IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI Before S/Shri Pramod Kumar, Vice-President, &, Saktijit Dey, Judicial Member ITA No.7448/Mum/2017 Assessment Year 2010-11 M/s. Sigfriede Infotech Pvt Ltd., ITO 15(3)(3), (Now Techstar Infotech (India) Mumbai. Pvt Ltd.), Vs. 15, Bhandup Village Road, Bhandup (West), Mumbai 400068. PAN : AABCS9241D (Appellant) (Respondent) Appellant By : Shri Anuj Kisnadwala Respondent By : Shri V Vinod Kumar Date of Hearing :17.09.2019 Date of Pronouncement : 30.09.2019 ORDER Per Saktijit Dey, Judicial Member: This is appeal by assessee against order dated 18.09.2017 of learned CIT(A)-24, Mumbai confirming penalty imposed u/s. 271(1)(c) of Act for A.Y. 2010-11. 2. Briefly, facts are, assessee company is engaged in business of development of land and property. In course of such activity, assessee has let out property to Mahanagar Telephone Nigam Ltd. (MTNL). For year under dispute, assessee filed its return of income on 11.05.2011 declaring loss of Rs. 8,223/-. income shown by assessee 2 ITA 7448/Mum/2017 Sigfriede Infotech Pvt Ltd. is from interest on Fixed Deposit and rental income received from letting out property. In course of assessment proceedings Assessing Officer found that, though, as per Form 26AS, assessee has received rental income of Rs.35,98,356/- from MTNL, however, it had not offered such income to tax. Therefore, he asked assessee to explain reason for not doing so. In submissions dated 17.10.2012, it was stated by assessee that leave and license agreement with MTNL was not renewed due to dispute and MTNL has illegally occupied premises even after expiry of agreement. It was submitted, assessee had filed suit for eviction against MTNL and also sought compensation for illegal possession. It was submitted, amount in dispute was paid by MTNL by way of ECS and directly credited to assessee s account and assessee had not control over it. Therefore, assessee had not considered it as income, since, acceptance of said amount would have jeopardized its legal rights and contentions. It was submitted, due to aforestated reasons, amount received from MTNL was accounted as MTNL deposit under other Current Liabilities. Assessing Officer, however, did not find merit in submissions of assessee and added amount of Rs.35,98,356/- as Income from house property . Further, Assessing Officer found that assessee had not offered interest income of Rs. 1,67,397/-. Accordingly, said amount was also added to income of assessee. On basis of aforesaid additions Assessing Officer initiated proceedings for imposition of penalty u/s. 3 ITA 7448/Mum/2017 Sigfriede Infotech Pvt Ltd. 271(1)(c) of Act alleging furnishing of inaccurate particulars of income and ultimately, passed order u/s. 271(1)(c) of Act imposing penalty of Rs.8,30,050/- in respect of both additions. penalty so imposed was also confirmed by learned CIT(A). 3. learned AR submitted, in so far as addition made on account of rental income from MTNL is concerned, issue has been restored to file of Assessing Officer by Tribunal while deciding assessee s appeal in ITA No. 7545/Mum/2013 dated 22.05.2019. Thus, he submitted, since by virtue of aforesaid order of Tribunal no addition in respect of rental income exists against assessee, penalty imposed on such addition has to be deleted. In so far as, penalty imposed on addition made on account of interest income, learned AR submitted, due to inadvertence assessee did not offer interest income to tax while filing its return of income. However, when this fact was brought to notice of assessee in course of assessment proceedings, assessee admitted its mistake and offered amount to tax. Thus, he submitted since non-disclosure of interest income was due to bona fide mistake and not deliberate, no penalty should be imposed u/s. 271(1)(c) of Act. 4. learned DR strongly relied upon observations of Assessing Officer and learned CIT(A). 4 ITA 7448/Mum/2017 Sigfriede Infotech Pvt Ltd. 5. We have considered rival submissions and perused material on record. Undisputedly, in so far as addition relating to amount received as rental income from MTNL is concerned, dispute has travelled up to Tribunal and Tribunal while deciding assessee s appeal has restored issue to file of Assessing Officer for fresh adjudication. Thus, at this juncture, addition of rental income is not in existence. That being case, penalty imposed u/s. 271(1)(c) of Act in respect of such addition cannot survive. Therefore, to that extent order of learned CIT(A) confirming imposition of penalty; u/s. 271(1)(c) of Act is set aside and issue is restored back to file of Assessing Officer for considering afresh, if warranted, depending upon decision to be taken by him on issue in quantum proceedings. In so far as imposition of penalty on addition made on account of interest income, though it may be fact that in return of income assessee has not offered it to tax, however, in course of assessment proceedings when Assessing Officer brought this fact to notice of assessee, amount was offered to tax. Thus, explanation of assessee that it was not offered to tax due to inadvertence and is bona fide mistake, appears to be plausible. That being case, in our considered opinion, no penalty u/s. 271(1)(c) of Act is required to be imposed on addition of Rs.1,67,397/- as it can neither be construed as concealment of income nor furnishing of inaccurate particulars of income. Accordingly, we delete penalty imposed on addition of Rs.1,67,397/-. 5 ITA 7448/Mum/2017 Sigfriede Infotech Pvt Ltd. Grounds are partly allowed. 6. In result, assessee s appeal is partly allowed. Order pronounced in open court on this 30th day of September, 2019. Sd/- Sd/- (Pramod Kumar) (Saktijit Dey) VICE-PRESIDENT JUDICIAL MEMBER Mumbai; Dated : 30th September, 2019. SA Copy of Order forwarded to : 1. Appellant. 2. Respondent. 3. CIT(A), Mumbai. 4. CIT 5. DR, G Bench, ITAT, Mumbai BY ORDER, //True Copy// (Assistant Registrar) Income Tax Appellate Tribunal, Mumbai Sigfriede Infotech Pvt Ltd., (Now Techstar Infotech (India) Pvt Ltd.) v. ITO- 15(3)(3), Mumbai