""
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, MUMBAI
. , ,
BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM
./I.T.A. No. 3196/Mum/2013
( / Assessment Year: 2005-06)
Mangalam Drugs & Organics Ltd. Asst. CIT-4(2),
292, Princess Street, / M. K. Marg,
Second Floor, Near Flyover, Mumbai-400 020
Vs.
Mumbai-400 002
. / . /PAN/GIR No. AAACM 7880 P
( /Appellant) : ( / Respondent)
/ Appellant by : Shri M. Subramanian
/Respondent by : Shri Love Kumar
/ : 05.02.2015
Date of Hearing
/
: 10.02.2015
Date of Pronouncement
/ O R D E R
Per Sanjay Arora, A. M.:
This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-8, Mumbai (`CIT(A)' for short) dated 12.02.2013, contesting
the levy of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (`the Act' hereinafter) for
the assessment year (A.Y.) 2005-06 vide order dated 20.03.2012.
2. The only issue arising in this appeal is validity or otherwise in law of the levy of
penalty on the assessee u/s. 271(1)(c) of the Act in the sum of Rs.20,888/-, since
confirmed by the ld. CIT(A), in the facts and circumstances of the case.
2
ITA No. 3196/Mum/2013 (A.Y. 2005-06)
Mangalam Drugs & Organics Ltd. vs. Asst. CIT
3. Explaining the facts of the case, it was submitted by the ld. Authorized
Representative (AR), the assessee's counsel, that the only disallowance made while
framing the assessment u/s. 143(3) on 11.12.2007 by the Assessing Officer (A.O.), i.e.,
on which penalty has been levied, is the claim for depreciation on electrical fittings;
having been claimed @ 25%, as against the eligible rate of 15%. This was clearly an
omission, and therefore the mistake admitted on the discrepancy being pointed out by the
A.O. in the assessment proceedings, explaining the underlying reason. Prior to A.Y.
2003-04, electrical fittings were eligible for depreciation at the general rate applicable to
plant and machinery, and which amendment was lost sight of while preparing the return
of income for the current year. In fact, he would further submit, the figure of depreciation
as worked out by the tax auditors was adopted, so that the mistake had in fact occurred at
the end of the auditors themselves. A case of bona fide mistake, therefore, ought to
exclude penalty. On further enquiry by the Bench, he however confirmed that this issue
had also arisen in the assessee's case for A.Y. 2003-04, whereat the Tribunal had
cancelled the penalty, allowing the assessee the benefit of doubt in-as-much as that was
the first year of the amendment, which therefore had escaped notice.
The ld. Departmental Representative, on the other hand, would submit that the
foregoing itself proves that the assessee had made a conscious claim, or, in any case, had
not acted with diligence, not correcting itself even after its assessment for the earlier year.
4. We have heard the parties, and perused the material on record.
In our view, the protection with regard to a genuine mistake, which the law
provides for u/s.273B, and which was granted by the tribunal while deciding the
assessee's appeal for A.Y. 2003-04, shall apply for the current year only where the
detection of the discrepancy by the A.O. during the assessment proceedings for A.Y.
2003-04 was subsequent to the date of filing the return for the current year, i.e.,
29.10.2005. The discrepancy having been surfaced at that time, no plea with regard to a
genuine mistake or an omission could be taken by the assessee subsequently. Rather, that
should have operated as a wake-up call for being more attentive and adopting a more
3
ITA No. 3196/Mum/2013 (A.Y. 2005-06)
Mangalam Drugs & Organics Ltd. vs. Asst. CIT
careful approach in preparing its tax return, i.e., even generally. As regards the plea of a
`mistake' by the tax auditors, the same cannot in our view be taken in a generalized
manner, absolving the assessee; the returns in almost cases being, or could be said to be,
prepared by the tax consultants. The verification to the return is of the assessee and,
besides, the nature of the discrepancy and the attendant circumstances are relevant
factors, so that the matter becomes factual and no proposition, apart from a saving for a
honest mistake, would obtain.
On such a view being expressed by the Bench during hearing, the ld. AR would
submit that the relevant date i.e., when the discrepancy was detected for the first time in
the assessee's assessment for A.Y. 2003-04, is not at hand, and shall be supplied later.
The copy of assessment order, submitted subsequently, however, does not throw light in
the matter, i.e., as to the date of the said detection. The basis of our decision being clear,
want of relevant material should not detain us further. Accordingly, in our clear view, the
assessee would be entitled to an acceptance of its' plea of a genuine mistake as being
responsible for furnishing inaccurate particulars of income and, thus, saving from the
impugned penalty, if the stated error had come to light, admittedly during the course of
assessment proceedings in its case for A.Y. 2003-04, subsequent to the date of the filing
the return, i.e., 29.10.2005. The onus to prove the same shall be on the assessee, who
shall be given due opportunity to explain its case on this parameter before the A.O., who
shall decide accordingly, issuing a definite finding/s of fact, one way or the other. We
decide accordingly.
5. In the result, the assessee's appeal is allowed for statistical purposes.
Order pronounced in the open court on February 10, 2015
Sd/- Sd/-
(D. Manmohan) (Sanjay Arora)
/ Vice President / Accountant Member
Mumbai; Dated : 10.02.2015
4
ITA No. 3196/Mum/2013 (A.Y. 2005-06)
Mangalam Drugs & Organics Ltd. vs. Asst. CIT
. ../Roshani, Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent
3. () / The CIT(A)
4. / CIT - concerned
5. , , / DR, ITAT, Mumbai
6. / Guard File
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
|
