Case Law Details
Brief of the Case
In the case of M/s Kantilal Siyaram vs. ACIT (ITAT Ahmedabad), the assessee has claimed that advance tax was paid, which was not recorded in the original return on the income which was remained to be disclosed in original return. When the assessee realized the mistake which was pointed out by the Assessing Officer during the assessment proceedings, the assessee filed a revised return although such revised return was not filed within the prescribed time limit. The Tribunal observed that it is the settled proposition of law that a bonafide mistake of the assessee cannot be fastened with the liability of penalty.
Facts of the Case
Search action u/s 132 of the Income-tax Act, 1961 was carried out on 31.05.2006. The original return was filed on 31.10.2007 declaring total income at Rs.1,04,490/- and the advance tax paid Rs.35,000/-. The assessee had made payment of advance tax amounting to Rs.1,01,000/- on 15.06.2006 on the basis of disclosure made. However the assessee had not incorporated the discrepancies found during the course of search proceedings i.e. the amount related to unaccounted stock amounting to Rs.2,59,351/- and income earned from unaccounted sources amounting to Rs.40,649/- which was admitted by the assessee during the course of survey proceedings. Assessment proceedings u/s 153A were initiated in the preceding assessment years and the case was selected for scrutiny assessment. During the course of assessment proceedings, the Assessing Officer pointed out the said discrepancies with regard to stock and income earned from unaccounted sources amounting to Rs.2,59,351/- and Rs.40,649/- respectively observing that in the letter dated 04.12.2008, the assessee admitted those discrepancies. On 23.12.2008, the assessee filed its revised return declaring total income of Rs.4,04,490/- and claiming advance tax of Rs.1,36,000/-. The Assessing Officer framed assessment u/s 143(3), assessing the income as declared in the revised return at Rs.4,04,490/- and also initiated penalty proceedings u/s 271(1)(c) of the Act. The penalty u/s 271(1)(c) of the Act was levied vide order dated 24.06.2009. The Assessing Officer imposed penalty of Rs.1,01,000/-. Against this, the assessee filed an appeal before the CIT(A) who, after considering the submissions of the assessee, dismissed the appeal. Being aggrieved, the assessee filed appeal before Tribuanl.
Contention of the assessee
The Ld. Counsel submitted that a search action was carried out on 31.05.2006 and the assessee had made payment of advance tax on 15.06.2006 amounting to Rs.1,01,000/- on the basis of disclosure made. Inadvertently in the original return this amount was not incorporated; however when it was pointed out by the Assessing Officer, the same was incorporated by way of revised return which was filed on 23.12.2008.
Contention of the Revenue
The ld. Sr.D.R. supported the orders of the authorities below that no explanation was made before the Assessing Officer even after show cause notice issued and served and sufficient time was also allowed to comply with such show cause notice. The appellant on account of negligence had not furnished any explanation in compliance to the show cause notice of the Assessing Officer. Therefore, the Assessing Officer was justified in imposing the penalty u/s 271(1)(c) of the Act for concealing the particulars of income to the extent of Rs.3,00,000/-.
Held by Tribunal
It is the contention of the assessee that inadvertently the amount disclosed was not incorporated into the original return of income. However, tax on such income was paid by way of advance tax on 15.06.2006. The assessee has not even claimed refund in the original return qua the advance tax paid. Therefore, the penalty ought not to have been levied. As per calculation of tax enclosed with the original return, the assessee has claimed to have paid advance tax on 27.03.2007 of Rs.35,000/-. In the original return, the assessee has not claimed advance tax paid on 15.06.2006 amounting to Rs.1,01,000/-. However, in the revised return, the assessee has claimed that it had paid advance tax of Rs.1,01,000/- on 15.06.2006 and Rs.35,000/- on 27.03.2007. Under the peculiar facts of the present case, the tribunal deem it proper to restore the issue to the file of the Assessing Officer for verification whether the assessee had made payment of advance tax on 15.06.2006, amounting to Rs.1,01,000/- on the basis of disclosure made. Thereafter, the Assessing Officer would delete the penalty levied u/s 271(1)(c) of the Act in case he finds that assessee already made the payment of advance tax on 15.06.2006 for Rs.1,01,000/-. Accordingly, the appeal filed by the assessee is allowed for statistical purposes.
