ACIT CIR 12(3), MUMBAI V. INTER GLOBE SERVICE, MUMBAI

ITA 7801/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79495 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Department
• Bench Allotted: I
• Next Hearing Date: 24-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 31-12-2012
• Court: TRIBUNAL
• Department Lawyers: IN CIRCUMSTANCES OF CA SE
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI JH FOT; IKY JKO U;KF;D LNL; JH FOT; IKY JKO U;KF;D LNL; JH FOT; IKY JKO U;KF;D LNL; JH FOT; IKY JKO U;KF;D LNL; ,OA ,OA ,OA ,OA JH JKTSUNZ] YS[KK LNL; DS LE{K JH JKTSUNZ] YS[KK LNL; DS LE{K JH JKTSUNZ] YS[KK LNL; DS LE{K JH JKTSUNZ] YS[KK LNL; DS LE{K BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER VK;DJ VIHY LA[;K / ITA NO.7801/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2008-09 ACIT CIRCLE- 12(3), MUMBAI, R. NO. 137, 1 ST FLOOR, AAYAKAR BHAWAN, MUMBAI 400 020. VS. M/S INTER GLOBE SERVICES 34A, JOLLY MAKER CHAMBER NO. 2 NARIMAN POINT MUMBAI 400 021. PAN:- AAAF I05444H APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.10.2012 OF CIT|(A) ARISING FROM PENALTY ORDER PASSED U/S 271(1 )(C). REVENUE HAS RAISED FOLLOWING GROUNDS IN THIS APPEAL:- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, WHETHER THE ID. CIT(A) IS RIGHT IN DELETING THE PENALTY U/S.271 (1 )(C) OF RS.4,08,303/- LEVIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE H AS FAILED TO DEDUCT TDS ON FREIGHT AND MARINE CHARGES AND HAS NOT DISALLOWED T HEM U/S.40(A)(IA). REVENUE BY/ JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS SMT.. AMRITA SINGH ASSESSEE BY / FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS MS. MRUGAKSHI K. JOSHI DATE OF HEARING 24.07.2014 DATE OF PRONOUNCEMENT 30.07.2014 M/S INTER GLOBE SERVICES 2 | P A G E 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE ID. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S.271 (1 )(C ) WHEN IT WAS CLEARLY ESTABLISHED THAT ASSESSEE FAILED IN DISALLOWING THE EXPENSES ON WHICH TDS HAD NOT BEEN DEDUCTED WHILE FULLY KNOWING THAT SUCH EXP ENSES ARE NOT ALLOWED UNDER INCOME TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE ID. CIT(A) IS RIGHT IN TREATING THE CONCEALMENT AND FIL ING OF INACCURATE PARTICULARS BY THE ASSESSEE AS A MERE INADVERTENT OMISSION WITHOUT CONSIDERING THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUN ICATION P. LTD 191 TAXMAN 179 (DELHI) WHICH CLEARLY COVERS THE ABOVE ISSUE'. 4. 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED.' 2. IN THE ASSESSMENT ORDER PASSED U/S 143(3), THE A SSESSING OFFICER HAD DISALLOWED RS. 3,13,671/- AND RS. 8,87,588/- PAID TO M/S VINS ONS AIR SERVICES (I) LTD. & M/S. CONTAINER CORPORATION OF INDIA LTD. RESPECTIVELY FO R WANT OF TDS AND BY APPLYING THE PROVISIONS OF SECTION 40(A)(IA). SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) IN RESPECT OF THESE TWO SUMS DISALLOWED U/S 40(A)(IA) AND LEVIED PENALTY OF RS. 4,08, 303/- BEING 100% OF TAX SOUGHT TO BE EVADED. 3. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEF ORE CIT(A) AND SUBMITTED THAT SUCH DISALLOWANCE /ADDITION U/S 40(A)(IA) DO NOT CO ME WITHIN THE PURVIEW OF CONCEALMENT OF INCOME AS PER SECTION 271(1)(C). IT WAS A DISALLOWANCE UNDER THE STATUTORY PROVISIONS AND NOT AGAINST ANY BOGUS OR INACCURATE CLAIM OF EXPENDITURE BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. ( 322 ITR 158). THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THAT THE PENALTY LEVIED U/S 271(1)(C) BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD (SUPRA). M/S INTER GLOBE SERVICES 3 | P A G E 4. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE DISALLOWANCE WAS MADE DUE T O NON DEDUCTION OF TAX AND NOT BECAUSE OF ANY BOGUS OR IMPERMISSIBLE CLAIM OF EXPE NDITURE BY THE ASSESSEE. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS CONCEALED ANY PARTICULAR OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E BECAUSE BY MAKING A WRONG CLAIM THE GENUINENESS AND CORRECTNESS OF THE EXPENDITURE INCURRED BY THE ASSESSEE HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER. THE CIT(A) H AS DELETED THE PENALTY BY CONSIDERING THE PROVISIONS OF THE ACT AND BY FOLLOW ING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUC TS PVT. LTD (SUPRA) IN PARA 2.3 AS UNDER:- 2.3 THE PENALTY ORDER, SUBMISSIONS MADE FOR THE APP ELLANT AND MATERIALS ON RECORD HAVE BEEN CONSIDERED. THIS IS THE CASE WHERE THE AS SESSING OFFICER DISALLOWED THE AMOUNT U/S 40(A)(IA) DUE TO NON-COMPLIANCE OF THE T DS PROVISIONS. IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSING OFFICER MADE THE DISALL OWANCE AND THE ASSESSEE ACCEPTED THE ADDITION IN THE ASSESSMENT ORDER AS IT WAS INFO RMED THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT AND PAY THE TAX. THE ASSESSEE DID NOT PREFER APPEAL AGAINST THIS DISALLOWANCE. IT IS THE CASE OF THE AS SEESEE THAT SUCH ADDITION DOES NOT COME WITHIN THE PURVIEW OF CONCEALMENT OF INCOME WI THIN THE MEANING OF SECTION 271 (1 )(C).. THE ASSESSEE DID NOT FURNISH ANY INACCURATE PARTICULARS OF INCOME AND IT WAS A MERE STATUTORY DISALLOWANCE SINCE THE APPELLANT HAD OMITTED TO ADD IN THE COMPUTATION OF INCOME THROUGH INADVERTENCE. THE HON'BLE ITAT, ' G' BENCH MUMBAI IN APPEAL NO.ITA NO.1487/MUM/2010 IN THE CASE OF M/S.KUMAR PAINTING WORKS VIDE ORDER DATED 30/1012010 HAS HELD THAT PENALTY LEVIED U/S 271 (1 )(C) IN A CASE WHERE ADDITION IS MADE ON ACCOUNT OF NON DEDUCTION OF TDS ON EXPENSES U/S 40(A)(IA) IS NOT JUSTIFIED IN VIEW OF THE HON'BLE SUPREME COURT'S JUDGMENT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. IN VIEW OF THI S, I AM OF THE OPINION THAT FACTS OF THE CASE DOES NOT CALL FOR ANY LEVY OF PENALTY U/S 271 (1 )(C). ACCORDINGLY, THE PENALTY OF RS.4,08,303/- LEVIED U/S 271 (1 )(C) OF THE I.T. AC T, 1961 IS DIRECTED TO BE DELETED. 5. THUS IT IS CLEAR THAT THE DISALLOWANCE WAS MADE BECAUSE OF NON DEDUCTION OF TAX AND NOT BECAUSE OF FURNISHING INACCURATE PARTICULAR S OF INCOME OR CONCEALMENT OF INCOME. THE HONBLE SUPREME COURT IN THE CASE OF RE LIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) HAS HELD THAT THE WORD 'PARTICULARS' USED I N THE SECTION 271(1)( C ) WOULD M/S INTER GLOBE SERVICES 4 | P A G E EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MAD E. NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING IN ACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE WHEN THE DETAILS OF THE CLAI M MADE BY THE ASSESSEE ARE NOT FOUND TO BE INCORRECT. IN VIEW OF THE FACTS OF THE CASE AND ABOVE DISCUSSION, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN DELETING THE PENALTY LEVIED U/S 271(1)(C). 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 30 -7-2014 SD/- SD/- ( RAJENDRA ) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 30-7 -2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI