ACIT,, Khanna v. M/s Little Bee Impex,, Doraha

ITA 912/CHANDI/2009 | 2006-2007
Pronouncement Date: 17-02-2012 | Result: Dismissed

Appeal Details

RSA Number 91221514 RSA 2009
Assessee PAN AABFL9170D
Bench Chandigarh
Appeal Number ITA 912/CHANDI/2009
Duration Of Justice 2 year(s) 5 month(s) 14 day(s)
Appellant ACIT,, Khanna
Respondent M/s Little Bee Impex,, Doraha
Appeal Type Income Tax Appeal
Pronouncement Date 17-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 17-02-2012
Date Of Final Hearing 06-02-2012
Next Hearing Date 06-02-2012
Assessment Year 2006-2007
Appeal Filed On 03-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 912/CHD/2009 ASSESSMENT YEAR: 2006-07 THE ACIT VS M/S LITTLE BEE IMPEX. CIRCLE VILL. MALLIPUR G.T.ROAD KHANNA DORAHA. PAN NO. AABFL9170D (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. JAISHREE SHARMA RESPONDENT BY : SHRI ASHWANI KUMAR DATE OF HEARING : 08.02.2012 DATE OF PRONOUNCEMENT :17.02.2012 ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-II. LUDHIANA 29.6.2009 RELATING TO ASSESSMENT YEAR 2006 -07 AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1) (C) OF THE I.T. ACT 1 961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING THE PENALTY AMOUNTING TO RS. 22 62 100/- LEVIED U/S 271(1) (C) OF THE INCOME TAX ACT 1961. 2. THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING THE PENALTY U/S 271(1)(C) OF THE INCOME TA X ACT 1961 IGNORING THE FACT THAT ASSESSEE VIOLATED THE PROVISIONS OF SECTION 10B OF THE INCOME TAX ACT 19 61 2 WHICH ATTRACTED PENALTY U/S 271(1) (C) OF THE INCOM E TAX ACT 1961. 3. THAT THE ORDER OF CIT(A)-II BE SET ASIDE AND THA T OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS RELATING TO THE CASE ARE THAT TH E ASSESSEE HAD FILED RETURN OF INCOME CLAIMING EXEMPTION U/S 10B OF THE ACT @ 100%. HOWEVER DURING THE ASSESSMENT PROCEEDINGS THE ASS ESSEE FILED LETTER DATED 22.12.2008 UNDER WHICH IT REVISED ITS CLAIM OF EXEM PTION U/S 10B OF THE ACT @ 90% AS AGAINST ORIGINAL CLAIM OF 100% EXEMPTI ON. THE ASSESSEE PAID THE TAX THERE ON ALONGWITH INTEREST UP-TO-DATE . THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT MADE THE UNDER MENTIONE D ADDITIONS:- 1. DISALLOWANCE OF INTEREST ON ACCOUNT OF RS. 37 332/- INTEREST FREE ADVANCE GIVEN TO SISTER CONCERN 2. ADDITION ON ACCOUNT OF DONATION RS. 6 300/ - 3. ADDITION ON ACCOUNT OF CESSATION OF LIABILITY RS . 30 493/- U/S 41(1) ADDITION 4. ADITION ON ACCOUNT OF GENERAL REPAIR RS. 2 50 000/- AND MAINTENANCE EXPENDITURE. 5. ADDITION U/S 10B OF THE I. TAX ACT 1961 RS. 64 39 945/- TOTAL ADDITION RS. 67 64 060/- 4. THE ASSESSING OFFICER HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY LEVIED PENALT Y OF RS. 22 62 100/-. THE CIT(A) OBSERVED THAT THE ADDITION OF RS. 30 493 /- U/S 41(1) WAS MADE AS THE ASSESSEE FAILED TO FILE THE CONFIRMATION OF THE OUTSTANDING LIABILITY. FURTHER ADDITION OF RS. 2 50 000/- WAS MADE AS THE ASSESSEE WAS UNABLE TO PRODUCE SUPPORTING VOUCHERS IN RESPECT OF CLAIM OF EXPENDITURE UNDER THE HEAD REPAIR AND MAINTENANCE. THE ASSESSEE AGREED TO THE ABOVE SAID ADDITION OF RS. 2 50 000/-. IN RESPECT OF BOTH THE SE ADDITIONS THE CIT(A) WAS OF THE VIEW THAT THE LEVY OF PENALTY U/S 271(1) (C) OF THE ACT IS 3 UNJUSTIFIED. THE LAST ADDITION WAS IN RESPECT OF TH E REVISED CLAIM OF EXEMPTION U/S 10B OF THE ACT. THE SAID EXEMPTION WA S CLAIMED ON THE BASIS OF CERTIFICATE ISSUED BY THE AUDITOR. THE CIT(A) W AS OF THE VIEW THAT THERE WAS CONSIDERABLE FORCE IN THE CONTENTION OF THE ASS ESSEE THAT DEDUCTION U/S 10B WAS CLAIMED ON THE BASIS OF BONAFIDE BELIEF AND HENCE NO PENALTY WAS LEVIABLE IN RESPECT OF SUCH DISALLOWANCE U/S 10B OF THE ACT. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS S.D. RICE MILLS [275 ITR 206(P& H)]. PENALTY LEVIED U/S 271(1) (C) OF THE ACT WAS THUS DELETED BY THE C IT(A). 5. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID D ELETION OF PENALTY LEVIED U/S 271(1) (C) OF THE ACT. THE REVENUE VIDE GROUND NO.1 HAS RAISED THE AFORESAID ISSUE AND VIDE GROUND NO.2 SPECIFIC I SSUE OF DELETION OF PENALTY U/S 271(1) (C) OF THE ACT VIS A VIS VIOLATI ON OF THE PROVISIONS OF SECTION 10B OF THE ACT HAVE BEEN RAISED. 6. SMT. JAISHREE SHARMA APPEARED ON BEHALF OF THE A SSESSEE AND SHRI ASHWANI KUMAR APPEARED ON BEHALF OF THE ASSESSEE AN D PUT FORWARD THEIR CONTENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE PENALTY LEVIED U/S 271(1) (C) OF THE ACT. THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION HAD CLAIMED ITS INCOME TO BE EXEMPT UNDER THE PROVISION S OF SECTION 10B OF THE INCOME TAX ACT. THE ASSESSEE IN RETURN OF INCOME F ILED FOR THE YEAR UNDER CONSIDERATION ON THE BASIS OF CERTIFICATE ISSUED B Y THE AUDITORS HAD CLAIMED THE EXEMPTION U/S 10B OF THE ACT AT 100% OF THE INCOME DECLARED. HOWEVER DURING THE ASSESSMENT PROCEEDINGS THE ASS ESSEE VIDE LETTER DATED 22.12.2008 HAD REVISED ITS CLAIM OF EXEMPTION U/S 1 0B OF THE ACT AT THE 4 RATE OF 90% AS AGAINST 100% CLAIMED IN THE RETURN O F INCOME. THE CONSEQUENT TAX AND INTEREST THEREON WERE SUE MOTTO PAID BY THE ASSESSEE BY REVISING ITS CLAIM OF EXEMPTION U/S 10B OF THE ACT. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS CERTAIN ADDITIONS WERE MADE BY THE ASSESSING OFFICER AS REPRODUCED IN THE PARAS HEREIN ABOVE FOR THE FAILURE ON BEHALF OF THE ASSESSEE TO ESTABLISH ITS CLAIM. THE CLAIM MADE BY THE ASSESSEE IN RESPECT OF THE ADDITIONS MADE U/S 41(1) OF THE ACT AND DISALLOWANCE OUT OF REPAIR AND MAINTENANCE EXPENSES DOES NOT WARRANT LEVY OF PENALTY U/S 271(1) (C) OF THE ACT WHERE THE ASSE SSEE HAD FAILED TO FILE COMPLETE EVIDENCE IN SUPPORT OF ITS EXPENDITURE. A CCORDINGLY WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND DELETE THE PENALTY LEVIED U./S 271(1) (C) OF THE ACT IN RESPECT OF THE TWO ADDITIONS MADE TOTALING RS. 30 493/- AND RS. 2 50 000/-. 8. NOW COMING TO THE NEXT ADDITION ON ACCOUNT OF E XEMPTION CLAIMED U/S 10B OF THE ACT. THE ASSESSEE HAD BONAFIDELY CL AIMED DEDUCTION U/S 10B OF THE ACT @ 100% OF ITS INCOME BY RELYING ON THE C ERTIFICATE ISSUED BY THE AUDITORS. EVEN IN THE PRECEDING TWO YEARS THE ASS ESSEE HAD MADE SIMILAR CLAIM AND THE SAME HAD BEEN ALLOWED IN THE HANDS OF THE ASSESSEE. HOWEVER DURING THE YEAR UNDER CONSIDERATION THE S AID CLAIM WAS REVISED BY THE ASSESSEE SUE MOTTO BY FILING A LETTER IN THI S REGARD AND RESTRICTING ITS EXEMPTION TO 90% OF THE INCOME AS AGAINST 100% CLAI MED IN THE RETURN OF INCOME. THE ASSESSEE HAD FURNISHED COMPLETE PARTIC ULARS IN RESPECT OF ITS CLAIM OF EXEMPTION U/S 10B OF THE ACT AND THE ONLY VARIANCE IN THE INCOME IS PERCENTAGE OF EXEMPTION ALLOWABLE TO THE ASSESSE E. IN THE TOTALITY OF FACTS OF CIRCUMSTANCES OF THE CASE WHERE THE ASSES SEE HAD MADE A BONAFIDE CLAIM ON THE ADVICE OF ITS AUDITORS AND HAD FILED C OMPLETE DETAILS IN RESPECT OF CLAIM WE FIND NO MERIT IN THE LEVY OF PENALTY U /S 271(1) (C) OF THE ACT. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON 'BLE PUNJAB & HARYANA 5 HIGH COURT IN CIT VS S.D. RICE MILLS (SUPRA). IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE UPHOLDING THE ORDER OF C IT(A) WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF FEBRUARY 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17 TH FEBRUARY 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR