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ACIT Circle-20 (1), Room No. F-308, Vikas Bhawan New Delhi Vs. Dharam Vir Yadav H-4/9, Model Town New Delhi
January, 13th 2016
                                      1                     ITA NO. 217/DEL/2012

                      DELHI BENCH: `B' NEW DELHI
                          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

              Appellant by       Sh. Neehar Ranjan Pandey,
                                 SR. DR
              Respondent by      Sh. B. L. Gupta, AR

                     Date of Hearing           17.12.2015
                  Date of Pronouncement


     This appeal is filed by Revenue against the order dated
4/10/2011 by the Revenue passed by the Ld. CIT(A) XVII, New
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

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 25 400 (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,
              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


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

6.    Kept for pronouncement on                .01.2016    PS

7.    File sent to the Bench Clerk                         PS

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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