Deputy Commissioner of Income-tax, Ahmednagar V. Epitome Components Ltd., Ahmednagar

MA 80/PUN/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6330 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 28-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C D UPASANI
• Keywords: Bonafide belief
• Section: 80IB; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / MA NO. 80 /PUN/2017 (ARISING OUT OF ITA NOS. 23 TO 25 /PUN/2015) / ASSESSMENT YEARS : 200 3 - 04 TO 2005 - 06 DEPUTY COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR ....... / APPLICANT / V/S. EPITOME COMPONENTS LTD., G - 17, MIDC INDUSTRIAL AREA, AHMEDNAGAR PAN : AAACE5491L / RESPONDENT ASSESSEE BY : S HRI C.D. UPASANI REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 0 2 - 02 - 2018 / DATE OF PRONOUNCEMENT : 14 - 0 2 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE REVENUE U/S. 254(2) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) 2 MA NO. 80/PUN/2017 SEEKING RECALLING OF ORDER OF TRIBUNAL IN ITA NOS. 23 TO 25/ PUN/2015 DATED 10 - 02 - 2017 FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. 2. SHRI AJAY MODI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE TRIBUNAL VIDE ORDER DATED 10 - 02 - 2017 HAS DELETED THE LEVY OF PENALTY U/S. 27 1(1)(C) FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE PENALTY WAS LEVIED AS THE ASSESSEE HAD CLAIMED THE BENEFIT OF DEDUCTION U/S. 80IB(10) BY WRONGLY CLAIMING ITSELF TO BE A SMALL SCALE INDUSTRIAL UNIT (SSI). THE LD. DR SUBMITTED THAT THE COST OF MAC HINERY INCREASED FROM RS.2,33,37,732/ - TO RS.6,53,02,221/ - IN ASSESSMENT YEAR 2004 - 05 AND TO RS.7,64,36,119/ - IN ASSESSMENT YEAR 2005 - 06. TH E INVESTMENT IN PLANT AND MACHINERY BY ASSESSEE EXCEEDS THE QUANTUM OF RS.3 CRORES PRESCRIBED INITIALLY FOR ASSESSM ENT YEARS 2004 - 05 AND 2005 - 06. THE LIMIT WAS SUBSEQUENTLY REDUCED TO RS.1 CRORE VIDE NOTIFICATION DATED 10 - 12 - 1999. THUS, THERE WAS NO CONFUSION REGARDING ASSESSEES STATUS OF NOT A SMALL SCALE INDUSTRY. THE LD. DR POINTED THAT THE TRIBUNAL WHILE DECIDI NG PENALTY APPEALS OF ASSESSEE FOR ALL THE THREE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 MERELY ON THE BASIS OF REASONING FOR ASSESSMENT YEAR 2003 - 04 DELETED PENALTY U/S. 271(1)(C) IN ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 , AS WELL. THE FA CTS IN ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 ARE DIFFERENT FROM ASSESSMENT YEAR 2003 - 04. THE LD. DR PRAYED FOR RECALLING THE ORDER DATED 10 - 02 - 2017 IN RESPECT OF ASSESSM ENT YEARS 2004 - 05 AND 2005 - 06 AND TO DECIDE THE APPEAL S OF REVENUE AFRESH. 3. ON THE OTHER HAND SHRI C.D. UPASANI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THERE IS NO ERROR APPARENT ON RECORD IN THE ORDER OF TRIBUNAL DATED 10 - 02 - 2017. THE TRIBUNAL HAS DECIDED THE APPEALS OF THE 3 MA NO. 80/PUN/2017 ASSESSEE ON MERITS. THE LD. AR POINTED THAT IN PARA 9 OF THE ORDER THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE HAD CORRECTLY DISCLOSED THE QUANTUM OF INVESTMENT IN PLANT AND MACHINERY IN RETURN OF INCOME. THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT IT IS ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB (10) OF THE ACT , THOUGH VIDE NOTIFICATION DATED 10 - 12 - 1999 , T HE ASSESSEE CEASED TO BE SSI. THERE WAS NO FAILURE ON THE PART OF ASSESSEE IN DISCLOSING THE TRUE AND COMPLETE FACTS. THE LD. AR SUBMITTED THAT EVEN OTHERWISE THE CASE OF ASSESSEE IS SQUARELY C OVERED BY THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS (P.) LTD. REPORTED AS 322 ITR 158. 4. BOTH SIDES HEARD. THE DEPARTMENT HAS FILED PRESENT MISCELLANEOUS APPLICATION FOR RECALLI NG THE ORDER OF TRIBUNAL DATED 10 - 02 - 2017 IN RESPECT OF ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE TRIBUNAL HAS DISMISSED THE APPEAL OF REVENUE AGAINST DELETING OF PENALTY LEVIED U/S. 271(1)(C) BY COMMISSIONER OF INCOME TAX (APPEALS) IN THE THREE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2003 - 04 TO 2005 - 06. THE SUBMISSIONS OF REVENUE IN SHORT ARE THAT THE TRIBUNAL HAS ERRED IN DECIDING THE APPEALS OF REVENUE FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 BASED ON THE FACTS OF ASSESSMENT YEAR 2003 - 04. AFTER HAVING P ERUSED THE ORDER OF TRIBUNAL DATED 10 - 02 - 2017 , WE ARE OF CONSIDERED VIEW THAT THE DEPARTMENT HAS WRONG LY READ THE ORDER OF TRIBUNAL . THE TRIBUNAL HAS CATEGORICALLY OBSERVED THAT THE ASSESSEE HAS CORRECTLY DISCLOSED THE QUANTUM OF INVESTMENT IN PLANT AND M ACHINERY IN THE RETURN OF INCOME. THUS, THESE OBSERVATION IS APPL Y TO ALL THE THREE ASSESSMENT YEARS UNDER APPEAL. THE RELEVANT EXTRACT OF THE ORDER OF TRIBUNAL IS REPRODUCED HERE - IN - BELOW : 4 MA NO. 80/PUN/2017 9. IN THE PRESENT CASE, THE ASSESSEE HAD GIVEN REASON FOR CLAIMING DEDUCTION U/S 80IB. THE ASSESSEE HAD CORRECTLY DISCLOSED THE QUANTUM OF INVESTMENT IN PLANT AND MACHINERY IN THE RETURN OF INCOME. THE CONDUCT OF THE ASSESSEE CLEARLY SHOW THE BONA - FIDE BELIE F THAT THE ASSESSEE HAD ABOUT ITS ELIGIBILITY FOR CLAIMING DEDUCTION U/S 80IB OF THE ACT. ALTHOUGH VIDE SUBSEQUENT NOTIFICATION DATED 10.12.1999, THE ASSESSEE CEASED TO BE SSI UNDERTAKING. THE ASSESSEE HAD MADE FULL DISCLOSURE OF INCOME IN RETURN OF INCOME , AS WELL AS BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS. THEREFORE, IN OUR CONSIDERED OPINION, IT IS NOT A CASE WHICH WOULD ATTRACT LEVY OF PENALTY. WE CONCUR WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY. 5. THE TRIBUNAL WHILE CONFIRMING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING LEVY OF PENALTY U/S. 271(1)(C) HAS ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PET ROPRODUCTS (P.) LTD. (SUPRA). 6. THUS, WE DO NOT FIND ANY MISTAKE MUCH LESS ANY APPARENT MISTAKE IN THE ORDER OF TRIBUNAL IN DELETING LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DEVOID OF ANY MERIT. ACCORDINGLY, THE SAME IS DISMISSED. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 14 TH DAY OF FEBRUARY, 201 8 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 14 TH FEBRUARY, 2018 RK 5 MA NO. 80/PUN/2017 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - IT/TP, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE