Dy.CIT, Circle-2(3),, Hyderabad v. M/s Global Energy Consulting Engineers Private Limited,, Hyderabad

ITA 1618/HYD/2013 | 2004-2005
Pronouncement Date: 16-04-2014 | Result: Dismissed

Appeal Details

RSA Number 161822514 RSA 2013
Bench Hyderabad
Appeal Number ITA 1618/HYD/2013
Duration Of Justice 4 month(s) 18 day(s)
Appellant Dy.CIT, Circle-2(3),, Hyderabad
Respondent M/s Global Energy Consulting Engineers Private Limited,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 16-04-2014
Assessment Year 2004-2005
Appeal Filed On 28-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA.NO.1616 1617 & 1618/HYD/2013 ASSESSMENT YEARS 2002-03 2003-04 & 2004-05 DCIT CIRCLE 2 (3) HYDERABAD VS. M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. HYDERABAD PAN AABCG-4974H (APPELLANT) (RESPONDENT) FOR REVENUE : MS. K. HARITHA FOR ASSESSEE : -NONE- DATE OF HEARING : 02.04.2014 DATE OF PRONOUNCEMENT : 16.04.2014 ORDER PER B. RAMAKOTAIAH A.M. THESE THREE APPEALS ARE BY REVENUE AGAINST THE COMMON ORDER OF CIT(A)-III HYDERABAD DATED 16.09.2 013 FOR THE ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05 D ELETING THE PENALTY UNDER SECTION 271(1)(C.) OF RS.11 67 85 2/- RS.35 999/- AND RS.4 21 325/- RESPECTIVELY. 2. BRIEF FACTS LEADING TO THE LEVY OF PENALTY ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND CONSULTANCY SERVICES AND FILED THE RETURNS OF INCOME RESPECTIVELY AFTER CLAIMING DEDUCTION UNDER SECTION 80IB AS WELL AS 80HHE OF THE I.T. ACT 1961 IN THE IMPUGNED YEARS. ASSESSEE WORKED-OUT THE DEDUCTION INDEPENDEN TLY OF EACH PROVISION WHEREAS THE A.O. WAS OF THE OPINION THAT BOTH DEDUCTIONS CANNOT BE CLAIMED ON THE SAME PROFIT AND AMOUNT DEDUCTED UNDER ONE SECTION HAS TO BE EXCLUDED FOR C OMPUTING 2 ITA.NO.1616 1617 & 1618/HYD/2013 M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. HYDERABAD THE DEDUCTION IN OTHER SECTION AS PER PROVISIONS O F SECTION 80IA(9) OF THE ACT. ASSESSEE CONTENDED THAT AS PER THE PROVISIONS OF THE ACT AND THE LEGAL PRINCIPLES THEN AVAILABLE ASSESSEE WAS ENTITLED TO CLAIM RELIEF CALCULATED SE PARATELY WHEREAS RELYING ON THE DECISION OF THE SPECIAL BEN CH IN THE CASE OF ACIT VS. ROHINI GARMENTS 294 ITR (AT) 50 (S B- CHENNAI) WHICH WAS PRONOUNCED ON 27.04.2007 THE ISS UE WAS HELD AGAINST ASSESSEE. IN QUANTUM PROCEEDINGS THE I TAT CONFIRMED THE ASSESSING OFFICERS STAND. THEREFORE A.O. CONSIDERED THAT IT IS A FIT CASE FOR LEVY OF PENALT Y UNDER SECTION 271(1)(C) OF THE ACT AS ASSESSEE HAS CLAIMED DEDUC TIONS WRONGLY. 3. THE LD. CIT(A) RELYING ON VARIOUS CASE LAW HELD THAT ASSESSEE HAD DISCLOSED PROPERLY ALL MATERIAL F ACTS AND HAD CLEARLY DISCLOSED THE TREATMENT OF INCOME IN THE RE TURN OF INCOME AS WELL IN THE AUDITED ACCOUNTS AND FINANCIA L STATEMENTS. EVEN WHEN THE RETURN WAS PROCESSED UNDE R SECTION 143(1) THESE FACTS WERE AVAILABLE AND A.O. DISCOVERED THE ISSUE ONLY FROM THE FINANCIAL STATEMENTS FILED VOLUNTARILY BY ASSESSEE. THEREFORE HE CONCLUDED THAT ASSESSEE HAS DISCLOSED INFORMATION PROPERLY AND THERE IS NO CONCEALMENT OF FACTS BY ASSESSEE. FURTHER CIT(A) HELD THAT ISSUE WAS DEBATA BLE AT THAT POINT OF TIME AS ASSESSEE HAS FILED RETURNS MUCH B EFORE THE DECISION OF THE SPECIAL BENCH OF THE ITAT CHENNAI B ENCH ON THE ISSUE. SINCE THE DECISION OF THE SPECIAL BENCH WAS NOT AVAILABLE TO ASSESSEE AT THE TIME OF FILING THE RET URNS OF INCOME THE LD. CIT(A) CANCELLED THE PENALTIES IN THE IMPUG NED ASSESSMENT YEARS. 3 ITA.NO.1616 1617 & 1618/HYD/2013 M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. HYDERABAD 4. REVENUE HAS RAISED ONLY ONE MATERIAL GROUND FOR ALL THE YEARS HOLDING THAT CIT(A) OUGHT TO HAVE APP RECIATED THAT MERE SUBMISSION OF FACTS IN RETURN OF INCOME DOES N OT ABSOLVE ASSESSEE FROM ITS OBLIGATION TO DISCLOSE ITS TRUE A ND CORRECT INCOME. 5. WHEN THE NOTICES WERE ISSUED NONE APPEAR ED ON BEHALF OF ASSESSEE. THEREFORE WE HEARD THE LEARNED D.R. A ND DECIDED THE ISSUE ON MERITS EXPARTE-RESPONDENT. 6. AFTER HEARING THE LEARNED D.R. WE DO NOT SEE AN Y REASON TO DIFFER FROM THE ORDER OF THE CIT(A). AS R IGHTLY HELD BY LD. CIT(A) THERE IS NO FURNISHING OF INACCURATE PAR TICULARS BY ASSESSEE. ONLY ISSUE IS WHETHER ASSESSEES CLAIM UN DER SECTION 80IB AND 80HHE WHICH ARE ALLOWABLE TO ASSESSEE ARE TO BE CALCULATED ON THE SAME INCOME OR AFTER EXCLUDING ON E FROM THE OTHER. THIS ISSUE BEING DEBATABLE IT CANNOT BE FOU ND FAULT WITH THE CLAIM OF ASSESSEE AT THE TIME OF FILING OF THE RETURNS. SUBSEQUENT JUDICIAL INTERPRETATION HOWEVER WAS AG AINST ASSESSEE THEREBY IN QUANTUM PROCEEDINGS A.OS. STA ND WAS UPHELD. THAT ITSELF PER SE DOES NOT LEAD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) AS IT CANNOT BE CONSIDERED THAT A SSESSEE HAS EITHER CONCEALED INCOMES OR FURNISHED INACCURATE PA RTICULARS OF INCOME TWO OF THE PARAMETERS NECESSARY FOR LEVY OF PENALTY UNDER SECTION 271(1)(C). MERE DISALLOWANCE OF A CLA IM DOES NOT LEAD TO PENALTY UNDER SECTION 271(1)(C) AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S 322 ITR 158 (SC) WHEREIN IT HAS BEEN HELD AS FOLLOWS : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE HAS TO BE CONCEALMENT OF THE 4 ITA.NO.1616 1617 & 1618/HYD/2013 M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. HYDERABAD PARTICULARS OF THE INCOME OF ASSESSEE. SECONDLY ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE ASSE SSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAI M TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE ASSESSEE CAN FURNIS H THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULA RS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARI SE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RET URN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURAT E PARTICULARS. 5 ITA.NO.1616 1617 & 1618/HYD/2013 M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. HYDERABAD 7. RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE P ETRO PRODUCTS (SUPRA) WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS REVENUE GROUND IN ALL THE YEARS. 8. IN THE RESULT APPEALS OF REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 16.04.20 14. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD DATED 16 TH APRIL 2014 VBP/- COPY TO : 1. DCIT CIRCLE 2 (3) HYDERABAD 2. M/S. GLOBAL ENERGY CONSULTING ENGINEERS P. LTD. 6-3-570/1 1 ST FLOOR DIAMOND BLOCK ROCKDALE COMPOUND SOMAJIGUD A HYDERABAD. 3. CIT(A)-III HYDERABAD 4. CIT-II HYDERABAD 5. D.R. ITAT A BENCH HYDERABAD.