ACIT, Panipat v. M/s. Textile World, Panipat

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER & SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 4448/DEL/2009 ASSESSMENT YEAR: 2002-03 ACIT VS. TEXTILE WORLD PANIPAT CIRCLE SHIV NAGAR BEHIND GANDHI MARG PANIPAT. PANIPAT. PAN NO. AACET0017E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. CHAND SR. DR RESPONDENT BY : SH. GURDEEP CA ORDER PER I.P. BANSAL J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST THE ORDER OF CIT(A) DATED 16 TH SEPTEMBER 2009 FOR A.Y. 2002-03. GROUNDS OF APPEAL READ AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) OF THE I NCOME TAX ACT 1961 IMPOSED ON THE BASIS OF WRONG CLAIM OF DEDUCTION U/ S 80IB OF THE INCOME TAX ACT 1961. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD D ELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE DEPARTMENT IN THE PRESENT APPEAL IS AGGRIEVE D BY THE ORDER OF CIT(A) VIDE WHICH PENALTY LEVIED ON ASSESSEE U/S 27 1(1)(C) AMOUNTING TO RS. 2 23 320/- HAS BEEN DELETED. THE PRESENT PENAL TY WAS LEVIED IN RESPECT ITA NO. 4448/DEL/09 2 OF DENIAL OF CLAIM OF DEDUCTION U/S 80IB ON THE DUT Y DRAWBACK AND DEPB COMPONENT OF INCOME. LD. CIT(A) HAS DELETED THIS P ENALTY FOLLOWING THE EARLIER DECISION OF ITAT ON THIS ISSUE WHICH ARE LI STED BELOW: - (I) M/S ORIENTAL RUG CO. VS. ACIT PANIPAT ITA NO. 3629 & 3630/D/08 ORDER DT. 02.04.2009 A.Y. 2001- 02 & A.Y. 2002-03. (II) M/S VIRENDER KUMAR JAIN VS. ACIT PANIPAT ITA NO. 3631/D/08 ORDER DT. 02.04.09 A.Y. 2003-04. (III) SPARTAN TRENDS INC. VS. ACIT PANIPAT ITA NO. 3677/D/08 ORDER DT. 02.04.09 A.Y. 2002-03. (IV) M/S MAYUR OVERSEAS VS. ACIT PANIPAT ITA NO. 3734/D/08 ORDER DT. 17.04.09 A.Y. 2004-05. (V) RAJ OVERSEAS VS. ACIT PANIPAT ITA NO. 3735/D/ 08 ORDER DT. 17.4.09 A.Y. 2003-04. (VI) M/S YATI OVERSEAS P. LTD. VS. ACIT PANIPAT I TA NO. 3736/D/08 ORDER DT. 17.4.09 A.Y. 2003-04. (VII) SHIV SHAKTI EXPORTS ITA NO. 3813 & 3814/D/08 ORDER DT. 20.05.09 A.Y. 2002-03 & A.Y. 2003-04. 3. REPRODUCING THE OBSERVATION OF ITAT IN THE CASE OF M/S ORIENTAL RUG COMPANY (SUPRA) LD. CIT(A) HAS OBSERVED THAT JURISD ICTIONAL ITAT HAS DECIDED THE ISSUE THAT WHERE THE CLAIM OF ASSESSEE IS REJECTED U/S 80IB ON DEPB AND DUTY DRAWBACK THEN NO PENALTY WAS TO BE LE VIED. IT IS IN THIS MANNER LD. CIT(A) HAS DELETED THE PENALTY. 4. AFTER NARRATING THE FACTS LD. DR RELIED ON THE P ENALTY ORDER AND IT WAS SUBMITTED THAT NOT ONLY HONBLE JURISDICTIONAL HIGH COURT BUT ALSO HONBLE SUPREME COURT HAS HELD THAT ASSESSEE CANNOT CLAIM D EDUCTION IN RESPECT OF DUTY DRAWBACK AND DEPB. THUS IT WAS PLEADED THAT THE CLAIM OF ASSESSEE ITA NO. 4448/DEL/09 3 WAS FALSE AND THEREFORE PENALTY WAS RIGHTLY LEVIE D BY THE AO AND THE ORDER OF CIT(A) SHOULD BE SET ASIDE AND THAT OF AO SHOULD BE RESTORED. 5. ON THE OTHER HAND LD. AR OF THE ASSESSEE HAS SU BMITTED BEFORE US A COPY OF ORDER OF HONBLE JURISDICTIONAL HIGH COURT DATED 19.11.09 IN ITA NO. 410 TO 412/09 IN THE CASE OF CIT LUDHIANA VS. ARIS UDANA SPINNING MILLS LTD. LUDHIANA (UNREPORTED DECISION) IN WHICH IN RE SPECT OF A SIMILAR CLAIM MADE BY THE ASSESSEE U/S 80IA IT WAS HELD THAT NO P ENALTY U/S 271(1)(C) WAS IMPOSABLE. WHILE HOLDING SO THEIR LORDSHIPS H AVE ALSO CONSIDERED THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F LIBERTY INDIA VS. CIT 293 ITR 520 AND ALSO DECISION OF HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT 317 ITR 218. THEIR LORDSHIPS HAVE ALSO CON SIDERED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILE PROCESSORS AND OTHERS 306 ITR 27 7 AND AFTER CONSIDERING THE SAME THEIR LORDSHIPS HAVE OBSERVED THAT THE ORDER OF ITAT DELETING THE PENALTY CANNOT BE SAID TO BE PERVERSED AS WHEN THE RETURNS WERE FILED THE ISSUE WITH REGARD TO ENTITLEMENT OF DEDUCTION WAS DEBATABLE. HE SUBMITTED THAT THE SAID ORDER IS APPLICABLE TO T HE PRESENT FACTS ALSO AND THEREFORE LD. CIT(A) HAS RIGHTLY DELETED THE PENAL TY. LD. AR ALSO RELIED UPON THE DECISIONS WHICH ARE CITED BY LD. CIT(A) IN HIS ORDER. A COPY OF THE ORDER OF HONBLE JURISDICTIONAL HIGH COURT UPHOLDING THE ORDER OF ITAT REGARDING DELETION OF PENALTY WAS ALSO GIVEN TO LD. DR. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE RETURN OF INCOME WA S FILED IN THE PRESENT CASE ON 31 ST OCTOBER 2002 WHEREIN SUCH CLAIM WAS MADE. THE D ECISION OF ITA NO. 4448/DEL/09 4 HONBLE JURISDICTIONAL HIGH COURT ON THE ISSUE THAT WHETHER OR NOT ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 80IB ON DUTY DRA WBACK AND DEPB IS DATED 27 TH SEPTEMBER 2006 (LIBERTY INDIA VS. CIT 293 ITR 520 ) WHICH IS MUCH AFTER THE DATE OF FILING OF THE RETURN BY THE ASSES SEE. THEREFORE IT CAN BE SAID THAT WHEN ASSESSEE PUT HIS CLAIM FOR DEDUCTION U/S 80IB ON DUTY DRAWBACK AND DEPB COMPONENTS THEN THE ISSUE WAS DEB ATABLE AND THEREFORE THE AFOREMENTIONED DECISION OF HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S ARISUDANA SPINNING MILLS LTD. (SUPRA) WILL BE APPLICABLE AND IT IS TO BE HELD THAT IT IS NOT A FI T CASE WHERE LEVY OF CONCEALMENT PENALTY CAN BE HELD JUSTIFIED. FOR THE SAKE OF CONVENIENCE THE RELEVANT OBSERVATIONS OF HONBLE JURISDICTIONAL HIG H COURT FROM THE SAID DECISION ARE REPRODUCED BELOW: - THE AFORESAID FINDING OF FACT ARRIVED AT BY THE I TAT CANNOT BE SAID TO BE PERVERSE OR AGAINST THE MATERI AL AVAILABLE ON THE RECORD. WHEN THE RETURNS OF INCOM E WERE FILED THE ISSUE WITH REGARD TO ENTITLEMENT OF DEDU CTION U/S 80IA ON THE PROFITS DERIVED FROM TRADING TURNOVER I .E. TRADING IN THE RAW WOOL AND KNITTED CLOTH WAS DEBTABLE AN D THIS ISSUE WAS SETTLED WITH THE JUDGMENT OF THIS COURT I N M/S LIBERTY INDIA LTD. (SUPRA) WHICH HAS BEEN UPHELD BY THE SUPREME COURT IN M/S LIBERTY INDIA (SUPRA). THEREF ORE THE ITAT HAS RIGHTLY COME TO THE CONCLUSION THAT THE AS SESSEE DID NOT DELIBERATELY OR CONSCIOUSLY CONCEALED THE T RUE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. THE JUDGMENT CITED BY THE COUNSEL FOR THE APPELLANT IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE PENALTY HAS BEEN DELETED ON THE BASIS OF AFORESAID FINDING OF FACT. ITA NO. 4448/DEL/09 5 IN VIEW OF THE AFORESAID FINDING OF FACT IN OUR O PINION NO SUBSTANTIAL QUESTION OF LAW IS ARISING OUT OF TH E ORDER OF THE ITAT. HENCE THESE APPEALS ARE DISMISSED. 7. IN VIEW OF ABOVE DISCUSSION WE FIND NO INFIRMIT Y IN THE ORDER OF CIT(A) WHEN HE DELETED THE PENALTY VIDE IMPUGNED O RDER. WE DECLINE TO INTERFERE. 8. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22.01.201 0 (K.G. BANSAL) (I.P. BANSAL) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: *KAVITA CHOPRA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR