DCIT, CHENNAI V. Chettinad Hospitals P Ltd., CHENNAI

ITA 592/CHNY/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6573 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO , JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NOS.590 TO 592/CHNY/2019 ( / ASSESSMENT YEARS: 2008-09 TO 2010-11) DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(2), CHENNAI-600 034. VS M/S.CHETTINAD HOSPITALS PVT.LTD. 5 TH FLOOR, 603, RANI SEETHAI HALL BUILDING, ANNA SALAI, CHENNAI-600 006. PAN: AACCC 5036B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. G.JOHNSON, ADDL.CIT /RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE ! /DATE OF HEARING : 07.09.2021 ! /DATE OF PRONOUNCEMENT : 07.09.2021 / O R D E R PER G.MANJUNATHA, AM: THESE THREE APPEALS FILED BY THE REVENUE ARE DIR ECTED AGAINST COMMON ORDER PASSED BY THE LEARNED CIT(A)- 1, CHENNAI DATED 31.12.2018 AND PERTAINS TO ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-11. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE , THESE APPEALS ARE HEARD TOGETHER AND ARE BEING DISPOSED OFF, BY THIS CONSOLIDATED ORDER. 2. THE REVENUE HAS MORE OR LESS RAISED COMMON GRO UNDS OF APPEAL FOR THESE ASSESSMENT YEARS, THEREFORE, FOR THE SAKE 2 ITA NOS. 590 TO 592/CHNY/2019 OF BREVITY, GROUNDS OF APPEAL FILED FOR THE ASSESSM ENT YEAR 2008-09 ARE REPRODUCED AS UNDER:- 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW , FACTS AND CIRCUMSTANCES, OF THE CASE. 2. THE LD.CIT(A) ERRED IN GIVING RELIEF TO THE ASSE SSEE BY DELETING THE PENALTY UNDER SECTION 271(L)(C) OF THE ACT WHEN THE QUANTUM ISSUE IS STILL PENDING ADJUDICATION BY THE HONBLE HIGH COURT. 3. THE LD.CIT(A) ERRED IN GIVING RELIEF TO THE ASSE SSEE IN THE PRESENT CASE OF PENALTY WHEN IN THE QUANTUM APPEAL ITSELF THE BUSINESS LOSS CLAIMED BY ASSESSEE WAS FOUND TO BE N OT GENUINE BY THE AO, AS THE REMUNERATION FOR SERVICES RENDERED WAS NOT AS PER THE MARKET PRICE & THE LOSS INCURRED AS A RESULT OF THE SCHEME OF ARRANGEMENT BETWEEN THE ASSESSEE A ND ITS ASSOCIATE CONCERN BY WHICH THE EXPENSES OF THE ASSO CIATE CONCERN (A TRUST REGISTERED U/S. 12AA) WERE BOOKED IN THE ASSESSEES ACCOUNTS AGAINST A PALTRY SUM RECEIVED F ROM THE ASSOCIATE CONCERN AS MANAGEMENT FEES THEREBY VIOLAT ING THE PROVISIONS OF SEC.37 OF THE L.T. ACT. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT FOR IMPUGNED ASSESSMENT YEARS HAS BEEN COMPLETED U/S.143(3) R. W.S.147 OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS CHALLENG ED ASSESSMENT ORDER BEFORE THE TRIBUNAL. THE ITAT., CH ENNAI BENCHES VIDE ITS ORDER DATED 01.06.2016 IN ITA NO S.3068 TO 3070/MDS/2014 HAS DELETED ADDITIONS MADE BY THE AS SESSING OFFICER. IN THE MEANTIME, THE ASSESSING OFFICER HA S LEVIED PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 AND LEVIED PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME FO R ALL THREE 3 ITA NOS. 590 TO 592/CHNY/2019 ASSESSMENT YEARS. THE ASSESSEE HAS CHALLENGED PENA LTY ORDER PASSED BY THE ASSESSING OFFICER BEFORE THE CIT(A) AND LEARNED CIT(A) VIDE ORDER DATED 31.12.2018 DELETED PENALT Y LEVIED BY THE ASSESSING OFFICER BY CONSIDERING FACT THAT TH E ITAT HAS DELETED ADDITIONS MADE BY THE ASSESSING OFFICER I N ASSESSMENT PROCEEDINGS. AGGRIEVED BY THE LEARNED CI T(A) ORDER, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DR SUBMITTED THAT THE LEARNED CIT(A ) HAS ERRED IN DELETING PENALTY U/S.271(1)(C) OF THE AC T, WHEN QUANTUM ISSUE IS STILL PENDING FOR ADJUDICATION BY THE HONBLE HIGH COURT. 5. THE LEARNED A.R FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT WHEN ADDITION WAS DELETED, THEN PENA LTY LEVIED ON SUCH ADDITION CANNOT SURVIVE UNDER THE LAW. THER EFORE, THERE IS NO ERROR IN THE ORDER PASSED BY THE LEARNED CIT( A) TO DELETE PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1) (C) OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE TRIBUNAL IN ITA NOS.3068 T O 4 ITA NOS. 590 TO 592/CHNY/2019 3070/MDS/2014 DATED 01.06.2016 HAS DELETED ADDITION S MADE BY THE ASSESSING OFFICER FOR ALL THREE ASSESSMENT YEARS. ONCE ADDITION ON WHICH PENALTY HAS BEEN LEVIED U/S.271( 1)(C) OF THE ACT, ITSELF WAS DELETED BY THE APPELLATE AUTHORITY , THEN PENALTY LEVIED ON SUCH ADDITION CANNOT SURVIVE UNDER LAW . THE LEARNED CIT(A), AFTER CONSIDERING RELEVANT FACTS HAS RIGHTL Y DELETED PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1) (C) OF THE ACT. THERE IS NO ERROR IN THE ORDER OF LEARNED CIT(A) AN D HENCE, WE ARE INCLINED TO UPHOLD FINDINGS OF THE LEARNED CIT( A) AND DISMISS APPEALS FILED BY THE REVENUE FOR ALL THREE ASSESSMENT YEARS. 7. IN THE RESULT, APPEALS FILED BY THE REVENUE FOR ASSESSMENT YEARS 2008-09 TO 2010-11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) ( G.MANJUNATHA ) % ' / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER % /CHENNAI, * /DATED 7 TH SEPTEMBER, 2021 DS ,- .- /COPY TO: 1. APPELLANT 2. RESPONDENT 3. / () /CIT(A) 4. / /CIT 5. - 3 /DR 6. /GF .