PURVI AHUJA, MUMBAI V. CIT (A) 36, MUMBAI

ITA 399/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2424 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 15-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Keywords: Business income
• Section: 143(3); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.399/M/2015 ASSESSMENT YEAR: 2007-08 PURVI AHUJA, 902, SHABARI ASHIANA, LAL JD GUPTA MARG DEONAR, MUMBAI 400 008 PAN: AAFPA0758E VS. ACIT-CC-47, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI K. RAVIKIRAN, D.R. DATE OF HEARING : 19.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 27.06.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] AGAINST THE CONFIRMATION OF PENALTY OF RS.1,59,795/- LEVIED BY THE ASSESSING OFFICER (HEREINAFTER REFERR ED TO AS THE AO) UNDER SECTION 271(1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT PURSUANT TO THE SEARCH ACTION, THE ASSESSEE FILED HER RETURN OF INCOME UNDER SECTION 1 53A READ WITH SECTION 143(3) OF THE ACT DECLARING TOTAL INCOME OF RS.1,20 ,610/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSES SEE HAD ARRIVED AT A PROFIT OF RS.12,81,792/- AGAINST WHICH THE ASSESSEE HAD SE T OFF OF BROUGHT FORWARD LOSSES FROM A.Y. 2002-03 TO A.Y. 2006-07 AGGREGATIN G TO RS.11,61,185/- AND THUS ARRIVED AT A TAXABLE PROFIT OF RS.1,20,607/-. THE AO NOTED THAT AS WAS DISCUSSED IN THE ASSESSMENT ORDERS FOR A.Y. 2004-05 TO A.Y. 2006-07, THE CARRY ITA NO.399/M/2015 PURVI AHUJA 2 FORWARD LOSSES FOR THOSE YEARS WERE DENIED AS THE A SSESSEE DID NOT FILE THE RETURN IN TIME. HE, HOWEVER, ALLOWED SET OFF OF LO SSES PERTAINING TO A.Y. 2002- 03 AND 2003-04 AGGREGATING TO RS.5,22,207/- AND THE REST OF THE CLAIM OF THE LOSSES AS OBSERVED ABOVE WERE DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS WERE ALSO INITIATED. DURING THE PENALTY PROCEEDINGS, THE ASSESSEE EXPLAINED THAT THE ASSESS EE WAS A HOUSE WIFE AND A SMALL TIME TRADER. THE ASSESSEE HAD INADVERTENTLY MADE A MISTAKE OF FILING THE RETURNS LATE AND WAS OF THE VIEW THAT HER BUSINESS INCOME HAS NOT GONE ABOVE THE LIMIT PRESCRIBED IN SECTION 44AB FOR AUDIT AND HENCE THE PROVISIONS OF THIS SECTION WOULD NOT APPLY TO HER BUSINESS. THE AO, H OWEVER, DID NOT ADMIT THE ABOVE PLEA OF THE ASSESSEE. HE WAS OF THE VIEW THA T THE ASSESSEE SHOULD HAVE BEEN AWARE THAT THE RETURNS WERE FILED LATE AND THE LOSSES SHOULD NOT HAVE BEEN ADJUSTED AGAINST THE INCOME RETURNED FOR THE INSTAN T YEAR. HE OBSERVED THAT IN TERMS OF SECTION 80 OF THE IT ACT, NO LOSS WHICH HA S NOT BEEN DETERMINED IN PURSUANCE OF A RETURN FILED UNDER SECTION 139 SHALL BE CARRIED FORWARD AND SET OFF UNDER THE SECTION. HE ACCORDINGLY LEVIED THE I MPUGNED PENALTY. 3. THE LD. CIT(A) CONFIRMED THE SAID PENALTY. THE ASSESSEE, THUS, HAS COME IN APPEAL BEFORE US. 4. NONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 5. WE HAVE HEARD THE LD. D.R. AND HAVE ALSO GONE TH ROUGH THE RECORD. WE FIND THAT IT IS NOT A CASE WHERE THE ASSESSEE HAD N OT CLAIMED ANY LOSSES IN THE PAST YEARS. THE CLAIM OF CARRY FORWARD AND SET OFF OF LOSSES FOR A.Y. 2004-05 TO 2006-07 WAS DENIED BECAUSE OF LATE FILING OF THE RETURN. THE CLAIM OF LOSSES DURING THE YEAR UNDER CONSIDERATION WAS DUE TO THE ABOVE MISTAKE ON THE PART OF THE ASSESSEE. IN OUR VIEW, THERE SEEMED NO DELI BERATE INTENTION OF THE ASSESSEE TO CONCEAL THE INCOME OR TO FURNISH ANY IN ACCURATE PARTICULARS OF INCOME. THE PROPOSITION OF LAW LAID DOWN BY THE HO NBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT (2012) 348 ITR 306 ITA NO.399/M/2015 PURVI AHUJA 3 (SC) IS APPLICABLE TO THE CASE OF THE ASSESSEE WHER EIN IT HAS BEEN HELD THAT THE PENALTY IS NOT LEVIABLE IF THE MISTAKE IS BONAFIDE AND DUE TO INADVERTENT ERROR. 6. CONSIDERING THE ABOVE FACTS OF THE CASE OF ASSES SEE AND THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT (SUPR A), WE DO NOT FIND IT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE PENALTY LEVIED BY THE LOWER AUTHORITIES IS THEREFORE ORDERED TO BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.