ITO 24(3)(1), MUMBAI v. KANTA R. SALVI, MUMBAI

ITA 2148/MUM/2010 | 2001-2002
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 214819914 RSA 2010
Bench Mumbai
Appeal Number ITA 2148/MUM/2010
Duration Of Justice 10 month(s) 11 day(s)
Appellant ITO 24(3)(1), MUMBAI
Respondent KANTA R. SALVI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-01-2011
Assessment Year 2001-2002
Appeal Filed On 18-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGHA VAN (JM) I.T.A.NOS.2148 TO 2152/MUM/2010 (A.YS. 2001-02 TO 2005-06)) INCOME-TAX OFFICER-24(3)(1) R.NO.703 C-11 7 TH FLOOR B.K.C. BANDRA (E) MUMBAI-400 051. VS. SMT. KANTA R. SALVI 21 ROCKY INDL. ESTATE I.B. PATEL RD. GOREGAON (W) MUMBAI-400 063. PAN:ANTPS8914R APPELLANT RESPONDENT APPELLANT BY SHRI SANDEEP GOYAL. RESPONDENT BY NONE. O R D E R PER BENCH : THIS BATCH OF 5 APPEALS BY THE REVENUE IS AGAINST THE DELETION OF PENALTY U/S.271(1)(C) BY THE LD. CIT(A) WHICH WAS IMPOSED BY THE A.O. IN RELATION TO THE ASSTT. YEARS 2001-02 TO 2005-06 AMOUNTING TO RS.1 47 489/- RS.97 951/- RS.51 462/- RS.8 84 819/- AND RS.5 36 570/- RESPEC TIVELY. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL WAS CARRYING ON THE BUSINESS OF MANUFACTURING METAL CAP S. DEDUCTION U/S.80IB(2)(III) WAS CLAIMED BY THE ASSESSEE IN THESE YEARS WHICH WAS ALLOWED BY THE AO FOR THE ASSTT. YEARS 2001-02 TO 2004-05. IN THE PROCEED INGS FOR THE ASSTT. YEAR 2005- 06 THE AO NOTED THAT THE ASSESSEE WAS COVERED U/S. 80IB(3)(II) AS IT WAS A SMALL SCALE INDUSTRY AND MIDC AREA WAS NOT COVERED. ON THE BASIS OF HIS DECISION FOR THE ASSTT. YEAR 2005-06 THE AO INITIATED RE-ASSESS MENT PROCEEDINGS FOR THE OTHER YEARS UNDER APPEAL AND RESTRICTED THE DEDUCTION TO 25% INSTEAD OF 100% CLAIMED BY THE ASSESSEE. IN THE PENALTY PROCEEDINGS THE AS SESSEE EXPLAINED THAT THERE ITA NOS.2148 TO 2152/M/10 2 WAS A BONA FIDE MISTAKE IN CLAIMING 100% DEDUCTION BY OVERLOOKING THE AMENDMENT IN THE PROVISIONS OF THE ACT REGARDING BA CKWARD AREA. IT WAS ALSO CLAIMED THAT THE DEDUCTION IN THESE YEARS WAS CLAIM ED ON THE BASIS OF AUDIT REPORT IN FORM NO.10CCB DULY SIGNED BY THE CHARTERE D ACCOUNTANT. NOT CONVINCED WITH THE ASSESSEES SUBMISSIONS THE AO IMPOSED PEN ALTY U/S.271(1)(C). HOWEVER THE LD. CIT(A) CONCURRED WITH THE SUBMISSI ONS ADVANCED ON BEHALF OF THE ASSESSEE AND ORDERED FOR THE DELETION OF PENALT Y IN ALL THE YEARS. 3. WE HAVE HEARD THE LD. D.R. AND PERUSED THE RELEV ANT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESS EE DESPITE NOTICE. IT IS OBSERVED THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80 IB(2)(III) WHICH WAS HELD BY THE AO TO BE CORRECTLY COVERED U/S.80IB(3)(II). IT IS NOT A CASE WHERE A FALSE DEDUCTION WAS CLAIMED. RATHER IT IS A CASE IN WHIC H DEDUCTION WAS CLAIMED UNDER SUB-SEC. (2) OF SEC. 80IB BASED ON THE REPORT OF TH E CHARTERED ACCOUNTANT IN FORM NO.10CCB WHEREAS THE AO OPINED THAT DEDUCTION WAS AVAILABLE AT A LOWER RATE IN SUB-SEC. (3) OF SEC. 80IB. IN OUR CONSIDERE D OPINION THE LD. CIT(A) WAS JUSTIFIED IN ORDERING THE DELETION OF PENALTY IN TH ESE YEARS FOR THE REASON THAT THE ASSESSEE HAD NOT MADE ANY FALSE CLAIM OF DEDUCTION. ON THE CONTRARY IT WAS BACKED BY THE REPORT OF A CHARTERED ACCOUNTANT WH O IS EXPERT IN THE FIELD OF COMPUTATION OF DEDUCTION. THE FACT THAT THE AO AL SO ALLOWED DEDUCTION UNDER ONE SUB-SECTION INSTEAD OF ANOTHER GOES TO PROVE TH AT THE ASSESSEE WAS OTHERWISE ELIGIBLE FOR DEDUCTION. WHEN ALL THE REL EVANT PARTICULARS WERE PROPERLY DISCLOSED BY THE ASSESSEE AND THE AO SIMPLY ALLOWED DEDUCTION UNDER A DIFFERENT SUB-SECTION THAN THAT CLAIMED BY THE ASSESSEE THER E CANNOT BE ANY QUESTION OF BRINGING THIS CASE WITHIN THE MISCHIEF OF SEC. 271( 1)(C). RECENTLY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) HAS HELD THAT MERELY BECAUSE THE ASSES SEE CLAIMED DEDUCTION WHICH ITA NOS.2148 TO 2152/M/10 3 WAS NOT ACCEPTED BY THE REVENUE PENALTY U/S. 271(1 )(C) WAS NOT ATTRACTED. A MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME. 4. THE LD. D.R. HAS RELIED ON THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN KUTTOOKARAN MACHINE TOOLS VS. ACIT (2009) 313 ITR 4 13 (KER.) FOR CONTENDING THAT PENALTY FOR CONCEALMENT COULD BE IMPOSED EVEN WHEN THE ASSESSEE CLAIMED WRONG DEDUCTION ON THE BASIS OF THE AUDITORS REPOR T. IT IS SEEN THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. HIMACHAL AGR O FOODS LTD. (2008) 9 DTR (P & H) 46 AND THE HONBLE DELHI HIGH COURT IN CIT VS. S. DHANABAL (2009) 309 ITR 268 (DEL.) HAVE HELD THAT PENALTY U/S.271(1(C) IS NOT LEVIABLE WHEN THE ASSESSEE INADVERTENTLY CLAIMED DEDUCTION ON THE BAS IS OF INCORRECT ADVICE OF THE CHARTERED ACCOUNTANT. BOTH THESE JUDGMENTS HAVE BEE N PRONOUNCED AFTER THE JUDGMENT OF THE KERALA HIGH COURT (SUPRA). BE THAT AS IT MAY NOW THE ISSUE STANDS SETTLED BY THE JUDGMENT OF THE HONBLE SUPRE ME COURT IN THE CASE OF RELIACE PETROPRODUCTS PVT. LTD. (SUPRA) AS PER WHI CH PENALTY IS NOT SUSTAINABLE IN THE PRESENT CIRCUMSTANCES. WE THEREFORE UPHOL D THE IMPUGNED ORDER FOR ALL THESE YEARS UNDER CONSIDERATION. 5. IN THE RESULT ALL THESE APPEALS STAND DISMISSED . ORDER PRONOUNCED ON THE 28TH DAY OF JANUARY 2 011. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEM BER MUMBAI: 28TH JANUARY 2011. NG: ITA NOS.2148 TO 2152/M/10 4 COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-34 MUMBAI. 4 CIT-24 MUMBAI. 5.DR A BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA NOS.2148 TO 2152/M/10 5 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 24-01-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 24-01-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *