9911796707
TMI Blog2016 (11) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... levied irrespective of the fact whether the incorrect claim was as a result of bonafide mistake or a genuine human error or otherwise. Thus, we find that penalty in this case has been wrongly levied and therefore, same is directed to be deleted. - Decided in favour of assessee. - ITA NO.1073/Mum/2015 - - - Dated:- 7-10-2016 - Shri Sanjay Garg, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Appellant : Shri H.P. Mahajani, Shri Karthik Natarajan, (AR) For The Revenue : Shri B.S. Bist (Sr. DR) ORDER Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai-34,{(in short CIT(A) }, dated 18.01.2015 passed against penalty order of the AO dated 28.03.2014 u/s 271(1)(c) for the Assessment Year 2008-09 on the following grounds: On the facts and circumstances of the case and in law: 1. The leaned CIT(A) erred in confirming the penalty u/s. 271(1)(c) of ₹ 35,00,000/- in respect to inadvertent claim of set off of unabsorbed depreciation of ₹ 75,07,162/- although the same was voluntarily rectified by filing Revised Computation du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8th July 2016) wherein penalty was confirmed where apparently incorrect claim was made by the assessee, though same was corrected by filing a revised return. 3.2. Per contra, Ld. Counsel of the assessee submitted that in this case facts and chronology of case reveals that there was bona fide mistake on the part of the assessee. The conduct of the assessee would show that the claim was made inadvertently by the assessee on account of inadvertent mistake made by the accountant namely Mr. Surendra Gupta. It was submitted that admittedly in this case the claim made was incorrect on the face of it and it is also true that scrutiny proceedings were initiated by the AO before the assessee could file revised return. But, it is also true that no query was asked with regard to any claim of depreciation on plant and machinery by the AO during the course of assessment proceedings, as is evident from the notices, questionnaires issued by the AO, copies of which have been annexed in the paper book. The assessee while going through its papers realised her mistake and therefore, voluntary, at her own motion and without having been pointed out any mistake by the AO, corrected her bona fide mista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d whether the said explanation can be held to be bonafide so as to meet the parameters of section 271(1)(c), the same has to be tested on the anvil of facts of each case. Now, the law in this regard has been well settled after the judgment of Hon ble Supreme court in the case of Price Waterhouse Coopers Pvt. Ltd.(supra) wherein it has been held by the their lordships that in case a bonafide and inadvertent error is made by the assessee while submitting its return, which could be described at human error, then it cannot be said that assessee was guilty of either furnishing of inaccurate particulars or had attempt to conceal its income and therefore penalty should not be levied under such cases. Thus, what is to be seen under such cases is that whether the case of the assessee would fall into the category of a bonafide mistake , or an inadvertent or genuine human error , and if yes then assessee s case would fall outside the net of penal provisions contained in section 271(1)(c). 3.5. Thus, what emerges from the legal position as discussed above is that merely because the claim made by the assessee on account of set off of unabsorbed depreciation was rejected by the AO, it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing year i.e. A.Y. 2007-08, as is evident from the assessment order of A.Y. 2007-08, passed u/s 143(3) dated 29.12.2009. Thus, the claim on account of unabsorbed depreciation was earlier available, but the same was exhausted in the immediately preceding year. It is further noted that in the computation sheet filed along with the return of A.Y. 2007-08 also, the assessee had given a similar table at the bottom of the computation sheet shown year-wise breakup of availability of unabsorbed depreciation wherein the entire claim has been set off and exhausted in A.Y. 2007-08 itself. Assessee has contended that while preparing the computation sheet of the impugned year, this very table (as given in computation sheet of AY 2007-08) was inadvertently copied and pasted in the computation sheet of impugned assessment year. 3.6. We have carefully analysed and find some force in the contention of the assessee. It is noted that pattern and frame work of computation sheets filed along with returns for A.Y. 2007-08 and A.Y. 2008-09 are identical. It seems to be quite possible that while preparing the computation sheet of 2008-09, the accountant had picked up, copied and pasted Proforma of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings u/s 143(3), thereby withdrawing the claim of set off .. 3.7. Similarly, affidavit filed by Mr. Snehal Uttarwar (CA) also contained detailed averments. The relevant portion of the affidavit is discussed hereunder: I, MR. Snehal Uttarwar aged 53 years, having address At A/402 Chembur Heights, Sindhi Society, Chembur, Mumbai -400071 hereby solemnly affirm and declare as under: 1. I was appointed by Smt. Deepi Rupindersingh Arora (hereinafter referred to as the Assessee'), as Consultant for AY 2008 - 2009. The entire accounts writing and tax return filing work was done by the Accountant appointed by the Assessee. 2. My scope of work included over-seeing the final computation of Income made the Accountant. 3. The Assessee is assessed to income-tax under P.A.No. AAIPA1690A. During the AY 2008-09, the Assessee derived income from House Property, Business/ Profession, Capital Gain and Other Sources. 4. For Asst. Year 2008-09, the accountant finalized her books of accounts and computed the taxable income at ₹ 60,06,890/- and accordingly made the Assessee file her Return of income on 29-09-2008. The Original Return of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the lower authorities have deemed it necessary to cross examine either of these persons and without their cross examination lower authorities have chosen to disbelieve the averments made on oath by these persons. In our view, the approach followed by the lower authorities is neither fair nor justified. The penal provisions are quite harsh in nature, in as much as, confirmation of the penalty may lead to prosecution of the assessee. Therefore, the revenue officials are expected to observe due diligence in discharge of their legal obligations while levying or confirming the penalty. The assessee should be given full of opportunity before levy of penalty and all the facts and circumstances of the case must be collectively analysed before levying the penalty. The penalty should never be levied in a casual or light hearted manner. The levy of penalty should be based solely upon material held on record and keeping in view objective parameters. It appears that approach to the lower authorities in this case has been that since incorrect claim has been made, then penalty must be levied irrespective of the fact whether the incorrect claim was as a result of bonafide mistake or a genui ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
