Income cannot be held to be suppressed merely because service tax return was mistakenly filed

Analysys Mason India Pvt Ltd Vs ACIT (ITAT Delhi)

ITAT Delhi held that difference between service tax return and the revenue was occurred due to the wrong exchange rate applied to export income transaction while filing the service tax return. Hence, mere mistake in the service tax return does not mean that the income of the assessee has been suppressed.

Facts- The assessee filed return of income declaring income of Rs.3,40,45,410/- an assessment order came to be passed u/s 143(3) of the Act by making an addition of Rs. 10,52,645/- by adding back the same u/s 28 of the Act.

Aggrieved by the assessment order, the assessee preferred an Appeal before the CIT(A), however, the same was dismissed. Being aggrieved, the present appeal is filed.

Conclusion- Held that the difference between service tax return and the revenue was occurred due to the wrong exchange rate applied to export income transaction while filing the service tax return, which being a genuine mistake and the Department has not alleged or proved any mens rea on the part of the assessee who has also tried to revise the service tax return. Thus, considering the above facts and circumstances, we are of the opinion that mere mistake in the service tax return does not mean that the income of the assessee has been suppressed. Thus, we find merit in the grounds of Appeal of the Assessee, accordingly we allow the grounds of Appeal by setting aside the order impugned.

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