ITO, Haridwar v. M/s. Mahima Udyog, Uttrakhand

ITA 2013/DEL/2016 | 2012-2013
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 201320114 RSA 2016
Assessee PAN AAPFM8548J
Bench Delhi
Appeal Number ITA 2013/DEL/2016
Duration Of Justice 1 year(s) 7 month(s) 18 day(s)
Appellant ITO, Haridwar
Respondent M/s. Mahima Udyog, Uttrakhand
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-11-2017
Assessment Year 2012-2013
Appeal Filed On 12-04-2016
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE : SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI L.P. SAHU ACCOUNTANT MEMBER ITA NO. 2013/DEL./2016 ASSESSMENT YEAR: 2012-13 INCOME - TAX OFFICER WARD 1(3)(2) HARIDWAR. (APPELLANT) VS. M/S. MAHIMA UDYOG PLOT NO. 144-145 SECTOR-IIDC HARIDWAR(PAN-AAPFM 8548J) (RESPONDENT) APPELLANT BY SH. RAGHU NATH SR. DR RESPONDENT BY MS. RANO JAIN ADVOCATE & SH. PRANGAL SRIVASTAVA ADVOCATE ORDER PER L.P. SAHU A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) DEHRADUN DATED 01.01.2016 FOR THE ASSESSMENT YEAR 2 012-13 ON THE FOLLOWING SOLITARY EFFECTIVE GROUND : 1. THE LD. CIT(A) DEHRADUN HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE PENALTY U/S. 271(1)(C) OF THE I.T. ACT 1961 IGNORIN G THE FACT THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN S PITE OF BEING WELL AWARE OF THE FACT THAT DEDUCTION U/S. 80IC WAS PATENTLY INAD MISSIBLE ON INTEREST INCOME. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 26.07.2009 DECLARING TOTAL INCOME OF RS.1 52 72 495 /- AFTER CLAIMING DEDUCTION DATE OF HEARING 23.11.2017 DATE OF PRONOUNCEMENT 30 .11.2017 ITA NO. 2013/DEL./2016 2 U/S. 80IC OF THE IT ACT AT RS.18 54 42 574/-. THE C ASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED ON 10.08.2013 WHICH W AS SERVED UPON THE ASSESSEE THROUGH SPEED POST AND NOTICE U/S. 142(1) WAS ISSUE D ON 30.12.2013 ALONG WITH QUESTIONNAIRES. AFTER ISSUING THE NOTICE U/S. 143( 2) THE ASSESSEE REVISED HIS RETURN OF INCOME ON 02.09.2013 DECLARING NIL INCOME BY CLAIMING DEDUCTION U/S. 80IC TO THE EXTENT OF RS.20 07 15 069/- WHICH INCLU DES BUSINESS INCOME AS WELL AS INTEREST RECEIVED ON FDRS OF RS.1 52 72 495/-. THE ASSESSEE ALSO OBTAINED CA CERTIFICATE IN FORM NO. 10CCB (PB 15 TO 19) FOR CLA IMING DEDUCTION U/S. 80IC AND IN THE CERTIFICATE AT SL. NO. 29 & 30 THE AUDITOR HAS ALSO CERTIFIED THAT THE DEDUCTION U/S. 80IC IS ELIGIBLE UPTO RS.20 07 15 070/-. THE A O DID NOT ACCEPT THE REVISED RETURN FILED BY THE ASSESSEE CLAIMING DEDUCTION U/S . 80IC ON INTEREST INCOME AND MADE ADDITION OF RS.1 52 72 495/- ON THE PREMISE TH AT THIS INTEREST INCOME WAS NOT GENERATED FROM THE MANUFACTURING ACTIVITIES OF THE ASSESSEES BUSINESS SO AS TO CLAIM IT ELIGIBLE FOR DEDUCTION U/S. 80IC OF THE AC T. THE ASSESSEE DID NOT CHALLENGE THIS ADDITION. THEREAFTER PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WERE INITIATED BY THE AO BY ISSUING NOTICE TO THE ASSESS EE AND THE ASSESSING OFFICER IMPOSED PENALTY OF RS.47 19 203/- BASED ON THE ABOV E ADDITION. IN APPEAL THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND THE ORDER OF THE AO DELETED THE PENALTY VIDE IMPUGNED ORDER. IT IS THIS ORDER WHICH HAS BEEN CHALLENGED BY THE REVENUE BY WAY OF THIS A PPEAL BEFORE THE TRIBUNAL. ITA NO. 2013/DEL./2016 3 3. THE LEARNED DR SUBMITTED THAT THE AO WAS JUSTIFI ED TO IMPOSE PENALTY ON THE ADDITION MADE ON ACCOUNT OF INTEREST INCOME WHICH WAS WRONGLY CLAIMED BY THE ASSESSEE AS ELIGIBLE FOR DEDUCTION U/S. 80IC OF THE ACT. THE SAID INTEREST INCOME WAS NOT PART OF THE ELIGIBLE BUSINESS INCOME DERIVED FR OM THE MANUFACTURING ACTIVITIES OF THE UNDERTAKING AS PRESCRIBED UNDER THE ACT. THE REFORE THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME FOR WHICH PENALTY IMPOSED HAS WRONGLY BEEN DELETED BY THE LD. CIT(A). 4. ON THE OTHER HAND THE LD. AR OF THE ASSESSEE RE LIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE AO HAS NOT SPELT OUT IN THE NOTICE ISSUED U/S. 274 READ WITH SECTION 271 AS TO ON WHICH CHARGES THE IM PUGNED PENALTY HAS BEEN LEVIED WHETHER CONCEALING THE PARTICULARS OF INCO ME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE NO PROPER SATISFA CTION HAS BEEN RECORDED BY THE AO FOR IMPOSITION OF PENALTY. RELIANCE IS PLACED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CIT VS. MANJUNATHA COTTON A ND GINNING FACTORY 359 ITR 565(KAR) DECISION OF HONBLE SUPREME COURT IN CIT VS. SSAS EMERALD MEADOWS (SLP NO. 11485/2016 DATED 05.08.2016 AND OTHER SEVE RAL DECISION OF VARIOUS BENCHES OF TRIBUNAL. IT WAS FURTHER SUBMITTED THAT MERE REJECTION OF CLAIM OF DEDUCTION WOULD NOT ATTRACT PENALTY U/S. 271(1)(C) OF THE ACT AS ALSO HELD BY ITA NO. 2013/DEL./2016 4 HONBLE SUPREME COURT IN CIT VS. RELIANCE PETROPROD UCTS (P) LTD. 322 ITR 158 AND SEVERAL OTHER DECISIONS OF VARIOUS HIGH COURTS AS R ELIED IN THE WRITTEN SYNOPSIS. THE ASSESSEE HAD OBTAINED CA CERTIFICATE IN PRESCRIBED FORM 10CCB IN WHICH TOTAL AMOUNT CLAIMED AS DEDUCTION HAS BEEN CERTIFIED BY T HE CHARTERED ACCOUNTANT TO BE ELIGIBLE FOR DEDUCTION U/S. 80IC OF THE ACT AND THE REFORE BONA FIDE OF THE CLAIM CANNOT BE DOUBTED AND FOR SUCH AN INNOCENT CLAIM N O PENALTY CAN BE LEVIED. RELIANCE IS PLACED ON THE DECISION OF HONBLE SUPRE ME COURT IN PRICE WATERHOUSE COOPERS (P) LTD. V. CIT 348 ITR 306 AND VARIOUS OT HER DECISIONS AS RELIED BY ASSESSEE IN HER WRITTEN SYNOPSIS. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE ENTIRE MATERIAL ON RECORD WE FIND THAT THE LD. CIT(A) HAS MADE REASONED ORDER AN D IT DOES NOT CALL FOR ANY INTERFERENCE. THE LD. CIT(A) HAS DELETED THE PENALT Y OBSERVING AS UNDER : 8. I HAVE DULY CONSIDERED THE FACTS AND CIRCUMSTAN CES OF THE CASE. PERUSAL OF THE AUDIT REPORT IN THE FORM 10CCB SHOWS THAT THE AUDITOR IN COLUMN NO. 29 HAD CITED THE PROFITS AND GAINS DERIVED BY THE UNDERTAKING/ENTERPRISE FRO M THE ELIGIBLE BUSINESS AS RS. 20 07 15 070/- AND IN COLUMN NO. 30 LISTED THE SAME AMOUNT AS THE AMOUNT ELIGIBLE FOR DEDUCTION U/S 80IC. THEREAFTER THE ASSESSEE HAD FI LED A RETURN IN WHICH IT HAD EXCLUDED THE INTEREST INCOME AND CLAIMED THE DEDUC TION OF ONLY RS. 18 54 42 574/-. SUBSEQUENTLY BEFORE THE CASE COULD BE ASSESSED IT REVISED THE RETURN AND FILED A CLAIM FOR DEDUCTION AT RS 20 07 15 069/- I.E. THE AMOUNT IND ICATED BY THE AUDITOR IN THE AUDIT REPORT IN FORM 10CCB AS THE ELIGIBLE AMOUNT FOR DED UCTION. THUS THE ASSESSEE WAS CLEARLY FILING A BONAFIDE CLAIM IN VIEW OF THE TREATMENT OF THE SAID INTEREST AS DEDUCTIBLE BY THE AUDITOR. HOWEVER NO PART OF THE INCOME WAS CONCEAL ED FROM THE AO AND NO INACCURACIES WERE OBSERVED IN ANY OF THE HEADS OF INCOME REPORTE D BY THE ASSESSEE IN ITS RETURN. THE ONLY CASE IS THAT BY CLAIMING DEDUCTION WHICH IT WA S NOT ENTITLED TO THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF WHAT ITS TAXABLE INCOME W AS AND THEREFORE IT WAS LIABLE TO PENALIZED. HOWEVER THE COURTS HAVE HELD OTHERWISE. THE CASE OF THE ASSESSEE APPEARS TO BE COVERED BY THE JUDGEMENT OF HON'BLE SUPREME COUR T IN THE MATTER OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. 322 ITR 158 (2010) IN WHICH THE HON'BLE SUPREME COURT HAD HELD ITA NO. 2013/DEL./2016 5 THAT 'A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO INACCURATE PARTICULARS. THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS ITS INCOME IN HIS RETURN WHICH DETAILS IN THEMSELVES WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED A S THE CONCEALMENT OF INCOME ON ITS PART. IT IS UP TO THE AUTHORITIES TO ACCEPT ITS CL AIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE WHICH CLAIM WA S NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WOULD NOT ATTRACT TH E PENALTY IT/S 271(1)(C). IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETUR N WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON THE ASSESSEE WILL INVITE PENALTY U/S 271(I)(C) AND IT DEARLY NOT THE INTENDMENT OF THE LEGISLATURE'. IN THE CASE OF CIT VS CAPLIN POINT LABORATORIES LTD REPORTED IN 293 ITR 524 MADRAS TH E ASSESSEE COMPANY CONSIDERED INTEREST INCOME AS BUSINESS INCOME AND CLAIMED DEDU CTION U/S. 80HHC AND 801. CLAIM OF ASSESSEE WAS NOT ACCEPTED AND ADDITION WAS MADE. IT WAS HELD THAT IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED PARTICULARS OF INCOME OR FUR NISHED INACCURATE PARTICULARS OF INCOME. 9. TO MY MIND THE CASE OF THE ASSESSEE IS COV ERED BY THE JUDGEMENTS OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S (P) LTD. (SUPRA.) AND ALSO SUPPORTED BY THE JUDGEMENT OF THE HON'BLE RAJASTHAN HIGH COUR T IN CIT VS HARSHVARDHAN CHEMICALS & MINERALS LTD 259 ITR 212 (2003) AND THE MADRAS HI GH COURT IN CIT VS CAPLIN POINT LABORATORIES 293 ITR 52(MAD). IN THE CIRCUMSTANCES THE PENALTY U/S 271(1)(C) IS HELD TO BE UNWARRANTED GIVEN THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS THEREFORE DELETED. A PERUSAL OF THE NOTICE ISSUED BY THE AO PLACED AT PAPER BOOK PAGE 28 SHOWS THAT IT IS IN A TYPED FORMAT COMMON TO ALL ASSESSEES WHERE IN THE NAME OF THE ASSESSEE IS WRITTEN IN THE PRESCRIBED COLUMN AND THE AO HAS NOT STRUCK DOWN EVEN THE NON- APPLICABLE PORTION OF THE TWO CHARGES PRINTED IN TH E SAID NOTICE I.E. CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME. THEREFORE IN VIEW OF THE DECISION OF KARNATAKA HIG H COURT IN THE CASE OF MANJUNATHA (SUPRA) PENALTY IMPOSED IS NOT SUSTAINA BLE U/S. 271(1)(C) OF THE ACT. BESIDES THE BONAFIDE OF ASSESSEES CLAIM STANDS PR OVED BY THE AUDITORS CERTIFICATE IN FORM 10CCB INDICATING THE AMOUNT OF RS. 20 07 15 069/- AS THE ELIGIBLE AMOUNT ITA NO. 2013/DEL./2016 6 FOR DEDUCTION U/S. 80IC WHICH IN VIEW OF VARIOUS D ECISIONS RELIED BY THE LD. AR GOES TO EXONERATE THE ASSESSEE FROM PENAL CONSEQUENCES. THERE IS NO MATERIAL ON RECORD FROM THE SIDE OF REVENUE TO DEVIATE FROM THE PRINCI PLE OF LAW LAID DOWN BY HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (S UPRA) THAT MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WI LL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE FOR IMPOSITION OF PENALTY. IN PRESENCE OF ALL THESE FACTS WE FIND NO SUBSTANCE IN THE APPEAL OF THE REVENUE AND NO MATERIAL TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH HAS BEEN PASSED AFTER RELYING UPON VARIOUS JUDICIAL PRO NOUNCEMENTS. ACCORDINGLY THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED BEI NG BEREFT OF MERITS. 6. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2017. SD/- SD/- (BHAVNESH SAINI) (L.P. SA HU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30.11.2017 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES NEW DELHI