MITSUBA SYSTEMS (INDIA) PVT. LTD. Vs. DY. CIT 8(2)
LAWS(IT)-2014-5-127
INCOME TAX APPELLATE TRIBUNAL
Decided on May 30,2014

Mitsuba Systems (India) Pvt. Ltd. Appellant
VERSUS
Dy. Cit 8(2) Respondents

JUDGEMENT

Sanjay Arora, Member (A) - (1.) THIS is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals) -17, Mumbai ('CIT(A)' for short) dated 14.11.2012, confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2009 -10 vide order dated 05.01.2012.
(2.) THE only issue arising in the instant appeal is the maintainability in law of the levy of penalty u/s. 271(1)(c) in the facts and circumstances of the case. The brief facts of the case are that the assessee, a company in the business of manufacturing and supply of automatic powder coating systems, was during the course of assessment proceedings observed to have claimed interest levied and paid u/ss. 234A, 234B and 234C, at Rs. 10,51,834/ - in aggregate, as financial expense per its return of income (ROI) for the year. The assessee, on being called upon to justify the said claim, agreed to the disallowance. In the penalty proceedings, initiated at the conclusion of the assessment on 26.09.2011, the assessee's explanation was of ignorance in -as -much as the assessee was managed by technocrats which had assigned this work to a firm of Chartered Accountants. In fact, they had committed an error by not reflecting the said sum in Form 3CD in reply to Q. No. 17(f), seeking disclosure of the amount disallowable u/s. 40(a), resulting in a consequential error in the ROI. The same was found not satisfactory in -as -much as the firm of CA's was a reputed firm, so that the claim could not be considered to be a result of a bona fide mistake. Penalty was levied relying on the decisions in the case of Union of India v. Dharmendra Textile Processors : [2008] 306 ITR 277 (SC) and CIT vs. Zoom Communication (P.) Ltd. : [2010] 327 ITR 510 (Del.), and confirmed in appeal for the same reason, distinguishing the decision by the apex court in the case of Price Waterhouse Coopers (P.) Ltd. vs. CIT : [2012] 348 ITR 306 (SC). Aggrieved, the assessee is in second appeal.
(3.) BEFORE us, while the ld. Authorized Representative (AR) would reiterate the assessee's case, i.e., as before the authorities below, the ld. Departmental Representative (DR) would rely on their orders.;


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