M/S Manzoor Ahmed Walvir, Kashmir V. The Asstt. Commissioner of Income-tax, Srinagar

ITA 716/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0719 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.716(ASR)/2014 ASSESSMENT YEAR: 2009-10 M/S MANZOOR AHMAD WALVIR 54, GOLE MARKET, KARAN NAGAR, SRINAGAR KASHMIR. PAN:AAIFM4288J VS. ASST. CIT, CIRCLE (3) SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.K.GUPTA (CA.) RESPONDENT BY: SH. UMESH TAKYAR (DR.) DATE OF HEARING: 16.05. 2016 DATE OF PRONO UNCEMENT: 20.05.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JAMMU, DATED 17.09.2014 FOR ASST. YEAR:2009 -10. 2. THE ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL, HO WEVER, THE CRUX OF GROUNDS OF APPEAL IS ACTION OF LEARNED CIT(A), BY W HICH, HE HAD UPHELD THE PENALTY IMPOSED BY ASSESSING OFFICER U/S 271(1) (C) OF THE I. T. ACT., FOR DISALLOWANCES MADE ON ACCOUNT OF NON DEDUCTION OF TDS. 3. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT LEA RNED CIT(A) INSTEAD OF ALLOWING RELIEF TO THE ASSESSEE HAD INCREASED TH E AMOUNT OF PENALTY WHICH IS NOT JUSTIFIED AT ALL. EXPLAINING THE FACTS OF THE CASE THE LEARNED AR SUBMITTED THAT ASSESSEE HAD MADE CERTAIN PAYMENT S OUT OF WHICH SOME PART WAS PAID DURING THE YEAR AND SOME PART WA S OUTSTANDING AT ITA NO.716 (ASR)/2014 ASST. YEAR : 2009-10 2 THE CLOSE OF YEAR. THE ASSESSING OFFICER MADE THE A DDITIONS ON ACCOUNT OF NON DEDUCTION OF TDS FOR WHOLE OF SUCH PAYMENTS ON WHICH TDS WAS NOT DEDUCTED. IT WAS FURTHER SUBMITTED THAT HONBLE TRI BUNAL IN ITA NO.417(ASR)/2012 FOR ASST. YEAR 2009-10, VIDE ORDER DATED 25.02.2016 HAD DISMISSED THE APPEAL OF REVENUE IN QUANTUM PRO CEEDINGS AND HAD UPHELD THE ACTION OF LEARNED CIT GIVING RELIEF TO T HE ASSESSEE BY DELETING DISALLOWANCES MADE ON PAYMENTS WHICH WERE PAID DURI NG THE YEAR AND THE LEARNED CIT(A) HAD ENHANCED THE PENALTY BY INC REASING PENALTY AMOUNT ON PAYMENTS FOR WHICH PAYMENT WAS ALREADY MA DE DURING THE YEAR. 4. WITHOUT PREJUDICE IT WAS SUBMITTED THAT VARIOUS TRIBUNALS AND COURTS HAS HELD THAT PENALTY IMPOSED ON DISALLOWANC ES MADE FOR NON DEDUCTION OF TDS IS NOT SUSTAINABLE AND IN THIS RES PECT RELIANCE WAS PLACED ON FOLLOWING CASE LAWS: I) ASST. CIT, CIRCLE 3(1), HYDERABAD VS. SEAWAYS SH IPPING LTD., SECUNDRABAD (ITAT, HYDERABAD A BENCH). II) RAMKRISHNA SHETTY VS. ASST. CIT, 20(2), MUMBAI. & ASST. CIT, 20(2), MUMBAI VS. RAMKRISHNA SHETTY (ITA T, D BENCH, MUMBAI.) III) RIDHAM TEXPORT P. LTD., VS. ASST. CIT, 7(2), M UMBAI. IV) DY. CIT 5(1), INDORE VS. ROOP SINGH BAGGA (ITAT , INDORE BENCH, INDORE). V) TANUSHREE BASU VS. ASST. CIT 36 CCH 0089 (MUM). OUR PARTICULAR ATTENTION WAS INVITED TO CASE LAW OF SH. SEAWAYS SHIPPING LTD. SECUNDRABAD, IN ITA NO.80/H/2011 DECIDED BY H ONBLE HYDERABAD ITA NO.716 (ASR)/2014 ASST. YEAR : 2009-10 3 A BENCH, PLACED AT (PB PAGE NO. 1 TO 5). IN VIEW OF THE ABOVE SUBMISSIONS THE LEARNED AR SUBMITTED THAT PENALTY I MPOSED AND CONFIRMED AND ENHANCED BY LEANED CIT(A) BE DELETED. 5. THE LEARNED DR, HEAVILY PLACED HIS RELIANCE ON T HE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS AN U NDISPUTED FACT THAT PENALTY WAS IMPOSED BY THE ASSESSING OFFICER FOR DI SALLOWANCE MADE U/S 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TAX ON VA RIOUS PAYMENTS. THIS FACT IS VERIFIABLE FROM THE PENALTY ORDER ITSELF. W E FURTHER FIND THAT THE HONBLE ITAT, HYDERABAD BENCH IN THE CASE OF ACIT, CIRCLE3(1), VS. SEAWAYS SHIPPING LTD., SECUNDRABAD IN ITA NO.80(H)/ 2011 VIDE ORDER DATED 17.06.2011 HAS DELETED THE SIMILAR PENALTIES IMPOSED BY THE AUTHORITIES BELOW. THE RELEVANT FINDINGS OF THE HON BLE TRIBUNAL ARE CONTAINED IN PARA 5 TO 6. FOR THE SAKE OF CONVENIEN CE THE RELEVANT FINDINGS ARE REPRODUCED BELOW. 5. AT THE TIME OF HEARING ON 16.6.2011, NONE APPEA RED ON BEHALF OF THE ASSESSEE. WE HEARD THE DEPARTMENTAL REPRESENTATIVE. IN THIS CASE, PENALTY IS LEVIED FOR DISALLOWANCE OF EXPENDITURE U/S 40(A) (IA) OF THE INCOME TAX ACT. NON DEDUCTION OF TDS BY THE ASSESSEE WAS RESU LTED IN DISALLOWANCE OF EXPENDITURE U/S 40(A) (IA), THAT ITSELF CANNOT B E CONSTRUED AS FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE ASSESSEE HAS FAILED TO DEDUCT TDS WHICH RESULTED IN DISALLOW ANCE OF EXPENDITURE. IN OUR OPINION, THE MISTAKE COMMITTED BY THE ASSESSEE WAS COMPENSATED BY DISALLOWING THE EXPENDITURE. FURTHER, THE REVENUE C ANNOT PENALISE THE ASSESSEE BY LEVYING PENALTY U/S 271(1) (C ) OF THE ACT. IN ORDER TO LEVY PENALTY U/S 271 (1) (C ) OF THE ACT, THERE HAS TO B E CONCEALMENT OF PARTICULARS OF INCOME OF THE ASSESSEE OR THE ASSESS EE MUST HAVE FURNISHED INACCURATE PARTICULARS OF ITS INCOME. PRESENT IS NO T THE CASE OF CONCEALMENT ITA NO.716 (ASR)/2014 ASST. YEAR : 2009-10 4 OF INCOME OR IT IS NOT THE CASE OF REVENUE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE DEPARTMENT HA S NOT FOUND OUT THAT THE ASSESSEE HAS FURNISHED ANY FACTUAL INCORRECT IN FORMATION AND THE ASSESSEE IS NOT GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR OPINION, THE CONDITIONS LAID DOWN IN SECTION 27 1(1) (C ) OF THE ACT IS NOT COMPLIED WITH. BEING SO, LEVY OF PENALTY IS NOT JUS TIFIED MERELY BECAUSE THE ASSESSEE HAS CLAIMED CERTAIN EXPENDITURE THAT EXPEN DITURE IS NOT ELIGIBLE IN VIEW OF THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT AND FOR THAT REASON, EXPENDITURE IS DISALLOWED. PENALTY CANNOT BE LEVIED FOR MERE MAKING OF A CLAIM OF THE EXPENDITURE WHICH IS NOT SUSTAINABLE A ND DELETION OF PENALTY BY THE CIT(A) IS JUSTIFIED. WE PLACE RELIANCE ON TH E JUDGMENT OF THE HONT)LE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (322 ITR 158) (SC). ACCORDINGLY THE GROUND RAISED BY THE REVENUE HOLDS NO MERIT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL A RE PARI MATERIA TO THE CASE LAWS RELIED UPON BY THE LEARNED AR, AND, THERE FORE, RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL PROCEEDINGS, WE DELETE THE PENALTY CONFIRMED AND ENHANCED BY LEARNED CIT(A). 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESS EE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:20.05.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER