Income Tax Appellate Tribunal - Pune
Assistant Commissioner Of ... vs The Solapur District Central Co.Op. ... on 12 May, 2017
आयकर अऩीऱीय अधधकरण "बी" न्यायऩीठ ऩण
ु े में ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, PUNE
श्री अननऱ चतुर्वेदी, ऱेखा सदस्य, एर्वं श्री वर्वकास अर्वस्थी, न्यानयक सदस्य के समक्ष ।
BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM
आयकर अऩीऱ सं. / ITA No. 933/PUN/2015
ननधाारण र्वर्ा / Assessment Year : 2008-09
Assistant Commissioner of Income Tax,
Circle - 2, Solapur
.......अऩीऱाथी / Appellant
बनाम/Vs.
The Solapur District Central Co-op. Bank Ltd.,
207-209, Gold Finch Peth,
Solapur
PAN : AAATT9561B
......प्रत्यथी / Respondent
प्रत्याक्षेऩ सं. / CO No. 15/PUN/2017
ननधाारण र्वर्ा / Assessment Year : 2008-09
The Solapur District Central Co-op. Bank Ltd.,
207-209, Gold Finch Peth,
Solapur
PAN : AAATT9561B
.......अऩीऱाथी / Appellant
बनाम / V/s.
Assistant Commissioner of Income Tax,
Circle - 2, Solapur
......प्रत्यथी / Respondent
Assessee by : Shri S.N. Puranik
Revenue by : Dr. Navaljit Kapoor
सुनवाई की तारीख / Date of Hearing : 25-04-2017
घोषणा की तारीख / Date of Pronouncement : 12-05-2017
2
ITA No. 933/PUN/2015 &
CO No. 15/PUN/2017, A.Y. 2008-09
आदे श / ORDER
PER VIKAS AWASTHY, JM :
This appeal by the Department is directed against the order of Commissioner of Income Tax (Appeals)-7, Pune dated 09-02-2015 for the assessment year 2008-09 deleting penalty levied by the Assessing Officer u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The assessee has filed cross objections in the appeal by the Department supporting the findings of First Appellate Authority.
2. The brief facts of the case as emanating from records are: The assessee is a Co-operative Society engaged in Banking business. The assessee filed its return of income for the assessment year 2008-09 on 18-09-2008 declaring loss of `1,30,78,739/-. During the course of scrutiny assessment proceedings the Assessing Officer made disallowances/additions inter alia on account of :
i. Overdue interest on NPA `47,01,85,366/-. ii. Interest on agricultural stabilization fund `52,24,988/-. iii. Interest on corpus fund `13,97,158/-. iv. Provision for bonus `60,500/-. 2.1 The Assessing Officer initiated penalty proceedings u/s. 271(1)(c)
of the Act against the assessee in respect of additions/disallowances made during assessment. Penalty proceedings were initiated for furnishing inaccurate particulars of income. Thereafter, the Assessing Officer vide order dated 28-03-2013 levied penalty of `14,73,49,200/- 3 ITA No. 933/PUN/2015 &
CO No. 15/PUN/2017, A.Y. 2008-09 on the above said additions for furnishing inaccurate particulars and concealing the particulars of income.
2.2 Aggrieved by the order levying penalty u/s. 271(1)(c) of the Act, the assessee filed appeal before the Commissioner of Income Tax (Appeals). In the meantime, the assessee had also challenged additions made during the assessment proceedings and confirmed by the Commissioner of Income Tax (Appeals) before the Tribunal in ITA No. 495/PN/2012. The Tribunal vide order dated 29-09-2014 deleted the addition of `47,01,85,366/- in respect of interest on NPA. However, the Tribunal confirmed the addition made on account of interest on agricultural stabilization fund `52,24,988/-. So far as other two additions i.e. interest debited on corpus fund and provision for bonus, the same were not agitated by the assessee before the Tribunal. The Commissioner of Income Tax (Appeals) vide impugned order deleted the entire penalty by placing reliance on the decision of Tribunal deleting interest on NPA and various other decisions. Now, the Department is in appeal before the Tribunal assailing the findings of Commissioner of Income Tax (Appeals) in deleting penalty u/s. 271(1)(c) in respect of additions confirmed by the Tribunal in assessee's quantum appeal, i.e.:
i. Addition made with respect to interest on agricultural stabilization fund ;
ii. Interest debited to corpus fund; and iii. Excess provision for bonus.
3. Dr. Navaljit Kapoor representing the Department vehemently supported the order of Assessing Officer in levying penalty u/s. 271(1)(c) of the Act. The ld. DR submitted that the Tribunal in 4 ITA No. 933/PUN/2015 & CO No. 15/PUN/2017, A.Y. 2008-09 assessee's appeal challenging the addition made in assessment has deleted the addition made on account of overdue interest on NPA. However, with respect to other additions/disallowances the same have been confirmed by the Tribunal, therefore, Commissioner of Income Tax (Appeals) should have confirmed penalty on such additions / disallowances.
4. On the other hand Shri S.N. Puranik appearing on behalf of the assessee strongly defended the order of Commissioner of Income Tax (Appeals) in deleting the entire penalty. The ld. AR submitted that in so far as disallowance of overdue interest on NPA is concerned the addition has been deleted by the Tribunal in assessee's appeal in ITA No. 495/PN/2012. Therefore, there is no question of levying penalty on the said amount and this fact has been admitted by the ld. DR. As far as the levy of penalty on other issues is concerned, the same are debatable. It is a well settled law that no penalty is leviable where the additions/disallowances are made on difference of opinion. The ld. AR pointed that while initiating penalty proceedings the Assessing Officer has recorded satisfaction for initiating penalty for furnishing inaccurate particulars of income. At the time of levy of penalty the penalty has been levied for furnishing inaccurate particulars and concealing particulars of income. The Assessing Officer is inconsistent in his reasons while recording reasons for levying penalty and at the time of levying penalty. The ld. AR prayed for rejecting the appeal of the Department and upholding the order of Commissioner of Income Tax (Appeals).
5ITA No. 933/PUN/2015 &
CO No. 15/PUN/2017, A.Y. 2008-09
5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The Assessing Officer had initiated penalty proceedings in respect of following additions/disallowances :
i. Overdue interest on NPA `47,01,85,366/-. ii. Interest on agricultural stabilization fund `52,24,988/-. iii. Interest on corpus fund `13,97,158/-. iv. Provision for bonus `60,500/-.
6. In so far as the major addition on account of overdue interest on NPA is concerned, the same has been deleted by the Tribunal in assessee's appeal in ITA No. 495/PN/2012 (supra). The Commissioner of Income Tax (Appeals) by placing reliance on the aforesaid order of Tribunal has deleted the levy of penalty on the said addition.
7. In so far as the other three additions/disallowances are concerned, interest on agricultural stabilization fund has been confirmed by the Tribunal and other two additions were not agitated by the assessee before the Tribunal. The Commissioner of Income Tax (Appeals) has deleted the levy of penalty on the said additions by observing that there was honest difference of opinion between the assessee and the Department on these issues. This finding of the Commissioner of Income Tax (Appeals) has not been rebutted by the ld. DR. It is a well settled law that where there is genuine difference of opinion and the addition has been made by the Assessing Officer, no penalty is leviable on such addition. Assessment proceedings and penalty proceedings are two distinct, separate and independent 6 ITA No. 933/PUN/2015 & CO No. 15/PUN/2017, A.Y. 2008-09 proceedings [Commissioner of Income Tax Vs. Khoday Eswarsa and Sons reported as 83 ITR 369 (SC)]. Therefore, it is not necessary that every addition made during the assessment should ultimately result in levy of penalty. The Assessing Officer has initiated penalty u/s. 271(1)(c) of the Act on the ground that the assessee has furnishing inaccurate particulars of income. A perusal of the documents on record shows that the assessee had made a bonafide claim which was not accepted by the Assessing Officer. It is not a case of furnishing of inaccurate particulars of income. At the most it is a case of making wrong claim. The assessee is a Co-operative Bank and has made full disclosure of particulars in its books of account.
8. The Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Reliance Petroproducts Pvt. Ltd. reported as 322 ITR 158 has held :
"Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature".
Thus, in view of the facts of the case and the decision of Hon'ble Apex Court, we do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in deleting the penalty in toto. We concur with the findings of Commissioner of Income Tax (Appeals) in deleting the penalty. Accordingly, the impugned order is upheld and the appeal of the Department is dismissed.
7ITA No. 933/PUN/2015 &
CO No. 15/PUN/2017, A.Y. 2008-09
9. The assessee has filed cross objections supporting the order of Commissioner of Income Tax (Appeals). Since, the appeal of the Department has been dismissed, the cross objections filed by the assessee have become infructuous and are dismissed, as such.
10. In the result, the appeal of the Department and the cross objections of the assessee are dismissed.
Order pronounced on Friday, the 12th day of May, 2017.
Sd/- Sd/-
(अननऱ चतुवेदी / Anil Chaturvedi) (ववकास अवस्थी / Vikas Awasthy)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER
ऩण
ु े / Pune; ददनाांक / Dated : 12th May, 2017
RK
आदे श की प्रनतलऱवऩ अग्रेवर्त / Copy of the Order forwarded to :
1. अऩीऱाथी / The Appellant.
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त (अऩीऱ) / The CIT(A)-7, Pune
4. Chief Commissioner of Income Tax-6, Pune
5. ववभागीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, "बी" बेंच, ऩुणे / DR, ITAT, "B" Bench, Pune.
6. गार्ड फ़ाइऱ / Guard File.
//सत्यावऩत प्रनत // True Copy// आदे शानुसार / BY ORDER, सहायक ऩांजीकार / Assistant Registrar, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune