Abhishek Industries Limited, Ludhiana vs Department Of Income Tax

The D.C.I.T., Vs. M/s Abhishek Industries Ltd., Circle -1, E-212, Kitchlu Nagar, Ludhiana. Ludhiana. PAN: AABCA4139J (Appellant) (Respondent)

Appellant by : Smt.Jyoti Kumari, DR Respondent by : Shri Ashwani Kumar

Date of hearing : 16.03.2015 Date of Pronouncement : 18.03.2015

Per BHAVNESH SAINI, J.M. :

This appeal filed by the Revenue is directed against

the order of learned Commissioner of Income (Appeals)-I,

Ludhiana dated 27.10.2014 for assessment year 2005-06,

challenging the cancellation of penalty under section

271(1)(c) of the Income Tax Act, 1961.

2. Briefly, the facts are that penalty was imposed under

section 271(1)(c) of the Act for furnishing inaccurate

particulars of income. The Assessing Officer imposed penalty

on the basis of the fact that the Hon'ble Punjab & Haryana

High Court in the case of the assessee itself for assessment

year 2003-04 has held that the sales tax subsidy was in the 2

nature of revenue receipt and merely filing of SLP or

admission thereof by the Hon'ble Apex Court does not give

assessee's choice to treat the same as capital receipt. The

Assessing Officer held that the assessee knew before the filing

of the revised return that the Jurisdictional High Court had

held that the exemption of sales tax as taxable by treating the

same as revenue receipt, the assessee had deliberately

claimed as capital receipt. The Assessing Officer further

recorded that the Department had not accepted the order of

the Hon'ble High Court for assessment year 2006-07 in which

penalty imposed on imilar issue was deleted and further SLP

had been filed. The assessee submitted before the learned CIT

(Appeals) that assessee is a Public Limited Company and filed

the return of income for assessment year under consideration

and assessment under section 143(3) of the Act was

completed. While filing the return, the assessee had claimed

sales tax exemption availed during the year as capital receipt

and reduced it from the taxable income. Likewise, the

assessee had not made any disallowance on account of

interest under section 36 (1)(iii) of the Act on the interest free

advance which has been worked out by the Assessing Officer

at Rs.26,75,942/-. On both the issues, no doubt, the Hon'ble

Punjab & Haryana High Court had decided the appeal against

the assessee company for assessment year 2003-04 (286 ITR

1). But fact of the matter is that SLP already stands

admitted by the Hon'ble Supreme Court. The Assessing

Officer has levied penalty on both the above grounds. It was

further submitted that penalty under section 271(1)(c) of the 3

Act was levied on the same grounds for assessment years

2004-05 and 2006-07 also, which were deleted by the learned

CIT (Appeals) vide order dated 10.12.2010. The Assessing

Officer failed to appreciate the facts of the case. It was

further submitted that similar issue in penalty matter or

exemption of sales tax came up for consideration before the

I.T.A.T., Chandigarh Bench in the case of M/s Bhushan Power

& Steel Ltd. In ITA Nos. 70 & 71/Chd/2012 for assessment

years 2005-06 and 2006-07 and the Tribunal following the

decision of the Hon'ble Punjab & Haryana High Court in the

case of CIT Vs. Gurdaspur Cooperative Sugar Mills, 354 ITR

27 upheld the order of the learned CIT (Appeals) in deleting

the penalty. It was, therefore, submitted that the penalty is

not leviable in the case of the assessee as well.

3. The learned CIT (Appeals) considering the material on

record observed that similar penalty imposed in the case of

the assessee for assessment years 2004-05 and 2006-07 have

been deleted by his predecessor vide order dated 10.12.2010.

The Assessing Officer also recorded that in assessment year

2006-07 also, penalty has been cancelled by the Hon'ble High

Court. It was also noted that the I.T.A.T., Chandigarh Bench

in the case of M/s Bhushan Power & Steel Ltd.(supra) also

cancelled the penalty. The learned CIT (Appeals) also noted

that the issue on levy of penalty was whether sales tax

subsidy was capital or revenue receipt and on disallowance of

interest on amounts advanced to sister concern on which

penalty had been cancelled earlier. The learned CIT (Appeals) 4

in canceling the penalty relied upon the decision of the

Hon'ble Apex Court in the case of CIT Vs. Reliance

Petroproducts (P) Ltd., 322 ITR 158. The learned CIT

(Appeals) was of the view that the assessee has not furnished

inaccurate particulars of income and accordingly cancelled

the penalty.

4. We have heard the rival submissions and perused the

material available on record.

5. The learned D.R for the Revenue relied upon the order of

the Assessing Officer.

6. On the other hand, the learned counsel for assessee

reiterated the facts submitted before the learned CIT (Appeals)

and also submitted that in assessment year 2004-05, the

learned CIT (Appeals) cancelled the penalty vide order dated

10.12.2010 on both the issues and both the parties preferred

a p p e a l b e f o r e t h e T r i b u n a l i n I T A N o . 1 4 4 5 / C h d / 2 0 1 0 & I TA

No.290/Chd/2011, in which the departmental appeal has been

dismissed and the appeal of the assessee has been partly

allowed by the Tribunal vide order dated 6.3.2014. He has,

therefore, submitted that the issue is now covered in favour of

the assessee on both the items. In view of the above and

considering the findings of the learned CIT (Appeals), we are

of the view that the departmental appeal has no merit and is

liable to be dismissed. It is admitted fact that in assessment

year 2004-05 penalty has been cancelled by the learned CIT

(Appeals) vide order dated 12.10.2010 on both the items, on 5

which penalty was imposed and the departmental appeal has

been dismissed by the Tribunal vide order dated 6.3.2014

(supra). It is also admitted fact that in assessment year

2006-07 also the penalty has been deleted by the Hon'ble High

Court as is noted in the impugned order. Considering the

facts of the case in the light of the above decisions referred to

by the learned CIT (Appeals) in the impugned order and in the

light of the order of the Tribunal dated 6.3.2014 for

assessment year 2004-05, we do not find any justification to

interfere with the order of the learned CIT (Appeals) in

canceling the penalty. We accordingly, dismiss the

departmental appeal.

7. In the result, the appeal filed by the Revenue is

dismissed.

Order pronounced in the open court on this 18th day of

March, 2015.

Sd/- Sd/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated : 18 t h March, 2015

*Rati*

Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.

Assistant Registrar, ITAT, Chandigarh