M/s. Wacorp Hyundai India Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 3393/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77711 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 29-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: T R TALWAR
• Keywords: Depreciation; Wrong claim; Corroborative evidences; Revised return; Unabsorbed depreciation
• Section: 143(3); 142(1)

Judgement Text

ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI B.C.MEENA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.3393/DEL/2013 ASSESSMENT YEAR : 2008-09 M/S WACORP HYUNDAI INDIA PVT. LTD., VS INC OME TAX OFFICER, H-186, SECTOR 63, WARD 18(2), NEW DELHI. NOIDA-201301 (PAN:AAJCS0376H) (APPELLANT) (RESPO NDENT) APPELLANT BY: SHRI T.R . TALWAR RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX(A)-XXI, NEW DELHI DATED 31.12.2012 IN APPEAL NO. 142/11-12/835 FOR AY 2008-09 BY WHICH PE NALTY ORDER DATED 27.06.2011 HAS BEEN AFFIRMED AND THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. 2. ALTHOUGH THE ASSESSEE HAS TAKEN AS MANY AS SI X GROUNDS IN THIS APPEAL BUT EXCEPT GROUND NO.1, OTHER GROUNDS ARE ARGUMENTA TIVE AND SUPPORTIVE TO THE MAIN GROUND NO. 1 WHICH READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE PENALTY OF ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 2 RS.2,47,000/- IMPOSED U/S 271(1)( C) BY THE ASSESSI NG OFFICER IGNORING THE FACT THAT THE ASSESSEE HAS NEI THER CONCEALED THE PARTICULARS OF ITS INCOME NOR FURNISH ED INACCURATE PARTICULARS THEREOF. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME T AX ACT, 1961 (FOR SHORT THE ACT) ON 10.12.2010 AT AN INCOME OF RS.7,99,390 AS AGAINST NIL RETURNED INCOME FURNISHED AFTER SET OFF OF LOSSES OF EARLIER YEARS. THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY DATED 13.12.2010 ASK ED THE ASSESSEE TO FILE DETAIL OF BROUGHT FORWARD LOSSES AND UNABSORBED DEP RECIATION ALONG WITH SUPPORTING EVIDENCE AS CLAIMED IN THE RETURN OF INC OME. THE ASSESSEE VIDE ITS REPLY DATED 27.12.2010 SUBMITTED:- THAT THERE IS MISTAKE ON THE PART OF THE COMPANY HAVE CLAIMED LOSSES IN THE ASSESSMENT YEAR 2008-09 AND SURRENDER THE WRONG CLAIM OF CARRIED FORWARD OF LOS SES AND FILED A REVISED COMPUTATION. 4. SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PE NALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND A NOTICE U/S 274 OF THE AC T WAS SERVED ON THE ASSESSEE. THE ASSESSEE FILED A WRITTEN REPLY DATED 11.5.2011 WHEREIN THE ASSESSEE HAS CONTENDED THAT:- THAT THERE IS MISTAKE ON THE PART OF THE COMPANY D UE TO THE REASON THAT MR. PODDAR WHO IS LOOKING AFTER THE ACCOUNTS DEPARTMENT WAS SICK AND NOT ATTENDING THE OFFICE IN THE LAST WEEK OF SEPTEMBER 2008. HE JOINED THE OFFICE ON THE 30 TH SEPTEMBER 2008 AND AS THIS WAS THE LAST DAY OF ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 3 SUBMITTING THE RETURN.THE RETURN WAS FILED AT 11.3 0 P.M. TO AVOID ANY PENALTY U/S 271B AND THE OTHER RELEVAN T SECTION OF THE INCOME TAX ACT. 5. AFTER CONSIDERATION OF ASSESSEES SUBMISSIONS AN D CONTENTIONS, THE ASSESSING OFFICER PASSED PENALTY ORDER DATED 27.06. 2011 AND IMPOSED PENALTY OF RS. 2,46,997 U/S 271(1)(C) OF THE ACT. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(A) BUT REMAINED EMPTY HANDED BECAUSE THE APPEAL OF THE ASSESSEE WAS ALSO DISMISSED. NOW, THE AGGRIEVED ASSESSEE IS BEFORE THIS TRIBUNAL IN THIS SECOND APPEAL WITH THE MAIN GROUND AS MENTIONED HEREINABOVE. 6. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD AND PAPER BOOK FILED BY THE ASSE SSEE SPREAD OVER 23 PAGES. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IMPOSED PENALTY IGNORING THE FACT THAT THE ASSESSEE HAS NEITHER CONCEALED THE PARTICULARS OF ITS INCOME NOR FURNISHED ANY INACCUR ATE PARTICULARS THEREOF. LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX(A) GROSSLY ERRED IN UPHOLDING THE PENALTY AND I GNORING THE SUBMISSIONS OF THE ASSESSEE THAT THE INADVERTENT MISTAKE IN CLA IMING THE BROUGHT FORWARD LOSSES IN THE RETURN BY THE ACCOUNTS HEAD OF THE CO MPANY, WHO RETURNED FROM SICKNESS ON THE LAST DATE I.E. 30.09.2008, OCC URRED DUE TO RUSH OF FILING THE RETURN IN TIME WHICH WAS SUBSEQUENTLY RECTIFIED BY FILING THE REVISED ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 4 COMPUTATION OF INCOME BEFORE THE COMPLETION OF ASSE SSMENT. THE COUNSEL ALSO SUBMITTED THAT THE AUTHORITIES BELOW IGNORED T HE VERY FACT THAT THE TAX AUDIT REPORT FOR THE YEAR UNDER CONSIDERATION HAD C LEARLY SPECIFIED IN POINT NO. 25 IN FORM 3CD U/S 44AB OF THE ACT (PB PAGE NO. 19) THAT THE AMOUNT OF CARRY FORWARD OF BUSINESS LOSS WAS SHOWN AS NIL. 7. THE COUNSEL VEHEMENTLY CONTENDED THAT THE AUTHOR ITIES BELOW PASSED IMPUGNED ORDER BY IGNORING THE ASSESSEES SUBMISSIO N THAT THE ASSESSEE HAD NOT CLAIMED BROUGHT FORWARD LOSSES IN THE PREVIOUS ASSESSMENT YEAR VIZ. AY 2006-07 AND 2007-08 AND ALSO IN THE SUBSEQUENT YEAR S I.E. AY 2009-10 AND 2010-11. THE LD. COUNSEL HUMBLY SUBMITTED THAT THI S INADVERTENT MISTAKE OCCURRED IN HASTE BY THE ACCOUNTS HEAD WHILE PREPAR ING THE RETURN FOR THE CURRENT ASSESSMENT YEAR WHICH CANNOT BE SAID AS AN ACT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE COUNSEL CONC LUDED HIS ARGUMENTS WITH A FINAL SUBMISSION THAT THE COMMISSIONER OF INCOME TAX(A) AND THE ASSESSING OFFICER ACTED IN A MECHANICAL MANNER IN N OT ACCEPTING THE ASSESSEES BONA FIDE EXPLANATION THAT THE MISTAKE W AS INADVERTENT BY THE ACCOUNTS HEAD AND THE SAME WAS RECTIFIED BY WAY OF REVISED RETURN BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS AND THE SAME H AS BEEN FOUND TO BE FALSE BY THE ASSESSING OFFICER. THE COUNSEL OF THE ASSESSEE PLACED RELIANCE ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 5 ON THE FOLLOWING DECISIONS OF HONBLE SUPREME COURT , HONBLE JURISDICTIONAL HIGH OF DELHI AND HONBLE PUNJAB & H ARYANA HIGH COURT:- 1. PRICE WAREHOUSE COOPERS (P) LTD. (2012) 348 ITR 306 (SC) 2. COMMISSIONER OF INCOME TAX VS BRAHMAPUTRA CONSTRUCT ION LTD. (2011) 348 ITR 339 )DELHI) 3. COMMISSIONER OF INCOME TAX VS SIDHARTHA ENTERPRISES (2009) 184 TAXMAN 460 (P&H) 4. COMMISSIONER OF INCOME TAX VS ESCORTS FINANCE LTD. (2010) 328 ITR 44 (DELHI) 8. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT UND ISPUTEDLY, THE ASSESSEE MADE A CLAIM PERTAINING TO BROUGHT FORWARD LOSSES/UNABSORBED DEPRECIATION WHICH WAS NOTICED BY THE ASSESSING OFF ICER AND WHEN NOTICES U/S 143(2), 142(1) OF THE ACT ALONG WITH QUESTIONNA IRE WERE ISSUED TO THE ASSESSEE, THEN ONLY THE ASSESSEE INSTEAD OF FILING A REPLY, SUBMITTED A REVISED RETURN WITHDRAWING THE CLAIM OF BROUGHT FORWARD LOS SES. THE DR FAIRLY ACCEPTED THAT THE ASSESSEE HAD NOT CLAIMED BROUGHT FORWARD LOSSES IN PREVIOUS AND SUBSEQUENT ASSESSMENT YEARS BUT FURNIS HING OF WRONG CLAIM IS FURNISHING OF INACCURATE PARTICULARS OF INCOME WHIC H ATTRACTS PENALTY. THE DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AN D SUBMITTED THAT THE APPEAL OF THE ASSESSEE IS WITHOUT MERIT. ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 6 9. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E OBSERVE THAT UNDISPUTEDLY, THE ASSESSEE HAD NOT CLAIMED BROUGHT FORWARD LOSSES IN THE PREVIOUS ASSESSMENT YEAR VIZ. AY 2006-07 AND 2007-0 8 AND ALSO IN THE SUBSEQUENT YEARS VIZ. 2009-10 AND 2010-11. THE MAI N CONTENTION OF THE ASSESSEE IS THAT THE ACCOUNTS HEAD OF THE ASSESSEE COMPANY WAS IN BAD STATE OF HEALTH, WHO RETURNED FROM SICKNESS ON THE LAST D ATE OF FILING OF RETURN I.E. 30.09.2008 AND RETURN WAS FILED ON THE SAME DATE AT 11.30 P.M. IN A HURRY. DUE TO THIS UNAVOIDABLE CIRCUMSTANCE, THE INADVERTE NT MISTAKE IN CLAIMING THE BROUGHT FORWARD LOSSES OCCURRED WHICH WAS SUBSE QUENTLY RECTIFIED BY FILING THE REVISED COMPUTATION OF INCOME BEFORE THE COMPLETION OF ASSESSMENT. FROM PAGE NO. 13 TO 20A, WE MAY SEE TA X AUDIT REPORT U/S 44AB FOR THE YEAR UNDER CONSIDERATION WHEREIN ON PAGE NO . 19, BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION AS PER ANNEXURE 9 ON PAGE NO. 20A IS SHOWN AS NIL. THE DR HAS NOT DISPUTED THIS POINT T HAT THE ASSESSEE FILED A REVISED RETURN WITHDRAWING THE CLAIM OF BROUGHT FOR WARD LOSSES BEFORE COMPLETION OF ORIGINAL ASSESSMENT PROCEEDINGS. 10. ON THIS POINT, LD. COUNSEL OF THE ASSESSEE HAS STRESSED RATIO OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PR ICE WAREHOUSE COOPERS (P) LTD. (SUPRA) WHEREIN THEIR LORDSHIPS HELD THAT WHERE TAX AUDIT REPORT FILED ALONG WITH RETURN UNEQUIVOCALLY STATED THAT THE PRO VISION FOR PAYMENT OF ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 7 GRATUITY WAS NOT ALLOWABLE U/S 44A(7) OF THE ACT BU T DUE TO BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE FAILED TO ADD THE P ROVISION FOR GRATUITY TO ITS TOTAL INCOME. 11. IN THIS SITUATION, THE ASSESSEE COULD NOT BE HE LD TO BE GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR LEVYING PENALTY U/S 271(1) (C) OF THE ACT. RESPECTFULLY FOLLOWING THE ABOVE D ECISION OF HONBLE APEX COURT IN THE PRESENT CASE, WE ALSO OBSERVE THAT THE ASSESSEE MADE CLAIM FOR BROUGHT FORWARD LOSSES IN THE ORIGINAL RETURN BUT W HEN THE MISTAKE CAME TO THE NOTICE OF ASSESSEE, THE ASSESSEE CAME FORWARD T O FILE A REVISED RETURN AND WITHDRAWING THE CLAIM OF BROUGHT FORWARD LOSSES. F ORM 3CD OF TAX AUDIT REPORT HAS ALSO SHOWN THAT THE BROUGHT FORWARD LOSS ES AND UNABSORBED DEPRECIATION WAS SHOWN AS NIL IN ANNEXURE 9 AND ASS ESSEE DID NOT MAKE THE SAME CLAIM EITHER IN PREVIOUS YEARS OR IN SUBSEQUEN T ASSESSMENT YEARS. IN THIS SITUATION, WE ARE UNABLE TO SEE ANY MALAFIDE O R ANY DELIBERATE ACT ON THE PART OF THE ASSESSEE AND WITHOUT ANY HESITATION, WE HOLD THAT THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING OF INACCURATE P ARTICULARS OF ITS INCOME, SPECIALLY WHEN THE ASSESSEE FILED A REVISED RETURN IMMEDIATELY AFTER NOTICING THE MISTAKE. 12. IN VIEW OF ABOVE, WE HOLD THAT THE ACTION OF TH E ASSESSING OFFICER IMPOSING THE PENALTY WAS WRONGLY UPHELD BY THE COMM ISSIONER OF INCOME ITA NO. 3393/DEL/2013 ASSTT.YEAR: 2008-09 8 TAX(A) AND AS PER OUR FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT A PENALTY CANNOT BE IMPOSED ON THE ASS ESSEE FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, SOL E GROUND OF THE ASSESSEE IS ALLOWED AND PENALTY IMPOSED U/S 271(1)(C) OF THE AC T IS DIRECTED TO BE DELETED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.04.2014. SD/- SD/- (B.C. MEENA) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 24 TH APRIL 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR