MR. REAL TEAM SYSTEM PVT. LTD, Mumbai V. ITO 15 (3)(1), Mumbai

ITA 1389/MUM/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6185 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI M. BALAGANESH, AM आयकरअपीलसं./ I.T.A. No. 1389/Mum/2019 (ननधधारणवर्ा / Assessment Year: 2014-15) M/s Real Team Systems Pvt. Ltd. 1101, Bldg. No. 6, Seawood Estates, NRI Complex, Navi Mumbai- 400 706 बनाम/ Vs. ITO 15(3)(1) Aayakar Bhavan, M. K. Road, Churchgate, Mumbai-400 020 स्थधयीलेखधसं./जीआइआरसं./PAN No. AADCR0073Q (अपीलधथी/Appellant) : (प्रत्यथी / Respondent) अपीलधथीकीओरसे/ Appellant by : None प्रत्यथीकीओरसे/Respondent by : Shri Mahita Nayar, Ld. DR सुनवधईकीतधरीख/ Date of Hearing : 17.08.2022 घोर्णधकीतधरीख / Date of Pronouncement : 17.08.2022 आदेश / O R D E R Per Amit Shukla, Judicial Member: The aforesaid appeal has been filed by the assessee against the impugned order dated 27.12.2018, passed by Ld. CIT(A), Mumbai in relation to penalty proceedings u/s 271(1)(c) for AY 2014-15. 2 I.T.A. No. 1389/Mum/2019 M/s Real Team Systems Pvt. Ltd. 2. Assessee is aggrieved by levy of penalty of Rs. 9,50,000/- in respect of disallowance of Rs. 27,08,548/- on account of excess claim of depreciation. 3. The facts in brief are that assessee is engaged in the business of IT Enabled services and also BPO services. The return of income declaring total loss of Rs. 2,01,97,785/- was filed on 27.09.2013. The Ld. AO on going through the working of depreciation noted that assessee company had claimed depreciation on higher rates and when the same was confronted, the assessee submitted that there was an error in taking depreciation number which was purely clerical error. The relevant submission reads as under:- We would like to bring to your notice that the error for depreciation number in. the filing is result of clerical error on the part of the staff of the assessing Chartered Accountant (Letter to the effect has been given by the same). So kindly consider this an inadvertent error which is to be corrected. The error persisted because of the extreme fine-print (usage of very small size in the excel sheet records). The number quoted matches exactly with the previous year assessment year number so should be condoned as a one time error since it was not deliberate on our part. 3 I.T.A. No. 1389/Mum/2019 M/s Real Team Systems Pvt. Ltd. 4. The penalty has been levied by the AO on this excess claim of depreciation at Rs. 27,08,548/- which 100% works out to Rs. 9,50,000/-. 5. Ld. CIT(A) after discussing the law relating to penalty and various judgments without any discussion how such judgments are related to the facts has confirmed the penalty. 6. None appeared before us on behalf of assessee despite several notices were served, therefore the matter is being decided on the basis of material available of record and the submission made by Ld. DR. 7. On perusal of the assessment order and the nature of disallowance, we find that there was some inadvertent error while applying the rates of depreciation. First of all, we have to see whether there was any inadvertent mistake or there was deliberate concealment of income or furnishing inaccurate particulars of income. Here in this case, assessee has stated that there was an error in noting, the rate of depreciation from the Schedule and there was no deliberate act on part of the assessee which has been explained vide explanation filed by the assessee. Ld. AO has simply 4 I.T.A. No. 1389/Mum/2019 M/s Real Team Systems Pvt. Ltd. accepted the explanation and has yet imposed penalty for furnishing inaccurate particulars of income. In such scenario, the judgment and principle laid down by the Hon’ble Supreme Court in the case of Price Waterhouse Coopers (P) Ltd. Vrs. CIT 348 ITR 306 is squarely applicable wherein it has been held that such bonafide mistakes made by the assessee cannot be the basis for imposition of penalty. Accordingly, penalty u/s 271(1)(c) cannot be imposed in these facts. Thus, the penalty levied by the AO is directed to be deleted. 8. In the net result, the appeal filed by the assessee stands allowed. Orders pronounced in the open court on 17 th August, 2022. Sd/- Sd/- (M. Balaganesh) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;नदनधंक Dated : 17/08/2022 Sr.PS. Dhananjay 5 I.T.A. No. 1389/Mum/2019 M/s Real Team Systems Pvt. Ltd. आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपीलधथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. नवभधगीयप्रनतनननध, आयकरअपीलीयअनधकरण, मुंबई/ DR, ITAT, Mumbai 6. गधर्ाफधईल / Guard File आदेशानुसार/ BY ORDER, .उि/सहायकिंजीकार (Dy./Asstt.Registrar) आयकरअिीिीयअतिकरण, मुंबई/ ITAT, Mumbai