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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI N. K. SAINI & MS SUCHITRA KAMBLE
This appeal is filed by the assessee against the order dated 20/01/2012 passed by the CIT(A)-IX, New Delhi.
The grounds of appeal
are as follows:
1. That the penalty as levied at Rs.3,24,840/- by the Ld. A.O and sustained by the ld by holding that the assessee had furnished inaccurate particulars of its income to the extent of Rs.9,65,056/- is arbitrary, unjust and illegal on various factual and legal grounds including the following: a). The appellant had neither concealed any income nor had furnished inaccurate particulars of its income as alleged by the A.O. b). Various observations made by the authorities below in their respective orders are either incorrect or are untenable. The submissions made by the appellant supported by case laws before the authorities below had either been ignored or had not been given due weight. The Ld.CIT(A) had not controverted the case laws relied upon by him to the appellant at the time of hearing of appeal above which the appellant had come to know from her appellate order. Moreover, the case laws relied upon by her had no application to the facts of appellant’s case. The authorities below were incorrect in holding that the appellant had deliberately indulged into furnishing of inaccurate particulars of income.
2. That without prejudice to ground no. 1 above, the penalty as levied is very excessive.
Return declaring loss of Rs.10,99,590/- was filed on 15/11/2007 by the assessee. The case was selected for scrutiny. During scrutiny proceedings, Assessee vide letter dated 28/8/2009 filed a revised statement of assessable income, whereby the inadvertent errors as mentioned therein while filing the return were offered to be added back. Accordingly, the ROC fee of Rs.7,51,850/- and interest expenditure of Rs.2,13,206/- was reduced from the loss of Rs.10,99,590/- as originally declared resulting in the revised loss of Rs.1,34,534/-. The Assessment u/s 143(3) of I.T. Act was completed on 11/11/2009 at a net loss of Rs.1,34,534/- as was declared in the revised statement of assessable income.
Penalty u/s 271(1)(c) of Rs.3,24,840/- being 100% of the tax was levied by Assessing Officer on account of alleged furnishing of inaccurate particulars/concealing true particulars of income to the extent of Rs.9,65,056/- which comprised of: (i) Rs.7,51,850/- on account of disallowance of filing fee of ROC for increasing the authorized share capital of the Company. (ii) Rs. 2,13,206/- on account of disallowance of interest expenditure on loan as taken.
Against the penalty order the Assessee filed appeal before the CIT(A). The CIT(A) vide order dated 20/1/2012 confirmed the penalty by recording his findings at Para 6 and also by relying on various case laws. The assessee is in appeal before us.
The Ld. AR submitted that the assessee was wholly dependent on the advise of his Chartered Accountant and were not at all conversant with the technicalities of income tax law while filing the return of income. From the audited profit and loss account of the assessee for the year under consideration as filed with the return it would be observed that both filing fee of Rs.7,51,850/- and interest expenditure of Rs.2,13,206/- stands disclosed in the said profit and loss account as soon as the assessee became aware of the inadvertent error of not adding back both these expense in the return of income as filed revised statement of accessible income was submitted during the course of assessment proceedings adding back such expenditure along with letter dated 28/8/2009 with regard to interest expenditure of Rs.2,13,206/-. The assessee clearly mentioned in its penalty reply that such interest was on the loan taken in proceedings for Financial Year 2005-06 in the interest expenditure of RS.3,30,100/- for such Assessment Year 2006-07 was not claimed in the return of income has filed for such year. Thus, there was no concealment or inaccurate particulars given by the assessee.
The Ld. AR relied on the Tribunal’s order in the case of M/s Bakers Circles Pvt. Ltd. Vs. DCIT in which penalty u/s 271(1)(c) as imposed on account of ROC fee has claimed for increasing authorised capital was deleted relying on the following judgments: (i) Price Waterhouse Coopers Pvt. Ltd. Vs. CIT(A) 348 ITR 306 (ii) CIT(A) Vs. Societex ITA No. 1190/2011 Delhi High Court (iii) Hindustan Steel Vs. State of Orissa 83 ITR 26 (SC)
The Ld. DR relied on the order of the CIT(A).
We have heard both the parties and perused the records. It is pertinent to note that the assessee never concealed or filed inaccurate particulars. After knowing that there was mistake on part of the Chartered Accountant, the assessee rectified the same. A revised statement of assessable income, whereby the inadvertent errors as mentioned therein while filing the return were offered to be added back. The ROC fee of Rs.7,51,850/- and interest expenditure of Rs.2,13,206/- was reduced from the loss of Rs.10,99,590/- as originally declared resulting in the revised loss of Rs.1,34,534/-. In other words, even after adding back the above mentioned ROC fee and interest expenditure as per revised statement of assessable income, it was a case of assessed loss. In fact the CIT(A) also observed that there is a wrong filing of return of income due to inadvertent mistake done by the Chartered Accountant of the assessee. The case laws relied by the assessee are inconformity with that of the assessee’s case. In case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT 348 ITR 306, the Hon’ble Supreme Court held that the absence of due care, does not mean that the assessee is guilty of either furnishing of inaccurate particulars or attempting to conceal its income. Thus, the imposition of penalty on the assessee is not justified in the present case as the assessee was not at fault. Therefore, we set aside the order of the CIT(A) and delete the penalty.
In result, appeal is allowed.
The order is pronounced in the open court on 20th of October, 2016.