Prima Private Ltd, Pune V. Deputy Commissioner of Income tax, Pune

ITA 539/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1922 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 271(1)(c); 80IB; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.539/PUN/2017 / ASSESSMENT YEAR : 2009-10 PRIMA PRIVATE LTD. T-73, MIDC BHOSARI, PUNE-411026. PAN : AABCP1938J ....... / APPELLANT / V/S. DCIT, CIRCLE-10, PUNE. / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 16.05.2019 / DATE OF PRONOUNCEMENT : 27.06.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)- 13, PUNE DATED 26.12.2016 FOR THE ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER :- 1. THE LD. A.O. ERRED (AND LD. CIT(A) ERRED IN CONFORMING) IN LEVYING THE PENALTY U/S 271(1)(C) OF RS.13,04,400/-. 2. THE LD. A.O. ERRED IN CONCLUDING THAT THE ASSESSEE CONCEALED THE INCOME, DISREGARDING THE FACT THAT THE ASSESSEE HAD OFFERED THE INCOME SUE MOTTO. 3. THE APPELLANT CRAVES ITS RIGHT TO ADD TO OR ALTER THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. 2 ITA NO.539/PUN/2017 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE HAS MULTIPLE UNITS I.E. BOTH (I) ELIGIBLE AND (II) NON-ELIGIBLE UNDERTAKINGS FOR CLAIMING OF DEDUCTION UNDER CHAPTER VI OF THE I.T. ACT. THE ASSESSEE FILED THE RETURN OF INCOME ON 30.10.2009 DECLARING THE TOTAL INCOME OF RS.2,49,93,790/- AFTER CLAIMING DEDUCTION UNDER THE SAID CHAPTER VI OF THE ACT. ASSESSEE CLAIMED GENERAL EXPENSES IN THE BOOKS. HOWEVER, THE ASSESSEE, WHILE FILING THE RETURN OF INCOME CLAIMED THE ENTIRE SUCH EXPENDITURE AS THE EXPENDITURE OF THE INELIGIBLE UNIT, THEREBY, A HIGHER AMOUNT OF DEDUCTION WAS CLAIMED IN THE SAID ORIGINAL RETURN OF INCOME. SUBSEQUENTLY, THE ASSESSEE FILED THE REVISED RETURN OF INCOME CORRECTING THE MISTAKE OF ALLOCATION OF THE SAID GENERATION EXPENSES. THE ASSESSEE REDUCED THE CLAIM OF DEDUCTION TO THE TUNE OF RS.39,21,408/- AND THE SAME IS THE SUBJECT-MATTER OF PENALTY U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY OF RS.13,04,400/- WAS LEVIED BY THE ASSESSING OFFICER AND THE SAME WAS CONFIRMED BY THE CIT(A). 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPER BOOK (PAGE 3) AND SUBMITTED THAT THE REVISED RETURN OF INCOME COULD NOT BE FILED IN TIME DUE TO GENUINE PROBLEMS WITH E-FILING/WEBSITE. BUT THE FACT THAT THE REVISED RETURN WITH THE SAID CORRECTIONS WAS FILED IN THE MONTH OF MAY, 2011 PRIOR TO THE COMPLETION OF THE ASSESSMENT IN DECEMBER, 2011, WAS DEMONSTRATED BY THE ASSESSEE. SUBMITTING THAT THE ASSESSEE MADE THE SAID CORRECTIONS AT THE TIME OF COMPUTATION OF DEDUCTION U/S 80IA AND SECTION 80IB OF THE ACT, WHICH IS MUCH BEFORE 3 ITA NO.539/PUN/2017 ANY INVESTIGATION MADE BY THE ASSESSING OFFICER INTO THE SAID CLAIM, WAS ALSO DEMONSTRATED BY THE ASSESSEE. IN THIS REGARD, LD. AR BROUGHT OUR ATTENTION TO THE CONTENTS OF PAGES 11, 12 TO 20 OF THE PAPER BOOK AND SUBMITTED THAT THE SAID DOCUMENTS CONTAINS THE VARIOUS ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER AND THE CLAIM OF EXCESS EXPENDITURE TO THE NON-ELIGIBLE UNDERTAKING WAS NEVER AN ISSUE BEFORE THE ASSESSING OFFICER. THE OFFER OF FINANCIAL STATEMENTS WITH THE CORRECTED CLAIM WAS DONE VOLUNTARILY BY THE ASSESSEE. THEREFORE, THE CLAIM OF THE ASSESSEE DOES NOT AMOUNT TO FURNISH INACCURATE PARTICULARS OF INCOME. FOR THIS PROPOSITION, LD. COUNSEL RELIED ON THE SERIES OF DECISIONS, WHICH ARE CITED IN THE WRITTEN SUBMISSIONS DATED 14.12.2016 FILED BEFORE THE CIT(A). PENALTIES ARE NOT EXIGIBLE WHEN THE OMISSION IS NOT INTENTION. THE ASSESSEE RELIED ON THE JURISDICTIONAL HIGH COURTS JUDGEMENT IN THE CASE OF CIT VS. UMASHANKAR SARAF, 139 ITR 842 (BOM.) FOR THE PROPOSITION AND SUBMITTED THAT FAILURE TO INCLUDE SUCH INCOME WHEN DELIBERATE DOES NOT ATTRACT THE PENALTIES AS IT IS A CASE OF OMISSION ON THE PART OF THE ASSESSEE OR HIS AGENT. RELYING ON THE HONBLE RAJASTHAN HIGH COURTS JUDGEMENT IN THE CASE OF J.P. SHARMA & SONS VS. CIT, 151 ITR 333 (RAJ.), LD. COUNSEL SUBMITTED THAT CORRECTING THE OMISSION, IF ANY, BEFORE THE ITO DISCOVERIES IT AND WHEN THE REVISED RETURN WAS FILED VOLUNTARILY BY THE ASSESSEE, THE ASSESSEE COULD BE CONSIDERED HONEST AND CANNOT BE HELD GUILTY OF DELIBERATELY FURNISHED THE INACCURATE PARTICULARS OF INCOME. FURTHER, RELYING ON ANOTHER JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MOHANLAL NAKUM VS. CIT, 255 ITR 649 (BOM.), LD. COUNSEL SUBMITTED THAT THE PENALTY IS NOT TO BE LEVIED WHEN THE DISCLOSURE IS 4 ITA NO.539/PUN/2017 VOLUNTARILY DISCLOSED TRUE FACTS BEFORE THE ASSESSMENT WAS MADE IN GOOD FAITH. HE ALSO BROUGHT OUR ATTENTION TO THE SERIES OF OTHER JUDGEMENTS BOTH THE JURISDICTIONAL HIGH COURT AS WELL AS OTHER JUDGMENTS OF THE HIGH COURT AND SUBMITTED THE PENALTY IS NOT LEVIABLE IN THIS CASE SINCE THE ASSESSEE SUO MOTU /VOLUNTARILY MADE NECESSARY CORRECTIONS IN THE CLAIM OF DEDUCTION U/S 80IB AND SECTION 80IA OF THE ACT WITH PROPER APPRECIATING THE HEAD OF EXPENSES BETWEEN THE ELIGIBLE AND NON-ELIGIBLE UNDERTAKINGS. 5. THE LD. DR FOR THE REVENUE, ON THE OTHER HAND, RELIED HEAVILY ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HEARD BOTH THE SIDES. WE FIND THE ABOVESAID ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE, IN OUR VIEW, ARE SUSTAINABLE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS UNSUSTAINABLE IN LAW. THE FACTS THAT THE ASSESSEE FILED THE REVISED STATEMENTS AND HIS ATTEMPT TO FILE THE REVISED RETURN, THE PAYMENT OF RELEVANT TAXES ON THE SAID ADDITIONAL/CORRECTED INCOME DEMONSTRATE THE GOOD FAITH OF THE ASSESSEE AND THE SAME SHALL SHIELD THE ASSESSEE FROM RIGORS OF THE PENALTY PROVISIONS U/S 271(1)(C) OF THE ACT. AS SUCH, THE DETAILS OF GENERAL EXPENDITURES ARE BORNE OUT OF THE RETURN OF INCOME. THE REVISED COMPUTATION WITH CORRECT ALLOCATION OF THE SAID EXPENDITURE BETWEEN THE ELIGIBLE AND INELIGIBLE UNDERTAKINGS CANNOT BE DIRECTLY ATTRIBUTABLE TO THE EFFORTS OF THE ASSESSING OFFICER AS NO SHOW CAUSE WAS ISSUED TO THE ASSESSEE ON THIS ISSUE OF INCORRECT ALLOCATION OF THE SAID 5 ITA NO.539/PUN/2017 EXPENSES. THUS, THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 27 TH DAY OF JUNE, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 27 TH JUNE, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-13, PUNE. 4. THE CCIT, PUNE. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.