SEAWARD EXPORTS PRIVATE LIMITED, KOTA V. DCIT-CIRCLE 2, KOTA

ITA 271/JPR/2021

AI Insights

The case involves M/s. Seward Exports Pvt. Ltd., which appealed against the penalty imposed by the Deputy Commissioner of Income Tax, Circle-2, Kota, confirmed by the CIT(A), National Faceless Appeal Centre, Delhi. The penalty was levied for not deducting the sale proceeds of Rs.1,05,000 from the block of assets, leading to an incorrect claim of depreciation and resultant tax effect. The assessee argued that the error was unintentional and minor, amounting to a mere Rs.698 in tax, and that there was no intention to conceal income. The Tribunal agreed with the assessee, citing a similar case to support the decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132482 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-03-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 23-11-2021
• Other Referred Cases: Saraogi Mansion Estate Pvt Ltd. vs DCIT (DBITA 4/2017 dated 6-11-2017)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Tax effect

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR JhlaanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 271/JP/2021 fu/kZkj.ko"kZ@AssessmentYear : 2012-13 M/s. Seward Exports Pvt. Ltd. 5-L-22, Mahaveer Nagar-3 Kota- 324 005 (Raj) cuke Vs. The DCIT Circle-2 Kota LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFCS 7423 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Saurav Harsh, Advocate jktLo dh vksj ls@Revenue by: Mrs. Monisha Choudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 23/03/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 01/05/2023 vkns'k@ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A), National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] dated 29-09-2021 for the assessment year 2012-13 wherein the assessee has raised the following grounds of appeal. ‘’1. That on the facts, in the circumstances of the case and in view of the oral and written submission made and the evidence adduced, the order of the ld. lower authorities is against the law and facts of the case. 2 ITA NO. 271/JP/2021 SEAWARD EXPORTS PVT. LTD VS DCIT, CIRCLE-2, KOTA 2. That the ld. CIT(A) has grossly erred in confirming the penalty levied by the AO in the amount of Rs.4,870/- without there being any basis and by ignoring the fact that the asset sold were already disclosed in its books of account and assessee had not intended to or attempted to either conceal of its income or furnish inaccurate particulars. 2.1 Brief facts of the case are that the assesssee filed the return of income on 29-09-2012 declaring total income at Rs.89,34,500/-. Subsequently, assessment u/s 143(3) of the Act was completed on 29-11-2017 at an income of Rs.96,28,990/- as against income of Rs.96,13,240/- after making addition of Rs.15,850/- by treating overcharged depreciation out of total depreciation @ 15%. Penalty proceedings u/s 271(1)© were initiated for furnishing inaccurate particulars of income after recording necessary satisfaction in the assessment order. Subsequently, penalty u/s 271(1) (c ) of the Act amounting to Rs.4,870/- was levied on the assesssee. 2.2 In first appeal, the ld. CIT(A) has confirmed the penalty by observing as under:- ‘’5.2.7 Thus, in my considered opinion, in view of the facts and circumstances of the case discussed above and in the light of the judicial precedents, the levy of penalty of Rs.4,870/- u/s 271(1)(c ) is justified and it is held that the AO has rightly initiated and levied the penalty8 u/s 271(1)©. The same is confirmed. The ground is accordingly dismissed.’’ 2.3 During the course of hearing, the ld.AR of the assessee prayed that due to sheer error the assessee had not deducted the sale proceeds of Rs.1,05,000/- from 3 ITA NO. 271/JP/2021 SEAWARD EXPORTS PVT. LTD VS DCIT, CIRCLE-2, KOTA its Block of Assets due to which it had inadvertently claimed depreciation @ 15% by Rs.17,570/- of which resultant tax effect comes to meager Rs.4,870/- (needless to mention that the assessee had deducted sale value of Rs.1,05,000/- from its opening WDV as of immediately succeeding year). Similarly, on other side, it had also not deducted profit on sale of assets of Rs.13,865/- from its computation of total income which resulted into excess payment of tax by Rs.4,172/-. Therefore, the difference comes to meager amount of Rs.698/- of tax and this error is genuine one which should not be treated as concealed of income by the AO. The ld. AR further apprised that assessee with a taxable income of Rs.89,34,449/- and with a total tax payment of Rs.27,60,745/- does not have any intention to save meager amount of tax of Rs.698/- and this act of error of omission does not amount to concealment of income and attract penalty u/s 271(1)© of the Act.. In this connection, the ld. AR of the assessee relied upon following case law. 1. Saraogi Mansion Estate Pvt Ltd. vs DCIT (DBITA 4/2017 dated 6-11-2017) Raj. High Court. 2.4 On the other hand, the ld. DR supported the orders of the lower authorities. 2.5 We have heard both the parties and perused the materials available on record. In this case, it is noted that the AO levied penalty of Rs.4,870/- u/s 271(1)© of the Act which has been confirmed by the ld. CIT(A). The Bench in view of the submissions as well as the case law cited in the case of Saraogi Mansion Estate Pvt 4 ITA NO. 271/JP/2021 SEAWARD EXPORTS PVT. LTD VS DCIT, CIRCLE-2, KOTA Ltd. vs DCIT (supra) noted that it is an advertent mistake and such an act of error or omission does not amount to concealment of income and it does not attract penalty. Hence, we do not concur with the findings of the ld.CIT(A) and this appeal of the assessee is allowed. 3.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 01/05/2023. Sd/- Sd/- ¼jkBksMdeys'kt;UrHkkbZ ½ ¼lanhi xkslkbZ½ (Rathod Kamlesh Jayantbhai) (Sandeep Gosain) ys[kklnL;@Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 01 /05/2023 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- M/s. Seaward Exports (P) Ltd. Kota 2. izR;FkhZ@ The Respondent- DCIT, Circle-2, Kota 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No. 271/JP/2021) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar