Mudra Builders, Ahmedabad V. The Income Tax Officer, Ward- 4(2)(3), Ahmedabad

ITA 505/AHD/2023

AI Insights

Mudra Builders appealed against the penalty imposed by the Income Tax Officer, which was upheld by the CIT(A). The penalty was related to the furnishing of inaccurate particulars of income concerning deductions claimed under Section 80IB(10) and additions under Section 40(a)(ia) for late deposit of TDS. The Tribunal noted that the issue of disallowance under Section 80IB(10) was debatable and thus not a ground for penalty. Additionally, the Tribunal considered the withdrawal of the earlier appeal by the assessee as a bona fide mistake and not a deliberate act to mislead.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129424 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-09-2023
• Assessment Year: 2005-2006
• Appeal Filed On: 14-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 271(1)(c); 143(3); 40(a)(ia); 80IB

Judgement Text

ITA No.505/Ahd/2023 Assessment Year: 2005-06 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.505/Ahd/2023 Assessment Year: 2005-06 Mudra Builders, 10, Kevalkunj Society, K.K. Nagar Char Rasta, Ghatlodia, Ahmedabad. [PAN – AAHFM 4263 G] Vs. The Income Tax Officer, Ward – 4(2)(3), Ahmedabad.. (Appellant) (Respondent) Assessee by Shri Mahesh Chhajed, AR Revenue by Shri Ramesh Kumar, Sr. DR Da te o f He a r in g 26.09.2023 Da te o f P ro n o u n ce m e n t 18.10.2023 O R D E R This appeal is filed by the Assessee against order dated 17.04.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2005-06. 2. The Assessee has raised the following grounds of appeal :- “1. The order passed by the Ld. CIT(A) is against law, equity & justice. 2. The Ld. CIT(A) has erred in law and facts by upholding the Penalty u/s.271(1)(c) for furnishing of inaccurate particulars of income.” 3. The return of income for the Assessment Year (A.Y.) 2005-06 was filed on 13.03.2006 declaring total income at Rs. Nil claiming deduction of Rs.84,92,482/- under Section 80IB(10) of the Income Tax Act, 1961. The assessment was completed under Section 143(3) of the Act vide order dated 12.12.2017 making addition of Rs.84,92,782/- disallowing the claim under Section 80IB(2) of the Act and addition of Rs.18,77,885/- was made under Section 40(a)(ia) of the Act for late deposit of TDS i.e. on 01.06.2005 instead of 31.05.2005. The matter was carried to the Tribunal and the Tribunal vide order dated 15.07.2011 set aside the Assessment Order directing re-assessment allowing proportionate deduction under Section 80IB(10) of the Act. In the meanwhile, the Assessing Officer initiated penalty under Section 271(1)(c) of the Act for the reason of furnishing of ITA No.505/Ahd/2023 Assessment Year: 2005-06 Page 2 of 3 inaccurate particulars of income. The Assessing Officer imposed penalty of Rs.6,87,167/-. 4. Being aggrieved by the Penalty Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that fresh assessment under Section 143(3) read with Section 254 was passed vide order dated 30.10.2012 and addition of Rs.18,77,885/- was made under Section 40(a)(ia) of the Act for late deposit of TDS of Rs.20,06,900/- under Section 80IB of the Act. Appeal filed against the order was dismissed by the CIT(A) vide order dated 12.11.2013 . The Assessing Officer vide order dated 10.03.2015 imposed penalty of Rs.6,87,167/- under Section 271(1)(c) of the Act for the said addition. In fact, penalty for the same addition was made earlier and was deleted by the CIT(A) vide order dated 29.07.2011. Therefore, the penalty order was bad in law and unwarranted. Appeal was filed against penalty order passed under Section 271(1)(c) of the Act but the same was withdrawn under misunderstanding vide order dated 07.07.2015. The assessee’s Representative under bonafide mistake misunderstood the order of the Tribunal dated 19.03.2015 as being order against the latest penalty order and withdrew the appeal before the CIT(A) unilaterally. The Ld. AR further submitted that the assessee firm ceased to carry out any business and was discontinued and, therefore, belated appeal filed before the CIT(A) should have been allowed with condonation of delay. 6. Ld. DR relied upon the Assessment Order, Penalty Order and the Order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. From the perusal of the penalty order dated 10.03.2015 it appears that the issue of penalty in respect of Section 80IB(10) and 40(a)(ia) of the Act was dealt with by the CIT(A) in the earlier order dated 29.07.2011, but after the penalty order passed by the Assessing Officer is in consonance with the Tribunal’s order dated 15.07.2011. The CIT(A)’s observation that since the assessee has withdrawn the appeal, the CIT(A) cannot decide the matter and, therefore, dismissed the same. But withdrawal of the earlier appeal was bonafide mistake on the part of the assessee’s Representative and that should have been taken ITA No.505/Ahd/2023 Assessment Year: 2005-06 Page 3 of 3 into account. Besides that, on merits, the issue of disallowance under Section 80IB(10) of the Act was in fact deduction claimed by the assessee which was debatable at the relevant point and, therefore, the same cannot be treated as furnishing of inaccurate particulars of income. Therefore, the penalty imposed under Section 27(1)(1)(c) does not sustain on merit as well. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 18 th October, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 18 th October, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad