M/S. BAS YUNHI FILM CO, MUMBAI V. THE ACIT 15(1), MUMBAI

ITA 4373/MUM/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55627 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 07-06-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SADISH MODY
• Keywords: Recovery proceedings; Tax effect; Bonafide mistake
• Section: 143(3); 68

Judgement Text

1 BAS YUNHI FILM CO IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B-I BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, AM & SHRI VIJAY PAL R AO, JM ITA NO. 4373/MUM/2007 (ASST YEAR 2003-04) BAS YUNHI FILM CO MOHAMADI MANZIL 2 ND FLOOR, 156 S V ROADM, KHAR (W), MUMBAI 52 VS THE ASST COMMR OF INCOME TAX 15(1) MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAFFB6619K ASSESSEE BY SHRI SADISH MODY REVENUE BY SHRI P C MOURYA DT.OF HEARING 23.9.2011 DT OF PRONOUNCEMENT 19 TH , OCT 2011 PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 18.4.2007 OF THE CIT(A) ARISING FROM THE PENALTY ORDER U/S 271(1 )( C) OF THE IT ACT FOR THE ASSESSMENT YEAR 2003-04. 2 THE ASSESSEE IS AN AOP ENGAGED IN THE BUSINESS OF PRODUCING FILMS. THE AOP WAS CONSTITUTED BY 8 PERSONS TO PRODUCE THE FILMS. THE ASSESSEE FILED RETURN OF INCOME DECLARING LOSS OF RS. 72,23,563/-. THE ASSES SMENT WAS COMPLETED U/S 143(3) AFTER MAKING AN ADDITION OF RS. 32,01,065/- U/S 68 OF THE I T ACT IN RESPECT OF UNEXPLAINED CAPITAL INTRODUCED BY FIVE MEMBERS OF THE AOP. THE ASSESSEE DID NOT CHALLENGE THE ADDITION MADE U/S 68 BECAUSE IT DID N OT HAVE TAX EFFECT AS THE TOTAL INCOME ASSESSED BY THE ASSESSING OFFICER IS STILL L OSS AT RS. 38,33,810/-. SUBSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)( C) WERE INITIATED BY THE ASSESSING OFFICER BY LEVYING PENALTY OF RS. 10,08,337/- AGAINST THE ADDI TION OF RS. 32,01,065 MADE U/S 68. 2 BAS YUNHI FILM CO THE ASSESSEE CHALLENGED THE PENALTY BEFORE THE CIT( A). THE CIT(A) CONFIRMED THE PENALTY AND DISMISSED THE APPEAL FILED BY THE ASSES SEE VIDE THE IMPUGNED ORDER. 3 BEFORE US, THE LD AR OF THE ASSESSEE HAS FILED PA PER BOOK CONTAINING THE COPY OF AGREEMENT, REMITTANCES BY PERSONS OF THE AOP FOR INTRODUCTION OF CAPITAL, BANK STATEMENT SHOWING TRANSFER OF FUNDS AS WELL AS CONF IRMATION FROM THE PARTIES. IN THE SAID PAPER BOOK DATED 16.8.2011, THE CHARTERED ACCO UNTANT, REPRESENTING THE ASSESSEE, CERTIFIED THAT THE PAPERS WERE FILED BEFO RE THE LOWER AUTHORITIES. THEREAFTER, IT WAS TRANSPIRED THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY RELEVANT RECORDS FILED BY THE AS SESSEE EVEN DURING THE PENALTY PROCEEDINGS, NO MATERIAL WAS FILED TO SHOW THE BONA FIDE EXPLANATION. THEREFORE, THIS QUERY WAS PUT TO THE ASSESSEE BY THE BENCH AS TO HO W SUCH CERTIFICATE HAS BEEN GIVEN THAT ALL THE DOCUMENTS WERE FILED BEFORE THE LOWER AUTHORITIES. 3.1 THE ASSESSEE FILED AN APPLICATION IN THE FORM O F EXPLANATION AND APOLOGY ON BEHALF OF THE CHARTERED ACCOUNTANT, WHO HAS ALSO FI LED FRESH CERTIFICATION OF DOCUMENTS DOCUMENTS. IT HAS BEEN EXPLAINED BEFORE US THAT THE DOCUMENTS IN THE PAPER BOOK WERE ACTUALLY FILED BEFORE THE LOWER AUT HORITIES DURING THE RECOVERY PROCEEDINGS AND NOT DURING THE ASSESSMENT AND PENAL TY PROCEEDINGS. IT WAS THEREFORE, URGED THAT DUE TO BONAFIDE MISTAKE, THE CHARTERED ACCOUNTANT HAS INADVERTENTLY MENTIONED IN THE CERTIFICATE THAT THE SE DOCUMENTS WERE FILED BEFORE THE LOWER AUTHORITIES. ACCORDINGLY, A CORRECT CERT IFICATE HAS BEEN FILED ALONG WITH EXPLANATION. 4 AFTER CONSIDERING THE RIVAL CONTENTION AND FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT INCORRECT CERTIFICATE WAS GIVEN BY THE CHARTERED ACCOUNTANT DUE TO CONFUSION AND BONAFIDE MISTAKE. THEREFORE, WE AC CEPT THE EXPLANATION AND 3 BAS YUNHI FILM CO APOLOGY OF THE CONCERNED CHARTERED ACCOUNTANT FOR G IVING INCORRECT CERTIFICATE INADVERTENTLY. 4.1 SINCE THE DOCUMENTS FILED BY THE ASSESSEE IN TH E PAPER HOOK, PRIMA FACIE SHOW THAT THE ASSESSEE HAS A CASE TO EXPLAIN THE BO NAFIDE TO DEFEND THE CASE OF LEVY OF PENALTY. ACCORDINGLY, WITHOUT EXPRESSING A NY VIEW ON MERITS OF THE LEVY OF PENALTY, WE SET ASIDE THE MATTER TO THE RECORD OF T HE ASSESSING OFFICER TO CONSIDER AND VERIFY THE RECORDS FILED BY THE ASSESSEE BEFORE US AND THEN TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE EXPLANATION 1(A) & (B) T O SEC. 271(1)( C) OF THE ACT. THE ASSESSING OFFICER SHALL GIVE A REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 19 TH , DAY OF OCT 2011. SD/- SD/- ( J SUDHAKAR REDDY ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 19 TH ,OCT2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI