Bestways Transport India P. Ltd., Faridabad V. ITO, WARD- 1(2), Faridabad

ITA 6251/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3100 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R MISHRA
• Assessee Lawyers: N R VERMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6251/DEL/2017 ASSESSMENT YEAR : 2013-14 BESTWAYS TRANSPORT INDIA P. LTD., 5NH/87, NIT FARIDABAD, HARYANA. VS. ITO, WARD- 1(2), FARIDABAD, HARYANA. PAN : AACCB1638C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N. R. VERMA, CA DEPARTMENT BY : SHRI B. R. MISHRA, SR.DR DATE OF HEARING : 12-02-2018 DATE OF PRONOUNCEMENT : 15-03-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 11.08.2017 OF CIT(A), FARIDABAD RELATING TO ASSESSM ENT YEAR 2013-14. 2. LEVY OF PENALTY OF RS.1,83,855/- U/S 271(1)(C) O F THE I.T. ACT, 1961 BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRANSPORT OPERAT ORS & CARGO AND CARRIER SERVICE. IT FILED ITS RETURN OF INCOME ON 26.09.20 13 DECLARING TOTAL INCOME OF RS.1,93,800/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN IN THE 2 ITA NO.6251/DEL/2017 STATEMENT OF CURRENT YEAR LOSSES ADJUSTMENT OF RS.3 5,40,113/- WHEREAS IT HAS DEDUCTED RS.39,72,835/- WHILE COMPUTING TAXABLE INC OME. ON BEING QUESTIONED BY THE ASSESSING OFFICER, IT WAS SUBMITTED THAT DUE TO SOME CLERICAL ERRORS AND INADVERTENT MISTAKE THAT HAS BEEN TAKEN PLACE FOR W HICH THE DIFFERENCE OF RS.5,95,000/- MAY BE ADDED TO THE TOTAL INCOME. IT WAS SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SOLD LAND AND BUILDING FOR RS.1,06,00,000/- WHICH WAS SHOWN IN THE FIXED ASSET S SCHEDULE AS PER COMPANIES ACT. WHILE COMPUTING THE BALANCING GAIN U/S 45 OF THE I.T. ACT, THE ASSESSEE ADDED THE AMOUNT OF PROFIT ON SALE OF SUCH LAND AND BUILDING AMOUNTING TO RS.39,72,835/- AND THERE WAS CLERICAL MISTAKE WH ILE THE PROFIT WAS TAKEN INTO ACCOUNT AMOUNTING TO RS.35,50,113/- WHICH ACTUALLY COMES TO RS.41,45,113/-. THUS, THERE IS DIFFERENCE OF RS.5,95,000/- WHICH MA Y BE ADDED TO THE INCOME OF THE COMPANY AS THERE IS SOME MISTAKE APARTMENT FROM THE RECORDS. 4. THE ASSESSING OFFICER MADE ADDITION OF RS.5,95,0 00/- TO THE TOTAL INCOME OF THE ASSESSEE. HE HAD ALSO MADE ANOTHER ADDITION OF RS.50,000/- BEING DISALLOWANCE U/S 36(1)(III) OF THE I.T. ACT. THE A SSESSING OFFICER THEREAFTER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). REJEC TING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON VARIOUS DECISI ONS, THE ASSESSING OFFICER LEVIED PENALTY OF RS.1,83,855/- U/S 271(1)(C) OF TH E I.T. ACT. 5. IN APPEAL, LD. CIT(A) UPHELD THE PENALTY SO LEVI ED BY THE ASSESSING OFFICER. 3 ITA NO.6251/DEL/2017 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJECTED T O THE ORDER OF THE LD. CIT(A) SUSTAINING THE PENALTY LEVIED BY THE ASSESSI NG OFFICER. HE SUBMITTED THAT THE ASSESSEE INADVERTENTLY DID NOT DISCLOSE TH E CORRECT SHORT TERM CAPITAL GAIN IN THE RETURN FILED ORIGINALLY AND THE SAME WA S OFFERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THIS WAS A CLERICAL MISTAKE AND, THEREFORE, PROVISIONS U/S 271(1)(C) ARE NOT APPLICA BLE. REFERRING TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF PRICE W ATERHOUSE COOPERS (P) LTD. VS. CIT REPORTED IN 348 ITR 306, HE SUBMITTED THAT WHEN DUE TO INADVERTENT ERROR, THE ASSESSEE FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME, IT WAS HELD THAT THIS COULD ONLY BE DESCRIBED AS A HUM AN ERROR WHICH ARE ALL PRONE TO HAPPEN. THE CALIBER AND EXPERTISE OF THE ASSESS EE HAD LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR. THAT THEY SHOULD HAVE BEEN CAREFUL, COULD NOT BE DOUBTED BUT THE ABSENCE OF DUE CARE WOULD NOT MEAN THAT THE ASSESSEE WAS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR WAS ATTEMPTING TO CONCEAL ITS INCOME. CONSEQUENTLY GIVEN THE PECULIAR FACTS OF T HIS CASE THE IMPOSITION OF PENALTY ON THE ASSESSEE WAS HELD TO BE NOT JUSTIFIE D. 8. REFERRING TO VARIOUS OTHER DECISIONS, HE SUBMITT ED THAT THE LEVY OF PENALTY U/S 271(1)(C) BY THE ASSESSING OFFICER AND UPHELD B Y THE LD. CIT(A) IS NOT JUSTIFIED. 4 ITA NO.6251/DEL/2017 9. REFERRING TO THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C), COPY OF WHICH IS PLACED AT PAGE 22 OF TH E PAPER BOOK, HE SUBMITTED THAT INAPPROPRIATE WORDS IN THE SAID NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO WHETHER THE PENALTY IS BEING LEVIED FOR HIS CONCEALING THE PARTICULARS OR FURNISHING INACCURATE PARTICULARS OF INCOME. REFERRING TO VARIOUS DECISIONS, HE SUBMITTED THAT WHEN INAPPROPRIATE WOR DS IN THE NOTICE ARE NOT DELETED AND THE NOTICE DOES NOT SPECIFY AS TO WHETH ER PENALTY IS BEING LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALING THE PARTICULARS, PENALTY U/S 271(1)(C) CANNOT BE LEVIED. HE ACCORDI NGLY SUBMITTED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THE PENALTY LEVI ED BY THE ASSESSING OFFICER BY CANCELLED. 10. LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT BY NOT DECLARING THE CORRECT SHOR T TERM CAPITAL GAIN, THE ASSESSEE HAS CONCEALED ITS PARTICULARS AND FURNISHE D INACCURATE PARTICULARS. THEREFORE, LD. CIT(A) WAS FULLY JUSTIFIED IN SUSTAI NING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT. 11. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. IT IS AN ADMITTED FACT THAT THE ASSESSEE IN IT S RETURN OF INCOME HAS NOT CONSIDERED APPROPRIATE LAW WHILE COMPUTING THE SHOR T TERM CAPITAL GAIN. ON 5 ITA NO.6251/DEL/2017 BEING QUESTIONED BY THE ASSESSING OFFICER DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SURRENDERED THE AMOUNT AN D THE ASSESSING OFFICER THEREAFTER LEVIED PENALTY U/S 271(1)(C) WHICH HAS B EEN SUSTAINED BY THE LD. CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FO R THE ASSESSEE THIS WAS AN INADVERTENT ERROR ON THE PART OF THE ASSESSEE AND, THEREFORE, PENALTY SHOULD NOT BE LEVIED SINCE IT WAS A BONA-FIDE MISTAKE. IT IS ALS O THE ALTERNATE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT INAPPROPRIATE WOR DS IN THE NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO WH ETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED ITS PARTICULARS OF INCOME. 12. I FIND SOME FORCE IN THE ALTERNATE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. A PERUSAL OF THE NOTICE ISSUED FOR LEVIE D OF PENALTY, COPY OF WHICH IS PLACED AT PAGE 22 OF THE PAPER BOOK, SHOWS THAT THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAVE NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO WHETHER PENALTY IS BEING LEVIED FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. I FIND THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY REPORTED IN 359 ITR 656 HAS HELD THAT WHERE THE INA PPROPRIATE WORDS IN THE NOTICE ISSUED FOR LEVY OF PENALTY ARE NOT STRUCK OF F AND THE NOTICE DOES NOT SPECIFY AS TO WHETHER THE ASSESSEE HAS CONCEALED IT S PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, PENALTY U/S 271(1)(C) IS LIABLE TO BE 6 ITA NO.6251/DEL/2017 DELETED. I FIND THE SLP FILED BY THE REVENUE WAS D ISMISSED BY THE HON'BLE SUPREME COURT VIDE C.C. NO.11485/2016 ORDER DATED 0 5.08.2016. SINCE IN THE INSTANCE CASE ALSO, THE ASSESSING OFFICER HAS NOT S TRUCK OFF THE INAPPROPRIATE WORDS AND THE NOTICE DOES NOT SPECIFY AS TO WHETHER THE PENALTY IS LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALING PARTICULARS OF INCOME, THEREFORE, IN VIEW OF THE RATIO LAID DOWN B Y THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA), THE PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAIN ED BY THE LD. CIT(A) IS LIABLE TO BE DELETED. IN VIEW OF THE ABOVE DISCUSSION, TH E ORDER OF THE LD. CIT(A) IS SET-ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE AR E ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH MARCH, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 15-03-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI