SRF LIMITED, NEW DELHI V. DCIT, CIRCLE- 1, LTU, NEW DELHI

ITA 8978/DEL/2019

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121220 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 18-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; TDS
• Section: 271(1)(c); 14A; 115JB; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SAKTIJIT DEY, VICE-PRESIDENT AND SH. PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.8978/Del/2019 (Assessment Year : 2011-12) SRF Limited Unitech Crest Block-C, Sector – 45, Gurgaon Haryana – 122 003 PAN No. AAACS 0206 P Vs. DCIT Circle – 1, LTU, New Delhi (APPELLANT) (RESPONDENT) Assessee by Shri R. K. Kapoor, Adv. Revenue by Shri H. K. Choudhary, CIT-D.R. Date of hearing: 23.08.2023 Date of Pronouncement: 23.08.2023 ORDER PER SAKTIJIT DEY, VICE-PRESIDENT : Captioned appeal has been filed by the assessee challenging the order dated 26.08.2019 of Learned Commissioner of Income Tax (Appeals) – 22, New Delhi confirming a part of the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961 pertaining to Assessment Year 2011-12. 2. Briefly the facts relating to the issue in dispute are, the assessee is a residential corporate entity. For the assessment year under dispute, assessee filed its return of income on 30.11.2011 declaring income of Rs.546,29,47,341/- under the normal provisions and book ITA No.8978/Del/2019 SRF Limited vs. DCIT 2 profit of Rs.674,78,88,670/- under Section 115JB of the Act. Subsequently, assessee filed revised return of income on 29.03.2013 declaring income of Rs.547,25,10,054/- under the normal provision and book profit of Rs.674,78,88,670/- under Section 115JB of the Act. While proposing the draft assessment order, the Assessing Officer made certain additions/disallowances. Against the draft assessment order, assessee raised objections before Learned Dispute Resolution Panel (DRP). The objections are disposed of Learned DRP granting partial relief to the assessee. In accordance with the directions of the Learned DRP, Assessing Officer passed the final assessment order making the following additions: a. Adjustment of Arm’s Length Price : 53,24,861/- b. Disallowance under Section 14A : 1,17,18,925/- c. Donation to SRF Vidhalaya Chennai : 4,20,000/- d. Short deduction of TDS : 78,260/- 3. On the basis of the aforesaid additions, the Assessing Officer issued a show-cause notice under Section 271(1)(c) of the Act calling upon the assessee to explain why penalty should not be imposed for furnishing inaccurate particulars of income. In response to the show- cause notice, assessee furnished its explanation requesting the Assessing Officer to drop the penalty proceedings. However, taking note of the fact that assessee’s appeal against the final assessment order has been dismissed by the Tribunal in ITA No.80/Del/2016 dated 09.10.2018, the Assessing Officer passed an order imposing penalty of Rs.18,76,064/- under Section 271(1)(c) of the Act. Against the penalty order so passed the assessee preferred an appeal before Learned CIT(A). After considering the submissions of the assessee in the context of the facts and material on record, Learned CIT(A) ITA No.8978/Del/2019 SRF Limited vs. DCIT 3 concluded that except the additions made of Rs.4,20,000/-, being payment made to SRF Vidhalaya claimed as deduction under Section 37(1) of the Act, and the addition made of Rs.78,260/- on account of short deduction of tax at source, penalty imposed in respect of other additions are unsustainable. In other words, Learned CIT(A) confirmed the penalty imposed under Section 271(1)(c) of the Act in respect of additions of Rs.4,20,000/- and Rs.78,260/-. 4. Before us, Learned Counsel appearing for the assessee submitted that assessee’s appeal against the final assessment order, though, was initially dismissed by the Tribunal due to non- prosecution, however, the order so passed was subsequently recalled while allowing miscellaneous application filed by the assessee. He submitted, the appeal is now pending for disposal before the Tribunal. Proceeding further, he submitted, in so far as addition relating to Rs.4,20,000/-, being payment made to SRF Vidhalaya claimed as deduction under Section 37(1) of the Act, it has been decided in favour of the assessee by the Tribunal in the preceding assessment year. In this context, he drew our attention to the relevant observations of the Co-ordinate Bench in ITA No.356/Del/2015 dated 24.02.2020 in A.Y. 2010-11. Thus, he submitted, on merits the issue is squarely covered in favour of the assessee. In so far as, the addition made on account of short deduction of TDS, the Learned Counsel submitted, the addition was made due to mismatch in the figure of TDS. He submitted, now the issue has been resolved and as per the information available in the system of the Department, there is no short deduction of TDS. Thus, ITA No.8978/Del/2019 SRF Limited vs. DCIT 4 he submitted, there is no case for imposition of penalty under Section 271(1)(c) of the Act. 5. Learned Departmental Representative strongly relied upon the observations of the Assessing Officer and Learned CIT(A). 6. We have considered rival submissions and perused the material on record. Undisputedly, after the order of Learned First Appellate Authority, penalty under Section 271(1)(c) of the Act survived in respect of two additions of Rs.4,20,000/-, being donation to SRF Vidhalaya claimed as deduction under Section 37(1) of the Act, and addition of Rs.78,260/- towards short deduction of TDS. As far as, the addition of Rs.4,20,000/- is concerned, we have noted that identical issue came up for consideration before the Tribunal in assessee’s own case in the immediately preceding assessment year. While deciding the issue in the order referred to above, the Tribunal has accepted assessee’s claim of deduction under Section 37(1) of the Act and deleted the addition. Thus, prima facie, issue is squarely covered in favour of the assessee. In so far as, the other addition of Rs.78,260/- on account of short deduction of tax at source, the assessee has demonstrated before us that such addition was due to mismatch in the claim made by assessee and the information uploaded in the system of the Department. However, as on date, the issue stands resolved and there is no such issue of short deduction of tax at source. Thus, upon considering the facts and material placed before us, we are of the view that no case for imposition of penalty under Section 271(1)(c) of the Act has been made out. Accordingly, we ITA No.8978/Del/2019 SRF Limited vs. DCIT 5 delete the penalty under Section 271(1)(c) of the Act as sustained by Learned First Appellate Authority. Grounds are allowed. 7. In the result, appeal is allowed. Order pronounced in the open court on 23.08.2023 Sd/- Sd/- (PRADIP KUMAR KEDIA) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT Date:- 23.08.2023 Priti Yadav* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI