DM CORPORATION PRIVATE LIMITED,KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR

It emerges during the course of hearing that the assessee’s instant four appeals involving the foregoing varying penalty sums (supra) hardly require us to delve deeper in the relevant factual matrix. Suffice to say, it is an admitted fact that the impugned penalties pertain to the quantum disallowances/additions made by the Assessing Officer regarding the assessee’s section 80IA deduction raised for the first time in section 153A assessments completed in furtherance to the search in issue dated 25-08-2011. Both the learned lower authorities admittedly hold that the said identical quantum disallowance indeed attracts the impugned penalty provision.

Mr. Jasnani at the outset filed before us this tribunal’s common quantum order dated 23-03-2018 allowing the corresponding Revenue’s appeals to 1811/PUN/2014 thereby restoring the Assessing Officer’s action making the impugned disallowance. We hardly find any reason to agree with the Revenue’s instant stand. A perusal of the said quantum discussion in para No.22 makes it clear that the learned coordinate bench had accepted the Revenue’s arguments for the sole reason that the assessee could not have claimed the impugned deduction in all these four years since involving unabated assessments u/s.153A of the Act. It had also rejected the Revenue’s cases in “abated” assessment at the same time thereby accepting the assessee’s very section 80IA deduction. It is for this precise technical reason that the Revenue has succeeded before the tribunal in quantum cases and the assessee has stated to have been pursuing its remedy before the hon’ble higher judicial forums.

Mr. Jasnani at this stage vehemently argued that the assessee’s act and conduct in raising the impugned section 80IA deduction claim in section 153A assessment proceedings itself forms a sufficient reason to hold that ‘it has concealed and furnished inaccurate particulars of its taxable income’.

We see no reason to accept the Revenue’s stand. We make it clear that the hon’ble Apex court’s landmark decision in CIT Vs. Reliance Petro Products (2010) 322 ITR 158 (SC) has settled the law long back that quantum and penalty proceedings are parallel in nature wherein each and every disallowance/addition made in the course of the former does not ipso facto attracts the latter provision. Hon’ble jurisdictional high court’s decision in PCIT Vs. JSW Steel Ltd. (2010) 422 ITR 1 (Bom.) also holds that an assessee can very well raise its deduction claim for the first time in section 153A assessment proceedings. Mr. Jasnani could not pinpoint any exception to this proposition in section 153A itself qua raising of such a claim in abated or unabated assessments. Be that as it may, we make it clear that we are dealing with penalty proceedings only.

We thus conclude that both the lower authorities have erred in law and on facts in imposing these penalties in the impugned four assessment years before us. The same are directed to be deleted. The assessee succeeds in its instant identical sole substantive grievance therefore.

Delay of 13 days in filing of all these four appeals is condoned in the larger interest of justice.

These assessee’s four appeals are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 30th December, 2022.