ASST.C.I.T.-1(3), MUMBAI V. M/S. UNITED RICELAND PVT.LTD., MUMBAI

ITA 6118/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7462 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 03-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 10-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Keywords: Wrong claim
• Section: 271(1)(c); 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F: MUMBAI BEFORE SHRI D.MANMOHAN, HONBLE VICE PRESIDENT AND SHRI R K PANDA, ACCOUNTANT MEMBER ITA NO. 6118/MUM/2008 ASSESSMENT YEAR 2003-2004 ASSTT COMMISSIONER OF INCOME TAX - 1(3), ROOM NO.540/564, 5 TH FLOOR, AAYAKAR BHAVAN, M K. ROAD, NEW MARINE LINES, MUMBAI 400 020 VS. M/S UNITED RICELAND PVT LTD, 411, JOLLY BHAVAN NO.7, NEW MARINE LINES, MUMBAI 400 020 PAN AAACU 0649 N (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI VIRENDRA OJHA FOR RESPONDENT : NONE ORDER PER D. MANMOHAN, V.P. 1. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REVENUE. THOUGH THE APPEAL WAS FILED AFTER OBTAINING AN AUTHORIZATION MEMO FRO M COMMISSIONER OF INCOME-TAX & BY INADVERTENCE GROUNDS OF APPEAL WAS NOT ANNEXED TO F ORM NO.36, WHICH WERE SUBSEQUENTLY FILED ALONG WITH THE COVERING LETTER D ATED 28.8.2009. THE CASE OF THE REVENUE IS THAT, THE LEARNED CIT (A) ERRED IN DELET ING THE PENALTY IN RESPECT OF DISALLOWANCE OF DEDUCTION U/S 80IA/80IB AS WELL AS 80HHC OF THE ACT. NONE APPEARED ON BEHALF OF THE ASSESSEE, WE, THEREFORE, DISPOSE O F THE CASE EX-PARTE QUA THE ASSESSEE . 2. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE AND PERUSED THE RECORD. CONSEQUENT TO THE COMPLETION OF ASSESSMENT U/S 143(3) OF THE ACT, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS, U/S 271(1)(C ) OF THE ACT, ON THE GROUND THAT WRONG CLAIM OF DEDUCTION U/S 80IA/80IB/80HHC WOULD AMOUNT TO DELIBERATE CONCEALMENT OF TAXABLE INCOME WHILE MAKING INACCURATE CLAIM. IN R ESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE CONTENDED THAT SIMILAR CLAIMS WERE ACCEPTE D IN THE PAST AND, THUS, MERE REJECTION OF CLAIM OF DEDUCTION IN THE YEAR UNDER CONSIDERATI ON WOULD NOT AMOUNT TO MAKING OF INACCURATE CLAIM. THE ASSESSING OFFICER REJECTED T HE CONTENTION OF THE ASSESSEE AND PROCEEDED TO LEVY A MINIMUM PENALTY U/S 271(1)(C) O F THE ACT. ITA 6118/M/2008 M/S UNITED RICELAND PVT LTD 2 3. ON AN APPEAL FILED BY THE ASSESSEE, THE LEARNED CIT (A) CONSIDERED THE ISSUES IN DETAIL TO ARRIVE AT THE CONCLUSION THAT N O CASE WAS MADE OUT BY THE ASSESSING OFFICER TO LEVY PENALTY. OPERATIVE PORTION OF THE ORDER OF THE CIT (A) I.E. PARAS 4 & 6, IS REPRODUCED FOR READY REFERENCE :- 4. I HAVE CAREFULLY CONSIDERED THE ISSUE. DEDUCTI ON U/S 80IA/80IB HAS BEEN CONSIDERED IN APPELLANTS OWN CASE FOR AYRS 1996-97 AND 1997-98 AND THE DEDUCTION HAS BEEN ALLOWED. THEREFORE, THERE ARE N O TWO OPINIONS REGARDING THE PENALTY NOT BEING SUSTAINABLE IN RESPECT OF THE APP ELLANTS CLAIM U/S 80IA. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO D ELETE THE PENALTY IN RESPECT OF DISALLOWANCE OF DEDUCTION U/S 80IA/80IB. 6. CONSIDERING THE ENTIRE GAMUT OF FACTS, IT IS HEL D THAT THE ACTION OF THE ASSESSING OFFICER IN LEVYING OF PENALTY U/S 271(1)( C) HAS EMANATED PURELY ON ACCOUNT OF SUSTENANCE OF DISALLOWANCE BY THE FIRST APPELLATE AUTHORITY. THE ASSESSING OFFICER HAS NOT CONSIDERED THE FACT THAT THE CLAIM MADE BY THE APPELLANT IS NOT FRIVOLOUS AND, THEREFORE, MAKING OF CLAIM WA S THE ONLY WAY FOR THE APPELLANT TO KNOW THE ALLOWABILITY OR OTHERWISE OF THE CLAIM UNDER THE FACTS AND CIRCUMSTANCES. IT IS NOT A CASE WHERE A CLAIM HAS BEEN MADE THROUGH HIDING OF ANY FACT OR THE SAME HAS BEEN MADE ON A FRIVOLOUS O R PURELY IMAGINARY GROUND. PENALTY BEING A QUASI CRIMINAL PROCEEDING REQUIRES ESTABLISHMENT OF GUILTY MIND ON THE PART OF THE ASSESSEE, WHICH IS ENTIRELY ABSE NT IN THE CASE. ACCORDINGLY, PENALTY LEVIED AT RS 25,68,400/- IS ORDERED TO BE D ELETED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), REVENUE IS IN APPEAL BEFORE US. 5. HAVING REGARD TO THE SUBMISSION OF LEARNED DEPAR TMENTAL REPRESENTATIVE AND ALSO ON PERUSAL OF THE RECORD, WE ARE OF THE VIEW T HAT THE ORDER PASSED BY LEARNED CIT (A) DOES NOT SUFFER FROM ANY INFIRMITY AND HENCE, A PPEAL FILED BY THE REVENUE DESERVES TO BE DISMISSED. UNDER THE CIRCUMSTANCES, ORDER OF TH E LEARNED CIT (A) IS CONFIRMED AND APPEAL FILED BY THE REVENUE IS DISMISSED. ITA 6118/M/2008 M/S UNITED RICELAND PVT LTD 3 ORDER PRONOUNCED ON 4-03-2010. SD/- SD/- (R K PANDA) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 4 TH MARCH, 2010. *CHAVAN/- COPY TO 1. THE APPELLANT. 2. THE RESPONDENT 4. CIT(A)-XXI, MUMBAI. 5 CIT-CITY-I, MUMBAI. 6. D.R. F BENCH, MUMBAI. 7. GUARD FILE. BY ORDER / / TRUE COPY / / ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI ITA 6118/M/2008 M/S UNITED RICELAND PVT LTD 4 SNO DATE INITIALS 1 DRAFT DICTATED ON 03-03-2010 SR.P.S 2. DRAFT PLACED BEFORE AUTHOR 03-03-2010 SR.P.S 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER V.P. 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER A.M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.P.S 6. KEPT FOR PRONOUNCEMENT ON SR.P.S 7. FILE SENT TO THE BENCH CLERK SR.P.S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER