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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: S/SHRI B.R.BASKARAN & AMARJIT SINGH
आदेश / O R D E R PER AMARJIT SINGH, JM:
The revenue has filed this appeal challenging the order dated 20.11.2013 passed by the order of learned Commissioner of Income Tax (Appeals)-2, Mumbai [hereinafter referred to as the “learned CIT(A)”] dated 20.11.2013 for assessment year A.Y. 2005-06. Wherein the learned CIT(A) deleted the penalty of Rs.3,26,588/- levied by the Assessing Officer u/s. 271(1)(c) of the Income Tax Act, 1961( in short “the Act”).
We have heard the parties and perused the record. The assessee is engaged in the business of manufacturing, trading export-import, conversion, alter or otherwise dealing in ready mix concrete, concrete pipes, beams, slabs
Assessment Year: 2005-06 and other products for building and construction industry. The assessee has leased the property at Gujarat and declared the same under the head “Business Income”. However, the Assessing Officer assessed the rental income under the head “Income from house property”. The same resulted in addition to allow the levy of impugned penalty. The learned CIT(A) deleted the penalty by holding that it has been levied on account of change of head of income and there is no concealment of particulars of inaccurate or furnishing of inaccurate particulars of income. The learned CIT(A) also relied on decision of Hon’ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd.[2010] 322 ITR 158. Aggrieved this revenue has filed this appeal.
We notice that an identical issue was considered by the co-ordinate bench of Tribunal in the case of M/s. Superb Royal Travels and Tours Pvt. Ltd. (ITA No. 4147/M/12) dated 15.01.2014 wherein penalty levied has been disallowed with the following observations:
Before us, the AR submitted that neither this was a case of concealment of particulars of income nor the case of furnishing of inaccurate particulars of income and nor is a case where the AO has inferred a finding, which would attract penal proceedings. The AR also submitted that penalty cannot be levied on a change of head of income or where the claim of the assessee is not accepted by the revenue authority. The AR cited the following decisions from the various fora:
1. 1. Reliance Petroproducts vs CIT 322 ITR 158 (SC): Mere making of a claim which is not sustainable in law does not attract penalty under Section 271(1)(c).
2. CIT vs Indersons Leather P. Ltd. 328 ITR 167 (Hon’ble P&H High Court): There cannot be any penalty when the AO treats rental receipt under a different head.
3. M/s Eurolink Trading P. Ltd. vs Income Tax Officer-9(1)(3) [ITAT “J” Bench, Mumbai 2004-05): There can be genuine difference of opinion in appreciating the principles of law but it does not mean that the assessee deliberately tried to conceal the income. Under the facts of the present case there is no scope for considering that there is concealment of income. In the same way, there is no case for furnishing inaccurate particulars as all
Assessment Year: 2005-06 the details including the agreement were placed on record. Therefore, we have no hesitation in canceling the penalty.
4. Dhananjay V. Gupta, Mumbai vs Department of Income Tax on 8 May, 2013 [ITA 3719/Mum/2011]: It was held that merely because the assessee had made a claim which was not accepted or acceptable to the Revenue, that by itself could not attract the penalty u/s 271(1)(c). As noted by the ld. CIT(A) in his impugned orders in this regard, full disclosure was made by the assessee regarding the nature of his M/s Superb Royal Travels and Tours Pvt Ltd 3 income which was also reflected in the certificate issued by the employer. Even the genuineness of the expenditure claimed to be incurred by the assessee for earning commission income etc. was not doubted by the AO. The assessee thus cannot be said to be guilty of furnishing inaccurate particulars of his income as held by the Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt Ltd. (supra) and the corresponding addition made to his total income being merely the result of change of head of income, we find ourselves in agreement with the ld. CIT(A) that it was not a fit case to impose penalty u/s 271(1)(c). We therefore uphold the order of the ld. CIT(A) canceling the penalty imposed by the AO u/s 271(1)(c).
M/s Crown Tradelink Pvt Ltd vs Asst. CIT (ITA No. 2768/Ahd/2012] 2768/Ahd/2012]: The addition was made merely because of a change in the head of income. In the absence of inaccuracy in the books of accounts or concealment of facts, penalty u/s 271(1)(c) cannot be levied.
Dy. CIT vs JMD Advisors Pvt. Ltd. (08.02.2008 – ITAT Delhi): A mere change of head of income by the AO in the assessment cannot be construed as concealment as envisaged in Sec. 271(1)(c) so as to attract the penal provisions contained therein.
Sabara Impex Limited C/o. G.P. Mehta and Co. vs Income Tax Officer (05.10.2011 – ITAT Mumbai): In case, as a result of the related adjustment, there was no concealment of income, but only change of head, clearly there could not be an occasion to impose concealment penalty u/s 271(1)(c).
8. Pfizer Pharmaceuticals vs DCIT 49 DTR (Mum)(Tri)16: No penalty can be levied for mere change in the head of income.
CIT vs Shyam Tex International Ltd. [43 DTR (Del)19]: No penalty can be levied for mere change in the head of income.
10. Industrial Development Bank of India Ltd. vs Dy. CIT 42 SOT 325: A legal claim per se, right or wrong, cannot amount to furnishing of inaccurate particulars of income.
Assessment Year: 2005-06 11. Cement Marketing Co. of India Ltd vs Ast. CST 1980 124 ITR 15 SC CIT v. Ahmed Tea Co. (P) Ltd. (1978) 113 ITR 74 (Gau) Adl. CIT v. Sawan Motor Stores 109 ITR 660 (AP) Unless the filing of return is accompanied by a guilty mind, penalty u/s 271(1)(c) cannot be levied.
Veejay Service Station V Asst. CIT 112 TTJ 824 (Delhi): Where assessee had disclosed complete facts before AO and it had adopted a particular computation of the capital gain which did not need approval of AO that would not mean that assessee had furnished inadequate particulars.
Where the addition is made on the basis of difference of opinion between the AO and the assessee, penalty u/s 271(1)(c) cannot be levied. ITO vs. Oasis Securities Ltd (2010) 37 SOTR 63 CIT (Central) Ludhiana vs. Sanitary Improvement & Tiles Mfg. Co. 133 ITR 334: 9. The AR, therefore, pleaded that no penalty is exigible on the given set of facts and placed reliance on the above decisions.
The DR, relied on the orders of the revenue authorities.
We have heard the arguments and have perused the facts and the orders of the revenue authorities and the case laws cited before us. At the outset, it is a matter of fact that the assessee was claiming income under one head and the revenue authorities assessed the assessee under a different head. In so far as furnishing of primary material, there was neither any dispute, nor an adverse allegation. The M/s Superb Royal Travels and Tours Pvt Ltd 4 only dispute is that the revenue authorities treated the income not from rent but from house property, this by itself cannot form the basis for the levy of penalty, as held by the above mentioned decisions and other catena of decisions on the issue of cancellation of penalty, when the revenue authorities change the head of income.
12. Respectfully following the above decisions, we are of the opinion that under the given set aside circumstances, penalty is not exigible. We, therefore, set aside the order of the CIT(A) and direct the AO to cancel the penalty.
Following the above said order we are of the view that it is not justify in deleting the penalty imposed by the Assessing Officer.
Assessment Year: 2005-06 5. In result the appeal of the revenue is hereby dismissed.