M/s Super Enterprises, Mandi Gobindgarh V. ITO, Mandi Gobindgarh

ITA 819/CHANDI/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7800 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R. SOOD, AM AND MS. SUSHMA CHOWLA, JM ITA NO. 819 /CHD/2011 ASSESSMENT YEAR: 2007-08 SUPER ENTERPRISES V. I.T.O. WARD 1, AMLOH ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN: ABBFS 4378 M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRIKSHIT AGGARWAL RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING: 16.04.2012 DATE OF PRONOUNCEMENT: 19 .04.2012 ORDER PER T.R. SOOD, A.M IN THIS APPEAL THE ASSESSEE HAS RAISED VARIOUS GRO UNDS BUT ONLY DISPUTE IS REGARDING THE LEVY OF PENALTY U/S 271(1)(C) OF T HE ACT. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT DUR ING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED VARIOUS D ISCREPANCIES IN THE LABOUR ACCOUNT. TO COVER UP THESE DISCREPANCIES A SUM OF RS. 3,50,000/- OUT OF LABOUR EXPENSES WAS DISALLOWED AND PENALTY U/S 271(1)(C) W AS INITIATED. 3. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY, IT WAS MAINLY STATED THAT THE ASSESSEE HAD AGREED TO ADDITION ON ACCOUNT OF LABOUR ON ACCOUNT OF LABOUR EXPENSES MAINLY TO BUY PEACE AND TO AVOID LITIGATION. IN THIS REGARD RELIANCE WAS PLACED ON A NUMBER OF CASE LAWS . HOWEVER, THE ASSESSING OFFICER DID NOT AGREE AND LEVIED A MINIMUM PENALTY OF RS. 1,17,810/-. ON APPEAL PENALTY WAS CONFIRMED BY THE LD. CIT(A). 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE ARGUED T HAT THE ADDITION WAS MADE ON ESTIMATE BASIS AND THEREFORE, PENALTY IS NO T CALLED FOR. IN ANY CASE, THERE IS NO FAILURE TO DISCLOSE ANY PARTICULARS OF INCOME AND MERE ADDITION ON ACCOUNT OF DISALLOWANCE OF CERTAIN EXPENSES, WOULD NOT ATTRACT PENAL PROVISIONS. ITA NO. 126ANDI/2010 AMCO INDUSTRIES V. DCIT 2 2 5. ON THE OTHER HAND, LD. DR FOR THE REVENUE STRONG LY SUPPORTED THE ORDERS OF ASSESSING OFFICER AND THE LD. CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE ADDITION ON ACCOUNT OF LABOUR EXPENSES HAS BEEN MADE ON ESTIMAT E BASIS TO COVER UP CERTAIN DISCREPANCIES IN THE LABOUR ACCOUNT. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY PARTICULARS OF INCOME. IT IS NOT A CASE EVEN OF CONCEALED PARTICULARS. RECENTLY, HON'BLE SUPREME C OURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT LTD, 322 ITR 158 (SC) HA S OBSERVED AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BED COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS IF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO IN FORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STR ETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS T HE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. 7. IN VIEW OF THE ABOVE, THE ASSESSEE HAS NOT FILED ANY INCOME PARTICULARS FOR CONCEALMENT OF PARTICULARS OF INCOME AND ACCORD INGLY, IN OUR OPINION, THIS IS NOT A FIT CASE OF PENALTY. ACCORDINGLY WE DELETE T HE PENALTY. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON 19 .04.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICAL MEMBER ACCOUNTANT MEMBER DATED: 19.04.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR ITA NO. 126ANDI/2010 AMCO INDUSTRIES V. DCIT 3 3