DCIT, Pune v. Seven Star Electropode Pvt. Ltd., Pune

ITA 1071/PUN/2010 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 107124514 RSA 2010
Assessee PAN AACCS3610D
Bench Pune
Appeal Number ITA 1071/PUN/2010
Duration Of Justice 1 year(s) 8 month(s) 11 day(s)
Appellant DCIT, Pune
Respondent Seven Star Electropode Pvt. Ltd., Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2012
Date Of Final Hearing 27-02-2012
Next Hearing Date 27-02-2012
Assessment Year 2006-2007
Appeal Filed On 19-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO. 1071/PN/2010 (ASSTT. YEAR : 2006-07 ) DY. COMMISSIONER OF INCOME - TAX ... APPELLANT CIRCLE 10 AKURDI PUNE V. SEVEN STAR ELECTRODES PVT. LTD. RESPONDENT GAT NO. 286 NANEKARWADI CHAKAN TAL. KHED PUNE 410501 PAN : AACCS3610D APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : C.V. CHITALE DATE OF HEARING :27/02/12 DATE OF PRONOUNCEMENT : -3-12 ORDER PER I.C. SUDHIR JM THE REVENUE HAS QUESTIONED THE FIRST APPELLATE O RDER WHEREBY THE LD CIT(A) HAS DELETED PENALTY OF RS.62 67 570/- LEV IED U/S. 271(1)(C ) OF THE ACT BY THE A.O. 2. THE RELEVANT FACTS ARE THAT IN ITS RETURN OF IN COME FILED ON 29.11.2006 THE ASSESSEE COMPANY HAD APPENDED A NOT E TO THIS EFFECT THAT THE ASSESSEE HAD MADE RE-PAYMENT OF DEFERRED SALES TAX LOAN LIABILITY AND AS PER OPINION OBTAINED FROM ITS COU NSEL THE SAME IS NOT TAXABLE AS INCOME. SUBSEQUENTLY SURVEY U/S. 133A OF THE ACT TOOK PLACE AT THE PREMISES OF THE ASSESSEE ON 6.3.2007. IN ITS STATEMENTS RECORDED DURING THE COURSE OF SURVEY THE MANAGING DIRECTOR OF THE COMPANY IN REPLY TO QUESTION NO. 11 SUBMITTED TH AT THE BENEFIT ARISING TO THE ASSESSEE IS OF RS. 1 86 20 233/- WHICH WAS NOT TREATED AS INCOME ON THE BASIS OF CERTAIN LEGAL OPINION. HOWEVER I N ORDER TO AVOID PROTRACTED LITIGATION HE WAS WILLING TO OFFER THE SAID AMOUNT FOR TAXATION. ITA . NO.1071//PN/2010 SEVEN STAR ELECTROPDE PVT. LTD. A.Y. 2006-07 PAGE OF 5 2 SUBSEQUENTLY THE ASSESSEE COMPANY SUBMITTED A REVI SED RETURN ON 28.11.2007 ENHANCING THE DECLARED INCOME TO RS. 3 92 31 188/-. THE ASSESSMENT U/S. 143(3) HAS BEEN FRAMED BY MAKING AN ADDITION OF RS. 7 00 000/- ONLY TO THE REVISED TOTAL INCOME. THE A .O HOWEVER ALSO RECORDED THAT RE-PAYMENT OF DEFERRED SALES TAX LIA BILITY DURING THE YEAR BY THE ASSESSEE HAS RESULTED IN A DIFFERENCE OF RS . 1 86 20 233.34/- WHICH WAS TO BE TREATED AS INCOME SINCE THE LIABILI TY HAD SEIZED TO EXIST TO THAT EXTENT. SINCE THE SAID AMOUNT WAS OFFERED FOR THE TAX BY THE ASSESSEE COMPANY ONLY AFTER THE SURVEY THE A.O IN ITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY OF RS. 62 67 570/- ON THE CONCEALED PARTICULARS OF INCOME OF THE ASSESSEE TO THE TUNE O F RS. 1 86 20 233/-. 3. THE LD CIT(A) HAS HOWEVER DELETED THE PENALTY B EING CONVINCED WITH THE SUBMISSION OF THE ASSESSEE. THE SAME HAS BEEN QUESTIONED BEFORE THE TRIBUNAL. 4. IN SUPPORT OF THE GROUND LD. D.R. HAS BASICALLY PLACED RELIANCE ON THE PENALTY ORDER. SHE SUBMITTED THAT THE LD CIT(A ) HAS DELETED THE PENALTY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 230 CTR 320 (SC) WITHOUT APPRECIATING THAT THE SAME IS NOT APPLICABLE UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE RELEVANT DECISION IN THE PRESENT CASE WAS DECISION OF HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS 295 ITR 244 (SC) AND IN THE CASE OF ATUL MOHAN BINDAL 317 ITR 1 (SC). 5. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT ALL THE NECESSARY INFORMATION REGARDING THE RE-PAYMENT OF DEFERRED S ALES TAX LOAN LIABILITY ITA . NO.1071//PN/2010 SEVEN STAR ELECTROPDE PVT. LTD. A.Y. 2006-07 PAGE OF 5 3 HAD BEEN FURNISHED BEFORE THE A.O. WHETHER TAX WA S LEVIABLE ON THIS RE- PAYMENT OF DEFERRED SALES TAX LOAN LIABILITY REMAI NED A DEBATABLE QUESTION AND SPECIAL BENCH WAS ALSO CONSTITUTED BY THE TRIBUNAL TO DECIDE THE ISSUE. UNDER THESE CIRCUMSTANCES THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY IN QUESTION. IN SUPPORT HE ALSO PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF THE TRIBU NAL IN THE CASE OF KANBAY SOFTWARE INDIA PVT. LTD (2009) 122 TTJ 72 AND HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) FOLLOW ED BY THE LD CIT(A). 6. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THE CONTENTION OF THE ASSESSEE THAT IT HAD DISCLOSED ALL THE NECESSAR Y AND RELEVANT INFORMATION REGARDING RE-PAYMENT OF DEFERRED SALES TAX LOAN LIABILITY TO THE A.O AND AS TO WHETHER IT IS TAXABLE OR NOT REMA INED A DEBATABLE ISSUE HAS NOT BEEN REBUTTED BY THE REVENUE BEFORE US. UN DER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LD CIT( A) HAS RIGHTLY DELETED THE PENALTY WITH THIS FINDING THAT THERE WAS NEITHE R ANY CONCEALMENT OF FURNISHING OF PARTICULARS OF INCOME NOR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE REGARDING THE R E-PAYMENT OF DEFERRED SALES TAX LOAN LIABILITY. THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) HAS BEEN PLEASED TO HOLD THAT IN ABSENCE OF ANY FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT ERRONEOUS OR FAL SE THERE WOULD BE NO QUESTION INVITING THE PENALTY U/S. 271(1)(C ) OF TH E ACT. IT WAS FURTHER HELD THAT A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RET URN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. THE HONBLE COURT HAS BEEN FURTHER PLEASED TO ITA . NO.1071//PN/2010 SEVEN STAR ELECTROPDE PVT. LTD. A.Y. 2006-07 PAGE OF 5 4 HOLD THAT MERELY BECAUSE THE 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 U/S. 271(1) (C ). IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTABLE BY THE A.O FOR ANY REASON T HE ASSESSEE WILL INVITE PENALTY U/S. 271(1)(C ) WHICH IS CLEARLY NOT THE IN TENDMENT OF THE LEGISLATURE. THUS MERELY BECAUSE IN THE PRESENT C ASE THE ASSESSEES SUBSEQUENTLY EXPRESSED THEIR WILLINGNESS TO OFFER THE SAID AMOUNT FOR TAX DURING THE COURSE OF SURVEY BY MAKING IT CLEAR THAT THERE ARE DOING SO IN ORDER TO AVOID PROTRACTED LITIGATION AND TO BUY TH E PEACE THE ASSESSEE CANNOT BE HELD LIABLE FOR LEVY OF PENALTY ON THE SA ID AMOUNT ESPECIALLY WHEN NECESSARY PARTICULARS OF WHICH WERE ALREADY DI SCLOSED IN THE ITS RETURN OF INCOME FILED. UNDER THESE CIRCUMSTANCES WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER WHICH IS WE LL SUPPORTED BY THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA). THE PUNE BENCH O F THE TRIBUNAL IN THE CASE OF KANBAY SOFTWARE PVT. LTD. (SUPRA) HAS ALSO OCCASION TO FOLLOW THE RECENT DECISION OF HONBLE SUPREME COURT IN THE CAS E OF RELIANCE PETRO PRODUCTS (PVT.) LTD. WHILE DISCUSSING THE EARLIER DECISION OF HONBLE SUPREME COURT IN THE CSE OF DHARMENDRA TEXTILES PR OCESSORS (SUPRA) RELIED UPON BY THE LD. D.R. BEFORE US. WE FIND THA T DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETR O PRODUCTS (P) LTD. IS RELEVANT UNDER THE FACTS AND CIRCUMSTANCES OF THE P RESENT CASE HENCE IT HAS BEEN RIGHTLY FOLLOWED BY THE LD CIT(A). THE FIR ST APPELLATE ORDER ON THE ISSUE IS THEREFORE UPHELD. THE GROUND IS ACCOR DINGLY REJECTED. 7. CONSEQUENTLY APPEAL IS DISMISSED. ITA . NO.1071//PN/2010 SEVEN STAR ELECTROPDE PVT. LTD. A.Y. 2006-07 PAGE OF 5 5 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH MARCH 2012. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 30TH MARCH 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT V PUNE 4. THE CIT(A)-V PUNE 5. THE D.R. A BENCH PUNE 6. GUARD FILE -TRUE COPY- BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE