PROPELLA TEXTILES PVT. LTD., v. ITO-8 (2) (4),

ITA 3244/MUM/2010 | 2004-2005
Pronouncement Date: 11-11-2011 | Result: Allowed

Appeal Details

RSA Number 324419914 RSA 2010
Assessee PAN AADCP3991M
Bench Mumbai
Appeal Number ITA 3244/MUM/2010
Duration Of Justice 1 year(s) 6 month(s) 15 day(s)
Appellant PROPELLA TEXTILES PVT. LTD.,
Respondent ITO-8 (2) (4),
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 11-11-2011
Date Of Final Hearing 02-11-2011
Next Hearing Date 02-11-2011
Assessment Year 2004-2005
Appeal Filed On 26-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH BEFORE SHRI D. MANMOHAN VICE PRESIDENT & BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER I.T.A.NO.3244/MUM/2010 A.Y 2004-05 M/S PROPELLA TEXTILES LTD. C/O. M/S. MALPANI & ASSOCIATES 307 CHARTERED HOUSE 297/299 DR. C. H. STREET MUMBAI 400 002. PAN: AADCP 3991 M VS. THE INCOME TAX OFFICER 8 (2)(4) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAHUL K. HAKANI. RESPONDENT BY : SHRI D.S.SUNDER SINGH. DATE OF HEARING: 02-11-2011 DATE OF PRONOUNCEMENT: 11-11-2011 O R D E R PER T.R.SOOD AM: IN THIS APPEAL ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) THROUGH WHICH PENALTY U/S.271(1) AMOUNTING TO RS.1 21 148/- HAS BEEN CONFIRMED. 2. AFTER HEARING BOTH THE PARTIES WE FIND THAT ASS ESSEE FILED A RETURN OF INCOME OF RS.1 21 560/- AFTER SETTING OFF OF BROUGHT FORWARD LOSSES OF RS.3 57 696/-. WHEN THE CASE WAS TAKEN UP FOR SCRUTINY IT WAS NOTICED THAT SHAREHOLDING PATTERN OF THE COMPAN Y WAS COMPLETELY CHANGED AND THEREFORE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE AS TO WHY THE CLAIM OF SET OFF OF BROUGHT FORWARD LOSS ES SHOULD NOT BE DISALLOWED IN VIEW OF SEC.79 OF THE ACT. IN RESPONS E THE ASSESSEE ITA NO.3244 OF 2010 2 ADMITTED THE MISTAKE AND WITHDREW THE CLAIM FOR SET OFF OF SUCH BROUGHT FORWARD LOSSES. ON THIS BASIS A SHOW CAUSE NOTICE FOR LEVY OF PENALTY WAS ISSUED. IN RESPONSE TO THE NOTICE IT WA S MAINLY STATED THAT IT WAS AN INADVERTENT MISTAKE AND ASSESSEE WAS NOT AWARE OF THE PROVISIONS OF SEC.79. IN FACT ASSESSEE WAS DEPENDI NG ON FILING THE RETURN ON THE C.A. WHO WAS ALSO AUDITOR OF THE COMP ANY AND ASSESSEES ATTENTION WAS NOT DRAWN TO THE PROVISIONS OF SEC.79 . IT WAS ALSO STATED THAT PROVISIONS OF SEC.271(1) WOULD BE ATTRACTED ONLY WHEN THERE WAS A CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS AND SINCE IT WAS NEITHER PENALTY COULD NOT BE LEVIED. RELIANCE WAS ALSO PLACED ON CERTAIN CASE LAWS. HOWEVER AO DID NOT AC CEPT THE CONTENTIONS AND OBSERVED THAT DESPITE CLEAR CUT PRO VISIONS OF SEC.79 BROUGHT FORWARD LOSSES WERE SET OFF BY THE ASSESSEE AND ACCORDINGLY PENALTY WAS LEVIED. 3. ON APPEAL ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT(A). 4. BEFORE US LD. COUNSEL OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A). HE ALSO RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SUN IL CHANDRA VOHRA VS. ACIT [127 TTJ 110]. IN THAT CASE PENALTY WAS DE LETED FOR NON DISCLOSURE OF DEEMED DIVIDEND INCOME U/S.2[22][E] B ECAUSE THE C.A. HAD NOT BROUGHT TO THE NOTICE OF THE ASSESSEE THE P ROVISIONS OF SEC.2[22][E]. ITA NO.3244 OF 2010 3 5. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT ASSESSEE HAS ADMITTED AT THE VERY FIRST OCCASION WHEN SHOW C AUSE NOTICE WAS ISSUED THAT IT HAD COMMITTED A MISTAKE BY SETTING O FF OF BROUGHT FORWARD LOSSES. THIS CLEARLY SHOWS THAT ASSESSEE HA S GOOD BONA FIDE. PERHAPS ASSESSEE WAS DEPENDING ON THE ADVICE OF THE C.A. FOR FILING THE RETURN. PROVISIONS OF SEC.79 ARE PURELY TECHNIC AL IN NATURE AND EVEN ASSESSEE MAY NOT BE AWARE OF THE SAME. CONSIDERING THESE FACTS AND ALSO SMALLNESS OF THE PENALTY WE ARE OF THE VIEW T HAT TI IS NOT A FIT CASE FOR LEVY OF PENALTY. ACCORDINGLY WE DELETE THE PEN ALTY. 7. IN THE RESULT APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 1-11-2011. SD/- SD/- (D.MANMOHAN) (T.R.SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 11-11-2011. P/-*