M/s Sachedeva & Songs Industries Pvt. Ltd, Amritsar. V. The Assistant Commissioner of Income Tax, Circle-5, Amritsar.

ITA 657/ASR/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8393 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 13-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL LD
• Keywords: Business income; Revised return
• Section: 271(1)(c); 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL AMRITSAR BENCH, AMRITSA R BEFORE SH. B.R. BASKARAN, ACCOUNTANT MEMBER A ND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.657/ASR/2017 ASSESSMENT YEAR:2013-14 M/S SACHDEVA & SONS INDUSTRIES PVT. LTD., 17, CONTONMENT AMRITSAR [PAN:AACCS 4619Q] VS. DY. CIT CIRCLE-5 AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PADAM BAHL (LD. CA) RESPONDENT BY: SH. CHARAN DASS (LD. DR) DATE OF HEARING: 27.08.2019 DATE OF PRONOUNCEMENT: 09.10.2019 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER DATED 17.08.2017 IMPUGNED HEREIN PASSED BY THE LD. CIT(A)-2, AMRITSAR U/S 250(6) OF INCOME TAX ACT, 1961 ( HEREINAFTER CALLED AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAD SHOWN INCOME UNDER THE HEAD 'LONG T ERM CAPITAL GAIN' SALE OF LAND SITUATED AT DELHI AT RS.3,6 7,22,000/- AND REDUCED RS.3,78,50,000/- OUT OF BUSINESS INCOME FOR SEPARA TE CONSIDERATION ON ACCOUNT OF SALE OF ABOVE LAND, ON WHICH THE ASSESSEE ITA N0.657/ASR/ 2017 (A. Y: 2013 -14 ) M/S. SACHDEVA & SONS INDUSTRIES PVT. LTD. V S. DCIT 2 WAS SHOW CAUSED. THE ASSESSEE'S COUNSEL/CA VIDE ITS REPLY DAT ED 07.01.2016 SUBMITTED AS UNDER: A MISTAKE HAS BEEN COMMITTED IN THE OFFICE OF UN DERSIGNED IN INCLUDING THE CAPITAL GAIN ON SALE OF DELHI LAND AT RS.3,67,22,000/- IN COMPUTATION OF INCOME. INFACT, NO SALE OF LAND T OOK PLACE DURING THE YEAR. WE ARE AT LOSS TO UNDERSTAND AS TO HOW TH IS MISTAKE OCCURRED WHILE PREPARING THIS RETURN. YOUR HONOUR I S REQUESTED TO EXCLUDE THIS CAPITAL GAIN FROM COMPUTATION OF INCOM E AS NO SALE OF LAND WAS MADE BY THE ASSESSEE . THE ASSESSEE ALSO FILED A REVISED RETURN AND COMPUTATION O F INCOME BY EXCLUDING THE SALE OF LAND FROM RETURN AND F URNISHED A COPY OF SALE DEED OF DELHI LAND/PROPERTY EXECUTED ON 30.06 .2014 FOR RS.5,54,91,350/- BEFORE THE ASSESSING OFFICER. FURTHER TH E DIRECTOR OF ASSESSEE COMPANY ALSO FURNISHED AN AFFIDAVIT TO THE EFFECT THAT NO LAND SITUATED AT DELHI WAS SOLD DURING THE YEAR AND TH E SAME WAS SOLD DURING THE FY:2014-15 RELEVANT TO AY:2015-16 ONLY. FURTHER, THAT BEFORE PREPARATION OF ITR, AN ESTIMATION WAS MADE IN COMPUTER SYSTEM THAT IF DELHI LAND IS SOLD, THEN WHAT WOULD BE P OSITION OF INCOME/LTCG AND LOSSES TO BE CARRIED FORWARD AND AT THE TIME OF PREPARATION OF FINAL RETURN, THE PROVISIONAL FIGURE S WERE INADVERTENTLY OMITTED TO BE DELETED AND THE ITR XML UPLOADED INCL UDED THAT FIGURE. IT IS A FACT THAT AUDIT BALANCE SHEET ALSO DOES NOT SHOW A NY SALE OF LAND. THOUGH THE STAND TAKEN BY THE ASSESSEE WAS TAKEN I NTO CONSIDERATION BY THE ASSESSING OFFICER, HOWEVER, DID NOT G ET IMPRESS AND ULTIMATELY IMPOSED THE PENALTY OF RS.3,48,550/. THE PENALTY WAS CHALLENGED BEFORE THE LD. CIT(A) WHO AFFIRMED THE PE NALTY BY CONCLUDING AS UNDER: DECISION :- THE RETURN OF INCOME WAS FILED BY APPELLANT ON 30- 09-2013 DECLARING A LOSS OF RS 315,80,509/-. THE CASE WAS S ELECTED UNDER SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3 ) AT A LOSS OF RS 2,97,52,485/- ON 13-01-2016 BY MAKING AN ADDITION O F RS 11,28,000/- ITA N0.657/ASR/ 2017 (A. Y: 2013 -14 ) M/S. SACHDEVA & SONS INDUSTRIES PVT. LTD. V S. DCIT 3 ON ACCOUNT OF ADJUSTMENT OF SALE OF LAND AT DELHI W RONGLY MADE IN THE RETURN. THE PENALTY PROCEEDINGS U/S 271(L)(C) OF TH E ACT WERE INITIATED. IN THE RETURN THE ASSESSEE HAD SHOWN INTERALIA INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN ON SALE OF DELHI LAND FOR RS 3,67 ,22,000/- AND HAD REDUCED RS 3,78,50,000/- OUT OF BUSINESS INCOME FOR SEPARATE CONSIDERATION. WHEN CONFRONTED BY AO THE ASSESSEE H AD FURNISHED REVISED COMPUTATION OF INCOME BY EXCLUDING THE SALE OF LAND FROM THE RETURN STATING THAT NO SALE OF LAND TOOK PLACE DURI NG THE YEAR UNDER CONSIDERATION AND THAT BEFORE PREPARATION OF ITR, A N ESTIMATE WAS MADE IN COMPUTER SYSTEM THAT IF DELHI LAND IS SOLD THEN WHAT WOULD BE THE POSITION OF LONG TERM CAPITAL GAIN AND LOSSES TO BE CARRIED FORWARD THAT AT THE TIME OF PREPARATION OF FINAL RETURN, THE PRO VISIONAL FIGURES WERE INADVERTENTLY OMITTED TO BE DELETED AND THE ITR UPL OADED INCLUDED THAT FIGURE. IN THE ASSESSMENT ORDER, AFTER EXCLUDING TH E SALE OF PROPERTY, THE NET LOSS WAS DETERMINED AT RS 304,52,509/- AND AN A DDITION OF RS 11,28,000/- WAS MADE TO THE INCOME OF THE ASSESSEE I.E. LOSS TO BE CARRIED FORWARD WAS, REDUCED BY RS 11,28,000/-. THE AO HELD THAT THE ASSESSEE HAD NO VALID BASIS FOR CLAIMING THAT THERE WAS NO DIFFERENCE IN THE AMOUNT OF LOSS C/F BECAUSE AS A RESULT OF ASSES SMENT, LOSS TO BE CARRIED FORWARD WAS REDUCED BY RS.11,28,000/-. INCO ME TO THAT EXTENT BUT FOR SCRUTINY WOULD HAVE ESCAPED ASSESSMENT. THE REFORE BY FOLLOWING THE DECISIONS OF SEVERAL CASE LAWS THE AO IMPOSED T HE PENALTY OF RS.3,48,550/- U/S 271(L)(C) OF THE ACT FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME BY SHOWING SALE OF LAND WRONG LY. THE MAIN ARGUMENT OF THE APPELLANT AGAINST THE IMPO SITION OF PENALTY U/S 271(L)(C) OF THE ACT STATED THAT THE MI STAKE HAS BEEN COMMITTED IN THE OFFICE OF THE COUNSEL WHERE CAPITA L GAIN ON THE SALE OF DELHI LAND AT RS.3,67,22,000/- WAS INCLUDED IN THE COMPUTATION OF INCOME, WHEN THE FACT WAS THAT NO SALE OF LAND HAD TAKEN PLACE. THE SALE OF LAND TOOK PLACE NEXT YEAR. THAT THERE IS N O SALE OF LAND IN THE AUDITED P&L A/C AND B/S OF THE ASSESSEE. THAT THE A O HAD ACCEPTED THIS POSITION. HOWEVER THE DIFFERENCE OF RS.3,78,50 ,000/-AND RS.3,67,22,000/- I.E. RS.11,58,000/- WENT TO REDUCE CURRENT YEARS LOSS. THIS WAS ADDED BACK BY THE AO AND THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ADDITION. THAT THE ASSESSEE IS B EING PUNISHED FOR THE MISTAKE COMMITTED BY THE COUNSEL OF THE ASSESSEE. THE CLAIM OF THE APPELLANT THAT THE MISTAKE HAS BEE N COMMITTED IN THE OFFICE OF THE COUNSEL WHERE CAPITA L GAIN ON THE SALE OF DELHI LAND AT RS.3,67,22,000/- WAS INCLUDED IN THE COMPUTATION OF INCOME, WHEN THE FACT WAS THAT NO SA LE OF LAND HAD TAKEN PLACE, IS NOT ACCEPTABLE FOR THE REASON T HAT THE COUNSEL OF THE ASSESSSEE IS A PROFESSIONAL HAVING E XPERIENCE OF ITA N0.657/ASR/ 2017 (A. Y: 2013 -14 ) M/S. SACHDEVA & SONS INDUSTRIES PVT. LTD. V S. DCIT 4 MORE THAN TWO DECADES. BEFORE THE RETURN OF INCOME IS SUBMITTED IN THE DEPARTMENT BY THE ASSESSEE, IT IS EXPECTED T HAT THE COUNSEL OF THE ASSESSEE FIRST CHECKS THE RETURN OF INCOME AND THE COMPUTATION OF INCOME PREPARED BY HIS STAFF AND THE N THE SAME IS CHECKED BY THE ASSESSEE HIMSELF BEFORE HE SIGNS THE VERIFICATION OF THE RETURN. THEREFORE TO PASS OFF T HE MISTAKE AS MERE CLERICAL ERROR CANNOT BE ACCEPTED. THE AO WAS JUSTIFIED IN STATING THAT AS PER THE SCHEME OF THE POLICY OF THE DEPARTMENT ONLY A SMALL NUMBER OF RETURNS ARE TAKEN UP FOR SCR UTINY AND THE OTHER RETURNS ARE ACCEPTED WITHOUT ANY FURTHER VERI FICATION FROM THE BOOKS OF ACCOUNTS. IT IS EVIDENT THAT IN THE CI RCUMSTANCES THE ASSESSEE HAD TAKEN A CHANCE TO FILE WRONG PARTICULA RS KNOWING THE POLICY OF DEPARTMENT ABOUT SCRUTINY ASSESSMENT. THEREFORE IT IS HELD THAT THE AO IS JUSTIFIED IN HO LDING THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF I NCOME BY SHOWING SALE OF LAND WRONGLY IN THE COMPUTATION OF INCOME A S ABOVE AND THEREFORE THE IMPOSITION OF PENALTY OF RS 3,48,550/ - U/S.271(L)(C)OF THE ACT WAS JUSTIFIED AND IS UPHELD. IN THE RESULT, APPEAL IS DISMISSED. 3. BEING AGGRIEVED, THE ASSESSEE FILED THE INSTANT APPEAL BEFORE US BY RAISING FOLLOWING GROUNDS OF APPEAL . 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, AMRITSAR HAS GROSSLY ERRED IN CONFIRMING THE PENALT Y U/S 271(1)(C) AMOUNTING TO RS.3,48,550/- LEVIED BY DEPUTY COMMISS IONER OF INCOME TAX, CIRCLE-5, AMRITSAR. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-2, AMRITSAR HAS FAILED TO APPRECIATE THAT THE ADDITION OF RS.11,28,000/- COULD NOT BE TREATED AS CONCEAL INCOME OF THE ASSES SEE AS NO LAND WAS ACTUALLY SAID BY IT. 3. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-2 AMRITSAR HAS FAILED TO APPRECIATE THAT THE ASSESSEE COULD NOT BE PUNISHED FOR THE MISTAKE COMMITTED BY ITS COUNSEL W HILE FILING THE INCOME TAX RETURN. 4. THAT THE PENALTY U/S 271(1)(C) MAY KINDLY BE DEL ETED. ITA N0.657/ASR/ 2017 (A. Y: 2013 -14 ) M/S. SACHDEVA & SONS INDUSTRIES PVT. LTD. V S. DCIT 5 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDE R OF AUTHORITIES BELOW. 5. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD . IN NUTSHELL THE CASE OF THE ASSESSEE IS THAT IT IS UNDISPUTED FACT THAT PROPERTY AT DELHI WHICH IS IN DI SPUTE HAS ACTUALLY BEEN SOLD ONLY ON 30.06.2014 AS PER REGISTERED SALE DEE D, WHICH ALSO REFLECTS FROM THE ASSESSMENT ORDER AND THEREFORE, IT IS UN DOUBTEDLY CLEAR THAT NO SALE OF LAND HAS EVER TOOK PLACE DURING T HE YEAR UNDER CONSIDERATION. THE ASSESSEE FURTHER CLAIMED THAT IT WAS ONL Y AN ESTIMATE WHICH WAS MADE IN COMPUTER SYSTEM WHILE CALCULAT ING THE EXCEPTED PRICE OF THE LAND TO BE SOLD AND WHAT WOULD B E THE POSITION OF LONG TERM CAPITAL GAIN AND LOSSES TO BE CARRIED FORWA RD, HOWEVER AT THE TIME OF PREPARATION OF FINAL RETURN, THE PROVISI ONAL FIGURES WERE INADVERTENTLY OMITTED TO BE DELETED AND THE ITR UPL OADED INCLUDED THAT FIGURE AND IN THAT EVENTUALITY THE MISTAKE HAS B EEN COMMITTED IN THE OFFICE OF THE COUNSEL ONLY WHEREAS IT IS AN UNDISPUTE D FACT THAT NO SALE OF LAND HAD TAKEN PLACE DURING THE YEAR UNDER C ONSIDERATION, WHICH ALSO GET STRENGTHEN FROM THE AUDITED P&L ACCOUNT A ND BALANCE SHEET OF THE ASSESSEE IN WHICH NO MENTION OF SUCH SALE OF L AND. THOUGH THE AO HAD ACCEPTED THIS POSITION IN THE ASSESSMENT ORDER, HOWEVER STILL IMPOSED THE PENALTY. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE SPECIFICALLY TO THE EFFECT THAT NO SALE OF LAND HAS EVER TOOK PLACE DURING THE RELEVANT YEAR UNDER CONSIDERATION AND SHOW ING THE SALE WITHOUT REALITY, SEEMS TO BE NEGLIGENT ACT OF THE ASSE SSEES REPRESENTATIVE/COUNSEL IN FILING THE INCOME TAX RETUR N, THEREFORE IN OUR CONSIDERED OPINION THE MISTAKE OF THE COUNSEL IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE, CANNOT FASTEN THE ASSESSEE BECAUSE ITA N0.657/ASR/ 2017 (A. Y: 2013 -14 ) M/S. SACHDEVA & SONS INDUSTRIES PVT. LTD. V S. DCIT 6 EVEN OTHERWISE THERE WAS NO CONCEALMENT OF INCOME BUT SE EMS TO BE MISTAKES MAY BE OCCURRED INADVERTENTLY RESULTING INTO IN CREASE THE LOSS CARRIED FORWARD. FROM THE PECULIAR FACTS AND CIRCUMSTAN CES IT REFLECTS THAT THE ASSESSEE ON THE MISCONCEPTION AND/OR LACK O F CONSCIOUSNESS, KNOWLEDGE AND GUIDANCE COMMITTED THE ERROR WHICH CAN BE TERMED AS INADVERTENT AND/OR BONAFIDE AND THER EFORE, IN OUR CONSIDERED OPINION DOES NOT ENTAIL ANY PENALTY, HENCE, THE PENALTY LEVIED BY THE ASSESSING OFFICER AND UPHELD BY THE LD. C IT(A) IS LIABLE TO BE DELETED. CONSEQUENTLY, THE SAME STANDS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/1 0/2019. SD/- SD/- (B.R.BASKARAN) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 09/10/2019. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER