M/s Annapurna Machinery Mfg. Works, Kolkata V. ITO, WD-28(1), KOLKATA, Kolkata

ITA 1871/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1725 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ZAFARUL HAQUE TANVEER JCIT LD
• Assessee Lawyers: B B PAYRA LD
• Keywords: Wrong claim; Condonation of delay; Bonafide mistake
• Section: 194C

Judgement Text

1 ITA NO. 1871/K/14 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUD ICIAL MEMBER I.T.A NO. 1871/KOL/2014 A.Y: 2007-08 M/S. ANNAPURNA MACHINERY VS. INOME TAX OFFICER MFG. WORK WARD 28(1), KOLKATA PAN: AANFA2070R [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI B.B PAYRA, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI ZAFARUL HAQUE TANVEER, JCIT, LD.SR.DR DATE OF HEARING : 13-06-2017 DATE OF PRONOUNCEMENT : 09-08-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKA TA DT. 28-01- 2014 FOR THE A.Y 2007-08, WHERE HE CONFIRMED THE PE NALTY LEVIED U/S. 271(1) ( C) OF THE ACT ON THE FOLLOWING EFFECT IVE GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA ERRED IN CONFIRMING THE PENALTY OF RS.1,83,572/- LEVIED BY THE ASSESSING OF FICER, U/S. 271(1) ( C ) OF THE ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA ERRED IN CONFIRMING THE ABOVE PENALTY WHICH WAS BASED ON THE DISALLOWANCE OF EXPENDITURE U/S. 40(A)(IA) OF THE ACT. 3. THAT THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA IS BAD IN LAW. 2. THERE IS A DELAY OF 159 DAYS IN FILING THE APPEA L. THE ASSESSEE FILED AN APPLICATION FOR CONDONATION OF DELAY. WE H AVE GONE THROUGH THE PETITION FILED FOR CONDONATION OF DELAY BY WAY OF AN AFFIDAVIT. WE ARE CONVINCED THAT THE ASSESSEE HAD SUFFICIENT CAUS E IN NOT FILING THE APPEAL IN TIME. HENCE, WE CONDONE THE SAME AND APPE AL IS ADMITTED AND DISPOSE OFF THE SAME ON MERITS/MATERIAL AVAILAB LE ON RECORD. 2 ITA NO. 1871/K/14 3. AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THA T THE PENALTY WAS LEVIED FOR NON DEDUCTION OF TAX AT SOURCE (TDS ) U/S. 194C R.W.S 40(A)(IA) OF THE ACT. THE ASSESSEE CONVINCED US TH AT HE RELIED ON EXPERT ADVICE AND AS SUCH DID NOT DEDUCT TAX AT SOU RCE. AS THE ASSESSEE WAS NOT AWARE THAT IT HAD TO DEDUCT TDS FO R THESE PAYMENTS, ASSESSEE DID NOT DO SO. THE EXPENDITURE WAS GENUINE. NO FALSE CLAIM WAS MADE. NOT DEDUCTION OF TAX AT SOURC E IS AN ERROR AND MISTAKE IS ON PART OF THE ASSESSEE. 4. WE FIND THAT THE EXPLANATION GIVEN BY THE ASSES SEE WAS BONAFIDE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATER CO OPERS (P) LTD VS. CIT REPORTED IN 348 ITR 306(SC) HELD AS UNDER:- NOTWITHSTANDING THE FACT THAT THE ASSESSEE IS UNDO UBTEDLY A REPUTED FIRM AND HAS GREAT EXPERTISE AVAILABLE WITH IT, IT IS POSSIBLE THAT EVEN THE ASSESSEE COULD MAKE A SILLY MISTAKE . THE FACT THAT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND THAT IT UNEQUIVOCALLY STA TED THAT THE PROVISION FOR PAYMENT WAS NOT ALLOWABLE U/S 40A(7) INDICATES THAT THE ASSESSEE MADE A COMPUTATION ERROR IN ITS RETURN OF INCOME. APART FROM THE ASSESSEE, EVEN THE AO WHO FRAMED THE ORIGINAL ASSESSMENT ORDER MADE A MISTAKE IN OVERLOOKING THE CONTENTS OF THE TAX AUDIT REPORT. THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT THERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THERE IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS . ALL THAT HAPPENED IN THE PRESENT CASE IS THAT THROU GH A BONA FIDE AND INADVERTENT ERROR FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TO TAL INCOME. THIS CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CALIBRE AND EXPERTISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR . THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE , IN A CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. CONSEQUENTLY, GIVEN THE PECULIAR FACTS OF THIS CASE, THE IMPOSITION OF PENALTY ON THE ASSESSE E IS NOT JUSTIFIED. 5. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD REPORTED IN 322 ITR 158(SC) HELD THAT- A MERE MAKING A CLAIM WHICH IS NOT SUSTAINABLE IN LAW WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICU LAR OF INCOME BY THE ASSESSEE. CLAIM OF DEDUCTION MADE BY THE ASSESSEE, WAS NOTHING BUT A BONAFIDE MISTAKE, RATHER THAN A DELIBERATE MISTAK E ON THE PART OF THE ASSESSEE. MOREOVER, THE MISTAKE WAS COMMITTED ON TH E BASIS OF ADVICE FROM A QUALIFIED CONSULTANT ON WHOM THE APPELLANT W AS FULLY DEPENDENT. 3 ITA NO. 1871/K/14 6. RESPECTFULLY FOLLOWING THE ABOVE, WE DELETE THE IMPUGNED PENALTY AS LEVIED BY THE AO AND CONFIRMED BY THE CI T-A. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09- 08-2017 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09-08-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE:M/S. ANNAPURNA MACHINERY MFG. WO RK 48/13 SWISS PARK, KOLKATA-33. 2 RESPONDENT/REVENUE THE INCOME TAX OFFICER, WARD 28( 1), GARIAHAT ROAD (S), KOLKATA-68. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA