M/s Blue Bird Leisure & Holidays Ltd., Kolkata V. ITO, Ward-5(3), Kolkata, Kolkata

ITA 438/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91908 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2012
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: N O N E
• Keywords: Bonafide belief; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HON BLE SRI MAHAVIR SINGH , JM & HON BLE SRI B.P.JAIN , AM] I.T.A NO. 438 /KOL/20 12 ASSESSMENT YEAR : 2006 - 07 M/S.BLUE BIRD LEISURE & - V S . - I.T.O., WARD - 5(3) HOLIDAYS LTD.,KOLKATA KOLKATA [ PAN : AABCB 9978 N) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : N ONE FOR THE RESPONDENT : SMT.RANU BISWAS, JCIT DATE OF HEARING : 20 .04. 2015 DATE OF PRONOUNCEMENT : 29.04.2015. ORDER PER SHRI B.P.JAIN , AM THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD.CIT (A) - VI , KOLKATA DATED 29.12.2011 FOR ASSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1 . FOR THAT THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING T H E ORDE R OF THE L EARNED ASSESS I NG OFFICER L EVYING PENALTY OF RS.41 ,890 U / S . 271(1)(D) OF T H E INCOME - TAX ACT, 1961 WITHOUT TAKING I N TO CO N S I DERATION OF SUBMISS I O N S MADE BY THE APPE L LANT AND THE EXP L ANATION GIVE N TO H IM . 2 . FOR THAT HAV IN G REGARD TO THE FACTS THAT THE APPELLANT HAD NO INTENTION OF CONCEALING THE VALUE OF FRI N GE BENEFITS IN THE RET URN AND MAKING PAYMENT OF THE FRINGE BENEFITS TAX OR DID NOT ACT I N CONSCIOUS DISREGARD OF ITS OB L IGATION, THE R E WAS NO REASON TO H O LD BY THE LEAR N E D COMMISSIONER OF INCOME - TAX (APPEALS) AND THE L EARNED ASSESSING OFFICER THA T THE PROVISIONS OF SECTION 2 71 (1) ( D) OF TH E INCOME - TAX ACT , 196 1 ATTRACTED IN T H IS CASE AND PENA L TY IS LEVIABLE FOR SUCH DEFAULT . 3 . FOR THAT I N V I EW OF THE FACT THAT T H E APPE L LANT HAD A BONAFIDE BELIEF THAT THE EXPE N DI T URE OF RS.6,22,249 ON ACCOUNT OF TELEPHONE EXPENSES AND TRAVELLI N G & CO N VEYANCE EXPENSES MIGHT NOT BE TREATED AS VALUE OF FRI N GE BENEFIT, THE L EA R NED CO M M I SSIONER OF IN COME - TAX (APPEA L S) AND THE LEA R NED ASSESSING OFF I CER S H O UL D H AVE CONSIDERE D THE EXP L ANATION GIVEN TO THEM AND THE EV I DENCE AD D UCE D TO THEM IN S U P P OR T OF T H E CON T ENT I ON. 4 . FOR T H A T T H E L EA R NED CO M MISSIONER OF I N COME - TAX (APPEA L S) AND THE L EARNED ASSESSING OFFICER WERE WRONG IN HO L DING T H AT THE APPE LL ANT FURNISHED INACC U RATE P ARTIC UL A R S OR CO N CEA L E D THE INCOME WITHO U T TAKING INTO CONSIDERATION OF THE F ACT THAT T H E APPELLANT FI L ED STATEMENTS OF ACCOUNT FOR THE PREVIOUS YEAR RE L EVANT TO THE ASSESSMENT YEAR U ND ER CO N SIDERATION FROM WHICH THE VALUE OF FRINGE BENEFIT WAS 2 ITA NO. 438/KOL/2012 M/S.BLUE BIRD LEISURE & HOLIDAYS LTD. . A.YR. 200 6 - 07 2 ASCE R TAINED BY T H E L EARNED ASSESSING OFFICER AND SUCH VALUE WAS BROUGHT TO TAX BY THE IMPUGNED ASSESSMENT ORDER. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 07 SHOWING A TOTAL INCOME OF RS.41,07,090/ - ON 30.11.2006. THE ASSESSEE DID NOT SHOW ANY FRINGE BENEFITS IN THE RET URN OF FRINGE BENEFITS IN THE ASSESSMENT YEAR 2006 - 07 IN THE RETURN FILED ON 30.11.2006. HOWEVER, THE ASSESSING OFFICER IN ITS ORDER U/S 115WE(3) FOUND THAT THE ASSESSEE INCURRED ON ACCOUNT OF TELEPHONE EXPENSES AMOUNTING TO RS.4,45,191/ - AND TRAVELLING AN D CONVEYANCE EXPENSES AMOUNTING TO RS.1,77,058/ - TOTALLING TO RS.6,22,249/ - WHICH WERE LIABLE TO BE CONSIDERED AS FRINGE BENEFITS AS PER CLAUSE J & Q OF EXPLANATION TO SUB - SEC (2) OF SEC. 115WB. THE ASSESSING OFFICER ASSESSED THE FRINGE BENEFIT @20% AMOUNT ING TO RS.1,24,450/ - . HE INITIATED PENALTY PROCEEDINGS U/S 271(1)(D) FOR FURNISHING INACCURATE PARTICULARS OF FRINGE BENEFITS. THE ASSESSING OFFICER OBSERVED IN HIS PENALTY ORDER U/S 271(1)(D) DT. 23 RD JUNE, 2009 AS FOLLOWS : - IN THE INSTANT CASE, THE ASS ESSEE FILED ITS RETURN OF FRINGE BENEFIT SHOWING VALUE OF EXPENDITURE LIABLE TO FRINGE BENEFIT IS NIL. IN COURSE OF ASSESSMENT PROCEEDINGS, IT IS OBSERVED FROM THE P&L A/C. OF THE ASSESSEE COMPANY THAT THE AS SESSEE HAS MADE EXPENDITURE OF R S.4,45,191/ - ON ACCOUNT OF TELEPHONE AND RS.1,77,058/ - ON ACCOUNT OF TRAVELLING AND CONVEYANCE, BUT FAILED TO INCLUDE THE SAME AMOUNT IN THE VALUE OF FRINGE BENEFIT. IN RESPONSE TO NOTICE U/S 271(1)(D) OF THE I.T.ACT SR. S.S.DUTTA, A/R OF THE ASSESSEE APPEARED AND ALSO FI LED WRITTEN SUBMISSION. CONSIDERING THE ASSESSEE S SUBMISSION AND ALSO FACTS OF THE CASE AO WAS OF THE OPINION THAT IT IS A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) OF THE I.T.ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. TAX ON RS.1,24,450/ - (20% O F RS.6,22,249/ - ) RS.41,890/ - TAX SOUGHT TO BE EVADED RS.41,890/ - 100% OF TAX SOUGHT TO BE EVADED RS.41,890/ - THEREFORE, PENALTY OF RS.41,890/ - @100% OF TAX SOUGHT TO BE EVADED IS LEVIED U/S 271(1)(D) OF THE I.T.ACT, 1961. THE LD. CI T(A) CONFIRMED THE ACTION OF AO. 3 ITA NO. 438/KOL/2012 M/S.BLUE BIRD LEISURE & HOLIDAYS LTD. . A.YR. 200 6 - 07 3 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD THE LD. DR AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD . IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE PROVIS ION OF CHAPTER - XII - H OF THE SAID ACT CAME INTO EFFECT FROM A.YR.2006 - 07 AND THE ASSESSEE AND ITS STAFF WAS NOT AWARE OF ALL THE PROVISIONS OF SUCH LAW. THERE WAS NO INTENTION TO HIDE OR CONCEAL OR TO EVADE TAX. IT WAS SUBMITTED THAT PENALTY U/S 271(1)(D) O F THE ACT IS IN PARI MATERIA TO SEC.271(1)(C) OF THE ACT . HE RELIED UPON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF DILIP N.SHROFF VS. JCIT (291 ITR 519) WHERE THE HON BLE SUPREME COURT HAD THE OCCASION TO CONSIDER THE EXPRESSIONS CONCEALMENT OF INCOME AND FURNISHI NG OF INACCURATE PARTICULARS AND IT WAS OBSERVED THAT BOTH ARE DIFFERENT AND CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME REFER TO DELIBERATE ACTS OF SUPPRESSION OR FALSE REPRESENTATION. THE WORD INACCURATE SIGNIFIES A DELIBE RATE ACT OR OMISSION ON THE PART OF THE ASSESSEE. WE ARE CONVINCED WITH THE ARGUMENTS OF THE LD. COUNSEL OF THE ASSESSEE AS SUBMITTED BEFORE THE INCOME TAX AUTHORITIES AND BEFORE US THAT THERE IS NO DELIBERATE ACT OF SUPPRESSION OR FALSE REPRESENTATION BY THE ASSESSEE AND PRIMARY BURDEN TO PROVE THAT ON THE REVENUE IT HAS NOT BEEN DONE IN THE PRESENT CASE. THEREFORE PENALTY IS NOT LEVIABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE AND ACCORDINGLY THE ORDER IS REVERSED. AO IS DIRECTED TO DELETE THE ADDITION. 5. IN THE RESULT TH E APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE C OURT ON 2 9.04.2015. SD/ - SD/ - [ MAHAVIR SINGH ] [ B.P.JAIN ] JU DICIAL MEMBER ACCOUNTANT MEMBER DATED : 29.04.2015. [ RG PS ] 4 ITA NO. 438/KOL/2012 M/S.BLUE BIRD LEISURE & HOLIDAYS LTD. . A.YR. 200 6 - 07 4 COPY OF THE ORDER FORWARDED TO: 1. M/S. BLUE BIRD LEISURE & HOLIDAYS LTD., 22, STRAND ROAD, GROUND FLOOR, KOLKATA - 700001. 2. I.T.O., WARD - 5(3 ), KOLKATA 3. CIT(A) - VI , KOLKATA 4. CIT KOLKATA. 5 . CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES