HOTEL SAHIL PRIVATE LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2), MUMBAI

ITA 5857/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0809 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 14-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL K MODY S
• Keywords: Bonafide mistake
• Section: 271(1)(c); 273B; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 5857/MUM/2017 (ASSESSMENT YEAR : 2012-13) M/S HOTEL SAHIL PVT LTD 292, J B BEHRAM MARG MUMBAI CENTRAL, MUMBAI-400 080 PAN : AAACH1038G VS ACIT, CENTRAL CIRCLE-1(2), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI NITESH JOSHI & VIPUL K MODY ADVOCATES RESPONDENT BY SHRI MANOJ KUMAR SINGH SR DR DATE OF HEARING 31-07-2019 DATE OF PRONOUNCEMENT 20-08-2019 O R D E R PER PAWAN SINGH, JUDICIAL MEMBER : THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF CIT(A)-47, MUMBAI DATED 26-07-2017 FOR AY 2012-13. THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER LEVING PENALTY O F RS.78,100/- UNDER SECTION 271(L)(C) OF THE ACT. IT IS SUBMITTED THAT THE APPELLANT HAD FURNISHED FU LL AND CORRECT PARTICULARS OF ITS INCOME. THE APPELLANT HAS NEITHER CONCEALED THE PARTICULARS OF ITS INCOME NOR HAVE FURNISHED INACCURATE PARTICULARS OF SUCH I NCOME AND THEREFORE NO PENALTY CAN BE LEVIED UNDER SECTION 271(L)(C) OF TH E INCOME TAX ACT, 1961. THE PENALTY ORDER IS HASTY, BAD IN LAW AND OUGHT TO BE CANCELLED. ITA 5857/MUM/2017 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED RETURN OF INCOME FOR A.Y. 2012-13 ON 29-09-2012 DECLARING INCOME OF RS.5 8,03,580/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT ASSES SEE HAS DEBITED AN AMOUNT OF RS.2,52,152/- UNDER THE HEAD LOSS ON SALE OF FIXED ASSETS (MOTOR CAR). THE AO ASKED THE ASSESSEE TO EXPLAIN WHY THE EXPENSES CLAIMED ON SALE OF FIXED ASSET SHOULD NOT BE ADDED BACK TO THE TOTAL INCOME AS THE SAME IS OF CAPITAL IN NATURE. IN REPLY, THE AS SESSEE STATED THAT DUE TO MISTAKE, THE ASSESSEE HAS CLAIMED LOSS ON SALE OF M OTOR CAR OF RS.2,52,152/-. THE ASSESSEE ALSO CLAIMED PRIOR PERIOD EXPENSES OF RS.600 UNDER THE HEAD OTHER EXPENSES. THE AO DISALLOWED LOSS ON FIXED AS SET (MOTOR CAR) AND PRIOR PERIOD EXPENSES WHILE PASSING THE ASSESSMENT ORDER ON 22.01.2015 UNDER SECTION 143(3). THE AO ALSO INITIATED PENALT Y PROCEEDINGS U/S 271(1)(C). NOTICE U/S 274 R.W.S. 271(1)(C) DATED 2 1-01-2015 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE FILED ITS REPLY DATED 1 8-07-2015. IN THE REPLY, THE ASSESSEE STATED THAT THERE WAS NO MALA FIDE INTENTI ON TO CONCEAL THE INCOME OR TO FURNISH INACCURATE PARTICULARS. THE ASSESSEE FU RTHER STATED THAT DURING THE ASSESSMENT THEY HAVE OFFERED THE ALLEGED LOSS ON FI XED ASSET FOR ADDITION, WHICH HAS BEEN ACCEPTED AND NO INITIATION OF PENALT Y WAS WARRANTED. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY AO. THE AO W ORKED OUT THE PENALTY @100% OF THE TAX SOUGHT TO BE EVADED. THE AO WORKE D OUT PENALTY OF ITA 5857/MUM/2017 3 RS.78,100/- VIDE HIS ORDER DATED 27-07-2015 PASSED UNDER SECTION 271(1)(C) OF THE ACT. ON APPEAL BEFORE THE LEARNED CIT(A), T HE ACTION OF AO WAS CONFIRMED. FURTHER AGGRIEVED BY THE ORDER OF LEAR NED CIT(A), THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSION OF LEARNED AUTHORIS ED REPRESENTATIVE (LD.AR) OF THE ASSESSEE AND LEARNED DEPARTMENTAL RE PRESENTATIVES ( LD. DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD.AR OF THE ASSESSEE SUBMITS THAT DUE TO INADVERTENT MISTAK E THE ASSESSEE DEBITED AN AMOUNT OF RS.2,52,152/- ON SALE OF FIXED ASSET. SO ON AFTER IT WAS REALISED DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VOL UNTARILY OFFERED THE SAME FOR ASSESSMENT. THERE WAS A VERY MINOR CLAIM OF PR IOR PERIOD EXPENSES. THE ASSESSEE ALSO AGREED FOR DISALLOWANCE OF SUCH PRIOR PERIOD EXPENSES OF RS.600/-. THERE WAS NO INTENTIONAL OR DELIBERATE A CTION ON THE PART OF ASSESSEE FOR FURNISHING OF INACCURATE PARTICULARS O F INCOME OR CONCEALMENT OF INCOME. THE LD.AR OF THE ASSESSEE SUBMITS THAT ASS ESSEE HIMSELF ACCEPTED THE UNINTENTIONAL MISTAKE. IN THE REPLY TO THE SHO W CAUSE NOTICE U/S 274 R.W.S. 271(1)(C), THE ASSESSEE SUFFICIENTLY EXPLAINED AS P ER SECTION 273B OF THE ACT. IN SUPPORT OF HIS SUBMISSION THE LD AR FOR THE ASS ESSEE RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN PRICE WATER CO OPERS PVT LTD (PWC) VS CIT (2012) 348 ITR 306 (SC). ITA 5857/MUM/2017 4 4. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU PPORTED THE ORDERS OF LOWER AUTHORITIES. THE LD. DR SUBMITS THAT HAD THE RETURN WAS NOT TAKEN UP FOR SCRUTINY, THE INCOME OF ASSESSEE WOULD HAVE BEE N ESCAPED FROM ASSESSMENT WITH RESPECT TO SALE OF FIXED ASSETS (MO TOR CAR) AND PRIOR PERIOD EXPENSES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISP UTE THAT DURING THE ASSESSMENT, THE AO FROM THE PERUSAL OF P&L ACCOUNT NOTED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.2,52,152/- UNDER THE H EAD LOSS ON SALE OF FIXED ASSET (MOTOR CAR) AND PRIOR PERIOD EXPENSES OF RS. 600/-. THERE IS N O FURTHER DISPUTE THAT ASSESSEE ACCEPTED BOTH THE ADD ITIONS / DISALLOWANCES VOLUNTARILY DURING THE COURSE OF ASSESSMENT. IT IS FURTHER NOT IN DISPUTE THAT NO FURTHER APPEAL IS FILED BY THE ASSESSEE AGAINST SUCH ADDITIONS. WE HAVE FURTHER NOTED THAT IN REPLY TO THE SHOW CAUSE NOTIC E UNDER SECTION 274 RWS 271(1)(C) THE ASSESSEE HAS EXPLAINED THAT THERE WAS NO MALAFIDE INTENTION TO CONCEAL THE INCOME OR PARTICULARS OF INCOME, THE AD DITION HAS BEEN ACCEPTED IN FULL. WE HAVE NOTED THAT THE HON BLE SUPREME COURT IN THE CASE OF PRICE WATER COOPERS PVT LTD (PWC) VS CIT (SUPRA) HELD THA T WHEN THE ASSESSEE DUE TO BONAFIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION OF GRATUITY TO ITS TOTAL INCOME, THE ASSESSEE ITA 5857/MUM/2017 5 SHOULD HAVE BEEN CAREFUL BUT THE ABSENCE OF DUE CAR E IN A CASE SUCH AS PRESENT ONE DID NOT MEAN THAT ASSESSEE WAS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL THE INCOME. 6. IN OUR CONSIDERED VIEW, THE RATIO OF THE DECI SION OF HON BLE SUPREME COURT IN PRICE WATER COOPERS PVT LTD (PWC) VS CIT ( SUPRA)) IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE. THERE FORE, CONSIDERING THE PECULIARITY OF FACTS OF THE CASE, WE ARE OF THE CON SIDERED VIEW THAT NO PENALTY WAS LEVIABLE ON SUCH FACTS AND CIRCUMSTANCES. THER EFORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE PENALTY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20-08-2019. SD/- SD/- ( SHAMIM YAHYA ) ( PAWAN SINGH ) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 20 TH AUGUST, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI