ACIT, CIRCLE- 22(2), NEW DELHI V. SAVEER BIOTECH LTD., NEW DELHI

ITA 6952/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5403 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 20-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Rule 8D
• Section: 271(1)(c); 143(3); 14A; 115JB

Judgement Text

1 ITA NO. 6952/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 6952/DEL/20 17 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) ACIT CIRCLE-22(2) ROOM NO. 226A, 2 ND FLOOR, C. R. BUILDING, I. P. ESTATE, NEW DELHI (APPELLANT) VS SAVEER BIOTECH LTD. 1442, WAZIR NAGAR, KOTLA MUBARAKPUR, NEW DELHI AAACS3271N (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 30/08/2017 PASSED BY CIT(A)-8, NEW DELHI FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER: WHETHER THE LD. CIT(A) HAS ERRED IN DELETING THE P ENALTY OF RS. 58,97,366/- LEVIED BY THE AO U/S 271(1)(C) ON ACCOUNT OF DEDUCT ION U/S 35(2AB) AS THE ASSESSEE NOT VOLUNTARILY DISCLOSED THE FACT OF NOT RECEIVING DSIR CERTIFICATE FOR, DEDUCTION U/S 35(2AB). IN FACT, THE REVISED CO MPUTATION WAS FILED BY THE ASSESSEE ONLY AFTER AO QUESTIONED HIM ON DEDUCTION U/S 35(2AB) DURING THE ASSESSMENT PROCEEDINGS. APPELLANT BY SH. PRAKASH DUEBY, SR. DR RESPONDENT BY DR. RAKESH GUPTA, ADV DATE OF HEARING 16.09.2021 DATE OF PRONOUNCEMENT 23.09.2021 2 ITA NO. 6952/DEL/2017 3. THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF B IOTECHNOLOGY IN MANUFACTURE AND INSTALLATION OF GREEN HOUSE / GROWT H AND VARIOUS ELECTRICAL INSTRUMENTS FOR GREEN HOUSE / GROWTH HOUSE / GROWTH CHAMBER, WHICH ARE USED BY RESEARCH INSTITUTIONS FOR RESEARCH PURPOSES , WHERE A PARTICULAR LEVEL OF TEMPERATURE IS REQUIRED TO BE MAINTAINED, IRRESPECT IVE OF TEMPERATURE OUTSIDE THE GREEN HOUSE. APPELLANT HAS FILED ITS RETURN OF INCOME ON 24.09.2013 FOR AY 2013-14, DECLARING LOSS OF RS. (-) 27,76,517/-, APA RT FROM DECLARING BOOK PROFITS OF RS. 2,20,45,910/- U/S 115JB OF THE ACT. FOR ASSESSMENT YEAR UNDER CONSIDERATION, TAX PAYABLE ON RETURN INCOME UNDER N ORMAL PROVISIONS OF THE ACT, WAS LESS THAN TAX PAYABLE ON BOOK PROFITS U/S 115JB OF THE ACT THEREFORE RETURN OF INCOME WAS FILED, DECLARING TAX PAYABLE U NDER SECTION 115JB OF THE ACT. THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSM ENT U/S 143(3) OF THE ACT WAS COMPLETED BY ASSESSING OFFICER ON 05.02.2016, D ETERMINING ASSESSED INCOME AT RS. 1,92,00,408/- UNDER NORMAL PROVISIONS OF ACT. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON 05.02.2016 T HEREBY MAKING ADDITION / DISALLOWANCE UNDER THE HEADS (I) DISALLOWANCE OF WE IGHTED DEDUCTION CLAIMED U/S 35(2AB) OF THE ACT (II) ADDITION OF RS. 4,37,24 4/- U/S 2(24)(X) READ WITH SECTION 36(L)(VA) OF THE ACT, ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND (III) DISALLOWANCE OF RS. 10 ,229/- U/S 14A OF THE ACT READ WITH RULE 8D. WHILE COMPUTING TOTAL INCOME FOR AY 2013-14, THE ASSESSING OFFICER ALLOWED REVENUE EXPENSES INCURRED BY THE ASSESSEE OF RS. 1,92,15,317/- FOR UNDERTAKING IN-HOUSE RESEARCH & D EVELOPMENT ON DSIR RECOGNIZED IN-HOUSE R & D FACILITY. WHILE FINALIZIN G SCRUTINY ASSESSMENT ON 05-02-2016, PENALTY PROCEEDINGS U/S 271(L)(C) OF TH E ACT, WERE ALSO INITIATED BY THE ASSESSING OFFICER, FOR FURNISHING INACCURATE PA RTICULARS OF INCOME. DURING THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER ISSU ED PENALTY NOTICE DATED 05.02.2016 FIXING THE HEARING DATE ON 14.04.2016 AN D ANOTHER PENALTY SHOW CAUSE NOTICE WAS ISSUED ON 12-08-2016 FIXING THE DA TE OF HEARING ON 19.08.2016. IN RESPONSE TO PENALTY SHOW CAUSE NOTIC E(S), NO REPLY WAS 3 ITA NO. 6952/DEL/2017 SUBMITTED ON BEHALF OF THE ASSESSEE, THEREFORE PLAC ING RELIANCE ON JUDICIAL PRONOUNCEMENTS MENTIONED IN PENALTY ORDER, THE ASSE SSING OFFICER HELD THAT THE ASSESSEE HAS NOT FURNISHED ACCURATE PARTICULARS OF ITS INCOME TO THE EXTENT OF RS. 1,96,57,885/-. THE ASSESSING OFFICER ALSO HE LD THAT THIS IS A FIT CASE FOR LEVY OF PENALTY FOR FURNISHING OF INACCURATE PARTIC ULARS OF INCOME. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 58,97,366/- VIDE PENALTY ORDER DATED 31.08.2016. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CIT(A) HAS GIVE A CATEGORICAL FINDING THAT THE ASSESSEE WAS UNDER THE GENUINE BELIEF THAT APPROVAL WILL BE GRANTED BY THE APPROPRIATE AUTHORITY I.E. DSIR AND ACCORDINGLY MADE THE CLAIM FOR DEDUCTION U /S 35(2AB) OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. BUT THE A PPROVAL WAS GRANTED BY DSIR W.E.F. 01.04.2013 AND, THEREFORE, THE ASSESSEE WITHDRAWN THE WEIGHTED DEDUCTION CLAIM BY FILING REVISED COMPUTATION OF IN COME BEFORE THE ASSESSING OFFICER IN ONGOING ASSESSMENT PROCEEDINGS. THIS CA NNOT BE TERMED AS CONCEALING INCOME OR FURNISHING INACCURATE PARTICUL ARS OF INCOME. BESIDES THIS, THE ASSESSEE HAS ALSO GIVEN EXPLANATION BEFOR E THE ASSESSING OFFICER AS RELATES TO REVISED COMPUTATION OF INCOME. THUS, IN LIGHT OF THE DECISION OF THE HONBLE APEX COURT IN CASE OF CIT VS. RELIANCE PETR O PRODUCTS PVT. LTD. (2010) 322 ITR 158 DELHI. THUS, THERE IS NO NEED TO INTER FERE WITH THE FINDINGS OF THE CIT(A). THE APPEAL OF THE REVENUE IS DISMISSED. 4 ITA NO. 6952/DEL/2017 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 23/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI