ACIT Rg. VI, Lucknow V. U.P. State Tourism Development Corporation Ltd., Lucknow

ITA 660/LKW/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5166 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-11-2013
• Assessment Year: misc
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: SANJAY MAHESHWARI
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.660/LKW/2011 A.Y.:07 - 08 A.C.I.T., RANGE - VI, LUCKNOW. VS. UP STATE TOURISM DEVELOPMENT CORPORATION LIMITED, C - 13, VIPIN KHAND, GOMTI NAGAR, LUCKNOW. PAN:AAACU4990N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY SHRI SANJAY MAHESHWARI DATE OF HEARING 13/11/2013 DATE OF PRONOUNCEMENT 2 7 /11/2013 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF CIT(A) - I, LUCKNOW DATED 24/08/2010 FOR ASSESSMENT YEAR 2007 - 2008. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE AND FAILED TO APPRECIATE THAT THE DISALLOWANCE WERE MADE ONLY WHEN THE ASSESSING OFFICER HIMSELF DETECTED THE DISCREPANCIES ON EXAMINATION OF BOOKS OF ACCOUNT. THE ASSESSEES ACCOUNTS DID NOT REFLECT THE CORRECT POSITION IN RELATION TO THESE EXPE NSES. 2. APPELLANT CRAVES LEAVES TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEAL, AS STATED ABOVE, AS AND WHEN NEED TO DOING SO ARISES WITH THE PRIOR PERMISSION OF THE COURT. 2 2. BRIEF FACTS ARE THAT IN THIS CASE, DURING THE COURSE OF ASSESSME NT PROCEEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT A PROVISION OF RS. 61,43,984/ - WAS MADE BY THE ASSESSEE IN RESPECT OF PROVISION FOR BONUS, PROVISION FOR GRATUITY AND PROVISION FOR LEAVE ENCASHMENT. HE HAS ALSO NOTED THAT AGAINST THIS PROVISION , THE ASSESSEE MADE PAYMENTS OF ONLY RS.13,50,888/ - AND, THEREFORE, THE BALANCE UNPAID AMOUNT OF RS.47,93,096/ - IS NOT ALLOWABLE. HE MADE THE DISALLOWANCE OF THIS AMOUNT AND INITIATED PENALTY PROCEEDINGS AND ULTIMATELY PENALTY OF RS.20 LAKH WAS IMPOSED U/S 271(1)(C) OF THE ACT. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A), WHO HAS DELETED THE PENALTY RELYING ON THE JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. NOW TH E REVENUE IS IN APPEAL BEFORE US. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE PENALTY ORDER AND PLACED RELIANCE ON A RECENT JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF MAK DATA P. LTD. VS. CIT IN CIVIL APPEAL NO. 9772 OF 2013 DATED 30 TH OCT OBER, 2013, A COPY OF WHICH WAS SUBMITTED BY LEARNED D.R. 5. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A) AND PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF PRICE WATERHOUSE COOPERS PVT . LTD. VS.CIT IN CIVIL APPEAL NO.6924 OF 2012 DATED 25/09/2012. HE SUBMITTED A COPY OF THIS JUDGMENT. HE ALSO POINTED OUT THAT IN THAT CASE ALSO , THE DISALLOWANCE WAS MADE IN RESPECT OF PROVISION MADE FOR GRATUITY AND STILL IT WAS HELD BY HON'BLE SUPREME COURT THAT THE PENALTY WAS NOT JUSTIFIED AND, THEREFORE THIS JUDGMENT OF HON'BLE APEX COURT IS SQUARELY APPLICABLE IN THE PRESENT CASE. REGARDING THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF MAC DATA P. LTD. (SUPRA) ON WHICH RELIANCE HAS BEE N PLACED BY LEARNED 3 D.R. OF THE REVENUE, IT WAS SUBMITTED THAT IN THAT CASE SURRENDER WAS MADE BY THE ASSESSEE AFTER SURVEY AND, THEREFORE, THE PENALTY WAS CONFIRMED BUT THE FACTS IN THE PRESENT CASE ARE DIFFERENT AND, THEREFORE, THIS JUDGMENT OF HON'BLE S UPREME COURT IS NOT APPLICABLE IN THE PRESENT CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT CITED BY BOTH THE SIDES. THE PENALTY HAS BEEN DELETED BY LEARNED CIT(A) AS PER PARA NO. 5 OF HIS ORDER, WHICH IS REPRODUCED BELOW: 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND HAVE ALSO GONE THROUGH THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. I FIND THAT THE PENALTY HAS BEEN LEVIED SOLELY ON ACCOUNT OF DISALLOWANCE MADE IN THE ASSES SMENT, WITHOUT ESTABLISHING ANY CONCEALMENT OF INCOME ON THE APART OF THE APPELLANT. THE AO HAS NOT APPRECIATED THE FACT THAT THE ASSESSMENT AN D THE PENALTY PROCEEDINGS ARE TWO SEPARATE PROCEEDINGS. THE FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS CANNOT BE CONCLUSIVE IN THE PENALTY PROCEEDINGS. MERELY, BECAUSE CERTAIN AMOUNTS HAVE BEEN DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE AND NO A PPEAL HAS BEEN PREFERRED AGAINST THIS ACTION SUCH INCOME WILL NOT IPSO FACTO AMOUNT TO CONCEALMENT OF INCOME ATTRACTING PENALTY U/S 271(1)(C) OF THE I . T. ACT. ONCE THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER, THE ONU S IS ON HIM TO PROVE THAT THE SA ID ADDITION CONSTITUTES THE INCOME CONCEALED . T HE IMPOSITION OF PENALTY U/S 271(1)(C) POSTULATES THAT THE AO IS SATISFIED THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF ITS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE INSTA NT CASE, THE AO HAS LEVIED PENALTY SOLELY ON THE BASIS OF THE DISALLOWANCES MADE IN THE ASSESSMENT, WHEREAS WHILE IMPOSING THE PENALTY THE AO WAS EXPECTED TO BRING COGENT MATERIAL OR EVIDENCE FROM WHICH IT COULD BE INFERRED THAT THE APPELLANT HAD DELIBERAT ELY CONCEALED ITS INCOME TO THE EXTENT THE AMOUNT WAS DISALLOWED AND ADDED TO ITS TOTAL INCOME OR 4 THAT THE APPELLANT CONSCIOUSLY FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IN MY CONSIDERED VIEW, THE AO HAS FAILED TO MAKE OUT A CASE FOR IMPOSING PENALT Y U/S 271(1)(C) OF THE ACT. 6.1 NOW WE FIRST CONSIDER THE APPLICABILITY OF THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF PRICE WATERHOUSE COOPERS (SUPRA). IN THAT CASE, THE ASSESSEE WAS A RENOUN E D CHARTERED ACCOUNTANT FIRM AND IT IS NOTED BY HON'BLE APEX COURT ALSO THAT THE ASSESSEE IS UNDOUBTEDLY A REPUTED FIRM AND HAS GREAT EXPERTISE AVAILABLE WITH IT BUT STILL IT IS POSSIBLE THAT EVEN SUCH AN ASSESSEE COULD MAKE A SILLY MISTAKE. IN THE PRESENT CASE ALSO, IN OUR CONSIDERED OPINION, THE ASS ESSEE HAS MADE A SILLY MISTAKE OF NOT DISALLOWING THE AMOUNT OF UNPAID PROVISION IN RESPECT OF PROVISION FOR BONUS, PROVISION FOR SALARY AND PROVISION FOR LEAVE ENCASHMENT. ALL THESE INFORMATION ARE VERY MUCH AVAILABLE IN THE AUDITED ACCOUNTS AND TAX AUDI T REPORT AND THEREFORE, IN OUR CONSIDERED OPINION, EVEN AFTER DISALLOWANCE , IT CANNOT BE CONSIDERED A CONCEALMENT BUT THE SAME HAS TO BE ACCEPTED AS A BONA FIDE MISTAKE. THEREFORE, IN OUR CONSIDERED OPINION , THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN PRICE WATERHOUSE COOPERS (SUPRA), IS SQUARELY APPLICABLE. 6.2 NOW WE CONSIDER THE JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF MAK DATA P. LTD. (SUPRA). IN THAT CASE, A SURVEY WAS CARRIED OUT AND DOCUMENTS WERE IMPOUNDED AND THEREAFTER, SHOW CAUSE NOTICES WERE ISSUED TO THE ASSESSEE AND THEREAFTER, THE ASSESSEE MADE A SURRENDER. HENCE, THIS CANNOT BE CONSIDERED A BONA FIDE MISTAKE. A CLEAR FINDING IS GIVEN BY HON'BLE SUPREME COURT THAT THE SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE ASSESSING OFFICER IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE AND THEREFORE, IT IS NOT A VOLUNTARY SURRENDER. IT IS ALSO OBSERVED BY HON'BLE SUPREME COURT THAT HAD IT BEEN 5 THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED RETURN OF INCOME DECLARING INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF ASSESSMENT PROCEEDINGS BECAUSE THE SURVEY U/S 133A WAS CONDUCTED ON 16/12/2003 IN THE CASE OF SISTER CONCERN OF THE ASSESSEE AND IT WAS 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HENCE, IN THAT CASE , THE SURVEY WAS CONDUCTED BEFORE 10 MONTHS OF FILING OF RETURN OF INCOME AND STILL THE ASSESSEE DID NOT COME OUT CLEAN BY INCLUDING THAT INCOME IN THE RETURN OF INCOME. BUT IN THE PRESENT CASE, THERE WAS NO SURVEY CONDUCTED AND THERE WAS ONLY A BONA FIDE OMISSION OF MAKING DISALLOWANCE OF UNPAID PROVISION . THEREFORE, THIS JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS (SUPRA) SHOUL D BE FOLLOWED IN THE PRESENT CASE . RESPECTFULLY FOLLOWING THIS JUDGMENT, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 / 1 1 / 2 0 1 3 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW 6