The Purshottam Farmers Co.op Cotton Ginning & Pressing Society Ltd., Surat V. The Deputy Commissioner of Income Tax, Circle-2(3), Surat

ITA 501/SRT/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6803 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-09-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 20-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Condonation of delay; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 501/SRT/2023 (AY: 2012-13) (Physical Hearing) The Purshottam Farmers Co. Op Cotton Ginning & Pressing Society Ltd., Jahangirpura Gin, Jahangirpura, Rander, Surat, Gujarat-395009 PAN No. AAAAT 3000 A Vs. D.C.I.T., Circle-2(3), Surat, Aayakar Bhawan, Majuragate, Surat, Gujarat-395001. Appellant/ Respondent Respondent/ Assessee Assessee represented by Shri Akshay Modi, C.A. Department represented by Shri Vinod Kumar, Sr.DR Date of Institution of Appeal 21/07/2023 Date of hearing 27/09/2023 Date of pronouncement 05/10/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the Assessee is directed against the order of learned National Faceless Appeal Centre, Delhi (in short, the NFAC)/ Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 18/12/2022 in confirming the penalty of Rs. 89,003/- levied under Section 271(1)(c) of the Income Tax Act, 1961 (in short, the Act) for the Assessment Year (AY) 2012-13. 2. At the outset of hearing, the ld. AR of the assessee submits that there is a delay of 155 days in filing appeal before the Tribunal. The learned Authorised Representative (ld. AR) of the assessee submits that he has ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 2 already filed application for condonation of delay. The ld. AR of the assessee submits that the impugned order was passed by the ld. CIT(A) on 18/12/2022 and the present appeal is filed on 21/07/2023. The ld. AR of the assessee further submits that the order was served on the Chartered Accountant of the assessee society on 18/12/2022 and appeal should have been filed on or before 15/02/2023. Shri Kamleshbhai Bhagwatibhai Patel, Manager, who was authorised officer to handle all matters relating to taxation of assessee society, who appointed Mr. Prashant N. Kabrawala Chartered Accountant (CA) as authorised representative. Prashant N. Kabrawala gave his email and telephone number on the portal of Income Tax Department so the assessee society could not become aware whether any order has been passed or not when the recovery proceeding was initiated by the Assessing Officer, the assessee society came to know and approached the present authorised representative to pursue the matter in further appeal. Though in Form- 36, the assessee society has written as service of communication of the order as on 18/12/2022. In fact, the order was not served or came to the notice of assessee as it was served on their CA. The Manager of society has given his affidavit that order was not communicated or came to their notice. The ld. AR of the assessee submits that the delay in filing appeal is neither intentional nor deliberate but for the reasons that the assessee was not aware about passing of the order. The ld. AR of the assessee ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 3 submits that the assessee has a good case on merit and is likely to succeed if they are allowed to contest the case on merit by condoning the delay in filing appeal. To support his submission, the ld. AR of the assessee relied upon the decision of Hon'ble Apex Court in Subhkaran & Sons Vs N.A. Kazi, 5 th I.T.O. 1984 SCC Online Bom 411, ADCC Infocom (P) Ltd. Vs Pr.CIT (2023) 150 taxmann.com 529 (Bom) and Collector, Land Acquisition Vs Mst. Katiji & ors. (1987) 167 ITR 471 (SC). 3. On merit, the ld. AR of the assessee submits that the Assessing Officer made disallowance under Section 80P(2)(d) of the Act of Rs. 2,98,035/- by taking a view that the assessee is not eligible for such deduction. The assessee has neither concealed any income nor furnished inaccurate particulars of income rather the disallowance was made on the basis of change of opinion. Mere disallowance in every case would not ipso facto lead to levy of penalty. The Assessing officer levied penalty @ 100% of tax sought to be evaded on such disallowance. The ld AR for the assessee submits that in fact the assessee has not claimed deduction of interest earned from Dakshin Gujarat Vij Company Limited (DGVCL) and interest from State bank of India, still the assessing officer on the basis of misconception and presumptive inferences denied the benefit of deduction under section 80P(2)(d) on the basis of Totgars’ Cooperative Society Limited (2010) 188 Taxman 282-SC. The decisions in Totgars’ Cooperative Society Limited (supra) is on the deduction under section ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 4 80P(2)(a)(i) and not on 80P(2)(d). It was not the case of furnish inaccurate particulars of income as presumed by the assessing officer. Even otherwise rejection of claim of deduction would not automatically allow the assessing officer to levy penalty under section 271(1)(c). The ld. AR of the assessee submits that the case of assessee is absolutely covered by the decision of Hon'ble Supreme Court in CIT Vs Reliance Petroproducts (P) Ltd 322 ITR 158. 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that on the condonation of delay, the Bench may take decision as per law. 5. On merit, the ld. Sr. DR for the revenue fully supported the order of Assessing Officer. The ld. Sr. DR for the revenue submits that the assessee has claimed deduction under Section 80P(2)(d) of the Act which was not admissible. The Assessing Officer disallowed such deduction and levied penalty on such disallowance. The ld Sr DR for the revenue prayed for dismissal of appeal. 6. We have considered the rival submissions of both the parties. First we are considering the plea of condonation of delay of assessee. We find that the main contention of ld. AR of the assessee is that there was no intentional or deliberate delay in filing appeal before the Tribunal. The delay is only for the reasons that the tax consultant Shri Prashant N. Kabrawala gave his telephone number & email on the portal of Income ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 5 Tax Department, so the assessee society could not become aware whether any order has been passed or not when the recovery proceeding was initiated by the Assessing Officer, the assessee society came to know and approached the present authorised representative to pursue the matter in further appeal. The Manager of assessee has filed an affidavit. The fact pleaded in the affidavit is not contested by the Revenue, therefore, considering the fact that there is no intentional or deliberate delay on the part of assessee. Keeping in view the principle that when technical consideration is pitted against the cause of substantial justice, the cause of justice deserves to be preferred as the opposite party has no vested right in injustice. Further there is no presumption that delay is caused deliberately. Keeping in view of the aforesaid facts and considering the plea of assessee, the delay in filing appeal before the Tribunal is condoned. Now adverting to the merit of the case. 7. We find that the Assessing Officer while passing the assessment order made addition/ disallowance of Rs. 2,98,035/- on account of interest income earned from State bank of India and interest of Rs. 29,366 Dakshin Gujarat Vij Company Ltd. (DGVCL). Such disallowance was made on the basis of details available in the Profit & Loss Account which was claimed as exempt. Though, the assessee before us vehemently argued that no such claim was made by the assessee and that the assessing officer disallowed on wrong presumption. The Assessing Officer ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 6 disallowed such deduction by taking a view that the assessee is entitled for deduction of interest earned from Cooperative society only. 8. Before levying penalty, the Assessing officer issued show cause notice to the assessee vide notice dated 16/02/2017. The assessee filed reply dated 03/03/2017. In the reply, the assessee submitted that the penalty cannot be imposed just for making incorrect claim and relied upon the decision of Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (supra). The assessee also explained that they have furnished all the details of its expenditure as well as income in its return which was not found to be inaccurate nor could be viewed as concealment of income on their part, it was on the authorities who accepted or not. Merely the assessee claimed expenditure which was not accepted to the revenue that itself would not attract penalty. The assessee requested to drop the penalty. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that the assessee willfully admitted to evade tax on the income to the extent of Rs. 2,98,035/- by furnishing inaccurate particulars of income. On appeal before the ld. CIT(A), the action of Assessing Officer was upheld. 9. We find that in the computation of income attached with the return of income, the assessee furnished all the details. The deduction regarding interest earned from DGVCL and State Bank of India was not allowed as deduction under Section 80)(2)(d) of the Act, though before us the ITA No. 501/Srt/2023 The Purshottam Farmers CO.Op CG & P Society Ltd. Vs DCIT 7 assessee claimed that no such claim was made by the assessee. Thus, considering the facts of the case we find that neither there was concealment of income nor furnishing inaccurate particulars of income rather it was the Assessing officer who has not accepted the claim of assessee. Thus, the ratio of decision of Hon'ble Supreme Court in CIT Vs Reliance Petroproducts (P) Ltd. (supra) is clearly applicable on the facts of the present case, wherein it was held that mere filing incorrect claim which is not allowed by the assessing officer, that by itself would not attract penalty under section 271(1)(c). Thus, we direct the Assessing Officer to delete the entire penalty. 10. In the result, this appeal of assessee is allowed. Order announced in open court on 05 th October, 2023. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 05/10/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat