TRILLIIZO HOLDINGS LTD, MUMBAI v. ITO WD 5(30(30, MUMBAI

ITA 412/MUM/2010 | 2005-2006
Pronouncement Date: 16-03-2011 | Result: Dismissed

Appeal Details

RSA Number 41219914 RSA 2010
Bench Mumbai
Appeal Number ITA 412/MUM/2010
Duration Of Justice 1 year(s) 1 month(s) 29 day(s)
Appellant TRILLIIZO HOLDINGS LTD, MUMBAI
Respondent ITO WD 5(30(30, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 16-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 16-03-2011
Date Of Final Hearing 08-03-2011
Next Hearing Date 08-03-2011
Assessment Year 2005-2006
Appeal Filed On 18-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI T.R. SOOD (AM) AND SMT. ASHA VIJAYARAG HAVAN (JM) ITA NO. 412/MUM/2010 ASSESSMENT YEAR- 2005-06 M/S. TRILLIZO HOLDING LTD. S-22 PAREKH MARKET 39 KENNEDY BRIDGE MUMBAI-400 004 PAN-AAACT 1592R VS. THE ITO WARD 5(3)(3) AAYAKAR BHAVAN MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUNIL V. SHAH RESPONDENT BY: SHRI S.K. SINGH O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEEIS DIRECTED AG AINST THE ORDER DATED 19.11.2009 PASSED BY THE LD. CIT(A)- 9 FOR TH E ASSESSMENT YEAR 2005-06. 2. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE C OMPANY ON 31.10.2005 DECLARING TOTAL INCOME OF RS. 2 18 959/- . THE SAME WAS PROCESSED U/S. 143(1) ON 31.3.2006. SUBSEQUENTLY IT WAS NOTICED THAT THE ASSESSEE COMPANY IS LIABLE TO TAX AS PER PROVIS IONS OF SEC. 115JB ON THE NET BOOK PROFIT OF THE COMPANY. THE NET BOOK P ROFIT OF COMPANY WAS RS. 93 57 899/-. 3. THE NOTICE US. 154 WAS ISSUED TO THE ASSESSEE CO MPANY ON 31.3.2006. THE ASSESSEE COMPANY HAS NOT REPLIED FO R THE SAME. HENCE ITA NO. 412/MUM/2010 2 IT WAS ASSUMED THAT ASSESSEE-COMPANY HAS NO OBJECTI ON TO RECTIFY THE ASSESSMENT. SUBSEQUENTLY THE ASSESSMENT WAS RECTI FIED U/S. 154 ON 1.8.2006 AFTER APPLYING PROVISIONS OF SEC. 115JB DETERMINING TOTAL INCOME AT RS. 93 57 899/-. THE CASE WAS SELECTED F OR SCRUTINY AND WAS COMPLETED U/S. 143(3) ASSESSING TOTAL INCOME AT RS. 93 57 899/-. THE AO HELD THAT ASSESSEE COMPANY HAS NOT DISCLOSED ITS INCOME APPLYING THE PROVISIONS OF SEC. 115JB AND THUS HAS FURNISHED INA CCURATE PARTICULARS OF INCOME. 4. ORDER U/S. 271(1)(C) THE AO HELD AS FOLLOWS: AS STATED BY THE ASSESSEE IT IS NOT JUST A CASE OF NON-PAYMENT OF TAX AS DUE BUT IT IS ALSO A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME RESULTING IN UNDERSTATEMENT O F INCOME FOR THE YEAR. RELIANCE WAS PLACED ON THE DECISION OF GUJAR AT HIGH COURT IN THE CASE OF CIT VS VIDYAGAURI NATVERLAL & OTHERS (1 999) 153 CTR (GUJ) 546: (1999) 238 ITR 91 (GUJ). IN THIS PRONOU NCEMENT IT WAS HELD THAT EVEN WHERE THERE IS SOME DISCLOSURE PENA LTY MAY STILL BE IMPOSED IF DISCLOSURES IN THE RETURN ARE INACCURATE /NOT FILED. THE GUJARAT HIGH COURT IN THE ABOVE CASE HAS HELD AS UNDER: THE WORD CONCEALMENT INHERENTLY CARRIES WITH IT TH E ELEMENT OF MENS REA. THE MERE FACT THAT SOME FIGURES OR SO ME PARTICULARS HGAVE BEEN DISCLOSED BY ITSELF EVEN IF TAKES OYUT THE CASE FROM THE PURVIEW OF NON DISCLOSURE IT CANNOT BY ITSELF TAKE OUT THE CASE FROM THE PURVIEW OF FURNISHING INACCURATE PARTICULARS. THE ASSESSEE COMPANY HAS TO SUBMIT COMPUTATION OF I NCOME U/S. 115JB WHICH WAS NOT FURNISHED BY THE ASSESSEE. INSTEAD HAS PRODUCED COMPUTATION OF INCOME UNDER THE NORMAL PRO VISIONS OF I.T. ACT WITH THE INTENTION TO AVOID TAX ON SUCH INCOME BY SUBMITTING INACCURATE PARTICULARS OF SUCH INCOME. IT IS SEEN FROM THE RETURN OF INCOME IN PARA G WHICH STATES ABOUT STATEMENT OF TAXES AND AT COLUMN NO. 3 WHICH READS AS 7.5% OF ADJUSTED BOOK P ROFIT AS COMPUTED IN SCHEDULE 106 IS SHOWN AS NIL BY THE A SSESSMENT COMPANY. THUS SIT SEEMS THAT IT IS A MALAFIDE INT ENTION OF THE ASSESSEE COMPANY TO AVOID TAX ON SUCH INCOME. ITA NO. 412/MUM/2010 3 IN VIEW OF THE ABOVE FACTS IT IS VERY CLEAR THAT A SSESSEE HAS COMMITTED AN OFFENCE WITHIN THE MEANING OF EXPLANAT ION 1 OF THE PROVISIONS OF SEC. 271(1)(C) OF THE I.T. ACT 1961 BY FILING INACCURATE PARTICULARS OF SUCH INCOME AND THUS CONCEALED THE I NCOME. I AM THEREFORE SATISFIED THAT THE ASSESSEE COMPANY HAS C OMMITTED A DEFAULT ATTRACTING THE PROVISIONS OF SEC. 271(1)(C) OF THE I.T. ACT 1961. I ACCORDINGLY LEVY THE MINIMUM PENALTY OF RS . 6 53 653/- FOR THE DEFAULT COMMITTED BY THE ASSESSEE COMPANY. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO THA T PENALTY U/S. 271(1)(C) SEEKS TO LEVY ON CONCEALMENT OF INCOME AN D NOT ON INCORRECT CALCULATIONS OF TAX ON INCOME WHICH IS ALREADY DISC LOSED IN THE RETURN OF INCOME. IT WAS ALSO SUBMITTED THAT THE ERROR OF CA LCULATION OF TAX WAS RECTIFIED AND TAX FOR THE SAME HAS ALREADY BEEN PAI D. IT IS FURTHER SUBMITTED THAT THE NON-PAYMENT OF TAX WAS GENUINE E RROR DUE TO OVERSIGHT AND THERE WAS NO INTENTION TO EVADE TAX A ND AS SUCH NO MALAFIDE INTENTION. HENCE PENALTY PROCEEDINGS TO BE DROPPED 6. THE LD. CIT(A) CONFIRMED THE ORDER OF THE LD. A O BY HOLDING THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION FOR NO T DECLARING INCOME U/S. 115JB AND ALSO FOR NOT FILING DETAILS IN FORM NO. 29(B). 7. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE US AN D PRAYED THAT THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. C IT(A) MAY BE CANCELLED. 8. THE LD. COUNSEL FOR THE ASSESSEE SHRI SUNIL V. S HAH SUBMITTED THAT PENALTY U/S. 271(1)(C) IS LEVIABLE ON CONCEALI NG OF INCOME AND NOT ON ACCOUNT OF INCORRECT CALCULATION OF TAXES. HE SUBM ITTED THAT IT HAS CORRECTLY COMPUTED THE INCOME AS PER NORMAL PROVISI ONS OF INCOME TAX ACT AND HAS COMMITTED THE MISTAKE IN NOT PAYING TAX ES ON BOOK PROFITS. HE FURTHER SUBMITTED THAT THE AO HAS PASSED ORDER U /S 154 OF THE I.T. ITA NO. 412/MUM/2010 4 ACT ON 1.8.2006 AND RECTIFIED THIS MISTAKE AND SUBM ITTED THAT THE AO HAS NOT MADE ANY ADDITION IN THE ASSESSMENT ORDER A ND THEREFORE NO PENALTY IS LEVIABLE. HE RELIED ON THE PROVISIONS O F EXPLANATION 6 TO SEC. 271 (1)(C) OF THE I.T. ACT AND VEHEMENTLY ARGUED TH AT NO PENALTY CAN BE LEVIED IN THE PRESENT CASE. 9. WE HEARD BOTH THE PARTIES. IN THE PRESENT CASE THE ASSESSEE FAILED TO DECLARE BOOK PROFITS AS PER PROVISIONS OF SEC. 1 15JB OF THE I.T. ACT IN THE RETURN OF INCOME FILED. AS PER PROVISIONS OF S EC. 115JB IT IS OBLIGATORY ON THE PART OF THE ASSESSEE TO PAY TAXES ON BOOK PROFITS IF TAX PAYABLE ON BOOK PROFIT IS MORE THAN THE TAXES PAYAB LE ON NORMAL INCOME. THE ASSESSEE ALSO SUBMITTED IN THE RETURN THAT THE TAX PAYABLE ON BOOK PROFIT IS NIL. THUS THE ASSESSEE HAS FURNISHED INA CCURATE PARTICULARS OF INCOME. THE PLEA OF THE ASSESSEE THAT IN SUCH CASE S NO PENALTY IS LEVIABLE CANNOT BE ACCEPTED BECAUSE ASSESSEE HAS AV OIDED PAYMENT OF TAXES. THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION FOR NOT DECLARING INCOME U/S. 115JB AND ALSO FOR NOT FILING DETAILS I N FORM NO. 29B. THEREFORE WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE ASSESSEES APPEAL. 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 16 TH DAY OF MARCH 2011 SD/- SD/- (T.R. SOOD) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI DATED 16 TH MARCH 2011 RJ ITA NO. 412/MUM/2010 5 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR I BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO. 412/MUM/2010 6 DATE INITIALS 1 DRAFT DICTATED ON: 14 . 0 3 .201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 14 .0 3 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______