DCIT, CC-XXVII, KOLKATA, KOLKATA vs. M/S HARBANSLAL MALHOTRA & SONS PVT. LTD., KOLKATA

In this appeal, the Revenue has raised the following grounds of appeal:- 01. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the credit of TDS, when the difference of receipts as per TDS certificate vis-a- vis those as per accounts was not shown as income in the return filed. 02. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessee had neither concealed its income nor furnished inaccurate particulars of income. 03. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the penalty u/s 27l(1)(c ) cannot be levied because all facts and figures were available before the A.O. 04. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that it is a fit case for imposition of penalty u/s 27l(l)(c) of the Act. 05. That the Department craves leave to add, modify or alter any of the above ground(s) of appeal and/or adduce additional evidence at the time of hearing of the case.

The only issue in this appeal is to be decided by us as to whether the CIT-A justified in cancelling the impugned penalty of Rs.11,78,385/-

The brief facts of the case are that the assessee is a company and filed its return of income for the A.Y under consideration disclosing a total income of Rs.9,643,69,300/-. Under scrutiny the notices u/s. 143(2) and 142(1) of the Act were issued. The ld.AR of the assessee appeared and produced books of account and other details in support of its return as filed. After through discussion in the assessment order the AO passed his order u/s. 143(3) of the Act on 27-12-2006 by making two additions i.e i) in respect of non explanation of short credit receipts as per TDS certificates a sum of Rs.28,30,098/- and ii) in respect of non filing of any supporting evidence to substantiate the claim of depreciation of Rs.4,54,600/- on machinery put to use by 31-03-2004. These two additions were added back to the total income of the assessee. This action of the AO was confirmed by the CIT-A in the first appellate proceeding.

Thereafter, the AO initiated penalty proceedings by issuing statutory notice U/Sec. 274 r.w.s 271(1)(c) of the Act for furnishing in accurate particulars of income at the time of filing of return of income. In response to such notice issued, the assessee submitted that the claims were unintentional and without any malafide and urged the AO to drop the penalty proceedings. The AO imposed penalty of Rs.11,78,385/- u/s. 271(1)(c) of the Act by holding that the assessee furnished inaccurate particulars of income and by observing as under:- Therefore the details supplied in the return were not accurate, not exact or correct, not according to truth or erroneous. The above submission is nothing but an afterthought to avoid penal action. The onus is on the assessee to explain his case but the assessee failed to discharge his onus. The assessee was not able to substantiate and failed to prove that all the facts relating to the same and materials to the computation of its total income were disclosed. It is therefore held that the assessee had furnished inaccurate particulars of income deliberately knowing that this action was against law. “

The assessee challenged the same before the CIT-A. Before him the assessee submitted that all the facts and figures with reference to the

Before us the ld.DR has relied on the order of the AO in imposing the impugned penalty. On the other hand, the ld. AR of the assessee placed his reliance on the order dt. 04-12-2015 in assessee’s own case in quantum appeal (copy of the same is available on record ) and argued that the Tribunal vide its order dt. 04-12-2015 in assessee’s own case in quantum proceedings in ITA No. 421/Kol/2013 has deleted the addition made on account of TDS. Thus, he submits that when the addition is deleted by the CIT-A/Tribunal, imposing of penalty does not stand and urged to dismiss the appeal of revenue.

Heard rival submissions and perused the material available on record. We find that the penalty proceedings were initiated for furnishing inaccurate particulars of income in respect of unexplained short credit of receipts as per TDS certificate and for non submission of any evidence to substantiate the claim of depreciation on machinery, which was put to use by 31-03-2004. We find that the CIT-A deleted the impugned penalty by observing that all the facts and figures were available before the AO in the assessment proceedings in respect of depreciation claimed on machinery and there was neither concealment of income nor furnishing of any inaccurate particulars of income, but, however, confirmed the addition in respect of short credit found as per TDS certificates.

We further find that in the quantum appeal in ITA No.421/Kol/2013 for the A.Y 2004-05 vide order dt. 04-12-2015 the Tribunal deleted the addition made on account of short credit. Therefore, the additions made by the AO in respect of depreciation claimed on machinery and on account of short credit of TDS were deleted by the CIT-A and Tribunal respectively in quantum proceeding, therefore, the imposition of penalty does not stand as rightly pointed out by the ld.AR of the assessee before us. Therefore, taking into consideration the finding of the Tribunal in assessee’s own case supra in the quantum proceeding, we cancel the impugned penalty of Rs. 11,78,385/- as imposed by the AO. Therefore, 4 ITA No. 855/Kol/2014 M/s. Harbanslal Malhotra & Sons Pvt.Ltd

In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 05-05-2017