The ITO, Ward-1(2),, Ahmedabad v. Anant Polysters Pvt. Ltd.,, Ahmedabad

ITA 588/AHD/2007 | 2001-2002
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 58820514 RSA 2007
Assessee PAN AABCA6142B
Bench Ahmedabad
Appeal Number ITA 588/AHD/2007
Duration Of Justice 2 year(s) 11 month(s) 15 day(s)
Appellant The ITO, Ward-1(2),, Ahmedabad
Respondent Anant Polysters Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-01-2010
Date Of Final Hearing 19-01-2010
Next Hearing Date 19-01-2010
Assessment Year 2001-2002
Appeal Filed On 07-02-2007
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI D.C. AGARWAL A.M.) I.T.A. NO. 588/AHD./2007 ASSESSMENT YEAR : 2001-2002 INCOME TAX OFFICER WARD-1(2) AHMEDABAD -VS.- ANANT POLYSTER PVT. LTD. AHMEDABAD (PAN : AABCA 6142 B) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI M.C. PAND IT SR. D.R. RESPONDENT BY : N O N E O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER :- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 16.11.2006 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V AHMEDABAD FOR THE ASSESSMENT YEAR 2001-02 CANCELLING THE PENALTY OF R S.2 56 207/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961. 2. IN THIS CASE NOTICE OF HEARING WAS SENT THROUGH REGISTERED POST. THIS WAS RETURNED BY THE POSTAL AUTHORITY WITH THE REMARKS NOT FOUND. IN T HESE CIRCUMSTANCES WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE ON THE BASIS OF SUBMISSIONS M ADE BY THE LD. DEPARTMENTAL REPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY. IN THIS CASE THE A.O. LEVIED THE PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF F OLLOWING THREE ADDITIONS :- (I) ADDITION ON ACCOUNT OF DEPRECIATION RS.1 03 178/- (II) ADDITION ON ACCOUNT OF P.F. RS. 34 230/- (III) ADDITION ON ACCOUNT OF EXCESS FUEL CONSUMPTION RS.5 10 400/- 4. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) CANCELLED THE SAME ON THE GROUND THAT IN THE ASSESS MENT ORDER THE A.O. HAS NOT INITIATED THE PENALTY PROCEEDINGS IN RESPECT OF DISALLOWANCE OF D EPRECIATION AMOUNTING TO RS.1 03 178/-. WITH REGARD TO THE ADDITION ON ACCOUNT OF BELATED PAYMEN T OF P.F. OF RS.34 230/- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT T HIS ISSUE IS DEBATABLE BECAUSE AS PER THE HON'BLE ITAT AHMEDABADS DECISION IF SUCH AMOUNT I S PAID BEFORE THE DUE DATE OF FILING OF 2 RETURN THE SAME SHOULD BE ALLOWED. FINALLY WITH R EGARD TO EXCESS CONSUMPTION OF FUEL THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVE D THAT IN QUANTUM APPEAL THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE A DDITION TO THE EXTENT OF RS.5 10 400/- WHICH WAS BASICALLY ON ACCOUNT OF UNDER-STATEMENT O F CLOSING STOCK. ACCORDING TO LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THIS ASPECT NO PENALTY WAS INITIATED BY THE A.O. IN PENALTY ORDER THE A.O. HAS DISCUSSED ONLY ABOUT TH E ADDITION ON ACCOUNT OF EXCESS FUEL CONSUMPTION BUT THE FACT IS THAT ADDITION CONFIRMED IS ON AN ENTIRELY DIFFERENT ITEM I.E. UNDER- STATEMENT OF CLOSING STOCK. IN THESE CIRCUMSTANCE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE BECAUSE THE A.O. LEVIED THE PENALTY ON A DIFFERENT UNDERSTANDING. 5. AGGRIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING ON BEHALF OF REVENUE SHR I M.C. PANDIT SR. D.R. APPEARED AND CONTENDED THAT PENALTY IN RESPECT OF THREE ITEMS OF ADDITIONS WAS RIGHTLY LEVIED BY THE A.O. AND LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN CANCELLING THE SAME. 7. HAVING HEARD THE LD. DEPARTMENTAL REPRESENTATIVE WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THE ASSESSMENT ORDE R THE A.O. HAS NOT MENTIONED THAT HE IS INITIATING PENALTY IN RESPECT OF DISALLOWANCE OF DE PRECIATION TO THE EXTENT OF RS.1 03 178/-. IN THE ASSESSMENT ORDER THE A.O. DISALLOWED DEPRECIATION BECAUSE AS PER LEASE DEED THE ASSESSEE IS NOT THE OWNER OF THE BUILDING BUT THE LESSER IS THE FIN AL OWNER OF THE CONSTRUCTION. IT IS TRUE THAT THE CONSTRUCTION WAS DONE BY THE ASSESSEE BUT AS PER C LAUSE 14 OF THE LEASE DEED ON EXPIRY OF A TERM OF CONTRACT THE OWNER OF THE FACTORY WILL PAY EXPE NSES OF CONSTRUCTION ON EXPIRY OF LEASE. IT APPEARS THAT THROUGH MISTAKE THE ASSESSEE CLAIMED D EPRECIATION AND ON BONAFIDE MISTAKE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE. 7.1. COMING TO THE PENALTY LEVIED IN RESPECT OF DIS ALLOWANCE OF PROVIDENT FUND AND EXCESS FUEL CONSUMPTION IN OUR OPINION THE CIT(A) HAS GI VEN COGENT REASON FOR CANCELLING THE PENALTY IN RESPECT OF THESE TWO ADDITIONS. AT THE RELEVANT TIME THE ISSUE REGARDING ALLOWANCE OF DEDUCTION OF P.F. WHICH IS PAID LATE WAS HIGHLY D EBATABLE BECAUSE ITAT AHMEDABAD BENCH HAS HELD THAT IF THE PAYMENT IS MADE BEFORE THE DUE DATE OF FILING OF RETURN THE SAME SHOULD BE 3 ALLOWED. IN VIEW OF THIS PENALTY UNDER SECTION 271 (1)(C) ON THIS DISALLOWANCE IS NOT LEVIABLE. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRM ED THE DISALLOWANCE IN RESPECT OF EXCESS FUEL CONSUMPTION ON A DIFFERENT GROUND I.E. IT SHO ULD BE ADDED IN THE CLOSING STOCK. OBVIOUSLY FOR THIS ADDITION ALSO THE PENALTY UNDER SECTION 2 71(1)(C) IS NOT LEVIABLE BECAUSE CLOSING STOCK OF THIS YEAR WILL BE OPENING STOCK OF THE NEXT YEAR. T O SUM UP THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR CAN CELLING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE THEREFORE DECLINE TO INTERFERE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER PRONOUNCED IN THE COURT ON 22.01.2010 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 / 01 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE RESPONDENT 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.