TULSIDAS KHIMJI P. LTD, MUMBAI V. ACIT 2(3)(1), MUMBAI

ITA 3368/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6407 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 20-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGHLD
• Keywords: TDS; FORM 26AS
• Section: 271(1)(c); 143(3); 115JB

Judgement Text

ITA NO.3368/MUM/2019 TULSIDAS KHIMJI PRIVATE LIMITED ASSESSMENT YEAR-2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.3368/MUM/2019 ( / ASSESSMENT YEAR:2014-15) M/S. TULSIDAS KHIMJI PRIVATE LIMITED 2 ND FLOOR, ISLAM BUILDING 46 VEER NARIMAN ROAD, FORT MUMBAI-400 001. / VS. A CIT CIRCLE - 2 ( 3)(1 ) 5 TH FLOOR, ROOM NO.552 AAYKAR BHAVAN MUMBAI- 400 020. !'./'./PAN/GIR NO. AAACT-4123-G ( ! /APPELLANT ) : ($% ! / RESPONDENT ) !'/ APPELLANT BY : NONE $% !'/ RESPONDENT BY : SHRI AMIT PRATAP SINGH-LD. DR / DATE OF HEARING : 21/09/2020 / DATE OF PRONOUNCEMENT : 21/09/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST LEVY OF PENALT Y U/S 271(1)(C) AS CONFIRMED BY LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-6, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)] VIDE APP EAL NO. CIT(A)- ITA NO.3368/MUM/2019 TULSIDAS KHIMJI PRIVATE LIMITED ASSESSMENT YEAR-2014-15 6/IT-14/2017-18 ORDER DATED 30/04/2019. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: - 1.1 THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE AO BY LEVYING PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 W ITH REGARD TO INCOME MISMATCH AS PER 26AS AND AS PER THE BOOKS OF ACCOUNT. 1.2 WHILE DOING SO HE FAILED TO APPRECIATE THAT (I) THE SAID PENALTY WAS LEVIED BY THE AO ON AN ERR ONEOUS UNDERSTANDING OF LAW WHICH WAS CONFIRMED BY THE CIT (A) WITHOUT ACCORDING ANY INDEPENDENT REASONING WHATSOEVER. 1.3 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE AND IN LAW NO SUCH PENALTY WAS CALLED FOR. THOUGH DURING COURSE OF HEARING NONE APPEARED FOR A SSESSEE, HOWEVER, WE FIND THAT FACTUAL MATRIX AS NARRATED IN THE ORDERS OF LOWER AUTHORITIES IS QUITE ADEQUATE TO ADJUDICATE T HIS APPEAL. THEREFORE, THE MATTER WAS PROCEEDED FURTHER WITH TH E ASSISTANCE OF LD. DR, SHRI AMIT PRATAP SINGH, WHO CONTENDED THAT PENALTY WAS JUSTIFIED. 2.1 FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT WHILE FRAMING AN ASSESSMENT U/S 143(3) FOR YEAR UNDER CONSIDERATION, AN ADDITION OF RS.9,79,921/- WAS MADE TO THE INCOME OF THE ASSESSE E OWING TO MISMATCH IN INCOME AS PER BOOKS VIS--VIS INCOME AS REPORTED IN FORM 26AS. THE ASSESSEE SUBMITTED THAT IT WAS ENGAG ED AS CLEATING AND FORWARDING AGENT AND THERE WOULD BE NU MEROUS CLIENTS WHO DEDUCT TDS ON MANY OCCASIONS BUT WOULD DEPOSIT THE TAX AFTER FILING OF THE TAX RETURN BY THE ASSESSEE. BUT FINDI NG THE EXPLANATION TO BE NOT TENABLE, THE AFORESAID DIFFERENCE WAS ADD ED TO THE INCOME OF THE ASSESSEE. 2.2 CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATE D IN THE QUANTUM ASSESSMENT ORDER AND SHOW-CAUSE NOTICE FOR LEVY OF ITA NO.3368/MUM/2019 TULSIDAS KHIMJI PRIVATE LIMITED ASSESSMENT YEAR-2014-15 PENALTY WAS ISSUED. ALTHOUGH THE ASSESSEE EXPLAINED VARIOUS FACTORS WHICH WOULD GIVE RISE TO MISMATCH IN INCOME AS PER BOOKS VIS--VIS INCOME AS REPORTED IN FORM 26AS, THE SAME COULD NOT CONVINCE LD. AO AND THE ASSESSEE WAS SADDLED WITH P ENALTY OF RS.3,02,800/- U/S 271(1)(C) VIDE ORDER DATED 28/06/ 2017. THOUGH, THE ASSESSEE CONTESTED THE PENALTY BEFORE LD. FIRST APPELLATE AUTHORITY, HOWEVER, THE SAME WAS CONFIRMED VIDE APP ELLATE ORDER DATED 30/04/2019 AGAINST WHICH THE ASSESSEE IS IN F URTHER APPEAL BEFORE US. 2.3 WHILE CONTESTING PENALTY BEFORE LD. CIT(A), THE ASSESSEE TABULATED AS WELL AS EXPLAINED THE PARTY-WISE DIFFE RENCES GIVING RISE TO MISMATCH IN FORM NO. 26AS. THE SUBMISSIONS ARE E XTRACTED ON PAGE 4 & 5 OF THE IMPUGNED ORDER, WHICH WE HAVE CAR EFULLY PERUSED. ON THE STRENGTH OF THE SAME, THE ASSESSEE RAISED A PLEA TO DELETE THE QUANTUM ADDITIONS ALSO. HOWEVER, LD. CIT(A) OPINED THAT NO COGNIZANCE OF THE RECONCILIATION COULD BE T AKEN SINCE THE APPEAL WAS AGAINST THE PROCEEDINGS U/S 271(1)(C) AN D NOT AGAINST THE QUANTUM PROCEEDINGS. THE ASSESSEES ANOTHER CON TENTION THAT TAX WAS PAID ON THE BASIS OF BOOK PROFIT U/S 115JB WAS ALSO REJECTED SINCE AS PER QUANTUM ORDER, THE MISMATCH D IFFERENCE WAS ADDED WHILE COMPUTING BOOK PROFITS U/S 115JB ALSO. FINALLY, THE ACTION OF LD. AO IN IMPOSING THE PENALTY WAS UPHELD . AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. UPON CAREFUL CONSIDERATION OF ORDERS OF LOWER AU THORITIES, IT IS QUITE EVIDENT FROM ASSESSEES SUBMISSIONS (AS EXTRA CTED ON PAGE ITA NO.3368/MUM/2019 TULSIDAS KHIMJI PRIVATE LIMITED ASSESSMENT YEAR-2014-15 NOS. 4 & 5 OF THE IMPUGNED ORDER) THAT THE ASSESSEE WAS SUCCESSFUL IN RECONCILING THE MISMATCH DIFFERENCE. THE MISMATC H AROSE DUE TO DIFFERENCE IN REVENUE RECOGNITION POLICY AS FOLLOWE D BY THE ASSESSEE VIS--VIS ASSESSEES CUSTOMERS. IN SOME CA SES, THE INCOME WAS ALREADY OFFERED BY THE ASSESSEE IN EARLI ER YEARS. TO SUBSTANTIATE THE SUBMISSIONS, CUSTOMERS LEDGER EXT RACTS WERE ALSO ENCLOSED. THEREFORE, THERE COULD BE NO OCCASION TO CONCLUDE THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF IN COME OR CONCEALED THE INCOME SO AS TO ATTRACT THE PENALTY U /S 271(1)(C). SIMPLY BECAUSE THE ASSESSEE DID NOT CONTEST THE QUA NTUM ADDITIONS ANY FURTHER, THE SAID FACT ALONE COULD NO T BE A GOOD GROUND TO CONFIRM THE PENALTY AGAINST THE ASSESSEE. IT WAS NOT A CASE THAT NO EXPLANATION WAS FURNISHED BY THE ASSES SEE OR THE EXPLANATION FURNISHED WAS NOT BONA-FIDE. THE ASSESS MENT PROCEEDINGS AS WELL AS PENALTY PROCEEDINGS ARE SEPA RATE PROCEEDINGS AND THE ASSESSEE COULD ASSAIL THE PENAL TY BY CHALLENGING THE QUANTUM ADDITIONS ITSELF, THOUGH NO T SEPARATELY CHALLENGED. THE GIVEN FACTUAL MATRIX DOES NOT CONVI NCE US TO CONFIRM THE PENALTY AGAINST THE ASSESSEE. THEREFORE , BY DELETING THE SAME, WE ALLOW THE APPEAL. 5. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 21 ST SEPTEMBER, 2020. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ITA NO.3368/MUM/2019 TULSIDAS KHIMJI PRIVATE LIMITED ASSESSMENT YEAR-2014-15 MUMBAI; DATED : 21/09/2020 SR.PS:-JAISY VARGHESE JK LK / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. $% ! / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT CONCERNED 5. 34$)5 , 5 , / DR, ITAT, MUMBAI 6. 4678 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.