A.C.I.T., CC-1(1), Kolkata, Kolkata V. M/s Bhaskar Tea & Industries Ltd., Kolkata

ITA 1992/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6325 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 07-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIARINDAM BHATTACHERJEE
• Assessee Lawyers: P K SANGHAI
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1992/KOL/2016 ASSESSMENT YEAR:2004-05 ACIT, CENTRAL CIRCLE- 1(1), AAYKAR BHAWAN, POORVA, 110, SHANTIAPLLY, 3 RD FLOOR, KOLKATA-107 / V/S . M/S BHASKAR TEA & INDUSTRIES LTD.,2, BIPLAB TRAILOKYA MAHARAJ SARANI, KOLKATA-700 001 [ PAN NO.AABCB 4084 F ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRIARINDAM BHATTACHERJEE, ADDL. CIT-DR /BY RESPONDENT SHRI P.K. SANGHAI, FCA /DATE OF HEARING 15-02-2018 /DATE OF PRONOUNCEMENT 09-05-2018 /O R D E R PER S.S.VISWANETHRA RAVI, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 19.08.2016 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS)-8, KOLKATA FOR ASSESSMENT YEAR 2004-05 WHEREIN HE CANCELLED THE PENALTY IMPOSED BY ASSESSI NG OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) 2. AT THE OUTSET LD. AR SUBMITS THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 20.12.2006 IN WHICH THE ADDITI ONS WERE MADE ON ACCOUNT OF ACCRUED INTEREST OF LOAN AND DISALLOWANCE OF 80,56,794/-U/S. 43B R.W.S 36(1)(VA) OF THE ACT. THE AO INITIATED THE PENALTY PROCEEDINGS F OR NOT CONSIDERING THE AMOUNT OF ITA NO.1992/KOL/2016 A.Y. 2004-05 ACIT CC-1(1) KOL. VS. M/S BHASKAR TEA & IND S. LTD. PAGE 2 80,56,794/- IN ITS COMPUTATION OF INCOME. THE ASSES SEE CONTESTED THE PENALTY PROCEEDINGS BY PLEADING THAT BY INADVERTENTLY THE S AID AMOUNT HAD BEEN MISSED OUT IN COMPUTATION OF INCOME. THE AO NOT SATISFIED WITH TH E SAID SUBMISSION IMPOSED PENALTY OF 28,90,875/- FOR CONCEALMENT OF INACCURATE PARTICULA RS OF INCOME. THE CIT(A) CANCELLED THE PENALTY BY OBSERVING AS UNDER: - 4.2 I HAVE CONSIDERED THE ISSUE AND THE PLEA. FIRSTLY, THE SAID SUM IS NOT THE APPELLANTS MONEY NOR INCOME; FOR IT IS THE EMPLOYEES CONTRIBUTION TO PF. THE APPELLANT HAS NO LEGAL OWNE RSHIP OF THE EMPLOYEES PF CONTRIBUTION. THE APPELLANT IS JUST THE TRANSIENT C USTODIAN UNTIL THE APPELLANT DEPOSITS ACCOUNT TOGETHER WITH THE EMPLOYERS CONTRIBUTION, I N THE PF SCHEME. THE ADDITION IN THE ASSESSMENT IS JUST A TECHNICA L DENIAL OF DEDUCTION DUE TO OPERATION OF SECTION 36(21)(VA). IT MAY BE THAT IN THE DEFINITION OF INCOME IN SECTION 2(24), AT CLAUSE (X) IS INCLUDED SUCH SUMS BUT, T HE UNDENIABLE FACT IS THAT SUCH SUMS DO NOT LEGALLY BELONG TO THE APPELLANT. I CONSIDER THAT SUCH SUMS HAD BEEN LISTED AT THE CLAUSE X) TO THE SECTION 2(24) SO THAT THE EMPLOYER IS VIGILANT ABOUT HIS LIABILITIES AND DUTIES TOWARDS HIS WORKERS SOCIAL SECURITY. IN THE FACTS OF THIS INSTANT CASE, I CONSIDER THAT THE APPELLANT WAS THEN UNDER FINANCIAL HARDSHIP AND WAS NOT ABLE TO MEET ITS LIABILITY TOW ARDS THE EMPLOYERS CONTRIBUTION AS THE RETURNED INCOME ITSELF IS AT LOSS AT 33,40,690/-; AND SO THE NON- PAYMENT/DELAYED PAYMENT. APES PLEA THAT INADVERTENTLY THE ITEM WAS MISSED-O UT IN THE COMPUTATION I CONSIDER IT TO HAVE BEEN SO, AS SUCH ITEMS/OCCURRENCE ARE VE RY RARE AND THUS NOT A REGULAR FEATURE IN COMPUTATION OF TOTAL INCOME. COMING NOW TO THE PENALTY SECTION 271(1)(C) THE I SSUE IS NEITHER CONCEALMENT OF THE PARTICULARS OF INCOME NOR IS IT FURNISHING OF INACC URATE PARTICULARS OF SUCH INCOME. IT IS NOT CONCEALMENT OF INCOME AS IT HAD BEEN MENTI ONED IN THE PARTICULARS OF THE TAX AUDIT REPORT; AND SO NEITHER IS THERE ANY CASE FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THUS ON LEGAL FACTUM TOO SECTION 271(1 )(C) CANNOT BE APPLIED. 3. LD. DR RELIED ON THE ORDER OF AO. 4. BEFORE US LD. AR SUBMITS THE SAID NON CONSIDERAT ION OF CERTAIN AMOUNT WAS ADMITTED BEFORE AO AS IT WAS HAPPENED BY MISTAKE. T HE CIT(A) ON PERUSAL OF TAX AUDIT REPORT FOUND THAT SAID AMOUNT WAS MENTIONED I N THE SAID TAX AUDIT REPORT. LD. AR ARGUED THAT IT IS A BONA FIDE MISTAKE AND HAS NO INTENTION TO CONCEAL ITS INCOME . LD. AR PLACED RELIANCE ON ORDER DATED 23.12.2013 OF THI S TRIBUNAL IN THE CASE OF DCIT VS. M/S SVM CERA TEA BUILD LTD. IN ITA NO.780/KOL/2011 REFERRED PARA-9 AND ARGUED THAT SAID AMOUNT WAS DISCLOSED IN THE TAX AUDIT REP ORT THERE WAS NO CONCEALMENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS OF INC OME. THE CO-ORDINATE BENCH OF THIS TRIBUNAL HELD THAT ASSESSEES CONDUCT CANNOT BE SAI D TO BE CONTUMACIOUS WARRANTLY ITA NO.1992/KOL/2016 A.Y. 2004-05 ACIT CC-1(1) KOL. VS. M/S BHASKAR TEA & IND S. LTD. PAGE 3 LEVY OF PENALTY. LD. AR ALSO PLACED RELIANCE IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. AND REFERRED TO PARA-19 AND ARGUED FAILURE TO ADDI NG THE PROVISION TO ITS TOTAL INCOME CANNOT BE CONSIDERED AS ASSESSEE IS GUILTY O F FURNISHING INACCURATE PARTICULARS OF INCOME AND CONCEALED ITS INCOME. LD.AR SUBMITS T HAT IT WAS A MISTAKE ON BEHALF OF ASSESSEE IN NOT CONSIDERING THE EMPLOYEES CONTRIBU TION TO ITS COMPUTATION OF INCOME AND REITERATES THAT THE FACTS OF PRESENT CASE ARE S IMILAR TO THE FACTS OF IN THE ABOVE CASE LAWS AND PRAYED TO UPHOLD THE ORDER OF CIT(A). 5. HEARD RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND ADMITTEDLY THE SAID AMOUNT OF 80,56,794/- INVOLVING THE EMPLOYEES CONTRIBUTION WA S DISCLOSED IN TAX AUDIT REPORT AS FOUND BY THE CIT(A ) AND CANCELLED THE PENALTY IMPOSED BY AO. THE FACTS IN THE CASE LAWS AS RELIED ON BY LD. AR ARE SIMILAR TO THE FACTS OF THE PRESENT CASE. THE RELEVANT PORTION IN THE CASE OF DCIT VS. M/S SVM CERA TEA BUILD LTD. SUPRA WHICH HAS CONSIDERED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT IN CIVIL APPEAL NO.6924 OF 2012 IS REPRODUCED HEREIN BELOW:- 19.THE CONTENTS O THE TAX AUDIT REPORT SUGGEST THA T THERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS CINE. THERE IS ALSO NO QUES TION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. IT APPEAR TO US THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME. THIS CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CALIBER 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. 20. WE ARE OF THE OPINION, GIVEN THE PECULIAR FACTS OF THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIF IED. WE ARE SATISFIED THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCO ME OR FURNISH INACCURATE PARTICULARS. 6. WE FIND THE TRIBUNAL IN THE AFORE-MENTIONED CASE LAW PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT WHICH OBSERVED TH AT THERE WAS A BONA FIDE AND INADVERTENT ERROR CAUSED WHILE SUBMITTING RETURN OF INCOME AND FAILURE TO ADD THE ITA NO.1992/KOL/2016 A.Y. 2004-05 ACIT CC-1(1) KOL. VS. M/S BHASKAR TEA & IND S. LTD. PAGE 4 PROVISION OF GRATUITY TO IT TOTAL INCOME CAN ONLY BE DESCRIBED AS HUMAN ERROR AND WHICH WE ARE ALL PRONE TO MAKE AND HOLDING THE ASSE SSEE GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALED ITS I NCOME IS NOT JUSTIFIED. IN OUR OPINION, THE FACTS OF THE PRESENT CASE IS THAT OF A FORE-MENTIONED CASE LAW ARE SIMILAR. THEREFORE, ORDER OF CIT(A) IS JUSTIFIED AND WE FIND NO INFIRMITY TO INTERFERE, THEREBY GROUND NO.1 AND 2 RAISED BY REVENUE ARE DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 09/05/2018 SD/- SD/- ( !) (#$ !) (P.M.JAGTAP) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS % - 09/05/2018 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ACIT, C-C-1(1), AAYKAR BHAWAN, PORVA, 11 0, SHANTIPALLY, 3 RD FLOOR, KOLKATAS-107 2. /RESPONDENT-M/S BHASKAR TEA & INDUSTRIES LT. 2, BIP LABI TRAILOKYA MAHARAJ SARAN I,KOLKATA-001 3. ( + / CONCERNED CIT 4. + - / CIT (A) 5. , $$( , ( / DR, ITAT, KOLKATA 6. 0 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO (,