DCIT 8(1), MUMBAI V. ATLANTA LTD, MUMBAI

ITA 6697/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4036 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 6697/MUM/2013 (ASSESSMENT YEAR : 2008-09) DY. COMMISSIONER OF INCOME TAX, RANGE 8(1), ROOM NO.260A, 2 ND FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 ... APPELLANT VS. M/S. ATLANTA LTD., 101, SHRI AMBA SHANTI CHAMBERS, OPP. HOTEL LEELA, ANDHERI KURLA ROAD, ANDHERI (W), MUMBAI 400 059. PAN:AAACA 8865E .... RESPONDENT APPELLANT BY : SHRI G.N.MAKWANA RESPONDENT BY : SHRI VIJAY MEHTA DATE OF HEARING : 02/02/2016 DATE OF PRONOUNCEMENT : 02/02/2016 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTE D AGAINST THE ORDER OF THE CIT(A)-16, MUMBAI DATED 12/08/2013, P ERTAINING TO THE ASSESSMENT YEAR 2008-09, WHICH IN TURN HAS ARISEN F ROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 15/12/2099 U NDER SECTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . 2 ITA NO. 6697/MUM/2013 (ASSESSMENT YEAR : 2008-09) 2. IN THIS APPEAL, THE ONLY ISSUE IN DISPUTE IS PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF TH E ACT AMOUNTING TO RS.15,73,824/-. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE RES PONDENT ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. PURSUANT TO A SEARCH AND SEIZURE ACTION UNDE R SECTION 132(1) OF THE ACT ON 19/07/2007, THE ASSESSEE HAD FILED RETUR N OF INCOME DECLARING A TOTAL INCOME OF RS.8,99,13,211/-, WHICH WAS SUBJECT TO AN ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT DATED 15/12/2009. THE INCOME ASSESSED BY THE ASSESSING O FFICER WAS HIGHER THAN THE RETURNED INCOME AND THE ADDITION RELEVANT FOR OUR PURPOSE IS A SUM OF RS.46,30,250/-, WHICH REPRESENTED DISALLOW ANCE IN TERMS OF SECTION 40(A)(IA) OF THE ACT. THE SAID DISALLOWANC E WAS MADE ON THE GROUND THAT THE CORRESPONDING TAX DEDUCTION AT SOUR CE WAS NOT DEPOSITED WITHIN THE TIME PERIOD PRESCRIBED UNDER S ECTION 200(1) OF THE ACT AND, HENCE, THE DISALLOWANCE IN TERMS OF SECTI ON 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER TREATED SUCH DIFFERENCE BETWEEN THE RETURNED INCOME AND THE ASSESSED INCOME AS FURNISHI NG OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE WITHIN THE ME ANING OF SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, THE ASSESSING O FFICER LEVIED A PENALTY OF RS.15,73,824/- UNDER SECTION 271(1)(C) OF THE AC T, WHICH WAS EQUIVALENT TO 100% OF THE TAX SOUGHT TO BE EVADED W ITH RESPECT TO A DISALLOWANCE OF RS.46,30,253/-. 3.1 ON AN APPEAL BY THE ASSESSEE, THE CIT(A) HAS DELETED THE PENALTY ON THE GROUND THAT NON-ACCEPTANCE OF A CLA IM FOR DEDUCTION OF 3 ITA NO. 6697/MUM/2013 (ASSESSMENT YEAR : 2008-09) EXPENDITURE DOES NOT AMOUNT TO FURNISHING OF INACCU RATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF T HE ACT. AGAINST SUCH DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE APPEA RING FOR THE REVENUE HAS REITERATED THE GROUNDS OF APPEAL WHICH PRIMARILY SEEK TO DEFEND THE ACTION OF THE ASSESSING OFFICER ON THE G ROUND THAT ASSESSEES CLAIM FOR DEDUCTION OF EXPENDITURE WITHOUT EFFECTUA TING THE TAX DEDUCTION/BELATED PAYMENT OF TDS JUSTIFIED THE DISA LLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT, WHICH IS LIABLE FOR L EVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. ON THE OTHER HAND, LD. REPRESENTATIVE FOR THE AS SESSEE DEFENDED THE ULTIMATE DECISION OF THE CIT(A) AND POINTED OUT THA T DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF NON-PAYM ENT OF THE TDS, WHICH IS A TECHNICAL DEFAULT, DOES NOT RESULT IN LE VY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN SUPPORT OF SUCH PROPOSITION, RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF THE HONBLE GU JARAT HIGH COURT IN THE CASE OF CIT VS.L.G.CHAUDHARY IN TAX APPEAL NO. 263 OF 2013 DATED 4 TH APRIL, 2013. FURTHERMORE, THE LD. REPRESENTATIVE FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE INDORE BENCH O F THE TRIBUNAL IN THE CASE OF ROOP SINGH BAGGA, ITA NO.44/IND/2013 DATED 31/5/2013, WHEREIN ALSO UNDER SIMILAR CIRCUMSTANCES PENALTY LE VIED UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN DELETED. APART FROM REITERATING THE REASONING ADOPTED BY THE CIT(A), LD. REPRESENTATIVE FOR THE ASSESSEE ALSO POINTED OUT THAT EVEN OTHERWISE, THE BASIS ON WHICH THE DISALLOWANCE WAS MADE BY INVOKING SECTION 40(A)(IA) OF THE ACT WAS A 4 ITA NO. 6697/MUM/2013 (ASSESSMENT YEAR : 2008-09) DEBATABLE ISSUE FOR WHICH THE PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT ATTRACTED. FOR THIS PURPOSE HE REF ERRED TO THE RELEVANT DISCUSSION IN THE ORDER PASSED BY THE ASSESSING OFF ICER AND THE CIT(A) IN THE QUANTUM ASSESSMENT PROCEEDINGS DATED 15/12/2009 AND 25/01/2011 RESPECTIVELY, COPIES OF WHICH WERE PLAC ED ON RECORD. 6. HAVING CONSIDERED THE RIVAL STANDS, IN OUR CONSI DERED OPINION, NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER OF THE CIT(A), WHEREBY PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SEC TION 271(1)(A) OF THE ACT HAS BEEN DELETED. OSTENSIBLY, THE DISALLOWANCE MADE IN THE QUANTUM ASSESSMENT PROCEEDINGS, WHICH HAS SUFFERED THE LEVY OF PENALTY UNDER SECTION 271(10(C) OF THE ACT, WAS MAD E BY INVOKING SECTION 40(A)(IA) OF THE ACT. SECTION 40(A)(IA) W AS INVOKED TO DISALLOW AN EXPENDITURE OF RS.5,00,53,380/- FOR THE REASON T HAT THE CORRESPONDING TDS WAS NOT DEPOSITED WITHIN THE TIM E PRESCRIBED IN LAW. NOTABLY, AS PER THE HONBLE GUJARAT HIGH COUR T IN THE CASE OF L.G.CHAUDHARY(SUPRA) NON-PAYMENT OF TDS WAS A TECHN ICAL DEFAULT WHICH LEADS TO THE DISALLOWANCE UNDER SECTION 40(A) (IA) OF THE ACT AND THE SAME DOES NOT CONSTITUTE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE WI THIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. IN VIEW OF THE AFORE SAID JUDGMENT OF THE HONBLE GUJARAT HIGH COURT NO FAULT CAN BE FOUND IN THE CONCLUSION DRAWN BY THE CIT(A), WHICH WE HEREBY AFFIRM. 6.1 MOREOVER, IT IS A TRITE LAW, AS SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158(SC) THAT MERE MAKING A CLAIM, WHICH IS FOUND U NSUSTAINABLE BY THE 5 ITA NO. 6697/MUM/2013 (ASSESSMENT YEAR : 2008-09) REVENUE, WOULD NOT AMOUNT TO FURNISHING OF INACCURA TE PARTICULARS REGARDING THE INCOME BY THE ASSESSEE. IN THE PRESE NT CASE TOO, THE ORDERS OF THE AUTHORITIES BELOW DO NOT REFLECT A FI NDING THAT ANY OF THE DETAILS OR OTHER PARTICULARS FURNISHED BY THE ASSES SEE EITHER IN ITS RETURN OF INCOME OR DURING THE ASSESSMENT PROCEEDINGS, QUA THE IMPUGNED DISPUTE WERE FOUND TO BE ERRONEOUS OR FALSE OR INC ORRECT. THUS, CONSIDERING THE ENTIRE GAMUT OF FACTS AND CIRCUMSTA NCES OF THE CASE, WE FIND THAT THE CIT(A) HAS CORRECTLY DELETED THE PENA LTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T. CONSEQUENTLY, THE ORDER OF THE CIT(A) IS AFFIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COUR T IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 02/02/2016. SD/- SD/- (JOGINDER SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 02/02/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI