DCIT,, v. Society,

ITA 1397/DEL/2002 | 1997-1998
Pronouncement Date: 25-03-2011 | Result: Dismissed

Appeal Details

RSA Number 139720114 RSA 2002
Bench Delhi
Appeal Number ITA 1397/DEL/2002
Duration Of Justice 8 year(s) 11 month(s) 10 day(s)
Appellant DCIT,,
Respondent Society,
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 25-03-2011
Date Of Final Hearing 15-03-2011
Next Hearing Date 15-03-2011
Assessment Year 1997-1998
Appeal Filed On 15-04-2002
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.1397/DEL./2002 (ASSESSMENT YEAR : 1997-98) DCIT CENTRAL CIRCLE 3 VS. M/S. SOCIETEX NEW DELHI. 48/1 COMMERCIAL CENTRE MALCHA MARG NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL BHALLA CA REVENUE BY : SHRI PEEYUSH SONKAR SENIOR DR ORDER PER B.C. MEENA ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF CIT (APPEALS)-II NEW DELHI DATED 15.01.2002. THE ONLY GROUND OF AP PEAL TAKEN BY THE REVENUE READ AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE PENALTY OF RS.10 09 948/- U/S 271(1)(C) SINCE THE ASSESSEE HAD FURNISHED INACCURATE PARTICU LARS OF ITS INCOME. 2. IN THE FIRST ROUND THE REVENUES APPEAL WAS DIS MISSED ON ACCOUNT OF NON- RECORDING THE SATISFACTION BY FOLLOWING THE DECISIO N OF HON'BLE HIGH COURT IN CIT V. RAM COMMERCIAL ENTERPRISES 246 ITR 568. AGAINST TH IS ORDER OF ITAT THE ITA NO.1397/DEL./2002 2 REVENUE AS WELL AS ASSESSEE FILED APPEALS IN THE HO N'BLE DELHI HIGH COURT. THE HON'BLE HIGH COURT VIDE ORDER DATED 22.9.2008 HAS D ECIDED AS UNDER :- 4. CONSEQUENTLY WE DISPOSE OF THE APPEALS AS WELL AS THE CROSS- OBJECTIONS BY SETTING ASIDE THE IMPUGNED ORDER BOTH ON THE QUESTION OF RECORDING OF SATISFACTION AS WELL AS ON MERITS. HOWEVER INSOFAR AS THE QUESTION ON MERITS IS CONCERNED WE REMAND T HE MATTER TO THE TRI FOR A FRESH CONSIDERATION. THE PARTIES SHALL B E ALLOWED TO MAKE ALL SUBMISSIONS AS ARE AVAILABLE TO THEM UNDER LAW. THE TRIBUNAL SHALL RECONSIDER THE MATTER ON ALL SUCH POINTS WHIC H MAY BE RAISED BY THE PARTIES WITH REGARD TO THE MERITS. IT IS MADE CLEAR THAT WE HAVE NOT EXPRESSED ANY VIEW ON THE MERITS OF THE MATTER. THE HON'BLE HIGH COURT HAS SET ASIDE THE ORDER ON T HE ISSUE OF RECORDING SATISFACTION AS WELL AS ON THE MERITS. SO FAR AS THE QUESTION O F MERIT IS CONCERNED THE HON'BLE HIGH COURT HAS REMANDED FOR FRESH CONSIDERATION. 3. WHILE DECIDING THE APPEAL OF THE ASSESSEE LEARN ED CIT (A) DELETED THE PENALTY BY HOLDING AS UNDER :- 3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL. I HAVE PERUSED THE ASSESSMENT ORDER AS WE LL AS THE PENALTY ORDER. AS FAR ASSESSMENT THE ISSUE OF ADD BACK OF INCOME TAX OF RS.23 50 000/- IS CONCERNED THIS AMOUNT WAS DULY D EBITED IN THE PROFIT & LOSS ACCOUNT AND COULD NOT BE ADDED BACK D UE TO SOME MISTAKE ON THE PART OF STAFF. AT THE TIME OF ASSES SMENT PROCEEDINGS ASSESSEE HIMSELF OFFERED TO ADD BACK THIS AMOUNT AN D FIELD REVISED COMPUTATION ACCORDINGLY. FOR THIS MISTAKE IT CANN OT BE SAID THAT THERE WAS ANY CONCEALMENT ON THE PART OF THE ASSESS EE. 4. AS FAR AS THE ISSUE OF DEPRECIATION ON KHAN MARK ET PROPERTY IS CONCERNED THIS PROPERTY WAS USED FOR BUSINESS PURP OSES FOR THE PART OF THE YEAR AND ONLY FROM AUGUST IT WAS GIVEN ON RE NT TO THE SISTER CONCERN. DEPRECIATION WAS CLAIMED AS USUAL IN EARL IER YEARS. AS FAR AS THE DEPRECIATION IN RESPECT OF BANGALORE PROPERT Y IS CONCERNED THE AMOUNT INVOLVED IS NOMINAL AS ONLY 1/3 RD HAS BEEN FOUND TO BE GIVEN OUT ON RENT. MOREOVER THE PARTICULARS OF THE RENT AL INCOME AS WELL AS THE CLAIM OF DEPRECIATION WAS DULY SHOWN IN THE STA TEMENT ENCLOSED WITH THE RETURN. IT CANNOT BE SAID THAT THE ASSESS EE HAD NO INTENTION OF FURNISHING INACCURATE PARTICULARS OR FALSE STATE MENT OR FALSE ITA NO.1397/DEL./2002 3 EXPLANATION. THERE IS NO INTENTION OF CONCEALMENT AND THEREFORE PENALTY FOR CONCEALMENT CANNOT BE SUSTAINED IN THIS CASE. THE PENALTY LEVIED IS ACCORDINGLY CANCELLED. 4. WHILE PLEADING ON BEHALF OF THE REVENUE THE LEA RNED DR RELIED ON THE ORDER OF ASSESSING OFFICER AND ALSO PLEADED THAT THE MIST AKE WAS NOT BONAFIDE. ASSESSEE HAS INTENTIONALLY NOT FURNISHED ACCURATE PARTICULAR S AND HAS MADE FALSE STATEMENT AND ALSO RELIED ON THE DECISIONS OF HON'BLE DELHI H IGH COURT IN THE CASES OF CIT VS. ZOOM COMMUNICATION PVT. LTD. 2010-TIOL-361-HIGH CO URT-DEL-IT AND CIT VS. ESCORTS FINANCE LIMITED (2010) 328 ITR 44. 5. ON THE OTHER HAND THE LEARNED AR SUBMITTED THAT THERE WAS A BONAFIDE INADVERTENT MISTAKE COMMITTED AT THE TIME OF FILING OF COMPUTATION OF INCOME THEREFORE THERE WAS NEITHER CONCEALMENT NOR FILING OF INACCURATE PARTICULARS. HENCE PENALTY U/S 271(1)(C) CANNOT BE LEVIED. HE ALSO PL EADED THAT INADVERTENTLY THE PROVISION FOR TAXATION DEBITED IN PROFIT & LOSS ACC OUNT COULD NOT BE ADDED BACK IN THE INCOME. THIS WAS A BONAFIDE MISTAKE. AS SOON AS THE ASSESSEE CAME TO KNOW ABOUT THE MISTAKE THE SAME WAS CORRECTED. THE ASSE SSEE HAS PAID FULL ADVANCE TAX ON THE GROSS INCOME PRIOR TO THE INADVERTENT MISTAK E OCCURRED IN THE STATEMENT OF INCOME. THE FACTS REGARDING PROVISION OF TAXATION WAS VERY WELL DISCLOSED IN THE PROFIT & LOSS ACCOUNT. THIS WAS A BONAFIDE MISTAKE NOT DELIBERATE AND INADVERTENT MISTAKE. HE PLEADED THAT ON ACCOUNT OF INADEQUATE MANPOWER AND PARTNERSHIP CONCERN WHICH IS NOT HAVING THE SERVICES OF QUALIF IED CHARTERED ACCOUNTANT THE EMPLOYEES MADE THE PROFIT & LOSS ACCOUNT AND COMMIT TED THIS BONAFIDE MISTAKE. HAD THERE BEEN ANY MALAFIDE ON THE PART OF THE ASSE SSEE THEN ADVANCE TAX WOULD NOT ITA NO.1397/DEL./2002 4 HAVE BEEN PAID. IT IS ALSO PLEADED THAT IT WAS THE FIRST TIME THAT THE PROVISIONS FOR TAXATION FOR THE YEAR WAS DEBITED IN THE PROFIT & L OSS ACCOUNT AND ON THIS ACCOUNT ALSO THE CLERICAL MISTAKE OCCURRED IN THE MAKING O F STATEMENT OF INCOME. HE PLEADED THAT AFTER SEEING THE FACTS HOLISTICALLY I T CANNOT BE SAID TO BE A MISTAKE WHERE PENALTY FOR CONCEALMENT FOR FILING INACCURATE PARTICULARS OR CONCEALMENT CAN BE LEVIED. HE ALSO PLEADED THAT THE ASSESSING OFFI CER HAS ALSO FAILED TO DETECT THE INADVERTENT MISTAKE WHILE PASSING THE ORDER U/S 143 (1)(A). IN THE FIRST ROUND FACT RECORDED BY THE ITAT THAT ASSESSEE HAS NOT PAID ANY ADVANCE TAX ON THE INCOME OF SUCH MAGNITUDE IS NOT CORRECT. THE FACT IS THAT AS SESSEE PAID ADVANCE TAX EVEN IN THE MONTH OF MARCH OF THE RELEVANT FINANCIAL YEAR. AFT ER SEEING HOLISTICALLY THE MISTAKE IS APPARENTLY A CLERICAL MISTAKE. HE ALSO RELIED O N THE FOLLOWING CASE LAWS :- (I) CHANDRAPAL BAGGA 261 ITR 67 (JAIPUR); (II) CIT VS. SIDHARTHA ENTERPRISES (2009) 184 TAXMA N 460 (PH) / 322 ITR 80 (PH) (III) CIT VS. RAJIV GARG 313 ITR 256 (PH) (IV) CIT VS. NELLAI TRADING AUTOMOBILE AGENCY 172 TAXM AN 330 (MAD.) / 288 ITR 557 (MAD.) (V) MAHADESWARA MOVIES VS. CIT 144 ITR 127 (KAR.) (VI) UDAYAN MUKHERJEE 291 ITR 3198 (CAL.) (VII) E.I. DUPONT INDIA LTD. ITA 485/2007 (VIII) NAMASTE VOYAGES (P) LTD. 5 ITR (TRIB) 90 DELHI 6. WE HAVE HEARD BOTH THE SIDES. THE PROVISION MAD E FOR ADVANCE TAX OF RS.23 50 000/- DEBITED IN THE P&L ACCOUNT NOT ADDED BACK TO INCOME IS BONAFIDE MISTAKE. ASSESSEE PAID ADVANCE TAX IN THE MONTH OF MARCH ONLY. IT IS THE FIRST TIME THAT PROVISION WAS DEBITED IN P&L ACCOUNT. HAD THE RE BEEN ANY INTENTION TO FILE INACCURATE PARTICULARS THEN THE ASSESSEE COULD NOT HAVE PAID THE ADVANCE TAX IN THE LAST MONTH OF ASSESSMENT YEAR. THE ASSESSEE CONCER N IS A FIRM WHICH IS NOT HAVING ITA NO.1397/DEL./2002 5 EXPERT CHARTERED ACCOUNTANTS AT ITS PAYROLL. FURTH ER THIS WAS THE FIRST YEAR IN WHICH THE PROVISION FOR TAXATION WAS DEBITED TO THE P&L A CCOUNT. IN SUCH A SITUATION IT IS A HUMAN BONAFIDE CLERICAL MISTAKE OCCURRED WHILE MA KING THE STATEMENT OF INCOME. THE ASSESSEE RECTIFIED THE MISTAKE AS SOON AS IT WA S DETECTED. EVEN THE ASSESSING OFFICER FAILED TO DETECT THE MISTAKE WHILE MAKING T HE ORDER U/S 143(1)(A). AFTER CONSIDERING ALL THE RELEVANT FACTS AND CIRCUMSTANCE S HOLISTICALLY WE HOLD THAT THE MISTAKE WAS BONAFIDE AND ASSESSEE CANNOT BE VISITED WITH THE PENALTY U/S 271(1)(C) FOR FILING INACCURATE PARTICULARS OF INCOME AND THE CASE LAWS RELIED UPON ARE ALSO NOT APPLICABLE. ACCORDINGLY THE GROUND IS DISMISSED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF MARCH 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 25 TH DAY OF MARCH 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-II NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.