Shri Naresh Kumar Mundra, Uttar Dinajpur V. ITO,Ward-1, Raiganj, Raiganj

ITA 845/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7939 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM JCITS
• Assessee Lawyers: RAVI TULSIYAN FCA LD AR

Judgement Text

ITA NO. 845/KOL/2012-C-AM SH. NARESH KUMAR MUNDRA 1 , IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH: KO LKATA ( ) , , BEFORE HONBLE SRI MAHAVIR SI NGH, JM & HONBLE SRI SHAMIM YAHYA, AM I.T.A NO. 845/KOL/2012 / ASSESSMENT YEAR :2008-09 SHRI NARESH KUMAR MUNDRA VS. I.T.O WARD -1, RAIGANJ PROP: M/S. LILA FOOD PRODUCTS PAN:AFAPM7295L ( $ /APPELLANT ) ( %&$ / RESPONDENT ) $ / FOR THE APPELLANT/ ASSESSEE : / SHRI RAVI TULSIYAN, FCA, LD.AR %&$ / FOR THE RESPONDENT/DEPARTMENT: / SHRI NILOY BARAN SOM, JCIT/SR.DR + , /DATE OF HEARING: 26-09-2014 + , /DATE OF PRONOUNCEMENT: 30 -09-2014 / ORDER , SHRI SHAMIM YAHYA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. CIT(A) DATED 03/04/2012 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE ISSUE RAISED IN THIS APPEAL IS THAT THE LD .CIT(A) HAS EARED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 271(1) ( C) OF THE I. T ACT 1961 AMOUNTING TO RS.2,34,479/-. 3. IN THIS CASE THERE WAS A SURVEY CONDUCTED U/S.13 3A OF THE I.T. ACT 1961 ON THE ASSESSEES BUSINESS PREMISES ON 27-03-2008. DURING THE COURSE OF SURVEY EXCESS CASH OF RS.3,43,349/- AND UNDISCLOSED SALES OF RS.32,75,3 97/- WAS DETECTED AND THE SAME WAS ACCEPTED BY THE ASSESSEE. THE ASSESSEE HAD ALSO PAI D RS.2,90,000/- IN THE MONTH OF MARCH 2008 AS ADVANCE TAX. HOWEVER, IN THE RETURN SUBMITTED BY THE ASSESSEE THESE AMOUNTS WERE NOT DISCLOSED IN THE AUDITED ACCOUNTS BEING UNDISCLOSED CASH SALES AND PROFIT, BUT THE SAME WERE TAKEN IN THE BALANCE SHEET AS CAPITAL ACCOUNT. DUR ING THE COURSE OF ASSESSMENT THE AO ITA NO. 845/KOL/2012-C-AM SH. NARESH KUMAR MUNDRA 2 DETECTED AND ADDED AN AMOUNT OF RS.3,28,850/-. I N THE ASSESSEES INCOME. IN THIS BACKGROUND, PENALTY PROCEEDINGS WERE INITIATED BY THE AO U/S. 271(1)( C) OF THE I.T ACT 1961. 4. IN THE PENALTY PROCEEDINGS ASSESSEE SUBMITTE D THAT DUE TO MISTAKE THIS AMOUNT WAS NOT DISCLOSED IN THE RETURN OF INCOME, BUT THE SAME WAS DULY DISCLOSED IN THE AUDIT REPORT. IT WAS SUBMITTED THAT THERE WAS NO CONCEALMENT OF ANY PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. HOWEVER, THE AO WAS NOT SATISFIED AND HE LEVIED THE PENALTY OF RS.2,34,479/-U/S. 271(1) ( C) OF THE ACT. 5. UPON THE ASSESSEES APPEAL, THE LD.CIT(A) HAS CO NFIRMED THE ACTION OF THE AO. 6. AGAINST THE ABOVE ORDER OF THE LD.CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE LD. COUNSEL AND PERUSED THE RECORD. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE NEVER RETRACTE D THE ACCEPTANCE OF UNDISCLOSED CASH AND SALES. THE DISCLOSURE WAS MADE DULY IN THE CASH BO OK AS WELL AS IN THE AUDITED ACCOUNTS AND THE AUDIT REPORT. HOWEVER, DUE TO MISTAKE THE AMOUN T WAS SHOWN AS CAPITAL ACCOUNT IN THE BALANCE SHEET, BUT IN THE TAX AUDIT REPORT THE AUD ITOR HAS DULY MENTIONED THAT THE AMOUNT HAS NOT BEEN TAKEN IN THE P & L ACCOUNT. THIS WAS AN INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE. EVEN THE ASSESEE HAS PAID TAX BY WAY OF ADVANCE TAX AND THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE AO. THE LD. CO UNSEL HAS SUBMITTED THAT DUE TO MISTAKE THE ASSESSEE DID NOT SHOW THE SAME IN THE RETURN OF INC OME, WHICH IS FULLY UNINTENTIONAL . IN THESE CIRCUMSTANCES, THE LD. COUNSEL OF THE ASSESSEE PRA YED THAT THERE WAS NO CONCEALMENT AT ALL ON THE PART OF THE ASSESSEE. HE SUBMITTED THAT FOR AN INADVERTENT ERROR IMPOSITION OF PENALTY U/S. 271(1)( C) IS NOT PERMISSIBLE. IN THIS REGARD, THE LD.COUNSEL OF THE ASSESSEE HAS RELIED ON THE DECISIONS IN THE FOLLOWING CASE LAWS:- (I) CIT VS. RELIANCE PETROPRODUCTS PVT. LTD REPORT ED IN (2010) 322 ITR 158(SC) (II) CIT VS. SANIA MIRZA (AP.HIGH COURT ITTA NO.526 OF 2011 DATED 09-02-2012 (III) PRICE WATERHOUSE COOPERS P.LTD VS. CIT REPORT ED IN (2012) 348 ITR 306(SC) ITA NO. 845/KOL/2012-C-AM SH. NARESH KUMAR MUNDRA 3 8. THE LD.DR, ON THE OTHER HAND, HAS RELIED ON THE ORDERS OF AUTHORITIES BELOW. 9. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE AS SESSEE HAS DULY DISCLOSED THE INCOME AS ACCEPTED DURING THE COURSE OF SURVEY BY WAY OF INCLUSION OF THE SAME IN THE BALANCE SHEET OF THE ASSESSEE. THE ONLY MISTAKE WAS THAT THE SAME HAD NOT BEEN TAKEN TO P & L ACCOUNT. HOWEVER, THIS ASPECT WAS DULY DISCLOSED BY THE AUD ITOR IN THE TAX AUDIT REPORT THAT THE AMOUNT INVOLVED IN QUESTION WAS NOT DISCLOSED IN THE P & L ACCOUNT. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THERE IS CONSID ERABLE COGENCY IN THE ASSESSEES SUBMISSION THAT THERE WAS AN INADVERTENT ERROR. NO BODY CAN I NTENTIONALLY SHOW AN UNDISCLOSED INCOME IN THE BALANCE SHEET AND IN THE AUDIT REPORT AND STILL NOT INCLUDE THE SAME IN THE RETURN OF INCOME. BY NO STRETCH OF IMAGINATION IT IS A CASE OF CONCEA LMENT, IN FACT, THERE IS FULLY DISCLOSURE BY THE ASSESSEE. IT IS ALSO SUPPORTED BY THE FACT THAT THE ASSESSEE HAS DULY PAID THE ADVANCE TAX IN THE MONTH OF MARCH 2008 ITSELF. IN THIS REGARD, THE HONBLE APEX COURTS DECISION IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD (SUPRA) IS DIR ECTLY APPLICABLE IN FAVOUR OF THE ASSESSEE TO THE FACTS OF THE CASE. IN THIS CASE THE HONBLE APEX COURT HAS FOUND THAT PENALTY U/S. 271(1) (C ) OF THE ACT IS NOT LEVIABLE ON AN INADVERTEN T ERROR FOUND ON THE PART OF THE ASSESSEE. FURTHER THE DECISION AS RELIED ON BY THE LD. COUNS EL OF THE ASSESSEE IN THE CASE OF SANIA MIRZA (REFERRED TO SUPRA) IS ALSO APPLICABLE TO THE FACT S OF THE PRESENT CASE. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THERE WAS NO CONTUMACIOUS CONDUCT ON THE PART OF THE ASSESSEE WARRANTING ANY LEVY OF PENALTY U/S. 271(1) (C ) OF THE ACT. HENCE, WE DIRECT TO DELETE THE PENALTY IN THIS CASE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AS STATED ABOVE. . , ORDER PRONOUNCED IN THE OPEN COURT ON 30/09/2014 SD/- SD/- [ , ] [ , ] [ MAHAVIR SINGH, JUDICIAL MEMBER ] [ SHAMIM YAHYA, ACCOUNTANT MEMBER ( , ) DATED : 30 /9 /2014 ITA NO. 845/KOL/2012-C-AM SH. NARESH KUMAR MUNDRA 4 ** PRADIP SPS + %1 21 / COPY OF THE ORDER FORWARDED TO: 1. . $ / THE APPELLANT : SHRI NARESH KUMAR MUNDRA PROP: LILA FOOD PRODUCTS SILIGURI MORE RAIGANJ, UTTAR DINAJPUR, W.B 733134. 2 %&$ / THE RESPONDENT- I.T.O W 1, RAIGANJ. 3. 5. / THE CIT, 4. ( )/ THE CIT(A) % / DR, KOLKATA BENCH 6.GUARD FILE . &1 % / TRUE COPY, / BY ORDER, / ASSTT REGIST RAR