M/s. Indraprastha Power Generation Co. Ltd., New Delhi V. DCIT, New Delhi

ITA 403/DEL/2013

• Counselvise Citation: 40320114 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-03-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Section: 43B; 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SH. R. S. SYAL, AM AND SH. RAJPAL YADAV, JM ITA NO. 403/DEL/2013 : ASST T. YEAR : 2004-05 M/S INDRAPRASTHA POWER GENERATION CO. LTD., RAJGHAT POWER HOUSE, BEHIND RAJGHAT, NEW DELHI-110005 VS DCIT, CIRCLE-11(1) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI K. SAMPATH REVENUE BY : SHR I SATPAL SINGH DATE OF HEARING : 27.3.2014 DATE OF PRONOUNCEMENT : 31.3.2014 ORDER PER R. S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 31.10.2012 UPHOLDING PENALTY OF RS . 7,04,043/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF T HE INCOME-TAX ACT, 1961 IN RELATION TO THE ASSESSMENT YEAR 2004-0 5. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE CLAIMED DEDUCTION IN RESPECT OF PROVISION FOR EX GR ATIA, GRATUITY AND LEAVE SALARY AMOUNTING TO RS. 52,01,365/-. OUT OF T HIS SUM, THE ASSESSEE PAID A SUM OF RS. 43,35,777/- BEFORE THE D UE DATE. THE REMAINING AMOUNT OF RS. 8,65,588/- WAS REPORTED AS NOT ALLOWABLE U/S 43B BY THE TAX AUDITOR. SIMILARLY, ANOTHER DIS ALLOWANCE OF RS. 11,45,965/- U/S 40A(3) OF THE ACT WAS REPORTED IN T HE TAX AUDIT REPORT, WHICH WAS NOT OFFERED AS INCOME BY THE ASSE SSEE. THE ASSESSING OFFICER MADE THESE ADDITIONS WHICH WERE N OT CHALLENGED ITA NO. 403/DEL/2013 INDRAPRA STHA POWER GENERATION CO. LTD. 2 BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORIT Y. THEREAFTER PENALTY OF RS. 7,04,043/- CAME TO BE IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT IN RELATION TO THE SE TWO DISALLOWANCES EMANATING FROM THE TAX AUDIT REPORT. THE LD. CIT(A) UPHELD THE PENALTY. THE ASSESSEE IS AGGRIEVED AGAIN ST THE CONFIRMATION OF SUCH PENALTY. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT TH ESE ADDITIONS REPRESENT THE AMOUNTS WHICH WERE REPORTED BY THE AU DITOR AS NOT ALLOWABLE BUT OMITTED TO BE INCLUDED IN THE TOTAL I NCOME BY THE ASSESSEE. THERE WAS A BONA FIDE MISTAKE ON THE PART OF THE ASSESSEE IN NOT MAKING SUCH DISALLOWANCES. THE ASSESSEE ACCE PTED THE SUCH BONA FIDE MISTAKE BY NOT ASSAILING THE ASSESSMENT ORDER IN F URTHER APPEAL. 4. THE HONBLE SUPREME COURT IN PRICE WATERHOUSE COOPERS PVT. LTD. VS CIT 2012 348 ITR 306 (SC) HAS DELETED THE PENALTY ON ACCOUNT OF DISALLOWANCE COMING TO THE LIGHT OUT OF THE TAX AUDIT REPORT WHICH WERE NOT OFFERED BY THE ASSESSEE IN IT S RETURN. THE FACTS OF THE INSTANT CASE ARE ON ALL FOURS WITH THA T OF THE HONBLE SUPREME COURT. HERE ALSO THE BASIS FOR THE PENALTY IS TWO DISALLOWANCES MADE BY THE ASSESSING OFFICER WHICH W ERE REPORTED IN THE TAX AUDIT REPORT BUT INADVERTENTLY OMITTED T O BE MADE BY THE ITA NO. 403/DEL/2013 INDRAPRA STHA POWER GENERATION CO. LTD. 3 ASSESSEE. RESPECTFULLY FOLLOWING THE PRECEDENT, WE FIND THAT THERE IS NO GROUND IN IMPOSING OR CONFIRMING PENALTY U/S 2 71(1)(C) OF THE ACT. WE, THEREFORE, ORDER FOR THE DELETION OF PENAL TY. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/3/2014. SD/- SD/- (RAJPAL YADAV) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31/3/2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR