M/s. Veritas Software India Pvt. Ltd., Pune v. DCIT, Pune

ITA 1299/PUN/2007 | 2002-2003
Pronouncement Date: 27-08-2010 | Result: Allowed

Appeal Details

RSA Number 129924514 RSA 2007
Assessee PAN AAACV6015F
Bench Pune
Appeal Number ITA 1299/PUN/2007
Duration Of Justice 2 year(s) 10 month(s) 19 day(s)
Appellant M/s. Veritas Software India Pvt. Ltd., Pune
Respondent DCIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-08-2010
Assessment Year 2002-2003
Appeal Filed On 08-10-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 1299/PN/2007 (ASSTT. YEAR : 2002-03) M/S. VERITAS SOFTWARE INDIA PVT. LTD. VRINDAVAN SOCIETY RANGE HILLS PUNE 411 020 PAN: AAACV6015F . APPELLANT V. DCIT CIRCLE 7 PUNE [ . RESPONDENT APPELLANT BY : SHRI S.U. PATHAK RESPONDENT BY : SHRI. SANTOSH KUMAR ORDER PER D. KARUNAKARA RAO AM THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE ORD ER OF THE CIT(A)- III PUNE DT. 25.7.2007 FOR THE A.Y. 2002-03. GROUNDS OF APPEAL READ AS UNDER : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE TO EACH OTHER - ON FACTS AND IN LAW 1] THE LEARNED CIT(A) ERRED IN CONFIRMING LEVY OF PENALTY U/S 271(1)(C ) IN RESPECT OF DISALLOWANCE OF DEDUCTION U/S 80G. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASS ESSEE HAD INTENTIONALLY MADE A FALSE CLAIM BY CLAIMING HIGHER DEDUCTION U/S 80G AND THEREFORE THE LEVY OF PENALTY WAS JUSTIFIED. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - A. THE ASSESSEE COMPANY HAD COMMITTED A BONA FIDE MISTAKE IN CLAIMING HIGHER DEDUCTION U/S 80G. B. THE ASSESSEES TAX AUDITOR ALSO HAS NOT POINTED OUT THE INADMISSIBILITY OF THE DEDUCTION CLAIMED UNDER SECT ION 80G. C. THE ASSESSEE COMPANY HAD NO INTENTION TO CONC EAL ITS INCOME OR FILE INACCURATE PARTICULARS THEREOF AND THEREFORE NO PENALTY SHOULD BE LEVIED. 2. IN THE BEGINNING OF THE PROCEEDINGS THE LD. COUN SEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE MADE DONATION OF RS.9 6 2 431 TO JANKALYAN SAMITEE FOR GUJARAT EARTHQUAKE VICTIMS. THESE PAYMENTS ARE FU LLY EXEMPT IF THE DONATIONS ARE MADE DURING A SPECIFIED PERIOD I.E. 26.1.2001 TO 3 0.9.2001. DURING THE ASSESSMENT PROCEEDINGS THE A.O FOUND THE IMPUGNED D ONATION WAS NOT MADE DURING THE SPECIFIED PERIODS MENTIONED ABOVE. THERE FORE THE A.O. RESTRICTED THE ITA NO1299/N/2007 M/S. VERITAS SOFTWARE INDIA PVT. LTD. A.Y.2002-03 2 DEDUCTION TO 50% ONLY. THERE WAS NO LITIGATION ON T HIS ADDITION BEFORE THE APPELLATE AUTHORITY. IN THIS REGARD THE AO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C ) AND LEVIED PENALTY AS PER THE ORDER DT. 28.9.2006. DURING T HE FIRST APPELLATE PROCEEDINGS ASSESSEE DID NOT GET RELIEF WITH REGARD TO THIS CLAIM RELATING TO THE SAID DONATION AND THEREFORE FILED AN APPEAL BEFORE THIS TRIBUNAL ON THIS ISSUE. 3. DURING THE PROCEEDINGS BEFORE US LD COUNSEL NARRATED THAT THE ASSESSEE HAS DISCLOSED THE RELEVANT INFORMTION FULLY THAT THE CLAIM MADE BY THE ASSESSEE IS A BONA FIDE CLAIM AND THE SAME IS EVIDENT FROM THE FACT OF DISC LOSURE GIVEN BY THE AUDITORS IN THE AUDIT REPORT U/S 44AB AS WELL AS IN T HE RETURN OF INCOME. THE COUNSEL FURTHER ARGUED STATING THAT IN CASES OF BONA F IDE IGNORANCE OF LAW THE PENALTY SHOULD NOT BE IMPOSED. FOR THIS HE RELIED O N THE REPORTED JUDGMENT OF MUMBAI BENCH IN THE CASE OF SUNILCHANDRA VOHRA 32 SO T 365. HE FURTHER RELIED ON PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF SIDHARTHA ENTERPRISES FOR THE PROPOSITION THAT WHEN THE ADDITION IS RESULTED OUT OF A MISTAKE THE PENALTY WILL NOT BE LEVIED U/S. 271(1)(C). FURTHER THE COUNSEL RELIED ON THE CO-ORDINATE BENCH DECISION IN THE CASE OF SHRI RAM BHAGATRAM SADHWANI ITA NO. 380/PN/2008 FOR THE A.Y. 2004-05 FOR THE PROPOSITION THAT THE MISTAKES MA DE BY THE ASSESSEE IN THE ANNUAL ACCOUNT WHICH RESULTED IN MAKING AN ADDITION OF INCOME SHALL NOT ATTRACT PENALTY U/S. 271(1)(C ). ON THE OTHER HAND THE LD . D.R. FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AND ARGUED VEHEMENTLY STATIN G THAT THIS IS THE CASE WHERE ASSESSEE MADE A CLAIM OF DEDUCTION U/S. 80 G AT THE RATE OF 100% OF THE DONATION WHEN HE IS ACTUALLY ENTITLED FOR 50% OF THE AMOUNT OF DONATION. THIS IS A CASE OF CLAIM OF DEDUCTION WHEN HE IS NOT ENTITLED FOR SUCH A CLAIM. 4. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RELEVANT CITATIONS QUOTED BY THE PARTIES. IT IS A FACT THAT THE RELEVANT INFORMATION WAS DISCLOSED IN THE RETURN OF INCOME/AUDITED REPORTS BUT THE AUDITORS HAVE ALSO REMA RKED IN COLUMN NO 26 OF FORM 3CD AT PAGE 25 OF THE PAPER BOOK AND THE AUDIT RE PORT THAT THE ASSESSEE IS ENTITLED FOR FULL DEDUCTION OF RS.9 62 431/-. SO I T IS DEFINITELY MISTAKEN CERTIFICATION BY THE AUDITORS AND THE ASSESSEE FILED HIS RETURN OF I NCOME. CONSIDERING THE ENTRIES IN SUCH AUDITED REPORTS ASSESSEE CANNOT BE FAULTED WITH THE MISTAKES MADE IN THE RETURN OF INCOME. THUS WE ARE OF THE OPINION IT IS A MISTAKE THAT ASSESSEE CLAIMED 100% DEDUCTION IN RESPECT OF DONATION INSTEAD OF 50% WITHOUT REALIZING THE FACT THAT THE SAID DONATION TO THE BENEFITS OF THE VICTI MS OF GUJARATH EARTH QUAKE BEYOND THE SPECIFIED PERIOD. CONSIDERING THESE FACTS THAT I T IS A MISTAKE WE ARE OF THE ITA NO1299/N/2007 M/S. VERITAS SOFTWARE INDIA PVT. LTD. A.Y.2002-03 3 OPINION THAT THE DECISION WE HAVE TAKEN IN THE CASE OF SHRI RAM BHAGATRAM SADHWANI (SUPRA) DECIDED RELYING ON THE DECISION IN THE CASE OF SIDHARTHA ENTERPRISES (SUPRA) AND OTHERS CITED BY THE COUNSEL WE ARE OF THE OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY . ACCORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH DAY OF AUG UST 2010. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 27TH AUGUST 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -IV PUNE 4. THE CIT(A) -III PUNE 4. THE D.R. B BENCH PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE