ITO, Ward - 41(3), Kolkata, Kolkata V. Swapan Kr. Poddar, Kolkata

ITA 137/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2452 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 05-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 22-01-2010
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Keywords: Depreciation; Revised return; Bonafide mistake
• Section: 142(1); 80HHC; 6

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( (( ( ) )) ) . .. . . . . . , ,, , ! ! ! ! '#$ '#$ '#$ '#$ . .. .% %% % . . . . &' &' &' &', , , , () () () () [BEFORE HONBLE SHRI G. D. AGRAWAL, VP & HONBLE SR I D. K. TYAGI, JM] $* $* $* $* / ITA NO. 137 /KOL/2010 +, #-. +, #-. +, #-. +, #-./ // / ASSESSMENT YEAR : 2004-05 INCOME-TAX OFFICER, WD-41(3), KOLKATA. VS. SWAPA N KUMAR PODDAR (PA NO. AFLPP 3267 L) (01 / APPELLANT ) (2&01/ RESPONDENT ) FOR THE APPELLANT: / SRI P. K. MISHRA FOR THE RESPONDENT: / SHRI SUBHAS AGARWAL (%3 / ORDER PER D. K. TYAGI, JM ( . . . . % %% % . . . . &' &' &' &', () ) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 29.10.2009 FOR THE ASSESSMEN T YEARS 2004-05 ON THE FOLLOWING SOLE GROUND : THAT THE LD. CIT(A) HAS ERRED BY ALLOWING THE APPE AL OF THE ASSESSEE DESPITE ASSESSEE HAVING FRANKLY ADMITTED THE FACT THAT THERE WAS A M ISTAKE IN THE CALCULATION OF DEDUCTION U/S. 80HHC. 2. BRIEFLY STATED FACTS OF THE CASE AS OBSERVED BY THE AO ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE A.YR.2004-05 ON 31.10. 2004 DECLARING TOTAL INCOME OF RS.2,L7,350/-. THE ASSESSEE IS A MANUFACTURER AND EXPORTER OF LEATHER GOODS CARRYING ON HIS BUSINESS UNDER THE NAME & STYLE OF M/S. PODDAR SONS. THE CASE WAS INITIALLY PROCESSED U/S. 143(1) OF THE I. T. ACT. SUBSEQUENT LY, IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S.8OHHC TO THE TUNE OF RS.18,13 ,101/-. THE CASE WAS, THEREFORE, SELECTED FOR SCRUTINY. ACCORDINGLY, NOTICES U/S. 1 43(2) & 142(1) OF THE I. T. ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE W AS SPECIFICALLY REQUIRED TO FURNISH A FRESH CALCULATION OF DEDUCTION U/S.8OHHC VIDE; QUES TIONNAIRE AT SL. NO 5 AS PER NOTICE U/S.142(1) DT.08.06.2005 AND SL NO. 6 OF QUESTIONN AIRE DT.23.09.2005 THE ASSESSEE, IN RESPONSE TO SUCH QUERY, ADMITTED THAT THERE WAS A M ISTAKE IN CALCULATION U/S.8OHHC WHICH WAS COMMITTED BY CHARTERED ACCOUNTANT. THE A SSESSEE BEING A LAYMAN WAS NOT AT ALL AWARE THAT SUCH MISTAKE PERSISTED IN THE CALCUL ATION FOR DEDUCTION CLAIMED U/S.8OHHC. HENCE, THE ASSESSEE SAID THAT SINCE HE W AS UNAWARE OF SUCH MISTAKE, IT WAS PURELY, UNINTENTIONAL. THE ASSESSEE FURTHER FURNISH ED A FRESH CALCULATION, ADMITTED THE MISTAKE AND PAID THE ENTIRE AMOUNT OF TAXES TO THE TUNE OF RS.6,27,637/- ON RETURNED INCOME AND ADDITIONS WERE MADE, INTER ALIA, ON ACCO UNT OF EXCESS DEDUCTION U/S. 80HHC 2 RS.12,52,752/-. PENALTY WAS INITIATED ON THE EXCESS AMOUNT OF DEDUCTION CLAIMED I.E.RS.12,52,752/- (RS.18,13,101/- (-) RS.5,60,349 = RS.12,52,752) BUT WHILE IMPOSING PENALTY U/S.271(1)(C), MISTAKE WAS COMMITTED BY IMP OSING ON THE ENTIRE AMOUNT OF ADDITIONS MADE AS UNDER: 1) EXCESS DED. U/S. 8OHHC RS. 12,52,752/-. 2) DEPARTMENTAL EXPENSES RS. 25,000/- 3) FILING FEES RS. 95,900/- 4) MOTOR CAR EXPENSE RS. 21480/- SINCE, THE MISTAKE WAS APPARENT FROM RECORD, IT WAS RECTIFIED U/S.154 OF THE I. T. ACT WHICH REDUCED THE AMOUNT OF PENALTY FROM RS.5,70,43 4/- TO RS.3,86,434/-. BEING AGGRIEVED BY THE PENALTY IMPOSED U/S.271(1)(C), THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). IN APPEAL, THE LD. CIT(A) DELETED THE PENALTY MADE U/S. 271(1)(C) OF THE I. T. ACT, 1961. AGGRIEVED BY THE SAID ORDER NOW THE R EVENUE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING, THE LD. DR HEAVILY RELIE D ON THE ORDER OF THE AO AND SUBMITTED THAT THE ASSESSEE CLAIMED EXCESS DEDUCTIO N U/S. 80HHC AND DID NOT PREFER AN APPEAL ON THE ADDITION. ACCORDING TO AO, THE ASSES SEES SUBMISSION OF INACCURATE PARTICULARS WAS INTENTIONAL AND DELIBERATE TO AVOID TAX. HE JUST ONLY TOOK A CHANCE TO ESCAPE THE INCOME BY CLAIMING EXCESS DEDUCTION U/S. 80HHC. AS SUCH, THE AO HAS RIGHTLY IMPOSED THE PENALTY U/S. 271(1)(C) OF THE I . T. ACT. HE LASTLY URGED BEFORE THE BENCH TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THAT OF AO. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFORE THE LOWER AUTHORITI ES RELIED ON THE ORDER OF THE LD. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM THE SA ME.. 5 WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOT H THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE LD. CIT (A) WHILE GIVING RELIEF TO THE ASSESSEE HAS OBSERVED AS UNDER : THE A.O LEVIED PENALTY U/S. 271(1)( C) ON TWO GROU NDS: A. INCORRECT CLAIM OF DEPRECIATION U/S. 8OHHC. B. DISALLOWANCE OF EXPENSES. THE CLAIM OF DEDUCTION U/S.. 8OHHC IS AS PER AUDIT REPORT. THE APPELLANT IT APPEARS IN COURSE OF ASSESSMENT FILED A REVISED COMPUTATION CL AIMING LESS DEDUCTION. IT IS NOT CLEAR FROM THE ASSESSMENT ORDER WHETHER THE APPELLANT FIL ED A REVISED COMPUTATION ON ITS OWN OR WHEN POINTED OUT BY THE AO. HOWEVER, THE APPELLA NT SUBMITTED IN THE WRITTEN SUBMISSIONS THAT IT WAS A BONAFIDE MISTAKE AND THAT HE RELIED ON THE CHARTERED ACCOUNTANTS CERTIFICATE. HE ALSO RELIED ON CERTAIN CASE LAWS IN SUPPORT OF HIS CONTENTIONS. IN MY OPINION IT IS NOT A CASE OF FURN ISHING INACCURATE PARTICULARS. IT MAY BE CASE WHERE BONAFIDE MISTAKE OCCURRED IN COMPUTAT ION OF DEDUCTION. 3 IN THE CASE OF CIT VS. SRI SARADHA TEXTILE PROCESSO RS (P) LTD. (2006) 286 ITR 499, THE MADRAS HIGH COURT WHILE CONFIRMING THE TRI BUNALS DECISION HELD THAT THE AUTHORITIES BELOW HAD CONCURRENTLY HELD THAT WHEN T HE MISTAKE WAS POINTED OUT, THE ASSESSEE HAD WITHDRAWN ITS CLAIM FOR DEPRECIATION A ND INVESTMENT ALLOWANCE ON THE MACHINERY AND FILED A REVISED RETURN AND THIS ACTIO N OF THE ASSESSEE SHOWED ITS BONAFIDES. IN THE PRESENT CASE THE APPELLANT FILED A REVISED COMPUTATION CLAIMING LESS DEDUCTION. AS REGARDS DISALLOWANCE OF EXPENSES, THEY ARE NEITH ER IN THE NATURE OF CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULARS. RATHER THE DI SALLOWANCES WERE MADE ON ESTIMATE BASIS. I HAVE PERUSED THE CASE LAWS CITED BY THE APPELLANT . I FIND THEY ARE ALL IN FAVOUR OF THE APPELLANTS SUBMISSIONS. UNDER THE CIRCUMSTANCES, I DO NOT FIND IT A FIT CASE WHERE THE ORDER AS PASSED BY THE AO U/S. 271(1)(C) CAN BE SUS TAINED. THE ORDER OF PENALTY U/S. 271(1)(C) IS CANCELLED. AT THE TIME OF HEARING BEFORE US, THE LD. DR DID NO T CONTROVERT THE ABOVE FINDINGS OF THE LD. CIT(A) BY PRODUCING ANY COGENT MATERIAL/EVIDENC E THEREFORE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD . CIT(A) AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.7.10 SD/- SD/- . .. . . . . . , , , , ! ! ! ! . . . . % %% % . . . . &' &' &' &', , , , () (G. D. AGRAWAL) (D. K. TYAGI) VICE PRESIDENT JUDICIAL MEMBER ( (( (4 4 4 4) )) ) DATED : 16 TH JULY, 2010 #56 +7 +8# JD.(SR.P.S.) (%3 9 2++: %:-;- COPY OF THE ORDER FORWARDED TO: 1. 01 /APPELLANT ITO, WARD-41(3), KOLKATA. 2 2&01 / SRI SWAPAN KUMAR PODDAR, 521/A, RABINDRA SARANI, KOLKATA-3.. .. . 3. +3/ THE CIT, KOLKATA 4. +3 ()/ THE CIT(A), KOLKATA 5. #B+' 2+ / DR, KOLKATA BENCHES, KOLKATA &: 2+/ TRUE COPY , (%3C/ BY ORDER , $ / DEPUTY REGISTRAR .