The ACIT, Circle-5,, Ahmedabad v. Parle International Pvt. Ltd.,, Ahmedabad

ITA 1084/AHD/2006 | 1990-1991
Pronouncement Date: 19-03-2010 | Result: Dismissed

Appeal Details

RSA Number 108420514 RSA 2006
Bench Ahmedabad
Appeal Number ITA 1084/AHD/2006
Duration Of Justice 3 year(s) 10 month(s) 17 day(s)
Appellant The ACIT, Circle-5,, Ahmedabad
Respondent Parle International Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 19-03-2010
Date Of Final Hearing 11-03-2010
Next Hearing Date 11-03-2010
Assessment Year 1990-1991
Appeal Filed On 02-05-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI BHAVNESH SAINI JM & SHRI A.N. PAHUJA A M ITA NO.1084/AHD/2006 (ASSESSMENT YEAR 1990-91) ACIT CIRCLE-5 VS PARLE INTERNATIONAL LTD AHMEDABAD 101 GIDC ESTATE VATVA AHMEDABAD [PAN : AAAC9018Q] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GOVIND SINGHAL DR ASSESSEE BY : SHRI JP SHAH AR O R D E R A.N. PAHUJA : THIS IS AN APPEAL BY THE REVENUE AGAINST AN ORDER DATED 10-02- 2006 OF THE LD.CIT(A)-XI AHMEDABAD CANCELLING PEN ALTY OF RS. 4 60 960/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 (HEREINAF TER REFERRED TO AS THE ACT). 2. FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOME OF RS. 2 12 22 297/- WAS FILED ON 31-12-1990 BY THE ASSESSEE MANUFACTURING MANGO PULP AND NON ALCOHOLIC BEVERAGES. THE ASSESS MENT WAS SUBSEQUENTLY COMPLETED U/S 143(3) OF THE ACT ON AN INCOME OF RS. 5 31 23 056/- VIDE ORDER DATED 26-03-1993. INTER ALIA AN ADDITION OF RS. 8 53 630/- WAS MADE ON ACCOUNT OF SUPPRESSION OF PROFITS IN THE CHITOOR UNIT ON TH E GROUND THAT PERCENTAGE OF YIELD WAS LOWER[44.71%] AS AGAINST 48.77% IN THE AY 1989-90 WHILE IN OTHER UNITS YIELD WAS ABOVE 45% .ACCORDINGLY THE ASSESSI NG OFFICER[AO IN SHORT] APPLIED YIELD OF 45% AND ADDED THE AFORESAID AMOUN T. ON APPEAL THE LD. CIT(A) DELETED THE ADDITION THE AO HAVING NOT POINTED OUT ANY DEFECTS IN THE BOOKS WHILE THE DIFFERENCE BETWEEN 44.71% & 45% WAS VERY NARROW. ON FURTHER APPEAL BY THE REVENUE THE ITAT VIDE ORDER DATED 29-08-20 00 INTER ALIA SET ASIDE THE ISSUE OF ADDITION ON ACCOUNT OF YIELD TO THE FILE OF THE AO. IN THE SUBSEQUENT ASSESSMENT COMPLETED VIDE ORDER DATED 18-03-2002 THE AO MADE AN ADDITION OF RS.50 18 230/- ON ACCOUNT OF SUPPRESSION IN SALE S THE ASSESSEE HAVING NOT FURNISHED THE DETAILS DESIRED BY THE AO CONSIDERIN G THE YIELD OF 46.5% OF THE ITA NO.1084/AHD/2006 2 MANGO PULP AS REASONABLE. ON APPEAL THE LD.CIT(A) RESTRICTED THE ADDITION TO RS. 8 53 630/- IN THE LIGHT OF DECISIONS RELATING T O POWERS OF ENHANCEMENT BY THE ITAT ON REMAND THEREBY UPHOLDING THE ESTIMATE OF Y IELD OF 45% MADE BY THE AO IN THE ORIGINAL ASSESSMENT. ON APPEAL THE ITAT VI DE THEIR ORDER DATED 19-12- 2008 IN ITA NO.1723/AHD/2004 DIRECTED THE AO TO ADO PT THE YIELD OF 45%. MEANWHILE IN RESPONSE TO A SHOW CAUSE NOTICE DATED 16-02-2005 ISSUED BEFORE LEVY OF PENALTY ACCORDING TO THE AO THE ASSESSEE DID NOT FURNISH ANY REPLY. IN THE ABSENCE OF ANY EXPLANATION THE AO IMPOSED A PE NALTY OF RS. 4 60 960/- @100% OF THE TAX SOUGHT TO BE EVADED ON THE AMOUNT OF RS.8 53 630/- UPHELD BY THE LD.CIT(A) . 3. ON APPEAL LD.CIT(A) CANCELLED THE PENALTY INTER ALIA ON THE GROUND THAT THE TWO APPELLATE AUTHORITIES HAD EXPRESSED DIFFERE NT OPINIONS ON THE ISSUE. THE FINDINGS OF THE LD. CIT(A) ARE AS UNDER: 4. I HAVE PERUSED THE SUBMISSIONS AND THE DECISION S REFERRED TO ABOVE AS RELIED UPON BY THE AR OF THE APPELLANT CAREFULLY. I HAVE ALSO PERUSED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE PENALTY ORDER. 4.1 IT IS SEEN THAT THE APPELLANT HAD FILED REPLY T O THE PENALTY NOTICE ISSUED BY THE A.O. IT APPEARS THIS WAS NOT NOTICED BY THE A.O. AND THEREFORE HE WAS UNDER THE IMPRESSION THA T THE APPELLANT DID NOT FILE ANY REPLY TO PENALTY NOTICE ISSUED BY HIM CALLING FOR AN EXPLANATION. 4.2 FURTHER IT IS SEEN THAT WHEN THERE WAS AN APPE AL AT THE TIME OF FIRST ROUND OF ASSESSMENT THE APPELLANT HAD FAV OURABLE ORDER. WHEREAS AT THE TIME OF SECOND ROUND OF APPEAL BEFO RE CIT(A) AGAINST THE SECOND ROUND ASSESSMENT SOME RELIEF WA S GRANTED BY CIT(A) AND SOME ADDITION WAS CONFIRMED. THE PENALT Y LEVIED WHICH IS THE SUBJECT MATTER OF APPEAL NOW IS AGAINS T ABOVE SUCH CONFIRMED PART OF ADDITION. THEREFORE THE SAME IS SUE WAS DECIDED BY THE TWO APPELLATE AUTHORITIES OF THE SAME RANK D IFFERENTLY AT DIFFERENT OCCASIONS. 4.3 THEREFORE CONSIDERING ALL THE FACTS AND CIRCUM STANCES OF THE CASE AND ALSO AFTER PERUSING THE CASE LAWS CITED BY THE AR I AM OF THE OPINION THAT THE ALLEGED ADDITION WHICH WAS CON FIRMED IN PART BY THE CIT(A) DOES NOT CONCLUSIVELY PROVE THAT THE APP ELLANT HAD ITA NO.1084/AHD/2006 3 CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTIC ULARS. HENCE I AM CONSTRAINED NOT TO ACCEPT THE A.OS DECISION WIT H REGARD TO LEVY OF PENALTY. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAIN ST THE AGAINST THE AFORESAID FINDINGS OF LD.CIT(A). THE LD. DR SUPPORTED THE ORD ER OF THE AO WHILE THE LD. AR ON BEHALF THE ASSESSEE SUPPORTED THE FINDINGS OF TH E LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE FACTS OF THE CASE. UNDISPUTEDLY REPLY DATED 07-02-2005 OF THE ASSESSE E RECEIVED IN THE OFFICE OF ACIT ON 08-02-2005 HAS NOT BEEN CONSIDERED BY THE A O. SINCE THE AO IMPOSED PENALTY WITHOUT CONSIDERING THE EXPLANATION OF THE AO ORDINARILY WE WOULD HAVE RESTORED THE MATTER TO THE FILE OF THE AO. HOWEVER THIS MATTER BEING QUITE OLD RELATING TO THE AY 1990-91 CONSIDERING THE FACTS A ND CIRCUMSTANCES OF THE CASE AS ALSO THE LD. CIT(A) HAVING CONSIDERED THE EXPLAN ATION OF THE ASSESSEE NO USEFUL PURPOSE WOULD BE SERVED IN REMANDING THE MAT TER AT THIS STAGE. UNDISPUTEDLY PENALTY FOR FURNISHING INACCURATE PAR TICULARS OF INCOME HAS BEEN IMPOSED ON THE BASIS OF ESTIMATED ADDITION OF RS. RS. 8 53 630/- APPLYING THE YIELD OF 45% AS AGAINST 44.71% DECLARED BY THE ASSE SSEE IN THEIR CHITOOR UNIT. THE EXPRESSION 'HAS CONCEALED THE PARTICULARS OF IN COME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEF INED EITHER IN SECTION 271 OR ELSEWHERE IN THE ACT. HOWEVER NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTANCES IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM THE RETURN. ACCORDING TO LAW LEXICON THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS C ON+CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO C OVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF ; TO WITHHOLD KNOWLEDGE OF . THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOM E OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME-TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY 'INACCURATE' HAS BEEN DEFI NED AS : ITA NO.1084/AHD/2006 4 'NOT ACCURATE NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT COPY OR TRANSCRIPT.' 5.1 THE PENALTY U/S 271(1)(C) OF THE ACT I S LEVIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH IS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS WELL S ETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AN D DISTINCT AND AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF ANANTHRAMAN VE ERASINGHAIAH & CO. VS. CIT - 123 ITR 457; THE FINDING IN THE ASSESSMENT PR OCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF THE PENA LTY PROCEEDINGS. IT IS THEREFORE NECESSARY TO REAPPRECIATE AND RECONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETHER THE ADDITION MADE IN THE QUANTUM PROC EEDINGS ACTUALLY REPRESENTS THE CONCEALMENT ON THE PART OF THE ASSESSEE AS ENVI SAGED IN SEC. 271(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SAID PROVISIONS. THE ISSUE AS TO WHETHER OR NOT THE YIE LD REFLECTED BY THE ASSESSEE IS CORRECT IS HIGHLY DEBATABLE. IN THE CASE UNDER CONS IDERATION IT IS APPARENT THAT ALL THE RELEVANT FACTS HAVE BEEN DISCLOSED BY THE A SSESSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IT IS WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE PURPOSE OF IMPOSING PENALTY U/S 271(L)(C) ARE DIFFE RENT THAN THOSE APPLIED FOR MAKING OR CONFIRMING THE ADDITIONS. WHEN THE ASSESS EE HAS MADE A PARTICULAR CLAIM IN THE RETURN OF INCOME AND HAS ALSO FURNISHE D ALL THE MATERIAL FACTS RELEVANT THERETO THE REJECTION OF SUCH CLAIM CANNOT AUTOMAT ICALLY LEAD TO THE CONCLUSION THAT THERE WAS CONCEALMENT OF PARTICULARS OF HIS IN COME BY THE ASSESSEE OR FURNISHING OF INACCURATE PARTICULARS THEREOF . WHAT IS TO BE SEEN IS WHETHER THE SAID CLAIM MADE BY THE ASSESSEE WAS BONA-FIDE AND W HETHER ALL THE MATERIAL FACTS RELEVANT THERETO HAVE BEEN FURNISHED AND ONCE IT IS SO ESTABLISHED THE ASSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENA LTY U/S 271(L)(C) OF THE ACT. IN ORDER TO EXAMINE THE CASE OF PENALTY ONE HAS PR IMARILY TO SEE THE NATURE OF CONCEALMENT THE EXPLANATION OFFERED BY THE ASSESSE E HIS CONDUCT ETC. THESE ARE ESSENTIALLY THE MATTERS WHICH ARE REQUIRED TO B E GONE INTO WITH A VIEW TO FIND ITA NO.1084/AHD/2006 5 OUT WHETHER OR NOT ANY CASE AS CONTEMPLATED IN SEC TION 271(1)(C) IS MADE OUT SO AS TO EXERCISE THE DISCRETION OF IMPOSING THE PENAL TY ON THE ASSESSEE . SINCE ALL THE MATERIAL FACTS RELEVANT TO THE SAID CLAIM HAD B EEN FURNISHED BY THE ASSESSEE IN OUR OPINION IT IS NOT A FIT CASE TO ATTRACT THE LEVY OF PENALTY U/S 271(L)(C) OF THE ACT. A MERE REJECTION OF THE CLAIM OF THE ASSESSEE BY RELYING ON DIFFERENT INTERPRETATIONS DOES NOT AMOUNT TO CONCEALMENT OF T HE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. WHEN TWO VIEWS ARE POSSIBLE NO PENALTY CAN BE IMPOSED IS A PRINC IPLE THAT HAS BEEN ENUNCIATED IN THE DECISION IN THE CASE OF CIT V. P.K. NARAYA NAN [1999] 238 ITR 905 (KER). 5.2 IN THE LIGHT OF AFORESAID DECISION ESPECIA LLY WHEN IN THE CASE UNDER CONSIDERATION ALSO ADDITION HAS BEEN MADE MERELY O N ESTIMATING THE YIELD WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. CIT(A) TH AT THIS IS NOT A CLEAR CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME. THE HO NBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. METAL PRODUCTS OF INDIA [1984] 150 ITR 714 HAS OBSERVED THAT THE ADDITION IF MADE ON ESTIMATE UNDE R THE PROVISO TO SECTION 145(1) OF THE ACT BY ADOPTING THE VIEW THAT GROSS P ROFIT SHOWN IN THE BOOKS OF ACCOUNT WAS TOO LOW THEN THAT DOES NOT AUTOMATICAL LY LEAD TO THE CONCLUSION THAT THERE WAS FAILURE TO RETURN THE CORRECT INCOME BY M EANS OF FRAUD OR GROSS OR WILFUL NEGLECT. THE PROVISIONS OF SEC. 271(1)(C) OF THE AC T ARE NOT ATTRACTED IN CASES WHERE THE INCOME OF AN ASSESSEE IS ASSESSED ON ESTI MATE BASIS AND ADDITIONS ARE MADE THEREIN.[CIT VS. SANGRUR VANASPATI LTD. 30 3 ITR 53(PUNJAB & HARYANA) & CIT VS. DHILLON RICE MILLS (2002) 256 ITR 447 (P&H)] . 5.3. IN VIEW OF THE FOREGOING WE ARE OF THE OPI NION THAT SINCE THE DIFFERENCE IN ESTIMATES WAS BASED ON A DIFFERENCE OF OPINION AND THERE WAS NO POSITIVE PROOF REGARDING CONCEALMENT OF INCOME BY THE ASSESS EE WE HAVE NO HESITATION IN CONCLUDING THAT IT IS NOT A CASE FIT FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ACCORDINGLY WE UPHOLD THE FINDINGS OF THE LD. CIT (A). THEREFORE GROUND NO.1 DISMISSED. ITA NO.1084/AHD/2006 6 6. GROUND NOS. 2 & 3 IN THE APPEAL BEING GENERAL IN NATURE DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE THEREFORE DISMI SSED. 7. IN THE RESULT APPEAL IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19TH DAY OF MARCH 2010. SD/- SD/- (BHAVNESH SAINI) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED :19TH MARCH 2010 COPY TO: 1. THE ASSESSEE 2. ACIT CIRCLE-5 AHMEDABAD 3. CIT(A)-XI AHMEDABAD 4. CIT-CONCERNED AHMEDABAD BY ORDER 5. DR A BENCH DEPUTY REGISTRAR ITAT AHMEDABAD