Meriton Infotech Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1250/DEL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6813 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 23-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ARORA
• Assessee Lawyers: SANJIV SPARA
• Section: 143(3)

Judgement Text

1 ITA NO. 1250/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 1250/DEL/2012 (ASSESSMENT YEAR-2007-08) MERITON INFOTECH PVT. LTD. C/O. O.P. SAPRA & ASSOCIATES, ADVOCATES C-763, NEW FRIENDS COLONY NEW DELHI AAECM4348N (APPELLANT) VS ITO WARD-6(4) NEW DELHI (RESPONDENT) APPELLANT BY SH. SANJIV SPARA, ADV RESPONDENT BY SH. S. K. ARORA, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 20/01/2012 PASSED BY THE CIT(A)-IX, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. THAT THE PENALTY AS LEVIED AT RS.3,24,840/- BY THE LD. A.O AND SUSTAINED BY THE LD BY HOLDING THAT THE ASSESSE E HAD FURNISHED INACCURATE PARTICULARS OF ITS INCOME TO T HE EXTENT DATE OF HEARING 23.08.2016 DATE OF PRONOUNCEMENT 20.10.2016 2 ITA NO. 1250/DEL/2012 OF RS.9,65,056/- IS ARBITRARY, UNJUST AND ILLEGAL O N VARIOUS FACTUAL AND LEGAL GROUNDS INCLUDING THE FOLLOWING: A). THE APPELLANT HAD NEITHER CONCEALED ANY INCOME NOR HAD FURNISHED INACCURATE PARTICULARS OF ITS INCOME AS A LLEGED BY THE A.O. B). VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BE LOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRECT OR ARE UNTENABLE. THE SUBMISSIONS MADE BY THE APPELLANT SUPPORTED BY CASE LAWS BEFORE THE AUTHORITIES BELOW HAD EITHER BEEN IGNORED OR HAD NOT BEEN GIVEN DUE WEIGH T. THE LD.CIT(A) HAD NOT CONTROVERTED THE CASE LAWS RELIED UPON BY HIM TO THE APPELLANT AT THE TIME OF HEARING OF A PPEAL ABOVE WHICH THE APPELLANT HAD COME TO KNOW FROM HER APPELLATE ORDER. MOREOVER, THE CASE LAWS RELIED UP ON BY HER HAD NO APPLICATION TO THE FACTS OF APPELLANTS CASE. THE AUTHORITIES BELOW WERE INCORRECT IN HOLDING THA T THE APPELLANT HAD DELIBERATELY INDULGED INTO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2. THAT WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, TH E PENALTY AS LEVIED IS VERY EXCESSIVE. 3. RETURN DECLARING LOSS OF RS.10,99,590/- WAS FILE D ON 15/11/2007 BY THE ASSESSEE. THE CASE WAS SELECTED F OR SCRUTINY. DURING SCRUTINY PROCEEDINGS, ASSESSEE VIDE LETTER D ATED 28/8/2009 FILED A REVISED STATEMENT OF ASSESSABLE INCOME, WHE REBY THE INADVERTENT ERRORS AS MENTIONED THEREIN WHILE FILIN G THE RETURN WERE OFFERED TO BE ADDED BACK. ACCORDINGLY, THE ROC FEE OF RS.7,51,850/- AND INTEREST EXPENDITURE OF RS.2,13,206/- WAS REDUC ED FROM THE LOSS OF RS.10,99,590/- AS ORIGINALLY DECLARED RESUL TING IN THE REVISED LOSS OF RS.1,34,534/-. THE ASSESSMENT U/S 143(3) OF I.T. ACT WAS COMPLETED ON 11/11/2009 AT A NET LOSS OF RS.1,34,53 4/- AS WAS DECLARED IN THE REVISED STATEMENT OF ASSESSABLE INC OME. 3 ITA NO. 1250/DEL/2012 4. PENALTY U/S 271(1)(C) OF RS.3,24,840/- BEING 100 % OF THE TAX WAS LEVIED BY ASSESSING OFFICER ON ACCOUNT OF ALLEG ED FURNISHING OF INACCURATE PARTICULARS/CONCEALING TRUE PARTICULARS OF INCOME TO THE EXTENT OF RS.9,65,056/- WHICH COMPRISED OF: (I) RS.7,51,850/- ON ACCOUNT OF DISALLOWANCE OF FIL ING FEE OF ROC FOR INCREASING THE AUTHORIZED SHARE CAPITAL OF THE COMPANY. (II) RS. 2,13,206/- ON ACCOUNT OF DISALLOWANCE OF I NTEREST EXPENDITURE ON LOAN AS TAKEN. 5. AGAINST THE PENALTY ORDER THE ASSESSEE FILED APP EAL BEFORE THE CIT(A). THE CIT(A) VIDE ORDER DATED 20/1/2012 CONFI RMED THE PENALTY BY RECORDING HIS FINDINGS AT PARA 6 AND ALS O BY RELYING ON VARIOUS CASE LAWS. THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AR SUBMITTED THAT THE ASSESSEE WAS WHOLL Y DEPENDENT ON THE ADVISE OF HIS CHARTERED ACCOUNTANT AND WERE NOT AT ALL CONVERSANT WITH THE TECHNICALITIES OF INCOME TAX LA W WHILE FILING THE RETURN OF INCOME. FROM THE AUDITED PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AS FILED WITH THE RETURN IT WOULD BE OBSERVED THAT BOTH FILING FEE OF RS.7,51,8 50/- AND INTEREST EXPENDITURE OF RS.2,13,206/- STANDS DISCLOSED IN TH E SAID PROFIT AND LOSS ACCOUNT AS SOON AS THE ASSESSEE BECAME AWARE O F THE INADVERTENT ERROR OF NOT ADDING BACK BOTH THESE EXP ENSE IN THE RETURN OF INCOME AS FILED REVISED STATEMENT OF ACCE SSIBLE INCOME WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDI NGS ADDING BACK SUCH EXPENDITURE ALONG WITH LETTER DATED 28/8/ 2009 WITH REGARD TO INTEREST EXPENDITURE OF RS.2,13,206/-. T HE ASSESSEE 4 ITA NO. 1250/DEL/2012 CLEARLY MENTIONED IN ITS PENALTY REPLY THAT SUCH IN TEREST WAS ON THE LOAN TAKEN IN PROCEEDINGS FOR FINANCIAL YEAR 2005-0 6 IN THE INTEREST EXPENDITURE OF RS.3,30,100/- FOR SUCH ASSESSMENT YE AR 2006-07 WAS NOT CLAIMED IN THE RETURN OF INCOME HAS FILED F OR SUCH YEAR. THUS, THERE WAS NO CONCEALMENT OR INACCURATE PARTIC ULARS GIVEN BY THE ASSESSEE. 7. THE LD. AR RELIED ON THE TRIBUNALS ORDER IN THE CASE OF M/S BAKERS CIRCLES PVT. LTD. VS. DCIT ITA NO. 5112/DEL /2014 IN WHICH PENALTY U/S 271(1)(C) AS IMPOSED ON ACCOUNT OF ROC FEE HAS CLAIMED FOR INCREASING AUTHORISED CAPITAL WAS DELET ED RELYING ON THE FOLLOWING JUDGMENTS: (I) PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT(A) 3 48 ITR 306 (II) CIT(A) VS. SOCIETEX ITA NO. 1190/2011 DELHI H IGH COURT (III) HINDUSTAN STEEL VS. STATE OF ORISSA 83 ITR 26 (SC) 8. THE LD. DR RELIED ON THE ORDER OF THE CIT(A). 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE NEVER CONCEALED OR FILED INACCURATE PARTICULARS. AFTER KNOWING THAT THERE WA S MISTAKE ON PART OF THE CHARTERED ACCOUNTANT, THE ASSESSEE RECT IFIED THE SAME. A REVISED STATEMENT OF ASSESSABLE INCOME, WHEREBY THE INADVERTENT ERRORS AS MENTIONED THEREIN WHILE FILING THE RETURN WERE OFFERED TO BE ADDED BACK. THE ROC FEE OF RS.7,51,850/- AND INT EREST EXPENDITURE OF RS.2,13,206/- WAS REDUCED FROM THE L OSS OF 5 ITA NO. 1250/DEL/2012 RS.10,99,590/- AS ORIGINALLY DECLARED RESULTING IN THE REVISED LOSS OF RS.1,34,534/-. IN OTHER WORDS, EVEN AFTER ADDING BA CK THE ABOVE MENTIONED ROC FEE AND INTEREST EXPENDITURE AS PER R EVISED STATEMENT OF ASSESSABLE INCOME, IT WAS A CASE OF AS SESSED LOSS. IN FACT THE CIT(A) ALSO OBSERVED THAT THERE IS A WRONG FILING OF RETURN OF INCOME DUE TO INADVERTENT MISTAKE DONE BY THE CHART ERED ACCOUNTANT OF THE ASSESSEE. THE CASE LAWS RELIED B Y THE ASSESSEE ARE INCONFORMITY WITH THAT OF THE ASSESSEES CASE. IN CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306, T HE HONBLE SUPREME COURT HELD THAT THE ABSENCE OF DUE CARE, DO ES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING OF INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. TH US, THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIF IED IN THE PRESENT CASE AS THE ASSESSEE WAS NOT AT FAULT. THEREFORE, W E SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY. 12. IN RESULT, APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20 TH OF OCTOBER, 2016. SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 20/10/2016 R. NAHEED * COPY FORWARDED TO: 6 ITA NO. 1250/DEL/2012 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 23/08/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 23/08/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2 0 . 1 0.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 0 . 1 0.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.