PRINCIPAL COMMISSIONER OF IN vs. MADRAS SECURITY PRINTERS PVT

TCA.No.66 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.01.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.66 of 2021 Principal Commissioner of Income Tax, Corporate Circle-4(1), Chennai - 600 034. ...Appellant Vs M/s.Madras Security Printers Pvt. Limited, No.72, T.H.road, Tondiarpet, Chennai - 600 081. PAN: AAGCM0599K ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 06.03.2019 made in ITA.No.1942/Chny/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench, for the assessment year 2010-11. For Appellant: Mr.Karthik Ranganathan Senior Standing Counsel For Respondent: Mr.N.Devanathan 1/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 06.03.2019 made in ITA.No.1942/Chny/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench (for brevity, the Tribunal) for the assessment year 2010-11. 2. The Revenue has raised the following substantial questions of law for consideration: "1. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was right in deleting the penalty levied u/s.271(1)(c) by holding that the assessee had not made a false claim and had not concealed income? 2. Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was right in holding that where an assessee being fully aware of unambiguous provisions of explanation to section 37(1), claimed an expenditure prohibited by said explanation, will not attract the 2/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 penal provisions envisaged by section 271(1)(c)? 3. Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal is right in deleting the penalty levied u/s.271(1)(c) of the I.T. Act having placed reliance on the Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. [2010] 322 ITR 158 (SC) when the facts of the case of the assessee is clearly distinguishable from that of Reliance Petro Products Ltd?" 3. We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel for the Appellant – Revenue and Mr.N.Devanathan, learned counsel appearing for the respondent. 4. The short question involved in this appeal is as to whether the assessee is liable for penalty under Section 271(1)(c) of the Act. 5. The Assessing Officer levied penalty on the ground that the assessee, with the knowledge that the expenditure of Rs.4,68,00,000/- is not leviable, made a wrong claim of expenditure, which led to the inaccurate 3/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 particulars of income or reduction of income to the equivalent amount. Therefore, the Assessing Officer rejected the argument of the assessee that there was no withholding or hiding of the information and that they had furnished all the particulars with reference to the transactions between them and the contractee. Further, the assessee contended that the assessee, with the knowledge that the expenditure is entitled to be claimed for the relevant accounting year, has made a claim of the expenditure, though the relevant information was produced. As noticed, this argument did not find favour by the Assessing Officer. 6. Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-8, Chennai [CIT(A)], which was allowed by order dated 07.03.2016. The CIT(A), after considering the entire facts, held that mere omissions and wrong claims would not amount to either concealment of income or furnishing of wrong particulars. After referring to a decision of the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. [reported in 322 ITR 151], the penalty was set aside. The CIT(A) also referred to the decision of 4/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 this Court in the case of CIT Vs. Cholamandalam Investment & Finance Co. Ltd. [reported in (2014) 364 ITR 0680]. 7. As against the order of the CIT(A), the Revenue preferred an appeal and the assessee has also preferred an appeal, because the quantum appeal filed before the CIT(A) was dismissed against the assessee. 8. From the impugned order, we find that there was no representation for the assessee before the Tribunal. The Tribunal dismissed the assessee's appeal and confirmed the findings of the CIT(A), so far as the disallowance of Rs.4.68 crores done by the Assessing Officer. With regard to the deletion of penalty, the Tribunal took note of the factual position and affirmed the order passed by the CIT(A). 9. We find that the issue as to whether the assessee furnished inaccurate particulars for examination of its correctness by the CIT(A) was in depth analyzed by the Tribunal. Therefore, we find no good ground to interfere with the said factual finding and also find that there are no 5/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 questions of law, much less substantial questions of law arising in this appeal. 10. Mr.N.Devanathan, learned counsel appearing for the respondent-assessee submitted that the respondent has accepted that portion of the order passed by the Tribunal confirming the disallowance. This is recorded. 11. For the above reason, the Tax Case Appeal is dismissed as no substantial questions of law arise for consideration. No costs. (T.S.S.,J.) (R.N.M.,J.) 25.01.2021 Index: Yes/No Internet:Yes/No Speaking Judgment/Non speaking Judgment hvk 6/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 To 1. The Income Tax Appellate Tribunal, Madras 'B' Bench. 2. Principal Commissioner of Income Tax, Corporate Circle-4(1), Chennai - 600 034. 7/8 https://www.mhc.tn.gov.in/judis/ TCA.No.66 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.66 of 2021 25.01.2021 8/8 https://www.mhc.tn.gov.in/judis/