Bombay High Court
The Pr. Commissioner Of Income Tax-2, ... vs M/S Novatech Software Pvt. Ltd. Nagpur on 17 February, 2017
Author: Vasanti A Naik
Bench: Vasanti A. Naik, V. M. Deshpande
1 itl2.17.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
INCOME TAX APPEAL NO.2/2017
The Pr. Commissioner of Income Tax-2,
Sataf Chambers, Sadar, Nagpur. .....APPELLANT
...V E R S U S...
M/s. Novatech Software Pvt. Ltd.
Unit No. 103, IT Tower, Opp. VNIT,
Parsodi, Nagpur. ...RESPONDENT
---------------------------------------------------------------------------------------------------
Shri Anand Parchure, Advocate for appellant.
--------------------------------------------------------------------------------------------------
CORAM:- SMT. VASANTI A. NAIK AND
V. M. DESHPANDE, JJ.
DATED :-
FEBRUARY 17, 2017
ORAL JUDGMENT (Per : Smt. Vasanti A Naik, J.)
By this income tax appeal, the appellant-Revenue, challenges the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, Nagpur dated 11.06.2014 and 01.09.2016 respectively holding that the Assessing Officer had committed an error in levying the penalty of Rs.42,00,000/- on the respondent-assessee.
The question that falls for consideration in this appeal is, whether in the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal were justified in holding that the penalty of ::: Uploaded on - 22/02/2017 ::: Downloaded on - 23/02/2017 00:31:31 ::: 2 itl2.17.odt Rs.42,00,000/- could not have been levied on the respondent- assessee under Section 271 (1) (c) of the Income Tax Act.
For the relevant assessment year, the respondent- assessee had claimed the deduction of Rs.1,24,84,297/- under Section 10A of the Income Tax Act. Along with the return, the assessee had furnished a copy of Form No.56F for the relevant assessment year stating therein that the date of commencement of the production in the undertaking of the assessee was 01.06.1999. The Assessing Officer found that the assessee was not entitled to the benefit of Section 10A of the Income Tax Act in the 11th year of production. After noticing the mistake in respect of the claim for deduction, the assessee offered the aforesaid amount as "income" and paid the tax on the same. The assessee unconditionally had withdrawn the said claim and had claimed that the mistake was inadvertent. According to the assessee, in these circumstances, Assessing Officer could not have levied the penalty of Rs.42,00,000/- on the assessee under Section 271 (1) (c) of the Act. After the Assessing Officer passed the order levying penalty, the assessee challenged the said order before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals), held that the assessee had committed a bona fide ::: Uploaded on - 22/02/2017 ::: Downloaded on - 23/02/2017 00:31:31 ::: 3 itl2.17.odt mistake and after realizing the mistake, had unconditionally withdrawn the claim and offered the amount that was sought to be deducted under Section 10A of the Act as his income and had paid the taxes on the same. The Commissioner held that in the circumstances of the case, penalty under Section 271 (1) (c) of the Act could not have been levied. While holding so, it was observed by the Commissioner of Income Tax that the assessee was getting his account audited by the Chartered Accountant from the assessment years 2000-2001 and since the assessee had not claimed deduction for three assessment years; 2006-07, 2009-10 and 2010-11 under Section 10 (A) of the Act, the assessee bona fide believed that he was entitled to seek the deduction under Section 10A of the Act in the year 2010-2011 as it could be considered as the 9th year. It was found by the Commissioner that in Form 56A, the date of commencement of production was rightly shown as 01.06.1999. The order of the Assessing Officer was set aside in the appeal filed by the assessee. The appellant challenged the order of the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal, by the order dated 01.09.2016, dismissed the appeal filed by the appellant.
::: Uploaded on - 22/02/2017 ::: Downloaded on - 23/02/2017 00:31:31 :::
4 itl2.17.odt On hearing the learned counsel for the appellant and on a perusal of the orders passed by the authorities, it appears that there is no scope for interference with the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, in this appeal. For the assessment year under consideration, the assessee had shown the date of commencement of production in Form 56F, as 01.06.1999. The assessee had not concealed the date of production or had not made any mistake in pointing out the same. The authorities, therefore, rightly held that the assessee had not concealed anything and not stated any incorrect particulars of income in the years under consideration. The assessee had claimed the benefit under Section 10A of the Act under a bona fide belief that since the deduction was not claimed under the said provisions for the three assessment years i.e. 2006- 07, 2009-10 and 2010-11, the claim for deduction in the year 2010-11, being the 9th or the 10 year, could be claimed. Both the authorities have concurrently found that claiming the deduction under Section 10A of the Act by the assesses was a bona fide mistake and the assessee had not concealed any material facts as the assessee had clearly pointed out the date of commencement of the production in Form No. 56F, as 01.06.1999. The authorities ::: Uploaded on - 22/02/2017 ::: Downloaded on - 23/02/2017 00:31:31 ::: 5 itl2.17.odt had found that since the mistake committed by the assessee was brought to the assessee's notice, the assessee unconditionally withdrew the said claim and offered the said amount as income of the relevant year and paid the tax on the same. We further find that while holding in favour of the assessee, the tribunal has considered the judgment of the Gujarat High Court in the case of BTX Chemicals vs. CIT, reported in (2007 205 CTR 252 (Guj). The judgment in the case of MAK Data P. Ltd. vs. Commissioner of Income Tax-II, reported in 2013 CJ (SC) 1240 and relied on by the counsel for the Revenue, cannot be made applicable to the case in hand. In the present case, the assessee has tendered an explanation which he was able to substantiate and prove to be bona fide before the Commissioner of Income Tax (Appeals). The facts of the case before the Hon'ble Supreme Court are distinguishable. The findings of facts recorded by both the authorities cannot be lightly interfered with, in this appeal.
Since no substantial question of law arises in this appeal, the appeal is dismissed with no order as to costs.
(V. M. Deshpande, J.) (Smt. Vasanti A. Naik, J.) kahale ::: Uploaded on - 22/02/2017 ::: Downloaded on - 23/02/2017 00:31:31 :::