M/s Balaji Heavy Lifters, RAJKOT-GUJARAT V. The Asstt. Commr. of Income Tax, Circle, GANDHIDHAM

ITA 723/RJT/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1586 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide mistake; TDS
• Section: 271(1)(c)

Judgement Text

BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 1 OF 6 , , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT . . [ , . . , BEFORE SHRI C. M.GARG , JUDICIAL MEMBER AND SHRI O.P.MEENA , ACCOUNTANT MEMBER . . ./ I.T . A . NO. 72 3 / RJT / 201 4 [[ / ASSESSMENT YEAR : 20 0 5 - 06 BALAJI HEAVY LIFTERS PVT. LTD., 1 ST FLOOR, DHIRAJ CHAMBERS, PL.NO.36, SECTOR 9A, GANDHIDHAM. [PAN: AACCB 5738 R] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE , GANDHIDHAM. APPELLANT / RESPONDENT [ /ASSESSEE BY WRITTEN SUBMISSION /REVENUE BY SHRI PRAVEEN VERMA SR. D.R. / DATE OF HEARING: 2 2 .11. 2018 /P RONOUNCEMENT ON 26 . 1 1 .2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME T AX (APPEALS) - II , RAJKOT (IN SHORT THE CIT (A)) DATED 13.10.2014 PERTAINING TO ASSESSMENT YEAR 2005 - 06 WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 2 OF 6 GANDHIDHAM CIRCLE, GANDHIDHAM (IN SHORT THE AO) DATED 27.02.2013 UNDER SECTION 271( 1)(C) OF INCOME TAX ACT,1961 (IN SHORT THE ACT). 2. GROUND NO.1 TO 4 STATES THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW AND CONFIRMING THE PENALTY LEVIED U/S.271( 1 )(C) OF THE ACT IN RESPECT OF ADDITION OF AMOUNT OF RS.5,74,774/ - . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT ORDER WAS PASSED U/S.144 OF THE ACT WHEREIN RS.1,36,64,731/ - ON ACCOUNT OF EXCESS EXPENSES WERE DISALLOWED BY THE AO AND RS.5,74,774/ - ON ACCOUNT OF SUPPRESSION OF RECEIPTS WERE DISALLOWED BY THE AO. THE LD.CIT(A) CONFIRMED THE AD DITION OF RS.20,84,970/ - MADE ON ACCOUNT OF DISALLOWANCE OF EXCESS EXPENSES OUT OF RS.13,66,473/ - . THE ADDITION OF RS.5,74,774/ - ON ACCOUNT OF SUPPRESSION RECEIPTS WAS CONFIRMED BY THE CIT(A) WHICH WAS ALSO CONFIRMED BY ITAT RAJKOT, THE AO THEREFORE TREAT ED THE AMOUNT OF RS.26,23,744/ - AS CONCEALED INCOME OF THE ASSESSEE AND LEVIED PENALTY U/S.271(1)(C) ON THE SAME. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) NOTED THAT THE DISALLOWANCE OF EXPENSES OF BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 3 OF 6 RS.12,76,390/ - IN RES PECT OF HANDLING AND TRANSPORTATION EXPENSES IS ONLY 2% OF TOTAL EXPENSES AND THE SAME HAS BEEN MADE PURELY ON ESTIMATE BASIS. SIMILARLY, THE ADDITION OF RS.7,72,580/ - IN RESPECT OF REPAIRS AND MAINTENANCE EXPENSES IS ONLY 6% OF THE EXPENSES AND SAME HAS BEEN MADE PURELY ON ESTIMATED BASIS. WHEN THE CLAIM IS FOUND TO BE IN ORDER TO THE EXTENT OF 95% THERE IS NO REASON FOR THE APPELLANT TO HIDE ONLY 5% OF THE CLAIM. SIMILARLY, THE ADDITION OF RS.5,74,774/ - IS ON ACCOUNT OF DIFFERENCE BETWEEN TDS RECEIPTS AND PROFIT AND LOSS ACCOUNT (PLA) RECEIPTS OUT OF RS.13,98,73,418/ - . I T IS MINISCULE PERCENTAGE AND THUS NO T LIABLE FOR PENALTY. HOWEVER, THE CIT(A) DELETED THE PENALTY WITH REGARD TO DISALLOWANCE OF EXPENSES OF RS.20,48,970/ - BY PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD., 322 ITR 158. HOWEVER, THE CIT(A) SUSTAINED THE PENALTY ON ACCOUNT OF SUPPRESSION OF RECEIPTS BY RS.5,74,774/ - BEING DIFFERENCE AS PER TDS CERTIFICATE AND AS SHOWN BY THE ASSESS EE. 5. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER WRITTEN SUBMISSIONS BY SHRI D.R.ADHIA , AR OF THE BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 4 OF 6 ASSESSEE HAS BEEN MADE THEREIN IT HAS BEEN CONTENDED THAT THE ASSESSEE HAS DISCLOSED RECEIPTS OF RS.13,92,98,644/ - WHICH IS 99.5% AND THE SHORT FALL OF RS.5,74,774/ - IS ONLY 0.5% WHEN A PERSON SHOWS SUCH HUGE RECEIPTS OF 99.5% HE WILL NEVER CONSIDERED TO SUPPRESS OF MEAGER DIFFERENCE OF 0.5%. IT IS SPECIFICALLY MENTIONED IN VARIOUS JUDICIAL LAWS THAT UNLESS THE CONDUCT OF THE ASSESSEE IS FOUND TO BE NOT BONAFIDE NO PENALTY IS LEVIABLE IN RESPECT OF SUCH ADDITION. THE CIT(A) HAS CONFIRMED THE ADDITION BECAUSE OF NON RECONCILIATION OF THE AMOUNT, THUS, THIS IS A MISTAKE WHICH CAN BE CONSIDERED AS A BONAFIDE MISTAKE HAVING NO INTENTION TO EVADE THE TAX ON SUCH SMALL AMOUNT WHICH SHOWS THAT THIS IS NOT A CASE STRICTLY SPEAKING LIABLE FOR PENALTY U/S.271(1)(C) OF THE ACT AS PER GUIDELINES PROVIDED BY THE HONBLE MADRAS HIGH COU RT IN THE CASE OF CIT VS. P.ROSES 356 ITR 707 (MAD). FURTHER, RELIANCE WAS ALSO PLACED IN THE CASE OF LLOYD INSULATION I. PVT LTD [2000] 164 CTR SC 196. 6. PER CONTRA, THE LD.SENIOR DEPARTMENTAL REPRESENTATIVE (SR.DR) SUPPORTED THE ORDERS OF THE LOWER AUTHORIT IES. BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 5 OF 6 7. WE HAVE HEARD THE LD.SR.DR AND PERUSED THE WRITTEN SUBMISSIONS FILED BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS DISCLOSED RS.13,92,98,644/ - AS AGAINST RS.13,98,73,418/ - RECEIPTS AS PER TD S CERTIFICATE. THUS, THE RE IS ONLY MEAGER AMOUNT OF RS.5,74,774/ - DUE TO NON RECONCILIATION OF TDS CERTIFICATE WITH THE PLA. THIS SHOWS THAT THE INTENTION OF THE ASSESSEE WAS NOT TO CONCEAL ANYTHING BUT THE MISTAKE CREPT DUE TO UNINTENTIONAL AND ERRONEOUS CONSIDERATION OF CONTRA CT RECEIPTS. IN THE WRITTEN SUBMISSIONS THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF ITAT R AJKOT IN THE CASE OF RAVJIBHAI P REMJIBHAI MOTISARIYA IN ITA NO.515/RJT/2013 FOR A.Y. 2009 - 10 DATED 07.03.2014 WHEREIN SUCH CLERICAL MISTAKE IN THE ACCOUNTING HAS BEEN HELD TO BE BONAFIDE FOR WHICH PENALTY U/S.271(1)(C) IS NOT LEVIABLE. IN THE CASE IN HAND , WE FIND THAT THERE APPEAR ED TO BE BONAFIDE MISTAKE IN ACCOUNTING THE TOTAL CONTRACT RECEIPTS, THEREFORE, THIS APPEARS TO BE A BONAFIDE MISTAKE, THEREFORE F OLLOWING THE DECISION OF COORDINATE BENCH OF ITAT, RAJKOT IN RAVJIBHAI PREMJIBHAI MOTISARIYA(SUPRA) THE PENALTY LEVIED ON THE AMOUNT OF RS.5,74,774/ - IS THEREFORE DELETED. BALAJI HEAVY LIFTERS PVT. LTD., VS. ACIT, CIRCLE, GANDHIDHAM / ITA NO .723/RJT/2014/ A . Y. 2005 - 06 PAGE 6 OF 6 8. THE ASSESSEE VIDE ITS WRITTEN SUBMISSIONS HAVE ALSO RAISED ADDITIONAL GROUND OF APPEAL ON THE LEGAL ISSUE THAT NOTICE U/S.274 R.W.S 271(1)(C) DATED 14.11.2007 IS VAGUE AND DOES NOT SPECIFY THE SPECIFIC CHARGE FOR WHICH PENALTY U/S.271(1)(C) IS INITIATED. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSED ON MERIT, THEREFORE THIS LEGAL GROUND IS NOT REQUIRED TO BE ADMITTED, HENCE NO DECISION IS REQUIRED , THEREFORE DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE ALLOWED. 10. THE ORDER PRONOUNCED IN THE OPEN COU RT ON 26 .11.2018 . SD/ - SD/ - ( . . /C.M. GARG) ( . . / O.P.MEENA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / RAJKOT , DATED : 26 TH NOVEMBER , 2018/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO : - 1) ASSESSEE 2) A CIT, CIRCLE, GANDHIDHAM 3) CIT(A) - II, RAJKOT 4) ACIT, GANDHIDHAM CIRCLE, GANDHIDHAM 5) ITAT (DR) 6) GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, RAJKOT