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Deputy Commissioner of Income Tax v/s Chetas Control Systems Pvt Ltd


Company & Directors' Information:- C P SYSTEMS PVT LTD [Active] CIN = U29199DL1999PTC101718

Company & Directors' Information:- T SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U72200DL2004PTC127138

Company & Directors' Information:- A K M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018546

Company & Directors' Information:- CHETAS CONTROL SYSTEMS P LTD [Active] CIN = U72900PN1989PTC054103

Company & Directors' Information:- W B M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC017764

Company & Directors' Information:- A R G SYSTEMS LIMITED [Active] CIN = U74899DL1994PLC062621

Company & Directors' Information:- S SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111270

Company & Directors' Information:- SYSTEMS INDIA PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059377

Company & Directors' Information:- V S S SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U03000TZ1997PTC007933

Company & Directors' Information:- I L SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U18100GJ1999PTC037104

Company & Directors' Information:- A V SYSTEMS PRIVATE LIMITED [Active] CIN = U31909PN2001PTC015788

Company & Directors' Information:- N D T SYSTEMS PRIVATE LIMITED [Active] CIN = U74210MH1996PTC104744

Company & Directors' Information:- S P P S SYSTEMS PRIVATE LIMITED [Active] CIN = U72200TG2000PTC033732

Company & Directors' Information:- L S I SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U32109DL2000PTC105666

Company & Directors' Information:- H B S SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048198

Company & Directors' Information:- J S CONTROL AND SYSTEMS PRIVATE LIMITED [Active] CIN = U40108TN2012PTC089064

Company & Directors' Information:- U C SYSTEMS INDIA PVT LTD [Active] CIN = U72200DL1997PTC084267

Company & Directors' Information:- L C SYSTEMS PRIVATE LIMITED [Active] CIN = U55200PB2012PTC036880

Company & Directors' Information:- C I SYSTEMS PVT LTD [Active] CIN = U45200TG1983PTC003915

Company & Directors' Information:- M J SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72900MH2005PTC150591

Company & Directors' Information:- R R SYSTEMS PRIVATE LIMITED [Active] CIN = U30007DL1999PTC098142

Company & Directors' Information:- C N C SYSTEMS PVT LTD [Active] CIN = U72900DL1999PTC100476

Company & Directors' Information:- M B M SYSTEMS PRIVATE LIMITED [Active] CIN = U30006DL1988PTC030404

Company & Directors' Information:- C SYSTEMS PRIVATE LIMITED [Active] CIN = U31103TN2009PTC071155

Company & Directors' Information:- R M I SYSTEMS PRIVATE LIMITED [Active] CIN = U72200KA2011PTC060246

Company & Directors' Information:- W & S SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U74910TN2005PTC055568

Company & Directors' Information:- M. Y. T. SYSTEMS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74990TG2016PTC110104

Company & Directors' Information:- L V SYSTEMS PRIVATE LIMITED [Active] CIN = U31900KA2021PTC150256

Company & Directors' Information:- S E I SYSTEMS LIMITED [Strike Off] CIN = L74899DL1994PLC061731

Company & Directors' Information:- D C S SYSTEMS LIMITED [Strike Off] CIN = U72100MP2000PLC014224

Company & Directors' Information:- I T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL1999PTC098431

Company & Directors' Information:- I O SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029166

Company & Directors' Information:- S E C O M SYSTEMS PRIVATE LIMITED [Active] CIN = U31909HR2009PTC039084

Company & Directors' Information:- D M SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL1999PTC101817

Company & Directors' Information:- K K K SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100UP1995PTC017784

Company & Directors' Information:- E-SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72200WB2003PTC096700

Company & Directors' Information:- CONTROL SYSTEMS (INDIA) PVT LTD [Strike Off] CIN = U51505RJ1995PTC010453

Company & Directors' Information:- J B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200KL1997PTC011510

Company & Directors' Information:- M AND S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200MH1996PTC103819

Company & Directors' Information:- K AND M SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U32101UP1993PTC015352

Company & Directors' Information:- S S V SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1996PTC037072

Company & Directors' Information:- R G B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1998PTC040485

Company & Directors' Information:- C C SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31100TG1996PTC023469

Company & Directors' Information:- K R T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U52392TN2002PTC048704

Company & Directors' Information:- B & D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100OR1996PTC004611

Company & Directors' Information:- A M P S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900WB2001PTC093281

Company & Directors' Information:- G M E SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U71290DL1987PTC029758

Company & Directors' Information:- R B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31300RJ1990PTC005689

Company & Directors' Information:- E D H SYSTEMS PVT. LTD. [Strike Off] CIN = U99999DL1991PTC045384

Company & Directors' Information:- P & R CONTROL SYSTEMS PRIVATE LIMITED [Active] CIN = U29300PN2009PTC133644

Company & Directors' Information:- H N G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900RJ2012PTC040713

Company & Directors' Information:- F A SYSTEMS PRIVATE LIMITED [Active] CIN = U72100MH2004PTC148941

Company & Directors' Information:- H AND P SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146918

Company & Directors' Information:- G. K. SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900PN2006PTC129225

Company & Directors' Information:- T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31403TN2006PTC061859

Company & Directors' Information:- I T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72400AS1999PTC005824

Company & Directors' Information:- Y Y SYSTEMS PRIVATE LIMITED [Active] CIN = U72200CH2015PTC035767

Company & Directors' Information:- N P M E SYSTEMS PRIVATE LIMITED [Active] CIN = U29299DL1998PTC094645

Company & Directors' Information:- R D SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL2000PTC103462

Company & Directors' Information:- V C SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111812

Company & Directors' Information:- K B N SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U64204DL1997PTC088904

Company & Directors' Information:- A B SYSTEMS PRIVATE LIMITED [Active] CIN = U93000DL2012PTC234774

Company & Directors' Information:- J S N D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900GJ2011PTC065160

Company & Directors' Information:- J C D SYSTEMS PVT LTD [Strike Off] CIN = U32109PB1988PTC008438

Company & Directors' Information:- Y R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC105093

Company & Directors' Information:- S R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC104743

Company & Directors' Information:- F C S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U73100DL1997PTC090517

Company & Directors' Information:- E R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC061904

Company & Directors' Information:- R & T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL2008PTC179617

Company & Directors' Information:- Q S Q SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U51109KA2000PTC026269

    ITA No. 1302/PUN of 2016

    Decided On, 16 October 2018

    At, Income Tax Appellate Tribunal Pune

    By, THE HONOURABLE MS. SUSHMA CHOWLA
    By, JUDICIAL MEMBER & THE HONOURABLE MR. ANIL CHATURVEDI
    By, ACCOUNTANT MEMBER

    For the Appellant: Rajesh Gawli, Advocate. For the Respondent: None.



Judgment Text

Sushma Chowla, JM:

1. The appeal filed by Revenue is against order of CIT(A)-1, Pune, dated 17.03.2016 relating to assessment year 2012-13 against penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').

2. Despite service of notice, none appeared on behalf of assessee nor any application was moved for adjournment. However, since the issue involved, we proceed to decide the present appeal after hearing the learned Departmental Representative for the Revenue.

3. The Revenue has raised the following grounds of appeal:-

1. The order of the Ld. Commissioner of Income-tax (Appeals) is contrary to law and to the facts and circumstances of the case.

2. The Ld. Commissioner of Income-tax(Appeals) has erred on the facts and circumstances of the case, in deleting the penalty levied u/s 271(1)(c) of the Act of Rs.37,96,070/- as against the additional income offered during the survey and admitted by filing revised return of income.

3. The Ld. Commissioner of Income-tax(Appeal) has erred on the facts and circumstances of the case in holding that the claim as revenue expenditure was on oversight and not a conscious decision.

4. The only issue raised in the present appeal is against deletion of penalty levied under section 271(1)(c) of the Act.

5. Briefly, in the facts of the case, the assessee was domestic company and engaged in the business of manufacturing and installation of engineering goods. The assessee had filed its original return of income on 28.09.2012 declaring total income at 28,53,37,379/-. Information was received from the Maharashtra Sales Tax Department regarding hawala purchases made by several persons including the assessee. Thereafter, survey under section 133A of the Act was conducted in the business premises of assessee. The Assessing Officer during the course of assessment proceedings after noting the details of purchases made from Aquatech Solutions Pvt. Ltd., expenditure for construction of laboratory held as capital expenditure and after allowing 10% depreciation at 13 lakhs, balance amount of 1,17,00,000/- was capitalized and disallowed as revenue expenditure under section 37 of the Act. The Assessing Officer further held that the assessee has concealed particulars of its income and furnished inaccurate particulars of income, penalty proceedings under section 271(1)(c) of the Act are being initiated separately. In the penalty order passed under section 271(1)(c) of the Act, dated 30.07.2014, the Assessing Officer first held the assessee to have concealed its income in the form of bogus purchases. Further, the Assessing Officer held the assessee to have furnished inaccurate particulars of income within meaning of section 271(1)(c) of the Act and has committed default in view of provisions of section 271(1)(c) of the Act and explanation thereof.

6. The CIT(A) has deleted the penalty levied by Assessing Officer observing that Explanation-1 of section cannot be invoked in respect of deciding the issue of furnishing inaccurate particulars of income, against which the Revenue is in appeal.

7. On perusal of record and after hearing the learned Departmental Representative for the Revenue, it transpires that penalty proceedings are to be initiated for non satisfaction of one of the two limbs of section 271(1)(c) of the Act. The requirement of law is that the assessee is to be show caused as to which limb of section 271(1)(c) of the Act has not been fulfilled. Thereafter, while levying penalty it is incumbent upon the Assessing Officer to levy penalty for concealment on the limb for which it was initiated. The Assessing Officer has to give a finding in this regard.

8. The Hon'ble Bombay High Court in CIT Vs. Shri Samson Perinchery in Income Tax Appeal No.1154 of 2014 with other Income Tax Appeals Nos.953 of 2014, 1097 of 2014 and 1226 of 2014, judgment dated 05.01.2017 have laid down the proposition with regard to initiation of penalty proceedings on one limb of section 271(1)(c) of the Act and levy on another limb and observed that show cause notice needs to be given to the assessee as to which limb of section has not been fulfilled by it and which makes the assessee liable for penalty for concealment and then can levy penalty on the said limb.

9. Now, coming to the facts of the present case, the Assessing Officer while making addition in assessment order had initiated penalty for furnishing inaccurate particulars of income and the said satisfaction so recorded is thus within framework of law. Now, coming to penalty order passed by the Assessing Officer. The perusal of para 8.3 of penalty order, the Assessing Officer holds the assessee to have concealed particulars of its income in the form of bogus purchases and further holds that the assessee has furnished inaccurate particulars of income within meaning of section 271(1)(c) read with Explanation-1 of the Act. As pointed out, Explanation-1 of section 271(1)(c) of the Act deals with concea

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lment of income and the Assessing Officer thus, in the present case has held the assessee to have furnished inaccurate particulars of income and also concealed its income. Such an order levying penalty under section 271(1)(c) of the Act on both the limbs of section 271(1)(c) of the Act do not stand and the same is held to be invalid and accordingly, penalty levied under section 271(1)(c) of the Act is deleted. Upholding the order of CIT(A), we dismiss the grounds of appeal raised by Revenue. 10. In the result, the appeal of Revenue is dismissed.
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