SPICE LIFE EXPORTS P.LTD, MUMBAI V. ASST CIT RG 5(3), MUMBAI

ITA 3896/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4187 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B V JHAVERI
• Keywords: Period of limitation; Revised return; Bonafide mistake
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , !'#$ , % &' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NO. 3896/MUM/2012 ( ( ( ( ( / ASSESSMENT YEAR : 2008-09 M/S. SPICE LIFE EXPORTS PVT. LTD., COMMONWEALTH BLDG., 1 ST FLOOR, 82, NAGINDAS MASTER ROAD, MUMBAI - 400 001 THE ACIT, RANGE-5(3), AAYAKAR BHAVAN, MUMBAI-400 020 ') % ./ *+ ./PAN/GIR NO. : AAFCS 3777G ( ), /APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : ` SHRI B.V. JHAVERI -.), 0 / /RESPONDENT BY : SHRI ABANIKANTA NAYAK 0 12% / DATE OF HEARING :01.07.2013 34( 0 12% / DATE OF PRONOUNCEMENT :05.07.2013 &5 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-9, MUMBAI DT.4.4.2012 PERTAINING TO A.Y . 2008-09. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING PENALTY OF RS. 4,64,564/- U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASS ESSMENT ORDER DT. 19.10.2010 PASSED U/S. 143(3) OF THE ACT. DURING T HE COURSE OF THE ITA NO.3896/M/2012 2 ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO G IVE CLARIFICATION AND DETAILS IN RESPECT OF CURRENT LOSS CLAIMED AT RS. 4 8,46,361/- IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER OBSERVED T HAT UNDER SCHEDULE-J, THE ASSESSEE HAS DEBITED RS. 13,66,768 ON ACCOUNT O F LOSS ON SALE OF ASSETS. WHEN THIS ITEM WAS CONFRONTED TO THE ASSES SEE, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME AND ADDED BACK THE LOSS ON SALE OF ASSETS SO CLAIMED AT RS. 13,66,768/-. THE AO WAS O F THE OPINION THAT THE ASSESSEE SHOULD HAVE FILED A REVISED RETURN INSTEAD OF FILING A REVISED COMPUTATION OF INCOME. ON THAT FINDING, THE AO INI TIATED PENAL PROCEEDINGS U/S. 271(1)(C) OF THE ACT. REQUISITE N OTICES WERE ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED FOR FILING OF INACCURATE PARTI CULARS. THE ASSESSEE FILED A DETAILED REPLY VIDE LETTER DT. 27.4.2011. IT WAS EXPLAINED THAT DUE TO CLERICAL ERROR, THE ASSESSEE COULD NOT ADD BACK TH E LOSS ON SALE OF ASSETS DEBITED TO THE PROFIT AND LOSS ACCOUNT. IT WAS FUR THER EXPLAINED THAT IT IS A CASE WHERE A CLAIM PUT FORTH BY THE ASSESSEE AS REG ARDS THE LOSS WAS NOT ACCEPTED BUT THAT WOULD NOT PER SE TANTAMOUNT TO FURNISHING ANY KIND OF INACCURATE PARTICULARS. THE ASSESSEE HAS IMMEDIATE LY ADDED BACK THE LOSS ON SALE OF ASSETS BY FILING A REVISED COMPUTATION O F INCOME. THUS THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INA CCURATE PARTICULARS. THE AO REJECTED THE EXPLANATION OFFERED BY THE ASSE SSEE. IT IS THE SAY OF THE AO THAT THE ASSESSEE FILED REVISED COMPUTATION OF INCOME ONLY WHEN IT WAS POINTED OUT TO IT AFTER DETECTING THE CLAIM OF SUCH LOSS. THE AO FINALLY CONCLUDED THAT THE ASSESSEE OUGHT TO HAVE F ILED REVISED RETURN INSTEAD OF FILING REVISED COMPUTATION OF INCOME AND WENT ON TO LEVY MINIMUM PENALTY AT RS. 4,64,565/-. 4. THE ASSESSEE STRONGLY AGITATED THIS MATTER BEFOR E THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. THE LD. CIT(A) RELIED UPO N THE DECISION OF ITA NO.3896/M/2012 3 HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA & ORS. VS DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277 AND CONFIRMED THE PENALTY LEVIED BY THE AO. 5. AGGRIEVED BY THIS FINDING OF LD. CIT(A), ASSESSE E IS BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. DRAWING OU R ATTENTION TO PAGE-4 OF THE PAPER BOOK, THE LD. COUNSEL SUBMITTED THAT U NDER THE HEAD OPERATING & ADMINISTRATIVE EXPENSES DETAILS OF WH ICH ARE PROVIDED UNDER SCHEDULE-J WHICH IS EXHIBITED AT PAGE-7 OF TH E PAPER BOOK. INADVERTENTLY, THE ASSESSEE HAS DEBITED A SUM OF RS . 13,66,768/- BEING THE LOSS ON SALE OF ASSET. IT IS THE SAY OF THE LD. CO UNSEL THAT WHILE COMPUTING THE INCOME IN THE YEAR UNDER CONSIDERATION, THE ASS ESSEE OUGHT TO HAVE ADDED BACK THIS AMOUNT TO THE RETURNED INCOME FOR T HE YEAR. HOWEVER, DUE TO OVERSIGHT, IT COULD NOT BE ADDED BACK. HOWE VER, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, WHEN THIS MISTAKE WA S BROUGHT TO THE NOTICE OF THE ASSESSEE, THE ASSESSEE IMMEDIATELY FI LED A REVISED COMPUTATION OF INCOME. THEREFORE, IT IS NOT THE CA SE OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL EVIDENCE BRO UGHT ON RECORD IN THE FORM OF PAPER BOOK. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS CHARGED LOSS ON SALE OF ASSETS TO OPERATING & ADMINISTRATI VE EXPENSES. IT IS ALSO AN ADMITTED FACT THAT WHEN THIS WAS BROUGHT TO TH E NOTICE OF THE ASSESSEE IT IMMEDIATELY FILED A REVISED COMPUTATION OF INCOM E AND ADMITTED THE ERROR. THE CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE THAT DUE TO ITA NO.3896/M/2012 4 OVERSIGHT, THIS AMOUNT REMAINED TO BE ADDED BACK H AS SOME FORCE IN IT BECAUSE THE ASSESSEE NOT ONLY ADMITTED ITS MISTAKE BUT THE MATTER ENDED THEN AND THERE ONLY. MEANING THEREBY, THAT THE ASS ESSEE DID NOT CARRY THIS ISSUE IN APPEAL IN QUANTUM PROCEEDINGS. THE SOLE G RIEVANCE OF THE REVENUE IS THAT THE MISTAKE OUGHT TO HAVE BEEN RECT IFIED BY FILING A REVISED RETURN OF INCOME. HOWEVER, IT IS NOTICED T HAT THE PERIOD OF LIMITATION FOR FILING THE REVISED RETURN HAS EXPIRE D. IN ANY EVENT, IT IS NOT DISPUTED THAT IT IS A BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE. IN THAT VIEW OF THE MATTER IMPOSITION OF PENALTY IS NOT WAR RANTED. WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 WHEREIN THE HON BLE SUPREME COURT HAS HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE . RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (SUPRA), WE DIRECT THE AO TO CANCEL THE PENALTY SO LEVIED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2013 . &5 0 4( % 6 7&8 5.7.2013 4 0 9 SD/- SD/- (H.L. KARWA ) (N.K . BILLAIYA ) / PRESIDENT % &' / ACCOUNTANT MEMBER MUMBAI; 7& DATED 05.07.2013 . . ./ RJ , SR. PS ITA NO.3896/M/2012 5 &5 &5 &5 &5 0 00 0 -1! -1! -1! -1! :!(1 :!(1 :!(1 :!(1 / COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. !<9 -1 , , / DR, ITAT, MUMBAI 6. 9= > / GUARD FILE. &5 &5 &5 &5 / BY ORDER, .!1 -1 //TRUE COPY// ? ?? ? / @ @ @ @ * * * * (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI