Dyna-K Automotive Stampings Pvt. Ltd., Pune v. DCIT, Pune

ITA 1333/PUN/2009 | 1994-1995
Pronouncement Date: 28-02-2011 | Result: Dismissed

Appeal Details

RSA Number 133324514 RSA 2009
Assessee PAN AAACD9370F
Bench Pune
Appeal Number ITA 1333/PUN/2009
Duration Of Justice 1 year(s) 3 month(s) 1 day(s)
Appellant Dyna-K Automotive Stampings Pvt. Ltd., Pune
Respondent DCIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-02-2011
Assessment Year 1994-1995
Appeal Filed On 26-11-2009
Judgment Text
IN THE INCOM E TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I. C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NOS 1333 1334 &1335/PN/09 (ASSTT. YEARS: 1994-95 1996-97 & 1997-98) DYNA K. AUTOMOTIVE STAMPINGS P.LTD. APPELLANT J-450 MIDC BHOSAR PUNE PAN AAACD9370F VS. DY. COMMISSIONER OF INCOME-TAX ... RESPONDENT CIR. 8 PUNE APPELLANT BY : S/SHRI SUNIL PATHAK & NIKHIL PATHAK RESPONDENT BY :SHRI HEMANT KUMAR L EUVA ORDER PER G.S. PANNU A.M SINCE A COMMON ISSUE IS INVOLVED IN ALL THE ABOVE CAPTIONED APPEALS THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF A COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE FACTS AND ARGUMENTS OF BOTH THE PARTIES BEIN G IDENTICAL IN ALL THE APPEALS WE SHALL TAKE UP ITA NO 1335/PN/09 FILED B Y THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 1997-98 IN ORDER TO APPRECIATE T HE CONTROVERSY. ITA NO 1335/PN/09 IS AN APPEAL PREFERRED BY THE ASSESSEE A GAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III PUNE DATE D 4.8.2009 CONFIRMING THE PENALTY OF RS 1 57 704/- LEVIED BY THE ASSESSI NG OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (FOR SHORT T HE ACT) FOR THE ASSESSMENT YEAR 1997-98. ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 2 3. THE BRIEF FACTS LEADING UP TO THE PRESENT CONTRO VERSY ARE THAT THE ASSESSEE A COMPANY FILED ITS RETURN OF INCOME FO R ASSESSMENT YEAR 1997-98 ON 29.1.1998 DISCLOSING TOTAL INCOME OF RS 25 21 22 0/-. IN THE RETURN OF INCOME ASSESSEE CLAIMED DEDUCTION U/S 80IA AMOUNTI NG TO RS 9 43 962/- IN RESPECT OF ITS UNIT NO. II LOCATED AT J-6 MIDC BH OSARI (4 TH YEAR OF CLAIM).THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SE CTION 143(3) OF THE ACT VIDE ORDER DATED 11.2.2000 ON A TOTAL INCOME OF RS 39 75 730/- WHEREIN HE DISALLOWED THE DEDUCTION U/S 80IA OF RS 9 43 962/- AND INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT IN R ESPECT OF THE AFORESAID DISALLOWANCE OF CLAIM UNDER SECTION 80IA. THE ASSES SING OFFICER DISALLOWED THE DEDUCTION U/S 80IA FOR THE FOLLOWING REASONS: A. THAT THE ASSESSEE WAS FORMED IN 1985 AND SINCE T HEN WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTOMOBILE PART S NAMELY BRAKE PARTS AND TOOLS. THE ABOVE PARTS WERE EARLIER MA NUFACTURED BY THE COMPANY IN ITS PREMISES AT J-450 MIDC BHOSARI I.E. UNIT NO. 1. B. THAT FOR THE MANUFACTURE OF ABOVE BRAKE PARTS T HE PROCESS INVOLVED ARE PICKLING WELDING AND SHEARING BLANKING FORMI NG PIERCING DEBURRING AND CLEANING. ALL THE ABOVE PROCESSES EXC EPT PICKLING SHEARING AND WELDING WERE DONE IN UNIT I WHILE PICK LING WELDING AND SHEARING WAS DONE BY OUTSIDE SUB-CONTRACTORS. C. UNIT NO. II WAS FORMED FOR DOING WELDING AND SHE ARING JOB FOR MANUFACTURE OF BRAKE PARTS; AND AFTER START OF UNI T NO. II IN APRIL 1993 ALL THE SALES OF THE ABOVE BRAKE PARTS IS MAD E BY UNIT NO.II WHILE THAT OF TOOLS IS MADE BY UNIT NO. I. THUS AL THOUGH SOME PART OF MANUFACTURING OF BRAKE PARTS LIKE BLANKING FORMING PIERCING DEBURRING AND CLEANING IS DONE BY UNIT NO I YET TH E ENTIRE PROFITS OUT OF SALE OF BRAKE PARTS WAS SHOWN IN UNIT NO. II. ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 3 D. FURTHER THE ASSESSING OFFICER HELD THAT IN 1993 -94 THE VALUE OF OLD PLANT AND MACHINERY TRANSFERRED TO UNIT NO. II EXCE EDED 20% OF THE TOTAL VALUE OF PLANT AND MACHINERY USED IN UNIT NO. II E. IN THE ABOVE BACKGROUND THE ASSESSING OFFICER HELD THAT UNIT NO. II HAS BEEN FORMED BY SPLITTING AND RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE AND THAT THE SAID UNIT NO. II HAS ALSO BEEN FORMED BY TRANSFER OF PREVIOUSLY USED MACHINERY VALUE OF WHIC H IS MORE THAN 20% OF THE TOTAL VALUE OF PLANT AND MACHINERY USED BY UNIT NO. II AND HENCE THE SAID UNIT NO. II IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. 4. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) IN THE QUANTUM PROCEEDINGS IT WAS SUBMITTED BY THE ASSESS EE THAT ITS CASE WAS NOT PROPERLY REPRESENTED BEFORE THE ASSESSING OFFICER B Y THE EARLIER TAX CONSULTANT AND THE CORRECT FACTS WERE NOT PRESENTED BEFORE THE ASSESSING OFFICER; THAT THE UNIT NO. II WAS IN-FACT FORMED IN RENTED PREMISES L OCATED AT TRISHUL SPRINGS INDIA J-312 MIDC BHOSARI PUNE FOR MANUFACTURE O F AN ENTIRELY NEW PRODUCT NAMELY SUSPENSION PART IN FINANCIAL YEAR 1991-92 A ND THE NEW PLANT AND MACHINERY WAS INSTALLED AT THE ABOVE RENTED PREMISE S; THAT THE FIRST INVOICE FOR SUPPLY OF SUSPENSION PARTS WAS RAISED ON 30.04.1991 AND THAT THE COMPANY SUBSEQUENTLY ACQUIRED PREMISES AT J-6 MIDC BHOSARI PUNE AND SHIFTED THE AFORESAID UNIT NO. II TO J-6 MIDC IN APRIL 1993. I T WAS THEREFORE SUBMITTED THAT FINANCIAL YEAR 1991-92 WAS THE FIRST YEAR OF T HE ELIGIBLE UNIT AND NOT FINANCIAL YEAR 1993-94 AS INADVERTENTLY CLAIMED BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME. IN THE LIGHT OF THESE FA CTS THE COMPANY SUBMITTED BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) THA T PRIOR TO SET UP OF J-6 UNIT THE ASSESSEE WAS GETTING THE SHEARING WORK DO NE FROM OUTSIDE THROUGH SUB-CONTRACTOR THEN THE PRESSING WORK WAS DONE AT OLD UNIT AFTER THAT FOR GETTING WELDING WORK DONE THE MATERIAL WAS SENT OU TSIDE TO SUB-CONTRACTOR AND ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 4 ON RECEIPT AFTER WELDING THE FINAL INVOICING WAS D ONE FROM OLD UNIT. IT WAS SUBMITTED THAT AFTER ESTABLISHMENT OF NEW UNIT THE MAIN CONSTRAINT FOR OPTIMUM UTILIZATION OF PRESSING FACILITIES WHICH WAS LACK O F CAPACITY WITH SUB-CONTRACTORS WAS REMOVED AS ALL THE PROCESSING FACILITIES (INCLU DING QUALIFIED LABOUR) WERE AVAILABLE IN THE NEW UNIT WHICH RESULTED IN SUBSTA NTIAL INCREASE IN TURNOVER DUE TO OPTIMUM UTILIZATION OF FACILITIES. IT WAS FURTHE R ARGUED THAT THERE WAS NO SPLITTING-UP OF BUSINESS AND THE LABOUR STRENGTH NE ARLY DOUBLED WITHIN A SPAN OF 2 YEARS OF SETTING OF NEW UNIT. IT WAS FURTHER S UBMITTED THAT MANUFACTURE OF VARIOUS NEW PRODUCTS LIKE SUSPENSION PARTS WAS STAR TED ONLY AFTER SET UP OF THE NEW UNIT. AS TO THE FINDING OF THE ASSESSING OFFICE R THAT VALUE OF OLD MACHINERY WAS MORE THAN 20% THUS DEDUCTION UNDER SECTION 80I A WAS NOT ADMISSIBLE IT WAS SUBMITTED THAT IF THE FIRST YEAR OF THE NEW UNI T WAS CONSIDERED AS FINANCIAL YEAR 1.4.1991 TO 31.3.1992 I.E. ASSESSMENT YEAR 19 92-93 THEN THE CONDITION REGARDING OLD PLANT AND MACHINERY BEING LESS THAN 2 0% OF THE TOTAL PLANT AND MACHINERY WAS SATISFIED. THE ASSESSEE ALSO SUBMITT ED UNIT WISE PROFIT & LOSS ACCOUNT FOR THE VARIOUS PREVIOUS YEARS COMMENCING F ROM PREVIOUS YEAR 1991- 92 (BEING THE CORRECT 1 ST YEAR OF CLAIM) TO PREVIOUS YEAR 1996-97 ALONGWITH REVISED STATEMENTS OF TOTAL INCOME DULY CERTIFIED B Y A CHARTERED ACCOUNTANT GIVING THEREIN THE REVISED DEDUCTION ALLOWABLE UNDE R SECTION 80IA OF THE ACT. THE REVISED DEDUCTION UNDER SECTION 80IA FOR ASSESS MENT YEAR 1997-98 WORKED OUT TO RS 5 77 208/- AS AGAINST RS 9 43 962/ - CLAIMED IN THE ORIGINAL RETURN OF INCOME. IN THE SAID REVISED WORKINGS ACC ORDING TO THE ASSESSEE ONLY THE SALES TURNOVER OF SUSPENSION PARTS WAS CONSIDER ED IN UNIT NO II (I.E. ELIGIBLE UNIT) WHILE TURNOVER OF ALL OTHER ITEMS WA S CONSIDERED IN UNIT NO. I (I.E. OLD UNIT). IT WAS SUBMITTED THAT THERE WAS AN INADV ERTENT ERROR IN NOT CLAIMING DEDUCTION UNDER SECTION 80IA FOR ASSESSMENT YEARS 1 992-93 AND 1993-94 PRIMARILY DUE TO A MISCONCEPTION THAT THE NEW UNIT CAME INTO EXISTENCE ONLY WHEN NEW FACTORY BUILDING WAS ACQUIRED. THE COMMISS IONER OF INCOME-TAX ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 5 (APPEALS) ACCEPTED THE ASSESSEE COMPANYS CONTENTIO N THAT UNIT NO. II WAS SET UP IN FINANCIAL YEAR 1991-92 IN RENTED PREMISES AND THEN SHIFTED TO OWNED PREMISES AT J-6 MIDC BHOSARI IN APRIL 1993. THE COMMISSIONER OF INCOME- TAX (APPEALS) HOWEVER HELD THAT THE ALLOWABLE DED UCTION WOULD BE AT RS 2 56 442/- AS WORKED OUT BY HER IN THE APPELLATE OR DER DATED 7.2.2005 AS AGAINST RS 9 43 962/- BEING THE DEDUCTION CLAIMED U NDER SECTION 80IA IN THE ORIGINAL RETURN AND RS 5 77 208/- BEING THE DEDUCTI ON CLAIMED UNDER SECTION 80IA OF THE ACT IN THE REVISED COMPUTATION OF INCOM E. THUS THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT WAS PARTIAL LY ACCEPTED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THOUGH IN A M ODIFIED MANNER. 5. AT THE AFORESAID STAGE THE ASSESSING OFFICER CO MMENCED THE PENALTY PROCEEDINGS AND IN THE COURSE OF SUCH PROCEEDINGS ASSESSEE FILED A DETAILED REPLY IN WHICH IT WAS STATED THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS INITIATED WHEN 80IA CLAIM WAS INITIALLY DISALL OWED FOR THE FIRST TIME BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 1995-96 VIDE HIS ORDER UNDER SECTION 143(3) OF THE ACT. SUBSEQUENTLY WHEN THE ABOVE ASSE SSMENT ORDER WAS SET ASIDE BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THE ASSESSING OFFICER AGAIN DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTI ON 80IA VIDE HIS ORDER DATED 31.10.2000 GIVING EFFECT TO THE COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER UNDER SECTION 250 AND IN THIS ORDER ALSO THE ASSESSING OFFICER DID NOT INITIATE PENALTY PROCEEDINGS; THAT THERE WAS NO WIL LFUL CONCEALMENT AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ON T HE PART OF ASSESSEE; THAT NO PENALTY WAS LEVIABLE IN RESPECT OF LEGAL CLAIMS/ADD ITIONS ON WHICH TWO OPINIONS ARE POSSIBLE; THAT THE REQUISITE SATISFACTION WAS N OT RECORDED PRIOR TO INITIATION OF PENALTY PROCEEDINGS. WITHOUT PREJUDICE TO ABOVE IT WAS ALSO SUBMITTED THAT LEVY OF PENALTY IS DISCRETIONARY AND NOT MANDATORY AND THAT CONSIDERING THE FACTS OF THE CASE THE DISCRETION VESTED BE EXERCIS ED BY DROPPING THE PENALTY ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 6 PROCEEDINGS. IN SUPPORT OF THE ABOVE SUBMISSIONS A SSESSEE RELIED UPON FOLLOWING CASE LAWS: A. RADHOSOAMI SATSANG V CIT 193 ITR 321 (SC) B. CIT V NEO POLY PACK (P) LTD 245 ITR 492 (DEL) C. DILIP N. SHROFF V CIT 291 ITR 519 (SC) D. T. ASHIJ OAU V CIT 292 ITR 11 (SC) IT WAS LASTLY SUBMITTED BY ASSESSEE THAT WITHOUT P REJUDICE TO ABOVE SUBMISSIONS PENALTY BE RESTRICTED TO THE MINIMUM A MOUNT LEVIABLE. 6. AFTER CONSIDERING THE VARIOUS SUBMISSIONS OF THE ASSESSEE CAREFULLY THE COMMISSIONER OF INCOME-TAX (APPEALS) HELD THAT AS REGARDS THE ASSESSEES SUBMISSION THAT THE RECORDING OF REQUISITE SATISFAC TION BY THE ASSESSING OFFICER BEFORE INITIATING PENALTY PROCEEDINGS IS NECESSARY FOR ASSUMING JURISDICTION FOR LEVY OF PENALTY THE HONBLE MADRAS HIGH COURT IN T HE CASE OF M SAJJANRAJ NAHAR 283 ITR 230 HELD THAT INDICATION IN ASSESSMEN T ORDER IS SUFFICIENT TO SHOW THE SATISFACTION.OF THE ASSESSING OFFICER FOR CONCEALMENT OF INCOME. HE ACCORDINGLY FOUND NO MERIT IN THIS CONTENTION OF TH E ASSESSEE. ACCORDING TO THE COMMISSIONER OF INCOME-TAX (APPEALS) BY MAKING A W RONG CLAIM OF DEDUCTION UNDER SECTION 80IA ASSESSEE HAS MADE ITSELF LIABLE FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE THEREFORE HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN VISITING THE ASSESSEE WITH PENAL PROVI SIONS OF SECTION 271(1)(C) OF THE ACT. THE COMMISSIONER OF INCOME-TAX (APPEALS) HOWEVER FOUND SUBSTANCE IN THE ASSESSEES PLEA THAT NO PENALTY IS LEVIABLE IN RESPECT OF DISALLOWANCE OF DEDUCTION UNDER SECTION 80IA TO THE EXTENT OF RS 23 717/- BEING 30% OF SALES-TAX SET OFF AND INTEREST RECEIVE D AND OTHER INCOME AGGREGATING TO RS 79 057/- WHICH WERE HELD TO BE ATTRIBUTABLE AND NOT DERIVED FROM THE ELIGIBLE INDUSTRIAL UNDERTAKING. AFTER CONSIDERING ASSESSEES PLEA REGARDING LEVY OF MINIMUM PENALTY THE COMMISS IONER OF INCOME-TAX ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 7 (APPEALS) WAS OF THE VIEW THAT ON THE FACTS OF CASE IT WOULD BE PROPER AND REASONABLE TO RESTRICT THE PENALTY TO 100% OF THE A MOUNT OF TAX ON THE DISALLOWANCE UNDER SECTION 80IA OF THE ACT AND HE A CCORDINGLY DIRECTED THE ASSESSING OFFICER TO LEVY THE MINIMUM PENALTY. 7. BEING AGGRIEVED WITH THE ABOVE ORDER OF THE COMM ISSIONER OF INCOME- TAX (APPEALS) ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8. BEFORE US LEARNED COUNSEL FOR THE ASSESSEE REI TERATED PRIMARILY THE SAME SUBMISSIONS AS WERE MADE BEFORE THE LOWER AUTH ORITIES. IN THIS CONNECTION OUR ATTENTION WAS INVITED TO A COPY OF THE WRITTEN SUBMISSIONS ADDRESSED TO THE COMMISSIONER OF INCOME-TAX (APPEAL S) WHICH HAVE BEEN PLACED IN THE PAPER BOOK FILED BEFORE US. THE SAID SUBMISSIONS HAVE ALREADY BEEN NOTED BY US IN THE EARLIER PART OF THIS ORDER AND ARE THEREFORE NOT BEING REPEATED FOR THE SAKE OF BREVITY. IT HAS BEEN POIN TED OUT BY THE LEARNED COUNSEL THAT THE PENALTY HAS BEEN IMPOSED BY THE AS SESSING OFFICER ON THE DIFFERENCE BETWEEN THE AMOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME AND THE AMOUNT ALLOWED BY THE CIT (A) IN ITS ORDER DATED 7.2.2005. IT IS ALSO POINTED OUT THAT MERE SCALING DOWN OF CLAIM OF DEDUCTION DURING ASSESSMENT PROCEEDINGS DOES NOT INVITE PENAL TY UNDER SEC. 271(1)(C) OF THE ACT SINCE THE CLAIM MADE IN THE RETURN WAS ON BONA FIDE CONSIDERATIONS. THE CLAIM MADE BY THE ASSESSEE WAS SUPPORTED BY A CERTIFICATE OF A CHARTERED ACCOUNTANT. THOUGH SUCH CLAIM HAS BEEN FO UND TO BE WRONG SUBSEQUENTLY IT CLEARLY SHOWS THAT THE CLAIM WAS M ADE ON THE ADVICE OF A TAX PROFESSIONAL. IT WAS ALSO VEHEMENTLY ARGUED THAT UN DER SIMILAR CIRCUMSTANCES THE DISALLOWANCE MADE IN THE ASSESSMENT YEAR 1995-9 6 DID NOT RESULT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IT W AS SUBMITTED THAT IN SIMILAR CIRCUMSTANCES THE PUNE BENCH OF THE TRIBUNAL IN THE FOLLOWING TWO DECISIONS HAS HELD THAT PENALTY UNDER SECTION 271(1)(C) OF TH E ACT IS NOT LEVIABLE: ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 8 (I) ITA NO 488/PN/2000 THAKKAR DEVELOPERS LTD NASH IK V ACIT ORDER DATED 22.12.2010; (II) ITA NO 7/PN/2006 DYNAMIC LOGISTICS P. LTD. V. DCIT ORDER DATED 29.2.2008. 9. IN SUM AND SUBSTANCE THE PLEA OF THE ASSESSEE I S THAT THERE IS NO WILLFUL CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE PRESENT CASE SO AS TO INVITE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 10. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE CASE OF THE REVENUE. ACCORDING TO THE DEPARTMENTAL REPRESENTATIVE THE CL AIM MADE BY THE ASSESSEE IN THE RETURN OF INCOME WAS FOUND TO BE WRONG AND M ERELY BECAUSE THE COMMISSIONER OF INCOME-TAX (APPEALS) PARTIALLY ALLO WED THE CLAIM AND THAT TOO WITH RESPECT TO A FRESH CLAIM MADE IN THE APPELLATE PROCEEDINGS WOULD NOT DISTRACT FROM THE FACT THAT THE ORIGINAL CLAIM WAS FOUND TO BE WRONG AND THEREFORE PENALTY UNDER SECTION 271(1)(C) OF THE A CT HAS BEEN RIGHTLY UPHELD BY THE COMMISSIONER OF INCOME-TAX (APPEALS). IN THI S MANNER THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS JUSTIFIED THE ORDER S OF THE AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. SECTION 271(1)(C) OF THE ACT EMPOWERS AN ASSESSING OFFICER TO IMPOSE PENALTY IF HE IS SATISFIED THAT AN ASSESSEE HAS CONCEALED THE PARTICULARS OF H IS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE BARE PRO VISIONS OF SECTION 271(1)(C) OF THE ACT SHOW THAT BEFORE IMPOSING PENALTY THE A SSESSING OFFICER HAS TO BE SATISFIED THAT EITHER OF THE TWO CONDITIONS PRESCRI BED THEREIN ARE FULFILLED. IN OTHER WORDS EITHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR IT HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME ONLY THEN THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS JUSTIFIED. IN THE PRESENT CASE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT IN ITS RETURN OF INCOME ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 9 AMOUNTING TO RS 9 43 962/- IN RESPECT OF ITS INCOME FROM UNIT NO. II LOCATED AT J-6 MIDC BHOSARI. FOR THE REASONS ALREADY NOTED BY US IN THE EARLIER PART OF THIS ORDER THE ASSESSING OFFICER DECLINED SUCH CLA IM. IN THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) AGAINST SUCH A SSESSMENT THE ASSESSEE REVISED ITS CLAIM TO RS 5 77 208/- AS AGAI NST RS 9 43962/- CLAIMED IN THE ORIGINAL RETURN OF INCOME. THE SAID REVISED CLA IM HAS BEEN PARTIALLY ACCEPTED BY THE COMMISSIONER OF INCOME-TAX (APPEALS ) INASMUCH AS ASSESSEE WAS HELD ELIGIBLE FOR THE CLAIM OF DEDUCTI ON UNDER SECTION 80IA TO THE EXTENT OF RS 2 56 452/-. THE ASSESSING OFFICER IN H IS ORDER DATED 29.3.2006 HAS LEVIED PENALTY ON THE INCOME REPRESEN TED BY THE DIFFERENCE BETWEEN THE CLAIM MADE IN THE RETURN AND THE AMOUNT OF DEDUCTION ALLOWED BY THE CIT (A). THE CIT (A) BY WAY OF IMPUGNED ORDER H AS SUSTAINED THE PENALTY EXCEPT WITH REFERENCE TO THE AMOUNT OF REVISED CLAI M DISALLOWED ON ACCOUNT OF THE NATURE OF INCOME REPRESENTED BY SALES-TAX SET O FF AND INTEREST. 12. AT THE PRESENT STAGE WE FIND IT APPROPRIATE TO BRIEFLY TOUCH UPON THE CLAIM OF DEDUCTION UNDER SECTION 80IA REVISED BY TH E ASSESSEE IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME- TAX (APPEALS). THE REVISED DEDUCTION UNDER SECTION 80IA FOR THE ASSESSMENT YEAR 1997-98 WAS RS 5 77 208/- AS AGAINST RS 9 43 9 62/- MADE IN THE ORIGINAL RETURN OF INCOME. ASSESSEE CLAIMED THAT FINANCIAL Y EAR 1991-92 WAS THE FIRST YEAR OF THE ELIGIBLE UNIT AND NOT THE FINANCIAL YEA R 1993-94 AS INADVERTENTLY CLAIMED IN THE ORIGINAL RETURN OF INCOME. SECONDLY ASSESSEE STATED THAT THE DEDUCTION UNDER SECTION 80IA WAS ELIGILBLE ONLY WIT H REGARD TO THE SALES TURNOVER OF SUSPENSION PARTS IN UNIT NO. II WHILE THE TURNOVER OF ALL OTHER ITEMS WHICH WAS ALSO CONSIDERED FOR DEDUCTION AT THE TIME OF FILING OF THE RETURN WAS EXCLUDED AND ACCORDINGLY THE DEDUCTION UNDER SECTI ON 80IA WAS REWORKED. FACTUALLY SPEAKING THE ERROR IN THE CLAIM MADE IN THE RETURN OF INCOME FOR DEDUCTION UNDER SECTION 80IA OF THE ACT IS CLEARLY ESTABLISHED. THE CLAIM OF ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 10 THE ASSESSEE IS THAT THE CLAIM MADE IN THE RETURN O F INCOME WAS AN INADVERTENT ERROR AND THAT THE SAME WAS BONA FIDE. IT IS SUBMIT TED THAT HAVING REGARD TO THE FACTUAL POSITION CORRECTLY BROUGHT OUT BEFORE THE C OMMISSIONER OF INCOME-TAX (APPEALS) IN QUANTUM PROCEEDINGS THE ASSESSEE WAS ELIGIBLE FOR THE 80IA CLAIM EVEN IN THE EARLIER YEARS 1992-93 AND 1993-94 WHILE IT HAD CLAIMED THE DEDUCTION ONLY FROM ASSESSMENT YEAR 1994-95. IT HAS BEEN POINTED OUT THAT THE CLAIM WAS MADE ON A MISCONCEPTION THAT NEW UNI T NO.II CAN BE SAID TO HAVE BEEN FORMED ONLY WHEN A NEW FACTORY BUILDING W AS ACQUIRED WHICH WAS IN APRIL 1993 WHEREAS ON FACTS THE UNIT NO. II OF THE ASSESSEE WHICH WAS ELIGIBLE FOR 80IA BENEFITS WAS INITIALLY SET UP IN FINANCIAL YEAR 1991-92 IN RENTED PREMISES AND THEN SHIFTED TO OWNED PREMISES IN APRI L 1993. WE HAVE CAREFULLY CONSIDERED THE AFORESAID PLEA OF THE ASSESSEE. IN O UR CONSIDERED OPINION THE PARAMETERS OF SECTION 271(1)(C) OF THE ACT ARE REQU IRED TO BE TESTED ON THE BASIS OF A CLAIM MADE IN THE RETURN OF INCOME. IN T HE PRESENT CASE IT IS QUITE CLEAR THAT THE ORIGINAL CLAIM MADE UNDER SECTION 80 IA HAS BEEN FOUND TO BE ERRONEOUS INASMUCH AS ASSESSEE ITSELF RESILED FROM THE SAME IN THE COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE COMMISSIONER O F INCOME-TAX (APPEALS). THE CLAIM MADE IN THE RETURN OF INCOME IS ADMITTEDL Y WRONG ON MORE THAN ONE COUNT. FIRSTLY IT INCLUDED THE INELIGILBLE INCOME BY WAY OF TURNOVER OF INELIGIBLE BUSINESS UNDERTAKING AND ALSO THE CONSEQUENTIAL ELI GIBLE PROFITS. TO THIS EXTENT IN OUR VIEW ASSESSEE CANNOT ESCAPE FROM TH E FACT THAT THE CLAIM MADE IN THE RETURN OF INCOME WAS INACCURATE WITHIN THE M EANING OF SECTION 271(1)(C) OF THE ACT. HOWEVER THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS PARTIALLY ALLOWED THE CLAIM WITH REFERENCE TO THE REVISED CLA IM SET UP BY THE ASSESSEE AND THE ASSESSING OFFICER HAS ALSO NOT LEVIED PENAL TY WITH REFERENCE TO THE AMOUNT OF CLAIM ALLOWED BY THE CIT(A). 13. BEFORE US IT HAS BEEN VEHEMENTLY ARGUED ON THE BASIS OF THE DECISION OF THE PUNE BENCH IN THE CASE OF THAKKAR DEVELOPERS LTD. (SUPRA) AND ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 11 DYNAMIC LOGISITICS P. LTD. (SUPRA) THAT PENALTY IS NOT LEVIABLE IN CASE ON SIMILAR SITUATIONS THE ASSESSING OFFICER HAD NOT LEVIED PE NALTY IN OTHER YEARS. IN THIS CONTEXT THE PLEA SET UP IS THAT IN THE ASSESSMENT YEAR 1995-96 WHEREIN THE DISPUTE REGARDING 80IA CLAIM AROSE FOR THE FIRST TI ME THE ASSESSING OFFICER HAD NOT INITIATED PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. 14. WE HAVE CAREFULLY CONSIDERED THE CASE MADE OUT BY THE ASSESSEE ON THE BASIS OF THE PRECEDENTS. UNDOUBTEDLY PRINCIPLE OF INCONSISTENCY IS TO BE ADHERED ON FUNDAMENTAL ISSUES EVEN IN INCOME-TAX PR OCEEDINGS. SO HOWEVER IN THE PRESENT CASE THE FACTUAL POSITION CLEARLY B RINGS OUT INACCURACY OF THE CLAIM MADE IN THE RETURN OF INCOME QUA THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT. IN THE CASE OF THAKKAR DEVELOPERS (SUPRA) NO DOUBT THE TRIBUNAL REFERRED TO ITS EARLIER DECISION IN THE CA SE OF DYNAMIC LOGISTICS P. LTD. (SUPRA) AND THE PRINCIPLE OF CONSISTENCY. SO HOWEV ER IT ALSO WAS CONVINCED WITH REGARD TO THE MERITS OF THE CLAIM THAT NO PENA LTY WAS LEVIABLE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE T HEREIN. IN THE CASE OF DYNAMIC LOGISTICS P. LTD. (SUPRA) PENALTY WAS INITI ATED FOR MORE THAN ONE ASSESSMENT YEAR AND IT WAS DROPPED IN ONE OF THE YE ARS BY THE ASSESSING OFFICER WHILE IN OTHER ASSESSMENT YEARS THE SAME W AS SUSTAINED UNDER IDENTICAL CIRCUMSTANCES. THE CONTRADICTORY ACTION O F THE ASSESSING OFFICER WAS FOUND UNACCEPTABLE AND HENCE PENALTY WAS DELETED FO R OTHER YEARS ALSO. IN THE INSTANT CASE THE FACTS ARE THAT IN THE ASSESSMENT YEAR 1995-96 PENALTY HAS NOT AT ALL BEEN INITIATED WHEREAS IT HAS BEEN INITI ATED AND IMPOSED FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. THUS THERE I S NO CONSCIOUS ACT BY THE ASSESSING OFFICER OF NOT LEVYING PENALTY IN ONE YEA R INASMUCH AS THERE WAS NO INITIATION ITSELF WHEREAS DROPPING OF PENALTY I N ONE YEAR IN THE CASE OF DYNAMIC LOGISTICS P. LTD. (SUPRA) WAS NOTED BY THE TRIBUNAL AS A CONSCIOUS ACT. UNDER THESE CIRCUMSTANCES THEREFORE THE PARI TY OF REASONING IN THE CASES OF THAKKER DEVELOPERS LTD. (SUPRA) AND DYNAMIC LOGI STICS P. LTD (SUPRA) ARE ITA NO 1333-1335/PN/09 DYNA AUTOMOT IVE STAMPINGS P LTD. PUNE 12 INAPPLICABLE TO THE FACTS OF THE PRESENT CASE WHER EIN FACTUALLY THE CLAIM MADE IN THE RETURN OF INCOME HAS BEEN FOUND TO BE PARTIA LLY INACCURATE. THEREFORE IN FINAL ANALYSIS WE HEREBY AFFIRM THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS) WHEREBY PENALTY HAS BEEN DIRECTED TO BE S USTAINED UNDER SECTION 271(1)(C) OF THE ACT TO A PARTIAL EXTENT. THUS THE PLEA OF THE ASSESSEE HAS TO FAIL. THE APPEAL OF ASSESSEE IS DISMISSED. 15. ON THE PARITY OF REASONING THE APPEALS FOR ASS ESSMENT YEARS 1994-95 AND 1996-97 ARE ALSO DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE 28 TH DAY OF FEBRUARY 2011. SD/- SD/- (I C SUDHIR) (G.S. PA NNU) JUDICIAL MEMBER ACCOUNTANT ME MBER PUNE DATED:28 TH FEBRUARY 2011. COPY TO:- 1) DYNA KAUTOMOTIVE STAMPINGS P. LTD. PUNE 2) DCIT CIR.8 PUNE 3) THE CIT (A)III PUNE. 4) THE CIT V PUNE. 5) THE DEPARTMENTAL REPRESENTATIVE B BENCH ITAT PUNE. BY ORDER TRUE COPY ASST. REGISTRAR I.T.A.T. PUNE B