ACIT, Chandigarh V. M/s Punjab State Federation of Coop. Sugar Mills Ltd., Chandigarh

ITA 838/CHANDI/2014

• Counselvise Citation: 83821514 RSA 2014
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 838/CHD/2014 ASSESSMENT YEAR: 2010-11 THE ACIT, VS. M/S PUNJAB SATE FEDERATION OF COOP. SUGAR CIRCLE 2(1), MILLS LIMITED, CHANDIGARH CHANDIGARH PAN NO. AAAAP0252A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VIVEK NANGIA RESPONDENT BY : NONE DATE OF HEARING : 30.09.2015 DATE OF PRONOUNCEMENT : 26.10.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A), CHANDIGARH DATED 16.07.2014 IN CANCELLING THE PENAL TY OF RS. 61,13,801/- IMPOSED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 ( IN SHORT 'THE ACT') RELATING TO ASSESSMENT YEAR 2010-11. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSMENT IN THIS CASE WAS COMPLETED ON 28.1.2013 DETERMINING THE TOTAL INCOME AT RS. 12,42,58,928/- AGAINST THE RETURNED INCOME OF RS. 9,77,46,340/-. T HE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CLAIMED EXPENSES FOR CAPITAL GAIN TAX, PROPERTY AND FRINGE BENEFIT TAX IN THE PROFIT AND LOSS ACCOUNT. ACCORDI NG TO ASSESSING OFFICER, THE CLAIM OF CAPITAL GAIN TAX, PROPERTY TAX AND FRINGE BENEFIT TAX IS NOT AN ALLOWABLE DEDUCTION. HOWEVER, IN THE COMPUTATION OF INCOME, T HE ASSESSEE ITSELF ADDED BACK THE FRIDGE BENEFIT TAX AMOUNTING TO RS. 1,88,7 21/-. THEREFORE, THE 2 ASSESSING OFFICER MADE THE ADDITION OF RS. 2,65,03, 000/- AND RS. 9,588/- ON ACCOUNT OF CAPITAL GAIN TAX AND PROPERTY TAX RESPEC TIVELY AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FU RNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER ISSUE D A SHOW CAUSE NOTICE TO THE ASSESSEE AND IN RESPONSE TO THE SAME, THE ASSESSEE SUBMITTED ITS REPLY ON 20.6.2013 STATING THAT THE COUNSEL OF THE ASSESSEE FILED REVISED COMPUTATION DURING THE ASSESSMENT PROCEEDINGS BECAUSE THE REVIS ED RETURN WAS NOT ACCEPTABLE THROUGH E-FILING. THERE WAS NO INTENTION TO CONCEAL THE INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFF ICER HAS STRAIGHTWAY REJECTED THE CONTENTION OF THE ASSESSEE AND IMPOSED A PENALT Y OF RS. 61,13,801/- U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME BY F URNISHING OF INACCURATE PARTICULARS OF INCOME. 3. ON APPEAL, THE CIT(A) CANCELLED THE PENALTY, OBS ERVING AS UNDER:- 5.2 THE LD, COUNSEL HAS EXPLAINED THAT THE INCOME TAX RETURN OF THE APPELLANT WAS FILED BY THE ADVOCATE, WHO HAD NOT ADDED BACK THE ADVANCE TAX PAID ON CAPITAL GAINS AND PROPERTY TAX, IN THE STATEMENT OF INCOME. FROM THE DOCUMENTS FILED BY THE LD. COUNSEL, IT IS EVIDENT T HAT THE COUNSEL HAD FILED THE INCOME TAX RETURN AND HAD NOT ADDED BACK THE IMPUGNED AMOUNTS DEBITED TO THE PROF IT & LOSS ACCOUNT, WHICH WERE INADMISSIBLE DEDUCTIONS. T HUS, THE MISTAKE OF NOT ADDING BACK THE IMPUGNED AMOUNTS IN THE STATEMENT OF INCOME WAS OF THE THEN COUNSEL AND MOREOVER, IT CANNOT BE SAID THAT ANYONE HAD BENEFIT TED BY NOT ADDING BACK THE IMPUGNED AMOUNTS, SINCE THE APPELLANT CO-OPERATIVE SOCIETY IS AN UNDERTAKING OF GOVERNMENT OF PUNJAB. THE EXPLANATION FURNISHED BY THE APPELLANT IS BONAFIDE AND SO THE IMPUGNED PENALTY L EVIED IS CANCELLED. GROUNDS OF APPEAL TAKEN BY THE APPELL ANT ARE ALLOWED. 3 4. WE HAVE HEARD SHRI VIVEK MONGIA LD. DR AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. HOWEVER, NONE APPEA RED ON BEHALF OF THE ASSESSEE. IT IS OBSERVED THAT THE ASSESSEE IS A CO OPERATIVE SOCIETY AND AN UNDERTAKING TO GOVERNMENT OF PUNJAB. IT IS CLAIMED THAT THE ASSESSEE HAD ENGAGED A PROFESSIONAL FOR PREPARING AND FILING OF THE INCOME TAX RETURN. IT IS STATED THAT ASSESSEE HAS SUBMITTED REVISED COMPUTAT ION DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THERE WAS NO INTENTION T O CONCEAL THE INCOME. FURTHERMORE, THE ASSESSEE HAD DULY PAID TAX ON THE IMPUGNED AMOUNTS OF CAPITAL GAINS TAX AND PROPERTY TAX SUE MOTTO, BUT DUE TO IN ADVERTENT MISTAKE ON THE PART OF THE COUNSEL, THIS AMOUNT OF CAPITAL GAINS TAX AN D PROPERTY TAX PAID WERE NOT ADDED BACK RESULTING INTO REFUND. IN OUR VIEW, T HE LD. CIT(A) HAS CORRECTLY OBSERVED THAT THE MISTAKE OF NOT ADDING BACK THE IM PUGNED AMOUNTS IN THE STATEMENT OF INCOME WAS OF THE THEN COUNSEL AND M OREOVER IT CANNOT BE SAID THAT ANYONE HAD BEEN BENEFITTED BY NOT ADDING BACK THE IMPUGNED AMOUNT, SINCE THE ASSESSEE IS AN UNDERTAKING OF GOVERNMENT OF PUN JAB. IN OUR OPINION, THE ORDER OF CIT(A) IS BASED ON APPRECIATION OF FACTS A ND THEREFORE, WE DECLINE TO INTERFERE WITH THE ORDER OF CIT(A). CONSEQUENTLY, THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.10.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 26 TH OCTOBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 4