Addison & Company Ltd., CHENNAI V. DCIT, CHENNAI

ITA 517/CHNY/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 8760 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Revised return
• Section: 271(1)(c); 143(3); 274

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , ! ' # , $ #% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMB ER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.517/CHNY/2017 & '& /ASSESSMENT YEAR: 2008-09 M/S. ADDISON & COMPANY LTD., 803, ANNA SALAI, CHENNAI 600 002. [PAN: AAACA 5199H] VS. THE DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI. ( () /APPELLANT) ( *+() /RESPONDENT) () , - / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADV. *+() , - /RESPONDENT BY : SHRI ARV SREENIVASAN, JCIT . , /$ /DATE OF HEARING : 22.10.2019 01' , /$ /DATE OF PRONOUNCEMENT : 20.11.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 27.01.2017 F OR THE ASSESSMENT YEAR (AY) 2008-09. ITA NO.517/CHNY/2017 :- 2 -: 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND TRADING OF METAL CUTTING TOOLS. THE RETURN OF INCOM E FOR THE A.Y 2008-09 WAS FILED ON 29.09.2008 DISCLOSING TOTAL INCOME OF RS. 4,81,11,038/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1) , CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 27.12.20 16 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL INCOME OF RS. 5,14,12,360/-. WHILE DOING SO, THE AO MADE ADDITION ON ACCOUNT OF HIRE PURCHASE TRANSACTIONS OF RS. 9,42,492/-. THIS ADDIT ION WAS MADE BY THE AO ON ALLEGED EXCESS LEASE RENTAL OF RS. 9,42,492/- WAS CLAIMED BY THE APPELLANT, IT WAS CONCEDED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT-COMPANY CONCE DED THAT BY MISTAKE EXCESS RENTAL AMOUNT OF RS. 9,42,492/- WAS CLAIMED, WHICH WAS PAYMENT TOWARDS HIGHER PURCHASE CHARGES. BASED ON THIS, THE AO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT BY ISSUING SHOW CAUSE NOTICE U/S. 274 R/W S. 271(1)(C) OF THE ACT D ATED 27.12.2010. IN RESPONSE TO THE SHOW CAUSE NOTICE, IT WAS SUBMITTED THAT EXCESS CLAIM WAS MADE BY INADVERTENCE AND VOLUNTARILY AGREED FOR ADDITION BY FILING REVISED STATEMENT OF TOTAL INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THEREFORE, NO PENALTY SHOULD BE LEV IED. HOWEVER, THE ITA NO.517/CHNY/2017 :- 3 -: AO REJECTED THE ABOVE EXPLANATION BY HOLDING THAT T HE APPELLANT- COMPANY HAD NOT FILED ANY REVISED RETURN OF INCOME AND THE APPELLANT HAD INTENTIONALLY MADE EXCESS CLAIM OF LEASE RENTAL S BUT, FOR THE SCRUTINY PROCEEDINGS, THE EXCESS CLAIM WOULD NOT HAVE COME T O LIGHT. ACCORDINGLY, LEVIED PENALTY OF RS. 3,20,354/- VIDE ORDER DATED 2 9.06.2011 PASSED U/S. 271(1)(C) OF THE ACT. BEING AGGRIEVED, AN APPEAL W AS FILED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDER DISMISSED THE APPEA L. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. 3. THE LD. AR SUBMITTED THAT IT IS ONLY BECAUSE OF INADVERTENT MISTAKE EXCESS CLAIM OF LEASE RENTAL WAS MADE, ON NOTICING THE MISTAKE THE APPELLANT AGREED TO ADDITION AND ADDITIONS MADE ON ACCOUNT OF INADVERTENT MISTAKES DOES NOT ENTAIL THE PENALTY. P LACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT [2012] 348 ITR 306 (SC) . ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) PLACED REL IANCE ON THE ORDERS OF LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ONLY ISSUE IN THIS CASE RELATES TO LEV Y OF PENALTY U/S. 271(1)(C) OF THE ACT. THE ADDITION IN RESPECT OF W HICH THE PENALTY WAS LEVIED BY THE AO WAS AGREED BY THE APPELLANT BEFORE AO ON NOTICING THE ITA NO.517/CHNY/2017 :- 4 -: MISTAKE. THE EXPLANATION TENDERED BY THE ASSESSEE T HAT EXCESS CLAIM WAS MADE ON ACCOUNT OF INADVERTENT MISTAKE CANNOT B E DISBELIEVED HAVING REGARD TO THE CIRCUMSTANCES MENTIONED THEREI N. THEREFORE, THE REJECTION OF THE EXPLANATION BY THE AO IS NOT A VAL ID AND THE RATIO LAID DOWN BY THE DECISION OF THE HON'BLE SUPREME COURT I N THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. , SUPRA, IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE AND ACCORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON THE 20 TH DAY OF NOVEMBER, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! ' # ) (INTURI RAMA RAO) $ /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED:20 TH NOVEMBER, 2019. EDN, SR. P.S , */34 54'/ /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. . 6/ ( )/CIT(A) 4. . 6/ /CIT 5. 47 */ /DR 6. 8& 9 /GF