INCOME TAX OFFICER(IT)-3(3)(1), MUMBAI vs. MR.BRUCE EDWARD NEAVE, MUMBAI

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ITA 1406/MUM/2018Status: DisposedITAT Mumbai22 May 2019AY 2013-144 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's revised submission was cogent, as the higher salary income was already reflected in the TDS details known to the Department. Therefore, there was no intention of concealment or furnishing inaccurate particulars, and the penalty was not warranted.

What were the facts?

The assessee initially declared a lower income and claimed a significant refund. Upon inquiry, the assessee revised the figures, explaining that there was an error in punching the details while filing the return. The revised figures showed a higher salary income and no refund due.

What were the issues?

Whether a penalty under Section 271(1)(c) is leviable when the assessee corrects a bonafide human error in reporting income and refund claims, especially when the correct figures are already known to the Department through TDS.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “B” Bench, Mumbai

Before: Shri Shamim Yahya (AM) & Shri Ramlal Negi (JM)

For Appellant: Shri Niraj Sheth
For Respondent: Shri Satish Chandra Rajore
Hearing: 18.03.2019Pronounced: 22.05.2019

O R D E R Per Shamim Yahya (AM) :

This appeal by the Revenue against the order of learned CIT(A) dated 4.12.2017 and pertains to A.Y. 2013-14.

2.

The issue raised is that learned CIT(A) erred in deleing penalty levied u/s. 271(1)(c) of the I.T. Act amounting to Rs. 1,09,57,483.

3.

Brief facts of the case are that the Assessing Officer during the scrutiny proceedings noticed huge discrepancies in respect of income returned and claim of refund.

4.

Assessee responded that there was some error in punching the details. Following reply was given :- "With reference to the above we would inform you that through an oversight while filing the returns in ITR-V for the F. Y 2012-13 amount mentioned under the income chargeable under the head "salary" was shown as Rs.50,86,073/-

and deduction under chapter VI-A was shown as Rs.75,397/-which was mentioned wrongly due to which it was showing a refund of Rs.1,12,73,450/.

We hereby change the computation and the correct figures are :- Income chargeable under the head "Salary" 4, 16, 11,01 7/ - Deduction under Chapter VIA 1,00,000/- 1,26,46,653/- Total Tax Payable Taxes paid 1,26,46,653/- Tax Refund NIL

Attached revised TDS computation alongwith Form 16 Part A, B and 12BA for the FY 2012-13 and Form 26AS generated which clears the issue as nil taxes liable and nil taxes refund. We apologize for the same and regret for the inconvenience caused to you."

Assessing Officer accepted that the above figures and penalty was also levied on this account. The assessee submission was that it was a human error without any malafide intention was accepted by the learned CIT(A) and penalty was deleted.

5.

Against the above order Revenue is in appeal before us.

6.

We have heard both the counsel and perused the records. We find that in assessment order the Assessing Officer has noticed that while assessee had declared total income of Rs. 50,10,680/-, it was claiming a refund of Rs. 1,02,73,450/-. Upon inquiry in this regard, assessee revised the figures of income chargeable under the head income from salary of Rs. 4,16,11,017/- and TDS thereon amounting to Rs. 1,26,46,653/-. Assessee’s claim is that above two figures of amount of salary and figures of tax deducted at source thereupon was already known to the Department in as much as the employer company M/s. Leighton India Contractors P. Ltd. has duly deducted tax deducted at source on the entire amount and reported the same against PAN of the assessee. Hence, it is claimed that there was no malafide intention and it was only the error in punching figures. We find considerable cogency in the above submissions. The amount of salary of Rs. 4,16,11,017/- was already known to the Department in as much as the same was reflected in the tax deducted at source by the employer. It cannot be said that there was any intention of concealment or furnishing inaccurate particulars of income by the assessee. The Assessing Officer also cannot feign ignorance about the salary received by the assessee amounting to Rs. 4,16,11,017/- against which tax deducted at source was to be adjusted. Hence, in our considered opinion action of the assessee is not contumacious so as to warrant levy of penalty u/s. 271(1)(c) of the Act. This view is supported by the decision of Hon'ble Apex Court in the case of Hindustan Steel Vs. State of Orissa (83 ITR 26). Further Hon'ble Apex court in the case of Pricewater House Coopers P. Ltd. Vs. CIT vide order dated 26.9.2012 has also expounded that assessee must not be visited with rigours of penalty u/s 271(1)(c) of the Act for bonafide mistake.

7.

In the background of the above discussion and precedent, we uphold the order of learned CIT(A) which delete the penalty levied.

8.

In the result, Revenue’s appeal stands dismissed.

Order has been pronounced in the Court on 22.5.2019.

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