B.D. Khaitan & Company Ltd., Kolkata V. ACIT, Circle - 5, Kolkata, Kolkata

ITA 310/KOL/2012

• Counselvise Citation: 31023514 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N M BHANSALI
• Keywords: Bonafide mistake; Ignorance of law

Judgement Text

I.T.A. NO.: 310/KOL./2012 ASSESSMENT YEAR : 2006-07 PAGE 1 TO 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) I.T.A. NO.: 310/KOL./ 2012 ASSESSMENT YEAR : 2006-2007 B.D. KHAITAN & COMPANY LIMITED,................... ..APPELLANT 23A, NETAJI SUBHAS ROAD, 6 TH FLOOR, ROOM NO. 14, KOLKATA-700 001 [PAN :AABCB 1075 E] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. .........RESPONDENT CIRCLE-5, AAYAKAR BHAWAN, KOLKATA P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI N.M. BHANSALI, ADVOCATE, FOR THE APPELLANT SRI SABOORUL HASAN USMANI, JCIT, SR. D.R. FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 17, 2013 DATE OF PRONOUNCING THE ORDER : DECEMBER 30, 2013 O R D E R PER ABRAHAM P. GEROGE : 1. IN THIS APPEAL FILED BY THE ASSESSEE, IT ASSAILS PENALTY OF RS.48,043/- LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX AC T, 1961 (IN SHORT THE ACT), WHICH WAS CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA. 2. FACTS APROPOS ARE THAT THE ASSESSEE DOING CONSUL TANCY IN INSURANCE HAD FILED ITS RETURN DECLARING AN INCOME OF RS.29,4 6,563/-. ASSESSEE HAD A LOSS OF RS.1,42,729/- ON SALE OF FIXED ASSETS INCUR RED DURING THE RELEVANT PREVIOUS YEAR. THIS WAS NOT ADDED BACK IN ITS COMPU TATION. THEREFORE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY MAKIN G AN ADDITION OF THIS I.T.A. NO.: 310/KOL./2012 ASSESSMENT YEAR : 2006-07 PAGE 1 TO 3 2 AMOUNT. PENALTY PROCEEDINGS FOR FURNISHING INACCURA TE PARTICULARS WERE INITIATED. IN REPLY TO THE SHOW-CAUSE NOTICE ASSESS EE THAT NON-RECKONING OF THE LOSS IN THE COMPUTATION OF INCOME WAS ONLY A TECHNICAL MISTAKE AND DID NOT TANTAMOUNT TO ANY CONCEALMENT OF INCOME. AS PER THE ASSESSEE, IT WAS A GENUINE LOSS AND BEING A BONAFIDE MISTAKE, WO ULD NOT ATTRACT PENALTY. FURTHER AS PER THE ASSESSEE RETURN WAS E-F ILED FOR THE FIRST TIME. BEING THE FIRST YEAR FOR FILING RETURN ONLINE, ASSE SSEE COULD FIND NO APPROPRIATE COLUMN FOR MAKING A SUO MOTU DISALLOWAN CE, RESULTING IN THE MISTAKE. HOWEVER, ASSESSING OFFICER WAS NOT IMPRESS ED. ACCORDING TO HIM EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SSESSEE DID NOT RECTIFY THE MISTAKE. ASSESSEE WAS HELD GUILTY OF FU RNISHING INACCURATE PARTICULARS OF INCOME. A PENALTY OF RS.48,043/- WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 3. ASSESSEE APPEALED BEFORE THE LD. CIT(APPEALS), B UT DID NOT MEET WITH ANY SUCCESS. ACCORDING TO THE LD. CIT(APPEALS) BUT FOR THE SCRUTINY OF THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS DONE BY T HE ASSESSING OFFICER, THE MISTAKE COMMITTED BY THE ASSESSEE WOULD NOT HAV E BEEN NOTICED. AS PER LD. CIT(APPEALS), IGNORANCE OF LAW WAS NO EXCUS E. HE, THEREFORE, CONFIRMED THE PENALTY. 4. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE PEN ALTY SUBMITTED THAT IT WAS A MISTAKE WHICH DID NOT TANTAMOUNT TO CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LOWER AUTHORITIES HAD ACCEPTED THAT IT WAS A SIMPLE MISTAKE OF THE ASSESS EE. ACCORDING TO HIM, A SIMPLE MISTAKE WOULD NOT BE SUFFICIENT TO FASTEN A PENAL PROVISION ON THE ASSESSEE. PER CONTRA, LD. DR SUPPORTED THE ORDER OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WHAT WE FIND IS THAT THE ASSES SING OFFICER HAD HIMSELF ACCEPTED THAT NON-ADDITION OF LOSS ON SALE OF FIXED ASSETS OF RS.1,42,729/-, SUO MOTU BY THE ASSESSEE, WAS ONLY A MISTAKE. THERE IS NO I.T.A. NO.: 310/KOL./2012 ASSESSMENT YEAR : 2006-07 PAGE 1 TO 3 3 DISPUTE THAT IT WAS THE FIRST YEAR OF E-FILING OF R ETURN. THEREFORE IT WAS VERY POSSIBLE FOR SUCH A MISTAKE TO HAPPEN. ONCE IT IS ACCEPTED AS A SIMPLE MISTAKE OF THE ASSESSEE AND NOT MADE WITH AN Y INTENTION OF CONCEALING ANY INCOME, WE CANNOT SAY THAT THERE IS ANY ELEMENT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. NONE OF THE LOWER AUTHORITIES HAS POINTED OUT AS TO WHAT IN ACCURATE PARTICULARS WERE FILED BY THE ASSESSEE WITH REGARD TO THE LOSS ON SALE OF FIXED ASSETS. OBVIOUSLY LOSS ON SALE OF FIXED ASSETS WAS MENTIONE D BY THE ASSESSEE ITSELF IN ITS BOOKS OF ACCOUNTS. HONBLE APEX COURT IN THE CASE OF PRICE WATER HOUSE COOPERS PVT. LTD. VS.- CIT [348 ITR 30 6] HELD THAT EVEN A REPUTED FIRM LIKE PRIME WATERHOUSE COOPERS PVT. LTD . HAVING GREAT EXPERTISE COULD MAKE A SILLY MISTAKE IN COMPUTATION AND IF SUCH MISTAKE IS BONAFIDE AND INADVERTENT CANNOT LEAD TO A PENALTY U NDER SECTION 271(1)(C). THIS IS ALL THE MORE A GOOD REASON FOR U S TO REACH AN OPINION THAT THIS WAS NOT A FIT CASE WHERE WE CAN SAY THAT ASSESSEE HAD CONCEALED ANY INACCURATE PARTICULARS IN RESPECT OF ITS INCOME . IN OUR OPINION, LEVY OF PENALTY UNDER SECTION 271(1)(C) WAS NOT WARRANTED. SUCH PENALTY STANDS QUASHED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF DECEMBER, 2013. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 30 TH DAY OF DECEMBER, 2013 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT(APPEALS) (4) CIT (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.