Dy. Commissioner of Income Tax, Faizabad V. M/s Cane Development Council, Faizabad

ITA 49/LKW/2015

• Counselvise Citation: 4923714 RSA 2015
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 15-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNIT KUMAR
• Keywords: Difference of opinion; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO. 49/LKW/2015 ASSESSMENT YEAR: 2008 - 09 DCIT CIRCLE FAIZABAD V. M/S CANE DEVELOPMENT COUN CIL MASODHA MOTINAGAR MASHODHA, FAIZABAD T AN /PAN : AAALK0808Q (APP ELL ANT) (RESPONDENT) C.O. NO. 09/LKW/2015 [IN ITA NO. 49/LKW/2015] ASSESSMENT YEAR: 2008 - 09 M/S CANE DEVELOPMENT COUNCIL MASODHA MOTINAGAR MASHODHA, FAIZABAD V. DCIT CIRCLE FAIZABAD ( CROSS - OBJECTOR ) (RESPONDENT) APP ELL ANT BY: SHRI. PUNIT KUMAR, D.R. RESPONDENT BY: NONE DATE OF HEARING: 12 03 201 5 DATE OF PRONOUNCEMENT: 26 0 3 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE LD. CIT(A) DELETING THE PENALTY LEVIED UNDER SECTIO N 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2. IN SUPPORT OF THE ORDER OF THE LD. CIT(A), THE ASSE SSEE HAS ALSO FILED CROSS OBJECTION. 3. THIS APPEAL WAS LISTED FOR HEARING ON 12.3.2015, BU T NONE APPEARED ON BEHALF OF THE ASSESSEE. ON A PERUSAL OF RECORD, IT IS NOTICED THAT NOTICE OF HEARING WAS DULY SERVED UPON THE ASSESSEE, BUT N ONE APPEARED ON BEHALF OF THE ASSESSEE. :-2-: 4. ON A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITI ES BELOW AND THE GROUNDS RAISED IN THIS APPEAL, WE ARE OF THE VIEW T HAT THIS APPEAL CAN BE DISPOSED OF EVEN IN THE ABSENCE OF THE ASSESSEE. 5. PENALTY WAS LEVIED ON ACCOUNT OF DISALLOWANCE OF DE DUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P OF THE ACT. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT( A). THE PENALTY ORDER WAS CHALLENGED BEFORE THE LD. CIT(A) AND THE LD. CI T(A) HAVING NOTICED THAT IN ASSESSMENT YEARS 2009-10 AND 2010-11, THE DISALL OWANCE MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LD. CIT(A) HAV ING OBSERVED THAT THE COMMISSION AND INTEREST RECEIPTS WHICH HAVE BEEN TA XED BY THE ASSESSING OFFICER ARE MEANT FOR SPECIFIC PROJECTS AND REQUIRE D TO BE SPENT FOR MEETING THE EXPENSES OF THESE PROJECTS AND THE SURPLUS, IF ANY, ARISING IS NOT THE INCOME OF THE ASSESSEE, HAS HELD THAT THERE WAS NO QUESTION OF TAXING THE COMMISSION AND INTEREST. 6. DURING THE COURSE OF HEARING, THE LD. D.R. COULD NO T DISPUTE THE FINDING OF THE FACTS RECORDED BY THE LD. CIT(A) IN HIS ORDER. NOTHING HAS BEEN STATED WITH REGARD TO THE FATE OF THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEARS 2009-10 AND 2010-11. IN THAT SITU ATION, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE, AS TH ERE MAY BE DIFFERENCE OF OPINION WITH REGARD TO THE DISALLOWANCE OF CLAIM OF THE ASSESSEE. FOR THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) AS UNDER:- 4. I HAVE CONSIDERED THE MATTER. IT IS FOUND THAT IN THE CASE OF THE APPELLANT SIMILAR ADDITIONS 'WE'RE MADE BY THE AO I N THE AYS 2009-10 & 2010-11. THE AO DISALLOWED THE CLAIM, OF DEDUCTIO N U/S SOP IN RESPECT OF CONTRIBUTION RECEIVED FROM THE SUGAR MIL LS IN FORM OF COMMISSION AND BANK INTEREST FOR THE REASON THAT TH E APPELLANT IS NOT A CO-OPERATIVE SOCIETY AND THE ACTIVITIES CARRIED O UT BY IT DO NOT QUALIFY FOR DEDUCTION U/S 80P. IN THE APPELLATE ORD ERS PASSED BY ME ON 18.02.2014 IN APPEAL NOS. OT(A)-I/LKO/11-12/115 & CIT(A)- :-3-: I/LKO/12-13/113 FOR AYS 09-10 & 10-11 RESPECTIVELY IT HAS BEEN HELD THAT-THE COMMISSION AND INTEREST RECEIPTS WHICH HAV E BEEN TAXED BY THE AO ARE MEANT FOR SPECIFIC PROJECTS AND REQUIRED TO BE SPENT FOR MEETING THE EXPENSES OF THESE PROJECTS. CONSEQUENTL Y, THE SURPLUS, IF ANY ARISING IS NOT INCOME OF THE APPELLANT AND THUS THERE DOES NOT ARISE ANY QUESTION OF TAXING COMMISSION AND INTERES T AS INCOME. I FIND THAT SIMILAR ARGUMENTS WERE MADE BY THE APPELL ANT BEFORE THE AO DURING THE PENALTY PROCEEDINGS WHICH WERE NOT CO NSIDERED BY HER. THE AO FAILED, TO APPRECIATE THAT THE PENALTY PROCE EDINGS ARE DIFFERENT FROM THE ASSESSMENT PROCEEDINGS. IT IS A LSO NOTED THAT THE APPELLANT HAS DISCLOSED ALL THE FACTS DURING THE AS SESSMENT PROCEEDINGS. THE ADDITION WAS ONLY MADE BECAUSE THE APPELLANT UNDER MISTAKEN LEGAL ADVICE FILED RETURN AS CO-OPER ATIVE SOCIETY AND CLAIMED DEDUCTION U/S 80P OF THE ACT. THE ADDITION WAS MADE BY THE AO AND SUBSEQUENTLY CONFIRMED BY THE CIT(A) BECAUSE THE APPELLANT COULD NOT PRESENT HIS CASE PROPERLY IN LIGHT OF THE JUDGMENTS OF THE APPELLATE AUTHORITIES DECIDING THE ISSUE IN HIS FAV OUR. IT IS NOTED THAT THE ADDITION IN RESPECT OF WHICH PENALTY HAS BEEN I MPOSED IS DISPUTED, INVOLVE CHANGE OF OPINION AND INTERPRETAT ION OF PROVISIONS OF THE ACT. SINCE THE APPELLANT HAS DISCLOSED THE F ULL FACTS THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271(L)(C) FOR MERELY MAKING OF A CLAIM ON A WRONG LEGAL ADVICE. RELIANCE IS PLACED O N THE FOLLOWING JUDGMENTS: A. CIT V. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC) B. CIT V. ARCTIC INVESTMENT (P) LTD., (2010) 190 TA XMAN 157 (DEL.) C. CIT V. THE SHAHABAD COOP. SUGAR MILLS LTD., 322 ITR 73 (P & H) UNDER THE CIRCUMSTANCES PENALTY ORDER U/S 271(L)(C) IMPOSING PENALTY OF RS.13,04,379/- FOR FURNISHI NG INACCURATE PARTICULARS IS CANCELLED. GROUNDS ARE DECIDED IN FAVOUR OF THE APPELLANT. :-4-: 7. SINCE THE REVENUE HAS NOT POINTED OUT ANY DEFECT IN THE ORDER OF THE LD. CIT(A), WE FIND NO INFIRMITY THEREIN AND WE CON FIRM THE SAME. 8. SINCE THE ORDER OF THE LD. CIT(A) IS CONFIRMED, THE CROSS OBJECTION OF THE ASSESSEE HAS BECOME INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTIONED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH MARCH, 2015 JJ:1703 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR