ITO, New Delhi V. M/s. Ahuja Furnishers Pvt. Ltd, New Delhi

ITA 3036/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9704 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 01-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: P J KHANNA
• Keywords: Wrong claim
• Section: 271(1)(c)

Judgement Text

ITA NO. 3036/DEL/2009 A.Y. 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3036/DEL/2009 A.Y. 2005-06 ITO, WARD-1(2), VS. M/S AHUJA FURNISHERS PVT LT D. CR BLDG., IP ESTATE, BEHIND BLIND SCHOOL, MAND IR MARG, NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. A.K. MONGA, DR RESPONDENT BY : SH. P.J. KHANNA ORDER PER SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDERS OF THE CIT(A) DATED 22.4.2009 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. THE ISSUE RAISED IS THAT THE LD. CIT(A) HAS ERRE D IN DELETING THE PENALTY OF RS. 5,14,870/- IMPOSED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) OF THE IT ACT. 3. IN THIS CASE DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD ADJUSTED BROUGHT FORWARD LOSSES AM OUNTING TO RS. 29,89,194/- AGAINST HIS INCOME AND HENCE THE TOTAL INCOME RETURNED AS N IL. THE ASSESSING OFFICER ASKED FOR DETAILS OF BROUGHT FORWARD LOSSES. THE ASSESSEE FILED REPLY INFORMING THAT THE ITA NO. 3036/DEL/2009 A.Y. 2005-06 2 BROUGHT FORWARD LOSSES AVAILABLE FOR SET OFF WAS R S. 15,17,142/- ONLY AS AGAINST RS. 29,89,194/- CLAIMED IN THE RETURN. THE ASSESSIN G OFFICER VERIFIED THE SAME AND ACCORDINGLY ALLOWED RS. 15,17,142/- AS BROUGHT FORW ARD LOSSES. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 2 71(1)(C) OF THE IT ACT. THE ASSESSEE EXPLAINED THAT ERRONEOUS FIGURE WAS TAKEN FROM TAX AUDIT REPORT AND IT WAS DUE TO ARITHMETIC ERROR THAT ERRONEOUS FIGURE OF BROUGHT FORWARD LOSSES WAS MENTIONED. IT WAS FURTHER STATED THAT THIS WAS DULY RECTIFIED AND REV ISED DETAILS FURNISHED DURING ASSESSMENT PROCEEDINGS. HOWEVER, THE EXPLANATION D ID NOT CONVINCE THE ASSESSING OFFICER ON PENALTY UNDER SECTION 271(1)(C). 4. ON ASSESSEES APPEAL THE LD. CIT(A) NOTED THAT T HE ASSESSEE HAD CLAIMED ORIGINALLY THE BROUGHT FORWARD LOSSES ON THE BASIS OF FIGURE M ENTIONED IN TAX AUDITED REPORT AND THERE WAS NO ACTUAL DETECTION BY THE DEPARTMENT ABO UT WRONG CLAIM. THE LD. CIT(A) FURTHER OBSERVED THAT IN RESPONSE TO THE GENERAL Q UERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE HAD ITSELF DISCOVERED THE MISTAKE AND R EVISED THE FIGURES. ACCORDINGLY, THE LD. CIT(A) CAME TO THE CONCLUSION THAT MISTAKE TOO K PLACE DUE TO THE FACT THAT THEY WERE TAKEN FROM THE TAX AUDITED REPORT AND THE REASON FOR THAT MISTAKE WAS ONLY CLERICAL IN NATURE. HENCE, THE CIT(A) DELETED THE LEVY OF PE NALTY. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. AS PER THE ADMITTED FACT OF THE CASE THE ASSESSEE HAS CLAIMED WRONG FI GURE OF BROUGHT FORWARD LOSSES WHICH ITA NO. 3036/DEL/2009 A.Y. 2005-06 3 WAS DULY RECTIFIED BY THE ASSESSEE DURING THE ASSES SMENT. REASON FOR THE SAME IS THAT THIS FIGURE WAS TAKEN FROM THE TAX AUDITED REPORT AN D IT WAS RESULTED OF SOME CLERICAL MISTAKE. IN OUR CONSIDERED OPINION THESE EXPLANAT IONS ARE COGENT AND CONVINCING ENOUGH. SECTION 271(1)(C) POSTULATES IMPOSITION O F PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS CA SE, WE FIND THAT THERE WAS NO SUCH ALLEGATION ON THE ASSESSEE AS REGARDS THE ACTUAL PR OFIT/ INCOME FOR THAT CONCERNED YEAR. IT WAS ONLY IN THE COMPUTATION OF TOTAL INCOME THA T THERE WAS MISTAKE IN THE BROUGHT FORWARD LOSSES FIGURES WHICH WAS ALSO DULY RECTIFIE D BY THE ASSESSEE DURING THE ASSESSMENT. HENCE IN OUR CONSIDERED OPINION THE AS SESSEE CANNOT BE HELD GUILTY SO AS TO IMPOSE PENALTY UNDER SECTION 271(1)(C) OF THE I T ACT. 7. IN THIS CONNECTION, WE DRAW SUPPORT FROM THE HON BLE APEX COURT IN THE DECISION RENDERED BY A LARGE BENCH COMPRISING OF THREE OF TH EIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 H ELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS T HE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PE NALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHO ULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF T HE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMST ANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR ITA NO. 3036/DEL/2009 A.Y. 2005-06 4 WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, WE CONFIRM THE SAME AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2009. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 4 TH SEPTEMBER, 2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES