M/s. Spectrum Eyewear Pvt. Ltd, New Delhi V. ITO, New Delhi

ITA 4828/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8096 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAOREM
• Assessee Lawyers: R B MATHUR
• Keywords: Business income; Bonafide mistake
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE SHRI I. P. BANSAL, JM SHRI K. D. RANJ AN, AM I. T. APPEAL NO. 4828 (DEL) OF 2009. ASSESSMENT YEAR : 2006-07. M/S. SPECTRUM EYEWEAR PVT. LTD., THE INCOME-TAX OFFICER , 5060, SANT NAGAR, KAROL BAGH, VS. W A R D : 9 (1), N E W D E L H I. N E W D E L H I. P A N / G I R NO. AAH CS 5803 K. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI R. B. MATHUR, C. A.; DEPARTMENT BY : MS. BANITA DEVI NAOREM, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 06-07 ARISES OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, NEW D ELHI. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE READ S AS FOLLOWS :- ' THE LD. CIT (APPEALS) ERRED IN LAW AND ON TH E FACTS AND CIRCUMSTANCES OF THE CASE IN DISMISSING THE APPEAL OF THE APPELLANT AND CONFIRMING THE 2 I. T. APPEAL NO. 4828 (DEL) OF 2009. IMPOSITION OF PENALTY OF RS.1,74,965/- BY THE ASSES SING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 WITHOUT PROPE RLY CONSIDERING AND APPRECIATING THE MATERIAL AND EXPLANATION FURNISHED REBUTTAL OF THE CASE OF THE ASSESSING OFFICER FOR IMPOSING OF IMPUGNED PENALTY. ' 3. THE ONLY ISSUE FOR CONSIDERATION RELATES TO IMPO SITION OF PENALTY U/S 271(1)(C) OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME THROUGH ELECTRONIC MEDIA ADMITTING NIL INCOME. THE ASSESSM ENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED T O AS THE ACT] ON AN INCOME OF RS.5,800/-. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSME NT INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 4. DURING THE COURSE OF PENALTY PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT DUE TO SOME TECHNICAL ERROR WHILE PREPARING E-RETURN THE T OTAL INCOME AND TAX THEREON WAS SHOWN AS NIL IN PLACE OF RS.5,19,800/- AND RS.1,74,696/- RES PECTIVELY. IT WAS ALSO SUBMITTED THAT THE INCOME-TAX RETURN IS A COMBINATION OF PART A, PART B, PART C AND SCHEDULE 1 TO 25. WHILE FILLING THE RETURN FORM ONE HAS TO START FILLING IN FORMATION IN RESPECTIVE SCHEDULES AND TOTAL OF THESE SCHEDULES AUTOMATICALLY COMES TO PART B / PAR T C OF THE RETURN FORM. IN THE CASE OF ASSESSEE THE SCHEDULES HAVE BEEN PROPERLY FILLED IN , BUT DUE TO SOME TECHNICAL ERROR, THE FIGURE OF BUSINESS INCOME WAS NOT REFLECTED IN PART B OF T HE RETURN FORM. THEREFORE, THE TECHNICAL ERROR CANNOT BE TREATED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THE BONAFIDE OF THE ASSESSEE IS ALSO CLEAR FROM THE CONDUCT OF DEPOSITING THE ADVANCE TAX AND SELF ASSESSMENT BEFORE SUBMISSION O F E-RETURN. THIS REPLY OF THE ASSESSEE WAS TREATED AS AN AFTER-THOUGHT BY THE AO. HE ALSO NOTED THAT THE ASSESSEE HAD FILED REVISED COMPUTATION SUBSEQUENT TO ISSUE OF NOTICE UNDER SEC TION 143(2) OF THE ACT. THEREFORE, THERE WAS CONCEALMENT ON THE PART OF THE ASSESSEE. THE A O, THEREFORE, PROCEEDED TO IMPOSE PENALTY OF RS.1,74,965/-, WHICH IS EQUAL TO 100 PER CENT TO TAX SOUGHT TO BE EVADED. 5. ON APPEAL, SIMILAR ARGUMENTS WERE ADVANCED. HOW EVER, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) WAS OF THE VIEW THAT THE ASSES SEE HAD FURNISHED INACCURATE PARTICULARS 3 I. T. APPEAL NO. 4828 (DEL) OF 2009. AND CONCEALED ITS INCOME AND HAD MADE AN INACCURATE CLAIM. SHE ACCORDINGLY UPHELD THE LEVY OF PENALTY BY THE ASSESSING OFFICER. 6. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE MISTAKE WAS COMMITTED IN E-RETURN BECAUSE OF SOME TECHNICAL PROBLEMS. THE A SSESSEE HAD DEPOSITED THE TAX ON INCOME OF RS.5,19,800/-. HE ALSO SUBMITTED THAT SCHEDULE 1 CONTAINS THE PROFIT OR LOSS FROM BUSINESS OR PROFESSION AT RS.5,19,800/-. THE ASSESSEE HAD D EPOSITED THE TAX BY WAY OF ADVANCE TAX AND SELF ASSESSMENT. THEREFORE, THE ASSESSEE HAD NOT C LAIMED ANY REFUND IN RESPECT OF AMOUNT OF TAX DEPOSITED BY WAY OF ADVANCE TAX OR SELF ASSESSM ENT. THEREFORE, THERE WAS NO MENS REA ON THE PART OF THE ASSESSEE. ON THE OTHER HAND, THE L D. SR. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LD. CIT (APPEALS). 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE THE ASSESSEE IN SCHEDULE 1 OF E-RETURN HAS DISCLOSED PROFIT AT RS.5,19,800/- AND HAD PAID TAX OF RS.1,74,696/-. THE ASSESSEE HA D PAID ADVANCE TAX AND SELF ASSESSMENT BEFORE FILING THE E-RETURN. FROM THESE FACTS IT IS CLEAR THAT THE ASSESSEE HAVING EARNED INCOME OF RS.5,19,800/-, WHICH HAS BEEN CORRECTLY D ISCLOSED AGAINST ITEM NO. 19 OF SCHEDULE 1 AND PAID TAX THEREON UNDER SCHEDULE 19 AND 20. I T CANNOT BE SAID THAT THE ASSESSEE WANTED TO CONCEAL THE INCOME OR FURNISH INACCURATE PARTICU LARS OF INCOME. PENALTY UNDER SECTION 271(1)(C) IS IMPOSABLE IF AS PER PROVISIONS OF EXPL ANATION1TO SECTION 271(1)(C) THE ASSESSEE DOES NOT OFFER AN EXPLANATION OR OFFERS AN EXPLANAT ION WHICH HE HAS NOT BEEN ABLE TO SUBSTANTIATE, THE INCOME ADDED SHALL BE DEEMED TO B E CONCEALED INCOME OF THE ASSESSEE. IN THE INSTANT CASE THE SCHEDULE 1 CONTAINS THE PRO FIT OF RS.5,19,800/-, WHICH HAS BEEN FINALLY ASSESSED BY THE AO. THE ASSESSEE HAD PAID TAX BY WAY OF ADVANCE TAX AND SELF ASSESSMENT. THEREFORE, THE EXPLANATION OFFERED BY THE ASSESSEE IS BONAFIDE AND ACCORDINGLY PENALTY UNDER SECTION 271(1)(C) IS NOT IMPOSABLE. A BONAFIDE MISTAKE HAS BEEN COMMITT4ED WHILE FILING THE E-RETURN. ACCORDINGLY IN OUR CONS IDERED OPINION, PENALTY UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE IMPOSED. WE ACCORDI NGLY CANCEL THE PENALTY IMPOSED BY THE ASSESSING OFFICER. ................4. 4 I. T. APPEAL NO. 4828 (DEL) OF 2009. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 26TH FEBRUARY, 2010. SD/- SD/- [ I. P. BANSAL ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26TH FEBRUARY, 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 5 I. T. APPEAL NO. 4828 (DEL) OF 2009.