ACIT, New Delhi V. Sh. Raj Kumar Mahajan, New Delhi

ITA 6531/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97084 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-08-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80HHC; 80IB

Judgement Text

ITA NO. 6531/DEL/2013 ASSTT.YEAR: 2002-03 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `D NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.6531/DEL/2013 ASSESSMENT YEAR : 2002-03 ACIT, VS SHRI RAJ KUMAR MAHAJAN, CIRCLE 25(1), PROP. M/S GIRDHARI INTERN ATIONAL, NEW DELHI. K-2, UDHYOG NAGAR, NEW DELHI. (PAN: AEKMP0668L) (APPELLANT) (RESPONDENT) APPELLANT B Y: SHRI ATIQ AHMAD, SR. DR RESPONDENT BY : SHRI TARU N, ADVOCATE DATE OF HEARING: 20.08.2015 DATE OF PRONOUNCEMENT: 28.08.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINS T THE ORDER OF CIT(A)- XXIV, NEW DELHI DATED 13.09.2013 IN APPEAL NO. 31/ 12-13 FOR AY 2002-03 BY WHICH PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT DATED 30.3.2012 HAS BEEN CANCELLED. 2. SOLE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) HAS ERRED IN : 1. DELETING THE PENALTY OF RS.8,92,379/- IMPOSED BY T HE AO U/S 271(1)(C) OF THE INCOME TAX ACT. ITA NO. 6531/DEL/2013 ASSTT.YEAR: 2002-03 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THA T THE APPELLANT FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2002-03 ON 03.10.2002 DECLARING TAXABLE INCOME OF RS. 13,97,050/-. IN HIS RETURN OF INCOME, THE APPELLANT CLAIMED DEDUCTIONS BOTH U/S 80HHC AT RS 1,20,12,513/- AND U /S 80IB AT RS.43,95,130/-. THE APPELLANT WHILE COMPUTING THE DEDUCTION U/S 80- HHC DID NOT REDUCE THE AMOUNT OF DEDUCTION CLAIMED U/S 80-IB OF THE IT ACT . DURING THE COURSE OF ASSESSMENT U/S 148/143(3) OF THE ACT, THE AO RECOMP UTED THE CLAIM OF DEDUCTION OF THE APPELLANT BY GIVING EFFECT FIRST T O THE DEDUCTION U/S 80-IB OF THE ACT AND AFTER REDUCING THE SAME, HE ALLOWED DEDUCTI ON U/S 80-HHC. THE AFORESAID ORDER OF THE AO WAS CONFIRMED BY THE LD. CIT (A) VIDE ORDER DATED 19.04.2010. MEANWHILE, THE AO ALSO IMPOSED PENALTY U/S 271(1)(C) ON THE GROUND THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME BY CLAIM OF EXCESS DEDUCTION U/S 80-IB AND 80-HHC AMOU NTING TO RS. 8,92,379/- VIDE ORDER DT.30.03.2012. 4. BEING AGGRIEVED BY THE SAID PENALTY ORDER, THE A SSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS ALLOWED BY PASSI NG THE IMPUGNED ORDER. NOW, THE AGGRIEVED REVENUE IS BEFORE THIS TRIBUNAL WITH THE SOLE GROUND AS REPRODUCED HEREINABOVE. 5. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. LD. DR SUPPORT ED THE PENALTY ORDER AND ITA NO. 6531/DEL/2013 ASSTT.YEAR: 2002-03 3 SUBMITTED THAT THE AO RIGHTLY CONCLUDED THAT THE FA CTUM OF FURNISHING INACCURATE PARTICULARS RESULTING INTO CONCEALMENT OF INCOME HA S BEEN DULY ESTABLISHED AND LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WAS QUITE JUSTIFIED. LD. DR SUBMITTED THAT THE AO LEVIED PENALTY ON THE ADDITION CONFIRME D BY THE CIT(A) BEING EXCESS DEDUCTION CLAIMED BY THE ASSESSEE U/S 80HHC OF THE ACT AMOUNTING TO RS.29,16,276/-. LD. DR VEHEMENTLY CONTENDED THAT T HE CIT(A) DELETED THE PENALTY WITHOUT ANY VALID AND JUSTIFIED REASON, THE REFORE, THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE AO. REPL YING TO THE ABOVE, LD. AR SUBMITTED A COPY OF THE ORDER OF THE ITAT E BENCH DELHI DATED 26.7.13 IN ITA NO. 536/D/13 FOR AY 2001-02 IN THE CASE OF M/S NEET EE CLOTHING (P) LTD. AND SUBMITTED THAT THE ORDER OF THE TRIBUNAL (SUPRA) HA S BEEN UPHELD BY THE HONBLE HIGH COURT AND THE ISSUE IN THE PRESENT CASE IS SQU ARELY COVERED BY THE SAID ORDER OF HONBLE HIGH COURT. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E NOTE THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING DECISIO N OF THE ITAT E BENCH DELHI IN THE CASE OF M/S NEETEE CLOTHING (P) LTD. (SUPRA) , WHICH HAS BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT OF DELHI BY ORDER DAT ED 13.8.14 (SUPRA). THE RELEVANT OBSERVATIONS OF HONBLE HIGH COURT ARE BEI NG RESPECTFULLY REPRODUCED BELOW:- THE SECOND ISSUE, ON WHICH PENALTY WAS IMPOSED AGA IN RELATES TO THE COMPUTATION OF DEDUCTION UNDER SECTI ON 88HHC AND WHETHER, DEDUCTION ALLOWED UNDER SECTION 80IA O R 80IB OF THE ACT SHOULD BE REDUCED FROM THE PROFITS WHILE CO MPUTING DEDUCTION UNDER SECTION 88HHC. THIS WAS ALSO A DEBA TABLE ITA NO. 6531/DEL/2013 ASSTT.YEAR: 2002-03 4 ISSUE AND THERE WERE CONFLICTING JUDGMENTS AS NOTED IN THE IMPUGNED ORDER. THE IMPUGNED ORDER ALSO REFERS TO T HE FACT THAT SPECIAL BENCH OF THE TRIBUNAL WAS CONSTITUTED TO DECIDE THE CONTROVERSY BUT THIS WAS LONG AFTER THE RETURN IN QUESTION WAS FILED BY THE RESPONDENT-ASSESSEE. THUS, PENALTY PROCEEDINGS WERE IN RESPECT OF LEGAL ISSUES AND RELATED TO INTERPRETATION OF SECTIONS 88 HHC, 80IA/80IB OF THE ACT. AT THE TIME, WHEN THE RETURN RELATING TO ASSESSMENT YEAR 200] -02 WAS FILED, THE ISSUES AND QUESTIONS OF LAW WERE DEBATABLE AND NOT SETTLED. IN THESE CIRCUM STANCES, WE DO NOT THINK, THE ORDER OF THE TRIBUNAL QUASHING TH E PENALTY FOR CONCEALMENT UNDER SECTION 271 (1)(C) REQUIRES INTER FERENCE. THE LAW HAS BEEN RIGHTLY APPLIED. THE ASSESSEE HAS BEEN ABLE TO DISCHARGE THE ONUS UNDER EXPLANATION I TO SECTIO N 271 (L)(C) OF THE ACT. THE APPEAL IS ACCORDINGLY DISMISSED. 7. IN THE LIGHT OF DICTA LAID DOWN BY THE HONBLE J URISDICTIONAL HIGH COURT OF DELHI, WHEN WE CONSIDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE CONSIDERED VIEW THAT MERE REJECTION OF CLAIM OF THE ASSESSEE BY RELYING ON DIFFERENT INTERPRETATION AND VIEWS DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE. OUR VIEW FURTHER FINDS SUPPORT FROM THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CIT VS RELIANCE P ETROPRODUCTS (2011) 322 ITR 158 THAT MERE MAKING A CLAIM WHICH IS NOT SUSTAINABLE I N LAW OR WHICH WAS NOT ACCEPTED OR NOT FOUND TO BE ACCEPTABLE BY THE R EVENUE, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. WE FURTHER OBSERVE THAT SUCH A CLAIM MADE IN THE RE TURN OF INCOME CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. FROM THE IMPUGNED ORDER, WE NOTE THAT THE CIT(A) NOTED THAT THE CONST ITUTION OF SPECIAL BENCH ON THE ITA NO. 6531/DEL/2013 ASSTT.YEAR: 2002-03 5 ISSUE WAS THE RESULT OF CONFLICTING OPINIONS PREVAI LING ON THE ISSUE AND IT WAS ONLY BY CONSTITUTING A SPECIAL BENCH THAT ONE VIEW WAS ESTABLISHED. IN THE SIMILAR FACTS AND CIRCUMSTANCES, ITAT DELHI DELETED THE PENALTY IN THE CASE OF M/S NEETEE CLOTHING (P) LTD. AND THIS ORDER OF THE TRIBUNAL HAS BEEN UPHELD BY THE HONBLE HIGH COURT. IN THE LIGHT OF AFORESAID DISCUSSION, IN OUR CONSIDERED OPINION, THE PENALTY LEVIED BY THE AO CANNOT BE SUS TAINED. HENCE, PENALTY ATTRIBUTABLE TO THE AMOUNT OF DISALLOWANCE OF CLAIM U/S 80HHC AND 80IB OF THE ACT AMOUNTING TO RS.8,92,379 WAS RIGHTLY DEL ETED BY THE CIT(A). WE ARE UNABLE TO SEE ANY INFIRMITY, PERVERSITY OR ANY OTHE R VALID REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/8/2015. SD/- SD/- (N.K. SAINI) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 28TH AUGUST 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR