HARSHAD SEVANTILAL SHAH, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 25(2), MUMBAI

ITA 6473/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3385 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 03-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER AND ITA NO.6473/MUM/2017 ASSESSMENT YEAR-2013-14 HARSHAD SEVANTILAL SHAH, B-501, SHANTINIKETAN, DIXIT ROAD, OPP. ASHISH NURSINGH HOME, VILE PARLE (E), MUMBAI-400057 / VS. ACIT - 25(2), 5 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI-400051 PAN NO. ABAPS7896P ( / ASSESSEE) ( / REVENUE) / ASSESSEE BY NONE / REVENUE BY SHRI MANOJ KUMAR SINGH / DATE OF HEARING : 23/04/2019 / DATE OF ORDER: 25/04/2019 / O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER OF LEARNED CIT(A)-37, DATED 21/08/2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. THE ASSESSEE IN THIS CASE IS AGGRIEVED BY THE LD. CIT(A), SUSTAINING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.1,74,730/-. TH E GROUNDS RAISED ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL)-37 MUMBAI ERRED IN CONFIRMING THE PENALTY ORDER U/S.271(I)(C) DATED 29.09.2016 AND FAILED TO APPRECIATE THAT THERE IS NO EVASION ITA NO.3604 & 3605/MUM/2018, SHRENIK STEEL CO. 2 OF TAX ON SALE OF CAR AS THE APPELLANT HAS NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF SALE OF CAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL)-37 MUMBAI FAILE D TO APPRECIATE THE JUDGMENTS OF THE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 IN WHICH THE APEX COURT HAS HELD THAT ' BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME'. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL)-37 MUMBAI FAILE D TO APPRECIATE THE JUDGMENTS OF THE APEX COURT IN THE CASE OF PRICE WA TERHOUSE COOPERS PVT. LTD. 348 ITR 306 SUPREME COURT, IN WHICH THE APEX COURT UNAM BIGUOUSLY HELD THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONAFIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNIS H INACCURATE PARTICULARS AND HENCE THE IMPOSITION OF PENALTY IS NOT JUSTIFIED. 2. THE BRIEF FACTS OF THE CASE LEADING TO THE LEVY OF PENALTY IS THAT ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE HAD BO OKED THE LOSS ON SALE OF CAR IN THE PROFIT AND LOSS ACCOUNT. THIS WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND T HAT THE ITEM WAS CAPITAL AND HENCE SHOULD NOT HAVE BEEN BOOKED I N THE PROFIT & LOSS ACCOUNT. PENALTY WAS ALSO INITIATED. IN THIS REGARD, THE ASSESSEE SUBMISSION WAS THAT HE HAD RELIED UPON THE AUDIT REPORT OF THE AUDITOR. IT WAS SUBMITTED THAT IN THE TAX AUDIT REPORT THE AUDITOR HAS DULY CERTIFIED THE SAME AND HAD NOT POINTED OUT THAT ERROR TO THE ASSESSEE. THE ASSESSE E SUBMISSION IS THAT HE SHALL NOT BE VISITED WITH THE RIGOURS OF PENALTY AS HE WAS UNDER A BONA-FIDE BELIEF OF THE CORRECTNESS OF THE ENTRY AS NO DEFECT WAS POINTED OUT BY HIS AUDITOR. THE SUBMI SSIONS WERE NOT ACCEPTED BY THE AUTHORITIES BELOW. ITA NO.3604 & 3605/MUM/2018, SHRENIK STEEL CO. 3 3. UP ON CAREFUL CONSIDERATION OF THE FACTS IN THIS REGARD WE NOTE THAT THE PENALTY IN THIS REGARD HAS BEEN LEVIE D WITH REFERENCE TO BOOKING OF LOSS ON SALE OF CAR TO THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE'S PLEA IS THAT HE WAS UNDER T HE BONA-FIDE BELIEF THAT IT'S TREATMENT IS CORRECT INASMUCH AS T HE AUDITOR HAS DULY CERTIFIED THE SAME AND HAS NOT POINTED OUT ANY DEFECT. IN OUR CONSIDERED OPINION, THE SUBMISSIONS OF THE ASSE SSEE HAVE CONSIDERABLE COGENCY. THE CONDUCT OF THE ASSESSEE C ANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. IN THE ORDER, ASSESSING OFFICER HIMSELF HAS NOTE D THAT THE AUDITOR HAS NOT POINTED OUT ANYTHING ABOUT THE WRON G ENTRY OF BOOKING OF LOSS OF CAR SALE IN THE PROFIT AND LOSS ACCOUNT. HENCE IN OUR CONSIDERED OPINION, THE ASSESSEE SHOULD NOT BE SUBJECTED TO THE LEVY OF PENALTY FOR FAULT OF THE CONSULTANT/ AUDITOR. ACCORDINGLY, WE SET ASIDE THE ORDER'S OF AUTHORITIE S BELOW AND DELETE THE LEVY OF PENALTY. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE STAND S ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 25/04/2019. SD/- S D/- (RAVISH SOOD) (SHAMIM YAHYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25/04/2019 ITA NO.3604 & 3605/MUM/2018, SHRENIK STEEL CO. 4 F{X~{T? P.S/. .. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI, 5. ( )*# !+ , $# # +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) $%&', / ITAT, MUMBAI