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TMI Blog2016 (12) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... ge benefits while filing FBT return and it had happened only on an inadvertent mistake by oversight. Hence no penalty is leviable u/s 271(1)(c) of the Act. - Decided in favour of assessee - Income Tax Appeal No.4369/Mum/2014 - - - Dated:- 21-10-2016 - SHRI RAJENDRA, AM AND SHRI C.N.PRASAD, JM For The Assessee : Shri Rushabh Mehta For The Revenue : Shri N.Sathya Moorthy ORDER PER C.N.PRASAD (J.M.) : This appeal is filed by the assessee against the order passed by the CIT(A)-18, Mumbai, dated 22.04.2014, for the assessment year 2006-2007. 2. In this appeal, the assessee has raised two grounds, out of which ground No.1 has not been pressed by the Ld.AR, accordingly, we dismiss the ground No.1 as not pressed. 3. In regard to ground No.2, the assessee is aggrieved by the levy of penalty u/s 271(1)(C) of the Act on fringe benefits of ₹ 8,14,180/- arising out of depreciation on motor car. 4. Facts giving rise to this appeal are that the assessee is a limited company, engaged in providing detective and security services. The assessee filed its return of income of FBT for the year under consideration and the assessment was completed and order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el/2013 dated 29.4.2015) 6. On the other hand, Ld.DR relied on the orders of authorities below. 7. We have heard the rival submissions, perused the orders of the authorities below and the case law relied on by the parties. The assessee company filed its return of fringe benefit tax on 28.3.2007 declaring fringe benefits at ₹ 1,14,37,629/-. The assessment of fringe benefits was completed on 29.12.2008 U/s 115WE(3) of the I.T.Act computing the total value of fringe benefits liable for fringe benefits tax the assessing officer held that the vehicle hire charges of ₹ 53,28,578/-, repairs and others of ₹ 22,10,151/- and depreciation on motor vehicles of ₹ 40,70,898/- aggregating to ₹ 1,16,09,627/- has not been including for fringe benefit u/s 115WE(2)(H) of the Act without giving reasons and he included the same in the value of fringe benefits. However, the CIT (Appeals) held that sales promotion including publicity of ₹ 5,25,437/-, conveyance, tour and travel of ₹ 83,445/- and repairs maintenance of motor car of ₹ 40,07,898/- only should be considered while computing the fringe benefits. 8. The assessing officer later levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore it was submitted that and explained tha6t the same had remained to be offered only due to oversight and inadvertence. It was further submitted that the assessee has no intention whatsoever not to offer the fringe benefits of ₹ 8,05,180/- on depreciation as is born out from the fact that the total value of fringe benefits offered by the assessee in the return itself if ₹ 1,14,37,629/-. It was also contended that the Tax Auditor had made a mistake in computing the correct fringe benefits being first year of FBT provisions coming into statute. The assessee further contended that there was no default of any item in computing fringe benefits in subsequent assessment years by the assessee. The assessee further contended that the tax effect on the said fringe benefit of depreciation comes to 2.74 lakhs and whereas the assessee has paid income tax of ₹ 241.93 lakhs and fringe benefits tax of ₹ 42.64 lakhs and this shows that there cannot be any malafide intention to save a meager tax of ₹ 2.74 lakhs. It was further submitted that the Assessing officer and the CIT (Appeals) did not find that the details or particulars furnished by the assessee or the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fails to offer explanation or, (ii) the explanation of the assessee is found to be false or (iii) the assessee offers an explanation which he is not able to substantiate or (iv) the assessee fails to prove that such explanation is bona fide and that all facts relating to the same and material to the computation of income have been disclosed by the assessee. 18. In the case in hand, the assessee has offered above explanation which was not found to be false and the authorities below have not adjudicated the explanation in a proper way because as per decision of Hon ble apex court in the case of MAC DATA (P) Ltd. vs C.I.T., voluntary surrender is not a cover to provide immunity from penalty but at the same time, explanation of the assessee is to be considered and if the same is found to be considerable and bonafide, then penalty will not be imposable as per Explanation 1 to section 271(1) of the Act. 19. In the instant case, there is no finding from the authorities below that it was not a mistake of omission and on the other hand, the mistake of omission was identified by the Assessing Officer and the assessee accepted the same without any dispute. In this situation, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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