R.Yogamoorthy, Coimbatore V. ACIT, Coimbatore

ITSSA 1/CHNY/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9928 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 04-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Keywords: Question of law
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , , ( BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER IT (SS) A NO. 01 / CHNY /20 12 BLOCK PERIOD: 01.04.1990 TO 23.01.2001 SHRI R. YOOGAMOORTHY, NO.9, MANDIRAPPA STREET, NEW SIDDHAPUDUR, COIMBATORE-641 044. VS. THE ASST. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-IV, COIMBATORE. [PAN: AAJPY 0909 P ] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : NONE *+) , /RESPONDENT BY : MR.HOMI RAJ VANSH, CIT , /DATE OF HEARING : 25.03.2019 , /DATE OF PRONOUNCEMENT : 25.03.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE , IN ITA NO.422/09- 10 DATED 25.10.2011 FOR THE BLOCK PERIOD 01.04.1990 TO 23.01.2001 AGAINST CONFIRMING THE LEVY OF PENALTY U/S.158BFA(2 ) R.W.S.158BFA(3) OF THE IT ACT. IT (SS) A NO.1/CHNY/2012 :- 2 -: 2. MR. HOMI RAJ VANSH, CIT REPRESENTED ON BEHALF OF THE REVENUE AND NONE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD.DR THAT THE MAIN CONT ENTION OF THE ASSESSEE IS THAT THE PENALTY U/S.158BFA(2) IS NOT L EVIABLE, IN VIEW OF THE FACT THAT THE QUANTUM APPEAL IN THE CASE OF THE ASS ESSEE HAS BEEN ADMITTED BEFORE THE HONBLE HIGH COURT OF MADRAS IN T.C.A.NO.1093/2009, WHEREIN, THE HONBLE HIGH COURT OF MADRAS HAS ADMI TTED THREE SUBSTANTIAL QUESTIONS OF LAW. ONE AGAINST THE ASSESSMENT IN RE SPECT OF THE LIMITATION, SECOND AGAINST THE ASSESSMENT BASED ON STATEMENT RE CORDED AND THE THIRD AGAINST THE ORDER OF THE TRIBUNAL. IT WAS A SUBMIS SION THAT THE ASSESSEE IS PLACING RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, INDORE BENCH, IN THE CASE OF SHRI YUGAL KISHORE JAJ OO VS. DCIT IN ITA NO.272/IND/2011 FOR THE AY 1994-95, WHEREIN IT HAS BEEN HELD AS FOLLOWS: 9. FURTHERMORE, HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. LIQUID INVESTMENT LIMITED, I.T.A.NO. 240/2009 VIDE ITS ORDER DATED 5.10.2010 HA S CLEARLY HELD THAT WHERE HIGH COURT HAS ACCEPTED SUBSTANTIAL QUESTION OF LAW U/S 260A, T HIS ITSELF SHOWS THAT ISSUE IS DEBATABLE. ACCORDINGLY, NO PENALTY WAS IMPOSABLE U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. HON'BLE SUPREME COURT IN THE CASE OF SANTOSH HOSIERY, CIVIL APPEAL NO. 1117 OF 20001 IN ITS ORDER DATED 3RD FEBRUARY, 2001, OB SERVED THAT TO BE SU BSTANTIAL, A QUESTION OF LAW MUST BE DEBATABLE. HON'BLE SUPREME COURT WHILE DECIDING AS TO WHAT IS SUBSTANTIAL QUESTION OF LAW HAS HELD THAT SAME MUST BE DEBATABLE. 4. THE LD.DR ALSO SUBMITTED THAT THE ASSESSEE HAD R ELIED UPON THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF CI T VS. NAYAN BUILDERS AND DEVELOPERS WHICH HAD SUBSEQUENTLY BEEN APPROVED BY THE HONBLE HIGH COURT OF BOMBAY IN 231 TAXMAN 0665, WHEREIN, I T HAS BEEN HELD AS FOLLOWS: IT (SS) A NO.1/CHNY/2012 :- 3 -: 3. IT IS, THEREFORE, ABUNDANTLY CLEAR THAT THE ADDI TIONS IN RESPECT OF WHICH PENALTY WAS CONFIRMED HAVE BEEN ACCEPTED BY THE HONBLE BOMBAY HIGH COURT LEADING TO SUBSTANTIAL QUESTION OF LAW. WHEN THE HIGH COURT ADMITS SUBSTAN TIAL QUESTION OF LAW ON AN ADDITION, IT BECOMES APPARENT THAT THE ADDITION IS CERTAINLY DEB ATABLE. IN SUCH CIRCUMSTANCES PENALTY CANNOT BE LEVIED U/S 271(1) AS HAS BEEN HELD IN SEVE RAL CASES INCLUDING RUPAM MERCANTILE VS. DCIT [(2004) 91 ITD 237 (AHD) (TM)] AND SMT.RAMILA RATILAL SHAH VS. ACIT [(1998) 60 TTJ (AHD) 171]. THE ADMISSION OF SUBSTANTIAL QUESTION OF LAW BY THE HONBLE HIGH COURT LENDS CREDENCE TO THE BONA FIDES OF THE ASSESSEE IN CLAIMING DEDUCTION. ONCE IT TURNS OUT THAT THE CLAIM OF THE ASSESSEE COULD HAVE BEEN CONS IDERED FOR DEDUCTION AS PER A PERSON PROPERLY INSTRUCTED IN LAW AND IS NOT COMPLETELY DE BARRED AT ALL, THE MERE FACT OF CONFIRMATION OF DISALLOWANCE WOULD NOT PER SE LEAD TO THE IMPOSITION OF PENALTY. SINCE THE ADDITIONS, IN RESPECT OF WHICH PENALTY HAS BEEN UPH ELD IN THE PRESENT PROCEEDINGS, HAVE BEEN HELD BY THE HONBLE HIGH COURT TO BE INVOLVING A SUBSTANTIAL QUESTION OF LAW, IN OUR CONSIDERED OPINION, THE PENALTY IS NOT EXIGIBLE UND ER THIS SECTION. WE, THEREFORE, ORDER FOR THE DELETION OF PENALTY. 5. IT WAS A SUBMISSION THAT BASICALLY, THE ASSESSEE IS CHALLENGING THE LEVY OF PENALTY ON THE GROUND THAT THE ISSUES, ON W HICH, THE PENALTY HAS BEEN LEVIED, HAVE BEEN CHALLENGED IN THE APPEAL BEF ORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT HAS ADMITTED THE S UBSTANTIAL QUESTIONS OF LAW AND THEREFORE, THE ISSUES BEING DEBATABLE, N O PENALTY IS LEVIABLE. IT WAS SUBMITTED BY THE LD.DR THAT THE DISTINCT FACTOR IS IN THOSE CASES, THE PENALTY WAS LEVIED U/S.271(1)(C), WHEREAS, IN THE A SSESSEES CASE, IT IS U/S.158BFA(2) OF THE ACT. 6. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A) 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 8. ADMITTEDLY, THE PROVISIONS OF SEC.158BFA(2) IS I N PARI MATERIA WITH THE PROVISIONS OF SEC.271(1)(C) OF THE ACT. THEREF ORE, THE DECISION RENDERED BY THE HONBLE BOMBAY HIGH COURT AND IN RE SPECT OF THE PENALTY IT (SS) A NO.1/CHNY/2012 :- 4 -: U/S.271(1)(C) OF THE ACT WOULD VERY MUCH BE APPLICA BLE TO PENALTY U/S.158BFA(2). THIS BEING SO, AS IT IS NOTICED THA T THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NAYAN BUILDERS AN D DEVELOPERS, REFERRED TO SUPRA, AS ALSO THE HONBLE DELHI HIGH COURT IN T HE CASE OF CIT VS. LIQUID INVESTMENT LIMITED, IN I.T.A.NO. 240/2009 VIDE ITS ORDER DATED 5.10.2010, HAS CLEARLY HELD THAT WHERE THE HONBLE HIGH COURT HAS ADMITTED THE SUBSTANTIAL QUESTIONS OF LAW U/S.260A. THIS ITSELF SHOWS THAT ISSUE IS DEBATABLE. CONSEQUENTLY, NO PENALTY IS PERMISSIBLE U/S.271(1) (C) OF THE ACT. THIS BEING SO, RESPECTFULLY FOLLOWING THE PRI NCIPLES LAID DOWN BY THE HONBLE BOMBAY HIGH COURT REFERRED TO SUPRA AS THE SUBSTANTIAL QUESTIONS OF LAW AND THE ISSUES IN THIS APPEAL HAS BEEN ADMIT TED BY THE HONBLE MADRAS HIGH COURT IN THE ASSESSEES OWN CASE REFERR ED TO SUPRA, IT IS HELD THAT THE ISSUES BEING DEBATABLE, PENALTY U/S.158BFA (2) R.W.S.158BFA(3) CANNOT BE LEVIED AND CONSEQUENTLY, THE SAME STANDS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH DAY OF MARCH, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER IT (SS) A NO.1/CHNY/2012 :- 5 -: /CHENNAI, 4 /DATED: 25 TH MARCH, 2019. TLN , *56 76 /COPY TO: 1. ) /APPELLANT 4. 8 /CIT 2. *+) /RESPONDENT 5. 6 * /DR 3. 8 ( ) /CIT(A) 6. /GF