ACIT, New Delhi V. M/s KOLBROS, New Delhi

ITA 2480/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5867 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRADEEP AGGARWAL F
• Keywords: Wrong claim; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH C NEW DELHI BEFORE SRI R.S.SYAL, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO.2480/DEL/2016 A.Y. 2011 - 12 ACIT, CIRCLE 30(1) VS. KOLBROS ROOM NO.1302, 13 TH FLOOR B 11, GREATER KAILASH I E - 2 BLOCK, SPM CIVIC CENTRE NEW DELHI 110 048 JLN MARG, NEW DELHI 110 002 PAN: AAHFK3322F (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ARUN KUMAR YADAV, SR. D.R. RESPONDENT BY: SH. PRADEEP AGGARWAL, F CA DATE OF HEARING: 28.05.2018 DATE OF PRONOUNCEMENT : 30 T H MAY, 2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 30.07.2014 PASSED BY LD.CIT(A) - 10 , NEW DELHI FOR ASSESSMENT YEAR 20 11 - 12 , ON FOLLOWING GROUNDS. 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON F ACTS BY DIRECTING THE A.O. TO DELETE THE PENALTY IMPOSED U/S 271(1)(CIT(A) ) OF RS.13,62,190/ - . 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY IGNORING THE WILFUL AND MALAFIDE INTENTION OF ASSESSEE IS APPAR ENT FROM THE FACT THAT THE ASSESSEE HAD DELIBERATELY CLAIMED DEDUCTION OF RS.44,08,380/ - U/S 80 ID OF THE ACT BY FILING REVISED RETURN AND HAD THE ITA 2480 /DEL/201 6, A.Y.20 11 - 12 ACIT VS. KOLBROS, NEW DELHI 2 CASE BEEN NOT SELECTED FOR SCRUTINY, THE ASSESSEE WOULD HAVE REVISED THE BENEFIT OF DEDUCTION U/S 80 ID OF THE ACT. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2. FACTS OF THE CASE IN BRIEF ARE AS UNDER . O RIGINALLY ASSESSEE HAD DECLARED INCOME OF RS.44,08,380/ - WHILE FILING THE RETURN OF INCOME ON 19.09.2011 BUT S UBSEQUENTLY REVISED RETURN WAS FILED ON 30.03.2013 SHOWING NIL INCOME. ASSESSMENT IN THIS CASE WAS COMPLETED AT AN INCOME OF RS.44,08,380 - / BY WITHDRAWING DEDUCTIO N CLAIMED BY ASSESSEE U/S 80 ID OF THE ACT IN THE REVISED RETURN. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE SURRENDERED THE WHOLE AMOUNT OF DEDUCTION CLAIMED U/S. 80 ID STATING THAT THE CLAIM WAS MADE INADVERTENTLY. ASSESSEE OPTED NOT TO FILE ANY APPEAL BEFORE LD. CIT(A) AGAINST ADDITION MADE BY LD. AO BY WITHDRAWING THE CLAIM OF DEDUCTION U/S. 80 ID . CONSIDERING THIS FACT IN VIEW, A.O. ISSUED SHOW CAUSE NOTICE U/S 271 (1)(C) OF THE ACT ON 20.06.2014 AND SUBSEQUENTLY ORDER OF PENALTY U/S. 271 (1)(C) WAS PASSED ON 30.06.2014. LD. AO RELIED UPON JUDICIAL PRONOUNCEMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE CIT VS. ZOOM COMMUNICATION P. LTD. 327 ITR 51 AND HELD THAT SINCE VERY LIMITED CASES ARE BEING SELECTED FOR SCRUTINY, THEREFORE, ANY WRONG CLAIM WOULD MEAN LOSS OF REVENUE TO THE GOVERNMENT AND PENALTY PROVISIONS ACT AS DETERRENCE FOR FILING INACCURATE PARTICULARS OF INCOME . 2 . 1. AGGRIEVED BY THE ORDER OF LD.AO, AS SESSEE PREFERRED APPEAL BEFORE LD.CIT(A). LD.CIT(A) DELETED PENALTY. 2 . 2 . AGGRIEVED BY ORDER OF LD.CIT(A), REVENUE IS IN APPEAL BEFORE US. 3 . LD.CIT, D.R. THOUGH SUPPORTED THE ORDER OF LD.A.O. BUT COULD NOT REFUTE THE ADMITTED POSITION RECORDED BY LD.CIT(A) IN THE ORDER. ITA 2480 /DEL/201 6, A.Y.20 11 - 12 ACIT VS. KOLBROS, NEW DELHI 3 4 . LD.AR SUBMITTED THAT ASSESSEE ORIGINALLY FILED RETURN WHEREIN TOTAL TAXABLE INCOME WAS DECLARED AT RS.44,08,380/ - BUT SUBSEQUENT TO FILING OF RETURN, IT WAS ADVISED TO THE ASSESSEE BY ANOTHER TAX CONSULTANT THAT IT WAS ELIGIBLE FOR CLAIMING DEDUCTION U/S 80 ID, THEREFORE, RETURN WAS REVISED BY THE ASSESSEE ON 30.3.2013 AT NIL INCOME CLAIMING DEDUCTION U/S 80 ID OF RS.44,08,380/ - . IT WAS SUBMITTED THAT ON CASE BEING SELECTED FOR SCRUTINY , MATTER WAS AGAIN ASSIGNED TO THE PRESENT TAX CONSULTANT WITH WHOSE ADVICE ASSESSEE AGAIN DECIDED TO FOREGO DEDUCTION CLAIM ED U/S 80 ID IN THE REVISED RETURN. D UE TO LIMI TATION OF FILING REVISED RETURN HAD LAPSED, AND ASSESSEE COULD NOT AGAIN REVISE THE RETURN. IT HAS BEEN SUBMITTED THAT INTENTION OF ASSESSEE MAY BE CONSIDERED AS ASSESSEE SUO MOTO REVISED THE RETURN FOR A.Y. 2012 - 13 , WITHDRAWING THE CLAIM OF DEDUCTION U/S 80 ID. IT IS ALSO SUBMITTED THAT RETURN REVISED ON 30.3.2013 WHICH WAS FIXED FOR SCRUTINY WAS DEFECTIVE AS THE CLAIM WAS NOT FILED ALONG WIT H CERTIFICATE UNDER RULE 18DE OF THE IT RULE S. HE FURTHER SUBMITTED THAT ON THIS PRETEXT, REVISED RETURN SHOULD HAVE BEEN REJECTED BY A.O. HOWEVER, ASSESSEE ITSELF WITHDRAWN THE CLAIM MADE U/S 80 ID. 4 .1. LD.AR RELIED ON THE RATIO OF JUDGMENT IN CIT VS. ZOOM COMMUNICATION P LTD . (SUPRA) , AND SUBMITTED THAT IT HAS BEEN CLAIMED THAT INCORRECT CLAIM WOULD NOT AMOUNT TO GIVING INACCURATE PARTICULARS , WHICH IS THE CASE OF ASSESSEE AND EVEN THE BONA FIDE OF ASSESSEE IS PROVED WHEN DEDUCTION U/S 80ID HAS BEEN WITHDRAWN VOLUNTARILY DURING ASSESSMENT PROCEEDINGS ITSELF . SINCE, TIME FOR REVISING THE RETURN WAS LAPSED, ASSESSEE HAD NO OPTION BUT TO WITHDRAW THE SAME BEFORE THE A.O. 4 .2. IT HAS FURTHER BEEN CLAIMED THAT THERE WAS NO INTENTION OF CONCEALMENT WI T H MALA FIDE INTENTION AND A GENU I NE MISTAKE MAY NOT BE TREATED AS FORECLOSURE ON THE GOOD INTENTION OF THE ASSESSEE . AS FAR AS CLAIM OF DEDUCTION MADE U/S 80 ID IS CONCERNED, LD. AR SUBMITTED THAT DURING COMMONWEALTH GAMES ASSESSEE DEVELOPED ITS PROPERTY INTO A HOTEL AND IT WAS GRANTED TWO STAR STATUS W.E.F . 23/11/2007 DULY RECOMMENDED BY THE REGIONAL DIRECTOR OF INDIAN TOURISM VID E L E TT E R DT 29/11/2007 , A COPY OF WHICH HAS BEEN PROVIDED A L ONG WITH WRIT TEN SU B MI S SIONS. LD . AR SUBMITTED ITA 2480 /DEL/201 6, A.Y.20 11 - 12 ACIT VS. KOLBROS, NEW DELHI 4 THAT DURING APPELLATE PROCEEDINGS ASSESSEE FILED AN AFFIDAVIT DULY SWORN BY THE PARTNER OF THE ASSESSEE FIRM WHE R E I N I T W AS C L AIMED THAT THE APPELLANT HAD DEALT W I TH TAXAT I ON MATTERS AS PE R AD VI CE OF PROFESSIONALS AND CORRECTED THE MISTAKEN RETURN TR UT H FULL Y A N D V O LUN TA RILY W I THOUT BEING PO I NTED OUT BY LD.A.O. AND T HERE I S N O M E N S R EA IN VO L VED I N CLAIMING OR WITHDRAWING THE CLAIM OF DEDUCTION U / S 80 ID OF THE ACT. 5 . WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. IT IS OBSERVED THAT LD.CIT(A) DELETED THE PENALTY BY OBSERVING AS UNDER. IN THE PRESENT CASE, THE UNDISPUTED FACT IS THAT ASSESSEE ORIGINALLY FILED THE RETURN DECLARING INCOME OF RS.44,08,380/ - BUT SUBS EQUENTLY RETURN WAS REVISED BY THE APPELLANT ON ADVICE OF TAX CONSULTANT AND WHEN DURING THE ASSESSMENT PROCEEDINGS, IT WAS ADVISED BY THE TAX AUDITOR WHO FILED THE ORIGINAL RETURN THAT DEDUCTION U/S 80 ID HAS BEEN CLAIMED WRONGLY, AND APPELLANT VOLUNTARI LY SURRENDERED THE CLAIM AND A O ACCORDINGLY ASSESSED THE AMOUNT OF RS.44,O 8 ,3 80 / - AS TAXABLE INCOME OF THE ASSESSEE FOR THE AY UNDER CONSIDERATION. IT IS ALSO A FACT THAT ASSESSEE HAD WITHDRAWN THE CLAIM OF DEDUCTION U/S 80 ID DURING THE COURSE OF ASSESSM ENT PROCEEDINGS AND THE SAME BECAME THE BASIS FOR THE A O TO MAKE THE ADDITION. LD. AR EXPLAINED THE WHOLE CIRCUMSTANCES UNDER WHICH THE CLAIM WAS MADE U/S 80 ID AND ITS SUBSEQUENT WITHDRAWAL WHICH SHOW THAT THERE WAS NO MALAFIDE INTENT ON THE PART OF THE APPELLANT, THOUGH THE AO HAS TERMED THE ENTIRE CIRCUMSTANCES AS MALAFIDE WITHOUT BRINGING ON RECORD THE BASIS ON WHICH THE SUO MOTO WITHDRAWAL OF CLAIM OF DEDUCTION U/S 80 ID CAN BE TREATED AS MALAFIDE. CONSIDERING THE EXPLANATION OF THE LD. AR BEFORE ME, IT IS HELD THAT IT IS NOT A CASE WHERE IT CAN BE HELD THAT ASSESSEE HAS FAILED TO OFFER AN EXPLANATION OR SUCH EXPLANATION IS FALSE OR THAT THERE IS ANY MALAFIDE IN CLAIMING THE EXPENSES. THEREFORE, I AM OF THE CONSIDERED VIEW THAT ON THIS ISSUE IT CANNOT BE HELD THAT ASSESSEE HAS CONCEALED OR FURNISHED THE INACCURATE PARTICULARS OF INCOME FOR WHICH THE PENALTY U/S 271 (1)(C) CAN BE IMPOSED BY THE A O . PENALTY ORDER FURTHER REVEALS THAT AO IMPOSED THE PENALTY CONSIDERING THE FACT THAT ASSESSEE HAS NOT FILED I N APPEAL BEFORE THE CIT (APPEALS) AGAINST THE ADDITION MADE BY HIM. FACTUAL POSITION OF THE CASE CLEARLY ESTABLISHED THAT AO HAS ERRED IN MAKING THE ABOVE OBSERVATION AS NO ONE WILL FILE APPEAL IF THE INCOME HAS VOLUNTARILY BEEN OFFERED FOR TAXATION BY T HE ASSESSEE ITSELF. 5.1 . IT IS CLEAR THAT LD. ASSESSING O FFICER WAS REQUIRED TO GIVE HIS FINDING THAT EXPLANATIONS GIVEN BY THE APPELLANT WERE FALSE AND NOT BONAFIDE. BUT BEFORE IMPOSING THE PENALTY U/S 271 (1 )(C), AO FAILED TO GIVE ANY SPECIFIC ITA 2480 /DEL/201 6, A.Y.20 11 - 12 ACIT VS. KOLBROS, NEW DELHI 5 FINDING THAT APPELLANT WILLFULLY AND /OR WITH A MALA FIDE INTENTION MADE THE CLAIM U/S 80 ID OF THE ACT, WHICH WAS SUBSEQUENTLY SUO MOTO WITHDRAWN BY ASSESSEE ITSELF. ON THE OTHER HAND, LD. AR DURING THE APPELLATE PROCEEDING HAS EXPLAINED THE CIRCUMSTANC ES DUE TO WHICH THE CLAIM WAS MADE U/S 80 ID AND ALSO EXPLAINED THE REASONS FOR ITS WITHDRAWAL. FURTHER, IT IS IMPERATIVE TO MENTION THAT THE BONA FIDE OF THE APPELLANT GETS ESTABLISHED FROM THE FACT THAT SUBSEQUENT RETURN FOR A.Y. 2013 - 14 WAS FILED ON 28 .09.203 IN WHICH APPELLANT DID NOT CLAIM ANY EXEMPTION U/S. 80 ID , WHICH IS MENTIONED IN THE AFFIDAVIT FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS . ALL THESE FACTUAL POSITION HAS NE ITHER BEEN PROVED TO BE CONTRARY BY LD.SR.D.R. NOR THEY HAV E PLACED ANY SUCH MATERIALS ON RECORD TO DISBELIEVE THE SUBMISSIONS OF ASSESSEE. THEREFORE, THE EXPLANATION OFFERED BY THE APPELLANT IS HELD TO BE BONA FIDE, AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) IN DELETING PENALTY. ACCORDINGLY W E UPHOLD THE SAME AND DISMISS THE APPEAL FILED BY REVENUE. 6. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H MAY , 2018. S D / - S D / - ( R.S.SYAL ) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DT. 3 0 T H MAY, 2018 *MV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 2480 /DEL/201 6, A.Y.20 11 - 12 ACIT VS. KOLBROS, NEW DELHI 6 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER