Punjab-Haryana High Court
Commissioner Of Income Tax vs S.D. Rice Mills on 3 August, 2004
Equivalent citations: (2004)192CTR(P&H)24, [2005]275ITR206(P&H)
Bench: N.K. Sud, Adarsh Kumar Goel
JUDGMENT
1. Revenue has filed this appeal under Section 260A of the IT Act, 1961 (for short 'the Act'), against the order of the ITAT, Amritsar Bench, Amritsar (for short 'the Tribunal'), dt. 31st Dec, 2002, whereby appeal of the assessee has been allowed and penalty levied under Section 271(l)(c) of the Act has been cancelled.
2. For the asst. yr. 1992-93 the assessee had claimed deduction under Section 80-I amounting to Rs. 33,965. The deduction was supported by the requisite certificate of the chartered accountants M/s N. Kumar Chhabra & Co. The AO found that the sheller was installed in the accounting year 1983-84 and the first year of the business was shown as 1985-86. The assessee had already availed deduction for 8 years and it was not eligible for deduction under Section 80-1 for the asst. yr. 1992-93. The AO, therefore, referred the matter to the chartered accountant who had issued the certificate. The chartered .accountant apparently sent a letter received by the AO on 13th July, 1993 stating therein as under:
"We are neither competent to certify nor we have certified that the unit M/s S.D. Rice Mills, Jalalabad, is eligible for deduction under Section 80-1 of the IT Act, 1961."
3. In view :Of the above submissions of the chartered accountant, the AO disallowed the claim for deduction and also initiated proceedings under Section 271(l)(c),of the Act.for furnishing inaccurate particulars of the income. In pursuance of the penalty proceedings, vide. order dt. 18th Aug., 1994, penalty of Rs. 28,527 was imposed with the prior approval of the CIT(A) [sic), Bathinda Range, Bathinda. Aggrieved by the said order, the assessee filed an appeal before the CIT(A), Bathinda, which was dismissed. On further appeal to the Tribunal, the assessee's contention that it had claimed the deduction in bona fide manner on the basis of the certificate issued by the chartered accountant was accepted and penalty was cancelled.
4. We have heard learned counsel for the parties and have perused the findings of the Tribunal.
5. It is an admitted position that the claim of deduction, was duly supported by the certificate of the chartered accountant in the prescribed format. In this view of the matter, no fault can be found with the claim of the assesses that it had claimed the deduction in a bona fide manner. The Revenue's contention about the denial of the chartered accountant cannot be used against the assessee for two reasons-firstly, the assessee was never confronted with this denial and secondly, this denial is contrary to the factual position on record. We are, therefore, satisfied that no substantial question of law arises out of the order of the Tribunal for consideration by this Court.
The appeal is accordingly dismissed.
6. Before parting, we must observe that we are not happy with the conduct of the chartered accountant in first issuing a certificate and then denying it altogether. Prima facie, we are satisfied that it is an appropriate case where action should be taken against the chartered accountant. However, before making any observation or arriving at any conclusion, we deem it proper to issue a notice to M/s N. Kumar Chhabra & Co., chartered accountants, SCO No. 1094-95, Sector 22-B, Chandigarh to explain their conduct before us. Notice be issued to the said company without payment of process fee to appear before us and explain their conduct on 5th Oct, 2004.