TaxTMI 
TaxTMI 
2015 (10) TMI 1081
X X X X Extracts X X X X
X X X X Extracts X X X X
....upport its claim of export in relation to two invoices issued to M/s. Andrews Sports Club Inc. USA. for an aggregate of Rs. 24,21,160/-. The same, in fact, represented export of another firm, M/s. First Trading House, Chennai/Mumbai?, which received the export proceeds as well. The assessee had only acted as an 'in between' or 'intermediary' for the purpose of availing export benefits from the Government of India; and b) non receipt of export proceeds (i.e., in convertible foreign exchange) within six months from the end of the relevant previous year. No instruction from Reserve Bank of India (RBI) had in fact been applied for. The assessee having found favour with the Tribunal, i.e., in the quantum proceedings, on the first issue, the only thing that survives for the purpose of levy of penalty u/s.271(1)(c) of the Act is the penalty qua the disallowance on the second issue. 3. Before us, the assessee's case was two-fold: a) that, on facts, post facto approval had, in fact, been obtained from RBI vide its letter dated 20.06.2008, so that it could not be said that no approval, albeit subsequent, had been obtained; and b) that the order by the tribunal disposing the assessee's a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e contents of the RBI's letter to the assessee as well as to another exporter, at paras 11 and 12 of its order respectively, emphasizing the difference in the clear language of the two; the latter explicitly providing a post facto approval for extension of time for the receipt of export proceeds. To state differently, not only is the letter to the assessee patently clear in its communication, the difference in the language of the two letters is so stark and obvious that it is difficult, almost absurd, to suggest or contend of the assessee's letter as conveying a 'post facto approval', which the other letter, cited as an example, clearly grants. The reference to the words 'post facto approval' in its letter, i.e., while stating its subject, is, again, firstly of no consequence in-as-much as the letter has to be read with reference to its contents and, two, is only as the assessee's letter, which stands responded to, as apparent, mentions the same as the captioned subject. The same, in any case, is of little moment as no extension has been sought, so that there is no question of it being granted. In fact, the tribunal having found thus, i.e., that no 'post facto approval' had been al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uction u/s.80HHC on that part of its exports? We observe no explanation by the assessee at any stage. None could in fact it be, given the clear provision of law (Section 80HHC(2)(a)), which clearly speaks of only that part of the export turnover as being eligible for being considered as so, i.e., for the purpose of this provision, which stands received within six months of the expiry of the relevant year or within the extended time as allowed by the competent authority. As nobody can be presumed to be bestowed with prescience so as to know in advance if the payment, not received by the date of filing the return of income, shall be received in future - and when, or not, the law prescribes a procedure for claiming deduction in its respect in cases of delay in payment. That is, the claim for deduction is made conditional to the allowance of the extended time for receipt. It may be that the assessee delays seeking the extension of time, i.e., by the expiry of the six month period, but surely unless the same has been obtained, there is no basis to make a claim for deduction. In the instant case, the approval having not been sought, there is no basis to even expect an approval - a condit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appeal challenging the allowance of the assessee's appeal contesting the same on the ground of it being debatable, as not raising any substantial question of law, is being relied upon. In other words, the said decision is being advanced as laying down a proposition of law that admission of appeal in quantum proceedings by the Hon'ble High Court, which would be on a substantial question of law, saves penalty in-as-much as the matter becomes per se debatable. Reliance is also placed on the decision by the Tribunal in the case of Advaita Estate Development Ltd. vs. ITO [2013] 27 ITR (Trib) 112 (Mum) to buttress the claim of such an understanding of the said decision by the Hon'ble jurisdictional High Court. In this regard, to begin with, the argument cannot be adopted in pursuance to the Ground No.1 in-as-much as the order by the Hon'ble High Court in the assessee's own case is dated 8-8-2014, while the orders levying and confirming the penalty in the present case are dated 28-3-2011 and 20-2-2012 respectively. In fact, the decision in the case of Nayan Builders and Developers (supra) by the Hon'ble High Court stands also rendered subsequently on 8-7-2014. How could the ld. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubsequent to it admitting a substantial question of law as arising from the impugned order, where-upon only the Hon'ble Court would exercise jurisdiction and, being called upon to, adjudicate or answer the question of law as admitted or as suitably modified by it in view of the exact or the precise question (of law) considered as arising in the given facts and circumstances of the case. Why, the Hon'ble High Court could have easily, if it considered otherwise, answered the question of law, since admitted, in favour of the assessee-respondent. In fact, the Hon'ble Court refers to the penalty being a debatable and arguable issue - a different matter altogether, and not the issue in the quantum proceedings. Could it be said that that is what it, nevertheless, meant. We are afraid not. Rather, even if so, it would imply just that - that the issue in assessment appeal was found by it as debatable indeed; it referring to the Order by the Tribunal in the quantum proceedings as well as to the substantial questions of law arising there-from, since admitted. Further on, the Hon'ble High Court has not expressed any view with regard to the issue as delineated, i.e., of admission of appeal in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rupam Mercantile vs. Dy. CIT [2004] 91 ITD 237 (Ahd) (TM) and Ramila Ratilal Shah vs. Asst. CIT [1998] 60 TTJ (Ahd) 171. He was, at this stage, confronted by the Bench with the decision in the case of CIT vs. Dharmshi B. Shah [2014] 366 ITR 140 (Guj) and CIT vs. Splender Construction [2013] 352 ITR 588 (Del), i.e., decisions by the higher courts taking a different view, and which would supersede that by the tribunal. The Hon'ble Court in Dharmshi B. Shah (supra), faced with a question as to whether admission of a tax appeal by the Hon'ble High Court would itself be a sufficient ground for coming to the conclusion that the matter is debatable (refer Question of law (ii) raised before it at pg. 142 of the reports), so that the penalty could not survive, rejected the said proposition, answering the question in the negative. It, referring to its earlier decision in CIT vs. Prakash S. Vyas (in Tax Appeal No. 606 of 2010 dated 15.11.2015/copy on record), also relied upon by the Revenue before us, held that admission of a tax appeal by a high court is only indicative of the courts' opinion that the issue raised before it requires further consideration by it. That a prima facie case is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n'ble High Court predicates on a given set of facts, which may have a direct bearing on the issue itself or as regards it being debatable. In the present case, for instance, the referred question of law does not refer to any particular fact, and may perhaps, therefore, as also noted earlier, not capture or bring out the issue/controversy in toto (refer para 4.2 of this order). 4.4 Penalty proceedings, it may be appreciated, are separate and distinct proceedings under the Act. The provision (section 271(1)(c)) places the burden of an explanation, i.e., in relation to any fact material to the computation of income for the relevant year, on the assessee, failing which he is deemed to have concealed the particulars of income. In other words, the applicability of the provision hinges critically on the satisfaction of the ingredients of the charging provision, which are well settled. Coming to the issue of the matter being debatable, the same itself implies that the matter admits of two or more views. If that be so, the same itself constitutes a reasonable explanation, eschewing the levy of penalty. Succinctly put, section 271(1)(c) itself offers sufficient scope for non levy of penalty....