Supreme Construction, Hooghly V. ACIT, CIR-2, HOOGHLY, Hooghly

ITA 1428/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1389 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA CIT LD
• Assessee Lawyers: SOMNATH GHOSH LD

Judgement Text

1 ITA NO. 1428/KOL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JU DICIAL MEMBER I.T.A NO. 1428/KOL/2016 A.Y 2006-07 M/S. SUPREME CONSTRUCTION VS. A.C.I.T, CIR-2, HOOGH LY PAN:AAXFS 5334A [APPELLANT] [RESPONDEN T] FOR THE APPELLANT : SHRI SOMNATH GHOSH, ADVOCA TE, LD.AR FOR THE RESPONDENT : SHRI S. DASGUPTA, ADDL. CIT , LD.DR DATE OF HEARING : 01-01-2018 DATE OF PRONOUNCEMENT : 9-03-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), 21, KOLKATA DT. 06-06-2016 FOR THE A.Y 2006-07. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A JUSTIFIED IN CONFIRMING THE IMPUGNED PENALTY OF RS.2,00,700/- IMPOSED U/S.271FB OF THE ACT BY THE AO IN THE FACTS AND CIR CUMSTANCES OF THE CASE. 3. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. T HE CONTENTION OF ASSESSEE WAS THAT THE PROVISION OF CHARGING OF F RINGE BENEFITS WAS INTRODUCED BY THE FINANCE ACT 2007, WHICH CAME INTO FORCE W.E.F 1-4- 2006. BEING FIRST YEAR RELEVANT TO A.Y UNDER CONSID ERATION, THE ASSESSEE WAS NOT AWARE AND CONVERSANT WITH THE PRAC TICES AND PROCEDURES REQUIRED TO BE FOLLOWED UNDER THE SAID P ROVISION INVOLVING THE FRINGE BENEFIT. HE ALSO ARGUED THAT THERE IS R EASONABLE CAUSE IN NOT COMPLYING WITH THE PROVISIONS OF SECTION 115WE OF THE ACT. WE FIND THAT THE LD.AR HAS RIGHTLY POINTED OUT THAT TH E PROVISIONS FOR CHARGING OF FRINGE BENEFITS WAS INTRODUCED BY THE F INANCE ACT 2007, 2 ITA NO. 1428/KOL/2016 WHICH CAME INTO FORCE W.E.F 1-4-06 AND THE A.Y UNDE R CONSIDERATION IS RELATING TO A.Y 2006-07. IN VIEW OF WHICH, THE ASS ESSEE IS LIABLE TO PAY TAX ON FRINGE BENEFITS. HOWEVER, ON SIMILAR SET OF FACTS AND CIRCUMSTANCES OF THE CASE, THE CO-ORDINATE BENCH, I TAT, KOLKATA, B BENCH IN THE CASE OF M/S. ASHOK TRADING CO. IN ITA NO. 141/KOL/2013 VIDE ORDER DT. 06-08-2015 HELD THAT THE DEFAULT ON THE PART OF THE ASSESSEE IN THE FIRST YEAR OF APPLICABILITY OF FBT CANNOT BE CONSIDERED AS MALAFIDE AND CANCELLED THE PENALTY FOR NON FILIN G OF RETURN INVOLVING THE FRINGE BENEFITS. IN THE PRESENT CASE, THE AO FO UND NON-COMPLIANCE OF FRINGE BENEFIT DURING THE ASSESSMENT PROCEEDINGS BEING FIRST YEAR OF APPLICABILITY OF CHARGING OF FBT, IN OUR OPINION THE FACTS OF THE PRESENT CASE AND THE FACTS WITH THAT OF CO-ORDINATE BENCH IN THE CASE OF SUPRA ARE SIMILAR AND IDENTICAL. RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED HEREIN BELOW FOR BETTER APPRAISAL:- '8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. THERE IS NO DISPUTE THAT THE A SSESSEE WAS REQUIRED TO FILE THE RETURN OF FRINGE BENEFIT. AS PER SUB-SECTION (2) OF SECTIO N 115WD, IF THE ASSESSEE HAD NOT FILED THE RETURN OF FRINGE BENEFIT BUT IN THE OPINION OF ASSESSING OFFICER HE SHOULD HAVE FILED THE RETURN, THE ASSESSING OFFICER WOULD ISSUE NOTIC E REQUIRING IT TO FILE SUCH RETURN, BUT NO SUCH NOTICE WAS ISSUED BY THE ASSESSING OFFICER. AL L THE FACTS CAME TO THE NOTICE OF THE ASSESSING OFFICER ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THERE IS NO CHARGE OF THE DEPARTMENT THAT THE ASSESSEE CONCEALED ANY PART ICULARS OR SUBMITTED INACCURATE PARTICULARS OF INCOME. NO DOUBT, THERE IS SPECIFIC REQUIREMENT OF FILING THE RETURN OF INCOME, BUT SINCE IT WAS THE FIRST YEAR OF APPLICAB ILITY OF FRINGE BENEFIT TAX, WHEN FBT RETURN WAS REQUIRED TO BE FILED AND DUE TAXES WERE PAID BY ASSESSEE, THEREFORE, WE ARE OF THE OPINION THAT THE DEFAULT ON THE PART OF THE ASSESSEE CANNOT BE CONSIDERED AS MALAFIDE AND WE CANCEL THE PENALTY FOR NON-FILING O F RETURN. ' 4. FOLLOWING THE ABOVE, WE SET ASIDE THE ORDER OF T HE CIT-A IN CONFIRMING THE IMPUGNED PENALTY IMPOSED OF RS.2,00, 700/- U/S. 271 FB OF THE ACT AND DIRECT THE AO TO CANCEL THE SAME. ACCORDINGLY, THE GROUND NOS. 1 TO 4 RAISED BY THE ASSESSEE IN THE AP PEAL FOR THE A.Y UNDER CONSIDERATION ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9-0 3-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9-03-2018 3 ITA NO. 1428/KOL/2016 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: M/S. SUPREME CONSTRUCTION C/O S.N. GHOSH & ASSOCIATES, ADVOCATES, SEBEN BROTH ERS LODGE, P.O BUROSHIBTALA, P.S CHINSURAH, DIST: HOOGHLY 71 2105. 2 RESPONDENT/DEPARTMENT : ASSTT. COMMISSIONER OF INCO ME TAX, CIR-2, HOOGHLY, AAYKAR BHAWAN, HOOGHLY, G.T ROAD, K HADINA MORE, P.O CHINSURAH P.S CHINSURAH, DIST: HOOGHLY 712101. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA