ACIT, Panipat v. Sh. O.P. Goel (HUF) Prop., Panipat

ITA 4453/DEL/2009 | 2003-2004
Pronouncement Date: 29-01-2010 | Result: Dismissed

Appeal Details

RSA Number 445320114 RSA 2009
Bench Delhi
Appeal Number ITA 4453/DEL/2009
Duration Of Justice 2 month(s) 5 day(s)
Appellant ACIT, Panipat
Respondent Sh. O.P. Goel (HUF) Prop., Panipat
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 29-01-2010
Date Of Final Hearing 21-01-2010
Next Hearing Date 21-01-2010
Assessment Year 2003-2004
Appeal Filed On 23-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI K.D.RANJAN AND SHRI GEORGE MATHAN ITA NOS. 4452 4453 & 4454/DEL/2009 ASSESSMENT YEARS : 2002-03 2003-04 & 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX PANIPAT CIRCLE PANIPAT. VS. SHRI O.P.GOEL (HUF) PROP. PARKASH WOOLLEN INDS. E-70 INDUSTIRAL AREA PANIPAT. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SUNITA SINGH SR. D.R. RESPONDENT BY : SHRI GURJEET SINGH C.A. ORDER PER K.D.RANJAN AM: THESE APPEALS BY THE REVENUE FOR ASSESSMENT YEARS 2 002-03 2003- 04 AND 2004-05 ARISE OUT OF SEPARATE ORDERS OF CIT( A) KARNAL. THESE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE ONLY ISSUE WHICH IS COMMON IN ALL THE THREE APPEALS RELATES TO DELETING THE PENALTY IMPOSED U/S 271(1)(C ) OF THE ACT IMPOSED ON THE BASIS OF WRONG CLAIM OF DEDUCTION U/S 80IB OF INCOME-TAX ACT 1961 EXCEPT DIFFERENCE IN FIGURE AMOUNT OF PENALTY IMPOSED FAC TS ARE IDENTICAL IN THESE APPEALS. 3. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 ON 30/ 10/2002; FOR ASSESSMENT YEAR 2003-04 ON 30/10/2003 AND FOR ASSES SMENT YEAR 2004-05 2 ON 09/10/2004. IN THE RETURNS OF INCOME THE ASSESS EE CLAIMED DEDUCTION U/S 80IB IN RESPECT OF EXPORT INCENTIVES IN THE FORM OF DEPB AND DUTY DRAW BACK. THE ASSESSING OFFICER HOWEVER WHILE COMPLET ING ASSESSMENT U/S 143(3) DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB I N RESPECT OF EXPORT INCENTIVES RELYING ON THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF CIT V. STERLING FOODS 237 ITR 579. THE ASSESSING OF FICER ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C ) ON THE GROUND TH AT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME IN THE FORM OF CLAIMING UNALLOWABLE DEDUCTION U/S 80IB ON EXPORT INCENTIVES AND WRONG C OMPUTATION OF DEDUCTION U/S 80HHC AND 80IB BY NOT APPLYING THE PR OVISIONS OF SEC. 80IB READ WITH SEC. 80IA(9) OF THE ACT. 4. IN THE COURSE OF PENALTY PROCEEDINGS IT WAS CON TENDED BY THE ASSESSEE THAT PENALTY PROCEEDINGS COULD NOT BE INITIATED IN VIEW OF THE FACTS THAT UNDER IDENTICAL CIRCUMSTANCES THE ASSESSING OFFICER HAD DROPPED PENALTY PROCEEDINGS IN SOME OF THE CASES. IT WAS ALSO STAT ED THAT PENALTY WAS NOT IMPOSABLE IN VIEW OF DECISION OF ITAT CHANDIGARH IN THE CASE OF ACIT V. VIJAY KIRAN HOTEL LTD. (ITA NO.987 AND 988 OF 2007 DATED 24/3/2008) AND IN THE CASE OF ACIT V. ARISUDANA SPINNING MILLS LTD . RELIANCE WAS ALSO PLACED ON SEVERAL DECISIONS INCLUDING THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. S.D.RICE M ILLS 275 ITR 206. IN VIEW OF THE AFORESAID DECISIONS IT WAS CONTENDED TH AT THERE WAS DIFFERENCE OF OPINION ON ALLOWABILITY OF DEDUCTION U/S 80IB ON DU TY DRAW BACK AND DEPB AND SINCE THERE WAS DIFFERENT JUDGMENTS OF DIFFEREN T HIGH COURTS ON THE SAME ISSUE MEANING THEREBY THAT JUDICIARY ITSELF WA S NOT CERTAIN WHETHER A PARTICULAR DEDUCTION WAS ALLOWABLE OR NOT. THEREFOR E THE ASSESSEE COULD NOT BE PENALIZED U/S 271(1)(C ) OF THE ACT FOR THE CLAI M OF DEDUCTION U/S 80IB IN RESPECT OF EXPORT INCENTIVES. HOWEVER THE ASSESSIN G OFFICER RELYING ON 3 DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LIBERTY INDIA V. CIT 207 CTR 243 AND OTHER DECISIONS HELD T HAT DEDUCTION U/S 80IB WAS NOT AVAILABLE IN RESPECT OF DUTY DRAW BACK AND DEPB. THEREFORE PENALTY U/S 271(1)(C ) WAS IMPOSABLE AS THE ASSESSE E HAD CLAIMED WRONG DEDUCTION THEREBY FURNISHING INACCURATE PARTICULARS OF HIS INCOME. 5. ON APPEAL BEFORE THE LD. CIT(A) ASSESSEE MADE D ETAILED SUBMISSIONS WHEREIN IT WAS SUBMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES ITAT IN MANY CASES OF CIT(A) KARNAL RANGE ITSELF HAS DELETE D THE PENALTY. LD. CIT(A) AFTER GOING THROUGH VARIOUS DECISIONS OF VAR IOUS HIGH COURTS AND ITAT DELHI BENCHES DELETED THE PENALTY BY OBSERVIN G AS UNDER: 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE. IN THE PRESENT APPEAL ALSO TWO VIEWS WERE CLEARLY POSSIBLE ON THE ISSUE OF DEDUCTION U/S 80IB WHICH W ERE SUPPORTED BY ORDERS OF THE HONBLE ITAT AS WELL AS DECISIONS OF HONBLE HIGH COURTS. FROM THE FACTS OF THE CASE IT CANNOT BE SA ID THAT ASSESSEE FURNISHED ANY INACCURATE PARTICULARS OR CONCEALED A NY PARTICULARS AND THE CLAIM IS SUPPORTED BY A CHARTERED ACCOUNTANTS CERTIFICATE. THE PENALTY HAS BEEN LEVIED MERELY BECAUSE THE CLAIM WA S NOT ALLOWABLE BUT THE CLAIM WAS PROPERLY SUPPORTED BY THE CERTIFI CATE FROM A CHARTERED ACCOUNTANT AND ALL THE PARTICULARS WERE C ORRECTLY FURNISHED RELATING TO THE DEDUCTION U/S 80IB AND THE RECEIPT OF EXPORT INCENTIVES. THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSI DERATION ARE SIMILAR TO THE FACTS OF THE CASE OF M/S ORIENTAL RU G CO. (SUPRA) DECIDED BY HONBLE ITAT AND OTHER CASES WHERE IN S IMILAR CIRCUMSTANCES PENALTY U /S 271(1)(C ) IS DELETED BY HONBLE ITAT DELHI. HENCE RESPECTFULLY FOLLOWING THE DECISION OF HONBLE ITAT IN THE CASE OF M/S ORIENTAL RUG. CO. (SUPRA) AND OTHER CASES THE PENALTY U/S 271(1)(C ) IS DELETED AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 6. BEFORE US LD. SR. D.R. SUPPORTED THE ORDER OF A SSESSING OFFICER. ON THE OTHER HAND LD. A.R. OF THE ASSESSEE RELYING ON DECISION OF ITAT DELHI 4 BENCH A IN THE CASE OF ANAND INTERNATIONAL IN ITA NO.28/DEL/2009 FOR ASSESSMENT YEAR 2002-03 DATED 20/7/2009 AND IN THE CASE OF M/S ORIENTAL RUG COMPANY V. ACIT IN ITA NOS. 3629 AND 3630/DEL/2 008 FOR ASSESSMENT YEARS 2001-02 AND 2002-03 ITAT DELHI BEN CH C DATED 02/4/2009 SUBMITTED THAT PENALTY U/S 271(1)(C ) COU LD NOT BE IMPOSED IN RESPECT OF ADDITIONS MADE DISALLOWING CLAIM OF DEDU CTION IN RESPECT OF DEPB AND DUTY DRAW BACK. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. ITAT DELHI BENCH C IN THE CA SE OF M/S ORIENTAL RUG COMPANY (SUPRA) DELETED THE PENALTY IMPOSED U/S 271 (1)(C) IN RESPECT OF DISALLOWANCE MADE U/S 80IB IN RESPECT OF DEPB AND D UTY DRAW BACK BY OBSERVING AS UNDER: 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORDS CAREFULLY. THERE IS NO DISPUTE ON FACTS THAT ASSESSEE HAVE DISCLOSED COMPLETE DETAILS OF THEIR CLAIMS IN THE RETURNS OF INCOME. THE ASSESSEE HAVE MADE THEIR CLAIMS ON THE BASIS OF ADVISE GIVEN BY THE EXPERT ON THE SUBJECT. THE AUDIT REPOR T AND THE CLAIM IN NECESSARY PROFORMA WERE SUBMITTED ALONG WITH THE RE TURNS. FROM PERUSAL OF THE RECORD IT REVEALED THAT CLAIM OF TH E ASSESSEE WERE BONA FIDE CLAIM. THERE WERE LARGE NUMBERS OF ORDERS AT T HE END OF THE ITAT IN FAVOUR OF ASSESSEE. THE ISSUE WHETHER DEDUCTION UNDER SEC.80-IB WOULD BE ADMISSIBLE ON DUTY DRAW BACK AND DEPB IS STILL A DEBATABLE ISSUE. THERE ARE DIVERGENT OPINION ON THIS ISSUE BY THE DIFFERENT HONBLE HIGH COURTS IS OF THE OPINION THAT DEDUCTIO N UNDER SEC. 80-IB WOULD BE ADMISSIBLE ON DUTY DRAW BACK AND DEPB. IN THE CASE OF LAKHVINDER SINGH IN ITA NO.5169/DEL/04 DECIDED ON S EPTEMBER 28 2005 THEN IN THE CASE OF ACIT VS. VIPIN SARDHANA I N ITA NO.5174/DEL/04 DECIDED ON 17.6.2005 AND AGAIN IN TH E CASE OF ITO VS. ESS KAY ENTERPRISES ITAT DELHI BENCHES HAVE AL LOWED THE DEDUCTION TO THE ASSESSEE UNDER SEC.80-IB ON DUTY D RAW BACK. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LIBERTY SHOES (SUPRA) HAS HELD THAT DEDUCTION UNDER SEC.80-IB WOU LD NOT BE ADMISSIBLE TO THE ASSESSEE. THE SLPS HAVE BEEN FILE D AGAINST THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE HONBL E SUPREME COURT 5 WHICH ARE STAND ADMITTED AS INFORMED BY THE LEARNED REPRESENTATIVE OF THE ASSESSEE. THUS PRIMA FACIE IT INDICATES THAT THIS ISSUE WAS A DEBATABLE ONE. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. BUDH WELL COOPERATIVE SUGAR MILLS (SUPRA) H AS HELD THAT IF AN ASSESSEE HAS MADE A BONA FIDE CLAIM ON THE BASIS OF LAW LAID DOWN BY VARIOUS HONBLE HIGH COURTS THEN PENALTY WOULD N OT BE LEVIED UPON SUCH AN ASSESSEE MERELY ON THE GROUND THAT HIS CLAIM WAS DISALLOWED. SIMILARLY THE HONBLE RAJASTHAN HIGH C OURT IN THE CASE OF CIT VS. HARSHVARDHAN (SUPRA) HAS HELD THAT IF AS ASSESSEE CLAIMS SOME DEDUCTIONS WHICH ARE DEBATABLE THEN IT COULD N OT BE SAID THAT ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED INAC CURATE PARTICULARS OF INCOME WHICH EXPOSED HIM WITH THE PE NALTY PROCEEDINGS UNDER SEC.271(1)(C ) OF THE ACT. SIMILARLY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. TEK RAM (SUPRA) H AS CONSIDERED THIS ISSUE. IN THIS CASE ASSESSEE DID NOT SHOW ENH ANCED COMPENSATION RECEIVED BY HIM ON ACCOUNT OF ACQUISITION OF HIS LA ND AS HIS INCOME. THE ASSESSING OFFICER MADE THE ADDITION AND LEVIED PENALTY UNDER SECTION 271(1)(C ). HONBLE COURT HAS HELD THAT MAT TER RELATING TO TAXABILITY OF ENHANCED COMPENSATION RECEIVABLE BY T HE ASSESSEE WAS STILL IN DISPUTE AND TWO VIEWS WERE CLEARLY POSSIBL E AND THEREFORE NO PENALTY CAN BE IMPOSED. IN THE PRESENT APPEALS ALSO TWO VIEWS WERE CLEARLY POSSIBLE WHICH WERE SUPPORTED BY ORDERS OF THE ITAT AS WELL AS DECISIONS OF HONBLE HIGH COURT. IN SUCH SITUATI ON IT CANNOT BE SAID THAT ASSESSEES HAVE CONCEALED INCOME OR FURNIS HED INACCURATE PARTICULARS. THERE IS NO ALLEGATION BY THE ASSESSIN G OFFICER THAT ASSESSEES HAVE NOT DISCLOSED THE COMPLETE PARTICULA RS. THE ONLY ALLEGATION IS THAT ASSESSEES HAVE CLAIMED DEDUCTION ON DEPB AND DUTY DRAW BACK UNDER SEC.80-IB WHICH IS NOT ADMISSI BLE TO THEM. SINCE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF ORIENTAL RUG COMPANY (SUPRA) PENALTY U/S 271(1)(C ) CANNOT BE I MPOSED IN RESPECT OF DISALLOWANCE MADE U/S 80IB ON ACCOUNT OF DEPB AND D UTY DRAW BACK. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE OR DER PASSED BY THE LD. CIT(A) DELETING THE ADDITION. 6 8. IN THE RESULT APPEAL FILED BY THE REVENUE OF AL L THE YEARS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY 2010. SD/- SD/- (GEORGE MATHAN ) (K.D.RANJAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29.01.2010. PSP COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR 7