M/s Fortune Associates, Bhopal V. ITO1(2), Bhopal

ITA 715/Ind/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7141 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Assessee Lawyers: N D PATWA
• Keywords: Opportunity of being heard; Question of law
• Section: 271(1)(c); 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.715/IND/2018 ASSESSMENT YEAR: 2009-10 M/S FORTUNE ASSOCIATES, 157, ZONE-I, M.P. NAGAR, BHOPAL / VS. INCOME TAX OFFICER -1(2), BHOPAL ( APPELLANT ) ( RE VENUE ) PAN: AABFF3398F APPELLANT BY SHRI N.D. PAT WA, ADV. RE VENUE BY SHRI RAJEEB JAIN, SR. DR DATE OF HEARING: 15.10.2019 DATE OF PRONOUNCEMENT: 17.10.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL AT THE INSTANCE OF ASSESSEE PERTAINING TO A.Y. 2009-10 IS DIRECTED AGAINST THE ORDER OF COMMISSION ER OF INCOME TAX-(APPEALS)-1, BHOPAL, (IN SHORT CIT), DATED 26 .06.2018 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOM E TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 05. 03.2014 BY ITO- 1(2), BHOPAL. M/S FORTUNE ASSOCIATES ITANO.715/IND/2018 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE: - 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF PENALTY, WHICH IS VOID-AB-INITIO, INVALID, UNJUSTIF IED, BARRED BY LIMITATION AND THEREFORE, LIABLE TO BE QUASHED. 2. THE LD. CIT(A) DID NOT PROVIDE PROPER AND MEANINGFU L OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND PAS SED EX- PARTE ORDER. 3. THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE RS.2,00,000/-. 3. THE SOLITARY GRIEVANCE OF THE ASSESSEES APPEAL IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AT RS.2,00,000/ - CONFIRMED BY LD. CIT(A). 4. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM. E-RETURN OF INCOME FOR A.Y. 2009-10 FILED ON 27.09.2009 DECLARING NIL INCOME AFTER CLAI MING DEDUCTION U/S 80IB(10) OF THE ACT AT RS.5,81,281/-. CASE PICK ED UP FOR SCRUTINY ASSESSMENT AND ASSESSMENT U/S 143(3) OF TH E ACT WAS COMPLETED ON 29.12.2011 IN WHICH CLAIM U/S 80IB(10) WAS DENIED AND INCOME ASSESSED AT RS.5,81,280/-. PENALTY PROCE EDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED. SUBSEQUENTLY, VIDE ORDER DATED 05.03.2014 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PENALTY OF RS.2,00,000/- WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. M/S FORTUNE ASSOCIATES ITANO.715/IND/2018 3 5. AGAINST THIS LEVY OF PENALTY ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) BUT FAILED TO SUCCEED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE QUANTUM ISSUE IS PENDING BEFORE THE HON'BLE JURISDICTIONAL HIGH COUR T FOR A.YS. 2004-05 & 2006-07. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SURABHI HOMES IN INCOME-TAX ACT, 19 61. NO.68/2016 AND 69/2016 DATED 21.03.2017 HAS HELD TH AT NO PENALTY IS TO BE LEVIED U/S 271(1)(C) OF THE ACT IN CASE THE DEDUCTION U/S 80IB(10) IS NOT GRANTED ON THE GROUND OF NOT RE CEIVING COMPLETION CERTIFICATE. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF LD. CIT(A). 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. WE OBSERVE THAT IN THE INSTANT CASE, THE ASSESSEE WAS DENIED BENEFIT U/S 80IB(10) OF THE ACT. LD. AO TREA TED THE ASSESSEE AS CONTRACTOR AND NOT AS A BUILDER. IN THE PAST ALS O ASSESSEE HAD BEEN DENIED BENEFIT. QUANTUM ISSUES ARE PENDING BEF ORE THE HON'BLE JURISDICTIONAL HIGH COURT. 9. IT HAS BEEN CONSISTENTLY HELD BY VARIOUS HON'BLE COURTS THAT IF THE QUANTUM ISSUE IS PENDING BEFORE HON'BLE HIGH COURT & APEX COURT WHICH SHOWS THAT THERE IS A SUBSTANTIAL QUESTION OF LAW AND THE M/S FORTUNE ASSOCIATES ITANO.715/IND/2018 4 ISSUE IS DEBATABLE WHICH MAY BE DECIDED IN EITHER W AY THEN PENALTY IS NOT LEVIABLE U/S 271(1)(C) OF THE ACT. 10.THE ASSESSEES CASE IS ALSO SIMILAR BECAUSE IT H AD MADE A CLAIM BELIEVING IT TO BE A CORRECT CLAIM BUT THE REVENUE AUTHORITIES DENIED THE CLAIM AND THIS QUESTION OF LAW IS NOW PENDING B EFORE HON'BLE JURISDICTIONAL HIGH COURT. 11. HON'BLE BOMBAY HIGH COURT IN THE CASE OF NAYAN BUILDERS AND DEVELOPERS IN ITA NO.415 OF 2012, DISMISSED THE DEPARTMENTS APPEAL AND UPHELD THE TRIBUNALS ORDER OF DELETING PENALTY ON THE GROUND THAT WHEN THE HIGH COURT ADMITS SUBSTANTIAL QUESTION OF LAW ON AN ADDITION, IT BECOMES APPARENT THAT THE AD DITION IS CERTAINLY DEBATABLE AND IN SUCH CIRCUMSTANCES PENAL TY CANNOT BE LEVIED. 12. COORDINATE BENCH, INDORE IN THE CASE OF SHRI YUGAL KISHOR JAJOO VS. DCIT (ITANO.271/IND/2011) HAS HELD THAT, WHEN THE HON'BL E HIGH COURT HAS ADMITTED THE APPEAL TO DECIDE THE SU BSTANTIAL QUESTION OF LAW, NO PENALTY CAN BE IMPOSED. 13. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN THE PEN ALTY HAS BEEN LEVIED FOR DENIAL OF DEDUCTION U/S 80IB(10) OF THE ACT AND IN THE PRECEDING YEARS THE ASSESSEE HAS CARRIED THE ISSUE BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WHEREIN THE ISSUE HAS BEEN M/S FORTUNE ASSOCIATES ITANO.715/IND/2018 5 ADMITTED HAVING SUBSTANTIAL QUESTION OF LAW, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD NOT BE VISITED WITH THE PENALTY U/S 271(1)(C) OF THE ACT WHICH HAS BEEN LEVIED MERELY ON A TECHNICAL GROUND AND WITHOUT FINDING ANY MISTAKE IN THE DETAILS FILED BY THE ASSESSEE IN THE RETURN OF INCOME. ACCORDINGLY PENALTY OF RS.2,0 0,000/- LEVIED U/S 271(1)(C) OF THE ACT STANDS DELETED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17.10.2 019. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 17/10/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR