ITO 6(1)(4), MUMBAI V. BOSTON ANALYTICS P.LTD, MUMBAI

ITA 95/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3329 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 07-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: JIGER SAIYA
• Keywords: TDS
• Section: 271(1)(c); 2; 43B; 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN , HON'BLE ACCOUNTANT MEMBER ITA NO. 95 /MUM/201 6 (A.Y: 2011 - 12) INCOME TAX OFFICER 6(1)(4 ) ROOM NO. 508 , 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. BOSTON ANALYTICS PVT. LTD., 11, JOLLY MAKER CHAMBER II, NARIMAN POINT, MUMBAI - 400 021 PAN: AAAC B 5871 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JIGER SAIYA DEPARTMENT BY : MS. POOJA SWAROOP DATE OF HEARING : 1 6 .11.2018 DATE OF PRONOUNCEMENT : 13 . 02 .2019 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 12, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 13.10.2015 IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 2. THE ASSESSING OFFICER LEVIED THE PENALTY U/S. 271(1)(C) OF THE ACT ON THE DISALLOWANCE MADE U/S. 10A , 40 ( A ) (IA) AND SECTION 43B OF THE ACT A S 2 ITA NO. 95/MUM/2016 (A.Y: 2011 - 12) M/S. BOSTON ANALYTICS PVT. LTD., THE ASSESSEE FAILED TO PRODUCE THE DETAILS IN RESPECT OF TDS DEDUCTION AND PAYMENT OF THESE EXPENSES IN THE CURRENT YEAR. IT WAS ALSO OBSERVED THAT ASSESSEE FAILED TO PRODUCE THE PROOFS REGAR DING THE PAYMENTS MADE WHICH WERE DISALLOWED U/S. 43B OF THE ACT. ON APPEAL THE LD. CIT(A) DELETED THE PENALTY AGAINST WHICH THE REVENUE IN APPEAL BEFORE US. 3. LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER IN LEVYING THE PENALTY, WHEREAS THE LD. COUNSEL FOR THE ASSESSEE STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. PENALTY U/S. 271(1)(C) OF THE ACT HAS BEEN LEVIED ON THE DISALLOWANCE MADE U/S. 10A OF THE ACT ON THE GROUND THAT ASSESSEE FAILED TO FULFILL THE CONDITIONS AND THE DISALLOWANCE MADE U/S. 40(A)(IA) IN RESPECT OF THE PAYMENTS MADE WHERE NO TDS HAVE BEEN DEDUCTED, AND IN RESPECT OF THE DISALLOWANCE MADE U/S. 43B IN NOT FURNISHING THE DETAILS BY THE ASS ESSEE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT CLAIM FOR DEDUCTION U/S. 10A WAS MADE SINCE A.Y. 2007 - 08 AND THE CLAIM WAS ALLOWED BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U/S. 143(3) FOR THE A.Y. 2010 - 11. IT IS SUBMITTED THAT THE ASSES SEE SEIZED OPERATIONS FROM THE FINANCIAL YEAR 2011 - 12. IT IS FURTHER SUBMITTED THAT ALL THE DETAILS ARE AVAILABLE WITH THE ASSESSEE THERE IS NEITHER CONCEALMENT 3 ITA NO. 95/MUM/2016 (A.Y: 2011 - 12) M/S. BOSTON ANALYTICS PVT. LTD., OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS, IN RESPECT OF THE DISALLOWANCE U/S. 43B IT IS SUBMITTED THAT IT IS ONLY REVERSAL OF ENTRIES MADE IN THE BOOKS OF ACCOUNT AND THERE IS NO ACTUAL LIABILITY. 5. WE HAVE PERUSED THE ORDER OF THE LD. CIT(A) WHERE THE SUBMISSIONS OF THE ASSESSEE WERE CONSIDERED AND DECIDED THAT THERE IS NO CONCEALMENT OF I NCOME AS THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS IN THE BOOKS OF ACCOUNTS AND IN THE RETURN OF INCOME AND THE PENALTY IS DELETED IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF [291 ITR 591], DHARMENDER TEXTI LE PROCESSORS [306 ITR 277] AND RELIANCE PETRO PRODUCTS PVT. LTD., [322 ITR 158], OBSERVING AS UNDER: - 5. I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER, THE PENALTY ORDER AND THE APPELLANT'S WRITTEN SUBMISSION. VARIOUS COURTS AND APPELLATE AUTHORITIES HAVE HELD THAT PENALTY U/S.271(1)(C) IS LEVIABLE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HERE IN THE PRESENT CASE IT IS SEEN THAT PENALTY CANNOT BE LEVIED ON THE APPELLANT COMPANY MERELY DUE TO THE REASON THAT DE DUCTION U/S.L0A HAS NOT BEEN ALLOWED DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT COMPANY HAD DISCLOSED ALL FACTS AND MATERIALS RELATING TO THE DEDUCTION AND SO PENALTY OUGHT NOT TO HAVE BEEN LEVIED. SIMILARLY THE ALLOWANCE OF RS.60,50,257/ - U/S.40(A)( IA) AND RS.4,38,575/ - U/S.43B HAD BEEN CLAIMED BY THE APPELLANT COMPANY WHILE COMPUTING ITS TOTAL INCOME. THE CONTENTION OF THE APPELLANT COMPANY WAS NOT ACCEPTED AND THE SAID AMOUNTS WERE DISALLOWED DURING THE ASSESSMENT PROCEEDINGS AND LATER THE PENALTY WAS IMPOSED. 6. MERE DISALLOWANCE OF PART OF EXPENSES DOES NOT ALTER THE BONAFIDE CLAIM OF THE APPELLANT. NO PENALTY U/S 271(1)(C) IS TO BE IMPOSED FOR SUCH DISALLOWANCE. HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (P) LTD. - 322 ITR 158 W HILE CONFIRMING THE ORDER OF HON'BLE HIGH COURT DELETING THE PENALTY IMPOSED U/S 271(L)(C) FOR DENIAL OF ASSESSEE'S CLAIM OF DEDUCTION OF INTEREST EXPENDITURE, HAS CATEGORICALLY OBSERVED THAT BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS'. ACCORDINGLY, IT WAS HELD THAT DECLINE OF ASSESSEE'S CLAIM OF INTEREST AGAINST THE LOAN UTILIZED FOR MAKING INVESTMENT IN TAX FREE SECURITIES, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS SO AS TO ATTRACT PENALTY U/S 271(L)(C) OF THE ACT. HON'BLE SUPREME COURT IN THIS CASE AFTER CONSIDERING THE PROPOSITION OF LAW LAID DOWN IN THE CASE OF DILIP N. SHROFF - 291 ITR 519 (SC) AND DHARMENDER TEXTILE PROCESSORS - 306 ITR 277 (SC), HELD AS UNDER: - 4 ITA NO. 95/MUM/2016 (A.Y: 2011 - 12) M/S. BOSTON ANALYTICS PVT. LTD., 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. MERELY BECAUSE T HE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, ATTRACT THE PENALTY UNDER SECTION 271(L)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(L)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE' 7. RELIANCE IS ALSO PLACED BY ME IN THE CASE OF ACIT VS. VIP INDUSTRIES 122 TTJ 289(MUM), WHEREIN THE HON'BLE MUMBAI IT AT HELD THAT ; U ......WHERE AN APPELLANT GENUINELY MAKES CLAIM FOR A PARTICULAR DEDUCTION BY DISCLOSING ALL THE NECESSARY FACTS RELATING TO THE SAME, THAT WILL NOT AMOUNT TO CONCEALMENT EVEN IF THE APPELLANT'S CLAIM IS REJEC TED. IF THE PENALTY IS IMPOSED UNDER SUCH CIRCUMSTANCES ALSO, THEN PROBABLY THERE WILL REMAIN NO COURSE OPEN TO THE APPELLANT FOR GENUINELY CLAIMING A DEDUCTION WHICH IN HIS OPINION IS ADMISSIBLE, BECAUSE THE FEAR OF SUCH CLAIM BEING REJECTED IN EVENTUALIT Y WILL EXPOSE HIM TO THE RIGOUR OF PENALTY. OBVIOUSLY, SUCH A PROPOSITION IS BEYOND ANY RECOGNISED CANON OF LAW.' 8. IN THE CASE OF THE APPELLANT COMPANY, IT IS SEEN THAT ALL DETAILS REGARDING CLAIM OF DEDUCTION WERE MADE AVAILABLE DURING THE COURSE OF ASS ESSMENT PROCEEDINGS. THUS, THE APPELLANT COMPANY HAD MADE FULL DISCLOSURE OF THE PARTICULARS OF INCOME AND NO MATERIAL FACTS WERE WITHHELD. 9. THEREFORE, THE ABOVE JUDGEMENTS MAKES IT ABUNDANTLY CLEAR THAT MAKING A CLAIM OF DEDUCTION EVEN IF NOT SUSTAINAB LE IN LAW, DOES NOT ATTRACT PENALTY. HENCE, IT CAN BE SEEN THAT THE CASE OF THE APPELLANT IS SQUARELY COVERED BY THE ABOVE JUDGEMENTS. 10. BEFORE PENALTY CAN BE IMPOSED THE ENTIRELY OF THE CIRCUMSTANCES MUST REASONABLY POINT TO THE CONCLUSION THAT THE DISP UTED AMOUNT REPRESENTED INCOME AND THAT THE APPELLANT HAD CONSCIOUSLY CONCEALED THE PARTICULARS OF HIS INCOME OR HAD DELIBERATELY FURNISHED INACCURATE PARTICULARS. IN THE APPELLANT'S CASE, THERE WAS NO CONSCIOUS CONCEALMENT OF THE PARTICULARS OF INCOME OR APPELLANT DID NOT DELIBERATELY FURNISH INACCURATE PARTICULARS AND THEREFORE THE QUESTION OF PENALTY DOES NOT ARISE. 11. RELIANCE IS ALSO PLACED BY ME IN THE CASE OF ITO VS. BURMAN STELL OIL STORAGE AND DISTRIBUTING CO. OF INDIA LTD. OF HON'BLE CALCUTTA HIG H COURT AND IN THE CASE OF P V RAMMANNA REDDY VS ITO (ITAT HYDERABAD), IN THE CASE OF CIT VS SIDDHARTH ENTERPRISES (184 TAXMANN 460) (PUNJAB & HARYANA HIGH COURT) AND LTD VS ECS LTD (336) ITR 162) (DELHI HIGH COURT). 12. THUS IN THE LIGHT OF THE ABOVE DISC USSION, IT IS HELD THAT THE APPELLANT IS NOT LIABLE FOR PENALTY U/S 271(L)(C) AND SO I ALLOW THESE GROUNDS OF APPEAL. 6. ON A CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT(A), WE DO NOT FIND ANY VALID REASON TO REVERSE THE FINDINGS OF THE LD. CIT(A). HENCE, W E SUSTAIN THE SAME AND REJECT THE GROUNDS RAISED BY THE REVENUE. 5 ITA NO. 95/MUM/2016 (A.Y: 2011 - 12) M/S. BOSTON ANALYTICS PVT. LTD., 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 13 TH FEBRUARY , 2019 SD/ - SD/ - ( N.K. PRADHAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 13 / 0 2 / 2019 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM