DCIT, New Delhi V. M/s. Security Printing & Minting Corporation of India Ltd., New Delhi

ITA 4871/DEL/2013

• Counselvise Citation: 487120114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Keywords: Business expenditure
• Section: 143(3); 147

Judgement Text

ITA NO. 4871/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 4871/DEL/2013 A.Y. : 2006 - 07 DY. COMMISSIONER OF INCOME TAX, CIRCLE 8(1), ROOM NO. 163, CR BUILDING, NEW DELHI VS. M/S SECURITY PRINTING & MINTING CORPORATION OF INDIA LTD., 16 TH FLOOR, JAWAHAR VYAPAR BHAWAN, JANPATH, NEW DELHI (PAN: AACJS6111J) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. B.R.R. KUMAR, SR. DR ASSESSEE BY : NONE DATE OF HEARING : 10 - 0 2 - 201 5 DATE OF ORDER : 12 - 0 2 - 201 5 ORDER PER H.S. SIDHU, JM TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS - XI ) NEW DELHI P ERTAINING TO ASSESSMENT YEAR 200 6 - 0 7. 2. THE GROUNDS RAISED READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS. 57,12,718/ - MADE BY THE AO U/S. 271(1)(C) OF THE I.T. ACT, ON ACCOUNT OF DISALLOWANCE OF PRIOR PERIOD EXPENSES. ITA NO. 4871/ DEL/ 2013 2 2. THE APPELLANT CRAVE , LEAVE TO ADD, AMEND , ALTER, FOREGO OR DELETE ANY GROUND OF APPEAL BEFORE AT OR BEFORE THE TIME OF HEARING. 3. THE AFORESAID APPEAL CAME UP FOR HEARING BEFORE THE BENCH ON 10 . 2 .201 5 . IN S PITE OF NOTICE TO THE ASSESSEE BY RPAD, ASSESSEE, NEITHER ITS ANY AUTHORIZED REPRESENTATIVE WAS APPEARED TO REPRESENT THE CASE NO R ANY ADJOURNMENT APPLICATION IS FILED BY THE ASSESSEE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED BY AGAIN AND AGAIN SENDING THE NOTICE TO THE ASSESSEE AND THEREFORE, WE ARE DECIDING THE ISSUE IN DISPUTE EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN DECLARING TOTAL INCOME OF RS. 9,11,18,593/ - WAS FILED ON 30.11.2006. THE ASSESSMENT WAS COMPLETED U/S. 143(3) VIDE ORDER DATED 22.11.2008 AT AN INCOME OF RS. 9,11,18,593/ - . SUBSEQUENTLY IT WAS NOTICED BY THE AO THAT AN AMOUNT OF RS. 1,69,71,833/ - RELATED TO PRIOR PERIOD EXPENSE. REASSESSMENT ORDER U/S. 147 R.W.S. 143(3) WAS PASSED ON 2.9.2011 WHEREBY PRIOR PERIOD EXPENSES AMOUNTING TO RS. 1,69,71,833/ - WERE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENA LTY PROCEEDINGS U/S. 271(1) WERE ALSO INITIATED IN THE ASSESSMENT ORDER U/S. 147 R.W.S. 143(3) ITSELF. IN RESPONSE TO SHOW CAUSE NOTICE U/S. 271(1) DATED 19.3.2012, THE ASSESSE FILED ITS REPLY DATED 26.3.2012 THROUGH ITS AUTHORISED REPRESENTATIVE WHIC H WAS CONSIDERED BY THE AO AND THE SAME WAS NOT ACCEPT ED . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE SUBMISSION OF THE ASSESSEE WITH REGARD TO PRIOR PERIOD EXPENSES WERE FOUND TO BE FACTUALLY INCORRECT. THE ASSESSEE COMPANY WAS INCORPORATED ON 13.1 .2006, I.E. DURING AY 2006 - 07 AND IN VIEW OF THE ABOVE , AO HELD THAT PRIOR PERIOD EXPENSES AMOUNTING TO RS. 1,69,71,833/ - SHOULD ITA NO. 4871/ DEL/ 2013 3 HAVE BEEN DISALLOWED BY THE ASSESEE IN ITS COMPUTATION OF INCOME. AO HAS FURTHER OBSERVED THAT THE ASSESSEE HAS CONCEDED THAT IT HAS DEBITED PRIOR PERIOD EXPENSE TO THE PROFIT AND LOSS ACCOUNT. LD. AO HAS FURTHER OBSERVED THAT THE ASSESSEE WAS IN FULL KNOWLEDGE OF THE CLAIMS MADE BY HIM AND FURNISHED INACCURATE PARTICULARS OF ITS INCOME WITH A VIEW TO WILLFULLY EVADE TAXES. ACC ORDINGLY, THE AO VIDE HIS ORDER DATED 30.3.2012 HAS IMPOSED THE PENALTY OF RS. 57,12,718/ - U/S. 271(1) OF THE I.T. ACT. 5 . AGAINST THE PENALTY ORDER OF THE ASSESSING OFFICER, ASSEESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGN ED ORDER 31 . 5 .201 3 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESEE BY DELETING THE PENALTY OF RS. 57,12,718/ - MADE U/S. 271(1) OF THE I.T. ACT IMPOSED BY THE ASSESSING OFFICER . 6 . AGGRIEVED BY THE AFORESAID ORDER DATED 31 . 5 .201 3 , REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. 7 . AT THE TIME OF HEARING LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED ON THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. 8 . WE HAVE HEARD LD. DR AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER DATED 31 . 5 .201 3 , WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS NOTED THAT IT WAS AN ENTITY, WHICH WAS UNDER THE MINISTRY OF FINANCE. THERE WERE 8 UNITS WHICH WERE LATER MERGED AND THE ASSESSEE COM PANY WAS INCORPORATED. THE EXPENSES OF RS. 1,69,71,833/ - PERTAINED TO AN EARLIER PERIOD BUT WERE CLAIMED IN THE CURRENT YEAR. THEREFORE, THERE WAS NO ATTEMPT TO CONCEAL INCOME. THE ASSESSEE CLAIMED THE EXPENSES IN THE CURRENT YEAR UNDER A BONAFIDE BELI EF THAT THE EXPENSES COULD BE CLAIMED AS THEY WERE GENUINE BUSINESS EXPENSES. LD. CIT(A) HAS CONSIDERED THE CONTENTION OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HAD ITA NO. 4871/ DEL/ 2013 4 INCURRED AN EXPENDITURE IN THE PERIOD PRIOR TO THE CURRENT YEAR. THE ASSESSEE UNDER A BONAFIDE MISCONCEPTION DEBITED THE EXPENDITURE IN THE CURRENT YEAR. THERE WAS NO DELIBERATE FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. LD. CIT(A) HAS FOUND THAT FROM THE RECORD THAT THE AO HAS NEVER DISPUTED THE FACT THAT THE EXPENDITURE OF RS. 1,69,71,833/ - WAS NOT GENUINE AND WAS NOT FOR THE PURPOSE OF BUSINESS. LD CIT(A) FURTHER NOTED THAT IN THE CASE OF K.C. BUILDERS, THE HON BLE SUPREME COURT HAS HELD THAT : - IT IS IMPLICIT IN THE WORD CONCEALED THAT THERE HAS BEEN A DELIBERATE ACT ON THE PART OF THE ASSESSEE. IN THIS CASE, THERE IS NO INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. THERE WAS NO FURNISHING OF INACCURATE PARTICULARS FOR CONCEALING OF IN COME. 8.1 WE FIND THAT LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS QUOTED VARIOUS CASE LAWS WHICH ARE IN ITS FAVOR. ONE OF THE CASES SQUARELY APPLICABLE IS OF HERO HONDA MOTORS LIMITED VS. DCIT PASSED IN ITA NO. 2698/DEL/2010 BY THE ITAT, DELHI BENCHES, DELHI. THE ITAT STATES: - THE STAND TAKEN BY THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME WAS A POSSIBLE AND PLAUSIBLE VIEW AND THEREFORE, THE PENALTY IS NOT JUSTIFIED. THE JUDGMENT OF APEX COURT IN THE CASE OF CIT VS. RELIANCE PET ROPRODUCTS LIMITED (322 ITR 158) ALSO SUPPORTS THE CASE OF THE ASSESSEE BECAUSE IN THAT CASE IT WAS HELD BY THE APEX COURT THAT MERE MAKING OF A CLAIM BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR UNLESS IT IS FOUND THAT THE DETAILS SUPPLIED BY THE ASSESSEE IN THE ITA NO. 4871/ DEL/ 2013 5 RETURN OF INCOME WAS FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. 8 . 2 WE ALSO FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSEE S CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. 8 . 3 IN THIS REGARD, WE FIN D LD. CIT(A) HAS RIGHTLY APPLIED THE DECISION OF THE HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 WHICH IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ON LY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1)(C). THE HON BLE APEX COURT ALSO OBSERVED THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE THE PENALTY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 8. 4 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS EXPLAINED ABOVE, WE ARE OF THE VIEW T HAT THE ASSESSEE HAS NOT DELIBERATELY FURNISHED INACCURATE PARTICULARS WITH A VIEW TO CONCEALMENT OF INCOME. WE FURTHER FIND THAT THE EXPLANATION OF THE ASSESSEE IS BONAFIDE. I N THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE FIND THAT L D. CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE WOULD NOT BE LIABLE FOR LEVEY OF PENALTY AND HE DELETED THE ITA NO. 4871/ DEL/ 2013 6 PENALTY OF RS. 57,12,718/ - . W E DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD THE SAME AND DECIDE T HE ISSUE AGAINST THE REVENUE BY DISMISSING THE APPEAL FILED BY THE REVENUE. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 12 / 02 /20 1 5 . SD/ - SD/ - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 12 / 2 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES