Bobbiti Sushma , Hyderabad V. Income Tax Officer, Ward-9(4), Hyderabad

ITA 1030/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9317 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2015-2016
• Appeal Filed On: 21-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Keywords: Revised return
• Section: 271(1)(c); 143(3); 201; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A. NO.1030/HYD/2019 ASSESSMENT YEAR: 2015-16 BOBBITI SUSHMA, HYDERABAD [PAN: AJEPB2832Q] VS INCOME TAX OFFICER, WARD-9(4) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI T.RAJENDRA PRASAD, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 31-12-2020 DATE OF PRONOUNCEMENT : 05-01-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2015-16 ARISES FROM TH E CIT(A)-7, HYDERABADS ORDER DATED 14-05-2019 PASSED IN CASE NO.0046/CIT(A)-7/2018-19, IN PROCEEDINGS U/S.271(1) (C) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED I N THE INSTANT APPEAL SEEKS TO SECTION 271(1)(C) PENALTY OF RS.5,17,522/-, IMPOSED BY THE ASSESSING OFFICER IN HIS ORDER DT.27-06-2018 AFFIRMED IN THE CIT(A)S LOWER APPELLA TE DISCUSSION READING AS FOLLOWS: ITA NO. 1030/HYD/19 :- 2 -: 4. THE ONLY ISSUE INVOLVED IN THIS CASE IS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSING OFFICER IN THE ORDER HAS STATED AS UNDER: 'IN THE PROFIT AND LOSS ACCOUNT UPLOADED ALONG WITH THE AUDIT REPORT, ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS.7,49,67,500 /-. ASSESSEE VIDE LETTER DATED 30.11.2017 SUBMITTED THAT GROSS RECEIP TS WERE INCLUSIVE OF SERVICE TAX WHEREAS IN THE RETURN OF INCOME NET TUR NOVER IS REFLECTED. ON VERIFICATION OF AUDIT REPORT AND PROFIT AND LOSS AC COUNT, IT IS NOTICED THAT, ASSESSEE HAS REDUCED RS.36,83,371/- AS SERVICE TAX FROM THE GROSS RECEIPTS. FROM THE P&L ACCOUNT IT IS CLEAR THAT AN AMOUNT OF RS.36,83,371/- IS CLAIMED AS 'SERVICE TAX PAYMENTS' MADE BY REDUCING SUCH AMOUNT FROM THE GROSS RECEIPTS. BUT THE ASSESSEE FURNISHED CHAL LANS TO THE EXTENT OF RS.20,51,856/- ONLY AT THE TIME OF VERIFICATION. TH E DIFFERENCE AMOUNT OF RS.16,31,515/- WAS NOT EXPLAINED INITIALLY. ON FURT HER VERIFICATION OF SERVICE TAX RETURNS FILED BY THE ASSESSEE, IT IS NOTICED TH AT EVEN AS PER TURNS OF SERVICE TAX, LIABILITY AND PAYMENT IS ONLY RS.20,51 ,856/-. IN RESPONSE FURNISHED DURING THE COURSE OF HEARING, SRI SRINIVAS REDDY HUSBAND OF ASSESSEE STATED THAT THE BUSINESS ENTERP RISE MADE SALARY PAYMENTS BUT DUE TO CLERICAL MISTAKE, SUCH AMOUNT H AS BEEN REFLECTED AS SERVICE TAX. HOWEVER, NO EVIDENCE WAS FURNISHED TO SUBSTANTIATE THIS EXPLANATION. HENCE, THE PENALTY NOTICE U/S 271(1)(C ) WAS ISSUED ON 05/12/2017 DULY HIGHLIGHTING THE FACT OF FURNISHING OF INACCURATE PARTICULARS IN RESPECT OF 'SERVICE TAX'. THE FACT OF FURNISHING 'INACCURATE PARTICULARS' WAS ALSO DISCUSSED IN THE ASSESSMENT ORDER. IN RESPONSE TO THE PENALTY NOTICE, THE ASSESSEE FUR NISHED A REPLY ON 01/02/2018. THE SUBMISSIONS OF THE ASSESSEE HAVE BE EN CAREFULLY CONSIDERED. ON GOING THROUGH HIS EXPLANATION, IT IS NOTICED THAT THE ASSESSEE DID NOT FURNISH ANY INFORMATION REGARDING THE DIFFERENCE AMOUNT OF RS.16,31,515/- WHICH HE CLAIMED WERE SALARY PAY MENTS AND WRONGLY REFLECTED AS SERVICE TAX DUE TO CLERICAL MISTAKE. THE ASSESSEES CASE IS COVERED BY THE PROVISIONS OF SECTION 44AB OF THE IT ACT. THE BOOKS OF ACCOUNT HAVE BEEN AUDITED AND IT IS NOT CLEAR HOW P AYMENTS TO THE EXTENT OF RS.16,31,515/- HAVE NOT BEEN REFLECTED EITHER IN THE BOOKS OF ACCOUNT OR IN BANK ACCOUNT STATEMENTS. IF AT ALL THE CLAIMS OF SALARY PAYMENTS IS GENUINE, SUCH ASSESEE'S EXPLANATION OUGHT TO BE SUB STANTIATED. I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE'S EXPLANATION IS NOT BONAFIDE. IN THIS REGARD, THE PROVISIONS OF SECTION 271(1)(C) ARE ATT RACTED.' 4.1 DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE VIDE HER LETTER DATED 01.05.2019 HAS MADE FOLLOWING WRITTEN SUBMISS IONS: 'SMT SUSHMA BOBBITI (THE ASSESSEE) IS ENGAGED IN TH E BUSINESS OF MAN POWER RECRUITMENT SERVICES. DURING THE ASSESSMENT Y EAR 2015-16, THE ITA NO. 1030/HYD/19 :- 3 -: ASSESSEE FILED ITS RETURN OF INCOME ON SEPTEMBER 30 , 2015 WITH TAXABLE INCOME OF RS.18,28,440/-. THE SCRUTINY ASSESSMENT U/S 143(3) OF THE INCOME TA X ACT, 1961 WAS COMPLETED ON DECEMBER 05, 2017 WITH TAXABLE INCOME OF RS.35,03,275/- BY ADDITION OF RS.16,31,515/- ON ACCOUNT OF DIFFERENCE IN SERVICE TAX BETWEEN PROFIT & LOSS ACCOUNT AND SERVICE TAX RETURNS, RS.4 3,320/- AS INTEREST ON IT REFUND AND RAISED A DEMAND OF RS. 6,34,290/-. DURING THE FINANCIAL YEAR 2014-15 RELEVANT TO ASSES SMENT YEAR 2015-16, THE ASSESSEE HAS PAID SERVICE TAX TO THE TUNE OF RS.20, 51,856/- ON TURNOVER OF RS. 7,49,67,500/-. WHILE PUNCHING THE DATA INTO PRO FIT & LOSS A/C THE SERVICE TAX AMOUNT OF RS. 20,51,856/- WRONGLY ENTER ED AS RS.36,83,371/-, WHICH RESULTED IN UNDERSTATEMENT OF TURNOVER TO THE EXTENT OF RS.16,31,515/- THE ABOVE FACTS WERE EXPLAINED DURING THE ASSESSMEN T PROCEEDINGS AND THE ASSESSEE AGREED FOR ADDITION OF ABOVE DIFFERENC E AND PAID THE DEMAND. AGAINST THE ABOVE DISALLOWANCE A NOTICE U/S 271(1)( C) OF THE INCOME TAX ACT, 1961 WAS ISSUED ON DECEMBER 05, 2017 AND THE A SSESSEE HAS EXPLAINED THAT THE UNDERSTATEMENT WAS DUE TO CLERICAL ERROR A ND ALSO SUBMITTED RELEVANT JUDICIAL RULINGS IN SUPPORT OF ASSESSEE'S CLAIM. A SHOW CAUSE NOTICE WAS ISSUED ON JUNE 08, 2018 TO PROVIDE INFOR MATION WITH RESPECT TO SALARIES AND WAGES BY JUNE 18, 2018, FOR WHICH THE ASSESSEE WAS NOT ABLE TO PROVIDE INFORMATION ON-TIME. AS THE INFORMATION WAS NOT PROVIDED BY JUNE 18, 201 8, WITHOUT PROVIDING ANY FURTHER OPPORTUNITY, THE AO HAS LEVIED PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 TO THE EXTENT OF RS.5,17,522/- I.E, 100% OF TAX AGAINST THE ADDITION OF RS. 20,51,856/-. AGGRIEVED BY THE ABOVE PENALTY ORDER, THE ASSESSEE IS IN APPEAL BEFORE APPELLATE COMMISSIONER 7, HYDERABAD. THE ABOVE UNDER STATEMENT OF INCOME WAS PURELY ON A CCOUNT OF CLERICAL ERROR IN PROFIT & LOSS A/C AND BUT NOT ON ACCOUNT O F ANY WILLFUL INCOME ESCAPEMENT. FURTHER, THE BOOKS OF ACCOUNTS OF THE ASSESSEE IS A LSO AUDITED U/S 44AB OF THE INCOME TAX ACT, 1961 AND THE TAX AUDITOR WAS AL SO OVERLOOKED THE ABOVE CLERICAL ERROR. THE ABOVE CLERICAL ERROR WAS IDENTIFIED ONLY DURING THE ASSESSMENT PROCEEDINGS AND THE ASSESSEE HAS VOLUNTARILY ACCEPT ED FOR ADDITION OF ABOVE INCOME ON ACCOUNT OF CLERICAL ERROR. THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONAF IDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS. ITA NO. 1030/HYD/19 :- 4 -: IN VIEW OF THE ABOVE BONAFIDE CLERICAL ERROR, THE A SSESSEE PRAYS THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS), HYDER ABAD-7 TO ALLOW THE APPEAL BY DELETING THE PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 5. I HAVE CONSIDERED THE FINDINGS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT CAREFULLY. THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME FOR AN AMOUNT OF R S.16,31,515/- BEING THE DIFFERENCE OF RS.36,83,371/- CLAIMED AS S ERVICE TAX PAYMENTS AND AN AMOUNT OF RS.20,51,856/- BEING THE EXTENT OF THE CHALLANS FURNISHED FOR VERIFICATION DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER FURTHER HELD THA T A CLAIM OF INFLATED SERVICE TAX PAYMENTS WERE MADE BY REDUCING SUCH INFLATED AMOUNT FROM THE GROSS RECEIPTS. THE CONTENTION OF T HE AR OF THE APPELLANT WAS THAT INADVERTENT MISTAKE HAPPENED AT THE TIME OF CLAIMING SERVICE TAX PAYMENTS TO THE EXTENT OF RS.2 0,51,856/-. THE AR OF THE APPELLANT FURTHER CLAIMED THAT THE AUDITO R HAS GIVEN A CERTIFICATE DETERMINING THE NET PROFIT AT RS.18,64, 831/- ON THE NET TURNOVER OF RS.7,12,84,129/- AND HENCE, MISTAKE DON E BY 7 APPELLANT WAS THROUGH OVERSIGHT AND ON THE BASIS OF THE CERTI FICATE OF AUDITOR IN FORM NO.3CD. THE CLAIM MADE BY THE AR OF THE APPELL ANT THAT THE MISTAKE OCCURRED WAS DUE TO OVERSIGHT IS NOT ACCEPT ABLE. THE APPELLANT DID NOT FURNISH ANY REVISED RETURN RECTIF YING ITS MISTAKE, BEFORE THE CASE WAS TAKEN FOR SCRUTINY. IT IS PERTI NENT TO MENTION HERE THAT DURING THE COURSE OF PENALTY PROCEEDINGS, THE APPELLANT SOUGHT TO EXPLAIN THE DIFFERENCE AS SALARY PAYMENTS. THEREAFT ER, THE ASSESSING OFFICER VIDE SHOW-CAUSE LETTER DATED 8-6-2017 REQUI RED THE APPELLANT TO FURNISH DETAILS OF THE SALARIES PAID FURNISHED T HE SALARY / WAGE REGISTER, RECONCILIATION OF THE AMOUNTS PAID ETC. T HE APPELLANT FAILED TO FURNISH THE SAME. HENCE, THE CLAIM OF THE APPELLANT THAT INFLATED SERVICE TAX PAYMENTS REFLECTED IN THE P&L ACCOUNT D UE TO OVERSIGHT IS NOT ACCEPTABLE. THE APPELLANT HAD MADE A CONSCIOUS ATTEMPT TO INFLATE THE EXPENSES IN THE NAME OF SERVICE TAX PAY MENT AND REDUCED THE TAX LIABILITY WHILE FILING THE RETURN OF INCOME . BUT FOR THE EXAMINATION OF THE CASE DURING THE SCRUTINY PROCEED INGS AND CONFRONTATION OF THE APPELLANT WITH POSITIVE EVIDEN CE, THE APPELLANT WOULD NOT HAVE COME FORWARD FOR ACCEPTANCE OF THE D ISALLOWANCE. THE FACTS OF THE CASES RELIED UPON BY THE AR OF THE APP ELLANT ARE DIFFERENT AND ARE NOT IDENTICAL. HENCE, THE ASSESSING OFFICER IS FULLY JUSTIFIED IN LEVYING PENALTY. ALL THE GROUNDS RAISED BY THE APPE LLANT ARE REJECTED. 3. WE HAVE GIVEN FRUITFUL CONSIDERATION TO RIVAL PLEAD INGS AGAINST AND IN SUPPORT OF THE IMPUGNED PENALTY IMPOSED IN BOTH THE LOWER PROCEEDINGS. A PERUSAL OF THE FOREGOIN G DETAILED LOWER APPEAL DISCUSSION SUFFICIENTLY SUGGESTS THAT THE ITA NO. 1030/HYD/19 :- 5 -: IMPUGNED PENALTY HAS ARISEN ON ACCOUNT OF THE DIFFERE NCE IN THE ACTUAL SERVICE TAX PAID AND THAT CLAIMED (SUPRA) AT THE ASSESSEES BEHEST. THE SAME APPEARS TO HAVE ARISEN ON ACCOUNT OF ASSESSEES AUDITORS CERTIFICATE ISSUED INAD VERTENTLY. HON'BLE APEX COURT DECISION IN PRICE WATERHOUSE COOPE RS PVT. LTD., VS. CIT (2012) [348 ITR 306] (SC) HOLDS IN SUCH A CASE OF AN INADVERTENT MISTAKE IN RAISING A CLAIM IS NEITHER CONCEALMENT NOR THAT OF FILING OF INACCURATE PARTICULAR S OF INCOME. THEIR LORDSHIPS YET ANOTHER DECISION IN CIT V S. RELIANCE PETROPRODUCTS P. LTD., [322 ITR 158] (SC) AL SO SETTLED THE LAW MUCH EARLIER THAT - QUANTUM AND PENALTY ARE DISTINCT PROCEEDINGS WHEREIN EACH AND EVERY DISALLOWANCE/ADD ITION MADE IN CASE OF THE FORMER AND DOES NOT AUTOMATICAL LY ATTRACT THE LATTER PENAL PROVISION . 3.1. WE KEEP IN MIND THE ABOVE FACTUAL AND LEGAL PROP OSITION TO HOLD THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE ERRE D IN PENALISING ASSESSEE U/S.271(1)(C) IN THIS CASE OF THE ASSESSEES AUDITORS INADVERTENT MISTAKE IN RAISING HIGHER SERVIC E TAX CLAIM. THIS PENALTY IS DIRECTED TO BE DELETED THEREFO RE. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY, 2021 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( S.S. GODAR A ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 05-01-2021 TNMM ITA NO. 1030/HYD/19 :- 6 -: COPY TO : 1.BOBBITI SUSHMA, 10-41/1, FLAT NO.404, 4 TH FLOOR, PADMALAYA APARTMENTS, NEW GADDI ANNARAM COLONY, DILSUKH NAGAR, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-9(4), HYDERABAD. 3.CIT(APPEALS)-7, HYDERABAD. 4.PR.CIT-7, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.