SURETECH HOSPITAL AND RESEARCH CENTRE LIMITED, Nagpur V. DCIT-CIRCLE-3, Nagpur

ITA 403/NAG/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1645 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Bonafide mistake
• Section: 143(3)

Judgement Text

1 ITA N O.403/NAG/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.403 /NAG/2012 ASSESSMENT YEAR : 2007 08. SURETECH HOSPITAL AND RESEARCH DY. COMMISSIONER OF CENTRE LTD., V/S. INCOME TAX, 13 A, BANERJEE MARG, DHANTOLI, CIRCLE 3, NAGPUR. NAGPUR. PAN AACCS5295A. APPELLANT. RESPONDENT. APPELLANT BY : SHRI MANOJ G. MORYANI. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 2 3 - 09 - 2015 DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) II, NAGPUR DATED 10 11 2012. THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF ` 2,31,000/ . 2. FACTS IN BRIEF AS EMERGED FROM THE CO RRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 30 TH OCT., 2009 AND THE PENALTY ORDER UNDER SECTION 271(1)(C) DATED 30 TH APRIL, 2010 WERE THAT DURING THE COURSE OF ASSESSMENT 2 ITA N O.403/NAG/2012 PROCEEDINGS IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASS ESSEE HAD DEBITED A SUM OF ` 6,85,313/ IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD LOSS ON SALE OF MERCEDES CAR . WHEN IT WAS NOTICED TH AT THE ASSESSEE HAD ACCEPTED THE ACCOUNTING MISTAKE AND AGREED BEFORE THE ASSESSING OFFICER TO TAX THE SAID AMOUNT. ACCORDINGLY THE ADDITION WAS MADE BY THE ASSESSING OFFICER WHILE FINALIZING THE ASSESSMENT. UNDISPUTEDLY THE TAX WAS STATED TO BE PAID. 3. WHI LE LEVYING THE PENALTY UNDER SECTION 271(1)(C) THE MAIN ALLEGATION OF THE ASSESSING OFFICER WAS THAT DETECTION OF CONCEALMENT WAS MADE BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HENCE LIABLE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME. EVEN THE FIRST APPELLATE AUTHORITY WAS ALSO OF THE SAME VIEW AND SUSTAINED THE LEVY OF PENALTY. 4. WITH THIS BRIEF FACTUAL BACKGROUND WE HAVE HEARD BOTH THE SIDES. IN OUR HUMBLE UNDERSTANDING OF LAW THE ISSUE OF LEVY OF PENALTY IN THE PRESENT CASE IS WITHIN THE AMBITS OF EXCEPTION OF EXPLANATION 1 TO SECTION 271(1)(C) OF I.T. ACT. THIS EXPLANATION PRESCRIBES THAT WHERE IN RESPECT OF ANY FACTS, MATERIAL TO THE COMPUTATION OF TOTAL INCOME SUCH PERSON FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION IS FOUND TO BE FALSE THEN PENALTY CAN BE LEVIED . AS AGAINST THAT, UNDISPUTEDLY THE ASSESSEE HAS OFFERED AN EXPLANATION THAT DUE TO A BONAFIDE MISTAKE THE SALE OF CAR WAS REFLECTED IN THE PROFIT AND LOSS ACCOUNT ALTHOUGH IT WAS REQUIRED TO BE ACCOUNTED IN T HE BLOCK OF ASSETS FORMING PART OF BALANCE SHEET. IN ADDITION TO THIS PLEA OF ACCOUNTING MISTAKE, AN ANOTHER PLEA HAS ALSO BEEN RAISED BEFORE US THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO CONCEAL THE MATERIAL FACTS ABOUT THE SALE OF CAR. IT IS PLEADED BEFORE US THAT THE FACTS IN RESPECT OF SALE OF CAR, RELEVANT ACCOUNTS AND THE AMOUNT TRANSACTE . D ALL WERE VERY 3 ITA N O.403/NAG/2012 MUCH DISCLOSED IN THE ACCOUNTS WHICH WERE FORMING PART OF THE INCOME TAX RETURN. ONLY ON THE BASIS OF THOSE FACTS AND MATERIAL AVAI LABLE ON RECORD THE ASSESSING OFFICER HAD PROCEEDED TO TAX THE AMOUNT IN QUESTION. MEANING THEREBY THIS IS NOT A CASE WHERE THE ASSESSING OFFICER HAD RECEIVED SOME INFORMATION NOT ALREADY AVAILABLE ON RECORD. IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS IS NOT A FIT CASE TO HOLD THAT THE ASSESSEE HAS CONCEALED THE MATERIAL FACTS WHICH RESULTED INTO LEVY OF CONCEALMENT PENALTY. IN SUPPORT, FEW CASE LAWS ARE CITED BEFORE US. SOME OF THEM ARE PRICE WATERHOUSE COOPERS PVT. LTD. 348 ITR 306 (SC), DELHI CL OTH & GENE R AL MILLS CO. LTD. 157 ITR 822 (DEL.) AND CIT V/S. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 (SC). RESULTANTLY, WE HEREBY DIRECT TO DELETE THE PENALTY. GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 24 TH SEPT. 2015. 4 ITA N O.403/NAG/2012 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSIST ANT REGISTRAR, ITAT, NAGPUR WAKODE