1 ITA NO. 217/DEL/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `B' NEW DELHI
BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER
AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A .No.-217/DEL/2012
(ASSESSMENT YEAR-2005-06)
ACIT vs Dharam Vir Yadav
Circle-20 (1), Room No. F-308, H-4/9,
Vikas Bhawan Model Town
New Delhi New Delhi
AAAPY1522F
(APPELLANT)
(RESPONDENT)
Appellant by Sh. Neehar Ranjan Pandey,
SR. DR
Respondent by Sh. B. L. Gupta, AR
Date of Hearing 17.12.2015
Date of Pronouncement
11.01.2016
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by Revenue against the order dated
4/10/2011 by the Revenue passed by the Ld. CIT(A) XVII, New
Delhi.
2. The grounds of appeal are as follows:-
"1. Whether on the facts and circumstances of the case the Ld.
CIT(A) has erred in law and on facts by deleting the
penalty u/s 271(1)(c), as the assessee was well aware of
the facts pointed out in the Audit report that the payments
2 ITA NO. 217/DEL/2012
of TDS on contract work and payment of Services tax was
made after the filing of return of income.
2. Whether on the facts and circumstances of the case the Ld.
CIT(A) has erred in law and on fcts by deleting the penalty
u/s 271(1)(c), as the assessee failed to add back these
amounts in the return of income filed, as these were in
violation of SESction 40 (1a) of the I. T. Act, 1961.
3. Whether on the facts and circumstances of the case the Ld.
CIT(A) has erred in facts by deleting the penalty u/s 271
(1) (c), as the assessee knowingly furnished inaccurate
particulars of income.
2. In this case, the assessment was completed at
Rs.1,35,17,790/- on 29/3/2007 as against the return income of
Rs.56,76,930/- and penalty proceedings were initiated in the
assessment order. The CIT(A) confirmed the addition made on
account of disallowance of contract payment amounting to
Rs.42,26,088/-, disallowance of late deposit of service tax u/s 43B
at Rs. 15,71,870/- , disallowance of expenses incurred on Mercedes
Cars at Rs.3,51,261/-. This order of CIT (A) was confirmed by ITAT.
The Assessing Officer issued show cause notice on 15/3/2010 by
fixing the date of hearing but no reply was filed by the assessee. As
a result, the Assessing Officer levied a penalty of Rs.20, 63,092/- @
100% of the tax sought to be evaded on 31/3/2010. The CIT (A)
held that the assessee claimed deduction in the return income for
A.Y 2005-06 and filed audit report with the same. The CIT(A)
observed that the amount of TDS was deposited late. In the audit
report it was also mentioned that Service Tax and Provident Fund
3 ITA NO. 217/DEL/2012
(PF) was not deposited by the assessee on time. The Assessing
Officer made disallowances of TDS, Service Tax and Provident Fund
on the basis of information contained in the audit report. The
CIT(A) further held that the assessee did not concealed any part of
his income or filed inaccurate particulars of income relevant to A.Y
2005-06. The additions were made on account of unpaid TDS,
Provident Fund and Service Tax cannot be considered as concealed
income or inaccurate particulars and on the basis of such penalty
cannot be levied. Therefore, the CIT(A) deleted the penalty levied in
the case of the assessee.
4. The Ld. DR submitted that the Assessing Officer has rightly
levied the penalty and he has relied upon the order of the Assessing
Officer. The Ld. DR further submitted that by claiming these
deductions in subsequent year are in appropriate and inaccurate
return.
5. The Ld. AR relied upon the CIT(A)'s order and submitted that
TDS and Service Tax was submitted late but the same was done
much prior to the disallowance. The assessee also relied upon the
judgment of PWC vs. CIT 2012 25 Taxman.com 400 (S.C) wherein it
was held in para 19 as under:
"19. The contents of the Tax Audit Report suggest that there is
no question of assessee concealing its income. There is also no
question of the assessee furnishing any inaccurate particulars.
It appears to us that all that has happened in the present case
is that through a bona fide and inadvertent error, the assessee
4 ITA NO. 217/DEL/2012
while submitting its return, failed to add the provision for
gratuity to its total income. This can only be described as a
human error which we are all prone to make. The caliber and
expertise of the assessee has little or nothing to do with the
inadvertent error. That the assessee should have been careful
cannot be doubted, but the absence of due care, in a case such
as the present does not mean that the assessee is guilty of
either furnishing inaccurate particulars or attempting to conceal
its income."
The Hon'ble Supreme Court further held that the imposition of
penalty on assessee is not justified and satisfied that the assessee
had committed inadvertent and bonafide error and had not
intended to or attempted to either conceal its income or furnish
inaccurate particulars.
6. The Ld. AR further submitted that the late payment of TDS
and Service Tax was due to the error of the assessee's Chartered
Accountant and thus it was a human error. Therefore, CIT (A)
rightly set aside the penalty order.
7. We have perused all the records and heard both the parties.
In the present case, the tax audit report clearly gives the picture
that there was none submission of TDS, Service Tax and Provident
Fund by the assessee and this information was known to the
Assessing Officer and there was no concealment or inaccurate
information given by the assessee. We have gone through the
judgment given by the Apex Court in the case of PWC, the ratio of
5 ITA NO. 217/DEL/2012
the said judgment will clearly apply in the present case as there was
a human error committed by the Chartered Accountant in the
present case as well. The Ld. CIT (A) rightly set aside the penalty
order passed by the Assessing Officer.
7. In the result, the Revenue's appeal is dismissed.
The order is pronounced in the open court on 11th of January,
2016.
Sd/- Sd/-
(S. V. MEHROTRA) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 11/01/2016
*R. Naheed*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT ASSISTANT REGISTRAR
ITAT NEW DELHI
Date
1. Draft dictated on 29.12.2015 PS
2. Draft placed before author 30.12.2015 PS
3. Draft proposed & placed before .01.2016 JM/AM
6 ITA NO. 217/DEL/2012
the second member
4. Draft discussed/approved by .01.2016 JM/AM
Second Member.
5. Approved Draft comes to the .01.2016 PS/PS
Sr.PS/PS
6. Kept for pronouncement on .01.2016 PS
7. File sent to the Bench Clerk PS
12.01.2016
8. Date on which file goes to the AR
9. Date on which file goes to the
Head Clerk.
10. Date of dispatch of Order.
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