THE DY CIT 5(1), MUMBAI V. M/S. AMAR REMEDIES LTD, MUMBAI

ITA 1537/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7490 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 03-03-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM GAUR
• Assessee Lawyers: A V SONDE
• Keywords: Wrong claim; Revised return; Bonafide mistake; TDS
• Section: 271(1)(c); 115JB; 80IB; 133(6); 143(1); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI. BEFORE SHRI R.K. GUPTA, J.M. AND SHRI J. SUDHAKAR REDDY, A.M. I.T.A. NO. 1 537/MUM/2008. ASSESSMENT YEAR : 2004-05. DY. COMMISSIONER OF INCOME TAX, M/S AM AR REMEDIES LTD. 5(1), MUMBAI. VS. SANE GURUJI PREMISES, BLOCK NO.3, 2 ND FLOOR, SAVARKAR MARG, PRABHADEVI, MUMBAI 400 025 PAN :AACA3774G APPELLANT RESPONDENT APPELLANT BY : SHRI VIKRAM GAUR RESPONDENT BY : SHRI A.V. SONDE. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE CIT(APPEALS)-V, MUMBAI DATED 19-12-200 7 FOR THE ASSESSMENT YEAR 2004-05, WHEREIN THE PENALTY LEVIED U/S 271(1)(C) BY THE AO WAS CANCELLED BY THE FIRST APPELLATE AUTHORITY. 2. FACTS IN BRIEF : THE ASSESSEE IS ENGAGED IN THE BUSINESS IN TRADIN G IN CUT AND POLISHED DIAMONDS AS WELL AS MANUFACTURE OF AYURVED IC PRODUCTS AT A FACTORY AT DAMAN WHICH IS A NOTIFIED AREA FOR THE P URPOSE OF SECTION 80IB. IT FILED ITS RETURN OF INCOME ON 01-11-2004 DECLARI NG A TOTAL INCOME OF RS.3,87,02,245/- U/S 115JB. THE ASSESSEE DECLARED N IL INCOME UNDER THE 2 NORMAL PROVISIONS OF THE ACT AFTER CLAIMING DEDUCTI ON U/S 80IB OF RS.3,88,87,484. THE TAX PAYABLE ON RETURNED INCOME U/S 115JB WAS WORKED OUT AT RS.29,75,235/-. THE ASSESSEE HAD CLAI MED TAX DEDUCTED AT SOURCE AT RS.8,03,301/-. THE RETURN WAS PROCESSED U /S 143(1) ON 23-02- 2005. LATER IT WAS SELECTED FOR SCRUTINY. MEANWHILE THE ASSESSEE FILED A REVISED RETURN ON 31-03-2006, DECLARING NET TAXABL E INCOME OF R.3,16,263/- UNDER THE NORMAL PROVISIONS OF THE ACT AND REITERATING BOOK PROFIT OF THE ASSESSEE AT RS.3,87,02,245/- U/S 115J B OF THE ACT. THE REASONS GIVEN BY THE ASSESSEE, FOR FILING A REVISED RETURN, WAS THAT THE DEDUCTION U/S 80IB WAS REVISED AS INADVERTENTLY, T HE ASSESSEE HAD CLAIMED DEDUCTION U/ 80IB, ON MISCELLANEOUS INCOME AS WELL AS ON PROFITS ON TRADING ACTIVITIES. THUS IN THE REVISED RETURN, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB AT RS.3,88,87,484/- MADE IN THE ORIGINAL RETURN OF INCOME. 3. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED TDS CREDITS OF RS.7,9 8,051/-, BEING TAX DEDUCTED AT SOURCE EFFECTED BY 20 PARTIES ON BROKER AGE AND COMMISSION EARNED BY THE ASSESSEE, WHICH AMOUNTED TO RS.1,54,6 7,688/-. THE ORIGINAL TDS CERTIFICATES WERE ALSO ATTACHED WITH THE RETURN . THE ASSESSEE HAS SHOWN ONLY AN AMOUNT OF RS.1,56,125/- AS INCOME FRO M OTHER SOURCES. THE AMOUNT OF BROKERAGE AND COMMISSION EARNED BY TH E ASSESSEE OF R.1,54,67,686/-, WAS NEITHER APPEARING IN THE CREDI T OF THE PROFIT AND LOSS ACCOUNT AS INCOME NOR AS COMPUTATION OF INCOME WAS FILED ALONG WITH THE RETURN. THE DETAILS OF BROKERAGE AND COMMISSION EAR NED AND TDS EFFECTED THEREON AS PER THE TDS CERTIFICATES, ARE GIVEN AT P AGE 3 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS ISSUED A QUESTIONNAIRE DAT ED 08-09-2006 ALONG WITH THE NOTICE U/S 142(1), WHEREIN THE AO SPECIFIC ALLY ASKED THE ASSESSEE TO FURNISH DETAILS OF INCOME EARNED FOR WHICH TDS C ERTIFICATES HAVE BEEN 3 FILED, AND THE NATURE OF SERVICES RENDERED ETC. THE ASSESSEE DID NOT RESPOND TO THIS NOTICE. MEANWHILE THE AO CALLED FOR INFORMATION FROM ALL THE PARTIES WHICH ISSUED THE TDS CERTIFICATES BY IN VOKING HIS POWER U/S 133(6) OF THE I.T. ACT, 1961. ALL THE PARTIES CONFI RMED TO THE AO THAT THEY HAVE PAID BROKERAGE AND COMMISSION TO THE ASSESSEE, FOR THE SERVICES RENDERED BY IT IN PROCURING ORDERS AND OTHER RELATE D SERVICES. THE AO ONCE AGAIN CALLED FOR AN EXPLANATION FROM THE ASSES SEE. THE ASSESSEE VIDE ITS LETTER DATED 20-12-2006 ADMITTED THAT THIS AMOU NT HAD NOT BEEN INCLUDED EITHER IN THE PROFIT AND LOSS ACCOUNT OR A S INCOME IN THE COMPUTATION OF INCOME FOR THE IMPUGNED ASSESSMENT Y EAR. IT SUBMITTED THAT THE CHEQUES RECEIVED OR THE AMOUNT USED FROM T HE PARTIES WERE CREDITED TO THE RESPECTIVE PARTY ACCOUNTS WHILE FIN ALIZING THE ACCOUNTS. IT CLAIMED THAT THIS WAS A MISTAKE AND AS IT IS NOW NO TICED, THE ASSESSEE IS RECTIFYING THE SAME. THE ASSESSEE REQUESTED THAT TH IS AMOUNT MAY BE INCLUDED AS INCOME. REVISED COMPUTATION OF INCOME W AS ALSO FILED. IT WAS SUBMITTED THAT THE EXPENSES INCURRED HAVE ALREADY B EEN CLAIMED. THE AO MADE AN ADDITION ACCORDINGLY. HE ALSO INITIATED PEN ALTY PROCEEDINGS ON TWO COUNTS, THE FIRST BEING ON THE GROUND THAT A PA TENTLY WRONG CLAIM OF DEDUCTION WAS MADE U/S 80IB AND SECONDLY ON THE GRO UND THAT THE ASSESSEE HAD CONCEALED ITS PARTICULARS OF INCOME AN D FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF R.1,54,67,68 6/-. HE SPECIFICALLY POINTED OUT THAT HAD THE ASSESSMENT NOT BEEN SELECT ED FOR SCRUTINY, THE INCOME TO THE EXTENT OF RS.1,54,67,686/- WOULD HAVE GONE UNDETECTED. HE FURTHER OBSERVED THAT IT IS BECAUSE OF THE SCRUTINY PROCEEDINGS AND VERIFICATIONAL INVESTIGATION CARRIED OUT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS FOR THE CURRENT ASSESSMENT Y EAR, THE CONCEALED INCOME CAME TO LIGHT. TO A NOTICE ISSUED, THE ASSES SEE FILED AN EXPLANATION VIDE HIS LETTER DATED 24-04-2007. WHILE ADMITTING T HAT THE INCOME PERTAINING TO THE TDS CERTIFICATES WERE NOT TAKEN I N THE PROFIT AND LOSS 4 ACCOUNT, IT CLAIMED THAT IT WAS A BONAFIDE MISTAKE WHICH WAS RECTIFIED, IMMEDIATELY ON THE ASSESSEE COMING TO KNOW OF THE S AME. IT PLEADED THAT THERE CANNOT BE A CASE OF DISHONEST DELIBERATE ATT EMPT TO HIDE THE INCOME PERTAINING TO THE TDS CERTIFICATES, WHEN THE ORIGIN AL TDS CERTIFICATES WERE FILED ALONG WITH THE RETURN ITSELF. HE CLAIMED THAT THE TDS CERTIFICATES WHICH WERE ENCLOSED ALONG WITH THE RET URN OF INCOME, CLEARLY SHOW THE COMMISSION INCOME AND THE CORRESPONDING TA X DEDUCTED, WHICH THE AO HAS EXTRACTED IN THE BODY OF THE ASSESSMENT ORDER. THUS IT CLAIMED THAT THE COMMISSION INCOME WAS DULY DISCLOSED IN T HE DOCUMENTS ATTACHED WITH THE RETURN OF INCOME. THE ASSESSEE SU BMITTED THAT HAD THERE BEEN AN INTENTION TO HIDE THE COMMISSION INCOME, TH EN OBVIOUSLY THE TDS CERTIFICATES WOULD NOT HAVE BEEN ATTACHED WITH THE RETURN AND THIS IS NOT THE CASE. IT ARGUED THAT THE PARTICULARS, SUCH AS NAMES AND ADDRESSES OF THE PARTIES FROM WHOM THE COMMISSION WAS RECEIVED, AS WELL AS THE AMOUNT OF COMMISSION WAS AVAILABLE IN THE RETURN FI LED, RIGHT FROM THE FIRST DAY AND THAT UNDER THESE CIRCUMSTANCES IT CAN NOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. I T CLAIMED THAT IT WAS A BONAFIDE MISTAKE AND THE FILING OF THE TDS CERTIFIC ATE ALONG WITH THE RETURN WAS VALID AND THIS FACT PROVES THE INNOCENC E OF THE PARTY. IT CLAIMED THAT THE MISTAKE EVEN ESCAPED THE NOTICE OF THE AUDITORS AND THE PERSON WHO PREPARED THE R.O.I AS PER AUDITED PROFIT AND LOSS ACCOUNT AND PROCEEDED FURTHER TO ARRIVE AT THE TOTAL INCOME. IT ALSO CLAIMED THAT NO CHARGE OF FURNISHING INACCURATE PARTICULARS WOULD A RISE. ON REVISED CLAIM U/S 80IB, THE ASSESSEE COMPANY EXPLAINED THAT THE O RIGINAL CLAIM WAS MADE ON THE BASIS OF A AUDIT REPORT AND WHEN A MIST AKE WAS DETECTED FOR THE ASSESSMENT YEAR 2003-04, THE CLAIM WAS SUO MOTO REVISED FOR THE ASSESSMENT YEAR 2004-05. THE AO REJECTED BOTH THE C ONTENTIONS OF THE ASSESSEE. HE HELD THAT THE ASSESSEE HAD FILED A REV ISED RETURN ON 31-03- 2006, I.E. AFTER ONE YEAR AND THAT IN THIS REVISED RETURN HE HAS NOT INCLUDED 5 THE ABOVE COMMISSION INCOME. HE HELD THAT THE ACTIO N OF THE ASSESSEE UNDER THE FACTS AND CIRCUMSTANCES, CANNOT BE TERMED AS A VOLUNTARY ACTION TO RECTIFY A MISTAKE. HE HELD THAT IT IS A DELIBERA TE AND CONSCIOUS ACTION OF THE ASSESSEE TO EVADE THE PAYMENT OF LEGITIMATE AND CORRECT TAX LIABILITY. HE REJECTED THE CLAIM OF THE ASSESSEE THAT IT WAS I NADVERTENT MISTAKE ON THE GROUND THAT IT IS NOT PRIMA FACIE TOO. HE HELD THAT MERE FILING OF TDS CERTIFICATE DOES NOT TANTAMOUNT TO DISCLOSURE OF IN COME. AT PARA 5(II) OF THE PENALTY ORDER, HE HELD AS FOLLOWS : EXPLANATION 1 TO SECTION 271(1)(C) CLEARLY INDIC ATES THAT WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE CO MPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT:- (A) SUCH PERSON FALLS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE (ASSESSING OFFICE R OR THE COMMISSIONER (APPEALS) {OR THE COMMISSIONER} TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLA NATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM] THEN, THE AMOUNT ADDED OR DISALLO WED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-S ECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. SINCE THE DISALLOWANCE/ADDITIONS IN THE ASSESSMENT ORDER ARE MADE ONLY, WHEN THE A.O. HAD DETECTED & CORNERED THE FAL SE CLAIM OF THE ASSESSEE AND THE VARIOUS EXPLANATION AND SUBMISSION S MADE BY THE ASSESSEE ARE NOT FOUND TO BE CONVINCING AND PROVING THE BONAFIDES OF THE ASSESSEE AND FOR THE VARIOUS REASONS GIVEN A BOVE AND IN THE ASSESSMENT ORDER, IT IS HELD THAT ASSESSEE HAD IN F ACT COMMITTED A DEFAULT WITHIN THE MEANINGS OF CLEAR PROVISIONS OF THE SECTION 271(1)(C) OF THE I.T. ACT 1961 AND RENDERED ITSELF LIABLE FOR PENAL ACTION PROVIDED THEREIN. MOREOVER, AS PER THE PROVI SIONS OF SECTION IT IS EVEN NOT NECESSARY THAT ASSESSEE SHOULD HAVE DELIBERATELY 6 FILED INACCURATE PARTICULARS OF INCOME AS THE WORD DELIBERATELY HAS BEEN OMITTED FROM THE SECTION 271(1)(C) FROM TH E YEAR 1964. HE ACCORDINGLY LEVIED A PENALTY OF RS.90,00,000/-. THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY ON THE ISSUE OF LEVY OF PENALTY ON REVISION OF THE CLAIM MADE U/S 80IB, DEL ETED THE PENALTY BY FOLLOWING THE DECISION OF HIS PREDECESSOR IN APPEAL NO. CIT(A)/V/5(1)/243/06-07 FOR ASSESSMENT YEAR 2003-04 DATED 05-01-2007 ON THE GROUND THAT THE ORIGINAL CLAIM U/S 80IB APPE ARS TO HAVE BEEN GUIDED BY THE REPORT OF THE AUDITORS. ON THE ISSUE OF NON DISCLOSURE OF COMMISSION INCOME THE FIRST APPELLATE AUTHORITY OBS ERVED HAT THE BOOKS HAVE BEEN AUDITED AND THE AUDITORS FAILED TO POINT OUT THE MISTAKE. IN HIS OPINION IT IS A CLEAR CASE OF DEFAULT OF THEIR COUN SELORS OF THE ASSESSEE. HE OBSERVED AS FOLLOWS : HAD THEY NOT BEEN ILL ADVISED, THEY WOULD HAVE NOT BROUGHT THE TDS CERTIFICATES DEPARTMENT EVEN AS A PART OF THEIR IMPUGNED MALA FIDE. THIS IS A SETTLED LAW THAT THE CLIENT SHOULD NOT BE PENALIZED FOR THE DEFAULT OF THE COUNSEL. MOREOVER, THE PENALTY U /S 271(1)(C) IS NOT AUTOMATIC AND MECHANICALLY BE IMPOSED AS PER TH E LATEST DECISIONS OF HONBLE SUPREME COURT IN THE CASES OF T. ASHOK PI VS. CIT 292 ITR 11(SC) AND DILIP N. SHROFF VS. JCIT 291 ITR 519 (SC) WHEREIN IT IS CLEARLY HELD THAT BOTH CONCEALME NT AND FURNISHING OF INACCURATE PARTICULARS REFER TO DELIB ERATE ACTS ON THE PART OF THE ASSESSEE DESPITE THE FACT THAT THE WO RD DELIBERATELY IS REMOVED FROM THE STATUTE IN SEC. 271(1)(C). IT W AS FURTHER HELD THAT A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTI TUTE A DELIBERATE ACT OF SUPPRESSION VERI OR SUGGESTIO FA LSI. THIS CLEARLY IMPLIES THAT PENALTY FOR CONCEALMENT IS NOT ATTRACT ED WHEN THERE WAS NO DELIBERATE OR INTENTIONAL OMISSION. IN VIEW OF THIS I FIND THAT THE LD. A.O. WAS CLEARLY IN ERROR IN INVOKING THE P ENALTY IN THE INSTANT CASE WHERE THERE WAS NO DELIBERATE OR INTEN TIONAL DEFAULT ON APPELLANTS PART AND IN NOT TREATING THE EXPLANATIO N OF THE APPELLANT ON THIS ISSUE BONA FIDE, LEGITIMATE AND GENUINE ONE WITHIN THE MEANING OF SEC. 274 READ WITH SEC. 271(1)(C) OF THE IT ACT, 1961. HENCE, IN VIEW OF ABOVE DISCUSSION AND FINDINGS, TH E LD. A.O. IS 7 DIRECTED TO DELETE THE PENALTY W.R.T. THE IMPUGNED COMMISSION INCOME IN THE FACTS AND CIRCUMSTANCES OF THE INSTAN T CASE. 4. THE LEARNED DR MR. VIKRAM GAUR, RELIED ON THE O RDER OF THE AO AND SUBMITTED THAT ON THE ISSUE OF FILING A REVI SED RETURN AND CLAIMING LESSER FIGURE OF COMMISSION U/S 80IB, THE ASSESSEE S ACTION WAS TRIGGERED BY THE DEPARTMENTAL ENQUIRIES AND FINDINGS FOR THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2003-04. HE SUBMITTED THA T IT WAS ONLY BECAUSE OF THE PROBE BY THE DEPARTMENT, THE ASSESSEE HAD FI LED THE REVISED RETURN AND ADMITTED THAT HE IS NOT ELIGIBLE TO CLAIM DEDUC TION U/S 80IB ON CERTAIN AMOUNTS. COMING TO THE SECOND GROUND, MR. VIKRAM GA UR VEHEMENTLY CONTENDED THAT THE ASSESSEE HAD DELIBERATELY AND IN TENTIONALLY SUPPRESSED DISCLOSURE OF A HUGE AMOUNT OF INCOME, WHILE TRYING TO TAKE ADVANTAGE OF TAX DEDUCTED AT SOURCE FROM SUCH INCOME. HE SUBMITT ED THAT BUT FOR THE FACT THAT THE AO WAS ALERT AND HAS SCRUTINIZED THE CASE AND HAD CONDUCTED INVESTIGATIONS, THIS FACT WOULD HAVE NEVER COME TO LIGHT. HE SUBMITTED THAT THE THEORY OF THE ASSESSEE THAT IT WAS AN INAD VERTENT BONAFIDE MISTAKE IS UNPROVED AND CANNOT BE BELIEVED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. HE POINTED OUT THAT THE ASSESSEE HAD FILE D A REVISED RETURN AFTER ONE YEAR AND EVEN IN THAT REVISED RETURN IT CONSCIO USLY AVOIDED TO DISCLOSE THIS RECEIPT OF COMMISSION OF RS.1,54,67,686/-. HE SUBMITTED THAT THE ASSESSEE DELIBERATELY ADMITTED TO SUPPRESS COMMISSI ON INCOME AND REFUSED ITS TAX LIABILITY. HE REITERATED THAT THIS ACT OF THE ASSESSEE IN EVASION OF TAXES, WOULD NOT HAVE COME TO LIGHT, IF THERE WAS NO SCRUTINY OF THE CASE. HE REFERRED TO THE ORDER OF THE CIT(APPEA LS) AND SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS ERRED IN HOLDING THAT IT WAS THE MISTAKE OF THE COUNSELLORS OF THE ASSESSEE AND THAT IT WAS A BONAFIDE MISTAKE. HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES PROCESSORS AND OTHERS 306 ITR 277 AND THE JUDGMENT OF THE RAJASTAN HIGH COURT IN THE CASE OF BADRI PRASAD 8 OMPRAKASH VS. CIT 163 ITR 440 AND THE JUDGMENT OF ALLAHABAD HIGH COURT IN THE CASE OF BILAND RAM HARGAN DASS VS. CIT 171 ITR 390. HE PRAYED THAT THE ORDER OF THE FIRST APPELLATE AUTHO RITY BE REVERSED AND THE ORDER OF THE AO BE UPHELD. 5. THE LEARNED COUNSEL FOR THE ASSESSEE MR. A.V. S ONDE, ON THE OTHER HAND, SUBMITTED THAT THERE WERE TWO ISSUES ON WHICH PENALTY U/S 271(1)(C) WAS LEVIED AND THAT ON THE FIRST ISSUE, T AX WAS BEING PAID U/S 115JB AND COMPUTATION OF RELIEF U/S 80IB AS NO IMPA CT ON THE TAX LIABILITY OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ORIG INAL CLAIM FOR DEDUCTION U/S 80IB WAS BASED ON A CERTIFICATE ISSUED BY THE A UDITORS AND THE ASSESSEE WAS GUIDED BY THE SAME. HE POINTED OUT THA T THE ASSESSEE SUO MOTO FILED A REVISED RETURN, AND HENCE THERE IS NO CONCEALMENT OF INCOME ON THIS ISSUE. IN ANY EVENT HE SUBMITTED THAT THIS IS A DEBATABLE ISSUE. ON THE SECOND GROUND OF NON INCLUSION OF COMMISSION IN COME OF RS.1,54,67,686/-, THE LEARNED COUNSEL SUBMITTED THA T IT WAS A SIMPLE MISTAKE DONE BY THE ACCOUNTANT AS WELL AS THE PERSO N PREPARING THE RETURN. HE SUBMITTED THAT HAD THE ASSESSEE AN INTEN TION TO SUPPRESS THE COMMISSION INCOME, HE WOULD NEVER HAVE FILED THE TD S CERTIFICATES RELATING TO THAT COMMISSION AND CLAIMED A CREDIT FO R THE SAME. HE RELIED HEAVILY ON THE ORDER OF THE CIT(APPEALS) AND SUBMIT TED THAT THIS WAS A BONAFIDE MISTAKE AND NO PENALTY CAN BE LEVIED ON TH E SAME. HE DISTINGUISHED THE CASE LAWS RELIED UPON BY THE LEAR NED DR. 6. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERA TION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PERUSAL O F THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED, WE HOLD AS FOLLOWS : 9 7. AS FAR AS THE ISSUE OF COMPUTATION OF RELIEF U/ S 80IB IS CONCERNED, THE QUANTIFICATION OF THE RELIEF IS A DE BATABLE ISSUE AND THE ASSESSEE HAD CLAIMED A DEDUCTION BASED ON A CERTIFI CATE ISSUED BY A PROFESSIONAL. EVEN OTHERWISE THE INCOME DETERMINED U/S 115JB REMAINS UNALTERED BOTH IN THE ORIGINAL RETURN OF INCOME AS WELL AS IN THE REVISED RETURN OF INCOME. ON THIS FACTUAL MATRIX, AS THE AS SESSEE BASED ITS CLAIM ON THE AUDITORS REPORT IN FORM NO. 10CCB OF THE AC T IT APPEARS TO BE A BONAFIDE MISTAKE AND THE EXPLANATION GIVEN BY THE A SSESSEE ON THE ISSUE IS A POSSIBLE EXPLANATION AND WE UPHOLD THE ORDER OF T HE CIT(APPEALS) DELETING THE PENALTY ON THE ABOVE ISSUE. 8. COMING TO THE NONDISCLOSURE OF COMMISSION INCOM E, WE ARE INCLINED AND PERSUADE TO AGREE WITH THE CONTENTIO N OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THIS IS A SIMPLE MISTA KE WHICH HAD INADVERTENTLY CREPT INTO THE RETURN OF INCOME. THE FACT REMAINS THAT THE ASSESSEE HAS EARNED A HUGE AMOUNT OF RS.1,54,67,686 /- AS COMMISSION INCOME AND HAS CHOSEN NOT TO DISCLOSE IT AS INCOME EITHER IN THE PROFIT AND LOSS ACCOUNT OR IN THE RETURN OF INCOME FILED BY IT . THE AO HAD ISSUED NOTICES U/S 133(6) TO VARIOUS COMPANIES AND GOT CON FIRMATIONS THAT THE ASSESSEE HAD RECEIVED THE AMOUNTS FROM THEM FOR SER VICES RENDERED BY IT. THE ASSESSEE WAS VERY MUCH AWARE THAT IT HAS EARNED HUGE INCOME BY WAY OF COMMISSION ON RENDERING OF REQUISITE SERVICE S TO VARIOUS PARTIES AND NON DISCLOSURE OF THE SAME, IN OUR HUMBLE OPINI ON, CANNOT BE CONSIDERED AS AN INADVERTENT MISTAKE. IN OUR HUMBLE OPINION, IT WAS A DELIBERATE ATTEMPT BY THE ASSESSEE TO CONCEAL THE INCOME ON ACCOUNT OF COMMISSION. THE CONTENTION OF THE ASSESSEE THAT IT HAS FILED THE TDS CERTIFICATES AND HENCE MADE TRUE AND FULL DISCLOSUR E OF THE FACT THAT IT HAS EARNED COMMISSION INCOME, IS DEVOID OF MERIT. CLAIM ING CREDIT FOR TAX 10 PAID, BY NO STRETCH OF IMAGINATION CAN BE CONSIDERE D AS FURNISHING INACCURATE PARTICULARS OF INCOME. THIS IS NOT A CAS E WHERE RELATIVELY A SMALL FIGURE OF INCOME ESCAPED THE ATTENTION OF THE COMPANY AND ITS AUDITORS. ALMOST 30% OF THE INCOME OF THE ASSESSEE WAS NOT DISCLOSED AND THIS CANNOT BE HELD AS A BONAFIDE MISTAKE. IN OUR H UMBLE OPINION, THE AO IN HIS ORDER LEVYING PENALTY U/S 271(1)(C) WHICH IS DATED 11-06-2007 HAS COME TO A RIGHT CONCLUSION IN PARA 5(I) AND 5(II) AT PAGE 6 AND 7 OF HIS PENALTY ORDER. WE UPHOLD THE SAME. 9. COMING TO THE ORDER OF THE CIT(APPEALS), WE ARE OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS ERRED IN HOLDING THAT THIS OMISSION OF DISCLOSURE OF INCOME IS A DEFAULT OF TH E COUNSELLORS OF THE ASSESSEE. THIS REASON CANNOT BE UPHELD. THE FIRST A PPELLATE AUTHORITY ALSO BASED HIS ORDER ON THE JUDGMENT OF THE HONBLE SUPR EME COURT IN THE CASE OF T. ASHOK PAI VS. CIT 292 ITR 11 AND THE CAS E OF DILIP N. SHROFF VS. JCIT 291 ITR 519 WHEREIN A PROPOSITION WAS LAID DOWN THAT MENSREA WAS REQUIRED FOR LEVY OF PENALTY U/S 271(1)(C). A L ARGER BENCH OF THE SUPREME COURT HAS HELD THAT MENSREA IS NOT AN ESSEN TIAL INGREDIENT FOR IMPOSING PENALTY. HE HELD THAT PENALTY FOR CONCEALM ENT IS NOT ATTRACTED WHEN THERE IS NO DELIBERATE OR INTENTIONAL OMISSION . THIS PROPOSITION OF LAW HAS BEEN OVERRULED IN THE JUDGMENT OF THE LARGE R BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS AND OTHERS REPORTED IN 306 ITR 277. THUS THE VIEW OF THE LEARNED CIT(APPEALS) HAS TO BE NECESSARILY OVER TURNED. HOWEVER, WE 11 FEEL THAT PENALTY SHOULD BE RESTRICTED @ 100% OF TH E TAX EVADED. ACCORDINGLY THE AO IS DIRECTED TO RE-COMPUTE THE PE NALTY. 10. ACCORDINGLY, GROUND NO. 2 IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED IN PART. ORDER PRONOUNCED ON THIS 9 TH DAY OF MARCH, 2010. SD/- SD/- (R.K. GUPTA) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 9 TH MARCH, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.