DCIT, NEW DELHI vs. M/S. NANDA MINT & PINE CHEMICALS LTD., NEW DELHI

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ITA 6753/DEL/2015Status: DisposedITAT Delhi16 January 2018AY 2009-103 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the excise duty refund was part of the profit derived from the industrial undertaking, making the assessee eligible for deduction under Section 80IB. Consequently, the basis for the penalty no longer existed.

What were the facts?

The Assessing Officer levied a penalty of Rs. 27,54,119/- under Section 271(1)(c) on the assessee based on disallowances of excise duty refund and deduction under Section 80IB. The CIT(A) had upheld these disallowances.

What were the issues?

Whether a penalty under Section 271(1)(c) is sustainable when the additions/disallowances forming the basis of the penalty have been subsequently deleted by higher authorities.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 80IB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “D”, NEW DELHI

Before: SHRI R. K. PANDA & SMT. BEENA A. PILLAI

For Appellant: Shri S. Krishnan, Adv
For Respondent: Shri Amit Jain, Sr.DR, Shri S. Krishnan, Adv

O R D E R

PER R. K. PANDA, AM :

1.

This appeal filed by the Revenue is directed against the order dated 23.10.2015 of CIT(A)- 20, New Delhi relating to assessment year 2009-10.

2.

Levy of penalty of Rs.27,54,119/- by the Assessing Officer u/s 271(1)(c) which was deleted by the ld. CIT(A) is the only issue raised by the Revenue in the grounds of appeal

3. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing of essential oils, menthol solutions, DMO and Menthol. It filed its return of income on 29.09.2009 declaring income of Rs. Nil. The Assessing Officer completed the assessment u/s 143(3) on 30.11.2011 determining the total income at Rs.72,39,100/- wherein he had made disallowance of excise duty refund of Rs.79,100/- and disallowed the deduction u/s 80IB of Rs.76,868/-. The assessee filed an appeal before the ld. CIT(A), who upheld the above disallowance made by the Assessing Officer. In the meantime, the Assessing Officer issued penalty notice u/s 271(1)(c) of the I.T.

Act. Rejecting the various explanations given by the assessee, he levied penalty of Rs.27,54,119/- on account of above two additions/disallowances.

4.

The assessee filed the appeal before the Tribunal against the quantum addition. The Tribunal vide order dated 08.04.2016 for assessment year 2009-10 allowed the appeal filed by the assessee holding that the central excise duty refund due to the assessee is part of the profit derived from the industrial undertaking and, therefore, the assessee was eligible for deduction u/s 80IB on the said refund.

5.

The appeal filed by the Revenue against the order of the Tribunal has been dismissed by the Hon’ble Delhi High Court in of 2016 and 680 of 2016 both order dated 23.09.2016. Since the very basis on which penalty has been levied does not survive in view of the decision of the Tribunal as well as the Hon’ble High Court, therefore, penalty does not survive. Accordingly, the order of the ld. CIT(A) is set-aside and the Assessing Officer is directed to cancel the penalty. The grounds raised by the assessee are accordingly allowed.

6.

In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court on this 16th January, 2018.

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