Assistant Commissioner of Income-tax, Pune V. Pune Burban Cooperative Bank Ltd., Pune

ITA 1927/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7135 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Bonafide mistake
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , ! ' # , % & BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1927/PUN/2014 ! ( ( / ASSESSMENT YEAR : 2010-11 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, PUNE, ROOM NO.111, 1 ST FLOOR, PMT COMMERCIAL COMPLEX, SWARGATE, PUNE 411 037. . / APPELLANT V/S PUNE URBAN COOPERATIVE BANK LIMITED, BC-2, GULTEKDI MARKET YARD. PUNE. PAN :AAAAP0284A. . / RESPONDENT / APPELLANT BY : SHRI P.L. KUREEL / RESPONDENT BY : SHRI M.K. KULKARNI ) / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) II, PUNE DT.30.06.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN THE BUS INESS OF BANKING AND FINANCE. IT FILED ITS RETURN OF INCOME FOR A.Y . / DATE OF HEARING : 05.01.2017 / DATE OF PRONOUNCEMENT: 01.03.2017 2 ITA NO.1927/PUN/2014 AY.NO.2010-11 2010-11 ON 15.10.2010 DECLARING TOTAL INCOME AT RS.2,94,33,540/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORD ER DT.07.01.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.4,38,69,747/-. WHILE FRAMING THE ASSESSMENT AO NOTICED THAT ASSESSEE HAD CLAIMED RS.96,20,665/- BEING THE INCOME TAX PAYMENT (RS.92,63,895/-) AND ADVANCE INCOME-TAX PAYMENT RS.3,56,770/- AS EXPENDITURE. ON POINTING OUT THAT THE AFORESAID AMOUNTS ARE NOT ADMISSIBLE EXPENDITURE, IT WAS SUBMITTED BY THE ASSESSEE THAT AMOUNT BE ADDED TO TA XABLE INCOME. THE AMOUNT WAS ACCORDINGLY ADDED BACK TO THE INCOME. ON THE AFORESAID CLAIM OF EXPENDITURE THAT WAS MADE BY ASSESSEE, AO VIDE ORDER DT.07.01.2013 PASSED U/S 271(1)(C) OF THE ACT CONCLUDED THAT ASSESSEE HAD WILLFULLY CONCEALED TH E INCOME TO EVADE THE TAX AND ACCORDINGLY IS LIABLE FOR PENA LTY U/S 271(1)(C) OF THE ACT. HE ACCORDINGLY LEVIED PENALTY OF RS.29,72,786/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) VIDE ORDER DT.30.06.2014 IN APP EAL NO.(PN/CIT(A)-II/DCIT CIR-4/525/2013-14/36) DELETED THE LE VY OF PENALTY BY HOLDING AS UNDER: 3.4.5 THE INTENTION OF THE APPELLANT CANNOT BE SA ID TO BE MALAFIDE AND DELIBERATE AS IS EVIDENT FROM THE MATE RIAL ON RECORD AND THE APPELLANT IN THE PAST YEARS HAS NEVE R CLAIMED INCOME-TAX AS A DEDUCTION. THOUGH DURING T HE YEAR THE AFORESAID MISTAKE CREPT IN INADVERTENTLY B Y THE MISTAKE OF THE ACCOUNTS DEPARTMENT OF THE BANK. MOREOVER, THE ADVANCE-TAX PAID DURING THE YEARS AS WELL AS TDS WERE DIRECTLY SHOWN ON THE ASSET SIDE OF THE BALANCE-SHEET AS USUAL AND DONE BEFORE AND HENCE NO DEDUCTION FOR THE SAME WAS CLAIMED IN THE COMPUTATI ON OF INCOME. FURTHER, THE AMOUNT SO DEBITED PASSED UNNO TICED COULD NOT DETECT THE MISTAKE DURING THE AUDIT BY DIF FERENT AUDITORS AND TAX CONSULTANTS. THUS, THE FACTS IF S EEN IN ENTIRELY AND THE APPELLANT BEING A COOPERATIVE BANK DO NOT 3 ITA NO.1927/PUN/2014 AY.NO.2010-11 APPEAR TO HAVE ANY MALAFIDE INTENTION OF DEFRAUDING THE REVENUE AS THERE IS BONA FIDE AND INADVERTENT MISTA KE WAS WRONGLY CLAIMED AS DEDUCTION AS THE AMOUNT OF INCOME-TAX PAID MISTAKENLY DEBITED UNDER THE HEAD OTHER EXPENSES. THE DELHI HIGH COURT IN THE CASE OF CIT VS SOCIETEX (DELHI) (2013) 87 DTR (DEL) 373, COURT HEL D THAT 6. IT IS A HUMAN BONAFIDE CLERICAL MISTAKE OCCURRED WHILE MAKING THE STATEMENT OF INCOME. THE ASSESSEE RECTIFIED THE MISTAKE AS SOON AS IT WAS DETECTED. EVEN THE ASSESSING OFFICER FAILED TO DETECT THE MISTAKE WHILE MAKING THE ORDER U/S 143(1)(A). AFTER CONSIDERING ALL THE RELEVANT FACT S AND CIRCUMSTANCES HOLISTICALLY, WE HOLD THAT THE MISTAKE WAS BONAFIDE AND ASSESSEE CANNOT BE VISITED WITH THE PENALTY U/S 271(1)(C) FOR FILING INACCURATE PARTICULARS OF INCOME AND 3.5 IN VIEW OF THE ABOVE FACTS AND RATIO OF THE JUD ICIAL DECISIONS THE PENALTY LEVIED @ 100 % OF THE TAX SOU GHT TO BE EVADED I.E. RS.129,72,786/- IS DIRECTED TO BE DE LETED AND GROUNDS OF APPEAL NO. 1 & 2 RAISED BY THE APPELLANT ARE ALLOWED. 3. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE PENALTY U/S.271(1)(C) OF RS.29,72,786/- NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD MADE LARGE CLAIM OF DEDUCTION OF RS.96,20,665/- AS EXPENDITURE BEING INCOME-TAX PAYM ENT UNDER THE GUISE OF EXPENSES AND MADE THE CLAIM OF R EFUND ACCORDINGLY. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE PENALTY WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS A BANKING AOP, HAVING PROFESSI ONAL ASSISTANCE AND ACCOUNTS SUBJECTED TO COMPULSORY AUD IT AND UNDER THESE CIRCUMSTANCES MISTAKE WAS NOT BONAFIDE OR INADVERTENT CLERICAL MISTAKE. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OR ALL THE GROUNDS OF APPEAL. 4. BEFORE US, AT THE OUTSET, LD. D.R. SUBMITTED THAT THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS BUT THE SOLE ISS UE IS 4 ITA NO.1927/PUN/2014 AY.NO.2010-11 WITH RESPECT TO THE DELETION OF PENALTY LEVIED BY AO U/S 271(1)(C) OF THE I.T. ACT. 5. BEFORE US LD. DR TOOK US THROUGH THE PENALTY ORDER P ASSED BY AO AND SUPPORTED THE ORDER OF AO. LD. AR ON THE O THER HAND REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES A ND FURTHER SUBMITTED THAT THE CLAIM OF DEDUCTION OF INCOME-TA X AS AN EXPENDITURE WAS DUE TO OVERSIGHT AND WAS A BONAFIDE MISTAKE AND THE CLAIM WAS NOT MADE WITH A MALAFIDE INTENTION. IT WA S FURTHER SUBMITTED THAT THE MISTAKE OCCURRED DUE TO INAD VERTENT AND HUMAN ERROR AND ASSESSEE HAS NEITHER FURNISHED INAC CURATE PARTICULARS OF INCOME NOR CONCEALED THE PARTICULARS OF INCOM E. HE FURTHER RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LIMITED VS. CIT RE PORTED IN (2012) 348 ITR 306 (SC). HE THUS SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON THE AMOU NT OF INCOME-TAX PAID WHICH WAS CLAIMED AS EXPENDITURE. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE ISSUE OF NON-ALLOWABILITY OF INCOME-TAX AS EXPENDITURE WAS BROUGHT TO THE NOTICE OF ASSESSEE, ASS ESSEE IMMEDIATELY ACCEPTED AND SUBMITTED THAT THE SAME MAY B E ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN THE PR ESENT CASE, WE FURTHER FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HAS 5 ITA NO.1927/PUN/2014 AY.NO.2010-11 GIVEN A FINDING THAT THE ASSESSEE IN THE PAST YEARS HAS NEVER CLAIMED INCOME-TAX AS DEDUCTION AND THE INTENTION OF THE ASSESSEE CANNOT BE SAID TO BE AS MALAFIDE AND THE MISTAK E OF CLAIMING DEDUCTION CREPT INADVERTENTLY. HE HAS FURTHER NO TED THAT THE ADVANCE-TAX AS WELL AS TDS WAS SHOWN ON THE ASSETS SIDE OF BALANCE-SHEET AND NO DEDUCTION WAS CLAIMED IN THE COMPUTATION OF INCOME. WE FURTHER FIND THAT HONBLE APEX C OURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LIMITED (SUPR A) HELD THAT IMPOSITION OF PENALTY WAS NOT JUSTIFIED WHEN ASSESSEE HAD COMMITTED AN INADVERTENT AND BONAFIDE ERROR AND HAD NO T INTENDED TO OR ATTEMPTED TO EITHER CONCEAL OF INCOME OR INTENDED TO FURNISH INACCURATE PARTICULARS OF INCOME . BEFORE US REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT TH E FINDINGS OF LD. CIT(A) NOR HAS DEMONSTRATED THE FINDINGS OF LD. CIT(A) TO BE INCORRECT. IN VIEW OF THE AFORESAID FACTS AND RELYING ON THE AFORESAID DECISION OF HONBLE APEX COURT IN THE CASE OF PRIC E WATERHOUSE COOPERS (SUPRA), WE FIND NO REASON TO INTERFER E WITH THE ORDER OF LD. CIT(A). THUS, THE GROUNDS OF REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 1 ST MARCH, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER % / ACCOUNTANT MEMBER PUNE; ! DATED : 1 ST MARCH, 2017. YAMINI 6 ITA NO.1927/PUN/2014 AY.NO.2010-11 ) * +',- .-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. COMMISSIONER OF INCOME TAX-(A)-III, PUNE. COMMISSIONER OF INCOME TAX-II, PUNE. #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE. )! / BY ORDER, // //// // TRUE COPY // T // // TRUE // //COPY // // TRUE COPY // //////// . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.