ACIT, New Delhi V. Sh. Dharam Vir Yadav, New Delhi

ITA 217/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7314 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST D ATED
• Assessee Lawyers: PASSED LD CITA X VII NEW DELHI
• Section: 43B

Judgement Text

1 ITA NO. 21 7/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 217/DEL/2012 (ASSESSMENT YEA R-2005-06) ACIT CIRCLE-20 (1), ROOM NO. F-308, VIKAS BHAWAN NEW DELHI (APPELLANT) VS DHARAM VIR YADAV H-4/9, MODEL TOWN NEW DELHI AAAPY1522F (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY REVENUE AGAINST THE ORDER D ATED 4/10/2011 BY THE REVENUE PASSED BY THE LD. CIT(A) X VII, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING TH E PENALTY U/S 271(1)(C), AS THE ASSESSEE WAS WELL AWA RE OF THE FACTS POINTED OUT IN THE AUDIT REPORT THAT THE PAYMENTS APPELLANT BY SH. NEEHAR RANJAN PANDEY, SR. DR RESPONDENT BY SH. B. L. GUPTA, AR DATE OF HEARING 17.12.2015 DATE OF PRONOUNCEMENT 11.01.2016 2 ITA NO. 21 7/DEL/2012 OF TDS ON CONTRACT WORK AND PAYMENT OF SERVICES TAX WAS MADE AFTER THE FILING OF RETURN OF INCOME. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN LAW AND ON FCTS BY DELETING THE PENALTY U/S 271(1)(C), AS THE ASSESSEE FAILED TO ADD BACK T HESE AMOUNTS IN THE RETURN OF INCOME FILED, AS THESE WER E IN VIOLATION OF SESCTION 40 (1A) OF THE I. T. ACT, 196 1. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN FACTS BY DELETING THE PENALTY U /S 271 (1) (C), AS THE ASSESSEE KNOWINGLY FURNISHED INACCU RATE PARTICULARS OF INCOME. 2. IN THIS CASE, THE ASSESSMENT WAS COMPLETED AT RS.1,35,17,790/- ON 29/3/2007 AS AGAINST THE RETURN INCOME OF RS.56,76,930/- AND PENALTY PROCEEDINGS WERE INITIAT ED IN THE ASSESSMENT ORDER. THE CIT(A) CONFIRMED THE ADDITIO N MADE ON ACCOUNT OF DISALLOWANCE OF CONTRACT PAYMENT AMOUNTI NG TO RS.42,26,088/-, DISALLOWANCE OF LATE DEPOSIT OF SER VICE TAX U/S 43B AT RS. 15,71,870/- , DISALLOWANCE OF EXPENSES INCUR RED ON MERCEDES CARS AT RS.3,51,261/-. THIS ORDER OF CIT (A) WAS C ONFIRMED BY ITAT. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE ON 1 5/3/2010 BY FIXING THE DATE OF HEARING BUT NO REPLY WAS FILED B Y THE ASSESSEE. AS A RESULT, THE ASSESSING OFFICER LEVIED A PENALTY OF RS.20, 63,092/- @ 100% OF THE TAX SOUGHT TO BE EVADED ON 31/3/2010. THE CIT (A) HELD THAT THE ASSESSEE CLAIMED DEDUCTION IN THE RET URN INCOME FOR A.Y 2005-06 AND FILED AUDIT REPORT WITH THE SAME. THE CIT(A) OBSERVED THAT THE AMOUNT OF TDS WAS DEPOSITED LATE. IN THE AUDIT REPORT IT WAS ALSO MENTIONED THAT SERVICE TAX AND P ROVIDENT FUND 3 ITA NO. 21 7/DEL/2012 (PF) WAS NOT DEPOSITED BY THE ASSESSEE ON TIME. TH E ASSESSING OFFICER MADE DISALLOWANCES OF TDS, SERVICE TAX AND PROVIDENT FUND ON THE BASIS OF INFORMATION CONTAINED IN THE AUDIT REPORT. THE CIT(A) FURTHER HELD THAT THE ASSESSEE DID NOT CONCE ALED ANY PART OF HIS INCOME OR FILED INACCURATE PARTICULARS OF INCOM E RELEVANT TO A.Y 2005-06. THE ADDITIONS WERE MADE ON ACCOUNT OF UNP AID TDS, PROVIDENT FUND AND SERVICE TAX CANNOT BE CONSIDERED AS CONCEALED INCOME OR INACCURATE PARTICULARS AND ON THE BASIS O F SUCH PENALTY CANNOT BE LEVIED. THEREFORE, THE CIT(A) DELETED TH E PENALTY LEVIED IN THE CASE OF THE ASSESSEE. 4. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY AND HE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER. THE LD. DR FURTHER SUBMITTED THAT BY CLAI MING THESE DEDUCTIONS IN SUBSEQUENT YEAR ARE IN APPROPRIATE AN D INACCURATE RETURN. 5. THE LD. AR RELIED UPON THE CIT(A)S ORDER AND SU BMITTED THAT TDS AND SERVICE TAX WAS SUBMITTED LATE BUT THE SAME WAS DONE MUCH PRIOR TO THE DISALLOWANCE. THE ASSESSEE ALSO R ELIED UPON THE JUDGMENT OF PWC VS. CIT 2012 25 TAXMAN.COM 400 (S.C ) WHEREIN IT WAS HELD IN PARA 19 AS UNDER: 19. THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST T HAT THERE IS NO QUESTION OF ASSESSEE CONCEALING ITS INCOME. THER E IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. IT APPEARS TO US THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE 4 ITA NO. 21 7/DEL/2012 WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROV ISION FOR GRATUITY TO ITS TOTAL INCOME. THIS CAN ONLY BE DESC RIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CAL IBER AND EXPERTISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR. THAT THE ASSESSEE SHOULD HAVE BE EN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT DOES NOT MEAN THAT THE ASSESSEE IS G UILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPT ING TO CONCEAL ITS INCOME. THE HON'BLE SUPREME COURT FURTHER HELD THAT THE IMP OSITION OF PENALTY ON ASSESSEE IS NOT JUSTIFIED AND SATISFIED THAT THE ASSESSEE HAD COMMITTED INADVERTENT AND BONAFIDE ERROR AND HA D NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCO ME OR FURNISH INACCURATE PARTICULARS. 6. THE LD. AR FURTHER SUBMITTED THAT THE LATE PAYME NT OF TDS AND SERVICE TAX WAS DUE TO THE ERROR OF THE ASSESSE ES CHARTERED ACCOUNTANT AND THUS IT WAS A HUMAN ERROR. THEREFOR E, CIT (A) RIGHTLY SET ASIDE THE PENALTY ORDER. 7. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. IN THE PRESENT CASE, THE TAX AUDIT REPORT CLEARLY G IVES THE PICTURE THAT THERE WAS NONE SUBMISSION OF TDS, SERVICE TAX AND PROVIDENT FUND BY THE ASSESSEE AND THIS INFORMATION WAS KNOWN TO THE ASSESSING OFFICER AND THERE WAS NO CONCEALMENT OR INACCURATE INFORMATION GIVEN BY THE ASSESSEE. WE HAVE GONE TH ROUGH THE JUDGMENT GIVEN BY THE APEX COURT IN THE CASE OF PWC , THE RATIO OF 5 ITA NO. 21 7/DEL/2012 THE SAID JUDGMENT WILL CLEARLY APPLY IN THE PRESENT CASE AS THERE WAS A HUMAN ERROR COMMITTED BY THE CHARTERED ACCOUNTANT IN THE PRESENT CASE AS WELL. THE LD. CIT (A) RIGHTLY SET ASIDE THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 TH OF JANUARY, 2016. SD/- SD/- (S. V. MEHROTRA) (SUCHI TRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/01/2016 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 29.12.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 30.12.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE .01.2016 JM/AM 6 ITA NO. 21 7/DEL/2012 THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. .01.2016 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .01.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON .01.2016 PS 7. FILE SENT TO THE BENCH CLERK 12.01.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.