PALM GROVE BEACH HOTELS P.LTD, MUMBAI V. ASST CIT CEN CIR 4(1), MUMBAI

ITA 5217/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0274 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DES
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5217 /MUM/2015 (ASSESSMENT YEAR: 2011-12) M/S. PALM GROVE BEACH VS. DCIT, CENTRAL CIRCLE - 4(1) HOTELS P VT. LTD. AAYAKAR BHAVAN, M.K. MARG CONSTRUCTION HOUSE - B 2ND FLOOR, 623, LINKING ROAD KHAR (W), MUMBAI 400052 MUMBAI 400020 PAN AAACP2735J APPELLANT RESPONDENT APPELLANT BY: SHRI SANJAY SAWANT RESPONDENT BY: SHRI SAURABH DESPANDE DATE OF HEARING: 07.08.2017 DATE OF PRONOUNCEMENT: 09.08.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-52, MUMBAI DATED 28.08.2015 FOR A.Y. 2011-12 . 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO T HE LEVY OF PENALTY UNDER SECTION 271BA OF THE INCOME TAX ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES B ELOW. WE NOTED THAT IN THIS CASE THE AO LEVIED PENALTY UNDER SECTION 271BA AS ACCORDING TO HIM THE ASSESSEE HAD NOT FURNISHED INFORMATION OR DOCUM ENT AS PRESCRIBED UNDER SECTION 92D(1). THUS THE ASSESSEE HAD MADE A DEFAULT. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF THE AO. 4. THE PROVISIONS OF SECTION 271BA ARE SUBJECT TO THE PROVISIONS OF SECTION 273B. SECTION 273B OF THE INCOME TAX ACT CL EARLY SPECIFY THAT NO PENALTY SHALL BE IMPOSED ON A PERSON FOR ANY FAILUR E REFERRED TO IN THE ITA NO. 5217/MUM/2015 M/S. PALM GROVE BEACH HOTELS PVT. LTD. 2 SECTION 271BA IN CASE THE ASSESSEE PROVES THAT THER E WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THE IMPUGNED CASE THE ASSE SSEE VIDE HIS REPLY DATED 25.01.2014 HAS CATEGORICALLY STATED THAT HE WAS UND ER THE BONAFIDE BELIEF THAT IT IS NOT AN ASSOCIATE CONCERN AS CONTEMPLATED UNDER SECTION 92A(2) OF THE INCOME TAX ACT. IN OUR VIEW THE INTERPRETATION TAKEN BY THE ASSESSEE THAT SECTION 92A(2) CANNOT BE READ IN ISOLATION BUT IT HAS TO BE READ IN COMBINATION WITH SUB-SECTION (1) AND THEREFORE UNLE SS THE CASE SATISFIES THE REQUIREMENTS OF BOTH THE SECTION THE RELATION B ETWEEN ENTERPRISE CANNOT BE CONSIDERED AS THAT OF ASSOCIATE CONCERN. THIS IN OUR VIEW IS A POSSIBLE VIEW AND THEREFORE WE FIND SUBSTANCE IN TH E SUBMISSION OF THE ASSESSEE AND ACCORDINGLY WE ARE OF THE VIEW THAT TH E ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FURNISHING THE REPORT IN FORM 3CEB AS PER THE PROVISIONS OF SECTION 92A. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED UNDER SECTION 271BA. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 9 TH AUGUST, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -52, MUMBAI 4. THE CIT, CENTRAL-II, MUMBAI 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.