Tribunal’) In Ita v. Ram Lal Baba Lal, 234 Itr 776 (P&H) And Also The Case Of Cit Vs. Guru Lal Bal Chand 111 Itr 134 (P&H) Wherein It Was Held That The Authorities By Reference To T

IN THE HIGH COURT OF PUNJAB AND HARYANAATCHANDIGARH ITA No.222 of 2015Date of decision:January 11, 2016 The Pr. Commissioner of Income [lax 3, Ludhian seooeeee ADPEllan M/s S.S.Food Industries .... Responde CORAM: HON’BLE MR. JUSTICK AJAY KUMAR MITTALHON’BLE MRS. JUSTICEK RAJ RAHUL GARG 1. Whether Reporters of local papers may be allowed to see thejudgment?2. To be referred to the Reporters or not?YES3. Whether the judgment should be reported 1n the Digest Present: Mr. Rajesh Katoch, Advocate for the appellant. Mr. B.M.Monga, Advocate and Mr. Rohit Kaura,Advocate for the respondent. Ajay Kumar Mittal,J. l.This appeal has been filed by the appellant-revenue underSection 260A of the Income Tax Act, 1961 (in short, “the Act’) againstthe order dated 23.12.2014, Annexure-4 passed by the Income TaxAppellate Tribunal, Chandigarh Bench, 'B', Chandigarh (in short, “the Tribunal’) in ITA No.925/CHD/2013 for the assessment year 2009-10,claiming following substantial questions of law:- 1) Whether on the facts and in the circumstances of thecase, the ITAT is right in law in cancelling the penaltyunder section 271(1)(c) even though the assessee hasclaimed deduction under section 80IC by not followingthe decision dated 17.8.2006 of Hon'ble JurisdictionalHigh court in the case of Liberty India 293 ITR 520(P&H) and the assessee accepts that the decision ofLiberty India dated 17.8.2006 is applicable 1n his case?case, the ITAT is right in law in cancelling the penaltyunder section 271(1)(c) even though the assessee hasclaimed deduction under section 80IC by not followingthe decision dated 17.8.2006 of Hon'ble JurisdictionalHigh court in the case of Liberty India 293 ITR 520(P&H) and the assessee accepts that the decision ofLiberty India dated 17.8.2006 is applicable 1n his case? 11) Whether on the facts and in the circumstances of thecase, ITAT is right in law in giving a finding that theassessee can claim deduction till the decision of Hon'bleSupreme Court even though there is a decision ofjurisdictional High Court in favour of the revenue?case, ITAT is right in law in giving a finding that theassessee can claim deduction till the decision of Hon'bleSupreme Court even though there is a decision ofjurisdictional High Court in favour of the revenue? 111) Whether on the facts and in the circumstances of thecase, the ITAT has not appreciated the Full Benchdecision of Hon'ble Punjab and Haryana High Court inthe case of Smt. Aruna Luthra 252 [TR 76 wherein it washeld that non following of jurisdictional High Courtdecision amounts to mistake apparent from record?case, the ITAT has not appreciated the Full Benchdecision of Hon'ble Punjab and Haryana High Court inthe case of Smt. Aruna Luthra 252 [TR 76 wherein it washeld that non following of jurisdictional High Courtdecision amounts to mistake apparent from record? iv) Whether on the facts and in the circumstances of thecase, the ITAT is right in law in not appreciating thedecision of jurisdictional High Court in the case of CITvs. Ram Lal Baba Lal, 234 ITR 776 (P&H) and also thecase of CIT vs. Guru Lal Bal Chand 111 ITR 134 (P&H)wherein it was held that the authorities by reference tothe opinion of another High Court cannot say that thepoint is debatable?case, the ITAT is right in law in not appreciating thedecision of jurisdictional High Court in the case of CITvs. Ram Lal Baba Lal, 234 ITR 776 (P&H) and also thecase of CIT vs. Guru Lal Bal Chand 111 ITR 134 (P&H)wherein it was held that the authorities by reference tothe opinion of another High Court cannot say that thepoint is debatable? v) Whether on the facts and in the circumstances of thecase, the ITAT 1s right in law in not considering detailedcase, the ITAT 1s right in law in not considering detailed findings given by CII(A) 1n his order dated 1.8.2013 inparas 3.14 to 3.26?” v) Whether on the facts and in the circumstances of thecase, the ITAT 1s right in law in not considering detailedcase, the ITAT 1s right in law in not considering detailed findings given by CII(A) 1n his order dated 1.8.2013 inparas 3.14 to 3.26?” oOA few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The respondentassessee 1S a firm which is engaged 1n the business of manufacturing ofbiscuits/cookies and other bakery products. It filed its return of incomeon 30.99.2009 at total income of=anil for the assessment year 2009-10.The case was selected for scrutiny and notices under various sections ofthe Act were issued to the assessee. The Assessing Officer completedassessment proceedings under Section 143(3) of the Act vide orderdated 29.11.2011, Annexure | and disallowed deduction under SectionSOIC of the Act amounting to=a1,50,09,481/-. Penalty proceedingsunder Section 271(1)(c) of the Act were also initiated for filingInaccurate particulars of income. Order imposing penalty of =51,01,720/- was passed on 29.5.2012, Annexure 2. Agegrieved by theorder, the assessee filed appeal before the Commissioner of Income Tax(Appeals) [CIT(A)]. Vide order dated 1.8.2013, Annexure 3, the CIT(A) dismissed the appeal. Not satisfied with the order, the assesseefiled appeal before the Tribunal. Vide order dated 23.12.2014,Annexure 4, the Tribunal allowed the appeal and set aside the orderpassed by the CIT(A) by deleting the penalty. Hence the instant appealby the revenue. 3.We have heard learned counsel for the parties. 4.Admittedly, the assessee had filed return of income ITA No22? of J2O15Adeclaring nil income on 30.9.2009 after claiming deduction underSection 8OIC of the Act amounting to.LT1,97,738,564/-. The judgment othe Apex Court in the case of M/s Liberty India vs. CIT,(2009) 317ITR 218 was rendered on 31.8.2009 but was published for the first timeonly on 17.9.2009. It has been categorically recorded by the Tribunalthat there was very little gap between the publication of the decision ofthe Apex Court 1n.M/s Liberty India'scase (supra) and the filing of thereturn by the assessee. At the time of making return, the issue wasdebatable and penalty could not have been levied. Further, the Tribunalnoticed that the assessee had disclosed all the particulars of the incomeand had not concealed anything. Once proper disclosure had beenmade, penalty was not attracted in view of the judgment of the ApexCourt 1nCIT vs. Reliance Petroproducts Pvt. Limited,(2010) 322 ITR158. Further the return which was filed on the basis of the certificateissued by the Chartered Accountant though under mistake, the assesseecould take the benefit on the basis of bonafide belief. The relevantfindings recorded by the Tribunal read thus:- 12. We have considered the rival submissions carefully andifind force in the submission of the learned counsel for theassessee. No doubt the Hon'ble Jurisdictional High Courthad decided this issue against the assessee which is reportedin 293 I'TR 520 and decision of Hon'ble Punjab and Haryanin case of Liberty India vs. CIT on 17.8.2006. At the sametime the decision of Hon'ble Delhi High Court in case ofCIT vs. Eltek SGS (P) Limited, 300 ITR 6 was rendered on19.2.2008 which was favourable to the assessee, therefore, assessee had the right to make claim of deduction. It is notalways necessary that everybody would become aware of thedecision. Ultimately when the same issue was decided by theHon'ble Supreme Court on 31.8.2009 which 1s said to bepublished for the first time on 17.9.2009 and therefore therewas very little gap between publication of the decision andfiling of the return. It 1s also possible that return may havebeen finalized before publication of the decision, therefore atthe time of making return the issue was debatable andpenalty could not have been levied. assessee had the right to make claim of deduction. It is notalways necessary that everybody would become aware of thedecision. Ultimately when the same issue was decided by theHon'ble Supreme Court on 31.8.2009 which 1s said to bepublished for the first time on 17.9.2009 and therefore therewas very little gap between publication of the decision andfiling of the return. It 1s also possible that return may havebeen finalized before publication of the decision, therefore atthe time of making return the issue was debatable andpenalty could not have been levied. 13. In any case assessee disclosed all the particulars of theincome and it cannot be stated that assessee has concealedany particulars and furnished incorrect particulars. Onceproper disclosures have been made then penalty 1s notattracted in view of the decision of Hon'ble Supreme Courtin case of CIT vs. Reliance Petroproducts Pvt. Limed 322ITR 158. Further the return was filed on the basis ofcertificate issued by Chartered Accountant and even if it 1s amistake on the part of Chartered Accountant, the assesseecan always take the shelter that he was under bonafide beliefon the basis of such advice that deduction was claimed onthe basis of such bonafide belief. Therefore, in our opinionthis 1s not a fit case for levy of penalty and accordingly weset aside the order of learned CIT(A) and delete thepenalty.” 5. In_Reliance Petroproducts (P) Limited'S case (supra), (2010) 189 Taxman 322 (SC), the Apex Court held that merely because the assessee had claimed expenditure which claim was not accepted or was not acceptable to the revenue, that by itself would not attract “7, AS against this, Learned Counsel appearing on behalf of therespondent pointed out that the language of Section 271(1)(c)had to be strictly construed, this being a taxing statute andmore particularly the one providing for penalty. It was pointedout that unless the wording directly covered the assessee andthe fact situation herein, there could not be any penalty underthe Act. It was pointed out that there was no concealment orany inaccurate particulars regarding the income were submittedin the Return. Section 271(1)(c) 1s as under:-| "271(1) It the Assessing Officer or the Commissioner(Appeals) or the Commissioner in the course of anyproceedings under this Act, 1s satisfied that any person-(c) has concealed the particulars of his income or furnishedinaccurate particulars of such income." 8. A glance at this provision would suggest that in order to becovered, there has to be concealment of the particulars of theincome of the assessee. Secondly, the assessee must havefurnished inaccurate particulars of his income. Present is notthe case of concealment of the income. That is not the case ofthe Revenue either. However, the Learned Counsel for Revenuesuggested that by making incorrect claim for the expenditureon interest, the assessee has furnished inaccurate particulars ofthe income. As per Law Lexicon, the meaning of the word"particular" 1s a detail or details (in plural sense); the details ofa claim, or the separate items of an account. Therefore, theword "particulars" used in the Section 271(1)(c) wouldembrace the meaning of the details of the claim made. It is an admitted position in the present case that no informationgiven in the Return was found to be incorrect or inaccurate. Itis not as 1f any statement made or any detail supplied wasfound to be factually incorrect. Hence, at least, prima facie, theassessee cannot be held guilty of furnishing inaccurateparticulars. The Learned Counsel argued that "submitting anincorrect claim in law for the expenditure on interest would It is an admitted position in the present case that no informationgiven in the Return was found to be incorrect or inaccurate. Itis not as 1f any statement made or any detail supplied wasfound to be factually incorrect. Hence, at least, prima facie, theassessee cannot be held guilty of furnishing inaccurateparticulars. The Learned Counsel argued that "submitting anincorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We donot think that such can be the interpretation of the concernedwords. The words are plain and simple. In order to expose theassessee to the penalty unless the case 1s strictly covered by theprovision, the penalty provision cannot be invoked. By anyStretch of imagination, making an incorrect claim in law cannottantamount to furnishing inaccurate particulars. InCommissioner of Income Tax, Delhi Vs. Atul Mohan Bindal[2009(9) SCC 589], where this Court was considering the sameprovision, the Court observed that the Assessing Officer has tobe satisfied that a person has concealed the particulars of hisincome or furnished inaccurate particulars of such income. ThisCourt referred to another decision of this Court in Union ofIndia Vs. Dharamendra Textile Processors |2008(13) SCC 369],as also, the decision in Union of India Vs.Rajasthan Spg. &Wve. Mills [2009(13) SCC 448] and reiterated in para 13 that:-"13. It goes without saying that for applicability of Section271(1)(c), conditions stated therein must exist." Further, this Court 1n|Commissioner ofIncome Tax 1, Ludhiana vs. TudorKnitting Works (P) Limited,(2014) 43 Taxman.com 28 (P&H) followingthe judgment of the Apex Court inReliance Petroproducts (P) Limited"9case (supra), dismissed the appeal filed by the revenue against the deletionof penalty levied under Section 271(1)(c) of the Act. The judgment of DelhiHigh Court inCIT vs. Zoom Communication (P) Limited, (2010) 233 CTR465 relied upon by the learned counsel for the appellant-revenue beingbased on individual fact situation involved therein does not come to therescue of the revenue. 6.In the present case, the view adopted by the Tribunal is aplausible view based on appreciation of material on record and, therefore, ITA No22? of J2O15 appellant-revenue has not been able to show any illegality or perversity inthe impugned order. Thus, no substantial question of law= arises.Consequently, the appeal stands dismissed. (Ajay Kumar Mittal)Judge January 11, 2016L7 3 (Raj Rahul Garg)Judge