S.R.M. PACKAGING P. LTD, MUMBAI V. ITO 7 (2)-2, MUMBAI

ITA 3014/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8388 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: CHETAN KARIA
• Keywords: Wrong claim

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) , AND B.R.BASKARAN (AM) , . . , ./I.T.A. NO.3014/MUM/2012 ( / ASSESSMENT YEAR : 200607) M/S S R M PACKAGING PVT. LTD., C/O M/S SHANKAR AND KAPANI, CHARTERED ACCOUNTANTS, 2 ND FLOOR, NTC HOUSE, 15 N M MARG, BALLARD ESTATE, FORT, MUMBAI400038 / VS. ASSTT. COMMISSIONER OF INCOME TAX, 7(2), MUMBAI. ( / APPELLANT) .. ( / RESPONDENT) ./ ./ PAN/GIRNO.:AADCS8666G ! / APPELLANT BY : SHRI CHETAN KARIA ' ! /RESPONDENT BY SHRI LOVE KUMAR # ' $% / DATE OF HEARING : 17.11.2014 &' ' $% /DATE OF PRONOUNCEMENT : 21.11.2014. / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20-12- 2011 PASSED BY LD CIT(A)-13, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE PENALTY OF RS.3,17,456/- LEVIED BY THE AO U/S 2 71(1)(C) OF THE ACT. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE WAS REQUI RED TO DISALLOW CERTAIN EXPENDITURE, AS IT DID NOT DEDUCT AND PAY THE APPLI CABLE TDS THEREON. AT THE SAME TIME, THE ASSESSEE REMITTED THE TDS AMOUNT OF RS.96,199/- PERTAINING TO THE IMMEDIATELY PRECEDING YEAR, I.E. AY 2005-06 ONL Y ON 28.5.2005. SINCE THE PROVISIONS OF SEC. 40(A)(IA) PROVIDE FOR DEDUCTION OF THE EXPENDITURE IN THE YEAR IN WHICH THE TDS AMOUNT IS REMITTED, THE ASSESSEE CLAI MED EXPENDITURE OF RS.9,43,128/- DURING THE YEAR. AT THE TIME OF ASSE SSMENT PROCEEDINGS, THE ITA NO.3014/M/2012 2 ASSESSING OFFICER, HOWEVER, NOTICED THAT THE ASSESS EE DID NOT DISALLOW THE ABOVE SAID AMOUNT OF RS.9,43,128/- IN AY 2005-06. THE AO POINTED THAT THE QUESTION OF ALLOWING THE ABOVE SAID AMOUNT IN AY 2006-07 WOU LD ARISE ONLY IF THE SAME HAD BEEN DISALLOWED IN AY 2005-06. ACCORDINGLY, TH E AO REJECTED THE CLAIM FOR DEDUCTION OF RS.9,43,128/- WHILE COMPUTING THE TOTA L INCOME OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07. THE LD A.R SAID THAT THE ASSESSEE HAS ACCEPTED THE SAID DISALLOWANCE. HOWEVER, THE AO ALSO LEVIED PEN ALTY U/S 271(1)(C) OF THE ACT ON THE ABOVE SAID DISALLOWANCE OF RS.9,43,128/-. 3. THE LD A.R FURTHER SUBMITTED THAT THE TAX AUDI TOR HAS REPORTED THE DETAILS OF NON-PAYMENT OF TDS IN THE TAX AUDIT REPORT PERTA INING TO AY 2005-06 AND YET THE SAME WAS OMITTED TO BE DISALLOWED WHILE COMPUTI NG THE TOTAL INCOME. SINCE THE RETURN OF INCOME RELATING TO AY 2005-06 WAS NOT TAKEN UP FOR SCRUTINY, THE SAID OMISSION ESCAPED THE ATTENTION OF THE ASSESSIN G OFFICER ALSO. HOWEVER, THE INCOME TAX RETURN PERTAINING TO AY 2006-07 WAS PREP ARED BY ANOTHER ASSISTANT, WHO CLAIMED THE DEDUCTION OF RS.9,43,128/- ON NOTIC ING THAT THE CONCERNED TDS AMOUNT WAS REMITTED ON 28.5.2005, I.E., DURING THE FINANCIAL YEAR RELEVANT TO THE AY 2006-07. THE LD A.R SUBMITTED THAT THE SAID ASS ISTANT FAILED TO REFER TO THE INCOME TAX RETURN OF IMMEDIATELY PRECEDING YEAR TO VERIFY AS TO WHETHER CORRESPONDING DISALLOWANCE WAS MADE IN THAT YEAR. HE SUBMITTED THAT THE ABOVE SAID AMOUNT WAS, IN ANY CASE, DISALLOWABLE IN AY 20 05-06 U/S 40(A)(IA) OF THE ACT, THERE WAS SOME JUSTIFICATION FOR THE ASSESSEE IN CLAIMING THE SAME AS DEDUCTION DURING THE INSTANT YEAR. HE FURTHER SUBM ITTED THAT THE ASSESSEE HAS BEEN MAKING LOSSES CONTINUOUSLY AND HENCE THE ASSES SEE COULD NOT HAVE GAINED ANYTHING BY MAKING WRONG CLAIM. ACCORDINGLY HE SUB MITTED THAT THE WRONG CLAIM WAS MADE BY THE ASSESSEE DUE TO INADVERTENT ERROR A ND IT WAS MADE WITH THE BONA FIDE BELIEF THAT THE SAID AMOUNT WAS DISALLOWA BLE IN THE EARLIER YEAR. THE LD A.R PLACED RELIANCE ON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF PRICE WATER HOUSE COOPERS PVT LTD VS. CIT (348 ITR 306) AND SUBMITTED THAT THE UNINTENTIONAL COMPUTATIONAL MISTAKES WOULD NOT GIVE RISE TO PENALTY. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS CLAIMED FOR DEDUCTION OF RS.9,43,128/- U/S 40(A)(IA) OF THE ACT WITHOUT MAKING CORRESPONDING DISALLOWANCE IN AY 2005-06. ACCORDINGLY HE SUBMITT ED THAT THE WRONG CLAIM PUT ITA NO.3014/M/2012 3 FORTH BY THE ASSESSEE WAS A DELIBERATE ATTEMPT TO F URNISH INACCURATE PARTICULARS OF INCOME. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. THE UNDISPUTED FACTS ARE THAT THE TDS AMOUNT OF RS.96,199/- WAS DE DUCTED ON 31.3.2005 FROM THE EXPENDITURE OF RS.9,43,128/- AND THE SAME WAS R EMITTED ON 28.5.2005. IN THE ANNEXURE E TO THE TAX AUDIT REPORT RELATING TO THE ASSESSMENT YEAR 2005-06, THE DUE DATE FOR REMITTING THE ABOVE SAID AMOUNT WA S MENTIONED AS 31.5.2005 BY THE TAX AUDITOR, MEANING THEREBY, THERE WAS NO REQU IREMENT TO MAKE DISALLOWANCE OF RS.9,43,128/- IN AY 2005-06, SINCE THE TDS AMOUNT WAS PAID ON 28.5.2005, I.E., BEFORE THE DUE DATE. HENCE, THE A SSESSEE ITSELF DID NOT MAKE THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IN AY 2005-06 . HENCE THE CLAIM FOR DEDUCTION OF RS.9,43,128/- MADE IN THE ASSESSMENT Y EAR 2005-06 WAS PERFECTLY IN ACCORDANCE WITH THE LAW. HENCE, THE QUESTION OF CLAIMING THE SAME AGAIN IN AY 2006-07 DOES NOT ARISE AT ALL. 6. HOWEVER, IN THE CURRENT ASSESSMENT YEAR, IT IS STATED THAT THE SAID AMOUNT WAS WRONGLY CLAIMED UNDER THE IMPRESSION THAT THE S AME WAS DISALLOWABLE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND HENCE THE SAME IS ALLOWABLE IN THE CURRENT YEAR. HOWEVER, THE SAID SUBMISSION, IN OUR VIEW, DEFIES THE LOGIC IN VIEW OF THE FACTS DISCUSSED IN THE PRECEDING PARAGRAPH. 7. THE ALTERNATIVE SUBMISSION OF THE ASSESSEE IS T HAT THE SAID CLAIM WAS INADVERTENTLY MADE AN ASSISTANT DURING THE CURRENT YEAR WITH THE BELIEF THAT THE SAME WAS DISALLOWABLE IN THE IMMEDIATELY PRECEDING YEAR. ACCORDINGLY IT WAS SUBMITTED THAT IT WAS A MERE COMPUTATIONAL ERROR. IN THIS REGARD, THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PRICE WATER HOUSE COOPERS PVT LTD (SUPRA). HOWEVER, WE N OTICE THAT THE FACTS PREVAILING IN THE CASE BEFORE HONBLE SUPREME COURT WAS DIFFERENT, I.E., THE DISALLOWANCE OF CLAIM OF PROVISION FOR GRATUITY WAS DULY REPORTED IN THE TAX AUDIT REPORT AND THE SAME WAS, HOWEVER, OMITTED TO BE DIS ALLOWED AT THE TIME OF COMPUTING THE TOTAL INCOME. IN THESE SET OF FACTS, THE HONBLE SUPREME COURT HELD THAT IT WAS MERE COMPUTATIONAL ERROR. IN THE INSTANT CASE, THE CLAIM FOR DEDUCTION WAS MADE IN THE CURRENT YEAR U/S 40(A)(IA ) OF THE ACT WITHOUT MAKING ITA NO.3014/M/2012 4 CORRESPONDING DISALLOWANCE IN THE IMMEDIATELY PRECE DING YEAR. ONLY IF THE DISALLOWANCE HAD BEEN MADE IN AY 2005-06, THEN THE ASSESSEE COULD HAVE CLAIMED THE DEDUCTION IN THE CURRENT YEAR UNDER SEC . 40(A)(IA) OF THE ACT. ACCORDINGLY THE IMPUGNED CLAIM RESULTS IN WRONG CLA IM AND HENCE, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES ARE JUSTIFIED IN LEVY ING PENALTY ON THE GROUND OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. AC CORDINGLY, WE AFFIRM THE ORDER OF LD CIT(A) 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21ST NOV, 2014 . &' # () * + 21ST NOV , 2014 ' ' , - SD SD ( / VIJAY PAL RAO ) ( . . ,/ B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( # MUMBAI: 21ST NOV,2014. . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # 0$ ( ) / THE CIT(A)- CONCERNED 4. # 0$ / CIT CONCERNED 5. 6. 1, $ 2 , % 2 , ( # / DR, ITAT, MUMBAI CONCERNED ,3 4 / GUARD FILE. 5 # / BY ORDER, TRUE COPY 6 (ASSTT. REGISTRAR) % 2 , ( # /ITAT, MUMBAI