Voiceline Teleservices, Hyderabad, Hyderabad V. ITO, Ward-10(1), Hyderabad, Hyderabad

ITA 562/HYD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4164 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-08-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: S SYAM SUNDER RAO
• Keywords: Wrong claim
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI INTURI RAMARAO, ACCOUNTANT MEMBER I.T.A. NO. 562/HYD/2017 ASSESSMENT YEAR: 2012-13 M/S. VOICELINE TELESERVICES, HYDERABAD [PAN: AACFV7461L] VS INCOME TAX OFFICER, WARD-10(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. SYAM SUNDER RAO, AR FOR REVENUE : SHRI NILANJAN DEY, DR DATE OF HEARING : 07-08-2018 DATE OF PRONOUNCEMENT : 17-08-2018 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS AN ASSESSEES APPEAL FOR THE AY. 2012-13 AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -6, HYDERABAD, DATED 26-12-2016, CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME TAX ACT [ACT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM, FILED ITS RETURN OF INCOME FOR THE AY. 2012-13 DECLARING A TOTAL INCOME ITA NO. 562/HYD/2017 :- 2 - : OF RS. 20,07,610/-. DURING THE ASSESSMENT PROCEEDING S U/S. 143(3) OF THE ACT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED VARIOUS EXPENDITURE TO P&L A/C. ASSESSEE WAS THEREFORE ASKED TO PRODUCE THE BOOKS OF A CCOUNT, BILLS AND VOUCHERS ETC., AND THE ASSESSEE PRODUCED THE SAME. ON A TEST CHECK BY THE ASSESSING OFFICER, IT WAS FOUND THAT MOST OF THE BILLS ARE SELF-VOUCHED AND ARE NOT OPEN F OR FULL AND COMPLETE VERIFICATION. HE THEREFORE DISALLOWED A PART OF THE SAID EXPENDITURE AND BROUGHT IT TO TAX. 3. FURTHER, THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS. 9,59,680/ - IN THE BALANCE SHEET. THE ASSESSING OFFICER CALLED FOR THE INFORMATION FROM THE CREDITORS U/S. 133(6) OF THE ACT, IN RESPONS E TO WHICH, THE CREDITORS, M/S. DEEPIKA ENTERPRISES AND M/S. KRIPA BHAVANI ENTERPRISES INFORMED THAT THERE IS NO BALANCE P AYABLE BY THE ASSESSEE TO THEM AS ON 31 ST MARCH, 2012. THEREFORE, ASSESSING OFFICER BROUGHT THE SUM OF RS. 4,22,738/- SHOWN BY THE ASSESSEE AS DUE TO THEM ALSO TO TAX AS DEEMED PROF IT OF THE ASSESSEE. IN VIEW OF THE ABOVE ADDITIONS, THE ASSESS ING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE AC T. 4. IN REPLY TO THE SHOW CAUSE NOTICE U/S. 271(1)(C) OF THE ACT, THE ASSESSEE SUBMITTED THAT THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE AND THEREFORE THE PENALTY IS NOT LEVIABLE. ASSESSING OFFI CER WAS, HOWEVER, NOT CONVINCED WITH THE ASSESSEES CONTENTIONS AND HELD THAT IT IS DEEMED THAT ASSESSEE HAS FURNISHED INACC URATE ITA NO. 562/HYD/2017 :- 3 - : PARTICULARS OF INCOME WITH A VIEW TO AVOID TAX LIABILIT Y IN AS MUCH AS CLAIMING THE EXPENDITURE WHICH HAS NOT BEEN INCURRED BY IT. HE THUS, LEVIED THE MINIMUM PENALTY OF RS. 10,41,500/-. AGGRIEVED, ASSESSEE PREFERRED AN APPE AL BEFORE THE CIT(A), WHO CONFIRMED THE PENALTY AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GRO UNDS OF APPEAL: 1. THAT THE ASSESSING AUTHORITY AS WELL AS THE COM MISSIONER OF APPEALS ONE HAND HAVING CAME TO CONCLUSION THAT THE ASSESSEE GIVEN THE NAMES OF THE 269 EMPLOYEES AND THE AMOUNT PAID. BUT ON THE OTHER HAND THE DETAILS OF EMPLOYEES LIKE ADDRESS, P AN, ETC DID NOT FURNISHED, AS SUCH IMPOSING PENALTY UNDER EXPLANATI ON-I(A) OF SECTION 271(1)(C) NOT TENABLE AND NOT SUSTAINABLE UNDER LAW . 2. THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT NOTICED THAT THE WORD PARTICULARS MUST MEAN THE DETAILS SUPPLIED I N THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT A CCORDING TO TRUTH OR ERRONEOUS. IN THE INSTANT CASE, THERE WAS NO FINDI NG THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND T O BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER EXPLANATION -1(B) OF SECTION 271 (1)(C) OF INCOME TAX ACT. 3. ON THE BASIS OF MERE DISALLOWANCE OF A CLAIM MAD E BY THE ASSESSEE IN RETURN OF INCOME, IT CANNOT BE SAID THA T THE ASSESSEE WAS GUILTY OF CONCEALMENT OR FILING INACCURATE PARTICUL ARS UNDER SECTION 271(1)(C) AS ALL INFORMATION WAS AVAILABLE IN THE R ETURN, AS PER THE RATIO LAID DOWN IN CIT VS RELIANCE PETROPRODUCTS PV T LTD (2010) HENCE, IT IS JUST AND NECESSARY THAT THIS HON'BLE T RIBUNAL MAY BE PLEASED TO SETASIDE THE IMPUGNED ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEALS)-6, HYDERABAD, TELANGANA STA TE IN VIDE ITA NO.0237/2015-16/CIT(A)6/16-17, DATED: 26.12.2016 AN D SAME WAS COMMUNICATED TO THE APPELLANT ON DATED: 31.1.2017, TO THE EXTENT OF IMPOSING PENALTY WITH REGARDING WRONG CLAIM OF SALA RIES OF EMPLOYEES AND SUNDRY CREDITORS REPRESENTS INCOME IN RESPECT O F WHICH INACCURATE PARTICULARS HAD BEEN FURNISHED, FOR THE ASSESSMENT YEAR 2012-13, AND TO PASS SUCH ORDER OR ORDERS AS THIS H ON'BLE TRIBUNAL MAY DEEM FIT AND IN THE PROPER IN THE CIRCUMSTANCES WITH THE INTEREST OF THE JUSTICE. ITA NO. 562/HYD/2017 :- 4 - : 5. LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING TH E SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORITIE S BELOW, SUBMITTED THAT THE ASSESSEE HAD FURNISHED ALL TH E RELEVANT MATERIAL BEFORE THE ASSESSING OFFICER, BUT BE CAUSE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CONTENTION S OF THE ASSESSEE, HAD MADE THE DISALLOWANCES AND THE CONSEQUE NTIAL ADDITIONS. HE SUBMITTED THAT EACH AND EVERY ADDITION DOE S NOT AUTOMATICALLY ATTRACT THE PENALTY U/S. 271(1)(C) OF THE ACT AND AS THE CONDITIONS FOR LEVY OF PENALTY ARE NOT SATISFIE D, THE PENALTY SHOULD BE DELETED. 6. LD.DR, HOWEVER, ON THE OTHER HAND, SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THE DISALLOWANCE OF EXPENDITURE IS NOT ON ACCOUNT OF FINDINGS OF THE ASSESSING OFFICER THAT THE AS SESSEE HAS FURNISHED INACCURATE PARTICULARS, BUT BECAUSE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE SELF-MAD E VOUCHERS PRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER, IN FACT, HAD NOT BROUGHT OUT ANY SPECIFIC EXPENDITURE, WHICH IS N OT ALLOWABLE OR WHICH HAS BEEN CLAIMED INACCURATELY OR EXCESSIVELY. IT IS ONLY THAT THE ASSESSEE COULD NOT SU BSTANTIATE THE EXPENDITURE WITH INDEPENDENT EVIDENCE. 7.1. AS REGARDS THE SUNDRY CREDITORS, THE ASSESSING OF FICER HAS RECEIVED INFORMATION U/S. 133(6) OF THE ACT FROM TH E CREDITORS BUT THE SAME HAS NOT BEEN CONFRONTED TO THE ITA NO. 562/HYD/2017 :- 5 - : ASSESSEE. IN FACT, BEFORE THE ASSESSING OFFICER DURI NG THE PENALTY PROCEEDINGS, THE ASSESSEE HAD STATED THAT THE DEALERSHIP WITH M/S. TATA TELESERVICES LTD., WAS TERMI NATED AND BECAUSE OF THIS, MANY DETAILS FOR THE CLAIM OF EX PENSES HAVE NOT BEEN FURNISHED AND SOME OF THE CREDITORS HAVE CLOSED THEIR ACCOUNTS AS THEIR RESPECTIVE BUSINESS ACTIVITIES HAVE ALSO BEEN CLOSED. 7.2. WE FIND THAT THE ASSESSEE HAS GIVEN THE DETAILS OF THE EXPENDITURE AND ALSO AN EXPLANATION WHICH HAS NOT BEEN FOUND TO BE FALSE OR UNACCEPTABLE. THE LD.DR ALSO HAS NOT B EEN ABLE TO REBUT THE CONTENTIONS OF THE ASSESSEE WITH ANY EVIDENCE TO THE CONTRARY. AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, EVERY ADDITION WILL NOT AUTOMATICALLY ATTRACT TH E PENALTY. THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIAT E ITS CLAIM BUT THERE IS ALSO NO FINDING THAT IT HAS FURNISHED INACCURATE PARTICULARS OR HAS CONCEALED ITS INCOME. I N VIEW OF THE SAME, WE ARE INCLINED TO DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH AUGUST, 2018 SD/- SD/- (INTURI RAMARAO) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED 17 TH AUGUST, 2018 TNMM ITA NO. 562/HYD/2017 :- 6 - : COPY TO : 1. M/S. VOICELINE TELESERVICES, C/O. S. SYAMSUNDER RAO, ADVOCATE, PLOT NO. 265/T, SAIDABAD, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-10(2), HYDERABAD. 3. CIT(APPEALS)-6, HYDERABAD. 4. PR.CIT-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.