D.C.I.T Cir - 1,kolkata, Kolkata V. M/s Budge Budge Jute Ltd, Kolkata

ITA 979/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4915 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2013
• Court: TRIBUNAL
• Assessee Lawyers: MANISH TIWARI
• Section: 43B; 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.979/KOL/2013 ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER OF INCOME-TAX, VS. BUDGE BUD GE JUTE LTD. CIRCLE-1, KOLKATA. (PAN: AABCB2410K) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 11.03.2016 DATE OF PRONOUNCEMENT: 16.03.2016 FOR THE APPELLANT: SHRI SALLONG YADEN, JCIT, SR. DR FOR THE RESPONDENT: SHRI MANISH TIWARI, AR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XX, KOLKATA VIDE APPEAL NO. 92/CIT(A)-XX/CIR-1/2011-12/KOL DATED 02.01.2013. AS SESSMENT WAS FRAMED BY ITO, WD-1(1), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 27.12. 2006. PENALTY WAS IMPOSED BY DCIT, CIRCLE-1, KOLKATA U/S. 271(1)(C) OF THE ACT VIDE HI S ORDER DATED 31.07.2008 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED BY AO U/S. 271(1)(C) OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE ADDITION OF DUTY, CESS, TAXES AND EPF AMOUNTING TO RS.1,17,04,699/- FOR THE REASON THAT THESE PAYMENTS HAVE BEEN MADE AFTER DUE DATE IN THE RELEV ANT YEARS. ACCORDINGLY, THE AO MADE ADDITION OF FOLLOWING BY DISALLOWING THE SAME U/S. 43B OF THE ACT. ADD: AMOUNT DISALLOWED U/S. 43B: CHARGED IN P.L A/C BUT NOT PAID WITHIN DUE DATE (A NNEXURE-6 OF TAR) 1. 2. 3. 4. 5. 6. 7. 8. 9. CESS DUTY INTEREST ON SALES TAX LOAN RAW JUTE TAX CENTRAL SALES TAX W.B. SALES TAX EMPLOYERS CONTRIBUTION TO PF EMPLOYERS CONTRIBUTION TO PF ADMN. CH. EMPLOYERS CONTRIBUTION TO PENSION FUND EMPLOYERS CONTRIBUTION TO EDLI RS. 1,34,529/- RS.25,24,903/- RS.25,47,711/- RS. 7,25,670/- RS. 804/- RS.24,04,543/- RS. 67,898/- RS.31,06,264/- RS. 1,92,377/- RS.1,17,04,697/- 2 ITA NO.979/KOL/2013 BUDGE BUDGE JUTE LTD., AY 200 4-05 AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND ALSO BEFORE TRIBUNAL AND IN BOTH THE STAGES APPEAL OF ASSESSEE WAS DISMISSED AND ADDITIO N TO THE EXTENT OF RS.82,12.,119/- WAS CONFIRMED. IN THE MEANTIME, AO STARTED PENALTY PRO CEEDING U/S. 271(1)(C) OF THE ACT AND IMPOSED PENALTY IN RESPECT TO THESE ITEMS CLAIMED B Y ASSESSEE U/S. 43B OF THE ACT AMOUNTING TO RS.82,12,119/- AND THEREBY IMPOSED 100% PENALTY AT RS.29,46,098/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE PEN ALTY BY OBSERVING IN PARA 3.2 AS UNDER: 3.2. I HAVE PERUSED THE PENALTY ORDER AND CONSID ERED THE SUBMISSION OF THE APPELLANT. THE FACT OF THE CASE IS THAT THE APPELLANT CLAIMED VARIOUS EXPE NSES WHICH WERE DISALLOWED BY THE AO TO THE TUNE OF RS.L,17,04,699/- ON APPEAL, THE THEN CIT(A) CONFIRMED THE DISALLOWANCE BUT THE ITAT CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.82,1 2,119/- ONLY. THE DISALLOWANCES PERTAIN TO SECTION 43B OF THE ACT AS VARIOUS PAYMENTS WERE MAD E BY THE APPELLANT AFTER THE DUE DATE AS SPECIFIED IN THE RELEVANT ACT. HOWEVER, THE APPELLA NT WAS ENTITLED TO GET CREDIT OF THE SAME ON PAYMENT BASIS. IN VIEW OF THE SUBMISSION AND CASE L AWS RELIED UPON BY THE APPELLANT, I AM OF THE VIEW THAT THE PENALTY U/S. 271(1)(C) IS NOT LEVIABL E IN THE INSTANT CASE BECAUSE THE APPELLANT HAD DISCLOSED ALL THE RELEVANT FACTS. THERE WAS NO MENS REA TO CONCEAL OR HIDE ANYTHING WITH THE SOLE INTENTION TO EVADE OR AVOID TAX LIABILITY. OTHERWIS E ALSO IF THE AMOUNT INVOLVED IS DISALLOWED IN THE YEAR UNDER CONSIDERATION, IN THE SUBSEQUENT YEAR TH E SAME IS TO BE ALLOWED ON PAYMENT BASIS FOLLOWING THE PROVISION OF SECTION 43B OF THE I.T. ACT. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE A.O. IS DIRECTED TO DELETE THE PENALTY LE VIED U/S.271(1)(C) OF THE ACT. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE TRIBUNAL . 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS OF THE CASE THAT THE ASSESSE E DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXPLAINED THE CLAIM OF DEDUCTION U/S. 43B OF THE AC T ON ACCOUNT OF TAXES, CESS, PF AND ALSO FILED ALL THE RELEVANT DETAILS. THE ASSESSEE HAS ALSO FU RNISHED ALL THE NECESSARY PARTICULARS IN TAX AUDIT REPORT AND ALSO GIVEN NOTES IN ITS COMPUTATION OF T OTAL INCOME. WE FIND THAT NOW THIS ISSUE, IN THE GIVEN FACTS, IS COVERED BY THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 15 8 (SC), WHEREIN HONBLE SUREMPE COURT HAS HELD AS UNDER: 'WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSE SSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER 'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFIN ED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. ' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN TH E DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TR UTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DET AILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE 3 ITA NO.979/KOL/2013 BUDGE BUDGE JUTE LTD., AY 200 4-05 FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH N OT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETU RN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A OF TH E ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER P OINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THER EFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUSION THAT S INCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRECT; IT AMOU NTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE E ITHER OF THE TWO FORMS; AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II) AN ITEM OF EXPENDI TURE MAY BE FALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE T HE TAXABLE INCOME AND, THEREFORE, BOTH TYPES AMOUNT TO CONCEALMENT OF PARTICULARS OF ONE'S INCOM E AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE DO NOT AGREE, AS THE ASSE SSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT O F INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NO T ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDE R SECTION 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE T HE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PE NALTY UNDER SECTION 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS V. STATE OF TAMIL NADU [2009} 23 VST 249 AS REGARDS THE PENALTY ARE APPOSI TE. IN THE AFOREMENTIONED DECISION WHICH PERTAINED TO THE PENALTY PROCEEDINGS UNDER THE TAMI L NADU GENERAL SALES TAX ACT, THE COURT HAD FOUND THAT THE AUTHORITIES BELOW HAD FOUND THAT THE RE WERE SOME INCORRECT STATEMENTS MADE IN THE RETURN. HOWEVER, THE SAID TRANSACTIONS WERE REFLECT ED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED (PAGE 251) : 'SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANT'S ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED IN THE TURNOVER ARE DISCLOSE D IN THE DEALER'S OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INCLUDES THESE ITEMS IN THE DEALER'S TURNOVER DISALLOWING THE EXEMPTION, PENALTY CANNOT BE IMPOSED. THE PENAL TY LEVIED STANDS SET ASIDE. ' THE SITUATION IN THE PRESENT CASE IS STILL BETTER A S NO FAULT HAS BEEN FOUND WITH THE PARTICULARS SUBMITTED BY THE ASSESSEE IN ITS RETURN. THE TRIBUNAL, AS WELL AS, THE COMMISSIONER OF INCOM E-TAX (APPEALS) AND THE HIGH COURT HAVE CORRECTLY REACHED THIS CONCLUSION AND, THEREFORE, T HE APPEAL FILED BY THE REVENUE HAS NO MERITS AND IS DISMISSED. ' 5. IN VIEW OF THE ABOVE FACTS OF THE CASE THAT THE ASSESSEE HAS FILED COMPLETE PARTICULARS IN RESPECT TO CLAIM OF DEDUCTION U/S. 43B OF THE ACT A ND WHEN ALL PARTICULARS WERE FILED IN THE TAX AUDIT REPORT AND ITS COMPUTATION OF INCOME ALONG WI TH RETURN OF INCOME, IT CANNOT BE A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME. IT IS ONLY A CASE OF OPINION WHETHER THE DEDUCTION IS TO BE ALLOWED OR N OT. ONCE THIS IS THE CASE, THE ASSESSEE IS NOT 4 ITA NO.979/KOL/2013 BUDGE BUDGE JUTE LTD., AY 200 4-05 LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT. RESP ECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S PVT. LTD. SUPRA, WE CONFIRM THE ORDER OF CIT(A) DELETING THE PENALTY. APPEAL OF REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.03.2016. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 TH FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CIRCLE-1, KOLKATA. 2. RESPONDENT M/S. BUDGE BUDGE JUTE LTD., 16A, BRABO URNE ROAD, KOLKATA-700 001. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .