U.P Power Transmission Corporation Ltd., Lucknow V. Dy. Commissioner Of Income Tax, Lucknow

ITA 937/LKW/2014

• Counselvise Citation: 93723714 RSA 2014
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH GIDWANI
• Keywords: Principle of natural justice; Retrospective amendment; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.937/LKW/2014 ASSESSMENT YEAR:2010 - 2011 DCIT, RANGE - VI, LUCKNOW. VS U.P. POWER TRANSMISSION CORPORATION LTD., 213, IIND FLOOR, NEW BUILDING, SHAKTI BHAVAN, 14, ASHOK MARG, LUCKNOW. PAN:AAACU8823E (RESPONDENT) (APPELLANT) SHRI R. C. JAIN, C. A. APPELLANT BY SHRI HARISH GIDWANI, D. R. RESPONDENT BY 22/04/2015 DATE OF HEARING 22 /06/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 03/09/2014 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. IN THIS APPEAL , THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY OUGHT NOT TO HAVE CONFIRMED THE PENALTY OF RS.1,00,000/ - U/S 271B OF THE INCOME TAX ACT, 1961. 2. BECAUSE THERE WAS A REASONABLE CAUSE FOR DELAY IN OBTAINING AND FILING OF TAX AUDIT REPORT U/S 44AB OF THE INCOME TAX ACT, 1961 HENCE NO PENALTY U/S 271B OUGHT TO HAVE BEEN LEVIED. 3. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2 3. LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER DATED 17/07/2013 ARE AVAILABLE ON PAGE NO. 17 & 18 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT IT WAS THE EXPLANATION OF THE ASSESSEE IN THIS LETTER THAT THE ASSESSEE IS A GOVERNMENT COMPANY WITHIN THE MEANING OF SECTION 617 OF THE COMPANIES ACT, 1956. IT WAS ALSO SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSMISSION OF ELECTRICITY. THE ASSESSEE ALSO SUBMITTED THAT THE GOVERNMENT ISSUED NOTIFICATION DATED 23/12/2010 WHEREBY THE BUSINESS OF TRANSMISSION OF POWER WAS DEMERGED TO THE ASSESSEE. HE ALSO SUBMITTED THAT DEMERGING OF BUSINESS OF POWER TRANSMISSION WAS DONE THROUGH THE NOTIFICATION WITH RETROSPECTIVE EFFECT AND HENCE, THE ACCOUNTS OF TRANSMISSION BUSINESS WH ICH WERE INCLUDED IN THE ACCOUNTS OF U.P. POWER CORPORATION LIMITED FOR FINANCIAL YEAR 2009 - 10 RELEVANT TO ASSESSMENT YEAR 2010 - 11 WERE INCLUDED IN THE ACCOUNTS OF THE ASSESSEE AND THE RETURN OF THE UP POWER CORPORATION LIMITED WAS REVISED. HE ALSO SUBMIT TED THAT BECAUSE OF THESE REASONS , THE ASSESSEE COULD NOT OBTAIN THE TAX AUDIT REPORT WITHIN THE TIME PRESCRIBED U/S 44AB OF THE ACT AND THEREFORE, AS PER SECTION 273B, PENALTY IS NOT JUSTIFIED. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE PROVISIONS OF SECTION 273B, PENALTY U/S 271B ALSO IS NOT LEVIABLE IF THE ASSESSEE CAN ESTABLISH THAT THERE WAS REASONABLE CAUSE FOR THE FAILURE OF THE ASSESSEE RESULTING INTO IMPOSITION OF PENALTY. IN THE PRESENT CASE, THE EXPLANATION GIVEN BY THE ASSESSEE FOR HIS FAILURE TO OBTAIN TAX AUDIT REPORT WITHIN THE TIME PRESCRIBED U/S 44AB IS VERY MUCH REASONABLE BECAUSE THE BUSINESS OF POWER TRANSMISSION WAS DEMERGED BY UP STATE GOVERNMENT TO 3 TH E ASSESSEE COMPANY BY NOTIFICATION DATED 23/12/2010 WITH EFFECT FROM FINANCIAL YEAR 2009 - 10 RELEVANT TO ASSESSMENT YEAR 2010 - 11. IN OUR CONSIDERED OPINION, THIS IS VERY MUCH REASONABLE BECAUSE WHICH RESULTED INTO FAILURE OF THE ASSESSEE TO GET THE ACCOUNT S AUDITED U/S 44AB WITHIN PRESCRIBED TIME AND THEREFORE, PENALTY UNDER THESE FACTS IS NOT JUSTIFIED. WE, THEREFORE, DELETE THE PENALTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MEN TIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 /06/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR