TMI Blog2022 (4) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty u/s 271(1)(c) of the Income Tax Act, 1961, (in short the Act ) levied by the A.O. As identical issue is involved in same set of circumstances, both these appeals and C.Os were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. 2. The ground of appeal raised by the revenue for A.Y.2012-13 are reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied by the AO without appreciating the fact that in AY 2011-12, the Id. DRP has upheld the quantum addition and the assesses has voluntarily offered the reimbursement of ₹ 47,90,32,670/- as fee for technical Services (FTS) to be taxable in India this year i.e. AY 2012-13? 2. Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) has erred in holding a view that there was no furnishing of inaccurate particulars of income by relying on its own decision for AY 2011-12 wherein the AO and the Ld. DRP established the fact that income as FTS was knowingly and willfully misclassifIed as reimbursement of expenses thereby holding assessee has furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was drawn to the delay of 523 days pointed out by the registry in filing the C.Os. The ld. Counsel of the assessee submitted that in these cases, copy of Form No. 36 along with ground of the appeal filed by the revenue, were received by the assessee from the Tribunal on 13.01.2020 and therefore, due date of filing of the C.O was 11.02.2020, whereas the C.Os have been filed on 19.07.2021. The ld. Counsel submitted that period from 15.03.2020 till 19.07.2021 is covered by the order of the Hon ble Supreme Court in M.A. No 665/2021. Therefore, he submitted that effective delay is only of 32 days from 11.02.2020 to 15.03.2020. The ld. Counsel of the assessee submitted that initially the assessee was advised to seek remedy against the order of ld. CIT(A) by way of application under Rule 27 of the ITAT Rules. However, later on the assessee was advised to file C.O. and therefore delay in filing the C.O is solely on account of legal advise received by the assessee and there was no deliberate or any malicious intention in delay in filing the C.O. The Counsel submitted that delay was due to bonafide belief and circumstances beyond control of the assessee and accordingly, he submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the present C.O. and it does not stand to gain by resorting to such delay. Therefore, in our opinion their exist a sufficient and reasonable cause for condoning the delay in filing the present cross objections. 6. In the light of aforesaid discussion and in exercise of powers u/s 253(5) of the Act, we hereby condone the delay in filing the present cross objections as we are satisfied that their exist a sufficient cause for not presenting the Cross Objections within the prescribed time and accordingly same are admitted for adjudication. 7. Briefly stated, the facts of the case are that the ld. Assessing Officer in draft assessment orders passed for A.Y. 2012-13 held the reimbursement for services received by the assessee from its Associated Enterprises as fee for technical services (FTS) following the finding of the ld. Dispute Resolution Panel (DRP) in assessment year 2011-12. In A.Y. 2011-12, the assessee did not prefer appeal against the finding of ld. DRP in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Notice at page 15 of the paper book. We find, the Hon ble Apex Court dismissed the Special Leave Petition filed by the Revenue against the judgment of the Hon ble ITA No. 6390/Mum/2018 CO No. 222/Mum/2019 CLSA Ltd, Mumbai - 10 - Karnataka High Court in ITA No.380 of 2015 dated 23/11/2015 in the case of CIT vs. M/s. SSA s Emerald Meadows where an identical issue was decided in favour of the assessee. We consider it appropriate to refer to the operative part of the decision of the Hon ble High Court of Karnataka in the case of CIT Vs. M/s. SSA s Emerald Meadows (supra) is read as under: 2. This appeal has been filed raising the following substantial questions of law: (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the penalty notice under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court has held that the standard proforma of notice u/s 274 of the Act, without striking of the relevant clauses would lead to inference of non-application of mind by the AO. In the present case, the learned Authorised Representative demonstrated the notice, we find that the AO is not sure whether he was to proceed on the basis that the assessee has concealed the particulars of his income or furnished inaccurate particulars of income. The Hon ble High Court also observed that in such a situation, the levy of penalty suffers from non-application of mind. 10. We, considering the ratio of decision of Hon ble Supreme Court in the case of CIT VS M/s. SSA s Emerald Meadows (supra), Hon ble High Court of Karnataka in the case CIT VS Manjunatha Cotton Ginning Factory (supra), and Hon ble jurisdictional High Court decision ITA No 1154/Mum/2014 in CIT Vs Samson Perinchary observe that the action of the AO in passing the penalty order u/s 271(1)(c) shows that there is non-application of mind thereby the penalty order is not sustainable. We also rely on ratio of the recent decision of the Hon ble Jurisdictional High Court in Tax Appeal No. 51 57 of 2012 of Mohd. Farhan A. Shaikh v. DCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctuous and is dismissed. (emphasis supplied externally) 10. On perusal of the notices for the year under consideration, we find that relevant limb of either concealment of income or furnishing inaccurate particular of income has not been striken out in the notices issued for penalties by the Assessing Officer. In view of the ground raised in the year under consideration being identical to ground before the coordinate bench of Tribunal in A.Y. 2011- 12, therefore, respectfully following the finding of the Tribunal (supra) on the issue in dispute, we quash the penalty levied and allow the ground of C.O. in favor of the assessee. Since we have allowed the C.O. filed by the assessee, the appeal filed by the revenue have became infrucous, thus same are dismissed. Since, we have already allowed the C.O. of the assessee, the application(s) under Rule 27 of ITAT Rules filed by the assessee are also rendered infructuous. 11. In the result, the Cross Objections filed by the assessee for both the A.Ys. 2012-13 2013-14 are allowed, whereas the appeals of the revenue for A.Y. 2012-13 and 2013-14 are dismissed. Order pronounced in the open court on 31.03.2022 - - TaxTMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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