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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED&
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER (Assessment Year: 2014-15) M/s. Kamlesh Gandhi Infrastructure Vs. DCIT 3-4, Vaidik Flats, Vrajdham Society Circle-1(2), Opp: PF Office, Akota, Vadodara, Baroda PIN-390020 [PAN No.AAKFK0103G] (Appellant) .. (Respondent) Appellant by: Written Submission Respondent by: Shri V. K. Singh, Sr. DR Date of Hearing 26.04.2022 Date of Pronouncement 22.06.2022 O R D E R PER Ms. MADHUMITA ROY - JM:
The instant appeal filed by the assessee is directed against the order dated 01.03.2019 passed by the Commissioner of Income Tax (Appeals)-5, Vadodara arising out of the penalty order under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2014-15.
None appeared on behalf of the assessee at the time of call. However, we have perused the written submission filed by the assessee. On the other hand, the Ld. DR relied upon the order passed by the Deputy Commissioner of Income Tax.
M/s. Kamlesh Gandhi Infrastructure vs. DCIT Asst.Year –2014-15 - 2 - 3. The assessee is dealing in land and real estate development and construction filed its return of income for A.Y. 2014-15 on 29.09.2014 declaring total income at Rs. 30,52,126/-. The said assessment was finalized under Section 143(3) upon making addition in regard to disallowance of expenses on account of income tax payment to the tune of Rs. 16,56,950/- and in respect of disallowance of interest for late deposit of TDS to the tune of Rs. 12,272/-. Penalty under Section 271(1)(c) was also initiated for furnishing inaccurate particulars of income to the computation of total income. No penalty proceeding in respect of the addition to the tune of Rs. 5,03,750/- as site expenses was levied. The penalty proceeding was finalized upon levying penalty of Rs. 5,15,790/- under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income.
We have carefully gone through the written submission filed by the assessee and the submission made by the Ld. DR relying upon the order passed by the authorities below imposing penalty against the assessee. It appears from the records that the assessee debited its Profit & Loss Account by a sum of Rs. 16,56,950/- on account of income tax payment. However, the same has not been added back while working out return income of Rs. 30,52,126/-. Such expenses as not allowable under Section 37(1) of the Act the same was disallowed by the Ld. AO.
It further appears that the assessee also agreed to this fact that this was wrongly claimed as expenses. Similarly the assessee debited its Profit & Loss Account by a sum of Rs. 12,272/- on account of interest for M/s. Kamlesh Gandhi Infrastructure vs. DCIT Asst.Year –2014-15 - 3 - late deposit of TDS and the same was not added back while working out the return of income. The same was also disallowed relying upon the provision of Section 37(1); the assessee’s submission that the same was wrongly claimed was also taken into consideration by the Ld. AO. During the penalty proceeding the assessee made a detailed reply to the authorities below in support of his defence that the penalty initiated under Section 271(1)(c) of the Act is not maintainable; neither the same can be levied for the fact that the assessee had furnished all the details of its expenditure as well as income in its return which were not found to be inaccurate neither it can be found as concealment of such income on the part of the assessee. It is also a fact that the assessee during assessment proceeding duly submitted that those expenditure was claimed by mistake not disallowed in the computation of income and the same to be accepted as a bona fide mistake on the part of the assessee.
Before the authorities below and before us too on this aspect the assessee relied upon the judgment the Hon’ble Apex Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd., reported in (2010) 322 ITR 158, Dilip N Shroff vs. JCIT, reported in (2007) 161 taxman 218 and CIT vs. Pricewaterhouse Coopers Pvt. Ltd. (2012) ITR (SC) 244.
We have gone through the relevant material and records and we have considered the entire aspect of the matter. In penalty matter it has already been settled by the Hon’ble Apex Court that it is incumbent upon the Revenue authorities to prove that the assessee has deliberately did the error or intention of the assessee was to evade tax. In this regard, we
M/s. Kamlesh Gandhi Infrastructure vs. DCIT Asst.Year –2014-15 - 4 - have also carefully considered the judgment passed by the Hon’ble Apex Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd. (supra) where it has been observed that the tendency of the ITO is to initiate penalty proceeding for any claim by the assessee which is not as per law. The word opportunities has been defined to this effect that it must meet the details supplied in the return which are not accurate not exact or correct, not according to truth or erroneous. In the instant case no such finding that the detail supplied by the assessee in its return were found to be incorrect or erroneous or false. Merely because the assessee’s claim was not accepted or was not acceptable to the revenue that by itself, would not attract the penalty under Section 271(1)(c) of the Act.
On this aspect the Hon’ble Apex Court also observed its apprehension that if the contention of the revenue is accepted then in case of every return where the claim was not accepted by the Ld. AO for any reason the assessee would invite penalty under Section 271(1)(c) of the Act which is not the intention of the Legislature. Further that the Hon’ble Madhya Pradesh High Court while deciding the identical issue in the case of CIT vs. Skyline Auto Products Pvt. Ltd., reported in 271 ITR 335 (M.P.) observed that if information given in return is not found to be correct simply by making incorrect claim does not amount to concealment of particulars of income; by no stretch of imagination, making an incorrect claim tantamount to furnishing inaccurate particulars. Hence, we do not justify the stand taken by the Revenue in levying penalty of a wrong claim which has repeatedly been admitted by the assessee before the authorities below. Such admission made by the M/s. Kamlesh Gandhi Infrastructure vs. DCIT Asst.Year –2014-15 - 5 - assessee and recorded by the Ld. AO is also evident at Page 2 & 3 of the original Assessment Order. Hence, the penalty is found to be on a wrong footing and thus, quashed. Hence, the assessee’s appeal is allowed.