Principal Commissioner Of Income Tax-14, Kolkata v. M/S West Bengal State Consumer’s Co-Operative Fedration Ltd

Form No. IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE PRESENT:THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA ITAT/23/2020IA NO:GA/2/2020 [OLD NO:GA/733/2020] PRINCIPAL COMMISSIONER OF INCOME TAX-14, KOLKATAVS.M/S WEST BENGAL STATE CONSUMER’S CO-OPERATIVE FEDRATIONLTD. ……… ITAT/23/2020IA NO:GA/1/2020 [OLD NO:GA/732/2020] PRINCIPAL COMMISSIONER OF INCOME TAX-14, KOLKATAVS.M/S WEST BENGAL STATE CONSUMER’S CO-OPERATIVE FEDRATIONLTD. ……… For the appellant: Mr. Debasish Chowdhury, Adv. Mr. Soumen Bhattacharyya, Adv. For the respondent: Ms. Swapna Das, Adv. Mr. Siddhartha Das, Adv. Heard on : February 8, 2022. Judgement on : February 8, 2022. RE: GA/1/2020 [OLD NO:GA/732/2020) T.S. SIVAGNANAM, J. : We have heard Mr. Debasish Chowdhury, learned senior standing counsel for the appellant/revenue assisted by Mr. Soumen Bhattacharyya and Ms. Swapna Das, learned counsel assisted by Mr.Siddhartha Das for the respondent/assessee. There is a delay of 621 days in filing this appeal. We have perused theaffidavit filed in support of the condone delay application and we find thatadequate explanation has not been given for lodging the appeal after a periodof 621 days. Considering the fact that the appeal filed by the revenue is oneunder Section 260A of the Income Tax Act, we suggested to the learnedcounsel appearing on either side to make their submissions on merits, whichthey have readily agreed. Therefore, we exercise discretion and condone thedelay in filing the appeal. The application, IA NO.GA/1/2020 [OLD No:GA/732/2020] standsdisposed of accordingly. RE: ITAT/23/2020 This appeal by the revenue filed under Section 260A of the Income TaxAct, 1961, (the Act, in brevity) is directed against the order dated 24.1.2018passed by the Income Tax Appellate Tribunal, “D” Bench, Kolkata (Tribunal) inITA No.1641/Kol/2016 and C.O. No.54/Kol/2016 for the assessment year2011-12. The revenue has raised the following substantial questions of law forour consideration. a.Whether on the facts and circumstances of the case and in law,the Learned Income Tax Appellate Tribunal, Kolkata erred in lawin holding that the assessee is not guilty of having concealed theparticulars of income or having furnished inaccurate particularsof income ? b.Whether on the facts and circumstances of the case and in law,the Learned Income Tax Appellate Tribunal, Kolkata erred in lawin holding that in a notice under section 274 of Income Tax Act,1961 mere mistake in the language used or mere non striking ofthe inaccurate portion by itself invalidates the notice ? We have heard Mr. Debasish Chowdhury, learned senior standingcounsel for the appellant/revenue assisted by Mr. Soumen Bhattacharyya andMs. Swapna Das, learned counsel assisted by Mr. Siddhartha Das for therespondent/assessee. The assessing officer by order dated 28.3.2014 passed under Section143(3) of the Act completed the assessment and came to the conclusion thatthere was concealment of income and wrong claim has been made by theassessee stating that the expenses incurred for construction of a compoundwall was a capital expenditure. The assessment order attained finality. Theassessing officer initiated penalty proceedings under section 271(1)(c) on thetwo grounds on which the assessments were completed. The assessee soughtto explain that they have made a claim that the expenditure incurred forconstructing a compound wall would have an enduring effect, to protect theproperty of the Co-operative society and, therefore, thought it fit to file returnclaiming expenditure to be capital in nature. With regard to the undisclosedpurchase and sale, the assessee explained by stating that there was an errorcommitted in the computer system as a result of which re-conciliation couldnot be done properly and that the wrong claim made by the assessee was not wilful. The assessing officer did not accept the explanation and confirmed theproposal to impose penalty by an order dated 23.9.2014. Challenging thesame, the assessee preferred an appeal before the Commissioner of IncomeTax (Appeals)-12, Kolkata (CIT(A)). Elaborate explanation was given which wasconsidered by the CIT(A) and the penalty was deleted. Aggrieved by the same,the revenue preferred appeal before the Tribunal, which has been dismissedby the impugned order. On perusal of the order passed by the CIT(A), we findthat the CIT(A) rightly held that merely because a wrong claim was made bythe assessee with regard to the expenses incurred for construction of acompound wall that by itself will not be a reason to impose penalty and,accordingly, vacated the penalty on the said head. With regard to theunexplained purchase and sale, the CIT(A) took note of the explanation offeredby the assessee and also the fact that the conduct of the assessee was notcontumacious or wilful so as to impose penalty. Accordingly, the penaltyimposed on the said head was also vacated. When the matter travelled to theTribunal, the explanation which was given by the assessee and accepted bythe CIT(A) was once again examined by the Tribunal and after noting severaldecisions as to under what circumstances penalty can be imposed underSection 271(1)(c) of the Act as also the fact that there was nothing on record toshow that the assessee had purposely made a wrong claim, confirmed theorder passed by the CIT(A). Thus, we find that there is no error committed bythe CIT(A) or the Tribunal for us to interfere with the said order. Accordingly,the appeal filed by the revenue is dismissed and the substantial questions oflaw are answered against the revenue. The stay application, IA NO.GA/2/2020 [OLD NO:GA/733/2020] alsostands dismissed. (T.S. SIVAGNANAM, J.) I agree. (HIRANMAY BHATTACHARYYA, J.) pkd/RSAR(CR)