Blue Bird Leisure & Holidays Ltd., ... vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA

[Before Hon'ble Sri Mahavir Singh, JM & Hon'ble Sri B.P.Jain, AM] I.T.A No. 438/Kol/2012 Assessment Year : 2006-07 M/s.Blue Bird Leisure & -vs.- I.T.O., Ward-5(3) Holidays Ltd.,Kolkata Kolkata [PAN : AABCB 9978 N) (Appellant) (Respondent) For the Appellant : None For the Respondent : Smt.Ranu Biswas, JCIT

Date of Hearing : 20.04.2015 Date of Pronouncement : 29.04.2015. ORDER Per Shri B.P.Jain, AM

This appeal of the assessee arises from the order of ld.CIT(A)-VI, Kolkata dated 29.12.2011 for Assessment Year 2006-07.

2. The assessee has raised the following grounds of appeal :

1. "For that the learned Commissioner of Income-tax (Appeals) was not justified in confirming the order of the learned Assessing Officer levying penalty of Rs.41,890 u/s. 271(1)(d) of the Income-tax Act, 1961 without taking into consideration of submissions made by the appellant and the explanation given to him.

2. For that having regard to the facts that the appellant had no intention of concealing the value of fringe benefits in the return and making payment of the fringe benefits tax or did not act in conscious disregard of its obligation, there was no reason to hold by the learned Commissioner of Income-tax (Appeals) and the learned Assessing Officer that the provisions of section 271(1)(d) of the Income-tax Act, 1961 attracted in this case and penalty is leviable for such default.

3. For that in view of the fact that the appellant had a bonafide belief that the expenditure of Rs.6,22,249 on account of Telephone Expenses and Travelling & Conveyance Expenses might not be treated as value of fringe benefit, the learned Commissioner of Income-tax (Appeals) and the learned Assessing officer should have considered the explanation given to them and the evidence adduced to them in support of the contention.

4. For that the learned Commissioner of Income-tax (Appeals) and the learned Assessing Officer were wrong in holding that the appellant furnished inaccurate particulars or concealed the income without taking into consideration of the fact that the appellant filed statements of account for the previous year relevant to the assessment year under consideration from which the value of fringe benefit was 2 ITA No.438/Kol/2012 M/s.Blue Bird Leisure & Holidays Ltd..

A.Yr.2006-07 ascertained by the learned Assessing Officer and such value was brought to tax by the impugned assessment order."

3. The brief facts of the case are that the assessee filed its return of income for assessment year 2006-07 showing a total income of Rs.41,07,090/- on 30.11.2006. The assessee did not show any Fringe Benefits in the return of Fringe Benefits in the assessment year 2006-07 in the return filed on 30.11.2006. However, the Assessing Officer in its order u/s 115WE(3) found that the assessee incurred on account of telephone expenses amounting to Rs.4,45,191/- and travelling and conveyance expenses amounting to Rs.1,77,058/- totalling to Rs.6,22,249/- which were liable to be considered as Fringe Benefits as per clause J & Q of explanation to Sub-sec (2) of Sec. 115WB. The Assessing Officer assessed the Fringe Benefit @20% amounting to Rs.1,24,450/-. He initiated penalty proceedings u/s 271(1)(d) for furnishing inaccurate particulars of Fringe Benefits. The Assessing Officer observed in his penalty order u/s 271(1)(d) dt. 23rd June, 2009 as follows :-

"In the instant case, the assessee filed its return of Fringe Benefit showing value of expenditure liable to Fringe Benefit is nil. In course of assessment proceedings, it is observed from the P&L a/c. Of the assessee company that the assessee has made expenditure of Rs.4,45,191/- on account of telephone and Rs.1,77,058/- on account of travelling and conveyance, but failed to include the same amount in the value of Fringe Benefit.

In response to Notice u/s 271(1)(d) of the I.T.Act Sr. S.S.Dutta, A/R of the assessee appeared and also filed written submission.

Considering the assessee's submission and also facts of the case AO was of the opinion that it is a fit case to impose penalty u/s 271(1)(c) of the I.T.Act for furnishing inaccurate particulars of income.

Tax on Rs.1,24,450/- (20% OF Rs.6,22,249/-) Rs.41,890/-

Tax sought to be evaded Rs.41,890/-

100% of tax sought to be evaded Rs.41,890/-

Therefore, penalty of rs.41,890/- @100% of tax sought to be evaded is levied u/s 271(1)(d) of the I.T.Act, 1961. The ld. CIT(A) confirmed the action of AO.

2 3 ITA No.438/Kol/2012 M/s.Blue Bird Leisure & Holidays Ltd..

A.Yr.2006-07

4. None appeared on behalf of the assessee. We have heard the ld. DR and carefully perused the materials available on record. It was submitted by the ld. Counsel of the assessee before the ld. CIT(A) that the provision of Chapter-XII-H of the said Act came into effect from A.Yr.2006-07 and the assessee and its staff was not aware of all the provisions of such law. There was no intention to hide or conceal or to evade tax. It was submitted that penalty u/s 271(1)(d) of the Act is in pari materia to Sec.271(1)(c) of the Act. He relied upon the decision of the Hon'ble Supreme Court in the case of Dilip N.Shroff vs. JCIT (291 ITR 519) where the Hon'ble Supreme Court had the occasion to consider the expressions "concealment of income" and "furnishing of inaccurate particulars" and it was observed that both are different and concealment of income and furnishing of inaccurate particulars of income refer to deliberate acts of suppression or false representation. The word "inaccurate" signifies a deliberate act or omission on the part of the assessee. We are convinced with the arguments of the ld. Counsel of the assessee as submitted before the income tax authorities and before us that there is no deliberate act of suppression or false representation by the assessee and primary burden to prove that on the revenue it has not been done in the present case. Therefore penalty is not leviable in the present facts and circumstances of the case and accordingly the order is reversed. AO is directed to delete the addition.

5. In the result the appeal of the assessee is allowed.

Order pronounced in the Court on 29.04.2015.

Sd/- Sd/- [ Mahavir Singh ] [ B.P.Jain ] Judicial Member Accountant Member

Dated : 29.04.2015.

[RG PS]

3 4 ITA No.438/Kol/2012 M/s.Blue Bird Leisure & Holidays Ltd.. A.Yr.2006-07 Copy of the order forwarded to:

1.M/s. Blue Bird Leisure & Holidays Ltd., 22, Strand Road, Ground Floor, Kolkata- 700001.

2. I.T.O., Ward-5(3), Kolkata

3. CIT(A)-VI, Kolkata 4. CIT Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

True copy

By Order

Asstt.Registrar, ITAT, Kolkata Benches

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