Silvertouch Technologies Ltd., ... vs Assessee
- CitationI.T.A. No.2089/Ahd/2011
Ratio decidendi
The rule this decision rests on
Where the assessee has disclosed all material facts to the Assessing Officer during assessment and its conduct throughout has been bona fide, the mere disallowance of a claimed deduction for non-fulfilment of statutory conditions does not, by itself, attract a penalty under section 271(1)(c) of the Income Tax Act, 1961; a claim that fails on the law is not thereby rendered a concealment or inaccurate particular warranting penalty, and where an explanation tendered by the assessee is not shown to be mala fide, penalty cannot be sustained.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Silvertouch Technologies बनाम/ The DCIT (OSD) Ltd. Vs. Circle-8 2 n d Floor, Saffron Tower Ahmedabad Nr.Panchvati Circle Ambawadi, Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AACCS 6474 P (अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri S.N. Divatia, A.R. यथ क ओर से/Respondent by : Shri Roop Chand Sr. DR.
ु वाई क तार ख / सन Date of Hearing 09/01/205 घोषणा क तार ख /Date of Pronouncement 02/02/2015
आदे श / O R D E R
PER SHRI G.C.GUPTA, VICE PRESIDENT (AZ) :
This appeal filed by the Assessee is directed against the order of ld.CIT(A)-XIV, Ahmedabad, dated 24/06/2011 for the Asst.Year 2007-
08.
2. The only issue in this appeal is regarding validity of penalty levied u/s.271(1)(c) of the I.T.Act, 1961 of Rs.3,09,457/-. The ld.counsel for the assessee submitted that the CIT(A) has deleted the penalty u/s.271(1)(c) of the Act on the Export payments received upto six months at the end of the relevant financial year and of the payments received ITA No.2089/Ahd/2011 Silvertouch Technologies Ltd. vs. The DCIT (OSD) Asst.Year - 2007-08 -2-
later on in April-2008 have been subjected to penalty u/s.271(1)(c) of the Act. He submitted that all the material facts were disclosed before the AO at the time of assessment itself and, therefore, there was no justification for levy of penalty in this case. He submitted that the conduct of the assessee was bona fide throughout the proceedings. The DR has relied on the orders of the AO and CIT(A).
3. We have considered the rival submissions and perused the orders of the AO and ld.CIT(A). We find that, in this case, all the material facts relevant for assessment were disclosed by the assessee at the time of assessment itself before the AO. The CIT(A) has deleted the penalty with regard to the proceeds of exports within the time-frame as per the RBI Circular and has confirmed the penalty u/s.271(1)(c) of the Act on the other proceeds of export sales amounting to Rs.2,30,800/- which was beyond the prescribed time on which amount the assessee would not be entitled to claim exemption u/s.10-B of the Act. We find that merely because a claim of deduction could not be allowed to the assessee as per the provisions of law, it does not automatically lead to the levy of penalty u/s.271(1)(c) of the Act. The assessee has disclosed all the material facts before the AO and the conduct of the assessee throughout has been bona fide. The assessee has filed an explanation, which could not be said to be not bona fide. Merely because certain disallowance was made due to non-fulfillment of certain conditions laid down as per provisions of the Act, it could not be said that the assessee should also be penalized u/s.271(1)(c) of the Act. In the facts of the case, we are of the view that it was not a fit case for levy of penalty u/s.271(1)(c) of the Act, which is ITA No.2089/Ahd/2011 Silvertouch Technologies Ltd. vs. The DCIT (OSD) Asst.Year - 2007-08 -3-
accordingly cancelled and the grounds of appeal of the assessee are allowed.
4. In the result, the appeal of the Assessee is allowed.
Sd/- Sd/- ( ANIL CHATURVEDI ) ( G.C. GUPTA ) ACCOUNTANT MEMBER VICE PRESIDENT (AZ)
Ahmedabad; Dated 02/ 02/2015
ट .सी.नायर, व.(न.स./T.C. NAIR, Sr. PS
आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं*धत आयकर आयु,त / Concerned CIT
4. आयकर आयु,त(अपील) / The CIT(A)-XIV, Ahmedabad
5. /वभागीय (त(न*ध, आयकर अपील य अ*धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड5 फाईल / Guard file.
ु ार/ BY ORDER, आदे शानस
स या/पत (त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 9.1.15 (dictation-pad 5-pages attached at the end of this File)
2. Date on which the typed draft is placed before the Dictating Member ..9.1.15
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......02.02.15
7. Date on which the file goes to the Bench Clerk.....................02.02.15
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................
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