SEA VIEW DEVELOPERS, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-4(2), MUMBAI

ITA 5791/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5776 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim; Bonafide mistake
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5791 / MUM/ 20 1 7 ( / ASSESSMENT YEAR: 2013 - 14 ) SEA VIEW DEVELOPERS RAHEJA CHAMBERS, LINKING ROAD, MAIN AVENUE, 23 - 35, M.R. ROAD, SANTACRUZ (W), MUMBAI - 400054 . / VS. DCIT - C.C. 4(2), MUMBAI AIR INDIA BUILDING ./ ./ PAN/GIR NO. : AABFS 6301 F ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 10 .0 1 .201 9 / DATE OF PRONOUNCEMENT : 30.01 .2019 / O R D E R PER AMARJIT SINGH, J M: T HE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 06 .0 6 .201 7 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 52 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2013 - 14 WHERE IN THE PENALTY LEVIED BY THE AO HAS BEEN O RDERED TO BE CONFIRMED . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 THE LD. CIT(A) ERRED IN NOT DELETING THE PENALTY OF RS.16,152/ - LEVIED BY THE AO U/S 271(1)(C) OF THE I.T. ACT, 1961. ASSESSEE BY : SHRI VINA Y SINHA REVENUE BY: SHRI CHAUDHARY ARUN KUMAR SINGH ITA. NO.5791 /M/201 7 A.Y. 20 13 - 14 2 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT APPELLANT DUE TO OVERSIGHT FAILED TO DISALLOW THE SUM OF RS.52,274/ - BEING TDS OF THE PREVIOUS YEAR AND THAT THE DEFAULT IS NOT INTENTIONAL BUT ON ACCOUNT OF INADVERTENCE. 3. IT IS PRAYED THAT THE PENALTY OF RS.16,152/ - LEVIED BY THE AO U/S 271(1)(C) MAY PLEASED BE DELETED. ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM, ENG AGED IN THE BUSINESS OF BUILDER S , DEVELOPERS AND DEALING IN REAL ESTATE. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2013 - 14 ON 22.08.2013 DEC LARING LOSS TO THE TUNE OF RS.52,274/ - . THE CASE WA S SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE I.T. ACT, 1961 ON 30/9/2014 WHICH WAS DULY SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDING , AO MADE DISALLOWANCE OF TDS FOR EARLIER YEARS AMOUN TING TO THE TUNE OF RS.52,274/ - ON THE GROUNDS THAT THE SAME WAS NOT AN ALLOWABLE EXPENSES. FINALLY , THE ASSESSMENT WAS COMPLETED ON NIL INCOME VIDE ORDER DATED 29/12/2015 PASSED U/S 143(3) OF THE I.T. ACT. PENALTY PROCEEDING U/S 271 (1)(C) OF THE ACT WAS ALSO INITIATED IN RESPECT OF DISALLOWANCE OF RS.52,274/ - IN RESPECT OF TDS DEBITED TO THE P&L ACCOUNT. AS THE ADDITION MADE BY THE AO WAS NOT CONTESTED BY THE ASSESSEE , THEREFORE, A SHOW - CA USE NOTICE DATED 29/12/2015 WAS ISSUED TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED ON THE ASSESSEE. IN RESPONSE TO THE NOTICE , THE ASSESSEE SUBMITTED THAT THE DISALLOWANCES MADE IN THE ASSESSMENT OR DER WAS NOT RESULTED IN ANY TAX PAYMENT AS THE ASSESSEE FILED A RETURN OF LOSS. T HE ASSESSEE SUBMITTED THAT THERE WAS NO MALAFIDE INTENTION TO FILE INAPPROPRIATE CLAIMS AND SAID DISALLOWANCES ITA. NO.5791 /M/201 7 A.Y. 20 13 - 14 3 HAPPENED BECAUSE OF AN OVERSIGHT. THE SUBMISSION OF THE ASSESSEE WAS CONSIDERED BUT FOUND TO BE NOT ACCEPTABLE BY THE AO . SO BY CLAIMING A DEDUCT ION WHICH WAS NOT ELIGIBLE THE ASSESSEE TRIED TO CLAIM A HIGHER LOSS TO TAKE TAX BENEFITS. IN VIEW OF THE ABOVE FACTS , AO LEVIED PENALTY OF RS.16,152/ - U/S 271(1)(C) OF THE ACT, BEING 100% OF THE TAX SOUGHT TO BE EVADED, VIDE ORDER DATED 27/6/2016 . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4 . WE HAVE HEARD THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED T HE RECORD. IN BRIEF, THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.52,274/ - IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD OF TDS OF PREVIOUS YEAR. IT IS CLEARLY WRONG CLAIM BE ING TDS AMOUNT OF EARLIER YEARS IS NOT LIABLE TO BE CLAIMED AS REVENUE EXPENSES. IT IS TO BE SEEN WHETHER THESE FACTS ARE LIABLE TO BE LEVIED THE PENALTY IN VIEW OF THE PROVISIONS U/S 271(1)(C) OF THE ACT. AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ASSESSEE IF ANY DID THE BONAFIDE MISTAKE, THEREFORE, NO PENALTY IS LEVIABLE IN VIEW OF THE LAW SETTLED PRICE WATER HOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC). IT IS ALSO ARGUED THAT THE ASSESSEE MADE THE WRONG CLAIM WHICH WAS NOT ALLOWABLE IF ANY SO THE PENALTY IS NOT LEVIABLE IN VIEW OF THE LAW SETTL ED IN CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. (2010) 189 TAXMAN 322 (SC). ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED ITA. NO.5791 /M/201 7 A.Y. 20 13 - 14 4 THE SAID CONTENTIONS. IN THE INSTANT CASE, THE ASSESSEE CLAIM ED THE TDS OF EARLIER YEARS AS REVENUE EXPENSES WRONGLY WHICH CAN BE SAID AS BONAFIDE MISTAKE . IF THE CLAIM HAS BEEN MADE WITH BONAFIDE MISTAKE THEN THE PENALTY IS NOT LEVIABLE IN VIEW OF THE LAW SETTLED IN PRICE WATER HOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC). THE FACTS OF THE PRESENT CASE IS QU ITE SIMILAR TO THE FACTS OF THE CASE DECIDED BY HONBLE SUPREME COURT IN CASE PRICE WATER HOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC). IN BRIEF, THE ASSESSEE NOWHERE FURNISHED THE INACCURATE PARTICULARS NOR CONCEALED THE PARTICULARS OF INCOME. IF THE ASSESSEE RAISED WRONG CLAIM WHICH IS NOT ALLOWABLE IN ACCORDANCE WITH LAW , THEREFORE, IN THE SAID CIRCUMSTANCES NO PENALTY IS LEVIABLE ALSO IN VIEW OF THE LAW SETTLED IN CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. (2010) 189 TAXMAN 322 (SC). ACCORDINGLY, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND DELETED THE PENALTY. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30. 01.2019 . SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 30. 01.2019 . V IJAY ITA. NO.5791 /M/201 7 A.Y. 20 13 - 14 5 / 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