PANACEA BIOTEC LIMITED,NEW DELHI V. DCIT, DELHI

ITA 5403/DEL/2024

AI Insights

The case involves Panacea Biotec Limited, which appealed against the penalty imposed by the Assessing Officer for underreporting of income in the assessment year 2017-18. The company had filed a revised income tax return, reducing its claimed loss and adjusting the tax deducted at source (TDS) based on the certification from DSIR regarding its research and development expenditures. The penalty was initially imposed for what was deemed an underreporting of income, but the company argued that all its claims were based on certified expenditures and that it had a history of revising returns based on DSIR reports without penalties. The Tribunal agreed with the assessee, noting that the revisions were voluntary and based on accurate certifications, thus removing the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312719 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: BHARTI
• Keywords: Revised return; TDS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 5403/DEL/2024 [A.Y 2017-18] Panacea Biotec Limited Vs. The Dy. C.I.T B-1, Extension, G-3, Delhi Mohan Co-operative Industrial Estate, Mathura Road, Delhi PAN: AAACP 5335 J (Appellant) (Respondent) Assessee By : Ms. Bharti, Adv Department By : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing : 29.04.2025 Date of Pronouncement : 29.04.2025 ORDER PER NAVEEN CHANDRA, AM :- This appeal by the assessee is directed against the order of the ld. NFAC, Delhi dated 24.09.2024 for A.Y 2017-18. 2 ITA No. 5403/DEL/2024 Panacea Biotec Ltd [A.Y 2017-18] 2. The solitary issue involved in this appeal relates to the confirmation by the ld. CIT(A) penalty of Rs. 3,87,514/- imposed by the Assessing Officer u/s 270A of the Income-tax Act, 1961 [the Act, for short]. 3. Facts, in brief, are that the assessee-company was incorporated on 02.02.1984 and became a Public Limited Company on 25.09.1995. The assessee company is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The assessee has been filing its Income Tax Returns since then. The company is one of India's leading research- based health management companies engaged in the business of research, development, manufacture, and marketing of branded Pharmaceutical Formulations and Vaccines. The company has products for various segments, which include pain management, diabetes management, organ transplantation, vaccines, etc. 4. For the year under consideration, the assessee-company filed its original income tax return on 29.11.2017 declaring a total loss of Rs. 73,55,80,607/- and tax deducted at source amounted to Rs. 90,13,152/, therefore, claiming a refund of Rs. 90,13,150/- thereon. Thereafter, on 30.05.2018, the assessee company filed its revised tax return reducing 3 ITA No. 5403/DEL/2024 Panacea Biotec Ltd [A.Y 2017-18] the Net total loss to Rs. 53,67,12,034/- and TDS amounted to Rs. 90,13,152/- therefore claiming a refund of Rs. 90,13,150/- thereon. Accordingly, the AO disallowed the excess deduction claimed of Rs 25,83,427/- and assessed the loss at Rs 53,41,28,607/- u/s 143(3). In the penalty proceedings u/s 270A, the AO held that the revised return filed was not suo-moto and levied penalty u/s 270A of Rs 3,87,514/- for under reporting of income. This penalty was confirmed by the CIT(A)/NAFC. 5. Aggrieved the assessee is before us. 6. The ld AR vehemently argued that during the year under consideration, the assessee company has claimed the expenditure u/s 35(2AB) of the Act amounting to Rs.50,28,74,852/- certified by the Statutory Auditors. Though the claim was certified by the auditors, the same was more than the research and development expenditure certified by the DSIR. Therefore, the assessee company while abiding with the certificate of expenditure approved by the Department of Scientific and Industrial Research amounting to Rs. 24,88,54,000/-, revised its computation before the Assessing Officer. 4 ITA No. 5403/DEL/2024 Panacea Biotec Ltd [A.Y 2017-18] 7. It is the say of the ld AR that the assessee company is following the practice of revising its return on the receipt of the certificate from the DSIR and offering the excess claim for tax while revising the return for the past many years. The return is always revised based on the Report of the Department of Scientific and industrial Research and whenever the return was revised in the past years, the same was accepted during the assessment proceedings and no penalty was levied on the assessee company as such. 8. The ld AR submitted that during the year under consideration also, the assessee company voluntarily submitted that the eligible weighted deduction u/s 35(2AB) is only Rs. 49,77,07,998/- instead of Rs. 50,28,74,852/ and accordingly revised its return during the assessment proceedings. The assessee company ab initio has not filed any inaccurate particulars in the return of income since the claim of deduction u/s 35(2AB) of the Act was based upon the Statutory Auditor's certificate. 9. The ld AR further stated that the company never had any mala fide intentions of furnishing inaccurate particulars and also all the explanations offered by the assessee company in respect of all incomes and expenses are bona fide and have been disclosed. 5 ITA No. 5403/DEL/2024 Panacea Biotec Ltd [A.Y 2017-18] 10. Per contra the ld DR relied on the order of the authorities below, 11. We have heard the rival submissions and have perused the relevant material on record. We find that that the assessee company had voluntarily revised the eligible weighted deduction of Rs. 49,77,07,998/- instead of Rs. 50,28,74,852/-. We are in agreement with the arguments of the ld. counsel for the assessee that the assessee has not filed any inaccurate particulars of its income in the return of income and its claim of deduction u/s 35(2AB) of the Act was based on statutory auditor’s certificate. The assessee company itself revises the deduction claimed as per the subsequent report of the DSIR. We are therefore, of the considered view that the penalty levied u/s 270A of the Act is not justified and we direct the AO to delete the penalty. Ground of appeal raised by the assessee is allowed. 12. In the result, appeal of assessee in ITA No. 5403/DEL/2024 is allowed. Order pronounced in open court on 29.04.2025. Sd/- Sd/- [SATBEER SINGH GODARA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 29th APRIL, 2025. 6 ITA No. 5403/DEL/2024 Panacea Biotec Ltd [A.Y 2017-18] VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order "