MANISH P. SHAH, MUMBAI V. ITO 16(1)(2), MUMBAI

ITA 853/MUM/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3619 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: N AVNEET KUMAR ARORA
• Keywords: Bonafide mistake
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 853 /MUM/201 6 ( / ASSESSMENT YEAR : 20 11 - 12 ) MANISH P SHAH,402, RAJENDRA VIHAR, 12 TH KHETWADI CROSS LANE, MUMBAI - 400004 / VS. INCOME TAX OFFICER 16( 1)(2) , MUMBAI. ./ PAN : AMXPSO901R / ASSESSEE BY SHRI NAVNEET KUMAR ARORA / REVENUE BY SHRI PREMANAND J / DATE OF HEARING : 12.5.2016 / DATE OF PRONOUNCEMENT : 17. 5.2016 / O R D E R PER RAJESH KUMAR, A. M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATE D 1.12.2015 OF COMMISSIONER OF INCOME TAX (APPEALS) - 30 , MUMBAI (HEREINAFTER CALLED AS THE CIT(A) FOR ASSESSMENT YEAR 20 11 - 12 . 2. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) ASSESSING THE INCOME OF THE ASSESSEE AT RS. 11,46,990/ - A S AGAINST THE RETURNED INCOME OF RS.6,35,503/ - AND PENALTY PROCEEDINGS WERE INITIATED U/S 271(1) ( C ) OF THE INCOME TAX ACT, 1961 ACT FOR CONCEALING THE PARTICULARS OF INCOME AND FURNISHING IN ACCURATE PARTICULAR S OF INCOME. THE ASSESSEE , A PROPRIETOR OF M /S 2 853 /MUM/ 201 6 GLOBAL SOLUTIONS , WAS ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE AND , DURING THE YEAR UNDER CONSIDERATION , HAD A TURNOVER OF RS. 73,96,959/ - INCLUDING EXPORT TURNOVER OF RS.72,35,001/ - AND ACCORDINGLY CLAIMED DEDUCTION U/S 10A OF THE ACT AT RS. 44,46,150/ - BY FILING FORM 56F. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE INTEREST ON FDR OF RS. 1,14,768/ - AND INTEREST ON LOANS RS. 3,72,390/ - WERE TREATED AS PART OF PROFIT OF EXPORT BUSINESS AND THUS CLAIMED EXCESS DEDUCTION U/S 10A. HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ,THE ASSESSEE REVISED THE CLAIM U/S 10A BY FILING REVISED WORKING S OF CLAIM U/S 10A OF THE ACT BY SUBMITTING THAT IT WAS A N INADVERTENT AND UNINTENTIONAL MISTAKE OCCURRED. I N THE REVISED WORKING TH E ASSESSEE DECLARED THE INCOME AT RS.11,11,900/ - AS AGAINST THE ORIGINAL RETURN ED INCOME OF RS. 6,35,500/ - WITHOUT REVISING THE RETURN OF INCOME. THE AO AFTER GIVING SHOW CAUSE ON 01.08.2014 AND AFTER CONSIDERING THE REPLY OF THE ASSESSEE AS FILED VID E LETTER DATED 14.08.2014, AS INCORPORATED IN PARA 4 OF THE PENALTY ORDER, REJECTED THE CONTENTION OF THE ASSE SSEE ON VARIOUS GROUNDS AND RELIED UPON VARIOUS DECISIONS AND CASE LAWS AS INCORPORATED IN PARA 5 OF THE PENALTY ORDER AND ULTIMATELY IMPOSED A P ENALTY OF RS.1,41,107/ - FOR FURNISHING INACCURATE PARTICULARS OF INCOME U/S 271(1) ( C ) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF AO , THE ASSESSEE FILED AN APPEAL BEFORE CIT(A) WHO ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY CONSIDERING AND REJECTING THE 3 853 /MUM/ 201 6 SUBMISSIONS OF THE ASSESSEE WHICH HAS BEEN INCORPORATED AT PARA 4 OF THE APPEAL ORDER AND HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD AR AT THE OUTSET , WHILE PLACING BEFORE THE US THE COPY OF JUDGMENT IN THE CASE OF CIT V JUBILANT ENPRO PVT LTD( DEL) IN ITA NO . 1471/2010 DATED 28.09.2010, VEHEMENTLY SUBMITTED THAT THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE SAID JUDGMENT OF THE DELHI HIGH COURT AND IN VIEW THE SAID DECISIONS THE PENALTY AS IMPOSED BY AO AND CONFIRMED BY CIT(A) IS PRAYED TO B E DELETED. THE LD DR ON THE OTHER HAND RELIED ON THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORDS. UPON CAREFUL PERUSAL OF THE DECISION IN THE CASE OF CIT V JUBILANT ENPRO PVT LTD (SUPRA) , WE FIND THAT AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE DELH I HIGH COURT IN FAVOUR OF THE ASSESSEE BY HOLDING THAT PENALTY U/S 271(1 ( C ) OF THE ACT WAS NOT LEVIABLE IN THE CASE OF DISALLOWANCE OF INTEREST ON FDR U/S 10A. THE RE LEVANT EXTRACTS OF THE SAID DECISION ARE AS UNDER: - 12. THE ISSUE WHETHER SUCH DISALLOWABLE ITEM OF INTEREST UNDER SECTION 10A OF THE INCOME TAX ACT, 1961 CALLS FOR PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT , 1961 CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. HCL TECHNOLOGIES ETC. AND ITAT, C BENCH, DELHI VIDE A CONSOLIDATED ORDER DATED 31ST MARCH, 2009 PASSED IN ITA NO.1445/DEL/2008 ASSESSMENT YEAR 1998 - 99, ITA NO.1320/DEL/2008 ASSESSMENT YEAR 2003 - 04 AND ITA NO.1446/DEL/2008 ASSESSMENT YEAR 2003 - 04 WHILE CONSIDERING A NUMBER OF DISALLOWABLE ITEM UNDER SECTION 10A FOR IMPOSITION OF PENALTY UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT, 1961, IN WHICH ONE OF THE TEMPS ALSO WAS DISALLOWANCE OF INTEREST RECEIVED ON FDRS UNDER SECTION 10A , HELD THAT PENALTY UNDER SECTION 4 853 /MUM/ 201 6 271(1)(C) OF THE INCOME TAX ACT, 1961 WAS NOT LEVIABLE, WHILE OBSERVING AS UNDER: - '3. .........THE CASE OF THE ASSESSEE BEFORE US AND BEFORE THE LD. CIT(A) WAS THAT THE CLAIM FOR DEDUCTION UNDER SECTION 10A ON THE AFORESAID ITEMS WAS MADE BONAFIDELY, AS THERE WERE DIFFERING DECISIONS OF THE TRIBUNAL IN THE MATTE R. THEREFORE, IF SUBSEQUENT DECISION OF THE HONBLE HIGH COURT OR THE HONBLE SUPREME COURT REVERSES THE FINDING OF THE TRIBUNAL, THEN A CLAIM MADE IN CONSONANCE WITH THE ORDER OF THE TRIBUNAL DOES NOT LEAD TO AN INFERENCE OF CONCEALMENT OF INCOME. WE FIND THAT THE LEARNED DR WAS NOT ABLE TO REBUT THIS ARGUMENT. WE ALSO FIND THAT THE LEARNED CIT(A) HAS SPECIFICALLY HELD THAT ALL THE FACTS RELATING TO COMPUTATION OF INCOME HAD BEEN DISCLOSED AND, THEREAFTER SPECIFIC CLAIMS FOR DEDUCTION WERE MADE. IN SUCH CI RCUMSTANCES, WE ARE OF THE VIEW THAT DECISION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & OTHERS (SUPRA) DOES NOT SUPPORT THE CASE OF THE REVENUE AS THE DECISION IS THAT THE MATTER HAS TO BE DECIDED IN THE LIGHT OF STATUTORY LANGUAGE CONTAINED IN SECTION 271(1)(C) AND EXPLANATION OFFERED BY THE ASSESSEE COULD NOT BE SAID TO BE MALA FIDE. THEREFORE, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS RIGHT IN DELETING THE PENALTY.' 6. IN THE INSTANT CASE , T HE ASSESSEE HAVING DISCLOSED ALL THE PARTICULARS QUA THE INTEREST ON FDRS AND LOANS IN THE CLAIM MADE U/S 10A OF THE ACT AND THE FACTS OF THE ASSESSEES BEING SAME AS IN THE CASE OF CIT V JUBILANT ENPRO PVT LTD (SUPRA) AND ARE SQUARELY COVERED BY THE RAT IO LAID DOWN IN THE SAID DECISION. WE , THEREFORE , RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN ABOVE DECISION DIRECT THE AO TO DELETE THE PENALTY AS IMPOSED U/S 271(1) ( C ) OF THE ACT. 5 853 /MUM/ 201 6 7. IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17TH MAY , 201 6 SD SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 17 . 05.2016 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI