DCIT, Cir-3(2), , Port Blair V. Andaman & Nicobar State Co-operative bank Ltd., Port Blair

ITA 576/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0790 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURBH KUMAR CITSRDR
• Keywords: Wrong claim; Bad and doubtful debts
• Section: 271(1)(c)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 576 / KOL / 20 17 ASSESSMENT YEAR :2012-13 DCIT, CIRCLE-3(2), MB- 210, SHAIDPUR, PORT BLAIR-74416 V/S . ANDAMAN & NICOBAR STATE CO-OPERATIVE BANK LTD., MA ROAD, PHOENIX BAY, PORT BLAIR-744101 [ PAN NO.AAAJT 1043 Q ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SAURBH KUMAR, ADDL. CIT-SR-DR /BY RESPONDENT NONE /DATE OF HEARING 15-11-2018 /DATE OF PRONOUNCEMENT 30-11-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2012-13 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-1 KOLKATAS OR DER DATED 09.12.2016 PASSED IN CASE NO.1775/CIA-1/CIRCLE-3(2)P.B/2014-15 REVIVING ASSESSING OFFICERS ACTION IMPOSING PENALTY OF 56,31,415/- I N PROCEEDING U/S 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHES T. IT IS ACCORDINGLY PROCEED EX PARTE AGAINST ASSESSEE IN THE INSTANT CA SE. 2. THE REVENUES SOLE SUBSTANTIVE GROUND PLEADED IN THIS INSTANT APPEAL SEEKS TO REVIVE THE ASSESSING OFFICERS ACTION IMPO SING PENALTY U/S 271(1)(C) OF 56,31,415/- IN HIS ORDER DATED 26.08.2015 AS REVERS ED IN THE CIT(A)S ORDER UNDER CHALLENGE AS FOLLOWS:- I HAVE CONSIDERED THE A.O'S FINDING AND PERUSED TH E WRITTEN SUBMISSION ALONG WITH THE ASSESSMENT ORDER. THE A.O. HAD IMPOSE THE PENALTY UNDER SECTION ITA NO.576/KOL/2017 A.Y. 2012-13 DCIT, CIR-3(2), P&B VS. ANDAMAN & N ICOBAR STAT CO-OP BANK LTD. PAGE 2 271(1)(C) OF THE I.T. ACT, IN RESPECT OF DISALLOWAN CE OF RS.1,82,24,646/- IN RESPECT OF PROVISIONS FOR BAD & DOUBTFUL DEBTS, HOL DING THAT THE APPELLANT HAD MADE A ' PROVISION OF NPA ' WHICH WAS NOT ALLOWABLE FOR PROVISION FOR BAD & DOUBTFUL DEBTS. THE A.O. HAD THUS HELD THAT THE APP ELLANT HAD COMMITTED A DEFAULT BY FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN ITS AUDIT REPORT AND THERE BY CONCEALED THE INCOME OF RS.1,82,24,646/- A ND THE PENALTY OF RS.56,31,415/- AT THE RATE OF 100% OF THE TAX SOUGH T TO BE EVADED WAS IMPOSED BY THE A.O. THE APPELLANT'S A.R. HAD MAINLY CONTENDED THROUGH T HE WRITTEN SUBMISSION THAT THE APPELLANT HAD FILED THE APPEAL BEFORE THE CIT(A), AGAINST THE QUANTUM ADDITION MADE BY THE A.O. THROUGH THE APPELLATE ORD ER NO.1066/CIT(A)-1/C- 3(2) P.B./2014-15, FOR A.Y.2012-13, THE ADDITION OF RS.1,82,24,646/- WAS DELETED BY RELYING ON THE DECISION OF THE ITAT, OF CHENNAI, CO-OPERATIVE BANK LTD. IN ITA NO., 1961 NO. 948/2013 DATED 21.01.2014 WHERE IN IT WAS HELD THAT IF THE ASSESSEE HAD CREATED PROVISION OF BAD & DOUB TFUL DEBTS UNDER NOMENCLATURE THIS ENTITLED THE ASSESSEE UNDER SECTI ON 36(VIIA). THE APPELLANT'S A.R. HAD ARGUED THAT IT HAD FURNISH ED THE COMPLETE PARTICULARS IN THE RETURN OF INCOME DURING THE ASSESSMENT PROCE EDINGS AND HAD NOT ACTED WITH ANY MALA FIDE INTENSION WITH INCOME THEREOF. T HE A,R. HAS ALSO CONTENDED THAT THE IMPUGNED ADDITION OF RS.L,82,24, 646/- WAS MADE BY THE A.O. ON A DEBATABLE ISSUE BY ADOPTING A DIFFERENT O PINION AND THUS HAD NOT ACTED WITH MALA FIDE INTENTION TO CONCEAL THE INCOM E OR PARTICULARS THEREOF. FOR THIS PROPOSITION RELIANCE WAS PLACED ON THE DECISIO N OF THE HON'BLE SUPREME COURT IN THE CASE OF IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS PVT. LTD, 322 ITR (SC) THE HON'BLE SUPREME COURT POINTED OUT THAT THE DISALLOWANCE MADE BY THE ASSESSING AUTHORITY IN THE ASSESSMENT O RDER OF THE ACT WERE SOLELY ON ACCOUNT OF DIFFERENCE VIEWS TAKEN ON THE SAME SET OF FACTS AND THEREFORE, THEY COULD, AT THE MOST, BE TERMED AS DI FFERENCE OF OPINION BUT NOTHING TO DO WITH THE CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF SUCH INCOME, THE APPELLANT HAS ALSO RELIED UPON THE JUDGEMTN OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V. STATE OF ORISSA 83 ITR 26, WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER IS N OT BOUND TO LEVY PENALTY AUTOMATICALLY SIMPLY BECAUSE THE QUANTUM ADDITION H AS BEEN SUSTAINED. ALSO IN CASE OF CIT V. KHODAYESWARA (83 ITR 369)(SC) REP ORTED IN SAME ITR VOLUME, IT IS HELD THAT PENALTY CANNOT BE LEVIED SO LELY ON BASIS OF REASONS GIVEN IN ORIGINAL ORDER OF ASSESSMENT. THE HON'BLE SUPREME COURT HAS REITERATED THE LAW IN CASE OF DILIP N. SHROFF V. JT .- CIT [2007] 291 ITR 519 BY HOLDING IN .. PARA 62 THAT FINDING IN ASSESSMENT PR OCEEDINGS CANNOT AUTOMATICALLY BE ADOPTED IN PENALTY PROCEEDINGS AN D THE AUTHORITIES HAVE TO CONSIDER THE MATTER AFRESH FROM DIFFERENT ANGLE. IN VIEW OF THE ABOVE DISCUSSION, IT IS FOUND THAT O N MERITS OF THE ISSUE IN DISPUTE I.E. DISALLOWANCE OF PROVISION FOR NPA, HEL D BY THE A.O. AS NOT ALLOWABLE AS BAD DEBTS UNDER SECTION 36(VIIA) OF TH E ACT. THE ISSUE INVOLVED WAS A DEBATABLE ISSUE ON WHICH MORE THAN ONE VIEW WAS POSSIBLE AND TAKEN BY THE A.O, WHO ADOPTED A DIFFERENT OPINION. THE A PPELLANT'S CLAIM WAS THUS ITA NO.576/KOL/2017 A.Y. 2012-13 DCIT, CIR-3(2), P&B VS. ANDAMAN & N ICOBAR STAT CO-OP BANK LTD. PAGE 3 NOT IN THE NATURE OF A FALSE CLAIM OR COULD BE SAID TO TANTAMOUNT TO FURNISHING OF INCORRECT PARTICULARS OF INCOME. CONSIDERING THE FACTUAL POSITION THAT THE APPELLANT HAD MADE A COMPLETE AND FULL DISCLOSURE O F THE RELEVANT PARTICULARS OF THE TRANSACTIONS IN ITS RETURN OF INCOME, AND TH US ITS CONDUCT COULD NOT BE TURNED AS MALA FIDE OR CONTUMACIOUS. THEREFORE, I A M OF THE OPINION THAT THE APPELLANT'S CASE IS COVERED BY RATIO OF CITED CASE LAWS, AND IS COVERED BY THE RATIO OF THE HON'BLE APEX COURT'S DECISION IN THE C ASE OF CIT VS RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) WHICH IS APPLICABL E TO THE FACTS OF THE CASE. HENCE, THERE IS NO SCOPE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE LT. ACT, 1961 AS THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THEREFORE, THE A.O. WAS NOT JUSTIFIED IN IMPOSITION OF PENALTY AMOUNTING TO RS. 56,31,415/- . ACCORDINGLY, THE PENALTY OF RS. 56,31,415/- IS DIRECTED IS TO BE DELETED. THESE GRO UNDS ARE ALLOWED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE IMPUGNED PENALTY. WE FIND NO MERIT IN REVENUES INSTANT GRIEVANCE. THIS TAXPAYER IS A CO-OPERATIVE SOCIETY . IT CLAIMED SEC. 36(1)(VIIA) BAD DEBTS DEDUCTION ALLOWABLE FOR A CO-OPERATIVE SO CIETY / BANK ASSESSEE. THE ASSESSING OFFICER DISALLOWED THE SAME HOLDING THAT IT HAD MADE ONLY AN NPA PROVISION RATHER THAN A PROVISION FOR BAD AND DOUBT FUL DEBTS. WE ARE INFORMED DURING THE COURSE OF HEARING THAT THIS QUANTUM DISA LLOWANCE HAS ALREADY ATTAINED FINALITY. 5. COMING TO THE IMPUGNED PENALTY, THE ASSESSING OF FICER HELD IN HIS ORDER DATED 26.08.2015 THAT THE ASSESSEE HAD FURNISHED IN ACCURATE PARTICULARS OF INCOME AS WELL AS CONCEALED ITS TAXABLE INCOME TO T HE EXTENT OF ITS SEC. 36(1)(VIIA) CLAIM AMOUNT OF 1,82,24,646/-. THE CIT(A) HAS ACCEPTED ASSESSEES ARGUMENTS HEREINABOVE CHALLENGING CORREC TNESS THEREOF DURING THE COURSE OF LOWER APPELLATE PROCEEDINGS. 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO TH E RIVAL REVENUES GRIEVANCE. CASE FILE PERUSED. WE MAKE IT CLEAR FIRS T OF ALL THAT HON'BLE APEX COURTS LANDMARK DECISION IN CIT VS. RELIANCE PETROPRODUCTS PVT LTD . (2010) 322 ITR 158 (SC) HELD LONG BACK THAT QUANTUM AND PE NALTY PROCEEDINGS ARE PARALLEL IN NATURE WHEREIN EACH AND EVERY DISALLOWA NCE / ADDITION MADE IN THE COURSE OF THE FORMER DOES NOT AUTOMATICALLY INVITE THE LATTER PENAL PROVISION. WE KEEP IN MIND THE SAID FINE DISTINCTION TO REVERT BACK THE FACTS IN THE INSTANT ITA NO.576/KOL/2017 A.Y. 2012-13 DCIT, CIR-3(2), P&B VS. ANDAMAN & N ICOBAR STAT CO-OP BANK LTD. PAGE 4 CASE. THE ASSESSEE HAD CLAIMED BAD DEBTS DEDUCTION WHICH STOOD DISALLOWED IN QUANTUM PROCEEDINGS BEING IN THE NATURE OF AN N PA PROVISION ONLY. IT THEREFORE APPEARS A CASE OF PURE DISALLOWANCE SIMPL ICITOR ON ACCOUNT OF FAILURE IN FULFILLING THE MANDATORY CONDITION AND NOT AN IN STANCE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE CIT(A) HAS TAKEN INTO CONSIDERATION ALL THE RELEVANT FACTS AND CIRCUMSTAN CE TO CONCLUDE THAT ASSESSEES IMPUGNED CLAIM DOES NOT ATTRACT EITHER O F THE TWO LIMBS (SUPRA) U/S 271(1)(C) OF THE ACT. WE CONFIRM THE SAME IN VIEW O F OUR FOREGOING DISCUSSION. 7. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 30 /11/2018 SD/- SD/- ( %) (' %) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 30 / 11 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIR-3(2), MB-210, SHAIDPUR, PORT B LAIR-74416 2. /RESPONDENT-ANDAMAN & NICOBAR STATE CO-OP BANK LTD. MA ROAD, PHOENIX BAY, PORT BLAIR -744101 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 3,