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ITO, Ward-4, Sonepat. Vs. Parshant Generator Co., 1401, Sector-06, Bahadurgarh.
September, 04th 2014
                       DELHI BENCH `F', NEW DELHI


                           ITA No. 1131/Del/2013
                          Assessment Year: 2008-09

 ITO,                                  vs.    Parshant Generator Co.,
 Ward-4,                                      1401, Sector-06,
 Sonepat.                                     Bahadurgarh.
 (Appellant)                                  (Respondent)
                 Appellant by : Shri Manoj Kumar Chopra, Sr. DR
                              Respondent by : None


       This is an appeal filed by the Revenue against the order dated

18/12/2012 of CIT(A)-Rohtak pertaining to 2008-09 assessment year on

the following grounds:

     1. "On the facts and in the circumstances of the case, the ld. CIT(A) has
        erred in law and in facts by deleting the penalty u/s 271(1)(c) of the I.T.
        Act, amounting to Rs. 8,31,315/- imposed by AO as the addition was
        made on account of non-payment of outstanding CST before filing of
        return thereby concealing and furnishing inaccurate particulars of
        income; the ld.CIT(A) deleted the said penalty without appreciating the
        facts of the case;
     2. That the appellant craves for the permission to add, delete or amend the
        ground of appeal before or at the time of hearing of appeal."
2.     At the time of hearing an adjournment was moved on behalf of the

assessee. However, on considering the material available on record and
                     ITA No. 1131/D/2013 ­ Parshant Generator Co.           2

hearing the ld. Sr. DR it was considered appropriate to proceed with the

hearing in the said appeal.

3.       The relevant facts of the case are that in the case of the assessee

disallowance of Rs. 32,82,056/- was made u/s 43B of the Act in respect of

CST payable. Out of the said disallowance, Rs. 24,32,056/- was upheld

by the CIT(A) in appeal vide his order no. 370/RTK/2010-11 dated

02.05.2011. The AO made a disallowance of FBT of Rs. 13,708/- which

was not pressed in appeal. On the said disallowances, the AO initiated

penalty proceedings u/s 271(1)(c) of the Act. In response to the show

cause given by the AO, the assessee contended that CST payable was

treated as allowable expenditure due to difference of opinion. The AO

however held that the explanation offered by the assessee is not

sustainable and levied minimum penalty of Rs. 8,31,315/-.

4.       The issue was challenged in the appeal before the CIT(A)

contending that the assessee has neither concealed the particulars of

income nor furnished inaccurate particulars of income.              Reliance was

placed upon the following decisions:

     1) PWC Vs. CIT (2010) 25 400 (SC);
     2) CIT vs. Ajay Singh & Co. (2002) 253 ITR 630 (P&H) and
     3) CIT vs. Reliance Petro Products (P) Ltd. (2010) 189 Taxman 322 (SC).
5.       Considering the same the CIT(A) came to the following conclusion:
         4. "I have considered the issue and the submissions made by the
         AR. Regarding the CST payable as on 31.03.2008 of Rs. 32,82,056/-
         , the assessee furnished photo copies of the receipts from which the
                    ITA No. 1131/D/2013 ­ Parshant Generator Co.                3

       AO disallowed the payments made after the due date of filing return
       i.e. 30.09.2008 u/s 43B of the Act. During the appeal proceedings,
       the assessee demonstrated that an amount of Rs. 8.50 lacs was paid
       before the due date of filing return and accordingly relief to this
       extent was granted. It is not in dispute that the payments of
       outstanding CST were not made. The disallowance arose only
       because of the time limitation of payment i.e. before the due date of
       filing return. The payments made after the due date are allowable
       as deduction u/s 43B in the subsequent assessment year. It has been
       held in the case of CIT vs. Reliance Petroproducts (P) Ltd. (supra)
       that claim of expenditure made by the assessee, which was not
       accepted or acceptable to revenue, by itself would not attract
       penalty u/s 271(1)(c). the other case laws relied upon by the AR
       also support this ratio. In view of the above, it is held that it is not a
       fit case for levy of penalty u/s 271(1)(c) and as such it is deleted and
       the grounds of appeal are allowed."
6.     Aggrieved by this the Revenue is in appeal before the Tribunal.

7.     Ld. Sr. DR places reliance upon the penalty order. On behalf of

the assessee an adjournment had been moved on account of a

bereavement in the family of the assessee. After hearing the ld. Sr. DR

and on going through the material available on record and the judgments

relied upon namely: The decision of the Apex Court in the case of PWC

vs. CIT cited (supra) and CIT vs. Reliance Petroproducts P. Ltd. cited

(supra) in the facts as they stand which have not been assailed by the

revenue we find no good reason to interfere with the finding arrived at as

admittedly there was neither any concealment nor any furnishing of

inaccurate particulars. Being satisfied with the reasoning and finding the

departmental appeal is dismissed.
                    ITA No. 1131/D/2013 ­ Parshant Generator Co.            4

8.       The said order was pronounced in the court after hearing the ld.

Sr. DR and considering the petition of the assessee's seeking time.

9.       In the result, the appeal of the Revenue is dismissed.

         The pronouncement in the open court on 29th August 2014.

         Sd/-                                                        Sd/-
     (J.S. REDDY)                                                  (DIVA SINGH)
 ACCOUNTANT MEMBER                                           JUDICIAL MEMBER
 Dated: 29.08.2014

 Copy forwarded to: -
   1. Appellant
   2. Respondent
   3. CIT
   4. CIT(A)
   5. DR, ITAT
                 TRUE COPY
                                                                       By Order,

                                                      ASSISTANT REGISTRAR
ITA No. 1131/D/2013 ­ Parshant Generator Co.   5
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