SH. SANJEEV SETHI, AMRITSAR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5, AMRITSAR

ITA 581/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5734 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISRA LD
• Assessee Lawyers: SUDHIR MEHRA; NITIN MEHRA LD ADVS

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.581(ASR)/2017 ASSESSMENT YEAR:2013- 14 MR. SANJEEV SETHI 10, MAQBOOL ROAD, AMRITSAR PAN:ABQPS7206P VS. DY. CIT CIRCLE-5, AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUDHIR MEHRA & SH. NITIN MEHRA (LD. ADVS.) RESPONDENT BY: SH. A.N.MISRA (LD. DR) DATE OF HEARING: 24.01.2018 DATE OF PRONOUNCEMENT: 28.02.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT U/S.271(1)(C) OF THE ACT (HEREIN CALLED AS THE ACT), ON FEELING AGGRIEVED AGAINST THE ORDER DATED 09 .06.2017 PASSED BY THE LD. CIT(A)-2, AMRITSAR, IN APPEAL NO.100 84/2016- 17, FOR ASST. YEAR:2013-14. ITA NO.581/ASR/2017 (A.Y.2013-14) SANJEEV SETHI VS. DCIT 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (1) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE APPELLANT RESPECTFULLY SUBMITS THAT LD. CIT(A) HAS ERRED, IN LAW AND IN FACTS IN SUSTAINING THE PENALTY U/S 271(1)(C) OF RS.62,405/- IMPOSED BY LD. DCIT, CIRCLE-5, AMRITSAR, VIDE HIS O RDER DATED 09.06.2017 OF THE INCOME TAX ACT, 1961 PERTAINING T O A.Y.2013-14. (2) THAT THE LD CIT(A) HAS NOT APPRECIATED THAT T HE DISCREPANCY IN THE VALUATION OF CLOSING STOCK HAS OCCURRED DUE TO INADVERTENT CLERICAL/TYPOGRAPHICAL MISTAKE IN OMITTING TO PUT A DIGIT 0 AFTER THE FIGURE 22 AND INADVERTENTLY VALUED THE ITEM TULUP RINT BROWN GR 1020 -KG @ RS22/- INSTEAD OF RS.220/- THE SAID CLER ICAL ERROR REMAINED UNNOTICED AND THERE WAS NO MALAFIDE INTENT ION OR DELIBERATE FURNISHING INACCURATE PARTICULARS. (3) THAT THE APPELLANT HAD ACCEPTED THE VIEW OF THE DEPARTMENT, FILED LETTER ACCEPTING THE ADDITION AND OFFERED THE RESULTANT DIFFERENCE IN STOCK VALUATION AMOUNTING TO RS.20196 0/- FOR INCLUSION IN THE TOTAL INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAVE NOT FILED APPEAL OR REVISION. THE ASSESSIN G OFFICER WAS DUTY BOUND IN LAW TO TAKE THESE FACTORS INTO CONSID ERATION AND ERRED IN NOT USING THE DISCRETION VESTED IN HER WHI LE IMPOSING THE SAID PENALTY. (4) THAT LD. OFFICER HAS NOT APPRECIATED THAT THE RE WAS NO LOSS OF REVENUE SINCE THE SAME VALUE OF CLOSING STOCK HAS B EEN TAKEN AS OPENING STOCK FOR F.Y. 2013-14 AND THE UNDERVALUATI ON OF CLOSING STOCK WAS NOT ADVANTAGEOUS TO THE APPELLANT NOR A D EVICE TO REDUCE THE TOTAL INCOME THIS YEAR, RATHER IT WAS AN INADVE RTENT ERROR. IN ANY CASE, MISTAKE OCCURRED DUE TO NEGLIGENCE OF CLE RICAL STAFF AND AUDITORS. (5) THAT LD. ASSESSING OFFICER AS WELL AS CIT(A) HAVE ACTED AGAINST THE LAW BY NEITHER FOLLOWING THE ORDERS OF HIGHER JUDICIAL AUTHORITIES QUOTED BY APPELLANT NOR DISTINGUISHING THE SAME IN ORDER UNDER APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE IN THE INSTAN T CASE, DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDER VALUED THE CLO SING ITA NO.581/ASR/2017 (A.Y.2013-14) SANJEEV SETHI VS. DCIT 3 STOCK OF 1020 KG OF TULUPRINT BROWN GR BY RS.198 PER K G, THEREFORE, AN ADDITION OF RS.2,01,960/- (I.E., 1020 KG X RS.198) WAS MADE TO CLOSING STOCK AND TOTAL INCOME OF THE ASSESSEE, T HE PENALTY PROCEEDINGS WERE ALSO INITIATED U/S 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH RESUL TED INTO IMPOSITION OF MINIMUM PENALTY AMOUNTING TO RS.62,405/ - @100% OF TAX SOUGHT TO BE EVADED AND ON APPEAL THE SA ID PENALTY ORDER WAS CONFIRMED BY THE LD. CIT(A). 4. NOW, THE ASSESSEE ON FEELING AGGRIEVED BY THE ORDER IMPUGNED HEREIN PASSED BY THE LD. CIT(A) IS IN APPEAL BEFORE US. 5. IT WAS ARGUED BY THE APPELLANT THAT THE ITEM TULUPR INT BROWN GR 1020KG HAS BEEN INADVERTENTLY, VALUED AT RS. 22 KG AS ON 31 ST MARCH, 2013 INSTEAD OF RS.220/- PER KG, AS PER PURCHASE INVOICE DUE TO TYPOGRAPHICAL ERROR AND VOLUNTARILY OF FERED THE RESULTANT DIFFERENCE IN STOCK VALUATION AMOUNTING TO RS.2,01,960/- FOR INCLUSION IN THE TOTAL INCOME. THE I NADVERTENT CLERICAL MISTAKE IN THE VALUATION OF CLOSING STOCK HAS OCCUR RED DUE TO INADVERTENT CLERICAL MISTAKE IN OMITTING TO PUT A DIGIT O AFTER THE FIGURE 22 AND UNDER VALUED THE ITEM TULUP RINT BROWN @ RS.22/- INSTEAD OF RS.220/-. IT WAS FURTHER ARGUED THAT THERE WAS NO MALAFIDE INTENTION OR DELIBERATE IN FURNISHING OF INACCURATE PARTICULARS OF INCOME AND EVEN OTHERWISE THERE WAS NO LO SS OF REVENUE, SINCE THE SAME VALUE ON VALUE OF CLOSING STOCK H AS BEEN TAKEN AS OPENING STOCK FOR THE NEXT FINANCIAL YEA R I.E. ITA NO.581/ASR/2017 (A.Y.2013-14) SANJEEV SETHI VS. DCIT 4 2013-14 AND THE UNDERVALUATION OF CLOSING STOCK WAS NOT ADVANTAGEOUS TO THE APPELLANT NOR DEVICE TO REDUCE TH E TOTAL INCOME THIS YEAR, RATHER IT WAS AN INADVERTENT ERROR A ND IT WAS FURTHER ARGUED THAT THE REVENUE IS REQUIRED TO SHOW CONTUMACIOUS CONDUCT OR MALAFIDE INTENT ON THE PART OF THE ASSESSEE BEFORE IMPOSING PENALTY. 6. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDE R PASSED BY THE AUTHORITIES BELOW. 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTAN CES OF THE CASE AND RIVAL SUBMISSIONS OF THE PARTIES AS WELL AS OR DER PASSED BY THE AUTHORITIES BELOW. WHILE PASSING THE IMPUG NED ORDER THE LD. CIT(A) HAS PASSED HIS ORDER ON THE REASONI NG THAT THE ARGUMENT OF THE APPELLANT IS THAT THE MISTAKE I N THE VALUATION OF CLOSING STOCK HAS OCCURRED INADVERTENT DUE TO CLERICAL MISTAKE IN OMITTING TO PUT A DIGIT 0 AFTER THE FIGURE 22 , HOWEVER BECAUSE THE RETURN OF THE ASSESSEE WAS FILED BY THE PROFESSIONAL CHARTERED ACCOUNTANT, WHO ALSO HAD AUDITED THE ACCOUNTS OF THE ASSESSEE, THEREFORE, THE ARGUMENT OF THE APPELLANT TO THE EFFECT THAT THERE WAS NO MALAFIDE IN TENTION OR DELIBERATE IN FURNISHING INACCURATE PARTICULARS OF INCO ME CANNOT BE ACCEPTED BECAUSE THE SAME WAS RECTIFIED ONLY AFTER, PO INTING OUT MISTAKE BY THE AO, THEREFORE, THE APPELLANT WAS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. ITA NO.581/ASR/2017 (A.Y.2013-14) SANJEEV SETHI VS. DCIT 5 WE REALIZED THAT IN THE INSTANT CASE, IT SEEMS THAT THER E WAS NO LOSS OF REVENUE SINCE THE CLOSING STOCK WAS SHOWN SAME AS OF OPENING STOCK FOR THE NEXT FINANCIAL YEAR AND THE REFORE, THE UNDER-VALUATION OF CLOSING STOCK APPARENTLY, DOES NOT SE EMS TO BE ADVANTAGEOUS TO THE APPELLANT BUT IT CAN BE INFERR ED THAT THE SAME HAS OCCURRED DUE TO NEGLIGENCE OF THE CLERICAL STAFF AND AUDITORS AND EVEN OTHERWISE THE APPELLANT HIMSELF OFFE RED THE RESULTANT DIFFERENCES IN THE STOCK VALUATION AMOUNTING T O RS.2,01,960/- FOR INCLUSION IN THE TOTAL INCOME DURING THE ASSESSMENT PROCEEDING ITSELF AND AFTER COMPUTATION IN THE ASSESSMENT ORDER, DID NOT PREFER ANY APPEAL OR REVISION. WE HAVE ALSO CONSIDERED THE CLERICAL/TYPOGRAPHICAL MISTA KE IN OMITTING TO PUT A DIGIT 0 AFTER FIGURE 22 BY W HICH THE VALUE OF THE ITEM UNDER CONSIDERATION BECOME UNDER VALUED AND I N OUR CONSIDERED OPINION, OMITTING TO PUT A DIGIT O AFTER THE FIGURE 22 SEEMS TO BE QUITE INADVERTENTLY TYPOGRAPHICAL MISTAKE B ECAUSE CLOSING STOCK WHICH HAS BEEN TAKEN AS OPENING STOCK FOR F.Y.2013-14, I.E. NEXT FINANCIAL YEAR IS THE SAME. IN OVER ALL CONSIDERATION, WE ARE OF THE CONSIDERED VIE W THAT THE MISTAKE OCCURRED IN THE INSTANT CASE WAS NOT BA SED ON MALAFIDE OR DISHONEST OR DELIBERATE INTENTION IN FURN ISHING OF INACCURATE PARTICULARS INCOME BUT BECAUSE OF BONAFIDE MIST AKE WHICH OCCURRED INADVERTENTLY ONLY AND THEREFORE, DOES N OT ENTAIL ANY PENALTY AND HENCE, THE ORDER UNDER CHALLENGE IS SET ASIDE ITA NO.581/ASR/2017 (A.Y.2013-14) SANJEEV SETHI VS. DCIT 6 AND PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD . CIT(A) STANDS DELETED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 .02.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 28.02.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. SANJEEV SETHI, AMRITSAR (2) THE DCIT, CIRCLE-5, AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED. (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER