SRF Limited, New Delhi V. ACIT, New Delhi

ITA 3090/DEL/2010

• Counselvise Citation: 309020114 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-08-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTY SENIOR
• Keywords: Bonafide mistake
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMEBR AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.3090/DEL./2010 (ASSESSMENT YEAR : 2002-03) M/S. SRF LIMITED, VS. ACIT, CIRCLE 9 (1), BLOCK C, SECTOR 45, NEW DELHI. GURGAON (HARYANA). (PAN : AAACS9331Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATYEN SETHI, ADVOCATE REVENUE BY : SMT. SURJANI MOHANTY, SENIOR DR ORDER PER T.S. KAPOOR, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT (APPEALS) DATED 10.03.2010. THE GROUNDS OF APPEAL TAKEN BY T HE ASSESSEE ARE AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) XII, NEW DELHI [BRIEFLY THE CIT (A)] HAS ERRED IN UPHOLDIN G THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY OF RS.39,6 6,997/- UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) FAILED TO APPRECIATE THAT ALLEGED INACCURATE PARTICULARS OF ITS INCOME WAS NOTHING BUT INADVERTE NT MISTAKE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS IMPOSED A PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DECLARING A WRONG FIGURE IN THE ITA NO.3090/DEL/2010 2 COMPUTATION OF INCOME WHICH WAS PROFIT ON SALE OF A SSETS. THE ASSESSEE HAD CLAIMED THE AMOUNT OF RS.1,99,57,525/- AS PROFIT OF SALE OF ASSETS WHEREAS THE ACTUAL FIGURE OF PROFIT ON SALE OF ASSETS WAS RS.86 ,90,541/-. THE ASSESSING OFFICER, AFTER MAKING ADDITION EQUIVALENT TO THE DI FFERENCE, ALSO PROCEEDED TO IMPOSE PENALTY U/S 271(1)(C). THE SUBMISSION OF TH E ASSESSEE BEFORE A.O. WAS THAT IT WAS AN INADVERTENT ERROR IN ADOPTING THE FI GURE OF PROFIT ON SALE OF FIXED ASSETS FROM UNIT-WISE COMPUTATION TO MAIN COMPUTATI ON AND THERE WAS NO MALAFIDE INTENTION TO GIVE WRONG INFORMATION, WAS N OT ACCEPTED BY ASSESSING OFFICER AND HE IMPOSED A PENALTY OF RS.39,66,997/-. DIS-SATISFIED WITH THE ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT (A) AND SUBMITTED THAT NO INACCURATE PARTICULARS WERE FURNISHED AND IT WAS A BONAFIDE MISTAKE AND, THEREFORE, PENALTY IN THIS CASE WAS NOT IMPOSABLE. THE LD. CIT (A) HELD THAT ASSESSEE HAD ADMITTED THE MISTAKE AFTER THE MISTAKE WAS POINTED OUT TO IT AND IT HAD NOT TAKEN ANY STEPS TO RECTIFY THE MISTAKE SUO MOTO OVER A LONG PERIOD. MOREOVER, HE HELD THAT ASSESSEES ACCOUNTS WERE AUD ITED AND THE COMPANY WAS A PROFESSIONALLY MANAGED COMPANY AND HENCE, THE ARG UMENT OF MISTAKE WAS NOT ACCEPTABLE. THEREFORE, HE UPHELD THE PENALTY IMPOS ED BY ASSESSING OFFICER. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED APPEAL B EFORE THE TRIBUNAL. 3. AT THE OUTSET, THE LD. AR ARGUED THAT THE MISTAK E WAS A BONAFIDE MISTAKE. IN THIS RESPECT, HE TOOK US TO PAGE 23 OF THE PAPER -BOOK WHEREIN UNDER SCHEDULE 14 OF OTHER INCOME, PROFIT ON SALE OF ASSETS UN DER THE COLUMN HEAD OFFICE WAS SHOWN AT RS.86,90,541/- AND PROVISION NO LONGE R REQUIRED WAS AT RS.1,99,57,525/-. THE LD. AR SUBMITTED THAT INSTEA D OF TAKING THE FIGURE OF ITA NO.3090/DEL/2010 3 RS.86,90,541/- INTO THE COMPUTATION OF INCOME AS PL ACED AT PAGE 11 OF PAPER- BOOK, THE ASSESSEE COMPANY TOOK THE IMMEDIATE BENEA TH FIGURE OF RS.1,99,57,525/- AND, THEREFORE, THE MISTAKE HAD HA PPENED. HE FURTHER ARGUED THAT WHEN MISTAKE WAS POINTED OUT BY ASSESSING OFFI CER THE ASSESSEE NEVER CONTESTED AND PAID THE DIFFERENCE IN TAX. HE FURTH ER ARGUED THAT THE COMPANY HAD PAID TAX U/S 115JB OF THE ACT AND HE POINTED OU T THAT IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LTD. REPORTED IN 327 ITR 543, IT WAS HELD BY DELHI HIGH COURT THAT WHEN ASSESSMENT IS MADE ON INCOME C OMPUTED U/S 115JB AND TAX HAD BEEN PAID THEREON, PENALTY WAS NOT LEVIABLE U/S 271(1)(C) ON THE ADDITION MADE BY ASSESSING OFFICER. HE FURTHER SUB MITTED THAT THE ABOVE JUDGMENT HAS BEEN CONFIRMED BY HON'BLE SUPREME COUR T, A COPY OF WHICH WAS PLACED BEFORE THE BENCH. 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DER OF THE ASSESSING OFFICER AND CIT (A) AND SUBMITTED THAT HAD THERE BE EN A GENUINE MISTAKE THE ASSESSEE WOULD HAVE ITSELF POINTED OUT ABOUT THE MI STAKE AND THE MISTAKE WAS CORRECTED AFTER A GAP OF 28 MONTHS AND THAT TOO WHE N POINTED OUT BY THE DEPARTMENT. THEREFORE, HE ARGUED THAT ASSESSING OF FICER HAS RIGHTLY IMPOSED THE PENALTY U/S 271(1)(C). RELIANCE WAS PLACED IN THE CASE OF MOMAN RAM RAM KUMAR VS. CIT REPORTED IN 59 ITR 135 AND IN THE CASE OF WAMAN PADAMNABH DANDE VS. CIT, NAGPUR REPORTED IN 22 ITR 331. 5. LD. AR, IN HIS REJOINDER, SUBMITTED THAT SINCE I T WAS A MISTAKE AND ASSESSEE COULD RECTIFY ONLY WHEN THE MISTAKE WAS BR OUGHT BEFORE ITS NOTICE. ITA NO.3090/DEL/2010 4 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE HAVE OBSERVED THAT ASSESSEE H AD PAID TAXES U/S 115JB AND HON'BLE SUPREME COURT HAS ALREADY DISMISSED THE APPEAL OF REVENUE IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LIMITED, CITE D SUPRA, WHEREIN IT WAS HELD THAT PROVISIONS OF SECTION 271(1)(C) ARE NOT A PPLICABLE WHERE INCOME IS COMPUTED U/S 115JB OF THE ACT. FOLLOWING THE JUDGM ENT OF HON'BLE SUPREME COURT, WE HOLD THAT PENALTY U/S 271(1)(C) IS NOT IM POSABLE. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF OCTOBER, 2012. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 12 TH DAY OF OCTOBER, 2012 TS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XII, NEW DELHI 5. CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI