STS HR SERVICES P.LTD, MUMBAI V. ITO 10(3)(3), MUMBAI

ITA 1661/MUM/2011

• Counselvise Citation: 166119914 RSA 2011
• Duration Of Justice: 3 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 25-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 28-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 1661/MUM/2011 (ASSESSMENT YEAR: 2007-08) M/S. STS HR SERVICES PVT. LTD. INCOME TAX OFFICER - 10(3)(3) 312, EXIM BLDG., OPP. INDIRA ROOM NO. 452, 4TH FLOO R CONTAINER YARD, MULUND GOREGAON VS. AAYAKAR BHAVAN, M.K. ROAD LINK ROAD, NAHUR (W), MUMBAI 078 MUMBAI 400020 PAN - AAICS8201L APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI P.K. SINGH DATE OF HEARING: 25.03.2014 DATE OF PRONOUNCEMENT: 25.03.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) 22, MUMBAI AND IT PERTAINS TO A.Y. 2007-08. 2. THE CASE WAS ORIGINALLY POSTED FOR HEARING ON 04.02 .2014 AND NOTICE WAS ISSUED BY RPAD AT THE ADDRESS GIVEN IN FORM NO. 36. SINCE THE BENCH DID NOT FUNCTION ON THAT DATE THE CASE WAS ADJOURNE D TO 25.03.204 AND THE DATE WAS ANNOUNCED THROUGH NOTICE BOARD. HOWEVER, N ONE APPEARED ON BEHALF OF THE ASSESSEE ON 25.03.2014. WE, THEREFORE , PROCEED TO DISPOSE OF THE APPEAL EXPARTE, QUA ASSESSEE, ON MERITS. 3. PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT HAVING BEEN CONFIRMED BY THE LEARNED CIT(A), THE ASSESSEE COMPA NY IS IN APPEAL BEFORE THE TRIBUNAL. 4. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. THE ASSESSEE COMPANY IS ENGAGED IN PROVIDING PRE-EMPLOY MENT DOCUMENT VERIFICATION SERVICES. FOR THE YEAR UNDER CONSIDERA TION IT DECLARED TOTAL INCOME OF ` 16,77,685/- WHICH WAS PROCESSED ACCORDINGLY BUT THE REAFTER IT ITA NO. 1661/MUM/2011 M/S. STS HR SERVICES PVT. LTD. 2 WAS TAKEN UP FOR SCRUTINY AND FINALLY THE ASSESSMEN T WAS COMPLETED ON A TOTAL INCOME OF ` 50,75,180/-. AT THE TIME OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE CLAIMED DIVIDEND AS EXPEN DITURE IN THE P & L ACCOUNT EVENTHOUGH DIVIDEND IS APPROPRIATION OF BOO K PROFIT, WHICH SHOULD BE PART OF PROFIT AND LOSS APPROPRIATION ACCOUNT. T HE DIVIDEND IS ALSO NOT DISALLOWED IN THE COMPUTATION OF INCOME. THEREFORE, THE AO SOUGHT TO DISALLOW A SUM OF ` 33,97,498/- REFERABLE TO DIVIDEND EXPENSES IN THE COMPUTATION OF INCOME AND ALSO ADDED TO THE BOOK PR OFIT OF THE ASSESSEE COMPANY FOR MAT CALCULATION. THE CASE OF THE ASSESS EE WAS THAT IT HAD NO INTENTION TO EVADE TAX AND IT WAS MISTAKENLY LEFT O UT AND MERE REJECTION OF A LEGAL CLAIM OF THE ASSESSEE CANNOT LEAD TO LEVY OF PENALTY. THE AO REJECTED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT TH E ASSESSEE HAS NOT DISCLOSED THE FACTS PROPERLY AND CORRECTLY AND IT I S NOT A BONAFIDE MISTAKE. DETAILS ARE MENTIONED FROM PARA 7 TO 10 OF THE PENA LTY ORDER. 5. THOUGH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), NONE APPEARED ON BEHALF OF THE ASSESSEE COMPANY. THEREFO RE THE MATTER WAS DISPOSED OF EXPARTE BY THE CIT(A) BY OBSERVING IN P ARA 5 AS UNDER: - 5 DURING THE COURSE OF APPELLATE PROCEEDINGS NO SU BMISSIONS HAVE BEEN FILED. HOWEVER IN THE STATEMENT OF FACTS FILED ALONG WITH FORM 35, IT WAS STATED THAT THE APPELLANT HAD INADV ERTENTLY AND WITHOUT INTENTION CLAIMED DEDUCTION ON ACCOUNT OF D IVIDEND PAID WHICH WAS ADMITTED BEFORE THE A.O. AFTER BEING POINTED OU T BY HIM. IT IS ALSO CLAIMED THAT THE MISTAKE WAS COMMITTED NOT ONLY BY THE DIRECTOR BUT ALSO BY THE C.A. HOWEVER, I DO NOT AGREE WITH THE C ONTENTION OF THE APPELLANT SINCE THERE IS NOTHING ON RECORD TO PROVE THAT THE CHARTERED ACCOUNTANTS HAVE ADMITTED THAT THE MISTAKE WAS COMM ITTED BECAUSE OF THEM. FURTHER DIRECTORS WERE FULLY AWARE OF THE COM PUTATION OF INCOME WHICH WAS SIGNED BY THEM AND FILED ALONG WITH THE R ETURN OF INCOME AS DISCUSSED IN DETAIL BY THE A.O. AS MENTIONED ABOVE. ALSO NO EXPLANATION HAS BEEN FILED BEFORE ME TO PROVE THAT THE ACTION OF THE APPELLANT WAS BONAFIDE. THUS, AS DISCUSSED ABOVE, T HERE IS AN ATTEMPT BY APPELLANT TO CLAIM EXCESS DEDUCTION BY WAY OF FU RNISHING INACCURATE PARTICULARS. IN VIEW OF THE FACTS AS DISCUSSED BY T HE A.O. IN DETAIL AND NARRATED ABOVE, I AM OF THE CONSIDERED OPINION THAT THE A.O. HAS RIGHTLY IMPOSED PENALTY U/S. 271(1)(C) WHICH IS UPHELD. 6. EVEN BEFORE US NO MATERIAL WAS FILED TO CONTROVERT THE FINDINGS OF THE AO AS WELL AS THE CIT(A). UNDER THESE CIRCUMSTANCES WE DO NOT FIND ANY REASON TO DEVIATE FROM THE VIEW TAKEN BY THE CIT(A) . ITA NO. 1661/MUM/2011 M/S. STS HR SERVICES PVT. LTD. 3 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE COM PANY IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2014. SD/- SD/- (RAJENDRA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 25 TH MARCH, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 22, MUMBAI 4. THE CIT 10, MUMBAI CITY 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.