HATHWAY CABLE & DATACOM LTD., MUMBAI V. ASS CIT 12 (2)(2), MUMBAI

ITA 7043/MUM/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5706 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 14-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 271(1)(c); 143(3); 14A; 115JB; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL "H" BENCH, MUMBAI SHRI PRAMOD KUMAR, VICE PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 7043/MUM/2019 (ASSESSMENT YEAR: 2014-15) Hathway Cable & Datacom Limited, 4 th Floor, Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai - 400054 [PAN:AAACC6814B] Commissioner of Income Tax (Appeals)- 20, Mumbai, 5 th Floor, Earnest House, Nariman Point, Mumbai - 400021 .................. Vs ................... Appellant Respondent Appearances For the Appellant/ Assessee For the Respondent/Department : : Ms. Moksha Mehta Ms. Neha Thakur Date of conclusion of hearing Date of pronouncement of order : : 24.02.2022 30.03.2022 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant/Assessee has challenged the order, dated 13.09.2019, passed by the Ld. Commissioner of Income Tax (Appeals)–20, Mumbai [hereinafter referred to as „the CIT(A)‟] levying penalty under section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred to as „the Act‟] pertaining to the Assessment Year 2014-15. 2. Brief facts of the case are that Appellant filed return of income on 30.11.2014 which was revised on 30.03.2016 declaring loss of INR 36,62,48,596/- under normal provisions and book loss of INR 1,25,25,11,722/-. The return was selected for scrutiny and assessment order under Section 143(3) of the Act was passed on ITA. No. 7043/Mum/2019 Assessment Year: 2014-15 2 28.11.2016 determining loss of INR 36,84,48,165/- under normal provision of the Act and book loss of INR 63,19,89,129/- under Section 115JB of the Act after making disallowance of INR 1,69,35,716/- under Section 14A of the Act. 3. In appeal, the addition made by the Assessing Officer under Section 14A of the Act was deleted by the CIT(A) while returning a finding that no exempt income was earned by the Appellant during the relevant previous year. However, the CIT(A) was of the view that in Paragraph No. 2 of the „Statement of Fact‟ filed by the Appellant along with Form No. 35, the Appellant had admitted that it had incurred expenses of INR.51,35,105/-, which were worked out on rational and scientific basis, for earning tax free dividend income, and therefore, CIT(A) made an enhancement of INR 51,35,104/- by making an addition under Section 37(1) of the Act. Further, penalty proceedings, were also initiated under Section 271(1)(c) of the Act. 4. The penalty proceedings culminated into penalty order, dated 13.09.2019, passed by the CIT(A) under Section 271(1)(c) of the Act levying a penalty of INR 15,86,748/- which has been impugned by way of the present appeal. The Appellant has raised five grounds of appeal, all challenging levying penalty of INR 15,86,748/- under Section 271(1)(c) of the Act. 5. The Ld. Authorised Representative for the Appellant appearing before us submitted that the enhancement of INR.51,35,105/- made by the CIT(A) stands deleted as the appeal filed before the Tribunal against the order passed by the CIT(A) has been allowed by the Tribunal vide order, dated 05.01.2021, and therefore, penalty be deleted. Ld. Departmental Representative, after examining the order, dated 05.01.2021, passed in ITA No.3840/Mum/2019 for the Assessment Year 2014-15 confirmed, verified that the quantum appeal has been allowed. ITA. No. 7043/Mum/2019 Assessment Year: 2014-15 3 6. We have perused the copy of order, dated 05.01.2021, passed in ITA No.3840/Mum/2019 for the Assessment Year 2014-15. The addition/enhancement of INR 51,35,105/- made by the CIT(A), which formed the basis of penalty proceedings, has been deleted in quantum appeal. Paragraph No. 10 of the aforesaid order of the Tribunal read as under: “9. Thereafter, the Ld. CIT(A) has held that since the assessee has himself made a disallowance of Rs.51,35,104/- for earning the exempt income u/s 14A he is going to sustain the aforesaid disallowance and hence he has made an enhancement of the said amount. 10. We find that there is no estoppel as to law. If an addition or disallowance is not permissible in law the same cannot be fastened upon the assessee on his concession. Moreover, the Ld. CIT(A) is relying upon the jurisdictional High Court decision in deleting the addition made by the assessing officer then again making an enhancement on a different pretext of estoppel or offering concession by the assessee. This is on the cusp of contempt of the Hon‟ble Jurisdictional High Court, and not at all sustainable.” 7. In view of above, the levy of penalty under Section 271(1)(c) of the Act cannot be sustained. The penalty of INR 15,86,748/- levied under Section 271(1)(c) of the Act is deleted. 8. In result the present appeal is allowed. Order pronounced on 30.03.2022. Sd/- Sd/- (Pramod Kumar) Vice President (Rahul Chaudhary) Judicial Member ITA. No. 7043/Mum/2019 Assessment Year: 2014-15 4 म ुंबई Mumbai; दिन ुंक Dated : 30.03.2022 Alindra, PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त(अपील) / The CIT(A)- 4. आयकर आय क्त / CIT 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदिकरण, म ुंबई / ITAT, Mumbai