SEA VIEW DEVELOPERS,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-4(2), MUMBAI

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ITA 5791/MUM/2017Status: DisposedITAT Mumbai30 January 2019AY 2013-145 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the claim of TDS of a previous year as revenue expense was a bonafide mistake and not an intentional concealment or furnishing of inaccurate particulars. Therefore, no penalty was leviable.

What were the facts?

The assessee, a real estate developer, claimed TDS of a previous year as a revenue expense, resulting in a higher declared loss. The Assessing Officer disallowed this claim and levied a penalty under Section 271(1)(c). The CIT(A) confirmed the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable for a bonafide mistake in claiming an ineligible expense, especially when the assessee has filed a return of loss.

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, “G” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM

For Appellant: Shri Vinay Sinha
Hearing: 10.01.2019Pronounced: 30.01.2019

O R D E R

PER AMARJIT SINGH, JM:

1.

The assessee has filed the present appeal against the order dated 06.06.2017 passed by the Commissioner of Income Tax (Appeals)-52, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2013-14 wherein the penalty levied by the AO has been ordered to be confirmed.

2. The assessee has raised the following grounds: - “1 The Ld. CIT(A) erred in not deleting the penalty of Rs.16,152/- levied by the AO u/s 271(1)(c) of the I.T. Act, 1961. A.Y. 2013-14

2.

The Ld. CIT(A) erred in not appreciating the fact that appellant due to oversight failed to disallow the sum of Rs.52,274/- being TDS of the previous year and that the default is not intentional but on account of inadvertence.

3.

It is prayed that the penalty of Rs.16,152/- levied by the AO u/s 271(1)(c) may pleased be deleted." The brief facts of the case are that the assessee is a partnership 3. firm, engaged in the business of builders, developers and dealing in real estate. The assessee filed its return of income for the A.Y. 2013- 14 on 22.08.2013 declaring loss to the tune of Rs.52,274/-. The case was selected for scrutiny by issuance of notice u/s 143(2) of the I.T. Act, 1961 on 30/9/2014 which was duly served upon the assessee. During the course of assessment proceeding, AO made disallowance of TDS for earlier years amounting to the tune of Rs.52,274/- on the grounds that the same was not an allowable expenses. Finally, the assessment was completed on Nil income vide order dated 29/12/2015 passed u/s 143(3) of the I.T. Act. Penalty proceeding u/s 271(1)(c) of the Act was also initiated in respect of disallowance of Rs.52,274/- in respect of TDS debited to the P&L Account. As the addition made by the AO was not contested by the assessee, therefore, a show-cause notice dated 29/12/2015 was issued to the assessee to explain as to why penalty should not be levied on the assessee. In response to the notice, the assessee submitted that the disallowances made in the assessment order was not resulted in any tax payment as the assessee filed a return of loss. The assessee submitted that there was no malafide intention to file inappropriate claims and said disallowances A.Y. 2013-14

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