Income Tax Appellate Tribunal - Mumbai
Deputy Commissioner Of Income ... vs Rahil Mercantile Private Limited, ... on 5 November, 2018
आयकर अपीलीय अधिकरण "D " न्यायपीठ मब
ुं ई में ।
IN THE INCOME TAX APPELLATE TRIBUNAL " D" BENCH, MUMBAI
श्री महावीर स हिं , न्याययक दस्य एविं श्री राजेश कुमार लेखा दस्य के मक्ष ।
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
Aayakr ApIla saM . / ITA No. 4384/Mum/2017
(inaQa- a rNa baYa- / Assessment Year 2012-13)
The Asst. Commissioner of Rahil Mercantile Pvt. Ltd.
Income Tax, Circle 4(3)(1) No.2, Pandey House,
R.No. 649, 6 t h Floor, Aayakar Vs. August Kranti Marg, Opp.
Bhavan, Mumbai -400 020 Cumbala Hill Hospital,
Mumbai-400 036
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
स्थायी ले खा िं . / PAN No. AAECRO7705N
अपीलाथी की ओर े / Appellant by : Shri Chaitanya Anjaria, DR
प्रत्यथी की ओर े / Respondent by : None
ुनवाई की तारीख / Date of hearing: 05-11-2018
घोषणा की तारीख / Date of pronouncement : 05-11-2018
AadoSa / O R D E R
महावीर स हिं , न्याययक दस्य/
PER MAHAVIR SINGH, JM:
This appeal filed by the Revenue is arising out of the order of Commissioner of Income Tax-9, Mumbai [in short CIT(A)], in appeal No. CIT(A)-9/361/2015-16, dated 22.03.2017. The Assessment was framed by the Dy. Commissioner of Income Tax, Mumbai (in short 'DCIT/ AO') for the A.Y. 2012-13 vide order dated 29.09.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act').
2ITA No s . 4 38 4/ Mu m/ 2 01 7
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the penalty levied by the AO under section 271(1)(c) of the Act. For this Revenue has raised the following ground No. 1: -
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to delete the penalty under section 271(1)(c) of the I.T. Act of ₹ 37,05,027/-."
3. Briefly stated facts are that the assessee company is engaged in the business of general commodities. The AO noted that during the relevant previous year relevant to this assessment year, there is no business activity carried on by the assessee or earned any receipt from the business. The assessee during the course of assessment proceedings filed revised return of income on 02.11.2014 at a total income at nil as against the originally returned loss of ₹ 1,14,58,398/-. The assessee in the revised return of income disallowed the entire expenses debited to the profit and loss account. This expenses includes interest of ₹ 1,14,19,413/- which was disallowed as an amount capitalized as investment. The AO initiated the penalty proceedings under section 271(1)(c) of the Act for furnishing of inaccurate particulars of income. The assessing officer levied the penalty in regard to wrong claim of interest expenditure of ₹ 1,14,19,413/- claimed as carry forward loss. The AO noted that this return was revised after receipt of notice by assessee under section 143(2) of the Act and also subsequent questionnaire dated 30.07.2015. According to AO, the assessee company claimed loss deliberately in regard to get the benefit of set off in future years. Aggrieved, against the levy of penalty, assessee preferred the appeal before CIT(A).
3ITA No s . 4 38 4/ Mu m/ 2 01 7
4. The CIT(A) after going through the submissions of the assessee noted that the AO has not brought out any fact to prove that the mistake on the part of the assessee was as intentional or it has concealed with an intention or deliberate gain. The CIT(A) deleted the penalty vide Para 5.3 as under: -
"5.3 I have considered the stand of the AO as well as submissions of the appellant, it is seen that the AO levied the penalty since the Appellant had originally filed return of loss seeking set off of the same against future years income which consequently during the course of the assessment proceedings was reduced to NIL. In other words, the return of Loss was reduced to NIL income. The AO alleged that this was a conscious act on the part of the Assessee since if the case would not have got selected for scrutiny, then it would have enjoyed the benefit of the said losses to be set off against the income of the future years. However, from the submissions of the Ld. AR, it is gathered that this error of the company and auditors at the time of the filing of the return of income was pointed out by the Lax representatives when the case records were shared with them on receipt of the notice for scrutiny. It was an inadvertent error and even the future years' returns were accordingly revised by the company on the error being noticed and being advised accordingly. Moreover, it has also been submitted that no such set off of the losses has been made till (late owing to no positive income having accrued to the Appellant fill date. However, except for the said statement of the AO, he has not 4 ITA No s . 4 38 4/ Mu m/ 2 01 7 brought out any fact to prove that the said act of the Appellant was intentional and with an intent to deliberately gain from the same. The return for the losses had been filed since the Audited Accounts reflected a Loss in the Profit & Loss Account on account of Interest Expenses. Hence, it is also not a case where owing to some computational adjustments, losses have been intentionally determined. -
Further, the judgement in the case of CIT vs. Hans Christian Gass (ITA N92109-14 of 2010) dt.
22.06.2011 belongs to the jurisdictional Hon'ble Bombay High Court. Moreover, the Ld., AR has also referred to and discussed the jurisdictional Hon'ble Mumbai ITAT decision in the case of M/s. Heranba Industries. Ltd. vs. DCIT (ITA No.2292/Mum/20I3) dt. 08.04.2015. That the facts of the case and issue at hand in the said judgements and in the present appeal has also been established above.
In both the said judgements as well as in the present case before me, the revised computation was filed during course of the assessment proceedings. It may be termed as a case of a bonafide mistake. Accordingly, since I am bound to follow the decision of the jurisdictional Hon'ble Bombay High Court and Hon'ble ITAT, Mumbai I direct the AO to delete the said penalty levied u/s 271(1)(c) of the Act of ₹ 37,05,029/-."
Aggrieved, now Revenue is in appeal before Tribunal.
5ITA No s . 4 38 4/ Mu m/ 2 01 7
5. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the penalty order of the AO that he has not brought anything on record that the assessee has concealed the particulars of income. This is merely a wrong claim made by assessee which was revised before detection. It seems that the notice under section 143(2) of the Act and subsequent questionnaire is dated 30.07.2015, whereas as per assessment order the revised return of income was filed on 02.11.2014 much prior to the issuance of notice. It means that the assessee has revised the return of income on 02.04.2014 disallowing the entire expenses debited to the profit and loss account including this interest of ₹ 1,14,19,413/- which was disallowed as amount capitalized as investment. But from the penalty order of the AO it is clear that the notice under section 143(2) of the Act and subsequent to questionnaire is dated 30.07.2015. It means that the assessee revised the return before detection. Hence, we find no infirmity in the order of CIT(A) and appeal of Revenue is accordingly dismissed.
6. In the result, the appeal of Revenue is dismissed.
Order pronounced in the open court on 05-11-2018.
Sd/- Sd/-
(राजेश कुमार / RAJESH KUMAR) (महावीर स ह
िं /MAHAVIR SINGH)
(लेखा दस्य / ACCOUNTANT MEMBER) (न्याययक दस्य/ JUDICIAL MEMBER)
मुिंबई, ददनािंक/ Mumbai, Dated: 05-11-2018 सदीप सरकार, व.निजी सधिव / Sudip Sarkar, Sr.PS 6 ITA No s . 4 38 4/ Mu m/ 2 01 7 आदे श की प्रनिललपप अग्रेपिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A)
4. आयकर आयुक्त / CIT
5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुिंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शािसार/ BY ORDER, त्यावपत प्रयत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुिंबई / ITAT, Mumbai