DCIT, New Delhi V. M/s NKC Conveyor Pvt. Ltd., New Delhi

ITA 3940/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91013 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 01-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 21-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PAREEK
• Assessee Lawyers: P DAM KANUNJNA
• Section: 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE S HRI C.M. GARG , JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 3940 /DEL/201 3 AY: 200 5 - 06 DCIT, CIRCLE 13(1) VS. M/S NKC CONVEYOR P.LTD. NEW DELHI D 44, KALKAJI NEW DELHI 110 019 (APPELLANT) (RESPONDENT) APPELLANT BY : MS. PRIYANKA PAREEK, C.A. RESPONDENT BY : SH. P.DAMKANUNJNA, SR.D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIRECTED AGAINST THE ORDER OF THE LD.CIT(A) - XVI, NEW DELHI DT. 5.3.2013 PERTAINING TO THE ASSESSMENT YEAR ( AY ) 2005 - 06. 2. FACTS IN BRIEF: - THE COMPANY IS A SUBSIDIA RY OF NKC CONVEYOR CO.LTD. JAPAN AND IS IN THE BUSINESS OF SUPPLY AND TRADING OF CONVEYOR SYSTEMS ETC. T O VARIOUS COMPANIES IN INDIA , SPECIFICALLY TO AUTOMOBILE SECTOR. DURING THE YEAR UNDER REFERENCE, THE COMPANY FILED ITS INCOME TAX RETURN ON 28.10.200 5 DECLARING THE INCOME OF RS.1,098,320/ - . THE COMPANY ALSO FILED THE TAX AUDIT REPORT U/S 44AB OF THE ACT ALONG WITH THE RETURN OF INCOME. AS PER CLAUSE 21 OF THE TAX AUDIT REPORT FILED ALONG WITH THE INCOME TAX RETURN , A DELAY IN DEPOSIT OF TAX DEDUCT ED AT SOURCE , AS PER ANNEXURE E , WAS REPORTED. AS PER TH IS ENCLOSED ANNEXURE E , COMPLETE DETAILS OF DEDUCTION/DUE DATE OF DEDUCTION/DATE OF DEPOSIT ETC. WERE REFLECTED ALONG WITH DETAILS OF SECTION UNDER WHICH THE DEDUCTION WAS MADE AND ALSO THE AMOUNT OF 2 TDS. HENCE IT WAS CLAIMED THAT CORRECT AND FULL FACTS AND PARTICULARS WERE DISCLOSED BEFORE THE INCOME TAX DEPT. ALONG WITH THE RETURN OF INCOME. 3. THE ASSESSING OFFICER (THE AO ) MADE DISALLOWANCE UNDER PROVISIONS OF S.40(A)(IA) OF THE INCOME TAX ACT, 1961 (THE ACT ) , ON THE GROUND THAT THE ASSESSEE HAS MADE TAX DEDUCTED AT SOURCE FROM CONTRACTORS U/S 194C OF THE ACT FROM CONTRACT PAYMENTS OF RS.53 ,846/ - AND U/S 195 OF THE ACT FROM DESIGN FEE PAYMENTS OF RS.51,61,006/ - BUT HAS FAILED TO DEPOSIT THE SAME WITHIN THE TIME PRESCRIBED UNDER THE STATUTE. HE ALSO OBSERVED THAT THE ASSESSEE HAS NO T SUO MOTO DISALLOWED THESE EXPENDITURE WHILE COMPUTING ITS RETURN OF INCOME. HE LEVIED PENALTY U/S 271(1)(C ) OF THE ACT ON THESE DISALLOWANCES . 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY CONSIDERED THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DELETED THE PENALTY . T HE AS SESSEE INITIALLY FILED AN APPEAL WITH THE LD.CIT(A) ON THE DISALLOWANCE IN QUESTION, , BUT HAD WITHDRAWN THE APPEAL IN VIEW OF THE FACT THAT IT HAD ALREADY DEPOSITED THE TAX DEMANDED ON COMPLETION OF ASSESSMENT AND AS THE ASSESSEE COULD CLAIM THE AMOUNT DI SALLOWED IN THE SUBSEQUENT A.Y. UNDER THE PROVISIONS OF S.40(A)(IA) OF THE ACT. THE LD.CIT(A) OBSERVED THAT , IN THE TAX AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME, THE FACT OF DELAY IN REMITTANCE OF TAX DEDUCTED AT SOURCE WAS REPORTED AS PER AN NEXURE E AND THAT THE ASSESSEE HAS DISCLOSED THE CORRECT AND FULL FACTS AND PARTICULARS. HE WAS OF THE OPINION THAT THIS WAS A CASE OF HUMAN ERROR AND THE EXPLANATION GIVEN BY THE ASSESSEE WAS BONAFIDE. HE GRANTED RELIEF. 3 5. AGGRIEVED THE REVENUE I S IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW BY DELETING PENALTY U/S 271(1)(C ) OF RS.17,55,656/ - IN THE LIGHT OF THE FACT THE ASSESSEE HAD WILFULLY CLAIMED THE WRONG DEDUCTIONS. 2. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW BY FAILING TO APPRECIATE THE FACTS DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER BY IGNORING THE FACTS THAT THE ASSESSEE REPEATED THE MISTAKE MANY T IMES. FIRSTLY BY DEDUCTING THE AMOUNT FROM THE P&L ACCOUNT, SECONDLY BY NOT CLAIMING THE SAME IN THE ORIGINAL RETURN FOR THE AY 2006 - 07 AND THIRDLY BY FILING AN APPEAL AGAINST THIS ADDITION AND AFTERWARDS WITHDRAWING THE SAME. 3. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW BY FAILING TO APPRECIATE THE FACTS DISCUSSED IN DETAIL IN THE PENALTY ORDER U/S 271(1)(C ) OF THE ACT, REGARDING ASSESSEE DELIBERATELY CLAIMING VARIOUS NON - ALLOWABLE EXPENSES. 4. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW AND FAILED TO APPRECIATE THE DECISION OF THE LD.CIT(A) IN THE QUANTUM APPEAL OF THE CASE WHEREIN THE APPEAL OF THE ASSESSEE WAS DISMISSED. 5. THE APPELLANT CRAVES TO BE ALLOWED TO AD D ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 6 . WE HAVE HEARD MS.PRIYANKA PAREEK, CA THE LD.COUNSEL FOR THE ASSESSEE AND SHRI P.DAMKANUNJNA, LD.SR.D.R. ON BEHALF OF THE REVENUE. 7 . ON A CAREFUL CONSIDERATION OF THE F ACTS AND CIRCUMSTANCES OF THE CASE, ON A PERUSAL OF MATERIAL ON RECORD, ORDERS OF LOWER AUTHORITIES, WE HOLD AS FOLLOWS. 8 . THE GROUND ON WHICH THE AO LEVIED PENALTY U/S 271(1)(C ) OF THE ACT IS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. WE FIND THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME, WHERE IT ENCLOSED A TAX AUDIT REPORT U/S 44AB OF THE ACT. IN THIS TAX AUDIT REPORT IN ANNEXURE E, THE FACTUM IN DELAY IN DEDUCTING THE TDS WAS DISCLOSED. TO THAT EXTENT, IN OUR VIEW, THERE IS NO CONCEALMENT OF INCOME. COMING TO THE POINT THAT THE 4 ASSESSEE HAD NOT SUO MOTO DISALLOWED THIS CLAIM OF EXPENDITURE U/S 40(A)(IA) OF THE ACT AND U/S 40(A), WE ARE OF THE VIEW THAT THE EXPLANATION GIVEN BY THE ASSESSEE , THAT IT WAS A GENUINE MISTAK E HAS FORCE. THE EXPLANATION GIVEN IS BONAFIDE. UNDER THE CIRCUMSTANCES WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE REVENUE. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 T H MAY, 2015. S D / - S D / - ( C.M. GARG ) ( J. SUDHAKAR REDDY ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: T H E 0 8 T H MAY, 2015 MANGA COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT TRUE COPY BY ORDER, A SSISTANT REGISTRAR