Shri Shiv Bahadur Singh, Hooghly V. ITO, Ward - 2(3), Hooghly, Hooghly

ITA 935/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54532 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 24-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Keywords: Bonafide mistake

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA ( ) . . , , , , , , ) [BEFORE HONBLE SRI S.V. MEHROTRA, A.M. & HONBLE SRI MAHAVIR SINGH, J.M.] ' ' ' ' / I.T.A NO. 935/KOL/2011 #$ %& / ASSESSMENT YEAR : 2002-2003 SHRI SHIV BAHADUR SINGH, HOOGHLY -VS .- INCOME TAX OFFICER, WARD-2(3), HOOGHLY (PAN : AVJPS 1151 J) ( '( /APPELLANT ) ( )*'( / RESPONDENT ) FOR THE APPELLANT : SHRI SUNIL SURANA, A.R. FOR THE RESPONDENT : SHRI S.K. ROY, D.R. + / ORDER PER SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER/ . . , :- THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2002-03 AGAINST ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 04.05.2011. 2. THE EFFECTIVE GROUND OF APPEAL IS THAT LD. CIT(A PPEALS) ERRED IN CONFIRMING THE PENALTY AT 100% OF THE TAX ALLEGEDLY SOUGHT TO BE EVADED. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, AN IN DIVIDUAL, IN THE RELEVANT ASSESSMENT YEAR, CARRIED ON THE BUSINESS OF TRANSPORTATION OF PETROL AND DIESEL. HE HAD FILED HIS RETURN OF INCOME SHOWING TOTAL INCOME OF RS.2,28,750/-. THE ASSESEE HAD SHOWN IN THE PROFIT & LOSS A/C. THE GROSS RECEIPT FIGURE OF RS.49,25,810/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT GROSS PAYMENT FIGURE OF IBP CO ., AS PER TDS CERTIFICATE, WAS RS.52,75,644/- AND OUT OF THIS, RS.1,07,625/- WAS D EDUCTED AS TDS. THE ASSESESE IN HIS EXPLANATION POINTED OUT THAT HE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING. HOWEVER, ASSESSING OFFICER DID NOT ACCEPT THE SAME OBSERVING THAT IF T HAT WAS SO, ASSESSEE COULD NOT CLAIM TDS CREDIT OF ALL SUCH TDS CERTIFICATES FOR WHICH INCOM E HAD NOT BEEN OFFERED FOR TAXATION. HE, ACCORDINGLY, MADE AN ADDITION OF RS.3,49,854/- ON A CCOUNT OF DIFFERENCE BETWEEN THE GROSS RECEIPTS SHOWN IN THE PROFIT & LOSS A/C. AND THAT A S PER TDS CERTIFICATES SHOWN BY IBP CO.. HE, THEREFORE, INITIATED PROCEEDINGS UNDER SECTION 271(1)(C) FOR IMPOSING PENALTY. THE ASSESSEE IN HIS EXPLANATION, INTER ALIA, POINTED OUT THAT IT WAS ON ACCOUNT OF UNINTENTIONAL MISTAKE ON THE ITA NO. 935/KOL./2011 2 PART OF ASSESSEE. FURTHER, IT WAS POINTED OUT THAT IT WAS ONLY AN ACCOUNTING MISTAKE, WHICH COULD NOT BE RECONCILED AT THE TIME OF HEARING. ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION AND LEVIED PENALTY OF RS.3,14 ,868/- BEING 300% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. LD. CIT(APPEALS), WHILE PARTLY ALLOWING THE ASSESSEES APPEAL, CONFIRMED THE PENALTY TO THE EXTENT OF 100% OF TAX SOUGHT TO BE EVADED EQUIVALENT TO RS.1,04,956/-. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(APPEALS), ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAD DISSLOSED ALL MATERIAL FACTS BEFORE ASSESSING OFFICER BUT THE DIF FERENCE COULD NOT BE RECONCILED AS THE ASSESSEE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING IN EARLIER YEARS ALSO. HE SUBMITTED THAT THE ASSESSEE HAD NOT CONCEALED ANY FACTS FROM THE DEPAR TMENT. 5. ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDER OF LD. CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY THE ADDITION OF RS.3,49,854/- HAD BEEN M ADE ON THE BASIS OF GROSS RECEIPTS SHOWN IN THE TDS CERTIFICATE FROM CONTRACT BUSINESS. THIS TD S CERTIFICATE WAS SUBMITTED BY ASSESESE FOR CLAIMING CREDIT OF TDS. THE ADDITION WAS MADE ON AC COUNT OF DIFFERENCE IN FIGURES OF GROSS RECEIPTS SHOWN BY ASSESSEE AND THAT AS PER TDS CERT IFICATE. ASSESSING OFFICER, HOWEVER, HAS NOT SPECIFICALLY POINTED OUT AS TO WHICH PARTICULAR REC EIPT WAS NOT ACCOUNTED FOR BY THE ASSESSEE. THE CONTENTION OF ASSESSEE WAS THAT IT WAS FOLLOWIN G CASH SYSTEM OF ACCOUNTING AND THE DIFFERENCE COULD NOT BE RECONCILED BECAUSE IT WAS I MPOSSIBLE TO LOCATE THE ACTUAL FIGURES FROM OTHER ASSESSMENT YEARS. THE ASSESSEES EXPLANATION COULD NOT BE SAID TO BE IMPROBABLE. AT BEST, IT WAS A CASE OF NOT CORRELATING THE RECEIPTS TO RE LEVANT ASSESSMENT YEARS, VIS--VIS THE TDS CERTIFICATE. THE ASSESSEE IN HIS WRITTEN SUBMISSION S POINTED OUT AS UNDER :- THE APPEAL HAS BEEN DIRECTED AGAINST THE ORDER OF THE AO IMPOSING PENALTY OF RS.314868/- AT 300% OF THE TAX SOUGHT TO BE EVADED. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN DECLARING AN INCOME O F RS.78,480/- CLAIMING TAX CREDIT OF RS.107625/-. IN SUPPORT OF THE CLAIM OF T DS FULL STATEMENT AND DETAILS OF THE GROSS CONTRACT AMOUNT OF RS 5275644/- ON WHICH TAX WAS DEDUCTED WAS FILED ALONG WITH THE RETURN ITSELF. THE SAID RETURN WAS P ROCESSED U/S. 143(1) OF THE L.T. ACT, 1961. SUBSEQUENTLY, HOWEVER, FROM THE TDS CERT IFICATE FILED BY THE ASSESSEE ALONG WITH THE RETURN THE AO NOTICED THAT THOUGH TH E GROSS RECEIPTS AS PER THE SAID TDS CERTIFICATES WERE RS.5275644/- BUT IN THE PROFIT AND LOSS ACCOUNT THE RECEIPTS WERE SHOWN AT RS.4925810/- WHICH WAS FILED ALONG WITH THE RETURN. ITA NO. 935/KOL./2011 3 NOTICING FROM THE STATEMENT FILED BY THE ASSESSEE A LONG, WITH THE RETURN, THE AO ISSUED NOTICE U/S. 148 MENTIONING THE SAME V ERY FACT IN THE NOTICE ITSELF, AND ADDED BACK RS.349831/- AS ADDITIONAL INCOME. TH E ASSESSEE SUBMITTED THAT THE ASSESSEE DECLARED THE INCOME WHICH WAS ACTUALLY RECEIVED IN CASH DURING THE YEAR AND BUT THE BASIS AND MANNER IN WHICH THE TAX WAS DEDUCTED BY CREDITING THE AMOUNT TO THE ACCOUNT OF THE ASSESSEE OR BY ACTUAL PAYMENT BY THE TAX DEDUCTOR WAS NOT KNOWN TO THE ASSESSEE. SINCE HOWEVER THE TD S CERTIFICATE WAS ISSUED THE CREDIT WAS CLAIMED AS PER THE CERTIFICATE. IN FACT IT WAS SUBMITTED ORIGINALLY THE IBP COMPANY ALSO COULD NOT SUBMIT THE CORRECT DETAI LS OF THE TDS MADE BY THEM AS WOULD APPEAR FROM THE NOTICE DATED 19.12.2005 IS SUED U/S. 142(L) BY THE A.O. THE ASSESSEE, ALSO HOWEVER, COULD NOT RECONCILE THE DIFFERENCE SINCE IT WAS IMPOSSIBLE TO LOCATE THE FIGURES OF ACTUAL RECEIPTS FROM OTHER ASSESSMENT YEARS. THIS ADDITION WAS CONFIRMED ON APPEAL SINCE NO RECO NCILIATION COULD HE FURNISHED. THE LD. AO HAS IMPOSED PENALTY ON THE GR OUND THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME. IT IS SUBMITTED THAT IT IS THE ASSESSEES STATEMENT ITSELF FILED ALONG WITH THE RETURN FROM WHICH THE AO FOUND THAT THE GROSS RECEI PTS AS PER TDS CERTIFICATES WERE HIGHER THEN WHAT WAS DISCLOSED IN THE PROFIT A ND LOSS ACCOUNT. THEREFORE WHEN THE ASSESSEE HIMSELF HAS DISCLOSED ALL THE PAR TICULARS WITH REGARD TO THE GROSS AMOUNT AND SUCH PARTICULARS WERE THE ONLY SOU RCE TO REOPEN THE ADDITION, IT CANNOT BE SAID THAT THERE WAS NON DISCLOSURE OF THE PARTICULARS OF INCOME OR THE GROSS RECEIPTS ITSELF. IT IS EVIDENT FROM THE DISCL OSURE MADE BY THE ASSESSEE THAT THERE WAS NO INTENTION TO CONCEAL ANY PARTICULARS. IN FACT THE ASSESSEE DISCLOSED THE RECEIPTS WHATEVER WAS ACTUALLY RECEIVED BY HIM DURING THE YEAR. THE ACCOUNTS WERE ALSO AUDITED. WHEN THE ASSESSEE HAS FULLY DISC LOSED ALL PARTICULARS ALONG WITH THE RETURN OF INCOME IT IS NOT A CASE OF CONCE ALMENT. THE ISSUE IS DIRECTLY COVERED BY THE JUDGMENT OF THE HONBLE SUPREME COUR T IN THE CASE OF RELIANCE PETRO PRODUCTS. THE HONBLE SUPREME COURT OBSERVED AS UNDER :- A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHE D INACCURATE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR REVENUE SUGGESTED THAT BY MAKING INCORR ECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD PARTICULAR IS A DETAIL OR DETAILS (IN PLURAL SENS E); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS USED IN THE S. 27L(L)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESE NT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INC ORRECT OR INACCURATE, IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SU PPLIED WAS FOUND TO HE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. T HE LEARNED COUNSEL ARGUED THAT SUBMITTING AN INCORRECT CLAIM IN LAW F OR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICUL ARS OF SUCH INCOME. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY (HE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED, FLY ANY STRETC H OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING ITA NO. 935/KOL./2011 4 INACCURATE PARTICULARS. IN CIT VS. ATUL MOHAN BINDA L (2009) 225 CTR (SC) 248 : (2009) 28 DTR (SC) I : (2009) 9 SCC 589, WHERE THIS COURT WAS CONSIDERING THE SAME PROVISION, THE COURT OBSER VED THAT THE AO HAS TO HE SATISFIED THAT A PERSON HAS CONCEALED THE PAR TICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISION OF THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (2007) 212 CTR (SC) 432 : (2008) 13 SCC 369, AS ALSO, THE DECISION IN UNION OF INDIA VS. RAJASTHAN SPINNING & WEAVING MILLS (2009) 224 CTR (SC) I : (2009) 23 DTR (SC) 15 8 : (2009) 13 SCC 448 AND REITERATED IN PARA 13 THAT: 13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF S. 271(L)(C), CONDITIONS STATED THEREIN MUST EXIST. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER S. 271(L)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAU SE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. IN DILIP N. SHROFF VS. JT. CIT & ANR. (2007) 210 CTR (SC) 228 : (2007)6 SCC 329, THIS COURT EXPLAINED THE TERMS CONCEALMENT OF INCOME A ND FURNISHING INACCURATE PARTICULARS. THE COURT WENT ON TO HOLD THEREIN THA T IN ORDER TO ATTRACT THE PENALTY UNDER S. 271(1 )(C), MENS REA WAS NECESSARY , AS ACCORDING TO THE COURT, THE WORD INACCURATE SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CL. (III) OF S. 2 71(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, IN AS MU CH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NO T EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TERM INACCURATE PARTIC ULARS WAS NOT DEFINED ANYWHERE IN THE ACT AND, THEREFORE, IT WAS HELD THA T FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE F URNISHING INACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSEE MUST BE FOUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE F ACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUST BE PRECEDED BY A FIN DING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N, SHROFF VS. JT. CIT & ANR. (SUPRA) WAS UPSET. IN UNION OF INDIA VS. DHARAMENDR A TEXTILE PROCESSORS (CITED SUPRA), ALIER QUOTING FROM S. 271 EXTENSIVELY AND A LSO CONSIDERING S. 271(1)(C), THE COURT CAME TO THE CONCLUSION THAT SINCE S. 271( 1)(C) INDICATED THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMEN T OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NO NECES SITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF S. 271(L)(C) R/W EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FO R PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AN D, THEREFORE, WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUTION UNDER S. 276C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF VS. IT. CIT & ANR. (CIT ED SUPRA) WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PRO CESSORS (CITED SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERE NCE BETWEEN S. 271(L)(C) AND S. 276C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF INDIA VS. ITA NO. 935/KOL./2011 5 DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FA ULT WAS FOUND WITH THE REASONING IN THE DECISION IN I)ILIP N. SHROFF VS. JT. CIT & ANR. (CITED SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS CONCEAL AND INACCURATE. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHRO FF VS. JT. CIT & ANR. (CITED SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER S. 271(L)(C) THAT THE DECISION IN DILIP N. SH ROFF VS. JT. CIT & ANR. (CITED SUPRA) WAS OVERRULED. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE M ENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICT IONARY, THE WORD INACCURATE HAS BEEN DEFINED AS : NOT ACCURATE, N OT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STA TEMENT, COPY OR TRANSCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT A CCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY TH E ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH N OT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER S. 271 (L)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS VS. STATE OF TAMIL NADU(2009) 23 VST 24 9 (SC) AS REGARDS THE PENALTY ARE APPOSITE. IN THE AFOREMENTIONED DECISIO N WHICH PERTAINED TO THE PENALTY PROCEEDINGS IN TAMIL NADU GENERAL SALES-TAX ACT, THE COURT HAD FOUND THAT THE AUTHORITIES BELOW HAD FOUND THAT THERE WER E SOME INCORRECT STATEMENTS MADE IN THE RETURN. HOWEVER, THE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANTS ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED I N THE TURNOVER ARE DISCLOSED IN THE DEALERS OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INCLUDE THESE ITEMS IN THE DEALERS TURNOVER DISALLOWING THE EXEM PTION, PENALTY CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE. IN VIEW OF THE ABOVE NO PENALTY SHOULD HAVE BEEN I MPOSED. IT MAY HERE BE SUBMITTED THAT BECAUSE OF THIS EVEN IN SOME YEARS THE TDS CERTIFICATES SHOWED LESS GROSS AMOUNT BUT THE ACTUA L RECEIPT DECLARED WAS MORE. FOR EXAMPLE IN ASSESSMENT YEAR 2004-05 THE TDS SHOW ED GROSS RECEIPT OF RS.1369127/- BUT THE ACTUAL RECEIPT SHOWN WAS 15404 59/-. A COPY OF THE TDS CERTIFICATE AND PROFIT & LOSS ACCOUNT FOR THE SAID YEAR IS ENCLOSED HEREWITH. EVEN OTHERWISE THE PENALTY IMPOSED IS ALSO BAD IN L AW SINCE THE LD. AO HAS IMPOSED 300% PENALTY BEING THE MAXIMUM PENALTY IMPOSABLE UNDER THE INCOME TAX ACT, 1961. THE FACTS STATED ABOVE CLEARL Y SHOWS THAT THERE WAS NO CONCEALMENT ON THE PART OF THE ASSESSEE WITH REGARD TO THE DISCLOSURE OF THE FACTS OF THE CASE. IN VIEW OF THE ABOVE, THE PENALTY IMPOSED MAY BE CA NCELLED AND / OR REDUCED. ITA NO. 935/KOL./2011 6 THESE SUBMISSIONS ARE NOT CONTROVERTED. 7. THUS, IT WAS NOT THE CASE OF CONCEALMENT OF ANY FACT FROM THE DEPARTMENT ON THE PART OF ASSESSEE BECAUSE THE ASSESSEE HIMSELF HAD DISCLOSED ALL THE PARTICULARS WITH REGARD TO THE GROSS AMOUNT ON THE BASIS OF WHICH RE-OPENING TOOK PLACE. 8. HONBLE APEX COURT HAS HELD IN THE CASE OF CIT VS.- RELIANCE PETRO PRODUCTS PVT. LTD. [322 ITR 158] THAT MERELY BECAUSE ASSESSEE HAD CLAI MED EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO REVENUE, THAT BY ITSELF WOULD NOT ATTRACT PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HONBLE APEX COURT OBSERVED A S UNDER: MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPEN DITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271( 1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RET URN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASO N, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT IS CLEARLY NO T THE INTENDMENT OF THE LEGISLATURE. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS VS. STATE OF TAMIL NADU(2009) 23 VST 24 9 (SC) AS REGARDS THE PENALTY ARE APPOSITE. IN THE AFOREMENTIONED DECISIO N WHICH PERTAINED TO THE PENALTY PROCEEDINGS IN TAMIL NADU GENERAL SALES-TAX ACT, THE COURT HAD FOUND THAT THE AUTHORITIES BELOW HAD FOUND THAT THERE WER E SOME INCORRECT STATEMENTS MADE IN THE RETURN. HOWEVER, THE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPE LLANTS ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED IN THE TURNOVE R ARE DISCLOSED IN THE DEALERS OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INC LUDE THESE ITEMS IN THE DEALERS TURNOVER DISALLOWING THE EXEMPTION, PENALT Y CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), WE HOLD THAT ASSE SSEE DID NOT CONCEAL ANY PARTICULAR FACT OR FURNISHED INACCURATE PARTICULARS OF GROSS RECEIPTS. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND ALLOW THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12/ 09/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 12 / 09/ 2011 ITA NO. 935/KOL./2011 7 COPY OF THE ORDER FORWARDED TO: 1. SHRI SHIV BAHADUR SINGH, G.T. ROAD, KANTA PUKUR, P. O. MOGRA, DIST. HOOGHLY-712 148. 2 ITO, WARD-2(3), HOOGHLY; 3. CIT(APPEALS)- ,KOLKATA 4. CIT- , KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.