SHIR GANESH JAGANNATH CHOUKSE,BULDHANA vs. ACIT,AKOLA CIRCLE, AKOLA
What did the Tribunal hold?
The Tribunal held that since the VAT was paid before the due date of filing the return and there was no loss to the Revenue, the penalty proceedings were not justified. Therefore, the penalty order was set aside.
What were the facts?
The assessee debited sales tax (VAT) of Rs. 3,84,986/- to his P&L Account, which was not paid by the due date for furnishing the return. The AO made a disallowance under Section 43B and initiated penalty proceedings under Section 271(1)(c). The assessee paid the VAT before the due date of filing the return.
What were the issues?
Whether penalty under Section 271(1)(c) is leviable when the tax liability, though disallowed under Section 43B initially, is paid before the due date of filing the return, and there is no loss to the revenue.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SH. VIKRAM SINGH YADAV & SH. YOGESH KUMAR U.S.
ORDER
PER YOGESH KUMAR U.S., JM
This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals)-1, Nagpur, [“Ld. CIT(A)”, for short], dated 29/05/2017 for Assessment Year 2012-13.
The brief facts of the case are that the Assessee has filed return on, 15.05.2013 declaring income of Rs.15,83,910/-. During the course of assessment proceedings, the AO has noticed that, the Assessee has debited sales tax (VAT) of Rs.3,84,986/- to his P&L Account. As per the AO, the appellant has failed to pay the same amount on or before the due date for furnishing of his return for the previous year. Therefore, disallowance of Rs.3,84,986/- has been made u/s 43B of the Act. The AO hasalso initiated penalty proceedings 271(1)(c) of the I.T. Act for furnishing of inaccurate particulars of income by the appellant.
Aggrieved by the order dated 24.07.2015 passed u/s 271(1)(c) of the Act, the Assessee has preferred the appeal before the Ld. CIT(A) and the Ld. CIT(A) vide order dated 29.05.2017 dismissed the appeal by confirming the penalty order passed u/s 271(1)(c) of the Act.
Aggrieved by the same, the Assessee has preferred the present appeal on the following ground: “(1.) On the facts and in the circumstances of the case the learned CIT(A) erred in confirming penalty of Rs.1,20,960/- levied by AO u/s 271(1) (c) of Income Tax Act, 1961.
(2) Any other ground that may be raised at the time of hearing of the Appeal.”
The Ld. Counsel for the Assessee submitted that, the due date for paying the VAT on 30.04.2012 but the same has not been paid on the due date but the tax has been paid on 16.03.2013 itself and the same well before the due date of filing the return. The Ld. Counsel for the Assessee further submitted that, there is no loss of Revenue to the Department. Therefore, initiation of penalty proceedings is illegal, since, there is no concealment of income by the Assessee.
The Ld. Counsel for the Assessee has taken to the order of the Ld. CIT(A) at para 4.0 wherein the Ld. CIT(A) has observed as under: “4.0 Appellant’s submissions along with penalty order and records have been considered carefully. There is no denying the fact that the appellant has not paid VAT of Rs.3,84,986/- on or before the due date for furnishing of his return of income; thereby clearly attracting the disallowance u/s 43B. In fact, the auditor himself has mentioned in the audit report in para-8 of Additional report “Sale Tax (VAT) on stock of 30.04.2012 Rs.3,84,986/- debited to Profit & Loss A/c”. Thus, the appellant is found liable for addition made u/s 43B.”
The Ld. Counsel for the Assessee has further submitted that, the Sales Tax (VAT) on stock Rs. 3,84,986/- has been debited on 30.04.2012 and not taken benefit of the same in the subsequent year. Since, the Assessee has paid the tax before filing the return and since, there is no loss to the Revenue.
Per contra Ld. Dr has justified the orders of the lower authorities and submitted that the orders require no interference from the Tribunal.
We have heard the parties, perused the materials of record and gave our thoughtful consideration. It is not in dispute that the Assessee has paid VAT of Rs.3,84,986/- before due date of filing the return, thus, there is no loss to the Revenue. Further, the assessee has not taken the benefit of the same in the subsequent years. Therefore, in our considered opinion, the penalty proceedings deserves to be set aside. Accordingly, we allow the grounds of appeal and set aside the penalty order passed by the AO which has been confirmed by the Ld. CIT(A).
In result, the appeal filed by the Assessee is allowed. Order pronounced in the Open Court on this 10th Day of June, 2022.
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