THE SAHYADRI SAHAKARI BANK LTD, MUMBAI V. ITO 1(3)(2), MUMBAI

ITA 1267/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9762 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER ITA NO. 1 267/MUM./2015 ( ASSESSMENT YEAR : 20 09 1 0 ) THE SAHYADRI SAHAKAR BANK LTD. 446,, JAGANNATH SHANKAR SHETH ROAD MUMBAI 400 002 PAN AAAAS0719B . APPELLANT V/S INCOME TAX OFFICER WARD 1(3)(2), MUMBAI . RESPONDENT ASSESSE E BY : NONE REVENUE BY : SHR I RAJAT MITTAL DATE OF HEARING 11 .0 7 .2017 DATE OF ORDER 28.07.2017 O R D E R PER SAKTIJIT DEY , J .M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH JANUARY 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 3, MUMBAI, CONFIRMING IMPOSITION OF PENALTY AMOUNTING TO ` 7,95,800, UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 2009 10. 2 . BRIEF FACTS ARE, THE ASSESSEE IS A BANKING COMPANY . F OR THE IMPUGNED ASSESSMENT YEAR ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMB ER 2009, DECLARING NIL INCOME. DURING THE ASSESSMENT 2 THE SAHYADRI SAHAKAR BANK LTD. PROCEEDINGS, THE ASSESSING OFFICER WHILE VERIFYING THE RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME FILED BY THE ASSESSEE FOUND THAT THE ASSESSEE HAS NOT TAKEN INTO CONSIDERATION THE EXPENDITURE INC URRED ON ACCOUNT OF SETTLEMENT AMOUNT OF RENT PAID TO BEST OF ` 41,71,124 AND BAD DEBT OF ` 6,10,875, AS A RESULT OF WHICH ASSESSEE HAS CLAIMED EXCESS DEDUCTION UNDER SECTION 36(1)(VIIA) AND 36(1)(VIII). WHEN THE ASSESSING OFFICER POINTED OUT THIS FACT, TH E ASSESSEE FILED A REVISED STATEMENT OF INCOME OFFERING AN AMOUNT OF ` 23,83,643 AS INCOME. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT , THOUGH , ACCEPTED THE INCOME OFFERED BY THE ASSESSEE IN THE REVISED STATEMENT OF INCOME, HOWEVER, HE INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 274 R/W SECTION 271(1)(C) THE ASSESSEE OBJECTED TO THE INITIATED OF PENALTY PR OCEEDINGS AND REQUESTED TO DROP THE PROCEEDINGS . H OWEVER, THE ASSESSING OFFICER REJECTING THE EXPLANATION OF THE ASSESSEE PROCEEDED TO IMPOSE PENALTY OF ` 7,95,800 UNDER SECTION 271(1)(C) OF THE ACT. THOUGH, THE ASSESSEE CHALLENGED THE IMPOSITION OF PENALTY BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, IT DID NOT SUCCEED. 3 . WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE APPEARED ON BEHALF OF THE ASSESSE E. ON EARLIER DATES OF HEARING ALSO, NONE HAS 3 THE SAHYADRI SAHAKAR BANK LTD. APPEARED FOR THE ASSESSEE. IN THE CIRCUMSTANCES, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON REC ORD. 4 . HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE ASSESSMENT ORDER , IN THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE ASSESSING OFFICER DOUBTED THE QUANTUM OF DEDUCTION CLAIMED BY THE ASSESSEE UND ER SECTION 36(1)(VIIA) AND 36(1)(VIII) OF THE ACT, THE ASSESSEE IMMEDIATELY FILED A REVISED STATEMENT OF INCOME OFFERING AN AMOUNT OF ` 23,83,643. NOTABLY, THE DIFFERENCE IN CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIIA) AND 36(1)(VIII) OF THE ACT BETWEEN TH E ASSESSEE AND THE DEPARTMENT IS ON ACCOUNT OF NON RE DUCTION OF SETTLEMENT OF RENT PAID TO BEST AMOUNTING TO ` 41,71,124 FROM THE PROFIT . HOWEVER, IT IS EVIDENT THAT THE ASSESSEE HAS NOT ONLY DISCLOSED ALL MATERIALS RELATING TO ITS INCOME AND EXPENDITURE I N THE RETURN OF INCOME BUT HAS SHOWN PROFIT AT A HIGHER FIGURE. BE THAT AS IT MAY, WHEN THE ASSESSING OFFICER RAISED THE ISSUE OF EXCESS CLAIM OF BAD DEBT THE ASSESSEE IMMEDIATELY CAME FORWARD TO FILE A REVISED STATEMENT OF INCOME OFFERING ADDITIONAL INCOM E TO THE EXTENT OF THE ALLEGED EXCESS CLAIM. IN THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS EITHER FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED ITS INCOME. AT BEST, IT 4 THE SAHYADRI SAHAKAR BANK LTD. CAN BE TERMED AS A BONAFIDE MISTAKE COMMITTED BY THE ASSESSEE. ONE MORE ASPECT WHICH CASTS SERIOUS DOUBT ON THE VALIDITY OF PENALTY IMPOSED IS, IN ASSESSMENT ORDER THE ASSESSING OFFICER WHILE INITIATING PROCEEDING FOR IMPOSITION OF PENALTY HAS RECORDED SATISFACTION THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME. WHEREAS, ULTIMATELY THE ASSESSING OFFICER HAS IMPOSED PENALTY UNDER SECTION 271(1)(C) ALLEGING CONCEALMENT OF INCOME. THIS, IN OUR VIEW, IS IMPROPER. THE ASSESSING OFFICER CANNOT INITIATE PROCEEDING FOR IMPOSITION OF PENALTY UNDER ONE LIMB AND UL TIMATELY IMPOSE PENALTY UNDER ANOTHER LIMB. IN THE AFORESAID VIEW OF THE MATTER, WE HOLD THAT THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE PRESENT CASE IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE SAME. 5 . IN THE RESULT, ASSESSEES APP EAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.2017 SD/ - RAMIT KOCHAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28.07.2017 5 THE SAHYADRI SAHAKAR BANK LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI .