DHUNJI FRAMROZE TITINA, MUMBAI V. ITO 5 (1)(1), MUMBAI

ITA 2879/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4088 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY JAISWAL
• Keywords: Bonafide mistake
• Section: 271(1)(c); 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI , , ' BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER . 2879/ /2018 ( . . 2009-10) ITA NO. 2879/MUM/2018 (A.Y.2009-10) SHRI DHUNJI FRAMROZE TITINA C/O SAVANT & CO., CHARTERED ACCOUNTANTS 12, SHASHANK SOCIETY, 444, MANMALA TANK ROAD, MATUNGA (W), MUMBAI-400016 ...... $ /APPELLANT PAN: AAEPT4451G VS. ITO 5(1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ..... % /RESPONDENT $ ' / APPELLANT BY : SHRI GIRISH DAVE (AR) % ' /RESPONDENT BY : SHRI VIJAY JAISWAL (DR) ( / DATE OF HEARING : 20/10/2020 ( / DATE OF PRONOUNCEMENT : 26/10/2020 ITA 2879 MUM 2018-SHRI DHUNJI FRAMROZE TITINA 2 / ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-10, MUMBAI [IN SHORT THE C IT(A)] DATED 21.12.2017 FOR THE ASSESSMENT YEAR 2009-10, CONFIRMING LEVY OF PEN ALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. 2. SHRI GIRISH DAVE APPEARING ON BEHALF OF THE ASSE SSEE SUBMITTED, THAT IN REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) , THE INCOME RETURNED BY ASSESSEE WAS ACCEPTED WITHOUT ANY ADDITION VIDE ORD ER DATED 14.11.2011. THE ASSESSEE IN RETURN OF INCOME HAD CLAIMED SHORT TERM CAPITAL LOSS (STCL) WHICH WAS ACCEPTED BY THE ASSESSING OFFICER. SUBSEQUENTLY , THE ASSESSMENT WAS RE- OPENED UNDER SECTION 147 R.W.SEC. 148 TO DISALLOW A SSESSEES CLAIM OF CARRY FORWARD OF STCL TO FOLLOWING ASSESSMENT YEARS. PENA LTY UNDER SECTION 271(1)(C) OF THE ACT WAS INITIATED FOR CLAIMING CARRY FORWARD OF STCL. THE LD. AR POINTED THAT EVEN IN THE RE-ASSESSMENT PROCEEDINGS, THE RET URNED INCOME WAS ACCEPTED WITHOUT MAKING ANY ADDITION/DISALLOWANCE VIDE ORDER DATED 03.09.2014. THE ASSESSING OFFICER VIDE ORDER DATED 12.03.2015 LEVIE D PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF ASSESSEES CLAIM OF CARRY F ORWARD OF LOSS IN THE ORIGINAL RETURN OF INCOME. THE LD. AR POINTED THAT THOUGH IN THE RETURN OF INCOME THE ASSESSEE HAS CLAIMED CARRY FORWARD OF LOSS, HOWEVER , IN THE SUBSEQUENT ASSESSMENT YEARS THE CLAIM WAS WITHDRAWN. THIS FACT WAS POINTED TO THE ASSESSEE IN RE-ASSESSMENT PROCEEDINGS AND EVEN IN T HE PENALTY PROCEEDINGS. THE LD. AR SUBMITTED THAT THE ASSESSEE IS A NRI. IN REPLY TO SHOW-CAUSE NOTICE, THE ASSESSEE HAS SUBMITTED THAT INADVERTENTLY CLAIM OF CARRY FORWARD OF LOSSES WAS NOT CORRECTED IN THE RETURN. IN ANY CASE THERE WAS NO AFFECT ON THE INCOME DECLARED AS THE TAXES WERE PAID ON THE DECLARED INC OME. EVEN IN SUBSEQUENT ITA 2879 MUM 2018-SHRI DHUNJI FRAMROZE TITINA 3 ASSESSMENT YEAR THE ASSESSEE HAD MADE NO CLAIM OF C ARRY FORWARD OF LOSSES. THE MISTAKE OF CLAIMING CARRY FORWARD OF LOSS IN TH E RETURN FOR THE IMPUGNED ASSESSMENT YEAR WAS AN INADVERTENT BONAFIDE MISTAKE AND HENCE, NO PENALTY SHOULD HAVE BEEN LEVIED FOR MAKING SUCH CLAIM. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISI ONS: 1. PRICE WATERHOUSE COOPERS (P.) LTD. VS. CIT [348 ITR 306 (SC)] 2. CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. [322 I TR 158(SC)] 3. CIT VS. MAKINO ASIA PVT. LTD. (40 TAXMANN.COM 16 9 (KAR.) THE LD. AR SUBMITTED THAT THE ASSESSEE FILED APPEAL AGAINST THE ORDER LEVYING PENALTY, HOWEVER, THE CIT(A) WITHOUT APPREC IATING THE FACTS AND THE LAW LAID DOWN BY HONBLE APEX COURT DISMISSED THE APPEA L OF ASSESSEE. 3. ON THE OTHER HAND, SHRI VIJAY JAISWAL REPRESENTI NG THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL OF ASSESSEE. 4. WE HAVE HEARD THE SUBMISSION MADE BY RIVAL SIDES AND EXAMINED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSI DERED THE DECISIONS ON WHICH THE LD. AR HAS PLACED RELIANCE. THE PENALTY U NDER SECTION 271(1)(C) HAS BEEN LEVIED IN RESPECT OF ASSESSEES CLAIM OF CARRY FORWARD OF STCL. THE CONTENTION OF THE ASSESSEE IS THAT THE CLAIM HAS BE EN INADVERTENTLY MADE. IN ANY CASE, THERE WAS NO AFFECT ON COMPUTATION OF TAX AS IN THE SUBSEQUENT AY THE CLAIM WAS WITHDRAWN. IN THE CASE OF CIT VS. RELIAN CE PETRO PRODUCTS PVT. LTD. (SUPRA), THE HONBLE APEX COURT HELD THAT MERE MAKI NG OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS AND HENCE, NO PENALTY CAN BE LEVIED. ITA 2879 MUM 2018-SHRI DHUNJI FRAMROZE TITINA 4 5. WE FIND MERIT IN THE SUBMISSIONS OF LD. AR. SINC E, THE ASSESSEE HAD ALREADY WITHDRAWN THE CLAIM OF CARRY FORWARD OF STC L IN RE-ASSESSMENT PROCEEDINGS, NO CASE FOR LEVY OF PENALTY UNDER SECT ION 271(1)(C) IS MADE OUT. THE IMPUGNED ORDER IS SET-ASIDE AND APPEAL OF THE A SSESSEE IS ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON MONDAY THE 26 TH DAY OF OCTOBER, 2020. S SD/- SD./- S SD/- SD./- (RAJESH KUMAR) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, , / DATED: 26/10/2020 S.K., PS % % % % - - - - COPY OF THE ORDER FORWARDED TO : 1. $ / THE APPELLANT , 2. % / THE RESPONDENT. 3. . ( )/ THE CIT(A)- 4. . CIT 5. % , . . ., / DR, ITAT, MUMBAI 6. 1 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI