Sandeep Jalota Prop., Ludhiana V. ACIT, Ludhiana

ITA 1030/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77015 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-03-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Depreciation; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1030/CHD/2012 ASSESSMENT YEAR: 2005-06 SANDEEP JALOTA VS. A.C.I.T. CIRCLE II, LUDHIANA PROP. M/S OLYMPIC WOOLLEN MILLS SAMRALA ROAD LUDHIANA ACKPJ 4000D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUBHASH AGGARWAL RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING 20.3.2014 DATE OF PRONOUNCEMENT 21. 4.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 3.7 .2012 OF THE LD CIT(A)-II, LUDHIANA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUND: THAT THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN CONF IRMING LEVY OF PENALTY U/S 271(1)(C) AMOUNTING TO RS. 69,273/- IGN ORING THE FACTS OF THE CASE. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSE SSEE HAS SHOWN LIABILITY OF RS. 6,86,040/- ON ACCOUNT OF CA PITAL SUBSIDY. IN RESPONSE TO THE QUERY IT WAS EXPLAINED THAT THIS AMOUNT WAS RECEIVED BY THE ASSESSEE AS CAPITAL SUBSIDY UNDER TUF SCHEME. IT WAS ADMITTED THAT THIS AMOUNT WAS CRED ITED TO THE PLANT & MACHINERY ACCOUNT BUT BECAUSE OF BONAFIDE MISTAKE ON THE PART OF THE AUDITOR THIS WAS NOT REDUCED FOR CA LCULATING DEPRECIATION U/S 32. ACCORDINGLY DEPRECIATION WAS REWORKED BY 2 THE ASSESSING OFFICER AND PENALTY PROCEEDINGS U/S 2 71(1)(C) WERE INITIATED ON THIS ACCOUNT. 4 IN RESPONSE TO THE SHOW CAUSE NOTICE WRITTEN SUBM ISSIONS WERE FILED IN WHICH IT WAS STATED THAT ACCOUNTS OF THE ASSESSEE WERE AUDITED BY A REPUTED C.A AND THE RETURN WAS FI LED ON THE BASIS OF AUDITORS REPORT. BONAFIDE MISTAKE WAS CO MMITTED BY THE AUDITOR IN NOT REDUCING THE AMOUNT OF SUBSIDY F ROM COST OF PLANT & MACHINERY AND DEPRECIATION WAS WRONGLY WORK ED OUT. IT WAS ALSO SUBMITTED THAT THE ASSESSEE BECOMING AWARE OF THE MISTAKE IMMEDIATELY WITHDREW THE CLAIM FOR DEPRECIA TION. HOWEVER, HE DID NOT AGREE WITH THE SUBMISSIONS AND LEVIED MINIMUM PENALTY. 5 ON APPEAL BEFORE THE LD. CIT(A) THE SUBMISSIONS M ADE BEFORE THE ASSESSING OFFICER WERE REITERATED AND IT WAS FURTHER SUBMITTED THAT ALL THE PARTICULARS HAVE BEEN ALREAD Y DISCLOSED, THEREFORE PENALTY WAS NOT LEVIABLE. IN THIS REGARD RELIANCE WAS MADE ON THE VARIOUS DECISION INCLUDING THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT LTD, 322 ITR 158 (SC). 6 THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS DI D NOT FIND FORCE IN THE SAME AND CONFIRMED THE LEVY OF PE NALTY. 7 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). HE FURTHER SUBMITTED THAT IT WAS A CASE OF BONAFIDE MISTAKE AND IN ANY C ASE ALL THE PARTICULARS HAVE BEEN DISCLOSED, THEREFORE NO PENAL TY WAS LEVIED. 8 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 9 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT THIS SEEMS TO BE A CASE OF BONAFIDE MISTAKE ON THE PART OF THE 3 AUDITOR OF THE ASSESSEE. IN ANY CASE ALL THE PARTI CULARS HAVE BEEN CORRECTLY DISCLOSED BY THE ASSESSEE, THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICU LARS OF INCOME OR FILED INACCURATE PARTICULARS OF INCOME. THE HON'BLE SUPREME COURT IN CASE OF CIT V. RELIANCE PETROPRODU CTS PVT LTD, 322 ITR 158 (SC) HAS OBSERVED AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BED COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS IF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO IN FORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STR ETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS T HE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. IN VIEW OF ABOVE WE ARE OF THE OPINION THAT THIS I S NOT A FIT CASE FOR LEVY OF PENALTY AND ACCORDINGLY WE SET ASI DE THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY. 10 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21.4.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.4.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4