Income Tax Appellate Tribunal - Ahmedabad
Income Tax Officer, S.K. Ward-3, , ... vs Adarsh Auto Centre, , Sabarkantha on 7 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH AHMEDABAD
BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER
AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
ITA No.1156/Ahd/2014
(Assessment Year:2007-08)
The Income-tax Officer,
Sabarkantha Ward-3, Himatnagar Appellant
Vs.
M/s. Adarsh Auto Centre,
8, Motipura, Himatnagar, Dist:
Sabarkantha - 383001 Respondent
PAN: AAHFA2095A
राज व क ओर से/By Revenue : Shri James Kurian, Sr. D.R.
आवेदक क ओर से/By Assessee : None
सन
ु वाई क तार ख/Date of Hearing : 06.03.2017
घोषणा क तार ख/Date of
Pronouncement : 07.03.2017
ORDER
PER S. S. GODARA, JUDICIAL MEMBER
This Revenue's appeal for assessment year 2007-08 arises against CIT(A)-VIII, Ahmedabad's order dated 31.01.2014 passed in appeal no. CIT(A)-VIII/ITO S.K. Wd-3/08/12-13, deleting penalty of Rs.10,70,720/- as imposed by the Assessing Officer in order dated 19.03.2012, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short "the Act".
Case called twice. None appears at assessee's behest. It is accordingly proceeded ex parte.
ITA No. 1156/Ahd/2014 ( ITO vs. M/s. Adarsh Auto Centre)A.Y. 2007-08 -2-
2. The Revenue's sole substantive ground seeks to revive the abovestated Section 271(1)(c) penalty of Rs.10,70,720/- as imposed by the Assessing Officer and deleted in course of the lower appellate proceedings. The instant case file reveals that the Assessing Officer had framed a regular assessment on 21.12.2009 inter alia disallowing various expenses of sales commission, tractor sales remuneration, customer awareness, demonstration and fuel of Rs.11.5lacs, Rs.7lacs, Rs.5,71,200/-, Rs.3,06,863/- & Rs.4,45,925/-; respectively. He further initiated the impugned penalty proceedings alleging furnishing of inaccurate particulars and concealment of income.
3. The instant case file reveals that the assessee preferred a quantum appeal. The CIT(A) confirmed all the abovestated disallowances/additions in his order dated 22.03.2010 except to the extent of salary expenses of Rs.64000/- as made by the Assessing Officer. The assessee then filed ITA No.2145/Ahd/2010. The Assessing Officer took up the impugned penalty proceedings in the mean time. He quoted all the abovestated quantum disallowances to conclude that the assessee's act and conduct therein came within the four corners of concealment of income as well as furnishing of inaccurate particulars of income u/s.271(1)(c) of the Act to levy the penalty in question amounting to Rs.10,70,719/- in order dated 19.03.2012. We notice that a co-ordinate bench on the other hand remitted the two quantum disallowances of tractor sales remuneration and customer awareness expenses made for non deduction of TDS u/s.40(a)(ia) of the Act back to the CIT(A) by observing that the assessee's contention of non deductibility of TDS deserved to be decided afresh. Learned co-ordinate bench thereafter restricted the remaining three disallowances (supra) to that in excess of 2.11%, 0.17% & 0.13%; respectively as compared to the corresponding figures in the preceding two assessment years. It is in this backdrop of facts that the learned CIT(A) has deleted the impugned penalty by observing that assessee's case is very well covered as per hon'ble apex court's decision in ITA No. 1156/Ahd/2014 ( ITO vs. M/s. Adarsh Auto Centre) A.Y. 2007-08 -3- Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC) holding that quantum and penalty are separate proceedings wherein each and every disallowance/addition made in case of former does not lead to ipso facto imposition of latter penal action. All this leaves the Revenue aggrieved.
4. We have heard learned Departmental Representative strongly seeking to revive Assessing Officer's action imposing the penalty in question. It has already come on record that the abovestated penalty pertains to five different issues of various disallowances/additions. Two of them are of tractor sale remuneration and customer awareness expenditure involving sums of Rs.7lacs and Rs.5,71,200/-. The Assessing Officer disallowed the same u/s.40(a)(ia) of the Act since the assessee had not deducted TDS thereupon. This is not the Revenue's case that assessee had not actually incurred the above stated expenses so as to dispute the genuineness of the claim. It further transpires that the assessee on the other hand sought to justify its stand that the above reimbursement were not liable for TDS deduction. It has also come on record that the same ultimately stood remitted back to the CIT(A) (supra). It is thus clear that the assessee's instant two claims neither amount to concealment nor furnishing of inaccurate particulars of income so as to be penalized u/s.271(1)(c) of the Act.
5. We now advert to the remaining three quantum issues of sales commission, demonstration and fuel expenses (supra). We reiterate that this tribunal in assessee's quantum appeal (supra) has already restricted the same to that falling excessive then the once declared in two preceding assessment years. This makes it amply clear that the assessee has succeeded in principle in so far as its three expenses claims are concerned. We again deem it appropriate to observe that hon'ble apex court's decision hereinabove has already drawn a distinction between quantum and penalty proceedings. We rely upon the same to conclude that these five above stated heads of expenses ITA No. 1156/Ahd/2014 ( ITO vs. M/s. Adarsh Auto Centre) A.Y. 2007-08 -4- are assessee's genuine claim which could neither held to be concealment of income nor furnishing of inaccurate particulars thereof u/s.271(1)(c) of the Act. We accordingly conclude that the CIT(A) has rightly reversed Assessing Officer's action in imposing the abovestated penalty.
6. This Revenue's appeal is dismissed.
[Pronounced in the open Court on this the 07th day of March, 2017.] Sd/- Sd/-
(PRADIP KUMAR KEDIA) (S. S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad: Dated 07/03/2017
True copy
S.K.SINHA
आदे श क त ल
प अ े
षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आयु!त / Concerned CIT
4. आयकर आयु!त- अपील / CIT (A)
5. )वभागीय ,-त-न ध, आयकर अपील य अ धकरण, अहमदाबाद /
DR, ITAT, Ahmedabad
6. गाड3 फाइल / Guard file.
By order/आदे श से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण, अहमदाबाद ।