Appeal details
Counselvise Citation
[2013] 140 COUNSELVISE.COM (IT) 67615 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 4 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-08-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
14-08-2013
Assessment Year
2005-2006
Appeal Filed On
30-03-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.935/AHD/2010 & 158/AHD/2013 A.YS: 2005-06 & 2006-07 ACIT, VAPI CIRCLE. VAPI. VS AMOLI ORGANICS LTD. PLOT NO.32/4, GIDC, VAPI-396195 PAN: AACCA3990Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. ASSESSEE(S) BY : SHRI SRI S.N. SOPARKAR WITH SRI BANDISH SOPARKAR, A.R. / // / DATE OF HEARING : 14/08/2013 / DATE OF PRONOUNCEMENT: 23/08/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE A RISING FROM THE ORDERS OF LEARNED CIT(A), VALSAD, RESPECTI VELY, DATED 23.11.2009 AND 31.10.2012 FOR A.Y. 2005-06 AND 2006 -07. FOR THESE TWO YEARS, THE REVENUE HAS RAISED THE GROUNDS CHALLENGING THE DELETION OF PENALTY LEVIED UNDER SECTION 271(1) (C) OF RS.19,47,164/- FOR A.Y. 2005-06 AND RS.16,61,790/- FOR A.Y. 2006-07, WHICH WAS IMPOSED ON ACCOUNT OF DISALLOWAN CE MADE UNDER SECTION 35(2AB) OF IT ACT. 2. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R. MR . O.P. BATHEJA, APPEARED AND STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2004-05, IT WAS NOTED BY THE A O THAT THE ITA NO.935/AHD/2010 & 158/AHD/2013 ACIT VAPI VS. AMOLI ORGANICS PVT. LTD. A.Y. 2005-06 & 2006-07 - 2 - ASSESSEE HAD CLAIMED A DEDUCTION UNDER SECTION 35(2 AB) OF RS.55,98,155/- I.E., 1.50 TIMES OF RS.37,32,103/-. THE ASSESSEE HAD INCURRED EXPENDITURE ON SCIENTIFIC RESEARCH AND DEV ELOPMENT, THEREFORE, CLAIMED THE SAID DEDUCTION. THE ASSESSEE WAS ASKED TO PRODUCE THE REQUIRED FORM NO.3 CM TO BE ISSUED BY S ECRETARY, DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH. I NSTEAD OF THAT CERTIFICATE, AS PER THE AO, THE ASSESSEE HAD FURNIS HED TWO LETTERS ISSUED BY THE DEPARTMENT OF SCIENTIFIC AND INDUSTRI AL RESEARCH, MINISTRY OF SCIENCE AND TECHNOLOGY, GOVERNMENT OF I NDIA, REFERRED AS UNDER:- DEDUCTION U/S. 35(2AB): RS.55,98,155/- PERUSAL OF THE PROFIT AND LOSS ACCOUNT, IT IS SEEN THAT THE ASSESSEE COMPANY HAS CLAIMED A DEDUCTION OF RS.55,98,155/- ( 1.50 TIME OF RS.37,32,103) U/S. 35(2AB) BEING EXPENDITURE ON SCI ENTIFIC RESEARCH AND DEVELOPMENT. DURING THE COURSE OF ASSESSMENT PR OCEEDING, AR OF THE ASSESSEE WAS ASKED TO PRODUCE THE CERTIFICATE I N FORM NO.3 CM ISSUED BY THE PRESCRIBED AUTHORITY I.E. SECRETARY, DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH. ASSESSEE FURNIS HED THE FOLLOWING CERTIFICATES ISSUED BY THE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH, MINISTRY OF SCIENCE AND TECHNOLOGY, GOVER NMENT OF INDIA: 1) CERTIFICATE DATED 28.06.00 VALID UP TO 31.03.03 2) CERTIFICATE DATED 08.09.03 VALID UP TO 31.03.06 2.1 SINCE, THOSE LETTERS WERE NOT ON THE PRESCRIBED PROFORMA, THEREFORE, THE AO HAD DISALLOWED THE CLAIM. BEFORE US, THE SAID ORDER OF A.Y. 2004-05 PASSED UNDER SECTION 143(3) D ATED 13.12.2006 IS PLACED. LIKEWISE FOR A.Y. 2005-06 AND 2006-07, THE YEARS UNDER APPEAL, THE SAID DEFECT WAS POINTED OUT AND THE ASSESSEE HAD SUO MOTU MADE THE ADJUSTMENT IN THE CL AIM WHICH RESULTED INTO MAIN ADDITION. FOR THESE TWO YEARS, T HE AO HAD HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME AND ALSO CONCEALED THE INCOME, THEREFORE, INITIATED THE PENALTY ITA NO.935/AHD/2010 & 158/AHD/2013 ACIT VAPI VS. AMOLI ORGANICS PVT. LTD. A.Y. 2005-06 & 2006-07 - 3 - PROCEEDINGS UNDER SECTION 271(1)(C). IT WAS REITERA TED THAT THE CLAIM OF DEDUCTION UNDER SECTION 35(2AB) WAS NOT MA DE AS PRESCRIBED UNDER LAW AND THE ASSESSEE HAD NOT FULFI LLED THE REQUIREMENT, THEREFORE, THE CLAIM WAS WRONGLY MADE BY FURNISHING INACCURATE PARTICULARS. THEREFORE, LEARNED DR HAS P LEADED THAT THE AO HAD RAISED CERTAIN INQUIRES AND WHEN THE ASSESSE E HAD NO EXPLANATION THEN ONLY WITHDRAWN THE CLAIM. HE HAS A RGUED THAT IF THE ASSESSEES CASE WAS NOT SELECTED FOR SCRUTINY T HEN THE ASSESSEE WOULD HAVE BEEN BENEFITED BY FILING INACCURATE PART ICULARS OF INCOME. IT WAS A DELIBERATE ATTEMPT TO TAKE THE CHA NCE WITH THE DEPARTMENT, HENCE, THE PENALTY WAS RIGHTLY IMPOSED ON THE ASSESSEE. 2.2 FROM THE SIDE OF THE RESPONDENT ASSESSEE, LEARN ED AR, MR. S.N. SOPARKAR AND MR. BANDISH SOPARKAR APPEARED AND PLACED RELIANCE ON THE VIEW TAKEN BY THE LEARNED CIT(A). 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES. WE HAVE NOTED THAT IN A.Y. 2004-05, THE ASSESSEE HAS CLAIME D THE DEDUCTION UNDER SECTION 35(2AB) IN RESPECT OF EXPEN DITURE INCURRED ON SCIENTIFIC RESEARCH AND DEVELOPMENT UND ER BONA FIDE BELIEF THAT THE CERTIFICATES WHICH WERE ISSUED BY T HE MINISTRY OF SCIENCE AND TECHNOLOGY WOULD BE THE CORRECT AND VAL ID CERTIFICATE FOR SUCH CLAIM. AS FAR AS THE GENUINENESS OF THE EX PENDITURE IS CONCERNED, THE AO HAS NOT DOUBTED THE SAME. THE CLA IM WAS DISALLOWED ONLY ON ACCOUNT OF THE FACT THAT THE ASS ESSEE HAD FAILED TO FURNISH THE PRESCRIBED CERTIFICATE. THE PARTICUL ARS IN RESPECT OF ITA NO.935/AHD/2010 & 158/AHD/2013 ACIT VAPI VS. AMOLI ORGANICS PVT. LTD. A.Y. 2005-06 & 2006-07 - 4 - THE EXPENDITURE AS ALSO THE PARTICULARS ABOUT THE C LAIM OF DEDUCTION UNDER SECTION 35(2AB) WERE FURNISHED BY T HE ASSESSEE AND THOSE PARTICULARS HAVE NOT BEEN FOUND TO BE INA CCURATE. WE HAVE NOTED THAT LEARNED CIT(A) HAS PLACED RELIANCE ON A DECISION OF HONBLE GUJARAT HIGH COURT PRONOUNCED IN THE CAS E OF CIT VS. UNION ELECTRONIC CORPORATION 200 CTR 636 (GUJ.) (32 2 ITR 158), WHEREIN IT WAS HELD THAT IF THE ASSESSEE HAD OFFERE D AN AMOUNT DURING THE ASSESSMENT PROCEEDINGS BEFORE THE DETECTION BY THE AO AND PAID TAX THEREON, THEN NO PENALTY IS TO BE LEVIED UNDER SECTION 271(1)(C) OF THE IT ACT. LIKEWISE, IN THE C ASE OF BACARDI MARTINI INDIA, 288 ITR 585 (DEL), IT WAS HELD THAT WITHDRAWAL OF CLAIM OF DEDUCTION BY FILING REVISED RETURN OR DISA LLOWANCE OF AN EXPENDITURE DUE TO DIFFERENCE OF OPINION DID NOT AM OUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. WE HAVE FURTHER NOTED THAT LEARNED CIT(A) HAS PLACED R ELIANCE IN THE CASE OF CIT VS. BETA NEPTHOL LTD. 272 ITR 323 (MP) FOR THE LEGAL PROPOSITION THAT WHERE THE ASSESSEE HAD SURRE NDERED THE DISPUTED ITEMS AND PAID TAX THEREON THEN IT WAS NOT A FIT CASE FOR LEVY OF PENALTY. RESULTANTLY, CONSIDERING THE TOTAL ITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THE ASSESSEE HAD MADE THE IMPUGNED CLAIM ON THE CERTIFICATES WHICH W ERE FURNISHED BUT NOT FOUND TO BE FALSE OR INCORRECT, HOWEVER, UN DER BONA FIDE IMPRESSION; THEN THE ASSESSEE SHOULD NOT BE HELD GU ILTY OF CONCEALMENT OF INCOME. THE VIEW TAKEN BY THE LEARNE D CIT(A) IS HEREBY APPROVED. THE GROUNDS OF BOTH THE ASSESSMENT YEARS OF THE REVENUE ARE HEREBY DISMISSED. ITA NO.935/AHD/2010 & 158/AHD/2013 ACIT VAPI VS. AMOLI ORGANICS PVT. LTD. A.Y. 2005-06 & 2006-07 - 5 - 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. SD/- SD/- (A.K. GARODIA ) (MUK UL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMB ER AHMEDABAD; DATED 23/08/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. 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