NATVAR PARIKH INDUSTRIES LTD, MUMBAI V. DCIT CEN CIR 40, MUMBAI

ITA 5751/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7900 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 23-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: SATISH R MODYLD
• Keywords: Revised return
• Section: 143(3); 2

Judgement Text

ITA.NO.5751/MUM/2013 NATVAR PARIKH INDUSTRIES LIMITED ASSESSMENT YEAR-2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5751/MUM/2013 ( / ASSESSMENT YEAR: 2008-09) NATVAR PARIKH INDUSTRIES LTD. 107-109,P.DMELLO ROAD OPP. SUGAR MARKET MUMBAI-400 009 / VS. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 40 MUMBAI ! ./ ./PAN/GIR NO. AAACN-5361-L ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : SATISH R.MODY,LD.AR RE VENUE BY : SUMAN KUMAR, LD. SR. DR / DATE OF HEARING : 01/11/2017 / DATE OF PRONOUNCEMENT : 13/12 /2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2008-09 ASSAILS THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX (APPEALS)-38 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-38/IT-119/2011-12 DATED 22/08/2013 QUA CONFIRMATION OF PENALTY U/S 271(1)(C). THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED ON 30/11/2010 BY LD. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRC LE 40, MUMBAI [AO] ITA.NO.5751/MUM/2013 NATVAR PARIKH INDUSTRIES LIMITED ASSESSMENT YEAR-2008-09 2 U/S 143(3) WHEREAS PENALTY U/S 271(1)(C) WAS LEVIED VIDE PENALTY ORDER DATED 30/05/2011. THE ASSESSEE HAS FILED ADDITIONAL GROUND OF APPEAL WHICH CONTESTS THE IMPOSITION OF PENALTY ON LEGAL G ROUNDS. SINCE THE SAME IS LEGAL GROUND AND DO NOT REQUIRE APPRECIATIO N OF NEW FACTS, THE SAME IS TAKEN ON RECORD. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE , IN QUANTUM ASSESSMENT, SUFFERED ADDITIONS OF RS.15,34,153/- ON ACCOUNT OF SUNDRY ASSETS WRITTEN OFF UNDER THE HEAD ADMINISTRATIVE EXPENDITURE. IN THE ABSENCE OF SATISFACTORY EXPLANATION, THE SAME WAS D ISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE QUANTUM ADD ITION WAS ACCEPTED BY THE ASSESSEE. CONSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED IN THE QUANTUM ASSESSMENT ORDER. 2.2 THE ASSESSEE, VIDE PENALTY ORDER DATED 30/05/20 11 WAS SADDLED WITH PENALTY OF RS.6 LACS WHICH WAS CONFIRMED BY LD . CIT(A) VIDE IMPUGNED ORDER DATED 22/08/2013. 3.1 THE LD. COUNSEL FOR ASSESSEE [AR], FIRST OF ALL , ASSAILED PENALTY ON LEGAL GROUNDS BY DRAWING OUR ATTENTION TO THE QUANT UM ASSESSMENT ORDER, NOTICE U/S 274 READ WITH SECTION 271(1)(C) AND PENALTY ORDER PASSED BY LD. AO ON THE PREMISES THAT NO CLEAR CHAR GE HAS BEEN SPECIFIED BY THE LD. AO WHILE LEVYING THE PENALTY A ND THEREFORE, THE SAME STOOD VITIATED. 3.2 THE LD. AR FURTHER CONTESTED THE PENALTY ON MER ITS BY STATING THAT THE SUNDRY ASSETS WRITTEN OFF REPRESENTED THE AMOUNT OF FIXED ASSETS NOT FOUND DURING PHYSICAL VERIFICATION BY THE AUDITOR. THE ASSESSEE DEBITED THE SAME UNDER ADMINISTRATIVE EXPENSES BUT INADVERTENTLY OMITTED TO ADD BACK THE SAME IN THE COMPUTATION OF INCOME. THEREFO RE, IT WAS CASE OF ITA.NO.5751/MUM/2013 NATVAR PARIKH INDUSTRIES LIMITED ASSESSMENT YEAR-2008-09 3 GENUINE / BONA FIDE MISTAKE WHICH WAS ACCEPTED BY ASSESSEE UPON BEING POINTED OUT DURING QUANTUM ASSESSMENT PROCEED INGS. NEVERTHELESS, THERE WAS NO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR NO INTENTION TO CONCEAL THE INCOME AND HENCE THE PENALTY WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE JUDGMENT OF H ONBLE APEX COURT RENDERED IN PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT [2012 25 TAXMANN.COM 400] AND ALSO ON CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. [2010 322 ITR 158] AND DECISION OF HONBLE DELHI HIGH COURT RENDERED IN CIT VS. BRAHAPUTRA CONSORTIUM LTD. [2011 12 TAXMANN .COM 486]. 3.3 PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE [DR] POINTED OUT TH AT THE ASSESSEE MADE A CLAIM WHICH WAS NOT TENABLE IN LAW AND WHICH WAS NOT RECTIFIED SUBSEQUENTLY BY FILING REVISED RETURN OF INCOME AND HENCE PENALTY WAS JUSTIFIED. 4. HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING CITED CASE LAWS. UPON PERUSAL OF THE SAME , WE FIND THAT THE ASSESSEE STANDS BENEFITTED OF LEGAL PROPOSITIONS ON LEGAL GROUNDS AS WELL AS ON MERITS. THE HONBLE APEX COURT IN PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT [SUPRA] HELD THAT WHEN THERE WAS CLEAR DISCLOSURE IN FINANC IAL STATEMENTS AND TAX AUDIT REPORT, PENALTY WAS NOT JU STIFIED FOR BONA FIDE AND INADVERTENT ERROR. THE ADDITION, IN QUESTION, WAS CLEARLY REFLECTED BY THE ASSESSEE IN SCHEDULE M OF THE FINANCIAL STATEMENTS. THE SAME HAS BEEN OMITTED TO BE ADDED BACK IN THE NET PROFIT IN THE COMPUTATION OF INCOME WHICH AT THE MOST, COULD BE ATTRIBUTED TO BONA FIDE / INADVERTENT MISTAKE . SIMILAR VIEW HAS BEEN TAKEN IN THE OTHER CITED D ECISIONS. QUA LEGAL GROUNDS, WE FIND THAT THE LD. AO HAS NOT SPEC IFIED THE CHARGE VIZ. FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME ITA.NO.5751/MUM/2013 NATVAR PARIKH INDUSTRIES LIMITED ASSESSMENT YEAR-2008-09 4 IN THE QUANTUM ASSESSMENT ORDER FOR WHICH PENALTY W AS BEING INITIATED. FURTHER, A PERUSAL OF NOTICE U/S 274 READ WITH SECTION 271(1)(C) REVEALS THAT APPROPRIATE CLAUSE AND CHARGE HAS NOT BEEN MARKED / TICKED OFF . FINALLY, PENALTY HAS BEEN LEVIED ON BOTH CHARGES WH EREAS THE SAME, AS PER SETTLED LEGAL POSITION, CARRY DIFFERENT MEANING / CONNOTATIONS. HENCE, BY DELETING THE SAME, WE ALLOW ASSESSEES APPEAL. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARW AL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 13.12. 2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI