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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: HON’BLE SHRI SANDEEP GOSAINvk;dj vihy la-@ITA No. 310/JP/2022
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 310/JP/2022 fu/kZkj.k o"kZ@Assessment Year : 2017-18. cuke Bagaria Trade Impex, The ACIT, Vs. Near State Bank of India, Behind Collectorate, Mandawa Road, Churu. Jhunjhunu. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AALFB 6581 E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rajesh Bhawsinghka (CA) jktLo dh vksj ls@ Revenue by : Ms Monisha Choudhary (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 14/09/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27/09/2022 vkns'k@ ORDER
PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 17.06.2022 of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the IT Act, 1961 for the assessment year 2017-18. The grounds raised by the assessee are as under :
Ground on the facts and circumstances of the case ld. CIT (A) has erred in confirming penalty of Rs. 1,14,114/- which is illegal and bad in law. 2. Ground on the facts and circumstances of the case ld. CIT (A) has erred in confirming the penalty order without considering the facts that all the things were suo moto disclosed by assessee vide letter dated 31.07.2019.
2 ITA No. 310/JP/2022 Bagaria Trade Impex, Churu.
Ground on the facts and circumstances of the case ld. CIT (A) has erred in confirming the order of ld. AO while it is settled law that no tax shall be levied or collected except by authority of law.
Ground that the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to cash other.
The brief facts of the case are that the assessee is a Partnership firm and filed
its return of income for the assessment year under consideration at Rs. 95,48,815/-.
However, the assessment was completed at a total income of Rs. 97,33,465/-
thereby making addition of Rs. 1,84,650/- on account of less interest declared in the
computation of income.
2.1. During the year under consideration, the assessee declared interest of Rs.
13,46,850/- from Ganpati Investment and Rs. 3,15,000/- from Ganpati Derivative
Service Pvt. Ltd. However, as per Form 26AS, the assessee has earned interest from
Ganpati Investment of Rs. 14,96,500/- and Rs. 3,50,000/- from Ganpati Derivative
Service Pvt. Ltd. Thus the AO concluded that the assessee has declared less interest
income.
In this regard the ld. A/R submitted that after coming to know this fact during
the assessment proceedings, requested the AO vide letter dated 31.07.2019 that
assessee is ready to pay tax on that amount and in this regard the assessee also
requested the AO for adjustment of the refund. It was also pointed out that the
assessee has interest income in its computation of income after netting off from TDS
amount which shows that there was no intention of the assessee to evade tax as has
been done in the past.
3 ITA No. 310/JP/2022 Bagaria Trade Impex, Churu.
On the contrary, the ld. D/R relied on the orders passed by the revenue
authorities.
We have heard the rival contentions and perused the material available on
record and gone through the orders of the revenue authorities. From the entirety of
facts, we find that it is an undisputed fact that TDS was not claimed by the assessee
and assessee also made self declaration during the assessment proceedings. Since
the assessee has fully disclosed all the facts, therefore, it cannot be termed that
there was mis-representation or suppression of facts on the part of the assessee.
The assessee even has not claimed the TDS which appears to be a bonafide mistake
as the Chartered Accountant of the assessee was not even able to detect this fact
during the audit. From the facts, we also noticed that assessee had claimed interest
of Rs. 13,46,850/- from Ganpati Investments and Rs. 3,15,000/- from Ganpati
Derivative Service Pvt. Ltd. aggregating to Rs. 16,81,850/- and claimed Nil TDS,
whereas total TDS declared is of Rs. 1,84,650/- on the interest payment. The
addition on account of interest was made of Rs. 1,84,650/- calculated on added
interest comes at Rs. 55,395 + 1662/- on account of Education Cess. Therefore, the
gross tax amount on added interest was Rs. 57,057/- and in this way the total tax
calculated on added interest is Rs. 57,057/- while tax remained with the Revenue
due to TDS not claimed is Rs. 1,84,650/-. Considering this fact, we conclude that
assessee had paid indirectly higher tax than actually liable, which goes to show that
there was no malafide intention on the part of the assessee and the Department had
no revenue loss. Since there is no revenue loss to the department, therefore, there
is no question of levying penalty upon the assessee. We appreciate that section
270A(9) of the IT Act set out six circumstances that amount to “misreporting” of
4 ITA No. 310/JP/2022 Bagaria Trade Impex, Churu.
income. Clause (a) deals with “misrepresentation or suppression of facts”.
Misrepresentation implies that there is no true and fair disclosure. The Hon’ble
Madras High Court has explained the meaning of misrepresentation as (i) the act of
making a false or misleading assertion about something, usually with the intent to
deceive. The word denotes not just written or spoken word but also any other
conduct that amounts to a false assertion; (ii) the assertion so made, an assertion
that does not accord with the facts can also be termed as false representation. Thus
in this way the Hon’ble Madras High Court has explained in the context of Sales tax
that the use of the word “suppression” show that the assessing officer would have
stated it as a mere omission. The use of the word “suppression” clearly brings out
the willful nature of the non disclosure. Misreporting is applicable when assessee
tries to escape income by unfair practice. However, considering the facts of the
present case, the assessee has not tried to escape from tax by not disclosing the
amount as an income. Since in the present case assessee has not even claimed
TDS, therefore, that amount still lying with the Department. Thus, in this way there
is no revenue loss to the department. Thus considering the entirety of facts, penalty
levied is not justified, the same is hereby deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 27/09/2022. Sd/- ¼lanhi xkslkbZ½ (SANDEEP GOSAIN) U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 27/09/2022. Das/
5 ITA No. 310/JP/2022 Bagaria Trade Impex, Churu. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Bagaria Trade Impex, Churu. 2. izR;FkhZ@ The Respondent- The ACIT Jhunjhunu. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 310/JP/2022}
vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत