DCIT, Parwanoo V. M/s Aarham Softronics, Solan

ITA 943/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6728 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 943/CHD/2017 ASSESSMENT YEAR: 2011-12 THE DCIT, VS. M/S AARHAM SOFTRONICS, CIRCLE, PLOT NO. 30, INDUSTRIAL AREA, PARWANOO. BADDI, DISTT. SOLAN (HP). PAN NO. AALFA1356L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. CHANDER KANTA, SR.DR RESPONDENT BY : SHRI VINEET KRISHAN DATE OF HEARING : 06.09.2017 DATE OF PRONOUNCEMENT : 31.10.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 20.03.2017 OF CIT (APPEALS ), SHIMLA PERTAINING TO 2011-12 ASSESSMENT YEAR ON THE FOLLOWING GROUND : ON THE FACTS AND THE CIRCUMSTANCES, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) IGNORING THE FACT THAT THE AS SESSEE WAS NOT ELIGIBLE FOR DEDUCTION @ 100% AND ESCAPED HIS INCOME FROM TAX WILLFULLY. 2. RIGHT AT THE OUTSET, THE LD. AR APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT THE PENALTY ORDER HAS BEEN QUASHED BY THE CIT(A) IN APPEAL RELYING UPON THE ORDER OF THE ITAT IN ITA 326/CH D/2015 IN THE CASE M/S HYCRON ELECTRONICS VS ITO. APART FROM THAT, H E HAS ALSO CONSIDERED SIMILAR OTHER CASES. ACCORDINGLY, IT WAS HIS SU BMISSION THAT THE DEPARTMENTAL APPEAL IS NOT MAINTAINABLE. 3. HOWEVER, IN VIEW OF THE FACT THAT THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE, THE LD. SR.DR WAS REQUIRED TO ADDRESS TH E ISSUES. LD. SR.DR CONSIDERING THE PRELIMINARY OBJECTIONS, RELIED UPON THE PENALTY ORDER. THE SUBMISSION OF THE LD. AR IN AS MUCH AS THAT T HE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE ORDE R OF THE ITAT, WAS NOT REBUTTED. NO CONTRARY DECISION WAS CITED BEFORE THE BENCH FOR TAKING A CONTRARY VIEW. ITA 943/CHD/2017 A.Y. 2011-12 PAGE 2 OF 3 4. THE LD. AR IN SUPPORT OF THE IMPUGNED ORDER, ON THE OTHER HAND, RELIED UPON THE LATEST DECISION OF THE ITAT DATED 08.06.20 17 IN THE CASE OF DCIT VS M/S SUPER LPG APPLIANCES IN ITA 85/2017. 5. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. AS FAR AS THE FACTS ARE CONCERNED, IT IS SEEN THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES AS CONSIDERED BY THE COORDINATE BENCH IN THE AFORESAID ORDER. NO DISTINCTION ON FACTS HAS BEEN POINTED OUT BY THE REVENUE IN ORDER TO TAKE A CONTRARY VIEW. A PERUSAL OF THE AFORESAID ORDER SHOWS THAT THE APPEAL OF THE DEPARTMENT IN ITA 85/2017 HAS BEEN DISMISSED ON SIMILAR FACTS AND ISSUES HOLDING AS UNDER : 7. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR TH AT ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IC IN ASSESSMENT YEAR UND ER APPEAL IN A BONAFIDE MANNER AND MERE FACT THAT CLAIM OF ASSESSEE HAS BEE N DISALLOWED, WOULD NOT PROVE IT TO BE A FIT CASE OF LEVY OF PENALTY FOR FI LING INACCURATE PARTICULARS OF INCOME. THE ISSUE OF CLAIM OF DEDUCTION WAS DEBATA BLE AND BONAFIDE. HOWEVER, THERE WAS CONFLICT FOR DETERMINATION OF PROVISION O F LAW. MERELY MAKING A CLAIM OF 100% DEDUCTION AGAINST 25% AS PER OPINION OF THE ASSESSING OFFICER UNDER SECTION 80IC OF THE ACT WOULD NOT BE AT PAR WITH CO NCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE D ECISIONS RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE SUPPORT THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HON'BLE SUPREME COURT IN THE CASE OF CIT V RELIANCE PETROPRODUCTS LTD. 322 ITR 158 HELD AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY I T, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 2 71(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIONS, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE T HE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CO RRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY U/S 271(1)(C). A MERE MAKIN G OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. 8. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE A CT BECAUSE IT IS WELL SETTLED THAT LEVY OF PENALTY IS NOT AUTOMATIC IN EACH AND EVERY CASE AS IT DEPENDS UPON FACTS AND CIRCUMSTANCES OF THE CASE. SINCE THE ASSESSEE S CLAIM OF DEDUCTION UNDER SECTION 80IC HAVE BEEN ALLOWED IN EARLIER YEARS @ 1 00% AND ADMITTEDLY ASSESSEE UNDERTOOK SUBSTANTIAL EXPANSION IN ASSESSM ENT YEAR UNDER APPEAL, THEREFORE, ASSESSEE MADE BONAFIDE CLAIM OF DEDUCTIO N UNDER SECTION 80IC OF THE ITA 943/CHD/2017 A.Y. 2011-12 PAGE 3 OF 3 ACT AND THERE WERE NO JUDICIAL PRONOUNCEMENTS AGAIN ST THE ASSESSEE ON THE DATE OF MAKING SUCH A CLAIM. THEREFORE, IT COULD NOT BE CONSTRUED THAT ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME SO AS TO LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. 5.1. IN THE FACTS OF THE PRESENT CASE ALSO, THE CLAIM OF THE ASSESSEE THOUGH REJECTED ON MERITS, HAS BEEN FOUND TO BE A BONA FIDE CLAIM AS PER THE BONAFIDE UNDERSTANDING OF THE RELEVANT PROVISIONS, WHER E ALL NECESSARY FACTS WERE DISCLOSED. ACCORDINGLY, IN THE FACTS AS THEY STAND, THE ORDER QUASHING THE PENALTY ORDER IS UPHELD. SAID ORD ER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER,2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.