Assistant Commissioner of Income-tax, Pune V. Kaiser Jamil Khan, Pune

ITA 919/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5876 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-09-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MALVIYA
• Assessee Lawyers: AKASH ROMANI
• Keywords: Difference of opinion
• Section: 271(1)(c); 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NO.919/PUN/2017 / ASSESSMENT YEAR : 2012-13 ACIT, CIRCLE-7, PUNE. .. /APPLICANT / V/S. KAISER JAMIL KHAN, 2, IIIRD FLOOR KONARK, ADITYA CO-OP HOUSING SOCIETY, CASTELLINO, GOLIBAR MAIDAN, CAMP, PUNE-411001. PAN: AIEPK2404L .. / RESPONDENT REVENUE BY : SHRI ALOK MALVIYA ASSESSEE BY : SHRI AKASH ROMANI / DATE OF HEARING : 03.09.2020 / DATE OF PRONOUNCEMENT : 16.09.2020 / ORDER PER P.M. JAGTAP, VP: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-5, PUNE DATED 30.11.2016 WHEREBY HE CANCELLED THE PENALTY OF RS.61,22,625/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND LAND DEVELOPERS. IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, A DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS.1,98,14,321/- WAS CLAIMED BY THE ASSESSEE. IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE ORDER DATED 26.03.2015, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) WAS DISALLOWED BY THE ASSESSING OFFICER 2 ITA NO.919/PUN/2017 INTER-ALIA ON THE GROUND THAT THE COMPLETION CERTIFICATE OF THE LOCAL AUTHORITY IN RESPECT OF THE HOUSING PROJECT WAS NOT OBTAINED BY THE ASSESSEE BEFORE THE DUE DATE OF COMPLETION. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AND SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPONSE TO THE SHOW-CAUSE NOTICE ISSUED DURING THE COURSE OF THE SAID PROCEEDINGS WAS NOT FOUND ACCEPTABLE BY HIM, THE ASSESSING OFFICER PROCEEDED TO IMPOSE PENALTY OF RS.61,22,625/- U/S 271(1)(C) BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE IN RESPECT OF THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB(10) OF THE ACT. 3. THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) WAS CHALLENGED BY THE ASSESSEE IN APPEAL FILED BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) CANCELLED THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO.5.3 AND 5.4 OF HIS IMPUGNED ORDER :- 5.3 I HAVE PERUSED CAREFULLY THE MATERIAL ON RECORD AND THE SUBMISSION OF THE APPELLANT. THE AO HAS INITIATED AND LEVIED THE PENALTY ON ACCOUNT OF THE DISALLOWANCE OF THE DEDUCTION CLAIMED BY THE APPELLANT U/S 80IB (10). THE AO DISALLOWED THE DEDUCTION ON THE GROUND OF NON-FURNISHING OF COMPLETION CERTIFICATE, THE REVISED SANCTION PLAN FOR BUILDING B TAKEN IN THE YEAR 2014 AND THE VIOLATIONS U/S 80IB(10) (F). IN THE QUANTUM APPEAL FILED AGAINST THIS ORDER OF THE AO IN APPEAL ORDER NO. APPEAL NO. PN/CIT (A)-5/DY.CIT, CIR-7, PUNE/354/2015-16 DATED. 30.11.2016 THE DISALLOWANCE MADE BY THE AO IS DELETED IN PRINCIPLE SUBJECT TO MINOR VERIFICATIONS REGARDING THE VIOLATION OF 80IB(10) (F) WHEREIN, THE APPELLANT HAD CLAIMED NOT TO HAVE INCLUDED THE REVENUE OF THESE FLATS IN THE YEAR UNDER CONSIDERATION. SINCE, IN THE QUANTUM APPEAL THE ISSUE HAS BEEN DECIDED IN FAVOR OF THE APPELLANT THE PENALTY LEVIED ON THE SAID QUANTUM DOES NOT SURVIVE. 5.4 I TEND TO AGREE WITH THE AO THAT, 271(1) (C) IS ATTRACTED WHEN SOMETHING IS UNEARTHED DURING ASSESSMENT PROCEEDINGS AS INCOME WHICH WAS ORIGINALLY UNDISCLOSED AT THE TIME OF FILING THE RETURN. SUBMISSION OF PARTICULARS OF DEDUCTION CLAIMED EVEN IF NOT FOUNDS SATISFACTORY DOES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE AO IN THE SAID CASE HAS NOT EXAMINED THE APPLICABILITY OF SECTION 271(1)(C) AS LAID DOWN IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (KARNATAKA HIGH COURT) AND IT SEEMS HAS AUTOMATICALLY LEVIED THE PENALTY ON THE DISALLOWANCE OF THE DEDUCTION. THE HON'BLE SUPREME COURT IN THE CASE OF CIT AHMADABAD VS. RELIANCE PETROPRODUCTS PVT. LTD STATED THAT, BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN THE SAID CASE UNDER CONSIDERATION THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS SOLELY ON ACCOUNT OF DIFFERENT VIEW TAKEN ON THE SAME SET OF FACTS AND THEREFORE THEY COULD, AT THE MOST, BE TERMED AS DIFFERENCE OF OPINION BUT NOTHING TO DO WITH THE 3 ITA NO.919/PUN/2017 CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. MERE DISALLOWANCE OF THE CLAIM IN THE ASSESSMENT PROCEEDINGS COULD NOT BE THE SOLE BASIS FOR LEVYING PENALTY U/S 271(1) (C). IT IS ALSO SEEN THAT, IN THE PRESENT CASE NO INFORMATION GIVING IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT THE CASE OF THE AO, THAT ANY STATEMENT MADE OR ANY DETAILED SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. THE RELIANCE PLACED BY THE AO ON MAK DATA PVT. LTD. VS. COMMISSIONER OF INCOME TAX IS MISPLACED AS IN THAT CASE, NON LEVY OF PENALTY WAS CLAIMED ON THE GROUND OF DECLARING THE INCOME TO BUY PEACE, AVOID LITIGATION ETC. THE AO HAS ALSO CONTENDED THAT, HAD THE CASE NOT BEEN PICKED UP FOR SCRUTINY THERE WOULD HAVE BEEN A LOSS TO THE EXCHEQUER BY PLACING RELIANCE ON THE CASE OF ZOOM COMMUNICATIONS. THIS IS COMPLETELY DISTINGUISHABLE ON FACTS FROM THE CASE OF THE APPELLANT AS THE APPELLANT HAD CLAIMED DEDUCTION ON THE BASIS OF THE FULFILLMENT OF CONDITIONS AND THE AO HAD DENIED THE SAME CLAIMING BARE READING OF THE SECTION 80IB(10). THE JURISDICTIONAL ITAT AND THE COURTS HAS ANALYZED THE SECTION AND ARRIVED AT CONCLUSIONS REGARDING THE COMPLETION CERTIFICATE, DATE OF COMMENCEMENT OF THE HOUSING PROJECT, PRO-RATA DEDUCTION ETC. WHICH ARE NOT COMMENSURATE WITH THE VIEWS AND INTERPRETATION OF THE DEPARTMENT. THEREFORE IN THE CASE UNDER CONSIDERATION IT COULD BE SAID THAT, THE DISALLOWANCE WAS DUE TO DIFFERENT VIEWS ON THE SAME SET OF FACTS WHICH COULD BE TERMED AS A DIFFERENCE OF OPINION BUT NOT LIABLE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE DISCUSSIONS IN THE PRECEDING PARAGRAPHS, THE AO IS DIRECTED TO DELETE THE PENALTY LEVIED. THEREFORE, GROUNDS OF APPEAL 2 TO 6 ARE ACCORDINGLY ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE RIVAL ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) IN RESPECT OF THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) WAS CANCELED BY THE LD. CIT(A) MAINLY ON THE GROUND THAT THE ISSUE RELATING TO THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) WAS DECIDED BY HIM SUBSTANTIALLY IN FAVOUR OF THE ASSESSEE VIDE AN APPELLATE ORDER PASSED IN THE QUANTUM PROCEEDINGS. SINCE THE SAID ORDER OF THE LD. CIT(A) DATED 30.11.2016 PASSED IN THE QUANTUM PROCEEDINGS ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) SUBSTANTIALLY HAS BEEN UPHELD BY THE TRIBUNAL VIDE AN ORDER DATED 09.09.2020 IN ITA NO.920/PUN/2017, WE AGREE WITH THE LD. CIT(A) THAT THE BASIS OF IMPOSITION OF PENALTY U/S 271(1)(C) NO MORE SURVIVES AND THE SAME IS LIABLE TO BE CANCELLED. MOREOVER, AS RIGHTLY OBSERVED BY THE LD. CIT(A) IN HIS 4 ITA NO.919/PUN/2017 IMPUGNED ORDER, NO INFORMATION GIVEN BY THE ASSESSEE IN HIS RETURN OF INCOME RELATING TO THE CLAIM FOR DEDUCTION U/S 80IB(10) WAS FOUND TO BE INCORRECT OR INACCURATE AND IT WAS NOT EVEN THE CASE OF THE ASSESSING OFFICER THAT ANY STATEMENT MADE BY THE ASSESSEE OR ANY DETAILS FURNISHED BY HIM WERE FOUND TO BE FACTUALLY INCORRECT. WE, THEREFORE, FIND OURSELVES IN AGREEMENT WITH THE LD. CIT(A) THAT IT IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT AND THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER THE SAID PROVISION IS LIABLE TO BE CANCELLED. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CANCELLING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) AND DISMISS THIS APPEAL FILED BY THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 16 TH DAY OF SEPTEMBER, 2020. SD/- SD/- ( S. S. VISWANETHRA RAVI ) ( P.M. JAGTAP ) JUDICIAL MEMBER VICE PRESIDENT / PUNE; / DATED : 16 TH SEPTEMBER, 2020 SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-5, PUNE. 4. THE PR. CIT-4, PUNE. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.