Gracure Pharmaceuticals Ltd., New ... vs Assessee

Assessee by : None Department by : Sh. Robin Rawal, Sr. DR

Date of Hearing: 28-1-2015 Date of Order : 30-1-2015

ORDER PER H.S. SIDHU, JM

This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-XV, New Delhi dated 09.3.2012 pertaining to assessment year 2004-05 on the following grounds:-

"The Ld. AO, Central Circle-12(1), New Delhi vide its order has imposed penalty for Rs. 6,04,320/- u/s. 271(1)(c) of the I.T. Act, 1961 on account of loss on sale of fixed assets / vehicles of Rs. 2,87,744/- and deference in deduction u/s. 80HHC of I.T. Act, 1961 for Rs. 24,36,077/- on ground of question of law.

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This penalty of Rs. 6,04,320/- has been imposed without going into the facts of case and without providing due opportunity to the assessee.

The said penalty may be ordered to be deleted.

The assessee receives the right to modify, alter, amend and add ground on appeal proceedings."

2. In this case the Return of Income was filed on 30.9.2004 declaring an income of Rs. 24,48,194/-. Assessment u/s. 143(2) vide order dated 8.12.2006 at Rs. 62,37,758/-, inter-alia making certain disallowances on various grounds and penalty of Rs. 6,04,316/- u/s. 271(1)© was imposed upon the assessee by the AO vide his order dated 14.5.2010.

3. Against the above Penalty Order dated 14.5.2010 passed by the Assessing Officer, assessee appealed before the Ld. First Appellate Authority, who vide impugned order dated 09.3.2012 dismissed the appeal of the assessee.

4. Against the above order of the Ld. CIT(A) dated 09.3.2012, assessee is in appeal before us.

5. None appeared on behalf of the assessee, as the Ld. Counsel of the assessee was not in town today i.e. 28.1.2015 which is intimated by him vide his letter dated 28.1.2015. However, Ld. Counsel of the assessee filed the written submissions through the aforesaid letter dated 28.1.2015. In our considered opinion, the assessee case may be decided exparte qua assessee after hearing the Ld. DR and perusing the written submissions filed by the assessee's counsel and other documents available on record.

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6. The Ld counsel of the assessee vide his letter dated 28.1.2015 has submitted the following submissions:-

"Reference to the Income Tax Appellate proceedings in case of M/s Gracure Pharmaceuticals Ltd. for the A.Y. 2004-2005 :

The assessee company had filed his return of income for A.Y. 2004-2005 declaring total taxable income at Rs. 24,48,194/- on 30.09.2004.

The learned Assessing officer has determined the total taxable income at Rs.33,63,926/- vide order u/s 250/143 (3) of I.T.Act,1961 dtd 23.07.2009 However, the Learned Assessing officer has levied penalty u/s 271(1)(c) of I.T. Act, 1961 on Rs. 16,84,504/- due to reduction in claim of deduction u/s 80HHC of I.T. Act Act,1961 However, It is stated that Penalty for concealment u/s 271 (1) (c) is not leviable in this case as there is no concealment of income. This was also held in the case of "Sanwaria Agro Oils Limited vs. Department of Income Tax (I.T.A No. 373/lnd/2010)" The Assessing officer had imposed penalty on disallowance part of claim made by the assessee u/sec 80HHC & 80 IB of Income Tax Act ,1961 which was ordered to be deleted by ClT( A) , and against which appeal was filed by revenue to ITAT and the same was dismissed by Hon. ITAT.

It has also been held by various Appellate Authorities that penalty u/s 271(1)(c) of I.T. Act, 1961 cannot be levied merely because the assessee has made a bonafide claim 3 ITA NO. 2572/DEL/2012

and the Revenue has rejected the claim on a different legal interpretation since there is no furnishing inaccurate particulars of income.

We also rely on the judgements in I.T.A No. 4186/DEL/2012 in the case of AClT, Cir 31 (1), New Delhi vs M/s United Exports and I.T.A No 536/DEL/20 13 in case of M/s Neetee Clothing (p) Ltd., New Delhi vs I.T.O, ward 13(2), New Delhi Where the claim of the assessee company in respect of sec. 80HHC of I.T Act, 1961 was reduced by Income Tax authorities and Penalty u/s 271(1)(c) of I.T Act,1961 was levied but Hon. Income Tax Appellate Tribunal, New Delhi order deletion of Penalties imposed U/s 271 c) of I.T Act, 1961, copies enclosed."

7. Ld. DR relied upon the order of the authorities below.

8. We have heard the Ld. DR and perused the orders passed by the Revenue authorities alongwith the written submissions of the Ld. Counsel submitted vide his letter dated 28.1.2015. We are of the view that the Ld. CIT(A) has issued notices on a short duration for the prosecution of the case of the assessee. Assessee could not appear and filed its adjournment from time to time stating its reasons. Ld. CIT(A) has also adjourned the case of the assessee by accepting the request of the assessee. But, lastly in a hurry manner has upheld the penalty order passed by the AO by relying upon the various decisions of the Hon'ble Supreme Court and Hon'ble High Courts. As we are not commenting upon the merits of the case and the applicability of the decision of the Hon'ble Supreme Court and Hon'ble High Courts to the present case, in our considered opinion, the Ld. CIT(A) had upheld

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the penalty in dispute contrary to the principles of natural justice and has not given sufficient opportunity to the assessee to substantiate its claim. Therefore, we are unable to uphold the impugned order, hence, in the interest of justice, the impugned order is cancelled and the issue in dispute is set aside to the file of the Ld. CIT(A) to decide the same, after providing full opportunity to the assessee.

9. In the result, the appeal filed by the Assessee stands allowed for

statistical purposes.

Order pronounced in the open court on 30/1/2015.

Sd/- Sd/-

[J.S. REDDY] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER "SRBHATNAGAR" 30/01/2015 Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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