M/s. Reinhardt Roto Machine, Baroda v. The ACIT., Circle-2,, Baroda

ITA 906/AHD/2007 | 2002-2003
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 90620514 RSA 2007
Assessee PAN AACFR0394N
Bench Ahmedabad
Appeal Number ITA 906/AHD/2007
Duration Of Justice 3 year(s) 3 month(s)
Appellant M/s. Reinhardt Roto Machine, Baroda
Respondent The ACIT., Circle-2,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 31-05-2010
Date Of Final Hearing 25-05-2010
Next Hearing Date 25-05-2010
Assessment Year 2002-2003
Appeal Filed On 28-02-2007
Judgment Text
ITA.906/AHD/07 A.Y.2002-03 M/S. REINHARDT ROTO MACHINE. 1 IN THE INCOME_TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI MUKUL SHRAVAT J.M. AND SHRI N.S. SAI NI A.M. ITA. NO.906/AHD/2007 (ASSESSMENT YEAR: 2002-03) M/S. REINHARDT ROTO MACHINE B-1 ANURAG SOCIETY AKOTA BARODA. VS THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2 AAYAKAR BHAVAN NR.RACE COURSE CIRCLE BARODA. (APPELLANT) (RESPONDENT) PAN: AACFR 0394N APPELLANT BY : SHRI SUNIL TALATI C.A. RESPONDENT BY : SMT. NEETA SHAH SR. D. R. ( (( ( )/ )/)/ )/ ORDER PER SHRI MUKUL SHRAVAT J.M. THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF C.I.T.(A)-II BARODA DATED 7-12-2006. 2. THE APPELLANT IS AGGRIEVED DUE TO CONFIRMATION O F LEVY OF PENALTY OF RS.5 00 000/- U/S. 271(1) (C) OF THE I.T. ACT. BRIE F FACTS OF THE CASE ARE THAT ASSESSEE HAS FILED RETURN OF INCOME ON 31-10-2002 D ECLARING TOTAL INCOME OF RS. 2 82 560/-. THEREAFTER A SURVEY U/S.133A WAS CONDUC TED ON 14-10-2003 WHEREIN THE STATEMENTS OF THE WORKERS WERE RECORDED AT THE FACTORY AS PER THE DETAILS GIVEN IN PARA-2 OF THE ASSESSMENT ORDER. SUBSEQUEN TLY STATEMENT OF ONE OF THE PARTNER WAS RECORDED ON OATH ON 20 TH OCTOBER 2003 AND ON THE SAME DATE A REVISED RETURN WAS FILED WITHDRAWING THE CLAIM OF D EDUCTION OF RS.9 03 767/- WHICH WAS EARLIER MADE U/S. 80IB IN THE ORIGINAL RE TURN OF INCOME. THE CONTENTION OF THE APPELLANT THAT THE REVISED RETURN OF INCOME WAS FILED VOLUNTARILY WAS NEGATED BY THE ASSESSING OFFICER ON THE GROUND THAT IT WAS FILED AFTER SURVEY AND ITA.906/AHD/07 A.Y.2002-03 M/S. REINHARDT ROTO MACHINE. 2 HENCE THE A.O. INITIATED THE PENALTY PROCEEDINGS AN D IMPOSED PENALTY OF RS.5 00 000/- U/S. 271(1) (C) OF THE I.T. ACT. BEI NG AGGRIEVED THE MATTER WAS CARRIED OUT BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LD. C.I.T.(A) II BARODA HAS CONFIRMED THE PENALTY AFTER GOING THROUGH THE SUBMISSIONS AND FACTS ON THE RECORDS. 4. NOW BEFORE US THE LD. A.R. SHRI SUNIL TALATI C. A. HAS SUBMITTED THAT THE CLAIM U/S. 80IB WAS MADE IN THE ORIGINAL RETURN BEC AUSE THE APPELLANT WAS UNDER BONAFIDE BELIEF THAT IN COMPUTING THE NUMBER OF WOR KERS ENGAGED IN THE MANUFACTURING THE NUMBER OF WORKING PARTNERS ETC. WERE REQUIRED TO BE TAKEN IN TO ACCOUNT AND HENCE A BONAFIDE CLAIM WAS MADE IN T HE ORIGINAL RETURN OF RS.9 03 767/-. THE SAME WAS SUPPORTED BY A DULY AUD ITED ACCOUNTS AND AUDITORS REPORT WHICH CAN BE SEEN AT PAGE NO.4 OF THE PAPER BOOK FILED BEFORE US. ON MERITS OF THE CASE HE SUBMITTED THAT THERE IS NEITHER ANY CONCEALMENT NOR FURNISHING ANY INACCURATE PARTICULARS OF INCOME AND HENCE PENALTY OUGHT NOT TO HAVE BEEN CONFIRMED BY THE FIRST APPELLATE AUTHORIT Y. 5. ON THE OTHER HAND ON BEHALF OF THE REVENUE LD. D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 6. THERE ARE FEW ADMITTED FACTUAL POSITION IN THIS APPEAL WHICH HAVE BEEN DULY CONSIDERED BY US. THAT THE APPELLANT HAD CONSI DERED THE WORKING PARTNERS AS A PART OF WORKERS FOR THE PURPOSE OF COUNTING THE NUMBER OF THE WORKERS AS PRESCRIBED FOR THE PURPOSE OF CLAIM OF DEDUCTION U/ S. 80-IB. ON THE OTHER HAND ADMITTEDLY CONSEQUENT UPON THE SURVEY U/S. 133A IT WAS REVEALED THAT THE ASSESSEE HAD FALLEN SHORT BY FOUR WORKERS. ADMITTED LY THE RETURN WAS REVISED AND THE CLAIM OF DEDUCTION U/S. 80-IB WAS AMENDED. HOW EVER THE REASON FOR THE ALLEGED WRONG CLAIM WAS STATED TO BE ON ACCOUNT OF A WRONG UNDERSTANDING THAT THE WORKING PARTNERS MAY ALSO FALL UNDER THE CATEGO RY WORKERS HENCE THEIR NUMBER WERE INCLUDED IN THE COUNTING OF WORKERS. TH E SECOND REASON FOR THE CLAIM WAS THE AVAILABILITY OF AN AUDIT REPORT FURNI SHED IN THE PRESCRIBED FORMAT IN FORM NO.10CCB DULY CERTIFIED BY A CHARTERED ACCOUNT ANT. ON THE BASIS OF THE CERTIFIED AUDIT REPORT THE ALLEGED CLAIM WAS MADE A S PER THE ORIGINAL RETURN. LATER ITA.906/AHD/07 A.Y.2002-03 M/S. REINHARDT ROTO MACHINE. 3 ON THOUGH A NOTE APPENDED FOR REVISED RETURN THE SA ID CLAIM OF RS.9 03 767/- AS MADE U/S. 80-IB WAS WITHDRAWN WITH A MENTION TO AVO ID LITIGATION AND TO GET MUTUAL PEACE IN FUTURE. DURING THE COURSE OF HEARIN G IT HAS ALSO BEEN STATED THAT THE YEAR UNDER CONSIDERATION WAS THE FIRST YEAR OF THE SAID CLAIM. WITH THIS BACKGROUND WE HAVE NOTICED THAT IN A SITUATION WHEN THE ASSESSEE HAS PROVED BEYOND DOUBT THAT A CLAIM HAS BEEN MADE DUE TO MIST AKE THEN THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BTX CHEMIC AL PVT. LTD. 288 CTR-196 (GUJ.) HAS HELD THAT THE SAID BONA-FIDE BELIEF BEIN G BASED UPON AN ADVICE RECEIVED FROM A CHARTERED ACCOUNTANT THEREFORE HE LD THAT CONCEALMENT PENALTY DO NOT SURVIVE IN THE EYES OF LAW. A RELIANCE FROM THE SIDE OF THE APPELLANT HAS ALSO BEEN PLACED ON A DECISION OF NEW SORATHIA ENGI NEERING CO. 282 ITR 642 (GUJ.) FOR THE PROPOSITION THAT IT IS INCUMBENT UP ON THE A.O. TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICU LARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF I NCOME HAD BEEN FURNISHED BY THE ASSESSEE. AN ANOTHER DECISION HAS BEEN CITED VIZ. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR0158 FOR THE PROPOSITION THAT MER ELY REJECTION OF A BONA-FIDE CLAIM WOULD NOT ATTRACT A CONCEALMENT PENALTY. CONSIDERING THE TOTALITY OF ITS CIRCUMSTANCES UNDER WHICH THE IMPUGNED CLAIM WAS MADE AND THE BONA-FIDES OF THE ASSESSEE ; WE HEREBY PLACE RELIANCE ON THE PRECEDENTS CITED HEREIN ABOVE AND HOLD THAT THIS IS NOT A FIT CASE FOR LEVY OF CONCEALMENT PENALTY AND DIRECT TO DELETE THE SAME. THIS GROUND IS ALLOWED. 7. IN THE RESULT THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31/05/2010. SD/- SD/- (N.S. SAINI) (MUKUL SHRAVAT) ACCOUNTANT MEMBER JUDICIAL MEMBER. AHMEDABAD. DATED: 31/05/2010. ITA.906/AHD/07 A.Y.2002-03 M/S. REINHARDT ROTO MACHINE. 4 S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD.