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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Amarjit Singh
आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2006-07, arises from order of the CIT(A)-3, Ahmedabad dated 07-08-2017, in proceedings under section 271(1)(d) of the Income Tax Act, 1961; in short “the Act”.
Page No 2 M/s. Vishal Exports Overseas Ltd. vs. ITO
The assessee has raised following grounds of appeal:-
“1. The Ld. Commissioner of Income Tax (Appeals - 8), Ahmedabad has erred in law and on facts in confirming the penalty imposed by the Assessing Officer DCIT -4(1)(2) of Rs.2,46,060/- u/s 271(l)(d) ex-parte without considering or taking into the appellant's written submissions made in the matter on 8th May 2007, the date of hearing kept by the Ld. Commissioner of Income Tax.
2. The Ld. Commissioner of Income Tax (Appeals - 8), Ahmedabad has erred in concluding his findings that no written submissions have been made whereas detailed written submission in the matter were made on 8th May 2017 which were missed by the Commissioner of Income Tax and the Department and later on found by the Commissioner of Income Tax (Appeals) and hence the CIT's Order confirming the penalty is bade in law and should be set aside or the matter may be restored to the Ld. Commissioner of Income Tax (Appeals-8) for his reconsideration after considering the written submissions dated 8th May 2017 made in the case.”
Both the grounds of appeal of the assessee are inter-connected, therefore, for the sake of convenience, both are adjudicated together as follows.
4. The fact in brief is that the return of fringe benefit declaring total fringe benefit to the value of Rs. 20,87,509/- was filed on 30th December, 2006. The assessment u/s. 115WE(3) of the act was finalized on 24th December, 2008 and total fringe benefit was determined at Rs. 20,87,509/-. Subsequently, the case was reopened by issuing of notice u/s. 115WH of the act on 26th March, 2012. In response to the notice issued u/s. 115WE(2), the assessee explained that issue raised by the A.O. of debiting entire amount of Rs. 93,60,567/- to P & L A/c was of expenses incurred on conveyance, tour and travel was not pertained to expenditure incurred for only employees of the assessee. The assessee has further submitted that the fringe benefit tax under the provision of Rs. 115WB of the Act was attracted on the amount of Rs. 57,05,528/- only and the remaining amount of Rs. 36,55,039/- was pertained to third parties mainly consultants, professionals etc. and same was not subjected to fringe benefit under the provision of the Page No 3 M/s. Vishal Exports Overseas Ltd. vs. ITO Act. In this regard, the assessee has also referred the report of the tax auditor wherein the auditor had certified after verification of bills and vouchers that the amount eligible for fringe benefit on account of conveyance, tour and travel was Rs. 57,05,528/- only. However, the assessing officer has not accepted the explanation of the assessee stating that assessee has not supported its contention with any supporting evidences. The assessing officer has also initiated penalty proceedings u/s. 271(1)(d) of the Act.
During the course of penalty proceedings u/s. 271(1)(d), the assessing officer has stated that neither the assessee has attended nor submitted any submission, therefore, the assessing officer has levied minimum penalty of tax sought to be evaded to the amount of Rs. 2,46,060/ stating that the ld. CIT(A) has also dismissed the appeal of the assessee pertaining to the quantum addition.
Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has confirmed the penalty stating that assessee has neither attended nor submitted any detail at the time of penalty proceedings.
During the course of appellate proceedings before us, the ld. counsel has contented that assessee has submitted written submission vide letter dated 8th May, 2017 which was duly received by the ld. CIT(A) as per the acknowledgement of the copy of written submission placed in the paper book. The ld. counsel has further contended that vide above cited written submission the assessee has also enclosed other supporting documents and Page No 4 M/s. Vishal Exports Overseas Ltd. vs. ITO materials to substantiate that expenses on which fringe benefit tax was not applicable were pertained to the third parties i.e. consultant and professional etc. However, the ld. CIT(A) has not considered the detailed written submission of the assessee before dismissing the appeal of the assessee. On the other hand, the ld. departmental representative has contended that in spite of giving a number of opportunities the assessee has not attended before the ld. CIT(A).
We have heard both the sides and perused the material on record. Assessment u/s. 115WE(3) r.w.s. 115WG of the Act was completed on 28th Nov, 2011 wherein the assessing officer has made addition of Rs. 7,31,008/- to the fringe benefit value for the year under consideration by computing value of fringe benefits at Rs. 93,60,567/- as against value of fringe benefits shown by the assessee at Rs. 57,05,528. Thereafter vide order dated 26-03- 2015, the assessing officer has imposed penalty u/s. 271(1)(d) of the Act to the amount of Rs. 2,46,060/- for furnishing inaccurate particulars of fringe benefit to the extent of Rs. 7,31,008/- stating that neither the assessee has attended nor filed any submission. The assessing officer has levied the penalty on the basis of decision of ld. CIT(A) and finding of assessing officer for the assessment year. Subsequently, the ld. CIT(A) has confirmed the penalty levied by the assessing officer stating that neither the assessee has attended nor furnished any detail during the course of appellate proceedings. After perusal of material on record, it is observed that during the assessment proceedings, the assessee in its written submission dated 06- 11-2012 had brought to the notice of the assessing officer that out of the total expenses on account of conveyance, tour and travel only an amount of Page No 5 M/s. Vishal Exports Overseas Ltd. vs. ITO Rs. 56,05,528/- was pertained to the amount incurred on account of conveyance, tour and travel related to employees and the remaining part of the expenses was pertained to the conveyance, tour and travel of third parties i.e. consultant, professionals etc. In this regard, the assesse has also submitted the copy of tax audit report wherein the auditor has certified such break up of expenses after verification of bills and vouchers. However, the assessing officer has rejected the submission of the assessee stating that contention was not supported with supporting evidences. In this regard, it is observed that the assessing officer has rejected the contention of the assessee on general observation without calling any supporting information from the assessee to contradict the facts reported by the auditor in the audit report. During the course of appellate proceedings, the ld. CIT(A) has confirmed the order of the assessing officer without considering the detailed written submission dated 8th May, 2017 duly submitted by the assessee along with supporting document and material explaining that no inaccurate particulars as FBT was furnished. In the light of the above facts and material on record, it is observed that the referred written submission dated 08-05-2017 was not considered by the Ld. CIT(A) before dismissing the appeal of the assessee. Section 250(6) contemplates that ld. CIT(A) would determine points in dispute and therefore record reason on such point in support of his conclusion. The ld. CIT(A) has not considered the written submission of the assessee as implicit from his observation made at para 7 of his order , therefore, failed to determine those points/reasons and record detailed findings. In view of the above facts and circumstances, we restore the matter to the file of the ld. CIT(A) for adjudicating afresh after taking into Page No 6 M/s. Vishal Exports Overseas Ltd. vs. ITO consideration the written submission and material filed by the assessee. Therefore, the appeal of the assessee is allowed for statistical purposes.