ACIT, New Delhi V. Sh. Mohinder Kr. Jain, New Delhi

ITA 5152/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74110 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 04-02-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR SHARMA
• Assessee Lawyers: GUNJAN PARSHAD
• Keywords: Difference of opinion
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI G.D. AGRAWAL, HONBLE VICE-PRESIDENT AND SHRI RAJPAL YADAV, HONBLE JUDICIAL MEMBER ITA NO. 5152/DEL/2012 ASSESSMENT YEAR: 2001-02 ASSISTANT CIT, VS. SHRI MOHINDER KR. JAIN, CIRCLE 27(1), B-78-79, MAYAPURI INDL. AREA, NEW DELHI. PHASE-I, NEW DELHI. (PAN: AAGPJ1935P) (APPELLANT) (RESPONDENT) REVENUE BY: SHRI SACHIN KUMAR SHARMA, CA ASSESSEE BY: SHRI KEYUR PAT EL, SR. DR & SHRI GUNJAN PARSHAD, CIT(DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER DISSATISFIED WITH THE ORDER OF LEARNED CIT(APPEALS ) DATED 30.07.2012 PASSED FOR ASSESSMENT YEAR 2011-12, REVENUE IS IN A PPEAL BEFORE US. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE PENALTY OF RS.14,90,438 IMPOSED BY THE LEARNED ASSESSING OFFICER UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS.142,81,285. AN ASS ESSMENT ORDER WAS PASSED UNDER SEC. 143(3) ON 23.4.2004 WHEREBY INCOM E OF THE ASSESSEE WAS 2 DETERMINED AT RS.182,48,302. THE BASIC DISPUTE RELA TES TO TREATMENT OF INTEREST INCOME EARNED BY THE ASSESSEE FOR THE PURP OSE OF CLAIMING DEDUCTION UNDER SEC. 80HHC OF THE ACT. ACCORDING TO THE ASSES SEE, IT HAS TO DEPOSIT CERTAIN AMOUNTS IN THE FD WHICH HAS RESULTED INTERE ST INCOME OF RS.61,72,759. IT HAD INCURRED INTEREST EXPENSES OF RS.63,23,615. THE ASSESSEE HAS INCLUDED THE INTEREST INCOME AS A BUSI NESS INCOME AND COMPUTED THE DEDUCTION UNDER SEC. 80HHC. ASSESSING OFFICER WAS OF THE VIEW THAT INTEREST INCOME CANNOT BE TREATED AS BUSI NESS INCOME. HE, THEREFORE, EXCLUDED THE INTEREST RECEIPTS FROM THE COMPUTATION OF ELIGIBLE PROFIT FOR THE PURPOSE OF DEDUCTION ADMISSIBLE UNDE R SEC. 80HHC. DISSATISFIED WITH THE ORDER, ASSESSEE WENT IN APPEA L BEFORE THE LEARNED CIT(APPEALS). LEARNED CIT(APPEALS) HAS GRANTED PART IAL RELIEF TO THE ASSESSEE. THE ASSESSEE, THEREAFTER, APPROACHED THE ITAT VIDE ITA NO.5162/DEL/2004. THE ITAT HAS SET ASIDE THE ORDERS OF THE LEARNED REVENUE AUTHORITIES BELOW AND REMITTED THIS ISSUE TO THE FI LE OF THE ASSESSING OFFICER FOR READJUDICATION. THE ITAT HAS DIRECTED THE ASSES SING OFFICER TO CONSIDER THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. SHRI RAM HONDA POWER EQUIPMENTS REPORTED IN 289 ITR 475. LEA RNED ASSESSING OFFICER HAS PASSED THE FRESH ASSESSMENT ORDER ON 22 .12.2009. HE TREATED THE INTEREST INCOME ON FDRS AS INCOME FROM OTHER SOURCE S INSTEAD OF BUSINESS 3 INCOME. LEARNED ASSESSING OFFICER IN THE SECOND ASS ESSMENT ORDER INITIATED THE PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME BY INCLU DING INTEREST INCOME IN THE ELIGIBLE PROFIT FOR THE PURPOSE OF GRANT OF DED UCTION UNDER SEC. 80HHC OF THE ACT. 3. LEARNED ASSESSING OFFICER HAD ISSUED A SHOW-CAUS E NOTICE UNDER SEC. 274 OF THE INCOME-TAX ACT, 1961 INVITING EXPLANATIO N OF THE ASSESSEE AS TO WHY PENALTY BE NOT IMPOSED UPON THE ASSESSEE. ACCOR DING TO HIM, THE ASSESSEE DID NOT FILE ANY REPLY IN RESPONSE TO THE NOTICE DATED 07.3.2012 AND HE PASSED THE PENALTY ORDER EX PARTE, WHEREBY HE HA S IMPOSED THE PENALTY OF RS.14,90,438 WITH REFERENCE TO THE UNDISCLOSED INCO ME OF RS.43,32,930. 4. ON APPEAL, LEARNED CIT(APPEALS) HAS DELETED THE PENALTY. 5. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE PENALTY ORD ER, WE FIND THAT LEARNED ASSESSING OFFICER HAS ISSUED NOTICE ON 07.03.2012 A ND PASSED THE PENALTY ORDER ON 26.3.2012. IT IS NOT ASCERTAINABLE WHETHER THIS NOTICE WAS DULY SERVED UPON THE ASSESSEE OR NOT AND HOW MUCH TIME W AS GIVEN TO THE ASSESSEE FOR REPLY. WHY THE ASSESSING OFFICER HAS W AITED FOR A LONG TIME FOR 4 ISSUING THE SHOW-CAUSE NOTICE. THE ASSESSEE HAS ALS O POINTED OUT BEFORE THE LEARNED CIT(APPEALS) THAT HE HAS NOT FURNISHED ANY INACCURATE PARTICULARS. IT IS THE DIFFERENCE OF OPINION ON A PARTICULAR ISSUE BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER. HE ALSO POINTED OUT THAT IN THE FIRST ASSESSMENT ORDER, ASSESSING OFFICER HAD DISALLOWED THE CLAIM UNDER SE C. 80-HHC ON INTEREST INCOME BUT DID NOT INITIATE ANY PENALTY PROCEEDINGS . ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING O FFICER. ON DUE CONSIDERATION OF THE FACTS, WE FIND THAT ACTUAL INT EREST RECEIPTS ARE OF RS.61,72,759. THIS INCOME WAS EARNED ON FDRS. LEAR NED CIT(APPEALS) HAS DELETED THE PENALTY ON THE GROUND THAT MATTER OF NE TTING OF INTEREST FOR THE PURPOSE OF DEDUCTION UNDER SEC. 80-HHC, WAS REMAINE D IN CONTROVERSY AND THE SAME SETTLED ONLY IN JANUARY 2007 WHEN THE HON' BLE DELHI HIGH COURT RENDERED ITS JUDGMENT IN THE CASE OF SHRI RAM HONDA POWER EQUIPMENT (SURPA). WHEN THE ASSESSEE HAS FILED ITS RETURN AND THE ASSESSING OFFICER HAS PASSED ORIGINAL ASSESSMENT ORDER IN 2004, THIS ISSU E WAS CONTROVERSIAL AND DIVERGENT OPINIONS WERE AVAILABLE. THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS, IT HAD ONLY MADE A CLAIM WH ICH ACCORDING TO THE ASSESSING OFFICER IS NOT SUSTAINABLE. LEARNED FIRST APPELLATE AUTHORITY HAS PUT RELIANCE UPON THE JUDGMENT OF THE HON'BLE SUPRE ME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN 322 ITR 158. AFTER 5 GOING THROUGH THE ORDER OF LEARNED CIT(APPEALS), WE DO NOT FIND ANY ERROR IN IT. THIS APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 07.02.201 4 SD/- SD/- ( G.D. AGRAWAL ) ( RAJPAL YADAV ) VICE-PRESIDENT JUDICIAL MEMBER DATED: 07/02/2014 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 6