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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘A’ MUMBAI
Before: Shri Joginder Singh, & Shri D. Karunakar Rao
आदेश / O R D E R
Per Joginder Singh(Judicial Member) The Revenue is aggrieved by the impugned order dated 13/01/2015 of the ld. First Appellate Authority, Mumbai, deleting the penalty imposed u/s 271C of the Income Tax Act, 1961, (hereinafter the Act). The only ground raised in this appeal is that the Department is in appeal before this Tribunal against deleting the penalty, by the ld. First Appellate Authority, imposed by the Assessing Officer.
During hearing of this appeal, the crux of argument advanced by Shri K. Ravi Ramchandran, ld. Sr. DR is that the Department is in appeal before this Tribunal against deleting the penalty imposed u/s 271C of the Act. On the other hand, nobody was present for the assessee.
2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a public undertaking, engaged in the business of transportation of air passengers and air cargo. The Assessing Officer vide order dated 28/03/2011, passed u/s 201(1) and 201(1A) of the Act considered the assessee as defaulter for non-deduction of tax with respect to passenger service fee (PSF), collected by the assessee from the passengers on behalf of airport developer i.e. Mumbai International Airport Ltd (MIAL) by holding that such PSF was part of fare/revenue, received by the assessee, therefore, tax should have been deducted at source by the assessee u/s 194 I of the Act.
2.2. Before the ld. Commissioner of Income Tax (Appeals), it was explained by the assessee that the notice issued to the assessee was not served at the right address and at the same time, the assessee vide letter dated 09/11/2011 made application before the Assessing Officer u/s 220 (6) of the Act praying that pending disposal of appeal before the ld. Commissioner of Income Tax (Appeals), the demand so raised vide order dated 28/03/2011 may be kept in abeyance. The ld. Addl. CIT(TDS) issued notice u/s 271C of the Act fixing the date of hearing on 18/12/2012. As per the assessee, all taxation matter are being attended by Director Finance and other staff attached to him at the office at old airport Santacruz (East), Kalina, Mumbai, whereas, the notice was issued to the assessee at its Air India building, Nariman Point, Mumbai, thus, firstly, the notice was issued at the wrong address and secondly, there was a delay in receiving the notice by the taxation section. On receipt of the notice, the Dy. Manager Finance, addressed a letter dated 25/01/2013 to the Addl. CIT explaining the reasons of delay in compliance. Meantime, the Addl. CIT vide order dated 28/01/2013 imposed penalty u/s 271C of the Act at Rs.4,50,43,746/-.
2.3. The aggrieved assessee filed appeal before the ld. Commissioner of Income Tax (Appeals), who vide order dated 13/01/2015, considered the submissions of the assessee and held that assessment and penalty proceedings are different and by following the decision from Hon’ble Apex Court in CIT vs Khoday Eswara & Sons 83 ITR 369 (SC) and further the decision of the Tribunal In M/s VIP Industries Ltd. (4524 and 4383/Mum/2006) held that it was not a case of imposing penalty. The ld. Commissioner of Income Tax (Appeals) also considered the decision of the Tribunal in the case of Jet Airways (India) Ltd. (ITA No.5264/Mum/2012) order dated 23/10/2013 for A.Y. 2010-11 by holding that assessee is not liable to deduct tax u/s 194 I of the Act on Passenger Service Fee (PSF) charged by Mumbai International Airport Ltd. Now the Revenue is in appeal before this Tribunal.
2.4. If the observation made in the penalty order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, under the facts, stated hereinabove, the only ground raised before us is that the Department has filed the appeal before the Tribunal. We note that the Tribunal in the aforesaid cases more specifically Jet Airways (India) Ltd. (supra), the Tribunal has already held that the assessee is not liable to deduct tax u/s 194 I of the Act. Even otherwise, quantum and penalty proceeding are altogether different and independent.
Our view finds supports from the ratio laid down, though u/s 271(1)(c) of the Act in decision of the Tribunal in M/s Parle Bottling Pvt. Ltd. (ITA No.1209/Mum/2014) order dated 23/11/2015 and further in CIT vs S.P Viz Construction company 176 ITR 47 (Patna) and K.C.
Builders vs ACIT 265 ITR 562 (Supreme Court). We are of the view that where the penalty for concealment or furnishing inaccurate particulars was levied and after deleting the quantum addition, there remains no basis at all for levying the penalty. Ordinarily, penalty cannot stand in itself if the addition made in the assessment itself is set aside or cancelled by the superior authority/Court. The penalty cannot stand by itself because false result may be produced by the falsity of one or more of the constituent items in the return. The word ‘inaccurate particulars’ would cover falsity in the final figure and also the constituent elements or items. They simply would mean inaccurate in some specific or definite respect whether in the constituent or subordinate items of income or the end result. Concealment or furnishing inaccurate particulars implies some deliberate act on the part of the assessee in withholding the true facts from the authorities. Since, the basis of levying penalty remains no more in existence, after deletion of quantum addition, therefore, from this angle, the stand of the ld. Commissioner of Income tax (Appeals) is justified.
However, on the issue in hand u/s 194 I of the Act, the Tribunal has already taken a view by holding that the assessee is in default, therefore, following the aforesaid decision of the Tribunal in the case of Jet Airways (India) Ltd., we find no infirmity in the conclusion of the ld.
Commissioner of Income Tax (Appeals). We affirm the same.
Finally, the appeal of the Revenue is dismissed.
This order was pronounced in the open court in the presence of the ld. representative from both sides at the conclusion of the hearing on 28/12/2015.