, ADVOCATE REVENUE BY : SHRI PEEYUSH SARKAR, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER OF THE CIT (A) DATED 18 TH MARCH, 2009 FOR ASSESSMENT YEAR 2001- 02. GROUNDS OF APPEAL READ AS UNDER:- 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF LD. CIT (A) IS WRONG AND AGAINST THE PROVISI ON OF LAW WHICH IS LIABLE TO BE SET ASIDE. 2. THAT LD. CIT (A) ERRED IN CONFIRMING THE PENALT Y OF RS.8,06,215/- U/S 271(1) BY NOT APPRECIATING THAT THE DIFFERENCE IN THE RETURNED INCOME AND THE ASSESSED INCOME IS ON ACCOUNT OF LEGAL ISSUE WHICH CANNOT BE ATTRIBUTED TO FURNISHING OF INACCURATE PARTICULARS U NDER LAW AS PER THE MANDATE OF HONBLE SUPREME COURT VIDE THE DECISION OF CIT VS. RELIANCE PETRO PRODUCTS ITA NO.4328/DEL/2010 2 PVT. LTD. 230 CTR 320. 3. THE LD. CIT (A) ERRED IN NOT APPRECIATING THAT THE PENALTY ON THE SAME GROUND WAS DROPPED BY THE HONBLE ITAT IN THE IMMEDIATE PRECEDING YEAR I.E., A.Y. 2000-01 AGAINST WHICH REVENUE DID NOT FILE FURTHER APPEAL. 4. THAT THE LD. CIT (A) ERRED IN NOT APPRECIATING THAT ADDITION MADE HOLDING A DIFFERENT OPINION DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME. 5. THE LD. CIT (A) ERRED IN NOT APPRECIATING THAT WHETHER INTEREST INCOME UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TO BE CONSIDERED FOR THE PROPOSE OF DEDUCTION U/S 80I IS TO BE CONSIDERED OR NOT IS ONE OF THE VEXED CONTROVERSIAL AND ARGUABLE POINT ON WHICH NO PENALTY IS LIABLE TO BE LEVIABLE AS PER T HE SETTLED LAW. 6. THE CIT (A) FAILED TO APPRECIATE THAT THE FACTS CONCLUDED IN THE QUANTUM PROCEEDINGS IS NOT A BINDING FACTOR FOR THE PENALTY PROCEEDINGS WHICH HAS TO BE EXAMINED SEPARATELY WITHIN THE FRAMEWORK OF LAW RELATED TO LEVY OF PENALTY. 7. THE APPELLANT CRAVES YOUR HONOUR LEAVE TO ADD, DELETE OR MODIFY ANY GROUNDS OF APPEAL DURING THE COURSE OF HEARING. 2. WHILE MAKING THE ASSESSMENT, THE ASSESSING OFFICER MADE THE FOLLOWING ADJUSTMENTS TO THE DEDUCTIONS CLAIMED BY TH E ASSESSEE U/S 80HHC AND 80IA:- - DEDUCTION U/S 80HHC WAS REDUCED TO RS.10,51,51,689/- A S AGAINST RS.10,91,48,734/- CLAIMED BY THE ASSESSEE. - DEDUCTION U/S 80IA WAS REDUCED TO RS.5,42,63,789/- AS AGAINST THE CLAIM OF RS.5,63,02,260/- 3. ACCORDING TO THE DEPARTMENT, THE ADJUSTMENT IN T HE CLAIMS OF THE ASSESSEE IN RESPECT OF BOTH THE ABOVE MENTIONED DEDUCTIO NS ITA NO.4328/DEL/2010 3 TANTAMOUNT TO CONCEALING THE PARTICULARS OF INCOME. ACCORDINGLY, A PENALTY OF ` 8,06,215/- IS LEVIED. THE ASSESSING OFFICE R HAS MENTIONED THAT EVEN THE ITAT IN THE CASE OF THE ASSESSEE HAS UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE CIT (A) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE ASSESSEE IS AGGRIE VED, HENCE, IN APPEAL. 4. IT WAS ALSO THE CONTENTION OF THE ASSESSEE BEFORE THE CIT (A) THAT THE TRIBUNAL IN EARLIER YEAR HAS DELETED THE PENALTY ON THE SIMILAR ISSUE, BUT THE CIT (A) HAS NOT CONSIDERED THE SAID ARGUMENT O F THE ASSESSEE AND HAS UPHELD THE PENALTY. 5. DURING THE COURSE OF HEARING, LD. AR OF THE ASSESSEE HAS PRODUCED BEFORE US THE EARLIER ORDER OF THE TRIBUNA L, THE REFERENCE OF WHICH IS AS UNDER:- ITA NO.3077/DEL/2006 ASSESSMENT YEAR : 2000-01 CAUSE TITLE : DCIT, CIRCLE 9(1), NEW DELHI VS. M/S SPL INDUSTRIES LTD. DATE OF ORDER : 9 TH OCTOBER, 2007. 6. LD. AR PLEADED THAT LD. CIT (A) HAS WRONGLY CONFI RMED THE LEVY OF PENALTY AND HIS ORDER SHOULD BE SET ASIDE AND APPROPRI ATE RELIEF SHOULD BE GIVEN TO THE ASSESSEE. 7. ON THE OTHER HAND, RELYING UPON THE ORDER OF THE ASSESSING OFFICER AND CIT (A), IT WAS PLEADED BY LD. DR THAT T HE PENALTY HAS RIGHTLY BEEN UPHELD BY THE CIT (A) AND HIS ORDER SHOU LD BE UPHELD. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THIS TRIBUNAL IN THE CASE OF THE ITA NO.4328/DEL/2010 4 ASSESSEE FOR ASSESSMENT YEAR 2000-01 HAS DELETED THE SIMILAR PENALTY IN RESPECT OF BOTH THE TYPE OF COMPUTATIONS MADE BY T HE ASSESSING OFFICER U/S 80HHC AND 80IA. IT WILL BE RELEVANT TO REPRODUCE THE ORDER OF THE TRIBUNAL WHEREBY THE APPEAL FILED BY THE DEP ARTMENT WAS DISMISSED WITH THE FOLLOWING OBSERVATIONS:- THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORD ER OF CIT (A)-XII NEW DELHI DATED 26.7.2006 DELETING PENALTY LE VIED U/S 271(1)(C) OF THE INCOME-TAX ACT. 2. THE ASSESSEE FILED RETURN OF INCOME CLAIMING DEDUCTI ON U/S 80HHC AND DEDUCTION U/S 80I OF THE ACT. IN THE ASSES SMENT PROCEEDINGS, THE A.O. NOTED THAT THE ASSESSEE HAS RECEIV ED INTEREST INCOME. SUCH INTEREST INCOME IS NOT TO BE RECKO NED FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC AND 80I O F THE ACT. THUS, THE DEDUCTION WAS NOT ALLOWED IN FULL BUT AL LOWED ONLY AFTER REDUCING SUCH INTEREST INCOME. ON APPEAL, LEARNED CIT (A) ALLOWED DEDUCTION U/S 80 -IA BUT REJECTED THE DEDUCTION U/S 80HHC. THE ITAT ALLOWED TH E APPEAL OF THE ASSESSEE U/S 80HHC FOR INTEREST INCOME. AS R EGARDS REVENUES APPEAL AGAINST THE ORDER OF CIT (A) ALLOWIN G DEDUCTION U/S 80IA, THE SAME WAS ORIGINALLY HELD IN FAVOUR OF REVENUE. THE TRIBUNAL HAVING FOUND THAT THE APPEAL WAS ALLOWED IN F AVOUR OF REVENUE IN AN EX PARTE ORDER, THE SAID ORDER WAS RECA LLED AND LATER ON AFTER RECALLING THE ORDER OF CIT (A) ALLOWING DEDUCTION U/S 80IA IN RESPECT OF INTEREST INCOME WAS UPHELD. IN THE MEANWHILE, THE A.O. IMPOSED PENALTY AS THE DEDUCTION WAS NOT FULLY ALLOWED. THE A.O. IN THE PENALTY ORDER HELD THAT SINCE THE TRIBUN AL HAS CONFIRMED THE ADDITION MADE BY THE A.O. ON ACCOUNT OF DEDUCTION U/S 80I FOLLOWING THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF PANDIAN CHEMICALS, 262 ITR 278. TO THIS EXTE NT, IT AMOUNTS TO FURNISHING INACCURATE PARTICULARS OF INCOME WHILE CLAIMING DEDUCTION U/S 80HHC AND 80I. THUS, DIFFER ENCE BETWEEN THE RETURNED INCOME AND ASSESSED INCOME WAS TREATED AS INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS ARE FILED. PENALTY WAS ACCORDINGLY LEVIED. LEARNED CIT (A) IN THE IMPUGNED ORDER HELD THAT THE ADDITION IN RESPECT OF DEDUCTION CLAIMED U/S 80I A WAS DELETED BY LEARNED CIT (A) AND IN VIEW OF SUBSEQUENT DECISION OF THE TRIBUNAL, THIS ORDER OF LEARNED CIT (A) STANDS APP ROVED. THUS, THE BASIS ON WHICH PENALTY WAS IMPOSED NO LONGER SUBS IST. HE ALSO HELD THAT MERELY BECAUSE THERE IS SOME ADDITION IN THE ASSTT. ORDER WILL NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT I NACCURATE PARTICULARS OF SUCH INCOME IS FILED. HE ACCORDINGLY CANCELLED THE PENALTY LEVIED. ITA NO.4328/DEL/2010 5 WHEREAS LEARNED DR SOUGHT TO RELY UPON PENALTY ORDER, LEARNED COUNSEL FOR ASSESSEE RELIED UPON APPELLATE O RDER. HE FURTHER SUBMITTED THAT IN THE ASSESSMENT PROCEEDINGS, NO SATISFACTION WAS ARRIVED AT TO ALLEGE THAT THE ASSESSEE H AS FURNISHED INACCURATE PARTICULARS OF INCOME. THUS, IN ABSENCE OF ANY SATISFACTION RECORDED IN THE ASSESSMENT PROCEEDINGS , PENALTY U/S 271 (1)(C) IS NOT LEVIABLE. FOR THIS PROPOSITION, RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAM COMMERCIALS ENTERPRISES LTD., 246 ITR 56 8. 3. WE HAVE CAREFULLY CONSIDERED RELEVANT FACTS, ARGUMENTS ADVANCED AND THE CASE LAWS CITED. IN THE PRESENT CASE , ASSESSEE WHILE FILING RETURN OF INCOME HAS CLAIMED DEDUCTION U /S 80HHC AND 80I. ALL THE PARTICULARS IN THIS REGARD WERE DISC LOSED. IT IS A MATTER OF OPINION AS TO WHETHER CERTAIN INCOME SHOULD FO RM PART OF PROFITS OF BUSINESS SO AS TO BE ELIGIBLE FOR DEDUC TION U/S 80HHC AND 80I. HOWEVER, ONLY BECAUSE THE A.O. DO NOT AGRE E WITH THE CONTENTION OF ASSESSEE, PENALTY IS NOT AUTOMATIC LEVIAB LE. SO LONG AS THE CLAIM IS BONA FIDE AND ALL THE PARTICULARS IN TH IS REGARD ARE FURNISHED, THE ASSESSEE CANNOT BE VISITED WITH PENALTY U/S 271(1)(C) FOR CONCEALMENT OF PARTICULARS OF INCOME OR FAILURE TO DISCLOSE PARTICULARS OF SUCH INCOME. IN VIEW OF THE ABOVE DISCUSSION, NO PENALTY IS LEVIAB LE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 5. PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2007. 9. AS THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE SIMILAR, WE FIND NO JUSTIFICATION IN LEVYING THE PENALTY WHIC H IS HEREBY DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.20 10. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30.11.2010. DK ITA NO.4328/DEL/2010 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES