Income Tax Appellate Tribunal - Ahmedabad
Dy.Cit.,Circle-1,, Ahmedabad vs Abhishek Engineers Pvt.Ltd.,, ... on 6 February, 2017
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'बी', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" B " BENCH, AHMEDABAD
सव ी आर.पी.तोलानी, या यक सद य एवं द प कुमार के डया, लेखा सद य के सम!।
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER
And SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.1302/Ahd/2014
( नधा रण वष / Assessment Year : 2005-06)
The DCIT बनाम/ M/s.Abhishek Engineers
Circle-1 Vs. Pvt.Ltd.
Ahmedabad Abhishek House
5, Shrimali Society
Ahmedabad
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAACA 9827 E
(अपीलाथ( /Appellant) .. ( )यथ( / Respondent)
अपीलाथ( ओर से / Appellant by : Shri James Kurian, Sr.DR
)यथ( क+ ओर से/Respondent by : Shri Rajesh C. Shah, AR
ु वाई क+ तार ख /
सन Date of Hearing 25/01/2017
घोषणा क+ तार ख /Date of Pronounce ment 6 /02/2017
आदे श / O R D E R
PER PRADIP KUMAR KEDIA, AM:
The captioned appeal is directed by the Revenue against the order of the Commissioner of Income Tax(Appeals)-6, Ahmedabad [CIT(A) in short] dated 04/02/2014 for Assessment Year (AY) 2005-06 wherein the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") imposed by the AO by its order dated 30/03/2012 was deleted.
ITA No.1302/Ahd/2014DCIT vs. Abhishek Engg. P.Ltd.
Asst.Year - 2005-06 -2-
2. The grounds of appeal raised by the Revenue reads as under:-
1. The CIT(A) has erred in law and on facts in deleting the penalty of Rs.27.44 lacs levied u/s.271(1)9c) despite the fact that the corresponding quantum additions were already confirmed by the CIT(A).
2. The CIT(A) has not appreciated the fact that in the Return of income the assessee had claimed deduction of expenses in contravention of the provisions of section 40(a)(ia) and had also claimed undue depreciation/expenses on motor cars which were not used for the purpose of business. The same tantamount to furnishing of inaccurate particulars of income liable to penalty u/s.271(1)(c) of the Act.
3. Briefly stated, the assessee filed return of income for AY 2005-06 declaring total income of Rs.7,79,010/-. The return was selected under scrutiny and assessment order under section 143(3) was passed vide order dated 31/12/2007. The Assessing Officer (AO) while framing the assessment made certain disallowances towards (i) late payment of TDS under section 40(a)(ia) Rs.19,97,980/-, (ii) disallowance on account of non-deduction of TDS under section 40(a)(ia) on carting expenses Rs.50,86,848/- and (iii) disallowance of depreciation allowance on motor car quantified at Rs.2,65,904/-.
4. Consequent upon the assessment, the AO also imposed penalty of aforesaid disallowances vide order dated 30/03/2012. In the penalty ITA No.1302/Ahd/2014 DCIT vs. Abhishek Engg. P.Ltd.
Asst.Year - 2005-06 -3- order, the AO alleged that the assessee has made payment to certain sub- contractors of Rs.19,97,980/- and TDS deducted thereon at Rs.20,379/- was remitted to Government treasury after the due date prescribed under the Act. In respect of carting expenses of Rs.50,86,848/- the AO noted that the Assessee has not discharged its statutory obligations of TDS. The AO thus held that the assessee has violated the provisions of section 40(a)(ia) of the Act and accordingly found the assessee of guilty of furnishing inaccurate particulars of income contemplated under section 271(1)(c) of the Act. Similarly, the AO also inter-alia observed that the assessee company has inter alia claimed depreciation on purchase of new Cars amounting to Rs.2,65,904/-. It was noted by the AO that the new Cars have been purchased in the name of Directors of the company and therefore depreciation on Car bought in the name of Directors instead of assessee-company is not allowable. Following the findings in quantum order, the AO also imposed penalty in respect of the aforesaid depreciation.
5. In the first appeal before the CIT(A), the assessee challenged the penalty imposed of Rs.27,44,812/- for allegedly furnishing inaccurate particulars of income as bad in law. It was contended before the CIT(A) that additions/disallowances of Rs.19,97,980/- made under section 40(a)(ia) on account of delay in deposit of TDS has been deleted by the CIT(A) in quantum appeal. Similarly, the addition of Rs.50,86,848/-
ITA No.1302/Ahd/2014DCIT vs. Abhishek Engg. P.Ltd.
Asst.Year - 2005-06 -4- under section 40(a)(ia) has been set aside by the CIT(A) vide order dated 26/08/2010 with some specific directions. It was also simultaneously contended that the assessee has not furnished any inaccurate particulars of income towards claim of depreciation and expenses on Motor Car, etc.
6. The CIT(A) examined the case of the assessee threadbare and found merit in the contentions raised in respect of various items of additions/disallowances as reproduced in its order and consequently deleted the penalty imposed by the AO under section 271(1)(c) of the Act.
7. On perusal of the assessment order, penalty order and the appellate order of the authorities below, we do not find any merit in the objections raised by the Revenue against the order of the CIT(A). Substantial penalty arises on account of disallowances made under section 40(a)(ia) owing to late payment of TDS or non-deduction of TDS as per provisions of the Act. We are in agreement with the view of the CIT(A) that such disallowances, per se, does not call for imposition of penalty in terms of section 271(1)(c) of the Act. On facts, we note that the assessee has got substantial relief on merits from the CIT(A) in quantum proceedings. The AO has not challenged the appellate order in quantum proceedings. Thus, the basis for imposition of penalty does not survive at the first place. Pertinent to say that notwithstanding the outcome of ITA No.1302/Ahd/2014 DCIT vs. Abhishek Engg. P.Ltd.
Asst.Year - 2005-06 -5- the quantum proceedings, the penalty under section 271(1)(c) of the Act not attracted for such technical default towards non-deduction of TDS or late payment thereof.
8. As regards disallowance of depreciation for registering the Car acquired by the company in the name of the Director, the issue of allowance of depreciation or otherwise itself is quite debatable and imposition of penalty on such debatable issue in our considered view is far fetched.
9. In the totality of the facts and the circumstances of the case, the action of the AO in resorting to the provisions of section 271(1)(c) of the Act for various disallowances/additions as noted above is neither valid nor legitimate.
10. In the result, Revenue's appeal stands dismissed.
This Order pronounced in Open Court on 6/02/2017
Sd/- Sd/-
(आर.पी.तोलानी) ( द प कुमार के डया)
या यक सद य लेखा सद य
( R.P. TOLANI ) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 6/ 02 /2017
ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS
ITA No.1302/Ahd/2014
DCIT vs. Abhishek Engg. P.Ltd.
Asst.Year - 2005-06
-6-
आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ( / The Appellant
2. )यथ( / The Respondent.
3. संबं5धत आयकर आयु7त / Concerned CIT
4. आयकर आय7
ु त(अपील) / The CIT(A)-6, Ahmedabad
5. 8वभागीय त न5ध, आयकर अपील य अ5धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स)या8पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 25.1.17 (dictation-pad 12-pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ...25.1.17
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......6.2.17
7. Date on which the file goes to the Bench Clerk.................. 6.2.17
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................