DCIT, New Delhi V. M/s. Inter Globe Hotels Pvt. Ltd., New Delhi

ITA 630/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3204 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: SHASHI ARORA
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 630/DEL/2016 ( A.Y 2011-12) DCIT CIRCLE-12(2), ROOM NO. 405 C. R. BUILDING NEW DELHI (APPELLANT) VS INTER GLOBE HOTELS PVT. LTD. 124, GF, CENTRAL WING, THAPAR HOUSE, JANPATH NEW DELHI AABCI2732H (RESPONDENT) APPELLANT BY SH. S.R. SENAPATI, SR DR RESPONDENT BY MS. SHASHI ARORA, CA ORDER PER SUCHITRA KAMBLE THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER DATED 16/11/2015 PASSED BY CIT(A)-4, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 99,91,000/- IM POSED U/S 271(L)(C) OF THE IT ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN DISREGARDING THE FACT AS BROUGHT IN AOS ORDER U /S 271(1 )(C) THAT THE ASSESSEE REVISED THE RETURN OF THE INCOME IN VIEW O F THE AOS QUERY WITH RESPECT TO REDUCTION IN INCOME. DATE OF HEARING 07.02.2018 DATE OF PRONOUNCEMENT 27.02.2018 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONCLUDING THAT ASSESSEE REVISED THE RETURN SUO MOTO IGNORING THE FACTS AS BROUGHT OUT BY THE AO IN ITS ORDER U/S 271(L)(C) THAT RETURN OF INCOME HAS BEEN REVISED IN RESPONSE TO AOS QUERY WITH RES PECT TO FALL IN ITS INCOME AND THAT THE REVISION OF RETURN IS NOT SUO - MOTO AS CLAIMED BY THE ASSESSEE. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFOR E OR DURING THE HEARING OF APPEAL. 3. THE ASSESSEE IS A COMPANY ENGAGED IN BUSINESS OF RUNNING HOTEL AND SERVICES. THE ASSESSEE E-FILED ITS RETURN ON 30/09 /2011 DECLARING TOTAL LOSS OF RS.13,63,24,167/-. THE RETURN WAS PROCESSED U/S 14 3(1) OF THE INCOME TAX ACT, 1961. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF THE I.T ACT DATED 22/8/2012 WAS ISSUED AND SERVED UPON THE ASSESSEE COMPANY. DUE TO CHANGE OF INCUMBENT NOTICE U/S 143(2) OF THE INC OME TAX ACT ALONG WITH A QUESTIONNAIRE U/S 142(1) OF THE ACT DATED 7/8/2013 WERE ISSUED AND SERVED UPON THE ASSESSEE COMPANY. IN RESPONSE TO THE NOTI CES CA AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY ATTENDED AND FURNISHED THE DETAILS CALLED FOR. THE ASSESSMENT WAS COMPLETED U/S 143(3 ) ON 10/03/2014 DETERMINING THE TOTAL LOSS OF THE ASSESSEE COMPANY AT RS.10,64,10,501/- AS AGAINST RETURN LOSS OF RS.13,63,24,166/-. AT THE T IME OF COMPLETING THE ASSESSMENT ADDITIONS OF RS.2,98,63,665/- WAS MADE O N ACCOUNT OF EXCESS CLAIM OF LOSS OF RS.2,98,63,665/-. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COMPANY WAS REQUIRED TO FI LE COMPUTATION OF INCOME WITH EXPLANATION ON EACH ITEM REDUCING THE TOTAL IN COME. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE COMPANY HAD CLAIMED DEPRE CIATION OF RS.2,98,63,665/- TWICE AND TO THAT EXTENT IT HAS IN CREASED THE LOSS IN THE RETURN OF INCOME. SINCE THE ASSESSEE FURNISHED INA CCURATE PARTICULARS OF ITS INCOME AS PER THE ASSESSING OFFICER, PENALTY PROCEE DINGS U/S 271(1)(C) WERE ALSO INITIATED. A SHOW CAUSE NOTICE DATED 22/09/20 14 WAS ISSUED TO THE ASSESSEE COMPANY PROVIDING AN OPPORTUNITY OF BEING HEARD. THE SAID NOTICE WAS DULY SERVED UPON THE ASSESSEE COMPANY. THE ASS ESSEE COMPANY FILED A LETTER DATED 24/09/2014 ALONG WITH A COPY OF SUBMIS SION DATED 15/09/2014. IN THE SUBMISSION THE ASSESSEE POINTED OUT THAT AS SOON AS THE ASSESSEE COMPANY REALIZED THAT THERE WAS EXCESS CLAIM OF LOS S BY RS.2,98,63,665/-. THE ASSESSEE COMPANY HAD SUO MOTO FILED REVISED COMPUTA TION OF INCOME REDUCING THE LOSS TO RS.10,64,10,501/-. IT WAS FURTHER EMPH ASIZED BY THE ASSESSEE THAT THE MISTAKE WAS OCCURRED AT THE INSTANCE OF CONSULT ANT FOR WHICH THE ASSESSEE COMPANY SHOULD NOT BE SUFFERED. THE ASSESSING OFFI CER WHILE PASSING PENALTY ORDER U/S 271(1)(C) OBSERVED THAT THE CLAIM OF THE ASSESSEE WAS SUO MOTO REVISED WHILE MAKING COMPUTATION OF INCOME IS TOTA LLY WRONG IN VIEW OF THE FACT THAT THIS CASE WAS SELECTED UNDER SCRUTINY AND THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN ITS CLAIM OF REDUCING THE TOTAL INCOME. AT THE INSTANCE OF THE ASSESSING OFFICER THE ASSESSEE HAD COME FORWARD TO REVISE ITS COMPUTATION AND REDUCED THE LOSS CLAIMED TWICE. HAD THE CASE O F THE ASSESSEE BEEN NOT SELECTED IN SCRUTINY, THE ASSESSSEE WOULD HAVE EVAD ED THE TAX ON THE EXCESS LOSS CLAIMED IN THE RETURN TO BE ADJUSTED AGAIN FUT URE YEARS INCOME. THEREFORE, THE ASSESSING OFFICER SATISFIED THAT THIS WAS A FIT CASE FOR LEVYING PENALTY WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER FURTHER HELD THAT THE ASSESSEES CASE IS CO VERED UNDER EXPLANATION 2 TO SECTION 271(1)(C) OF THE INCOME TAX ACT AND IMPOS ED A PENALTY OF RS.99,91,000/-. 4. BEING AGGRIEVED BY THE SAID PENALTY ORDER THE AS SESSE FILED APPEAL BEFORE THE CIT(A). THE CITA(A) ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN DE LETING THE PENALTY, DESPITE THE FINDING OF THE ASSESSING OFFICER THAT T HE ASSESSEE COMPANY HAD COME FORWARD TO REVISE ITS COMPUTATION AND REDUCED THE LOSS CLAIM TWICE AFTER THE CASE WAS SELECTED UNDER SCRUTINY. THE LD. DR F URTHER SUBMITS THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS IN COME AND INCREASED THE PROFIT TO BE ADJUSTED AGAINST FUTURE YEARS INCOME. THUS, THE ASSESSEE EVADED THE TAX ON THE EXCESS LOSS CLAIMED IN THE RETURN TO BE ADJU STED AGAINST FUTURE YEARS INCOME. THE CIT(A) ERRED IN CONCLUDED THAT THE ASS ESSEE REVISED THE RETURN SUO MOTO. ONCE THE A.O HAS ISSUED SCRUTINY AND THERE I S A QUERY WITH RESPECT TO FALLEN IN ITS INCOME. THE REVISION OF RETURN IS NO T SUO MOTO AS CLAIMED BY THE ASSESSEE. 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) A ND SUBMITTED THAT THE ASSESSEE HAS SUO MOTO REVISED THE COMPUTATION OF TH E INCOME AS THE TAX AUDITORS AND THE TAX CONSULTANTS WHO HAD PREPARED T HE RETURN OF INCOME WERE DIFFERENT PERSONS. THE LD. AR FURTHER SUBMITTED T HAT DUE TO THE LAST MINUTE RUSH BETWEEN THE TAX ON THE FINDING AND THE RETURN OF INCOME FILING DEAD LINE INADVERTENTLY EXCESSIVE LOSS WAS CLAIMED BY THE ASS ESSEE COMPANY. BUT THE SAME WAS SURRENDERED ACCORDINGLY BY THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT AS THE ASSESSMENT PROCEEDINGS FOR TH E SPECIAL ASSESSMENT YEAR WERE GOING ON U/S 143(2) OF THE ACT, AFTER REALISIN G THE ERROR THE ASSESSEE VIDE ITS SUBMISSION DATED DECEMBER 13TH, 2013 SUO MOTO B EFORE THE ASSESSING OFFICE OFFERED THE AMOUNT OF RS.2,98,63,655/- FOR D ISALLOWANCE. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER FOR THE PRESENT ASSESSMENT YEAR ACCEPTED THE SUO MOTO DISCLOSURE MADE BY THE ASSESSEE WITHOUT ANY OTHER ADVERSE FINDINGS IN THE REVISED COMPUTATION OF INCOME FILED BY THE ASSESSEE FOR THE SPECIAL ASS ESSMENT YEAR. CONSIDERING THE FACT OF THE CASE AND BONAFIDE INTENTION OF THE ASSESSEE, THE ASSESSING OFFICER AGREED TO THE SUBMISSIONS MADE BY THE ASSES SEE AND THE ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE ACT ON MARCH 10 TH , 2014 WHEREIN AN AMOUNT OF RS.2,98,63,665/- WAS DISALLOWED AND APART FROM IT NO OTHER ADDITION OR DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER W HILE CONCLUDING THE ASSESSMENT PROCEEDINGS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CIT(A) HAS GIVEN A FINDING THAT THE ASS ESSEE HAD SUO MOTO REVISED THE COMPUTATION OF THE INCOME AND AFTER THAT ONLY T HE ASSESSING OFFICER HAD TAKING THE COGNIZANCE OF FACTS. SECONDLY, THE DEPR ECIATION OF RS.2,98,63,665/- WAS SURRENDERED BY THE ASSESSEE DUE TO THE TAX AUDI T REPORT U/S 44AB AS THIS DEDUCTION WAS WORKED OUT BY THE AUDITOR IN THE COMP UTATION OF DEDUCTION U/S 80 ID. THE ASSESSING OFFICER HAD NOT TAKEN A COGNI ZANCE OF THIS FACT AND DID NOT CONSIDER THE TAX AUDIT REPORT. IN VIEW OF THE OVERALL LOSSES, THE ASSESSEE COMPANY DID NOT CLAIM THE DEDUCTION U/S 80ID. THER EFORE, IT IS OBVIOUS THAT THE ASSESSEE DID NOT FURNISH ANY INACCURATE PARTICU LARS OF INCOME NOR DID IT CONCEAL ANY PARTICULARS OF INCOME. THE FACT THAT T HE ASSESSING OFFICER ACCEPTED THE SUO MOTO DISCLOSURE MADE BY THE ASSESSEE BY POI NTING OUT IN THE ASSESSMENT YEAR THAT THE CLAIM BY THE ASSESSEE COMP ANY TO THE TUNE OF RS.2,98,63,665/- WAS SURRENDERED AS MENTIONED IN PA RA 4 OF THE ASSESSMENT ORDER WITHOUT GIVING ANY ADVERSE FINDINGS IN THE RE VISED COMPUTATION OF INCOME FILED BY THE ASSESSEE. THUS, THE ASSESSEE HAS MADE OUT A BONAFIDE INTENTION OF THE ASSESSEE AND THERE IS NO INACCURATE FURNISHING OF PARTICULARS OR CONCEALMENT OF INCOME. THEREFORE, THERE IS NO NEED TO INTERFERE WITH THE FINDING OF THE CIT(A). THE APPEAL OF THE REVENUE IS DISMI SSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH FEBRUA RY, 2019 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 27/02/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 26/02/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 26/02/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27.02.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 28 .02.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.