Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 6267 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 6 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-01-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
E
Assessment Year
2009-2010
Appeal Filed On
12-07-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI G.S. PANNU ( VP ) AND SHRI RAM LAL NEGI (JM) ITA NO. 5131 /MUM/20 1 3 ASSESSMENT YEAR: 2009 - 10 M/S TIGERS WORLDWIDE LOGISTICS PVT. LTD., 301, SANGEET PLAZA, MAROL NAKA, ANDHERI (EAS T), MUMBAI - 400059 PAN: AABHD8522M VS. THE DY. COMMISSIONER OF INCOME TAX, CIR, 8(2), AAYKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.N. NANDGAONKAR & HARIDAS BHATT ( A R S ) REVENUE BY : SHRI V. JUSTIN & AKHILENDRA PRATAP YADAV (DR) DATE OF HEARING: 26/10 /201 8 DATE OF PRONOUNCEMENT: 23 / 01 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29/04/2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI , FOR THE A S S ESSMENT YEAR 2009 - 10 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). THE ASSESSEE COMPANY CARRYING O N THE BUSINESS AS CUSTOM CLEARING AGENT, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 59,16,310/ - . SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN DECLARING THE TOTAL INCOME AT RS. 54,15,260/ - AFTER CLAIMING DEDUCTION U/S 80G AND TDS CREDIT. THE ASSESSMENT WAS COMPLETED U/S 143 (3) DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 77,00,620/ - AFTER MAKING 2 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 DISALLOWANCE OF RS. 11,58,109 / - ON ACCOUNT OF LOSS OF FIX ASSETS SALE, DISALLOWANCE OF RS. 5,21,913/ - U/S 43B ON GRATUITY PAID , DISALLOWANCE OF RS 4,00,000/ - ON ACCOUNT OF PROVISION FOR COMMISSION U/S 40(A)(IA), DISALLOWANCE OF PROVISION FOR LEGAL CHARGES U/S 40(A)(IA) AMOUNTING TO RS. 4,09,530/ - AND CLAIM OF D EDUCTION U/S 80G OF THE ACT. 2. THE AO INITIATED THE PROCEEDINGS U/S 271 (1) (C) OF THE ACT AND LEVIED PENALTY OF RS. 8,28,664/ - VIDE ORDER DATED 28.06.2012. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING T HE ASSESSEE CONFIRMED THE PENALTY LEVIED BY THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. THE ASSESSEE IS IN APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A). 3 . T HE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUND S : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN HOLDING THAT THE APPELLANT HAD FURNISH INACCURATE PARTICULARS OF INCOME AGGREGATING TO RS. 25,11,104/ - FOR AY 2009 - 10 AND IN LEVYING PENALTY OF RS. 8,28,664/ - U/S 271(10(C) AND THE LEARNED CIT (A) HAS ERRED IN CONFIRMING BOTH THE ACTIONS OF THE AO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT THE APPELLANT, BY NOT OBJECTING TO THE ADDITIONS MADE IN THE ASSESSMENT, AGREES TO THE STAND TAKEN BY THE DEPARTMENT AS THE APPELLANT HAD NOT CHALLENGED THE ADDITIONS BY FILING AN APPEAL AGAINST THE QUANTUM OF THE ADDITIONS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED AO HAS ERRED IN HOLDING THAT: A) THE APPELLANT HAS FURNISH INACCURATE PARTICULARS OF INCOME IN REGARD TO THE EXPENSES/DEDUCTIONS CLAIMED BY THE APPELLANT ON THE BASIS OF EXPERT PROFESSIONAL ADVICE AND, 3 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 B) THE APPELLANT HAS FURNISH INACCURATE PARTIC ULARS OF INCOME ON ACCOUNT OF DISALLOWANCES/ADDITIONS MADE BY INVOCATION/APPLICATION OF PROVISIONS OF SECTION 43B AND 40(A)(IA) OF THE ACT. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT ON THE ADDITION MADE ON ACCOUNT OF LOSS ON SALE OF ASSETS WAS CLAIMED BY THE ASSESSEE UNDER A BONA FIDE AND INADVERTENT MISTAKE OF THE CHARTERED ACCOUNTANT WHILE FILING THE RETURN OF INCOME. THE MISTAKE WAS ADMITTED AND THE CLAI M WAS WITHDRAWN BY THE ASSESSEE. THE LD. COUNSEL RELYING ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SOMANY EVERGREE KNITS LTD. 352 ITR 592 (BOM) SUBMITTED THAT THAT BONA FIDE AND INADVERTENT MISTAKE OF A CHARTERED ACCOUNTANT IN MAKING WRONG CLAIM IN RETURN OF INCOME WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS WITHIN THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT , THEREFORE THE LD CIT(A) OUGHT TO DELETE THE PENALTY LEVIED BY THE AO . 5. ON THE OTHER HAND, THE LD. DEP ARTMENTAL REPRESENTATIVE ( DR) SUBMITTED THAT SINCE THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND THE AO REJECTED THE CLAIM OF THE ASSESSEE AND ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE, THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE A DDITION. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE ENTIRE RELEVANT RECORD INCLUDING THE CASES RELIED UPON BY THE PARTIES. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SOMANY EVERGREE KNITS LTD . (SUPRA), HAS HELD THAT BONA FIDE AND INADVERTENT MISTAKE OF THE CHARTERED ACCOUNTANT WHILE FILING THE RETURN OF INCOME WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE RELEVANT PARAS OF THE JUDGMENT OF THE HONBLE COURT READ AS UNDER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE STAND OF THE ASSESSEE AS PUT FORTH 4 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 BEFORE THE REVENUE AUTHORITIES. HE FURTHER RELIED ON THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. DEEP TOOLS PVT. LTD ., 274 ITR 603(P&H), WHEREIN IT WAS HELD THAT BONAFIDE AND INADVERTENT MISTAKE OF A CHARTERED ACCOUNTANT WHILE FILING A RETURN OF INCOME WILL NOT AMOUNT T O FURNISHING OF INACCURATE PARTICULARS OF INCOME. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SHAHABAD COMPANY - OPERATIVE SUGAR MILLS LTD . (2009) IT S 2255[(DECISION OF P&H HIGH COURT IN ITA NO.19 OF 2007 (O&M)] DATED 12/10/2009, WHEREIN IT WAS HELD THAT MAKING A WRONG CLAIM FOR DEDUCTION OF DEPRECIATION OF GUEST HOUSE DOES NOT INVITE AN ORDER IMPOSING PENALTY. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158(SC), WHEREIN IT WAS HELD THAT MAKING AN INCORRECT CLAIM DOES NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. THE HON'BLE SUPREME COURT FURTHER HELD TH AT PENALTY WILL BE ATTRACTED ONLY WHEN THE DETAILS SUPPLIED IN THE RETURN ARE NOT TRUE. THE LD. D.R RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS FAR AS THE LOSS ON SALE OF MACHINERIES OF THE GARMENT UNIT IS CONCERNE D, THE P&L ACCOUNT FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOME CLEARLY GIVES A DESCRIPTION OF THE LOSS AS LOSS ON SALE OF GARMENT UNIT ASSETS. IT IS THIS LOSS WHICH WAS ADDED TO THE NET LOSS AS PER P&L ACCOUNT IN THE COMPUTATION OF TOTAL INCOME ( UND ER THE HEAD PRIOR PERIOD INCOME/EXPENDITURE/EXTRA ORDINARY ITEMS). THE FACT THAT THIS LOSS WAS IN RESPECT OF ASSETS OF THE GARMENT UNIT HAS BEEN VERY CLEARLY DISCLOSED IN THE RETURN OF INCOME. THE CHARTERED ACCOUNTANT OF THE ASSESSEE DID NOT ADVISE THE ASS ESSEE AS TO THE CORRECT LEGAL POSITION AND THE RETURN OF INCOME WAS FILED ON THE ABOVE LINES. WHEN THIS WAS POINTED OUT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE ACCEPTED THE ADDITION MADE BY THE AO. THE FIXED ASSETS OF THE GARMENT DIVISION CLEARLY SHOW THAT THE ASSETS SOLD WERE DEPRECIABLE ASSETS, THUS THERE WAS ENOUGH EVIDENCE AVAILABLE IN THE DOCUMENTS FILED ALONG WITH THE RETURN OF INCOME TO SHOW THAT THE CLAIM MADE BY THE ASSESSEE ARE NOT IN ACCORDANCE WITH 5 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 LAW. IN THE ABOVE CIRCUMSTANCE S THE PLEA OF THE ASSESSEE THAT THE CLAIM FOR DEDUCTION WAS MADE ON ACCOUNT OF A BONA FIDE MISTAKE HAS TO BE ACCEPTED. WHEN ALL FACTS ARE AVAILABLE ON RECORD IT CANNOT BE SAID THAT THE ASSESSEE ATTEMPTED TO FURNISH INACCURATE PARTICULARS. IT IS A CASE MAKI NG AN INCORRECT CLAIM. THE BONA FIDE OF THE ASSESSEE ARE FURTHER ESTABLISHED BY THE FACT THAT NO APPEAL WAS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE AO. 6. AS CONTENDED BY THE LD. COUNSEL IN THE PRESENT CASE THE ASSESSEE HAD CLA IMED THE LOSS ON SALE OF ASSETS AT THE BRANCHES CLOSED DOWN BY IT . THE DECISION WAS TAKEN BY THE MANAGEMENT IN THE FINANCIAL INTEREST OF THE COMPANY TO AVOID HEAVY COST OF REPAIRS AND RENEWALS ON THE SAID ASSETS. THE MANAGEMENT WAS ADVISED BY THE TAX CONSULTANT THAT SINCE THE ASSETS HAD LOST ITS VALUE SIGNIFICANTLY , THE SAME SHOULD BE WRITTEN OFF AS THE EXPECTED COST OF REPAIRS WOULD BE MORE THAN THE LOSS ON WRITE OFF ON DISCARDING. ACCORDINGLY, THE LOSS WAS CLAIMED UNDER A BONA FIDE AND INADVERTENT MISTAKE. I N OUR CONSIDERED V IEW, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT DISCUSSED ABOVE. ACCORDINGLY, HENCE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT , WE SET ASIDE THE FINDINGS OF THE LD. CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY LEVIED ON ACCOUNT OF ADDITION MADE BY THE AO REJECTING THE CLAIM OF LOSS ON SALE OF ASSETS. 7. THE ASSESSEE HAS CHALLENGED THE PENALTY LEVIED ON ACCOUNT OF ADDITION MADE BY AO BY INVOK ING THE PROVISIONS OF SECT ION 43B OF THE ACT FOR NOT MAKING PAYMENT OF GRATUITY AMOUNTING TO RS. 5,21,913/ - BEFORE FILING RETURN OF INCOME U/S 139(1) OF THE ACT. THE LD. COUNSEL RELYING ON THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF PRICE WAREHOUSE COOPERS PVT. LTD. VS . COMMISSIONER OF INCOME TAX 348 ITR 306 , SUBMITTED THAT SINCE THE ASSESSEE HAD CLAIMED THE DEDUCTION BY MISTAKE UNDER AN INADVERTENT AND BONAFIDE ERROR, THE LD. CIT (A) OUGHT TO HAVE DELETED THE PENALTY LEVIED BY THE AO. THE 6 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 LD. COUNSEL FURTHER SUBMITTED THAT THOUGH IT WAS REPORTED IN AUDIT REPORT THAT SUCH PROVISION IS NOT AVAILABLE, HOWEVER, THE ASSESSEE DEBITED THE AMOUNT IN P & L ACCOUNT OF UNDER A BONA FIDE MISTAKE. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THIS GROUND OF APPEAL IS COVERED IN FAVOU R OF THE ASSESSEE BY THE ORDER OF THE HONBLE SUPREME COURT, THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE IS LIABLE TO BE SET ASIDE. 8. ON THE OTHER HAND THE LD. DR RELYING ON THE DECISION OF THE LD. CIT(A) SUBMITTED THAT THERE IS NO MERIT IN THE CONTENTI ON OF THE ASSESSEE THAT THE CLAIM WAS MADE UNDER A BONA FIDE AN D INADVERTENT MISTAKE. THE LD DR FURTHER SUBMITTED SINCE THE PLEA OF THE ASSESSEES IS NOT PLAUSIBLE, THIS GROUND OF APPEAL DESERVES DISMISSAL. 9. WE HAVE PERUSED THE RELEVANT MATERIAL ON RECOR D IN THE LIGHT OF THE RIVAL CONTENTION INCLUDING THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. WE NOTICE THAT IN THE CASE OF PRICE WAREHOUSE COOPERS PVT. LTD. VS. COMMISSIONER OF INCOME TAX (SUPRA ) THE HONBLE SUPREME COURT HAS HELD THAT IM POSITION OF PENALTY IN A CASE WHERE THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR WITHOUT ANY INTENTION TO CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS, WOULD BE UNWARRANTED. IN THE SAID CASE THE ASSESSEE BY MISTAKE CLAIMED DEDUCTIO N IN RESPECT PROVISIONS TOWARDS PAYMENT OF GRATUITY IN ITS RETURN OF INCOME EVEN THOUGH TAX AUDIT REPORT INDICATED THAT SUCH PROVISION WAS NOT ALLOWABLE. THE AO INITIATED PENALTY PROCEEDINGS ON THE BASIS OF ADDITION MADE AND IMPOSED PENALTY U/S 271(1)(C) O F THE ACT. THE PENALTY WAS CONFIRMED BY THE HONBLE HIGH COURT. HOWEVER, THE HON,BLE SUPREME COURT SET ASIDE THE ORDER PASSED BY THE HIGH COURT HOLDING THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR WITHOUT ANY INTENTION TO CONCEAL ITS INCOME OR TO FURNISH INACCURATE PARTICULARS OF ITS INCOME. 7 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 10. WE NOTICE THAT T HE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE DISCUSSED ABOVE. HENCE, FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE SAID CASE WE SET ASIDE TH E FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY CONFIRMED BY THE LD. CIT(A). 11. THE ASSESSEE HAS FURTHER CHALLENGED THE ACTION OF THE LD. CIT(A) IN CONFIRMING PENALTY LEVIED BY THE AO ON ACCOUNT OF DISALLOWANCES MADE U/S 40(A)(IA) OF THE ACT IN RESPECT OF PROVISION FOR COMMISSION AND LEGAL CHARGES PROVISION. THE LD. COUNSEL AT THE OUTSET POINTED OUT THE ACTUAL ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PROVISION FOR COMMISSION WAS RS.4 0, 000 / - AND NOT 4,00,000/ - . THE LD. COUNSEL FURTH ER SUBMITTED THAT THE ASSESSEE COMPANY MADE THE PROVISION FOR COMMISSION IN THE BOOKS OF ACCOUNTS IN THE ORDINARY COURSE OF BUSINESS AND AS PER THE MATCHING CONCEPT OF ACCOUNTING AND AFTER ADOPTING A SCIENTIFIC METHOD FOR CALCULATIONS. OUT OF THE SAID AMOU NT COMMISSION WAS PAID IN RESPECT OF CERTAIN BROKERS WITHOUT DEDUCTING TAX AT SOURCE, WHOSE INDIVIDUAL AMOUNTS WERE LESS THAN RS. 2,500/ - EACH. THE LD COUNSEL FURTHER SUBMITTED THAT THE COMPANY WAS ADVISED BY THE THEN TAX CONSULTANTS THAT SINCE THE PROVISI ON WAS FOR COMMISSION PAYABLE TO VARIOUS PERSONS, TAX AT SOURCE WAS NOT REQUIRED TO BE DEDUCTED. HENCE THE COMPANY ACTED ON THE BASIS OF LEGAL ADVICE AND A BONA FIDE BELIEF THAT THE PROVISIONS OF CHAPTER XVII B AND SECTION 40(A)(IA) WERE NOT APPLICABLE ON THE SAID PROVISION. THE LD. COUNSEL MADE THE SIMILAR ARGUMENTS IN RESPECT OF DISALLOWANCE MADE ON ACCOUNT OF PROVISION FOR LEGAL CHARGES. THE LD. COUNSEL PLACING RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME T AX VS. RELIANCE PETROPRODUCTS LTD. 322 ITR 158 , SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(A) IS NOT IN ACCORDANCE WITH THE LAW LAID DOWN BY THE HONBLE SUPREME COURT, THE SAME IS LIABLE TO BE SET ASIDE. 12. THE LD. DR ON THE OTHER HAND SUBMITTED TH AT SINCE THE ASSESSEE HAS MADE THE CLAIMS WHICH ARE NOT PERMITTED UNDER THE LAW, THE LD. CIT(A) HAS 8 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 RIGHTLY CONFIRMED THE PENALTY LEVIED ON THE BASIS OF THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT. 13. WE HAVE GONE THROUGH THE RELEVANT RECORD INCLUDING THE JUDGMENT RELIED UPON BY THE ASSESSEE IN THE LIGHT OF THE RIVAL SUBMISSIONS. THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT DEDUCTING THE TAX AT SOURCE WHILE MAKING PAYMENTS TO THE CONCERNED PERSONS. EXPLANATION 1 TO SECTION 271(1) SAYS THAT ; WHERE I N RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE 10[***] 24[PRINCIPAL COMMISSIONER OR COMMISSIONER] (APPEALS) 11[OR THE 24[PRINCIPAL COMMISSIONER OR COMMISSIONER]] TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUBSECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 14. IN VIEW OF THE AFORESAID EXPLANATION, PENALTY CAN BE IMPOSED U/S 271(1)(C) OF THE ACT, IN CASE THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHIC H IS FOUND BY THE ASSESSING OFFICER OR OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE . IN THE PRESENT CASE, THE ASSESSEE S HAS EXPLANATION THE REASON FOR MAKING CLAIM IN QUESTION . IN OUR CON SIDERED VIEW, THE EXPLANATION GIVEN BY THE ASSESSEE IS PLAUSIBLE. 9 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 15. IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS LTD. (SUPRA), THE HONBLE SUPREME COURT HAS HELD THAT MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT T O FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. IN THE SAID CASE, THE HONBLE COURT HELD THAT SECTION 271 (1) (C) IS NOT ATTRACTED MERELY FOR THE REASON BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF INTEREST EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE. 16. HENCE, IN THE LIGHT OF THE FACTS OF THE CASE AND THE EXPLANATION GIVEN BY THE ASSESSEE AND THE RATIO OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE AFORESAID CASE, WE HOLD THAT THE LD. CIT (A) HAS WRONGLY CONFIR MED THE ADDITION MADE BY THE AO. WE THEREFORE SET ASIDE THE FINDINGS OF THE LD. CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY. 17. THE ASSESSEE HAS FURTHER CHALLENGED THE ACTION OF THE LD. CIT (A) IN CONFIRMING THE PENALTY LEVIED ON ACCOUNT OF REJECTION OF CLAIM U/S 80G OF THE ACT. THE LD. COUNSEL SUBMITTED THAT THE COMPANY HAD INCURRED EXPENDITURE OF RS. 17,000/ - TOWARDS DONATION, FINANCIAL AID, DIWALI BONUS ETC. THE ASSESSEE CLAIMED THE SAID EXPENDITURE IN THE ORDINARY COURSE OF BUSINESS AS IF IT WAS INC URRED FOR THE PURP OSE OF BUSINESS OF THE COMPANY DUE TO BONA FIDE AND INADVERTENT MISTAKE OF CHARTERED ACCOUNTANT WHILE FILING THE RETURN OF INCOME. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAS EXPLAINED BEFORE THE AO THAT THE MISTAKE WAS BONA FIDE AND INADVERTENT, THE SAME CANNOT BE TERMED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF THE INCOME TO ATTRACT SECTION 271 (1) (C) OF THE ACT. THEREFORE, THE FINDINGS OF THE LD. CIT (A) ARE LIABLE TO BE SET ASIDE. THE LD. CO UNSEL RELIED ON THE DECISION OF THE ALLAHABAD BENCH OF THE ITAT RENDERED IN THE CASE OF ACIT VS. AH WHEELERS & COMPANY P LTD. (2011) 30 CCH 0245 (ALL TRIB.) AND THE JUDGMENT OF THE HONB LE 10 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CAMPR O TECHNOLOGIES PVT. LTD. (2014) 91 CCH 0110 (DELHI) TO SUBSTANTIATE HIS ARGUMENTS. 18. ON THE OTHER HAND, THE LD. DR RELYING ON THE FINDINGS OF THE LD. CIT (A) SUBMITTED THAT SINCE THE CLAIM OF THE ASSESSEE WAS NOT ALLOWABLE UNDER THE LAW, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE PENALTY LEVIED ON ACCOUNT OF DISALLOWANCE MADE U/S 80G OF THE ACT. HENCE, THERE IS NO MERIT IN THE CONTENTION OF THE ASSESSEE. 19. WE HAVE PERUSED THE RELEVANT MATERIAL INCLUDING THE CASES RELIED UPON BY THE LD. COUNSEL IN THE L IGHT OF THE RIVAL SUBMISSIONS OF THE PARTIES. WE NOTICE THAT IN THE CASE OF ACIT VS. AH WHEELERS & COMPANY PVT. LTD. (SUPRA), THE ALLAHABAD BENCH OF TRIBUNAL HAS HELD THAT CARRY FORWARD LOS S SHOWN AT W RONG FIGURE DUE TO MISTAKE OF TAX CONSULTANT WOULD NOT ATTRACT PENALTY U/S 271 (C) AS THE CORRECT FIGURE WAS AVAILABL E WITH THE AO. SIMILARLY, IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CAMPRO TECHNOLOGIES PVT. LTD. (SUPRA) THE HONBLE HIGH COURT HELD THAT IF THE REASON GIVEN FOR WRONG FILING IS NOT A DEVI CE TO COVER AND ULTERIOR PURPOSE, THE MISTAKE MADE BY THE CHARTERED ACCOUNTANT CAN BE TREATED AS HUMAN ERROR, THEREFORE THE SAME CANNOT BE HELD TO BE THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT PENALTY U/S 2 71 (1) (C) OF THE ACT. 20. IN VIEW OF THE FACTS OF THE CASE AND EXPLANATION GIVEN BY THE ASSESSE E AND IN THE LIGHT OF THE FINDINGS OF THE ITAT, ALLAHABAD AND THE HONBLE DELHI HIGH COURT DISCUSSED ABOVE, WE HOLD THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE IN QUESTION. ACCORDINGLY, WE SET ASIDE THE FINDINGS OF THE LD. CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY. 11 ITA N O. 5131 / MUM/2013 ASSESSMENT YEAR: 2009 - 10 IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2009 - 2010 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY, 2019 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; DATED: 23 / 01/2019 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A ) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
