ACIT, Hyderabad V. Medvarsity Online Limited, Hyderabad

ITA 942/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3337 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: ADITYA BAJORIA
• Keywords: Non-deduction of tax

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' , HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.942/HYD/10 (ASSESSMENT YE AR 2005-06) ASSTT. COMMISSIONER OF INCOME- TAX, CIRCLE 16(2), HYDERABAD V/S. M/S. MEDVERSITY ONLINE LIMITED, HYDERABAD ( PAN AACCM 9646 B ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NIVEDITA BISWAS RESPONDENT BY : SHRI ADITYA BAJORIA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2005-06 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- 1. THE ORDER OF THE CIT(A) IS ERRONEOUS IN LAW AND ON FACTS. 2. THE LEARNED CIT(A) ERRED IN DELETING THE PENALTY IGNORED THE FACT THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS BY NOT CONSIDERING THE DISALLOWANCES AS PER THE PROVISIONS OF SECTION 40(A)(IA) FOR THE DEFAULTS IN NON-DEDUCTION OF TAX. 3. THE LEARNED CIT(A) OUGHT TO HAVE CONFIRMED THE L EVY OF PENALTY AS THE FAILURE ON THE PART OF THE ASSESSEE IN NOT MAKING D ISALLOWANCES REQUIRED U/S. 40(A)(IA) TANTAMOUNTS TO FURNISHING I NACCURATE PARTICULARS, WHICH WARRANTS LEVY OF PENALTY U/S. 27 1(1)(C). 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS VALIDI TY OF THE PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT. SHE SUBMITTED THAT T HE EXPENSES CLAIMED IN ITA NO.942./HYD/10 M/S. MEDVERSITY ONLINE LIMITED, HYDERABAD 2 THE PROFIT AND LOSS ACCOUNT ARE CREDITED EITHER TO THE PAYEES ACCOUNT OR SOME OTHER ACCOUNT AND THEREBY ATTRACTING THE TDS P ROVISIONS AND CONSEQUENTLY THE PROVISIONS OF S.40(A)(IA) OF THE A CT ARE VIOLATED IN THIS CASE AND THEREFORE NON-ALLOWANCE OF THE AMOUNT OF RS.9,5 4,000 OUT OF WEB EXPENSES IN THE COMPUTATION OF INCOME AMOUNTS TO F URNISHING OF INACCURATE PARTICULARS OF INCOME. SHE RELIED ON THE ORDER OF T HE ASSESSING OFFICER. 4. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS NOT CO NCEALED ANY FACTS AND THE ADDITION/DISALLOWANCE OUT OF EXPENSES WAS MADE BY A PPLYING THE PROVISIONS OF S.40(A)(IA) OF THE ACT AND THERE IS NO EVIDENCE OF ANY CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND T HAT THE DISALLOWANCE OF EXPENSES WAS MADE BY INVOKING THE PROVISIONS OF S.4 0(A)(IA) OF THE ACT. IN THIS CASE, THE ASSESSEE HAS FURNISHED ALL THE RELEV ANT MATERIAL FACTS ALONGWITH ITS RETURN OF INCOME. THE AUDIT REPORT IN THE STAT UTORY FORM WAS ALSO ANNEXED TO THE RETURN OF INCOME BY THE ASSESSEE. T HE ASSESSEE HAS FILED AN EXPLANATION WHICH COULD NOT BE SAID TO BE NOT BONA FIDE. WE FIND THAT MERELY BECAUSE CERTAIN DISALLOWANCE HAS BEEN MADE DUE TO S OME PROVISION OF LAW, IT COULD NOT BE SAID THAT THE ASSESSEE IS GUILTY OF CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE EXPLANATION OF THE ASSESSEE WAS WITHOUT ANY BASIS OR FOUNDATION. IT IS A CASE OF HONEST DIFFERENCE OF O PINION BETWEEN THE ASSESSEE AND THE REVENUE REGARDING THE DISALLOWANCE MADE AND THE APPLICABILITY OF THE PROVISIONS OF S.40(A)(IA) OF THE ACT. IN THESE FAC TS OF THE CASE, WE HOLD THAT NO CASE FOR IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT COULD BE MADE OUT BY THE DEPARTMENT. ACCORDINGLY, THERE IS NO MI STAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THERE WAS NO CASE OR JUSTIFI CATION FOR IMPOSING PENALTY ITA NO.942./HYD/10 M/S. MEDVERSITY ONLINE LIMITED, HYDERABAD 3 UNDER S.271(1)(C) OF THE ACT. ACCORDINGLY, THE GRO UNDS OF APPEAL OF THE REVENUE ARE REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED . ORDER PRONOUNCED IN THE COURT ON 13 TH MAY, 2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 13TH MAY, 2011. COPY FORWARDED TO: 1. M/S. MEDVERSITY ONLINE LIMITED, ACADEMIC BUILDING, APOLLO HOSPITALS COMPLEX, JUBILEE HILLS, HYDERABAD 2. A SST . COMMISSIONER OF INCOME - TAX, CIRCLE 16 (2) , HYDERABAD. 3. COMMISSIONER OF INCOME - TAX (APPEALS) V, HYDERABAD 4. COMMISSIONER OF INCOME - TAX I V, HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S