ACIT, Cir.-8, Pune V. M/s. Rohan Engg. Construction., Pune

ITA 867/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9920 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Wrong claim
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 867/PN/2011 (ASSTT. YEAR : 20 06-07) ASST. COMMISSIONER OF INCOME TAX, APPELLANT CIRCLE-8, PUNE V. M/S. ROHAN ENGG CONSTRUCTION RESPONDENT S.NO. 17/ MAHESH NAGAR, PIMPRI, PUNE-18 PAN :AAGFR3905F APPELLANT BY : MS. AN N KAPTHUAMA RESPONDENT BY : NONE DATE OF HEARING : 15/10/1 2 DATE OF PRONOUNCEMENT : 19-10-12 O R D E R PER R.S. PADVEKAR, JM THIS APPEAL IS FILED BY THE REVENUE CHALLENGING TH E IMPUGNED ORDER OF THE LD CIT(A)-V, PUNE DATED 31.3.2011 FOR THE A .Y. 2006-07. THE REVENUE HAS TAKEN THE FOLLOWING TWO GROUNDS : (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW THE LD. CIT(A), ERRED IN DELETING PENALTY U/S. 271(1)(C) O F THE I.T. ACT, 1961. (2) THE PENALTY WAS DELETED BY IGNORING THE FACT T HAT WHEN THE ASSESSEE FILED THE RETURN OF INCOME FOR A.Y.2006-07 AND CLAIMED DEDUCTION U/S. 80IB(10), HE KNEW THAT IT WAS NOT PO SSIBLE TO OBTAIN THE COMPLETION CERTIFICATE BEFORE THE DUE DATE AND THUS AO HAS RIGHTLY HELD THAT THE CLAIM HAS BEEN MADE DELIBERATELY BY CONCEA LING THE FACTS. 2. WE HAVE HEARD THE LEARNED D.R.. NONE WAS PRESEN T FOR THE ASSESSEE. 3. THE SOLITARY ISSUE WHICH ARISES FOR OUR CONSIDER ATION IS WHETHER THE LD CIT(A) JUSTIFIED IN CANCELLING THE PENALTY LEVIE D BY THE A.O. U/S. 271(1)(C) OF THE ACT ON THE DISALLOWANCE OF THE CLA IM OF RS. 28,06,265/- AND RS. 90,263/- UNDER THE PROVISIONS OF SEC. 80 IB (10) AND 40(A)(IA) OF THE ACT RESPECTIVELY. 2 ITA NO. 867/PN/2011 ROHAN ENGG CONSTRUCTION A.Y.2006-07 4. THE FACTS WHICH REVEAL FROM THE RECORD ARE AS UN DER. THE ASSESSEE FIRM IS IN THE BUSINESS AS A BUILDER AND DEVELOPER. THE ASSESSEE CLAIMED DEDUCTION U/S. 80 IB (10) IN RESPECT OF HIS PROJECT ROHAN HEIGHTS TO THE EXTENT OF RS. 28,06,264/-. THE A.O EXAMINED THE CL AIM OF THE ASSESSEE ON THE ISSUE OF THE COMMERCIAL AREA IN THE PROJECT AND SECONDLY, AS THE BUILDING PLAN WAS PASSED PRIOR TO 31.3.2004, BUT TH E ASSESSEE FAILED TO PRODUCE COMPLETION CERTIFICATE TO SHOW THAT THE SAM E HAD BEEN COMPLETED BEFORE 31 ST MARCH 2008. THE A.O, THEREFORE, MADE THE DISALLOWANCE OF THE ENTIRE CLAIM OF THE ASSESSEE MA DE U/S. 80 IB (10). THE A.O ALSO MADE THE DISALLOWANCE OF RS. 90,263/- FOR NON-DEDUCTION OF THE TDS ON THE LABOUR CHARGES, BROKERAGE AND PROFES SIONAL CHARGES. THE A.O. INITIATED THE PENALTY PROCEEDINGS ON THE SAID DISALLOWANCE/ADDITION. THE ASSESSEE PLEADED THAT HE WAS UNDER THE BONAFID E BELIEF THAT ALL THE CONDITIONS PRESCRIBED U/S. 80 IB (10) HAD BEEN FUL FILLED AND THAT HE HAS IMMEDIATELY WITHDRAWN THE CLAIM AS SOON AS IT WAS F OUND THAT SOME OF THE CONDITIONS HAD NOT BEEN FULFILLED. HE FURTHER PLEADED BEFORE THE A.O. THAT MERELY BECAUSE THE CLAIM WAS NOT ADMISSIBLE U /S. 80 IB (10), THAT DOES NOT MEAN ASSESSEE HAS CONCEALED ANY INCOME OR HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. THE ISSUE OF NON- DEDUCTION OF THE TAX AT SOURCES IS CONCERNED, THE ASSESSEE PLEADED THAT IT IS PURELY A LEGAL ISSUE AND MOREOVER ALL THE DETAILS WERE FURNISHED AT THE TIME OF THE ASSESSMENT. THE A.O WAS NOT CONVINCED WITH THE EX PLANATION OF THE ASSESSEE AND HE LEVIED THE PENALTY OF RS. 9,75,000/ - VIDE ORDER DATED 22 ND JUNE 2009.THE ASSESSEE CHALLENGED THE ORDER BEFORE THE LD CIT AND LD. CIT DELETED THE PENALTY LEVIED BY THE A.O. THE LD CIT HAS DELETED THE PENALTY LEVIED BY THE A.O. THE LD CIT HAS DEALT W ITH THIS ISSUE IN DETAIL FOR DELETING THE PENALTY LEVIED BY THE A.O. 5. IN OUR OPINION, THE FINDINGS OF THE LD CIT(A) N EEDS TO BE SUPPORTED. THE OPERATIVE PART OF THE ORDER OF THE LD CIT(A) IS AS UNDER : 12. FURTHER, THE HONBLE SUPREME COURT IN C.I.T V. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) HAS HELD AS FOLLOWS : .WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS . IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS :- NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRAN SCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS I N CONJUNCTION, 3 ITA NO. 867/PN/2011 ROHAN ENGG CONSTRUCTION A.Y.2006-07 THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TR UTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RE TURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BE ING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. 13. HAVING GIVEN CAREFUL CONSIDERATION TO THE FACTS OF THE INSTANT CASE, I AM OF THE VIEW THAT NO CASE EITHER OF CONCEALMENT O F INCOME, OR FURNISHING OF INACCURATE FACTUAL PARTICULARS HAS BE EN MADE OUT EITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY ORDER. AS RE GARDS THE ADDITION UNDER SECTION 40(A)(IA), THE SAME WAS PURELY A STAT UTORY DISALLOWANCE. AS NOTED BY THE AO HIMSELF, THE FACT THAT TDS HAD N OT BEEN DEDUCTED WAS NOTED BY THE LEARNED AO FROM THE DETAILS SUBMITTED BY THE ASSESSEE ITSELF. ON THESE FACTS, I AM OF THE CLEAR VIEW THAT NO CASE OF EITHER CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IS MADE OUT SO FAR AS THE DISALLOWANCE UNDER SECTION 40(A)(IA) IS CONCERNED. ADMITTEDLY, THERE WAS A BREACH OF TDS PROVISIONS, FOR WHICH THE LAW HAS S EPARATELY ENACTED PROVISIONS FOR CHARGING OF INTEREST, AS WELL AS FOR LEVY OF PENALTY. 14. AS REGARDS THE MAXIMUM ALLOWABLE COMMERCIAL SPA CE UNDER THE AMENDED LAW, THE ISSUE IS A HIGHLY CONTENTIOUS ONE ON WHICH JUDICIAL OPINION ITSELF WAS DIVIDED AT THE RELEVANT TIME, LE ADING TO THE CONSTITUTION OF A SPECIAL BENCH OF THE HONBLE ITAT. FURTHER, N O FACTS HAVE BEEN BROUGHT TO LIGHT BY THE LEARNED AO WHICH ESTABLISH THAT ANY FACTS WERE CONCEALED OR INACCURATE PARTICULARS WERE FURNISHED . AT BEST, IT WAS A CASE OF INCORRECT READING OF THE LAW OR FAILURE TO APPLY THE SAME CORRECTLY WHICH, IN MY VIEW, CANNOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C). AS ITAT PUNE HAS EXPLAINED IN KANBAY, THE SAID PROVISI ON IS ONLY ATTRACTED IN THE CASES OF CONCEALMENT OF FACTS, OR FURNISHING OF INACCURATE FACTUAL PARTICULARS. INTERPRETATION OF LAW CANNOT BE A MAT TER OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. 15. THE ONLY OTHER REASON FOR DENIAL OF THE BENEFIT OF SECTION 80-IB(10) IN THIS CASE WAS THE INABILITY TO OBTAIN COMPLETION CERTIFICATE BY THE APPOINTED DATE, I.E., 01.04.2008. NOTABLY, THE ASSE SSMENT YEAR UNDER CONTENTION IS 2006-07, FOR WHICH THE RETURN OF INCO ME WAS FILED BY THE ASSESSEE ON 31.10.06. CLEARLY, AT THE TIME OF FILI NG THE RETURN IN 2006, THE ASSESSEE COULD NOT HAVE KNOWN THAT IT WOULD FAI L TO OBTAIN COMPLETION CERTIFICATE IN RESPECT OF THE PROJECT BY 01.04.2008 . THEREFORE, ON THIS COUNT ALSO, IT CANNOT BE SAID THAT THE ASSESSEE HAD DELIBERATELY MADE A WRONGFUL CLAIM CONCEALING FACTS OF FURNISHING INACC URATE PARTICULARS OF FACT. WHILE THE INABILITY TO OBTAIN THE SAID COMPLETION C ERTIFICATE WAS SUFFICIENT GROUND FOR DENIAL OF EXEMPTION BY THE AO AT THE STA GE OF SCRUTINY ASSESSMENT, THE SAME WAS CLEARLY NOT SUFFICIENT GRO UND FOR LEVY OF PENALTY. 16. FOR ALL THE REASONS MENTIONED ABOVE, THEREFORE, I AM OF THE VIEW, THAT THE LEVY OF PENALTY IN THE INSTANT CASE IS NOT SUSTAINABLE. THE PENALTY LEVIED IS THEREFORE, DELETED. 4 ITA NO. 867/PN/2011 ROHAN ENGG CONSTRUCTION A.Y.2006-07 6. WE FURTHER FIND THAT THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS BEFORE THE A.O AT THE TIME OF ASSESSMENT PROCEEDING S ALONG WITH THE RETURN. WHEN IT WAS FOUND THAT SOME OF THE CONDITI ONS FOR CLAIMING THE DEDUCTION U/S. 80IB (10) IN RESPECT OF THE HOUSING PROJECT ROHAN HEIGHTS WERE NOT FULFILLED, THE ASSESSEE WITHDREW HIS CLAIM. WE FURTHER FIND THAT SO FAR AS DISALLOWANCE MADE U/S. 40(A)(IA ) IS CONCERNED, I.E. TOWARDS NON-DEDUCTION OF THE TDS, NOWHERE IT IS TH E CASE OF THE A.O THAT ANY BOGUS CLAIM IS MADE BY THE ASSESSEE. IN OUR OP INION, THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LT D., 322 ITR 158 (SC). IN THE SAID CASE, THEIR LORDSHIPS HAVE HELD THAT ME RELY BECAUSE THE CLAIM IS DISALLOWED WHICH IS OTHERWISE BONAFIDE, THE ASSE SSEE CANNOT BE SUBJECTED TO PENAL CONSEQUENCES U/S. 271(1)(C) OF T HE ACT. MOREOVER, THE LD CIT(A) HAS CONSIDERED THE ISSUE IN DETAIL. WE FIND NO REASON TO TAKE DIFFERENT VIEW BUT CONFIRM THE ORDER OF THE CI T(A). 7. IN RESULT, THE REVENUES APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19TH OCTOBER 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 19TH OCTOBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- V, PUNE 4. THE CIT(A)- V, KOLHAPUR 5. THE D.R. A BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE