Income Tax Appellate Tribunal - Ahmedabad
Alidhara Technotex Industries, ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "A" AHMEDABAD
Before Shri N.S.SAINI, ACCOUNTANT MEMBER and
Shri MAHAVIR SINGH, JUDICIAL MEMBER
ITA No.3737/ Ahd/2007
Assessment Year:2004-05
Date of hearing:11.10.10 Drafted:25.10.10
M/s. Alidhra Technotex V/s. ACIT, Vapi Circle, N.M.
Industries, Plot No.122, Patel, Building,
Vaghdhara Road, Dadra Ajitnagar, Chala,
Road, Silvasa, Vapi - 396191
P AN No.AAEEA2988E
(Appellant) .. (Respondent)
Appellant b y :- Shri K.N.Bhatt, AR
Respondent by:- Shri R.K. Dhaniesta, DR
ORDER
PER Mahavir Singh Judicial Member:-
This appeal of the assessee is arising out of the order of the Commissioner of Income-tax (Appeals), Valsad in appeal No.CIT(A)/VLS/6/07-08 dated 20-06-2007. The assessment was framed by the ACIT, Vapi Circle, Vapi under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the "the Act") vide order dated 30-10-2006 for the assessment year 2004-05. The penalty under dispute was levied by the ACIT under Section 271(1)(c) of the Act vide order dated 22-3-2007.
2. The only issue in this appeal of assessee is against the order of CIT(A) in confirming the penalty amounting to Rs.1,99,860/- levied by Assessing Officer u/s.271(1)(c) of the Act. For this, assessee has raised the following ground No.1:-
"(1) The learned Commissioner of Income Tax (Appeals-A), Valsad has erred in confirming the penalty of Rs.1,99,860/- imposed by the A.O u/s. 271(1)(c)."
3. The brief facts are that the unit of the assessee is situated in the Union Territory of Dadra & Nagar Haveli and is entitled for under Section 80IB of the Act upto the assessment year 2003-2004 i.e. for ten years as per the Act. In the original return of income filed on 29.10.2004, the assessee claimed deduction of ITA No3737/Ahd/2007 A.Y2004-05 M/s. Alidhra Technotex Inds. v. ACIT Vapi Circle Page 2 Rs.5,57,089/- under Section 80IB of the Act. Thereafter, scrutiny assessment was undertaken as the assessee has claimed deduction under Section 80IB for the 11th consecutive years. To the show cause notice issued to the assessee for giving reasons for claiming deduction under Section 80IB for the 11th consecutive years, the assessee filed revised return withdrawing the claim of deduction under Section 80IB as wrongly claimed. Since the assessee filed revised return withdrawing the claim of the deduction only after the issuance of show cause notice and not suo motto the AO held that the assessee has furnished inaccurate particulars of income and levied penalty of Rs.1,99,860/- under Section 271(1)(c) of the Act. In the first appeal by the assessee, the CIT(A) confirmed the penalty imposed by the AO by following observations:
"3.4 I have considered the facts of the case as well as the rival contentions. It is evident that the act of filing revised return by the appellant has taken place only after the AO pin pointing our finding out the appellant's so-called lapse. It is not a case where the appellant itself has realized about its mistake at its own and filed the revised return. I am, therefore, of the considered view that the appellant would not get the benefit of the decisions on which it has sought to rely upon. It is quite unlikely and hard to believe that the appellant has made such a huge claim in the 11th consecutive year only through inadvertence. I am, therefore, convinced that it is a case in which inaccurate particulars of income have been returned and therefore, a fit case for imposition of penalty u/s.271(1)(c) of the Act. Even the facts of the case do not suggest that it is a claim made through inadvertence. I am, therefore, inclined to confirm the action of the AO. The penalty of Rs.1,99,860/- imposed by the AO u/s.271(1)(c) of the Ac is hereby confirmed. The appellant's appeal is dismissed."
4. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee pleaded before us that it had claimed inadvertently deduction u/s.80IB to the tune of Rs.5,57,089/- for the 11th year but realized the mistake and furnished revised return on 06-01-2006 which was as per the provisions of Section 139(5) of the Act. It was further stated that no refund was issued to the assessee-company before assessment proceedings and assessee-company only came to know in Dec.'05 and furnished immediately the revised return. According to the assessee the details showing that it was 11th year were on the records of the Department and there was no attempt on the part of the assessee to conceal deliberately as the claim of deduction u/s.80IB of the Act were subject to scrutiny assessment. Further, scrutiny assessment for assessment year 2003-04 was also made, but, in fact, it was an oversight which resulted in claiming ITA No3737/Ahd/2007 A.Y2004-05 M/s. Alidhra Technotex Inds. v. ACIT Vapi Circle Page 3 deduction u/s 80IB which was not available to the assessee-company. A mere omission or negligence would not constitute deliberate act. According to the assessee, it is immaterial whether the revised return was filed before issuance of notice u/s 143(2) or before any show cause notice. It explained that if it was the intention of the assessee to wrongly claim the deduction u/s.80IB, it could have claimed the same for assessment year 2005-06 also, as the return in respect of which was field before issuance of show cause notice for assessment year 2004-05. The Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 258 regarding the word 'particulars' used in section 271(1)(© had held that there can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in the case under consideration, it was found that the assessee had furnished full detail and had not concealed any particulars of income or had furnished any inaccurate particular of income. In the case of Reliance Petroproducts (P) Ltd. (supra) the Hon'ble Supreme Court held that where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)©. A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The assessee had demonstrated that its claims were bona fide claims. The claim regarding sections 80IB of the Act was surrendered by the assessee by filing a valid revised return and proved its bona fide. In the light of above discussion, it was not found that the case under consideration was a fit case for levy of penalty u/s 271(1)©. Therefore, the penalty levied was to be cancelled. The orders of the lower authorities are reversed and the appeal of assessee is allowed.
5. In the result, assessee's appeal is allowed.
Order pronounced in Open Court on 29/10/2010
Sd/- Sd/-
(N.S.Saini) (Mahavir Singh)
Accountant Member Judicial Member
Ahmedabad,
Dated : 29/10/2010
ITA No3737/Ahd/2007 A.Y2004-05
M/s. Alidhra Technotex Inds. v. ACIT Vapi Circle Page 4
*Dkp
Copy of the Order forwarded to :
1. The Assessee.
2. The Revenue.
3. The CIT(Appeals)-
4. The CIT concerns.
5. The DR, ITAT, Ahmedabad
6. Guard File.
BY ORDER,
/True copy/
Deputy/Asstt.Registrar
ITAT, Ahmedabad