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Income Tax Appellate Tribunal, “G” Bench, Mumbai
O R D E R Per Shamim Yahya (AM) :- This appeal by the assessee is directed against the order of learned CIT(A) dated 29.3.2019 pertains to assessment year 2008-09.
The grounds of appeal
read as under :-
1. The learned First Appellate authority CIT (A)-40,Mumbai, seriously erred in law and on the facts and in the circumstances of the case in making the following arbitrary alleged Penalties u/s 271(1)(c) of The Income Tax Act 1961 : (i) The Learned CIT(A)-40 Mumbai has Dismissed the Appeal filed against the order passed u/s 271(1)(c)by ITO 15(3)(1) without considering any submission and demanded Penalty of Rs 11,35, 532/- u/s. 271(1)(c) of The Income Tax Act 1961. (ii) The Learned CIT(A)-40 Mumbai dismissed the Appeal without considering the Fact that the Assessee has submitted the case under DRS Scheme 2016 and paid the full tax demanded and 25% of the Penalty as per the scheme.
3. In this case learned CIT(A) has passed following order :-
In this case, the AO levied penalty u/s. 271(l)(c) on the disallowance of deduction claimed u/s. 80IB(10)(iii) of the I.T. Act. The AO disallowed the 2 Shivom Developers P2 claim of 80IB(10(iii) since the appellant could not complete the project by 31.3.2011 within 5 years from year end of the F.Y. in which the housing project is approved by the local authority. As per the instruction no. 4 of 2009 dated 30.6.2009 issued by CBDT in which it has been stated that in case it is latter found that the condition of completing the project within the specified time limit of 4 years as stated in section 80IB(10) of the Act, has not been satisfied, deduction granted to the assessee u/s. 80IB(10) of the Act in earlier years should be withdrawn.
Based on the ratio held in the order of Lucknow ITAT in the case of Fortuna Foundation Engineer and consultant P. Ltd vs. ACIT 54 SOT 99 (2012) Lucknow, wherein the Hon'ble ITAT confirmed the disallowance of deduction u/s. 80IB(10) of the I.T. Act, 1961 for the reason that the project of the assessee was completed beyond 4 years from the end of the F.Y. in which the housing project was approved by the local authority.
The AO based on the assessment order levied penalty u/s. 271(l)(c) relying on the Hon'ble Apex Court decision in the case of Union of India and others vs. Dharmendra Textile Processors and others, wherein it was held for levying penalty men srea are willful evasion is not an essential ingredient for levy of penalty and in this case, the assessee has deliberately filed inaccurate particulars to make the false claim and J therefore, within the meaning of explanation 1 to section 271(l)(c) of the I.T. Act, an amount of Rs. 36,74,858/- so as to evade tax, the tax sought to be evaded works out to Rs.11,35,532/- being the penalty has been levied and the same is hereby confirmed, dismissing all the grounds of appeal.
The AR for the appellant has filed intimation of application under DRS scheme on 30.12.2016 by stating the appellant had paid tax arrears alongwith 25% of the penalty amount i.e. 11,35,532/- towards full and final settlement of tax arrears as declared and mentioned in certificate received from Pr. CIT-29 in prescribed format Form No. 3 dt. 2.5.2017 under DRS - 2016 for A.Y. 2008-09. However, the AO may consider at the time of giving effect to this order for the calculation of tax and penalty and accordingly, verify the contentions of the appellant. However, this will not have any bearing on the decision given in the appellate order for the year under consideration.
In the result, the appeal filed by the appellant is dismissed.
Against this order assessee is in appeal before us.
We have heard learned Departmental Representative and perused the record. None appeared on behalf of the assessee despite notice. We note that it is assessee’s plea that it has opted for DRS Scheme 2016 and paid the full tax demanded and 25% of the penalty towards full and final settlement of tax arrears. The learned CIT(A) instead of considering the import of this 3 Shivom Developers P2 submission has remitted the issue to file of Assessing Officer. As per present scheme of Act. Learned CIT(A) cannot make a remand to the Assessing Officer.
Upon careful consideration we remit the matter to learned CIT(A). The learned CIT(A) shall examine the submission of the assessee and pass a speaking order after giving the assessee proper opportunity of being heard.
In the result, the assessee’s appeal is allowed for statistical purposes.
Pronounced in the open court on 6.4.2021.