Ahaar Consumer Products Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 3903/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3455 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 19-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KHURANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.K. HALDAR ITA NO. 3903 /DEL/2010 ASSTT. YR: 2006-07 AHAAR CONSUMER PRODUCTS PVT. LTD. VS. INCOME-TAX OFFICER, G-37, LAWRENCE ROAD INDL. AREA, WARD 1(2), NEW DEL HI. NEW DELHI. PAN/GIR NO. AAACF8541N ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SURESH GUPTA CA RESPONDENT BY : MS. KHURANA SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST THE CIT(A)S ORDE R DATED 28-5-2010 RELATING TO A.Y. 2006-07. SOLE GROUND RAISED IS UND ER: THE LD. CIT(A) HAS ERRED BOTH LAW & FACTS IN CONFI RMING IMPOSING THE PENALTY AS PER THE IMPUGNED ORDER IGNO RING THE FACT THAT THERE WAS NO CONCEALMENT OF THE FBT PAYME NTS AS THE ASSESSEE HAD DEPOSITED FBT PAYMENT EXCEEDING THE AM OUNT OF FBT ASSESSED AS PER ORDER U/S 115WE(3) OF THE ACT. 2. BRIEF FACTS ARE THAT ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNT AND WAS LIABLE FOR TAX ON VALUE OF FRINGE BENEFITS. THE EXPENDITURE QUA WHICH FBT WAS PAYABLE WAS DULY RECORDED IN THE BOOKS OF A CCOUNT AND PAID ADVANCE FBT OF RS. 45,000/- ON SUCH EXPENDITURE. TH ERE IS NO DISPUTE ABOUT THESE FACTS. THIS WAS THE FIRST YEAR OF LEVY OF FBT AND FILING OF E-RETURN OF INCOME. WHILE FILING ITS E-RETURN, ASSESSEE FAILED TO ENTER DATA ABOUT FBT EXPENDITURE AND ADVANCE TAX PAYMENT, THUS THE RELEV ANT PORTION OF E-RETURN WAS LEFT BLANK. DURING THE COURSE OF ASSESSMENT, AO ASSESSED THE FBT AND ITA 605/DEL/11 BT TELECOM INDIA P. LTD. 2 INITIATED THE IMPUGNED PENALTY PROCEEDINGS. ASSESSE E EXPLAINED ABOUT THE NEW E-RETURN AND FBT REGULATORY REGIME AND ITS BON A FIDES OF HAVING PAID THE FB ADVANCE TAX AND NO CLAIM FOR ANY REFUND. IT WAS PLEADED THAT THERE WAS NEITHER WILLFUL CONCEALMENT NOR MALA FIDE INTEN TION IN THIS. AO, HOWEVER, HELD THAT ASSESSEE COMMITTED A DEFAULT AND ESTABLISHMENT OF CONCEALMENT WAS NOT ESSENTIAL INGREDIENT AND IMPOSE D THE PENALTY. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WHERE C IT(A) CONFIRMED THE VIEW OF THE AO. AGGRIEVED, ASSESSEE IS BEFORE US. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS: (I) DETAILS OF ACCOUNT AND EXPENDITURE QUA WHICH FBT W AS PAYABLE, WERE DULY INCORPORATED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT WHICH ARE DULY AUDITED AND FILED WITH THE RETURNS, THUS ALL THE MATERIAL FACTS WERE FURNISHED WITH RETURN. (II) THE AMOUNT OF RS. 45,000/- PAID BY THE ASSESSEE ON 16-3-2006 AS ADVANCE FBT TAX WAS THROUGH ITS BOOKS OF ACCOUNTS AND BANK STATEMENT. FBT AND E-FILING OF RETURN ARE NEW DISP ENSATIONS IN THIS YEAR AND BY AN OVERSIGHT, ASSESSEE IN THE RETURN OF INCOME MENTIONED NIL AGAINST THE VALUE OF FRINGE BENEFIT . ASSESSEE HAD NO MALA FIDE INTENTION AS ALL THE ENTRIES ARE INCOR PORATED IN ITS BOOKS OF ACCOUNT WHICH ARE FILED ALONG WITH THE RET URN OF INCOME. (III) IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE WANTED TO DERIVE ADVANTAGE BY CLAIMING ANY REFUND OF FB TAX. THE AO AND CIT(A) BOTH HAVE PROCEEDED ON A PREMISE THAT ONCE ADDITION IS MADE, PENALTY FOR CONCEALMENT AUTOMATICALLY FOLLOWS, WHIC H IS NOT THE VIEW PROPOUNDED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT ITA 605/DEL/11 BT TELECOM INDIA P. LTD. 3 VS. RELIANCE PETRO PRODUCTS 322 ITR 158 SC. IN THE CASE OF DHARMENDRA TEXTILES 306 ITR 277, THE HONBLE SUPREM E COURT HAS THOUGH HELD THAT THE WILLFUL CONCEALMENT MAY NOT BE ESSENTIAL INGREDIENT AS IN PROSECUTION, IT NO WHERE LAYS TH AT EVERY DEFAULT WILL LEAD TO CONCEALMENT PENALTY. THE EXPLANATION AND BONA FIDES OF THE ASSESSEE IS TO BE ASCERTAINED, ASSESSEE HAS TO FURNISH AN EXPLANATION WHICH IT IS ABLE TO SUBSTANTIATE. IN TH IS CASE THE ASSESSEE HAS BEEN ABLE TO SUBSTANTIATE ITS CLAIM TH AT MISTAKE WAS INADVERTENT AND THE TAXES WERE ALREADY PAID IN ADVA NCE WHICH DEMONSTRATES THE BONA FIDES OF THE ASSESSEE THAT IT WANTED TO PAY THE DUE TAX. ALL THE DETAILS WERE FURNISHED ALONG W ITH THE RETURN, WHICH IS NOT DISPUTED. PENALTY MAY BE DELETED. 4. LEARNED DR SUPPORTED THE ORDER OF AUTHORITIES BE LOW. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND HAVE GO NE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IN CASE OF CON CEALMENT PENALTY, THOUGH THE ESTABLISHMENT OF WILLFUL CONCEALMENT IS NOT NEC ESSARY NEVERTHELESS HONBLE COURTS HAVE HELD THAT THE EXPLANATION FURNI SHED BY THE ASSESSEE IS TO BE JUDGED ON THE TEST OF BONA FIDES AND SUBSTANTIAT ION. LOOKING FROM THESE PARAMETERS, THE CONDUCT OF THE ASSESSEE DOES NOT DE SERVE FOR CONCEALMENT PENALTY INASMUCH AS ALL THE DETAILS ABOUT EXPENDITU RE LIABLE FOR FBT BENEFIT WERE INCORPORATED IN THE RETURN OF THE ASSESSEE ALO NG WITH THE STATEMENT OF ACCOUNTS. IT HAS NOT BEEN DISPUTED THAT THE ASSESSE E PAID ADVANCE FBT TAX AND IT HAS NOT BEEN CLAIMED AS REFUND OF SUCH TAX. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES THE DEFAULT BECOMES TECHNICAL IN NATU RE AND NOT THE ONE INTENDED TO DERIVE ANY UNDUE ADVANTAGE. SINCE THE A SSESSEE HAS BEEN ABLE TO ITA 605/DEL/11 BT TELECOM INDIA P. LTD. 4 SUBSTANTIATE ITS STAND ABOUT BONA FIDE OMISSION, WE SEE NO JUSTIFICATION FOR LEVY OF THE PENALTY WHICH IS DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28-7-2011. SD/- SD/- (B.K. HALDAR ) ( R.P. TOLA NI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH JULY, 2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR