The DCIT, Circle-1(1), Baroda V. Gujarat Fluorochemeicals Ltd, Baroda

ITA 522/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94540 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UKTI PARIKH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI S. S. GODARA, JM, & MANISH BORAD, AM. ITA NO.522/AHD2012 ASST. YEAR:2005-06 .THE DY. CIT, CIR.1(1), BARODA. VS GUJARAT FLUROCHEMICALS LTD., 2 ND FLOOR ABS TOWER, OLD PADRA ROAD, BARODA. (APPELLANT) (RESPONDENT) PA NO.AAACG6725H APPELLANT BY SHRI RAJDEEP SINGH, SR.DR RESPONDENT BY MS UKTI PARIKH, AR DATE OF HEARING: 9/10/2015 DATE OF PRONOUNCEMENT: 14/10/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-I, BARODA, DATED 20.12.2011. ORDER UNDER SEC TION 271(1)(C) OF THE INCOME-TAX ACT,1961 (IN SHORT THE ACT) WAS FRAM ED BY DCIT, CIR.1(1), BARODA. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING PENALTY U/S 271(1) (C) AMOUNTING TO RS.6,60,000/- WITHOUT CONSIDERING THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES, 3 06 ITR 277 (SC) ACCORDING TO WHICH THERE IS NO ONUS UPON T HE DEPARTMENT TO ESTABLISH MENS REA. ITA NO. 522/AHD/2012 ASST. YEAR 2005-06 2 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR AL TER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL IT IS PRAYED THAT THE ORDER OF THE CIT(A) BE SET A SIDE AND THAT OF THE AO BE RESTORED. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING REFRIGERAN T GASES USED PRIMARILY IN REFRIGERANT EQUIPMENTS. THE ASSESSEE F ILED ITS RETURN OF INCOME ON 28.10.2005 DECLARING TOTAL INCOME OF RS.4 9,25,39,459/-. ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT WERE COMPLETED ON 31.12.2007. 3. THEREAFTER PENALTY ORDER U/S 271(1)(C) WAS FRAME D BY AO WHEREIN HE IMPOSED PENALTY OF RS.6,60,000/- ON ACCO UNT OF NON- DISCLOSURE OF INTEREST OF RS.17,86,644/- ON INCOME- TAX REFUND RECEIVED BY THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE TH E CIT(A) WHO FOLLOWING THE ORDER OF HIS PREDECESSOR CIT(A)-I, BA RODA, IN ASSESSEES OWN CASE FOR AY 2004-05 DELETED THE PENALTY LEVIED BY AO. 5. AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE T HE TRIBUNAL. BEFORE GOING FURTHER, WE WILL LIKE TO MENTION HERE THAT ON 20 TH MARCH, 2012 AN APPLICATION WAS MOVED BY THE LD. AR BEFORE HONBLE VICE PRESIDENT, ITAT, AHMEDABAD FOR CONSOLIDATION OF VAR IOUS APPEALS OF ITA NO. 522/AHD/2012 ASST. YEAR 2005-06 3 ASSESSEE PENDING BEFORE THE TRIBUNAL. THERE ARE THR EE APPEALS LISTED ON 9.10.2015 IN THE CASE OF ASSESSEE OUT OF WHICH T WO ARE FOR AY 2008-09 AND ONE FOR AY 2005-06. THE LD. AR SUBMITTE D THAT THERE IS NO COMMON MATTER IN BETWEEN AY 2005-06 AND AY 2008- 09 APPEALS AND REQUESTED FOR HEARING OF THE APPEAL RELEVANT TO AY 2005-06. THE LD. DR CONCEDED TO THE SUBMISSIONS OF LD. AR. 6. THE LD. AR SUBMITTED THAT SIMILAR GROUNDS OF APP EAL HAS BEEN DECIDED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 2004-05 IN ITA NO.1108/AHD/2009 PRONOUNCED ON 31.01 .2013 WHEREIN THE CO-ORDINATE BENCH HAS DISPOSED OF SIMIL AR GROUND RAISED BY REVENUE. 7. THE LD. DR RELIED ON THE ORDER OF A.O. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT PENALTY HAS BEEN LEVIED BY THE AO ON ACCOUNT OF ADDITION OF RS.17,86,644/- ON ACCOUNT OF INTEREST ON INCOME-TAX REFUND. HOWEVER, CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE. THE LD. AR HAS REFERRED TO THE ORDER OF C O-ORDINATE BENCH IN ITA NO.1108/AHD/2009 FOR AY 2004-05 WHEREIN SIMI LAR GROUND WAS RAISED BY THE REVENUE, WHICH IS AS FOLLOWS :- 1(A) ON THE FACTS, IN THE CIRCUMSTANCES OF THE CAS E AND LAW, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING PENALT Y U/S 271(1)(C) AMOUNTING TO RS.8,15,000/- WITHOUT CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEX TILES, 306 ITR ITA NO. 522/AHD/2012 ASST. YEAR 2005-06 4 277 (SC), ACCORDING TO WHICH, THERE IS NO ONUS UPON THE DEPARTMENT TO ESTABLISH MENS REA. THE CO-ORDINATE BENCH HAS DECIDED THE ABOVE GROUND IN ITA NO.1108/AHD/2009 FOR AY 2004-05 IN THE FOLLOWING MA NNER :- 71. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND W E FIND THAT THE PENALTY IN THE PRESENT CASE WAS IMPOSED IN RESPECT OF DISALLOWANCE UNDER SECTION 36(1)(III) AND U/S 14A, WHICH WAS RED UCED FROM RS.69,05,369/- TO RS.9,13,000/- AND ONE MORE ADDITI ON OF RS.13,57,606/- FOR INTEREST ON INCOME-TAX REFUND. T HE PENALTY IN RESPECT OF FIRST DISALLOWANCE OF RS.9,13,000/- IS N OT LEVIABLE BECAUSE ALL THE MATERIAL FACTS WERE FURNISHED BY THE ASSES SEE AND THEREFORE IT CANNOT BE SAID THAT THERE WAS ANY CONCEALMENT OF IN COME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, PAR TICULARLY, WHEN THE DISALLOWANCE WAS REDUCED SUBSTANTIALLY FROM RS.69,0 5,369/- TO RS.9,13,000/-. SIMILARLY, ON ACCOUNT OF ADDITION IN RESPECT OF INTEREST ON INCOME-TAX REFUND ALSO, THE PENALTY IS NOT JUSTI FIED BECAUSE THIS AGAIN IS A DEBATABLE ISSUE AS TO WHETHER THE INTERE ST ON REFUND WOULD BE ASSESSABLE IN THE YEAR IN WHICH IT IS GRANTED OR IN THE YEAR IN WHICH THE PROCEEDINGS UNDER SECTION 143(3) ATTAINS FINALI TY. THIS BEING A DEBATABLE ISSUE, THE PENALTY IS NOT JUSTIFIED FOR T HE ADDITION ALSO. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN TH E ORDER OF THE CIT(A) AND THE APPEAL OF THE REVENUE IS DISMISSED. 9. GOING THROUGH THE ABOVE ORDER, WE FIND THAT IN I TA NO.1108/AHD/2009 FOR AY 2004-05, IN ASSESSEES OWN CASE, GROUND OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) IN RELATION TO ADDITION FOR INTEREST ON INCOME-TAX REFUND HAS BEEN ADJUDICA TED. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE CO-ORDINATE BENCH, WE FIND THAT PENALTY IN THE PRESENT CASE WAS IMPOSED AT RS.6,60, 000/- ON ACCOUNT OF NON-DISCLOSURE OF INTEREST INCOME ARISING OUT OF INCOME-TAX REFUND, CANNOT BE SAID TO BE CONCEALMENT OF INCOME OR FURNI SHING OF ITA NO. 522/AHD/2012 ASST. YEAR 2005-06 5 INACCURATE PARTICULARS OF INCOME. THEREFORE, IN VIE W OF ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A), WE UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMI SSED. 10. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2015 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 14/10/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD ITA NO. 522/AHD/2012 ASST. YEAR 2005-06 6 1. DATE OF DICTATION: 12/10/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 12/10/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 14/10/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: