Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
PER KUL BHARAT, J.M: This appeal by the Revenue is directed against the order of Ld. Commissioner of Income Tax (Appeals)-I, Indore, (in short ‘CIT(A)’), dated 21.11.2016 pertaining to A.Y. 2010-11. The Revenue has raised solitary ground which reads as under: “On the facts and in the circumstances of the case the Ld. CIT(A) has erred in restricting the penalty u/s 271(1)(c) of the Act from 300% to 100% of furnishing inaccurate particulars of income without appreciating the facts and evidences brought into light by the AO who has given clear findings that the assessee has furnished inaccurate particulars of its income during assessment proceedings & penalty proceedings.”
Indison Agro foods ltd.
Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called referred as the ‘Act’) was framed vide order dated 26.03.2013. While framing the assessment, the Assessing Officer made disallowance of deduction u/s 80IB of the Act of Rs.62,37,703/-, disallowance out of hamali expenses of Rs.2,00,000/-, disallowance out interest expenses of Rs.51,000/-, expenses of increasing authorized share capital of Rs.2,60,500/-. The AO also initiated the penalty proceeding. 3. Subsequently, the impugned penalty u/s 271(1)(c) was passed on 27.09.2013. Thereby, the AO imposed the penalty at the rate of 300% being maximum penalty of Rs.61,75,326/-. 4. Aggrieved this the assessee preferred an appeal before the Ld. CIT(A) who after considering the submissions reduced the penalty at the rate of 100%. Thereby, the penalty was restricted to Rs.20,58,441/-. Now the Revenue is in appeal before the Tribunal. 5. No one appeared on behalf of the assessee, the notice of hearing was duly served. Therefore, the appeal was taken up for hearing in the absence of the assessee. 6. The Ld. DR vehemently argued that the Ld. CIT(A) was not justified in reducing the penalty. He submitted that the assessee has furnished inaccurate particulars of income. 7. We have heard the Ld. Departmental Representative and perused material on record. We find that the ld. CIT(A) has decided the issue by observing as under:
Indison Agro foods ltd.
“It is to be noted that in both section 80IB(4) & 80IB(5) of the Act the reference is not to a backward area but, to backward state and Backward District. There was thus no basis for claiming deduction for a manufacturing unit situated in a backward village, which was not part of a backward state or a backward district. It is further to be noted that the claim of deduction u/s 80IB of the Act would have been available to the appellant if the manufacturing had commenced before 31st March, 2002. As per the appellant’s own admission the manufacturing started from November, 2003. The claim therefore was inadmissible ab initio. The explanation given by the appellant therefore cannot be considered as a bonafide explanation. It may also be noted that a claim u/s 80IB of the Act is to be supported with the Form No.10CCB in view of the provision of section 80IB(13) r.w.s. 80IA(7) of the Act. It is also to be noted that the deduction has been claimed by the appellant on profit of Rs.20792342/- although, the total profit was much more as appellant was also carrying out trading in Pulses apart from sale of Pulses manufactured by it. No basis for adopting the profit of Rs.20792342/- for the purpose of claiming deduction has been given. In view of the above it cannot be said that the appellant filed correct particulars in respect of claim of deduction u/s 80IB of the Act. In view of the above the facts of the appellant’s case are distinguishable from the facts of the cases cited by the appellant. The AO in the penalty order has made detailed discussion bringing out the difference in the facts of the
Indison Agro foods ltd.
appellant’s case and the case of Reliance Petro Products Ltd. Considering the above facts and circumstances the AO rightly invoked the provisions of section 271(1)(c) of the Act however, there was no justification for levy of maximum penalty at the rate of 300%. In view of the above the penalty is restricted to 100% which has been worked out by the AO at Rs.20,58,440/-. The appellant gets relief of Rs.4116890/-. These grounds of the appellant are therefore partly allowed. 8. The above order of the Ld. CIT(A) is justified, therefore, we do not see any reason to interfere. As in the present case, the AO has imposed maximum penalty without appreciating the fact in right prospective. The ground raised by the revenue is dismissed. The finding of Ld. CIT(A) is hereby sustained. 9. In the result, the appeal of the Revenue in ITANo.134/Ind/2017 is dismissed. Order was pronounced in the open court on 16.05.2018.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 16/ 05/2018 ctàxÄ? P.S/.�न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore