SHAKEEL AHMED MOHAMED YUNUS ANSARI, MUMBAI V. ITO 21 (3)(3), MUMBAI

ITA 6993/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6743 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P AVAN BEERLA
• Keywords: Wrong claim; Set aside
• Section: 271(1)(c); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA (AM) & SHRI RAVISH SOOD ( JM) I.T.A. NO. 6993/MUM/2019 (ASSESSMENT YEAR 2010-11) SHAKEEL AHMED MOHAMED YUNS ANSARI 101/1, HARI JAIRAM CHAWL, MAULANA AZAD ROAD MADANPURA MUMBAI-400 011 PAN : AGUPA3796R VS. ITO - 21(3)(3) MUMBAI ( RESPONDENT ( APPELLANT ) ASSESSEE BY NONE DEPARTMENT BY SHRI P AVAN BEERLA DATE OF HEARING 30.08 .2021 DATE OF PRONOUNCEMENT 02.09 .2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-33 DATED 16.08.2019 AND PERTAINS TO ASSESSMENT YEAR 20 10-11. 2. THE GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.9,66,000/- U/S,271(1)(C) OF THE ACT, WHICH IS CONTRARY TO THE FACTS AND EVIDENCE ON RECORD AND HE NCE, IT SHOULD BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) FAILED TO APPRECIATE THAT, THERE IS NO CONCEALMENT OF ANY INCOME AND HENCE THE PENALTY LEVIED BE CANCELLED. 3. THE LEARNED CIT(APPEALS) FAILED TO APPRECIATE THAT, THE APPELLANT HAD DISCLOSE TRUE AND CORRECT DETAILS OF ITS CLAIM AND THERE IS NO CO NCEALMENT OF THE SAME. 4. THE APPELLANT PRAYS THAT, THE CLAIM OF DEDUCTI ON MADE U/S.80 IB (10) WAS ON TECHNICAL GROUND REJECTED AND HENCE, THE PENALTY LE VIED BE CANCELLED. 3. BRIEF FACTS LEADING TO THE LEVY OF PENALTY ARE A S UNDER:- ITA NO.6993/MUM/2019 2 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF REDEVELOPMENT OF RESIDENTIAL BUILDING UNDER THE NAME & STYLE OF RAJ CONSTRUCTIONS. THE RETURN OF INCOME FOR THE YEAR 2010-11 WAS FILED ON 14/10/2010 DECLARING TOTAL INCOME OF RS 9,92,510/- AFTER AVAILING DEDUCTION OF RS 31.26.206 /- U/S 80IB(10) OF I.T.ACT.1961. THE ASSESSEE HAS CONSTRUCTED A BUILDING AND THE PRO JECT HAS BEEN COMPLETED DURING THE YEAR AND INCOME FROM THE SAME OF RS. 31,26,206/ - WAS CLAIMED AS DEDUCTION U/S 80IB(10). THE AREA OF THE PLOT ON WHICH THE BUILDIN G PROJECT WAS COMPLETED DURING THE YEAR IS 18,215 SQ. FT. I.E. LESS THAN 1 ACRE. T HE CASE WAS SELECTED FOR SCRUTINY WHEREIN THE AO DISALLOWED DEDUCTION CLAIMED U/S.80I B(10) ON THE GROUND THAT THE PROJECT DEVELOPED BY THE ASSESSEE WAS NOT COVERED B Y BOARD NOTIFICATION AND THE SAID FINDING WAS CONFIRMED BY THE CIT(A) VIDE ORDER DATE D 23/09/2013 WHEREIN THE DISALLOWANCE OF RS 31,26,206/- WAS CONFIRMED. 4. AO ALSO LEVIED 100% PENALTY UPON THE SAME. UPON ASSESSEES APPEAL LD.CIT(A) NOTED ASSESSEES SUBMISSION AS UNDER:- 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT HAS FILED WRITTEN SUBMISSIONS DATED 07/8/2019 WHEREIN IT WAS STATED THAT THE ASSESSEE FILED RETURN OF INCOME ALONG WITH TAX AUDIT REPORT CLAIMI NG DEDUCTION U/S 80IB(10) UNDER THE GUIDANCE OF THE AUDITOR. NO OTHER ADDITION WAS MADE BY THE AO OR CIT(A). APPEAL WAS FILED IN ITAT UNDER THE PROFESSIONAL GUI DANCE OF THE AUDITOR. HOWEVER, ASSESSEE GOT SECOND WRITTEN OPINION ON 4.3.2014 FRO M CA ANANT PAI & CO. AND HAS WITHDRAWN APPEAL IN TRIBUNAL. BOTH AO AND CIT(A) HA D DISALLOWED DEDUCTION U/S 80IB(10) SOLELY ON VIOLATION OF PROVISO TO SECTION 80IB(10)(B). THE DEDUCTION CLAIMED WAS ONLY UNDER PROFESSIONAL GUIDANCE OF THE AUDITOR WHO ARE SPECIALIZED IN THE TAXATION LAWS. HE RELIED ON THE DECISION OF THE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS P. LTD. IN SUPPORT OF HIS VI EW THAT A MERE CLAIM OF DEDUCTION DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF INCOME. THE APPELLANT HAS ALSO FILED A COPY OF T HE AFORESAID JUDGEMENT ALONG WITH WRITTEN OPINION, TAX AUDIT REPORT AND ORDER OF CIT( A). 5. LD.CIT(A) PROCEEDED TO CONFIRM THE PENALTY BY ELABORATELY DEALING WITH THE MERIT OF THE ADDITION. HE HAS HELD AS UNDER:- 5. I HAVE CAREFULLY GONE THROUGH THE PENALTY ORDER OF THE AO AS WELL AS THE WRITTEN SUBMISSIONS FILED BY THE AR OF APPELLANT. THERE IS NO DISPUTE THAT THE PLOT AREA OF THE ITA NO.6993/MUM/2019 3 HOUSING PROJECT IN CASE OF APPELLANT WAS LESS THAN 1 ACRE. THE DECISION OF THE BOMBAY HIGH COURT IN CASE OF CIT VS. VANDANA PROPERTIES [2 010] 353 ITR 36 [BOM] DOES NOT SUPPORT THE CLAIM OF THE APPELLANT IN ANY MANNE R AS THE FACTS ARE ENTIRELY DIFFERENT. IN CASE OF VANDANA PROPERTIES, THE PLOT AREA WAS MO RE THAN ONE ACRE AND THE ISSUE WAS ALLOWABILITY OF DEDUCTION U/S 80IB(10) ON A NEW HOU SING PROJECT WHEN THAT PLOT HAD SOME EXISTING HOUSING PROJECTS. IT IS NOT DESIRABLE TO PICK OUT A WORD OR A SENTENCE FROM ANY DECISION AND THE JUDGEMENT MUST BE READ AS A WHOLE. IN VANDANA PROPERTIES, THE PRESENT ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80IB(10) WAS NOT AT ALL ADJUDICATED. 5.1 IN THE CASE OF THE APPELLANT, THERE IS NOTHING WHICH SHOWS THAT EVEN THE LOCALITY IN WHICH HIS HOUSING PROJECT WAS SITUATED WAS DECLARED AS A SLUM AREA BY SLUM REGULATORY AUTHORITY. THE PERMISSION GRANTED TO THE ASSESSEE FOR RE-DEVELOPMENT BY THE LOCAL AUTHORITY WAS UNDER DCR 33(7) AND NOT UND ER DCR 33(10) AS APPLICABLE FOR SLUM RE-DEVELOPMENT. HENCE, THERE IS NO CASE FOR HI S HOUSING PROJECT BEING COVERED UNDER CBDT CIRCULAR OF 3.8.2010 AS THE SAME WAS APP LICABLE ONLY FOR SLUM RE- DEVELOPMENT PROJECTS PERMITTED UNDER DCR 33(10). 5. 2 TO CONCLUDE THE APOPELLANT WAS NOT AT A/I ELIGIBLE FOR SPECIAL INCENTIVE CARVED OUT FOR SLUM RE-DEVELOPMENT HOUSING PROJECTS BY WAI VING THE REQUIREMENT OF MINIMUM PLOT AREA OF 1 ACRE WHICH IS APPLICABLE IN GENERAL CASES. AS THE LANGUAGE OF SECTION 80IB ARE CLEAR AND UNAMBIGUOUS, THERE IS NO DOUBT THAT THE CLAIM O F THE APPELLANT MADE U/S 8016(10) WERE WITHOUT ANY JUSTIF ICATION WHATSOEVER AND WITHOUT ANY BONA FIDE REASONS. THE CLAIM OF THE APPELLANT W AS PATENTLY WRONG AND INADMISSIBLE. THIS IS NOT A CASE WHERE CONFLICTING DECISIONS OF VARIOUS HIGH COURTS WERE AVAILABLE ON THE DATE OF FILING OF RETURN. IN FACT, THE DECISION OF VANDANA PROPERTIES IS ALSO SUBSEQUENT TO FILING RETURN ON 1 4.10.2010. 5.3. APART FROM THAT I FIND THAT THE RELIANCE OF TH E APPELLANT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. IN 322 ITR 128 IS MISPLACE D. HON'BLE SUPREME COURT IN THIS CASE HAS HELD IN PARA 9 THAT '9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH T HE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A M ATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONA RY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS: 'NOT ACCURATE, NOT EXACT OR CORRECT: NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, TH EY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ORE NOT ACCURATE, NOT EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY TH E ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH N OT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT. A MERE ITA NO.6993/MUM/2019 4 MAKING OF THE CLAIM, WHICH IS NOT SUSTAINAB/E IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS.' 5.4 FROM THE ABOVE, IT IS CLEAR THAT IN THE AFORESA ID CASE THERE WAS A FINDING OF THE FACT THAT NO DETAILS SUPPLIED BY THE ASSESSEE IN ITS RET URN OF INCOME WAS FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE BY THE REVENUE. HOW EVER, IN THE INSTANT CASE, THE AO HAS CLEARLY GIVEN THE FINDINGS THAT THE CLAIM OF TH E DEDUCTION U/S 80IB MADE IN THE RETURN OF INCOME WAS INCORRECT OR FALSE. THE FOCUS OF THE AR OF THE APPELLANT ON THE PHRASE USED BY THE HON'BLE SUPREME COURT - 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSES'.- CANNOT BE READ IN ISOLATION. IN THE INSTANT CASE, DURING THE ASSESSMENT AS WELL AS THE PENALTY PROCEEDINGS, IT WAS BROUGHT ON RECORD THAT THE APPELLANT HAD MADE THE FALSE CLAIM WHICH WAS NOT ADMISSIBLE IN LAW. HENCE, IT WILL TANTAMOUNT TO FURNISHING OF INACCURA TE PARTICULARS OF INCOME IN THE RETURN OF INCOME FILED BY THE APPELLANT DURING A.Y. 2010-11. 5.5 IN THE LIGHT OF DISCUSSION MADE IN THE PRECEDI NG PARAGRAPHS, IN MY CONSIDERED OPINION, THE PENALTY OF RS.9,66,000/- IMPOSED BY TH E AO FOR FURNISHING INACCURATE PARTICULARS OF INCOME IS JUSTIFIED AND NEEDS NO INT ERFERENCE. HENCE, THE LEVY OF PENALTY U/S 271(1)(C) IS CONFIRMED. THUS, GROUNDS O F APPEAL ARE DISMISSED. 6. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATI VE AND PERUSED THE RECORDS. 8. WE HAVE CAREFULLY CONSIDERED SUBMISSIONS. SECTIO N 271(1)(C) OF THE ACT EMPOWERS THE ASSESSING OFFICER TO IMPOSE PENALTY IN THE COUR SE OF PROCEEDINGS OF THE ACT, IF HE IS SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS IN COME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN OTHER WORDS, IN ORDE R TO LEVY PENALTY, TWO PRE-REQUISITES ARE REQUIRED TO BE FULFILLED, NAMELY, THAT THE ASSE SSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF S UCH INCOME. IT IS ALSO A WELL SETTLED POSITION THAT THE ASSESSMENT PROCEEDINGS AND THE PE NALTY PROCEEDINGS ARE SEPARATE AND INDEPENDENT PROCEEDINGS. IT HAS BEEN HELD BY HON'BL E SUPREME COURT IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO. VS. CIT, (1980) 121 ITR 0457 (SC) THAT THE ITA NO.6993/MUM/2019 5 FINDINGS IN THE QUANTUM ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE TO DETERMINE THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. 9. WE NOTE THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED UPON THE DENIAL OF THE ASSESSEES CLAIM UNDER SECTION 80IB. IT IS NOT THE CASE THAT ASSESSEES CLAIM WAS EX- FACIE BOGUS. AS A MATER OF FACT, THE LD.CIT(A) IN D EALING WITH THE PENALTY ORDER HAS DISTINGUISHED THE ASSESSEES RELIANCE UPON HONBLE BOMBAY HIGH COURT DECISION IN THE CASE OF VANDANA PROPERTY(SUPRA) BY HOLDING THAT ASSESSEE IS PICKING LINES FROM THE ABOVE HONBLE JURISDICTIONAL HIGH COURT DECISION. A FTER HAVING HELD SO LD.CIT(A) HAS MISLED HIMSELF IN DISTINGUISHING THE ASSESSEES RELIANCE UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS. IN THE SAID CASE HONBLE SUPREME COURT HAS EXPOUNDED THAT MERE DENIA L OF AN ASSESSEES CLAIM CANNOT FASTEN UPON THE ASSESSEE LIABILITY OF PENALTY U.S 2 71(1)(C), UNLESS THE ASSESSEES CLAIM IS FOUND TO BE EX-FACIE BOGUS. IN OUR CONSIDERED OP INION, THE ASSESSEES CLAIM BY NO STRETCH OF IMAGINATION CAN BE SAID TO BE APPARENTLY BOGUS CLAIM. HENCE, IN OUR CONSIDERED OPINION, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AUTHORITIES BELOW HAVE ERRED IN LEVYING THE PENALTY U.S. 271(1)(C) UPON TH E ASSESSEE. 10. MOREOVER, THE ONLY ASPECT IN THE PRESENT CASE IS THAT THE CLAIM OF DEDUCTION WAS MADE, WHICH HAS NOT BEEN ALLOWED BECAUSE OF THE NON -SATISFACTION OF THE REQUIREMENT OF SIZE OF THE PROJECT. WE NOTE THAT IN SIMILAR SI TUATION THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PETELS ENGINEERS LIMITED (142 TAXMA NN.COM 433) HAS HELD THAT PENALTY U/S. 271(1)(C) IS NOT EXIGIBLE ON DENIAL OF CLAIM U/S 80IA. THEREFORE, LEVY OF PENALTY IN THE PRESENT CASE IS NOT JUSTIFIED ON THI S COUNT TOO. 11. ACCORDINGLY, IN THE BACKGROUND OF AFORESAID DI SCUSSION AND PRECEDENT, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E PENALTY. ITA NO.6993/MUM/2019 6 12. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 02.09.2021 SD/- SD/- (RAVISH SOOD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 02/09/2021 SR.PS. THIRUMALESH 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// ( ASSISTANT REGISTRAR) ITAT, MUMBAI