ACIT, New Delhi V. M/s Datamation Consultants Pvt., New Delhi

ITA 4647/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3553 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: JK ANAND
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI B.C. MEENA ITA NO. 4647/DEL/2010 ASSESSMENT YEAR: 2006-07 ASSISTANT COMMISSIONER OF IT, VS. M/S. DATAMATION CIRCLE 10(1), CONSULTANTS PVT. LTD., NEW DELHI. PLOT NOS. 3 & 4, HASANPUR, IP EXTENTION, DELHI. (PAN: AAACD2668L) (APPELLANT) (RESPONDENT) APPELLANT BY: MS.Y. KAKKAR , SR.DR RESPONDENT BY: SHRI JK ANAND, CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 23.08.2010 PASSED FOR ASSESSMENT YEAR 2006-07. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE PENALTY AMOUNTING TO RS.8,95,083 IMPOS ED UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS FILE D ITS RETURN OF INCOME ON 30 TH NOVEMBER, 2006 DECLARING AN INCOME OF RS.27,22,885 . AN ASSESSMENT ORDER U/S. 143(3) OF THE I.T. ACT WAS PASSED ON 24 .12.2008, WHEREBY 2 INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.53 ,82,074. ASSESSING OFFICER HAS MADE TWO ADDITIONS IN THE INCOME OF THE ASSESSEE WHICH WERE CONSIDERED FOR VISITING THE ASSESSEE WITH PENALTY U NDER SEC. 271(1)(C) OF THE ACT. THESE ADDITIONS ARE OF RS.20,18,919 AND RS. 6, 40,270. THEY REPRESENT EMPLOYEES CONTRIBUTIONS TOWARDS EPF AND ESI WHICH A CCORDING TO THE ASSESSING OFFICER COULD NOT DEPOSITED BY THE ASSESS EE WITHIN THE DUE DATE PROVIDED IN THESE ACTS. HE VISITED THE ASSESSEE WIT H PENALTIES UNDER SEC. 271(1)(C) OF THE ACT ON THESE TWO ADDITIONS. 2. ON APPEAL, LEARNED CIT(APPEALS) DELETED THE PENA LTY ON THE GROUNDS THAT THESE AMOUNTS HAVE BEEN PAID BY THE ASSESSEE I N THE RESPECTIVE EPF AND ESI ACCOUNTS BEFORE THE DUE DATE OF FILING OF THE RETURN FOR THIS ASSESSMENT YEAR. THUS, THEIR DISALLOWANCE IN THE QUANTUM ITSEL F IS NOT SUSTAINABLE. 3. LEARNED DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARMENDER SHARMA REPORTED IN 213 CTR 609 AS WELL AS IN THE CASE OF CIT VS. PM ELECTR ONICS REPORTED IN 220 CTR 635 HAS HELD THAT IF EMPLOYEES CONTRIBUTIONS ON ACCOUNT OF ESI AND EPF HAVE BEEN DEPOSITED BY THE ASSESSEE IN THESE AC COUNTS BEFORE DUE DATE OF FILING OF THE RETURN THEN THEIR DISALLOWANCE CAN NOT BE MADE. IF AN AMOUNT 3 CANNOT BE DISALLOWED TO THE ASSESSEE WHILE DETERMIN ING THE TOTAL TAXABLE INCOME THEN HOW THAT AMOUNT CAN QUALIFY FOR VISITIN G THE ASSESSEE WITH THE PENALTIES. THE REVENUE HAS PLEADED IN ITS GROUNDS O F APPEAL THAT LEARNED CIT(APPEALS) HAS DELETED THE DISALLOWANCE BUT REVEN UE HAS NOT ACCEPTED THAT DELETION OF DISALLOWANCE. IN OUR OPINION, IRRESPECT IVE OF THE FACTS WHETHER ADDITION HAS BEEN MADE IN QUANTUM OR NOT. IF AN AMO UNT IS NOT DISALLOWABLE THEN PENALTY AT LEAST CANNOT BE IMPOSED. IN VIEW OF THE HON'BLE DELHI HIGH COURTS DECISION, THESE AMOUNTS COULD NOT BE DISALL OWED. THEREFORE, NO PENALTY CAN BE IMPOSED. LEARNED CIT(APPEALS) HAS RI GHTLY APPRECIATED THE FACTS AND NO INTERFERENCE IS CALLED FOR IN HIS ORDE RS. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 08.07.201 1 SD/- SD/- ( B.C. MEENA ) ( RAJ PAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/07/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR