VIVA MOTORS SPORTS PVT. LTD., THANE V. ITO WARD- 4 (5), THANE

ITA 6510/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2612 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 14-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHINTAMANI DINGANKARLD
• Assessee Lawyers: MUKUND BAKSHI LD
• Keywords: TDS
• Section: 271(1)(c); 143(3)

Judgement Text

ITA NO.6510MUM/2018 ASSESSMENT YEAR: 2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6510/MUM/2018 ( / ASSESSMENT YEAR: 2014-15) VIVA MOTORS SPORTS P VT .LTD. 1 ST FLOOR, THAKUR ARCADE STATION ROAD, VIRAR(W) THANE-401 303. / VS. INCOME TAX OFFICER - WARD 4(5) R.NO.5, A WING ASHAR I.T. PARK WAGLE ESTATE, THANE PAN/GIR NO. AADCV - 9814 - H ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) ASSESSEE BY : SHRI MUKUND BAKSHI LD. AR REVENUE BY : SHRI CHINTAMANI DINGANKAR-LD. SR.DR / DATE OF HEARING : 26/11/2020 / DATE OF PRONOUNCEMENT : 26/11/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THIS APPEAL FOR ASSESSMENT YEAR [AY] 2014-15, THE ASSESSEE CONTESTS PENALTY U/S 271(1)(C) FOR RS.5.95 LACS AS CONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, THAN E [CIT(A)] VIDE ORDER DATED 16/08/2018. 2. FACTS LEADING TO THE PENALTY ARE THAT THE ASSESS EE WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S 143(3) ON 02/12/20 16 WHEREIN THE RETURNED LOSS OF RS.59.11 LACS WAS REDUCED TO RS.39 .83 LACS. THE ITA NO.6510MUM/2018 ASSESSMENT YEAR: 2014-15 2 ASSESSEE CLAIMED RENT EXPENDITURE FROM THE DATE OF REGISTERED LEAVE & LICENSE AGREEMENT I.E. AUGUST, 2013 TO MARCH, 2014. BUT LD. AO OPINED THAT THE RENT SHOULD BE CALCULATED FROM DECEMBER, 2 013 TO MARCH, 2014 AS PER THE AGREEMENT DATED 26/08/2013. ACCORDINGLY, EXCESS RENT OF RS.19.27 LACS WAS DISALLOWED WHICH REDUCED THE RETU RNED LOSS. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED U/ S 271(1)(C) FOR FILING INACCURATE PARTICULARS OF INCOME AND THE ASSESSEE W AS SADDLED WITH IMPUGNED PENALTY OF RS.5.95 LACS VIDE ORDER DATED 1 9/06/2017. 3.1 BEFORE LD. CIT(A), IT WAS POINTED OUT THAT THE SHOW CAUSE NOTICE WAS DEFECTIVE SINCE IT DID NOT SPECIFY THE EXACT LI MB I.E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME FOR WHICH THE PENALTY WAS BEING INITIATED AND HENCE, THE PENALTY WAS BAD IN LAW. RELIANCE WAS PLACED, INTER-ALIA, ON THE DECISION OF HONBLE SUPREME COURT IN CIT V/S SSAS EMERALD MEADOWS WHICH DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE. RELIANCE WAS A LSO PLACED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN CIT V/S SHRI SAMSON PERINCHERY 392 ITR 4. 3.2 CONTESTING THE PENALTY ON MERITS, THE ASSESSEE SUBMITTED THAT THE EXPENDITURE WAS CLAIMED ON THE BASIS OF AGREEMENT D ATED 26/08/2013 AND IN FACT, DUE TDS WAS DEDUCTED AGAINST THE SAME U/S194-I. HOWEVER, THE AGREEMENT PERIOD WAS TO START FROM 16/11/2013 E XCLUDING FIT-OUT PERIOD FROM 15/10/2013 TO 14/11/2013 BUT THE ASSESS EE INADVERTENTLY TOOK THE RENT FROM THE DATE OF AGREEMENT AND BOOKED RENT ACCORDINGLY. THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE FI GURES OF RENT GIVEN IN THE AUDITED BALANCE SHEET WAS CORRECT AND THEREFOR E IT DEDUCTED TDS AGAINST THE SAME AND FILED RETURN OF INCOME CLAIMIN G RENT OF RS.55.27 LACS AS PER AUDITED ACCOUNTS. AS THE RETURN WAS BEL ATED, THE LOSS WAS ITA NO.6510MUM/2018 ASSESSMENT YEAR: 2014-15 3 NOT TO BE ALLOWED TO BE CARRIED FORWARD AND THEREFO RE, THERE WOULD BE NO ADVERSE CONSEQUENCE OR ANY LOSS TO THE REVENUE. IT WAS NEVER THE INTENTION TO FURNISH INACCURATE PARTICULARS OF INCO ME BY CLAIMING EXCESS RENT. 3.3 HOWEVER, THE LEGAL ARGUMENTS AS WELL AS GROUNDS ON MERITS COULD NOT CONVINCE LD. CIT(A) WHO CHOSE TO CONFIRM THE PE NALTY. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US WITH SI MILAR GROUNDS. 4. SO FAR AS THE LEGAL GROUNDS ARE CONCERNED, THE S AME HAS RIGHTLY BEEN DISMISSED BY LD. CIT(A) SINCE WE FIND THAT THE PENALTY WAS INITIATED AS WELL AS LEVIED FOR FURNISHING OF INACCURATE PART ICULAR OF INCOME AND THERE IS NO SUCH AMBIGUITY IN THE ORDERS OF LD. AO. MERE FACT THAT THE RELEVANT LIMB WAS NOT TICKED IN THE SHOW-CAUSE NOT WOULD NOT VITIATE THE PENALTY PROCEEDINGS PARTICULARLY WHEN NO SUCH OBJEC TION WAS TAKEN AT THE OUTSET BEFORE LD. AO. IN FACT, THE ASSESSEE FAI LED TO APPEAR DURING PENALTY PROCEEDINGS. THE LEGAL GROUNDS THUS RAISED STANDS DISMISSED. 5. NEVERTHELESS, THE ASSESSEE HAS A CASE ON MERITS SINCE THE RETURN WAS A LOSS RETURN FILED BELATEDLY AND THE SAME WOUL D DISENTITLE THE ASSESSEE TO CLAIM CARRY-FORWARD OF THE LOSSES. THE SAME IS FURTHER FORTIFIED BY THE FACT THAT DUE TDS WAS DEDUCTED AGA INST THE RENT SO CLAIMED AS PER AUDITED BOOKS. THEREFORE, THE FACTS AND CIRCUMSTANCES WOULD NOT CONVINCE US TO CONFIRM THE PENALTY ON MER ITS OF THE CASE. BY DELETING THE SAME, WE ALLOW GROUND SO RAISED BEFORE US. 6. THE APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED ON 26 TH NOVEMBER, 2020. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ITA NO.6510MUM/2018 ASSESSMENT YEAR: 2014-15 4 MUMBAI; DATED : 26/11/2020 SR.PS:-JAISY VARGHESE '# $# / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$- , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.