RADIANT SILK MILLS PVT. LTD., Jaipur V. ACIT, Jaipur

ITA 30/JPR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99373 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Section: 142(1); 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES SMC, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA- @ ITA NO. 30/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 RADIANT SILK MILLS PVT. LTD., 110, JAI JAWAN COLONY, SCHEME NO. 3, JLN MARG, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAACR 8253 M VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI HIMANSHU GOYAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 21/10/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 23/10/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 22/11/2011 PASSED BY THE LEARNED CIT(A), JODHPUR FO R A.Y. 2006-07. THE SOLE GROUND OF APPEAL IS AS UNDER:- THE LD CIT(A) HAS ERRED IN LAW AND FACTS BY UPHOLDI NG THE ORDER PASSED BY LEARNED A.O. UNDER SECTION 271(1)(D ) OF THE ACT, LEVYING A PENALTY OF RS. 223475/- IN VIEW OF TH E PROVISIONS OF SECTION 115WL OF THE INCOME TAX ACT, 1 961. ITA 30/JP/2012_ RADIANT SILK MILLS PVT. LTD. VS. ACIT 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS LIABLE TO PAY FBT. A.Y. 2006-07 WAS THE FIRST YEAR FOR FILING E-RE TURN. AT THE TIME OF FILING OF RETURN, THE M.D. OF THE ASSESSEE COMPANY EXPIRED ON 01/7/2006 WHICH PLUNGED THE COMPANY INTO FINANCIAL CRISIS AND DISPU TE AMONGST DIRECTORS, BESIDES THE ASSESSEE HAD INCURRED HUGE LOSSES FOR Y EAR ENDING 31/3/2006. THE FBT LIABILITY WAS ALSO A NEW LEGISLATION. SINCE THE ASSESSEE WAS IN FINANCIAL MESS, NO FUNDS WERE AVAILABLE TO PAY FBT T AXES. THE ASSESSEE FILED E-RETURN LEAVING THE COLUMN OF PAYMENT OF FBT TAX BLANK, CONSEQUENTLY THE E-RETURN WAS NOT ACCEPTED BY THE CO MPUTER. THUS, DUE TO NON-PAYMENT OF FBT TAX ONLY, THE E-RETURN WAS NOT ACC EPTED, WHICH ACCORDING TO ASSESSEE, CONTAINED FULL DISCLOSURE AB OUT OTHER FACTS OF FBT LIABILITY. THE DEATH OF THE M.D. OF THE COMPANY, THE FINANCIAL CRISIS, DISPUTE AMONGST DIRECTORS AND NON-AVAILABILITY OF FUNDS WERE MAIN CAUSE OF CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE. A FTER NON ACCEPTANCE OF E RETURN, NOTICE U/S 143(1) WAS ISSUED BY LD. AO AND IN COMPLIANCE THERETO, THE ASSESSEE FILED ALL THE DETAILS APART F ROM THE DETAILS FILED IN E- RETURN. ULTIMATELY THE FBT LIABILITY WAS PAID ALONG WI TH INTEREST THEREON. THE ASSESSING OFFICER HOWEVER, IMPOSED PENALTY U/S 27 1(1)(D) HOLDING THAT THE ASSESSEE WAS NOT PRESENTED BY A SUFFICIENT CAUSE AND THERE WAS DELIBERATE FURNISHING OF INACCURATE PARTICULARS IN RESPECT OF FBT LIABILITY. ITA 30/JP/2012_ RADIANT SILK MILLS PVT. LTD. VS. ACIT 3 3. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WH EREIN THE LD CIT(A) HELD THAT THE ASSESSEE DID NOT FILE ANY REVISED RET URN BY RELYING ON HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE (INDIA ) LTD. VS. CIT 284 ITR 323 (SC) WITHOUT BRINGING ANY PARITY OF FACTS AND CONFIRMED THE PENALTY. AGGRIEVED THE ASSESSEE IS BEFORE US. 4. LD COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND CONTENDS THAT ASSESSEE ACCEPTED AND DISCLOSED THE FBT LIABILITY, O NLY PAYMENT WAS NOT MADE DUE TO CIRCUMSTANCES BEYOND ITS CONTROL WHICH I S EVIDENT FROM THE UNDISPUTED FACTS THAT ASSESSEE, OTHERWISE, FILED ALL THE DETAILS ABOUT THE LIABILITY. THERE IS NEITHER FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF PARTICULARS OF INCOME. THEREFORE, THE PENALTY IS NOT LEVIABLE. RELIANCE IS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD, VS. CIT AND ANOTHER (20 12) 348 ITR 306 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD AS U NDER:- THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT TH ERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THERE IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INA CCURATE PARTICULARS. IT APPEARS TO US THAT ALL THAT HAS HAP PENED IN THE PRESENT CASE IS THAT THROUGH A BONAFIDE AND INADVER TENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISIONS FOR GRATUITY TO ITS TOTAL INCOME. THIS CA N ONLY BE ITA 30/JP/2012_ RADIANT SILK MILLS PVT. LTD. VS. ACIT 4 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 ABSENC E 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. 4.1 LD COUNSEL FOR THE ASSESSEE CONTENDS THAT THE A SSESSEES CASE IS ON BETTER FOOTING INASMUCH AS THERE IS NO INADVERTENT MISTAKE EVEN EXCEPT NON-PAYMENT OF TAX LIABILITY DUE TO THE CIRCUMSTANC ES MENTIONED ABOVE. ALL THE DETAILS WERE FILED AND THE COMPUTER SYSTEM DID N OT ACCEPT THE ASSESSEES E-RETURN. IT IS CONTENDED THAT RATIO LAI D DOWN BY THE HON'BLE SUPREME COURT IS FULLY APPLICABLE ON THE ASSESSEE. THE PENALTY MAY BE DELETED. 5. THE LD DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD CIT(A). 6. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE FACTS NARR ATED BY THE ASSESSEE HAVE NOT BEEN DISPUTED AND FINDINGS MENTIONED IN TH E PENALTY ORDER. IN VIEW THEREOF, THE PLEADED FACTS THAT THE ASSESSEE WAS IN DIFFICULT CIRCUMSTANCES DUE TO DEATH OF MD, DISPUTES, FINANCI AL CRISIS AND NON- AVAILABILITY OF MONEY TO PAY TAXES, REMAIN UNCONTRO VERTED. THE FACT THAT E- ITA 30/JP/2012_ RADIANT SILK MILLS PVT. LTD. VS. ACIT 5 RETURN WAS NOT ACCEPTED AND THEREAFTER IN RESPONSE T O 142(1) NOTICE, ON THE FIRST AVAILABLE OPPORTUNITY, THE ASSESSEE FILED THE DETAILS ABOUT LIABILITY OF FBT AND LATER ON THE ASSESSEE PAID FBT WITH INTERES T THEREON ALSO HAS NOT BEEN DISPUTED. IN THESE FACTS AND CIRCUMSTANCES THE ASSESSEE BEING IN DIFFICULT AND COMPELLING CIRCUMSTANCES ABOUT AVAILA BILITY OF FUNDS, CANNOT BE DEEMED TO BE TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. IN MY VIEW, THE ASSESSEES IS NOT A FIT CASE FOR LEVY OF IMPUGNED PENALTY, WHICH IS SUPPORTED BY THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPE RS PVT. LTD, VS. CIT AND ANOTHER (SUPRA). IN THE ENTIRETY OF FACTS AND C IRCUMSTANCES, PENALTY IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/10/2015. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 23 RD OCTOBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- RADIANT SILK MILLS PVT. LTD., JAIPUR .. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-5, JAIPUR. ITA 30/JP/2012_ RADIANT SILK MILLS PVT. LTD. VS. ACIT 6 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 30/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR