DCIT 4 (1), Bhopal V. M/s Vidisha Bhopal Regional Bank, Vidisha

ITA 725/Ind/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9236 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KHAA
• Keywords: Question of law; Set aside
• Section: 271(1)(c); 143(3); 80P

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE JUSTICE P.P. BHATT, HON'BLE PRESIDENT AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.725/IND/2017 ASSESSMENT YEAR: 2009-10 REVENUE BY SHRI HARSHIT BARI , SR.DR APPELLANT BY SHRI ANIL KHABYA , CA DATE OF HEARING 03.12. 2020 DATE OF PRONOUNCEMENT 07.01 .202 1 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF REVENUE PERTAINING TO ASSESSMENT YEAR 2009-10 IS DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2 (IN SHORT LD.CIT], BHOPAL DATED 22.09.2017 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 27.03.2014 FRAMED BY ACIT-3(1), BHOPAL. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL : - DCIT 4(1), BHOPAL VS. M/S. VIDISHA BHOPAL KSHETRIYA GRAMIN BANK, MODH BHAWAN, CLUB ROAD, VIDISHA (M.P) (REVENUE ) (APPELLANT) PAN NO. A A A C V 5199E ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 2 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN: 1) HOLDING THAT THERE IS NO FINDING ON RECORD THAT AN Y DETAILS SUPPLIED BY THE APPEL LANT IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDE RATION ORE FOUND TO BE INCORRECT OR FALSE AND THEREFORE, THERE IS NO QU ESTION OF LEVYING PENALTY U / S 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEN W.E .F . 01.04.2007, THE ASSESSEE WAS NOT ELIGIBLE FAT DEDUC TION ULS80P OF THE INCOME TAX ACT, 1961 DESPITE THE SAME THE ASSESSEE HAS BEEN MAKING INCORRECT CLAIM OF DEDUCTION U / S 80P OF THE IT ACT THUS FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2) HOLDING THAT THERE IS NO FINDING ON RECORD THAT ANY DETAILS SUPPLIED BY THE APPE LL ANT IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONS IDERATION ORE FOUND TO BE INCORRECT OR FALSE AND THEREFORE, THERE IS NO QU ESTION OF LEVYING PENALTY U / S 271(1)(C) WHEN ASSESSEE WAS CLAIMING DEDUCTION U / S 80P DESPITE THE FACT THAT IN ITS OWN CASE DEDUCTION WAS DISALLOWED IN A.Y 200708 AND SOME WAS DISA LLOWED BY HON'BLE ITAT.' 3. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT THE ASSESSEE IS A REGIONAL RURAL BANK CARRYING OUT BANKING ACTIV ITIES. NIL INCOME DECLARED IN THE RETURN FOR ASSESSMENT YEAR 2 009-10 FILED ON 24.09.2009 AFTER CLAIMING DEDUCTION U/S 80P OF THE ACT. LD. A.O COMPLETED THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT ON 20.12.2011 AFTER DISALLOWING THE DEDUCTION U/S 80P OF THE ACT. THE DISALLOWANCE WAS UPHELD BY LD. CIT(A)-2, BHOPAL. P ENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED BY LD. A.O. REPLY FILED BY THE APPELLANT IN RESPONSE TO SHOW CAUSE NO TICE COULD NOT SATISFY LD. A.O AND HE IMPOSED PENALTY U/S 271(1)(C ) OF THE ACT AT ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 3 RS.1.80 CRORES FOR FURNISHING INACCURATE PARTICULAR S OF INCOME. AGGRIEVED ASSESSEE FILED APPEAL BEFORE LD. CIT(A) A GAINST IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT AND SUCCEEDED A S LD. CIT (A) DELETED THE PENALTY OBSERVING AS FOLLOWS:- 7. THE FACTS OF THE CASE IN PRESENT APPEAL ARE ID ENTICAL TO THE FACTS IN THE CASE OF THE APPELLANT FOR A.Y. 2011-12. THE APPELL ANT HAS ALSO PLACED ON RECORD THAT THE HON'BLE HIGH COURT OF MADHYA PRADES H, PRINCIPAL SEAT AT JABALPUR HAS ADMITTED THE APPEAL OF THE APPELLANT O N THESE ISSUES AS SUBSTANTIAL QUESTION OF LAW FOR THE A.Y. 2007-08 AN D 2008-09. APPELLANT HAS ALSO RELIED ON HON'BLE I.T.A.T., INDORE BENCH O RDER IN ITA NO. 502 TO 505/IND/2014 FOR A.Y. 2005-06 TO 2008-09 DATED 01.1 2.2015 IN THE CASE OF ACIT-3(1), BHOPAL VS. M/S R.K. GUPTA CONTRACTORS & ENGINEERS PVT. LTD BHOPAL, WHEREIN THE HON'BLE I.T.A.T. HAS STATED THA T WE ARE TAKING A CONSISTENT VIEW THAT WHEN THERE IS AN ADMISSION OF HIGH COURT REGARDING PENALTY, THE PENALTY CANNOT BE IMPOSED. THEREFORE , RESPECTFULLY FOLLOWING THE ORDER OF THE LD. CIT(A)-2, BHOPAL AND THE DECIS ION OF THE HON'BLE I.T.A.T., INDORE, THE PENALTY ORDER U/S 271(1)(C ) FOR THE ASSESSMENT YEAR 2009-10 IN THE CASE OF THE APPELLANT IS HEREBY CANC ELLED. THE GROUNDS OF APPEAL WITH REGARD TO THE VALIDITY AND JURISDICTION OF THE A.O IN LEVYING THE IMPUGNED PENALTY DO NOT REQUIRE ADJUDICATION AS THE PENALTY ITSELF HAS BEEN DELETED. 4. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . 5. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE RELYI NG ON THE FINDING OF LD. CIT(A) SUBMITTED THAT THE ISSUE RAIS ED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF CO- ORDINATE BENCH, INDORE IN ASSESSEES OWN CASE FOR A SSESSMENT YEAR ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 4 2011-12 VIDE ITA NO.597/IND/2015 ORDER DATED 11.08.2017 WHEREIN THE TRIBUNAL HAS HELD THAT SINCE THE HONBLE JURIS DICTIONAL HIGH COURT HAS ADMITTED THE APPEAL OF THE ASSESSEE ON TH E SIMILAR ISSUE OF LEVY OF PENALTY ON DISALLOWANCE OF DEDUCTION U/S 80P OF THE ACT AS SUBSTANTIAL QUESTION OF LAW FOR ASSESSMENT YEAR 200 7-08 AND 2008- 09, PENALTY LEVIED U/S 271(1)(C) OF THE ACT DESERVE S TO THE DELETED. 6. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTED THE ORDER OF LD. A.O BUT COULD NOT CONTROVERT THE SUBMISSION MADE BY THE LD. COUNSEL FOR THE ASSESSEE . 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUES SOLE GRIEVANCE IS AGAI NST THE DELETION OF PENALTY AT RS. 1,80,00,000/- BY LD. CIT(A) WHICH WA S LEVIED BY LD. A.O U/S 271(1)(C) OF THE ACT ON THE DISALLOWANCE OF DEDUCTION U/S 80P OF THE ACT. WE OBSERVE THAT SIMILAR ISSUE UNDE R IDENTICAL FACTS HAS CAME UP BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 VIDE ITA NO.597/IND/2015 AN D REVENUES APPEAL WAS DISMISSED AND THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT WAS CONFIRM ED BY THIS TRIBUNAL OBSERVING AS FOLLOWS:- ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 5 3. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL, INTER ALIA PA PER BOOK FILED BY THE ASSESSEE. THE LD. CIT-DR, SUBMITTED THAT THE LD. CI T(A) WAS NOT CORRECT IN HOLDING THAT THERE IS NO FINDING ON RECORD THAT ANY DETAILED SUPPLY BY THE APPELLANT IN ITS RETURN OF INCOME ARE FOUND TO BE I NCORRECT OR FALSE AND THEREFORE, NO QUESTION LEVYING THE PENALTY U/S 271( 1)(C) OF THE INCOME TAX ACT 1961 (FOR SHORT THE ACT) WHEN W.E.F. 01.04.2 007 THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT, DESP ITE THE SAME, THE ASSESSEE HAS BEEN MAKING INCORRECT CLAIM OF DEDUCTI ON, THUS, FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. THE LD. CIT-DR VEHEMENTLY POINTED OUT THAT THE F IRST APPELLATE AUTHORITY WAS ALSO NOT CORRECT IN HOLDING THAT THERE IS NO FI NDING ON RECORD THAT ANY DETAILED SUPPLY BY THE APPELLANT IN ITS RETURN OF I NCOME WAS FOUND INCORRECT OR FALSE SPECIFICALLY WHEN THE ASSESSEE WAS CLAIMIN G DEDUCTION U/S 80P OF THE ACT DESPITE THE FACT THAT IN ITS OWN CASE DEDUC TION WAS DISALLOWED IN A.Y.2007-08 AND DISALLOWANCE WAS UPHELD BY THE TRIB UNAL. 5.THE LD. CIT-DR FINALLY SUBMITTED THAT LD. CIT(A) HAS GRANTED RELIEF WITHOUT ANY BASIS, THEREFORE, IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING PENALTY ORDER OF THE AO. 6. PLACING TO THE ABOVE, STRONGLY SUPPORTING FIRST APPELLATE ORDER, THE ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE P ROVISIONS OF PART SECTION V OF BANKING REGULATION ACT ARE NOT APPLICA BLE TO THE PRESENT ASSESSEE AS THE APPELLANT IS NOT COVERED UNDER THE DEFINITION OF COOPERATIVE BANKS AND HENCE PROVISIONS OF SECTION 80P(4) EXCLUDING THE BENEFIT OF SECTION 80P OF THE ACT ONLY TO CERTAIN C OOPERATIVE BANK AND IS NOT APPLICABLE TO THE ASSESSEE. THE LD. AR SUBMITTE D THAT THE ASSESSEE IS ENTITLED TO CLAIM BENEFIT OF SECTION 80P OF THE ACT WHICH ALLOWS US BENEFIT OF DEDUCTION OF ENTIRE PROFIT EARNED FROM BANKING ACTI VITIES AND HENCE, THE ASSESSEE HAS MADE A BONAFIDE LEGAL CLAIM AND HAS NO T CONCEALED OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL SUBMITTED THAT ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 6 THE APPEAL AGAINST THE ORDER OF THE TRIBUNAL WHICH UPHOLD DISALLOWANCE FOR EARLIER YEARS HAVE BEEN FILED BEFORE HON'BLE HIGH C OURT AND FOR A.Y. 2011- 12. THE I.T.A.T. HAS PASSED ORDER U/S 158A OF THE A CT, THEREFORE, SAME HAS NOT ATTAINED FINALITY AND THUS PENALTY CANNOT BE LE VIED. THE LD. AR FURTHER POINTED OUT THAT EVEN IN THE ASSESSMENT ORDER DATED 13.12.2013 THE AO HIMSELF HAS MENTIONED STATUS OF THE ASSESSEE AS DEE MED SOCIETY UNDER THE REGIONAL RURAL BANK ACT, 1976 AND THUS, IT IS NOT A COOPERATIVE BANK ON WHICH PROVISIONS OF SECTION 80P(4) OF THE ACT APPLI ES. THE LD. AR FINALLY SUBMITTED AS PER RATIO OF THE DECISION OF HON'BLE H IGH COURT DATED 11.01.2017 IN I.T.A.T. NO.89/2016 AND OTHERS APPEAL S IN THE CASE OF PR. CIT VS. M/S. R.K. GUPTA CONTRACTORS & ENGINEERS PVT . LTD. TILL DECISION OF APPEAL BY THE HIGH COURT BONA FIDE OF THE ASSESSEE IN CLAIMING DEDUCTION CANNOT BE DISPUTED AND PENALTY IMPOSED SHOULD BE CA NCELLED. 7. ON CAREFUL CONSIDERATION OF OUR RIVAL SUBMISSION S, AT THE VERY OUTSET, FROM THE COPY OF THE ORDER OF I.T.A.T., INDORE DATE D 27.10.2015 IN ITA NO.511/IN/2014 FOR A.Y. 2011-12 IN ASSESSEES OWN C ASE, WE OBSERVE THAT THE TRIBUNAL DISPOSED OF THE APPEAL OF THE ASSESSEE ON THE BASIS OF DECLARATION MADE BY THE APPELLANT-ASSESSEE U/S 158A (1) OF THE ACT TO AVOID REPETITIVE APPEALS ON THE IDENTICAL QUESTION OF LAW WHICH IS PENDING BEFORE THE HON'BLE HIGH COURT FOR THE EARLIER YEARS . THUS, IT IS DISCERNABLE THAT ON THE ISSUE OF ELIGIBLE OF DEDUCTION U/S 80P OF THE ACT FOR A.Y. 2007- 08 IS PENDING BEFORE THE HON'BLE HIGH COURT OF MAD HYA PRADESH WHEREIN SUBSTANTIAL QUESTION OF LAW HAS BEEN FRAMED. FOR PR ESENT A.Y. 2011-12 THE TRIBUNAL HAS PASSED AN ORDER DISMISSING THE APPEAL OF THE ASSESSEE U/S 158A(1) OF THE ACT BY FOLLOWING IT EARLIER YEAR FOR A.Y. 2007-08 DATED 18.06.2012. THEREFORE, WE HAVE INCLINED TO HOLD THA T AS PER RATIO OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT OF MADHYA PRA DESH IN THE CASE OF PR. CIT VS. R.K. GUPTA CONTRACTORS & ENGINEERS PVT. LTD .(SUPRA), TILL DECISION OF APPEAL BY THE HIGH COURT BONA FIDE OF THE ASSESSEE IN CLAIMING THE DEDUCTION CANNOT BE DISPUTED AND THEREFORE, THE PEN ALTY IMPOSED SHOULD ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 7 BE CANCELLED. IN THIS SITUATION, WE ARE INCLINED TO HOLD THAT SINCE APPEAL OF THE ASSESSEE ON THIS ISSUE WHICH IS PENDING FOR DEC ISION BEFORE HON'BLE HIGH COURT TILL DISPOSAL OF SUCH APPEAL BONA FIDE I N CLAIMING DEDUCTION U/S. 80P OF THE ACT CANNOT BE RULED OUT AND HENCE PENALT Y U/S 271(1)(C) OF THE ACT CANNOT BE SUSTAINED AND ONLY ON THIS COUNT PENA LTY DESERVES TO BE DELETED. 8. WE FIND THAT THE ISSUE RAISED IN THE INSTANT A PPEAL IS SQUARELY COVERED BY THE DECISION OF THIS CO-ORDINATE BENCH (SUPRA) IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 AND LD. DEPARTMENTAL REPRESENTATIVE FAILED TO BRING ON RECO RD ANY OTHER CONTRARY JUDGMENTS IN ITS FAVOUR. WE THEREFORE RESP ECTFULLY FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CAS E FOR ASSESSMENT YEAR 2011-12, FIND NO INCONSISTENCY IN THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE AC T. WE ACCORDINGLY ORDER SO. 9. IN THE RESULT REVENUES APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.01.2 021. SD/- SD/- ( P.P. BHATT) (MANISH BORAD) PRESIDENT ACCOUNTANT MEMBER / DATED : 07 TH JANUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. ITA NO.725/IND/2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 8 BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE