Mr. Tapan Bhattacharya, Kolkata V. ITO, Ward - 25(2), Kolkata, Kolkata

ITA 1024/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54686 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 17-05-2010
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Keywords: Revised return; Set aside
• Section: 271(1)(c); 139(5); 148

Judgement Text

1 , A , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A, KOL KATA [ , . .. . . .. . , , , , !' ] BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SRI C.D. RAO, ACCO UNTANT MEMBER # # # # / ITA NOS. 1024 TO 1026 (KOL) OF 2010 $% &' / ASSESSMENT YEARS 2003-04 TO 2005-06 TAPAN BHATTACHARYA, KOLKATA. (PAN-AEAPB2409L) INCOME-TAX OFFICER, WARD-25(2), KOLKATA. (*+ / APPELLANT ) - $ - - VERSUS - (./*+/ RESPONDENT ) *+ 0 1 !/ FOR THE APPELLANT: / SRI SOUMITRA CHOUDHURY ./*+ 0 1 ! / FOR THE RESPONDENT: / SRI S.K. ROY 2$3 0 ' / DATE OF HEARING : 28/10/2011 4& 0 ' / DATE OF PRONOUNCEMENT : 18 /11/2011 !5 / ORDER ( . .. . . .. . ), !' (C.D. RAO), ACCOUNTANT MEMBER : THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST THE ORDER OF LD. C.I.T.(A)-XIV, KOLKATA DATED 22/1/2010 FOR ASSESSME NT YEARS 2003-04 TO 2005-06. SINCE THE ISSUE INVOLVED IN THESE APPEALS IS COMMON , THEY ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE WILL FIRST TAKE UP APPEAL FOR ASSESSMENT YEAR 2003-04 IN ITA NO. 1024/KOL/2010, T HE OUTCOME OF WHICH WILL SQUARELY BE APPLICABLE TO OTHER TWO APPEALS FOR ASSESSMENT Y EARS 2004-05 AND 2005-06. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS IN RE SPECT OF LEVY OF PENALTY OF RS.20,917/- U/S. 271(1)(C) OF THE ACT, WHICH WAS CO NFIRMED BY THE LD. C.I.T.(A). THE ASSESSEE FILED HIS RETURN FOR THE ASSESSMENT YEAR U NDER CONSIDERATION SHOWING TOTAL INCOME OF RS.2,58,778/-. SUBSEQUENTLY, IN RESPONSE TO NOTICE U/S. 148 OF THE ACT, THE ASSESSEE FILED RETURN SHOWING INCOME UNDER THE HEAD OTHER SOURCES AMOUNTING TO RS.78,395/- IN RESPECT OF THE FOLLOWING :- A) INTEREST ON NSC RS.43,880 B) INTEREST ON FIXED DEPOSIT RS.34,343 2 C) INTEREST FROM SAVINGS BANK RS. 172 RS.78,395/- THE LD. A.O. INITIATED PENALTY PROCEEDING U/S. 271( 1)(C) OF THE ACT IN RESPECT OF NON- DISCLOSURE OF ABOVE INCOME FROM OTHER SOURCES IN TH E ORIGINAL RETURN OF INCOME. THE ASSESSEE EXPLAINED THAT HE HAD NO MALAFIDE INTENTIO N TO CONCEAL THE ABOVE INCOME. HOWEVER, THE LD. A.O. LEVIED PENALTY OF RS.20,917/- BY OBSERVING AS UNDER :- HOWEVER THE ABOVE CONTENTION OF THE ASSESSEE CAN NOT BE ACCEPTED SINCE THE ASSESSEE HAD EHOUGH TIME TO RECTIFY THE MISTAKE COM MITTED IN THE ORIGINAL RETURN BY FILING A REVISED RETURN U/S. 139(5) OF I. T. ACT61. HOWEVER HE DELIBERATELY AVOIDED THIS OPTION AND DECLARED THE A BOVE INCOME FROM OTHER SOURCES ONLY WHEN THE CASE WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE I.T. ACT61. THOUGH THE ASSESSEE CLAIMED THAT HE DID NO T CONCEAL THE ABOVE INCOME DURING ASSESSMENT PROCEEDINGS IT TOOK ALMOST FOUR Y EARS FOR HIS GOOD SENSE TO PREVAIL AND DECLARE THE TRUE PICTURE REGARDING HIS INCOME. CONSIDERING THE ABOVE CIRCUMSTANCES I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED INCOME/FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF R S.78,395/- MAKING HIMSELF LIABLE TO PENALTY U/S. 271(1)(C). 3. ON APPEAL, THE LD. C.I.T.(A) HAS CONFIRMED THE PENALTY BY OBSERVING AS UNDER :- 4. I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE A/R. FIRST OF ALL IT CAN BE SEEN THAT THE MAIN REASON FOR LEVYING OF PENALTY U/ S. 271(1)(C) ON THE ASSESSEE IS THAT HE HAS NOT INCLUDED INTEREST INCOME HE EARNED ON NSC INVESTMENT, FDR, SAVING BANK DEPOSIT ETC. IN HIS RETURN OF INCOME. T HIS IS CLEARLY A CASE WHERE THE ASSESSEE HAS CONCEALED HIS INCOME AND WHICH IS LIAB LE FOR LEVYING OF PENALTY U/S. 271(1)(C). THE FACT THAT THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 148 AND INCLUDED THE UNDISCLOSED INCOME IN THAT RETURN CANNOT ABSOLVE THE ASSESSEE FROM THIS PENALTY BECAUSE IN THE ORIGI NAL RETURN THE UNDISCLOSED INCOME HAD NOT BEEN SHOWN. THIS INCOME HAD TO BE I NCLUDED BY THE ASSESSEE IN THE RETURN FILED U/S. 148 BECAUSE IT WAS DETECTED B Y THE DEPARTMENT AND THE ASSESSEE DID NOT HAVE ANY CHOICE BUT TO ACCEPT THIS . THE A/R HAS REFERRED TO A NUMBER OF COURT CASES AND HAS CLAIMED THAT FOR LEVY ING PENALTY U/S. 271(1)(C) THE A.O. HAS TO PROVE MENS REA ON THE PART OF THE ASSES SEE. IT CAN BE SEEN THAT ALL THESE COURT CASES HAVE BEEN OVERRULED BY HON. SUPRE ME COURT IN THE CASE OF DHARMENDRA TEXTILES REPORTED AT 306 ITR 277 WHEREIN HON. APEX COURT HAS SAID THAT PENALTY U/S. 271(1)(C) IS A CIVIL LIABILI TY FOR WHICH THE DEPARTMENT IS NOT REQUIRED TO PROVE THE MENS REA OR INTENSION OF THE ASSESSEE TO CONCEAL INCOME. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE ASS ESSEE CONCEALED HIS INCOME FOR ASSESSMENT YEAR 2003-04 AND THE A.O. HAS RIGHTL Y LEVIED THE PENALTY OF RS.20,917/- U/S. 271(1)(C). HENCE THIS APPEAL BY THE ASSESSEE. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSING THE MATERIAL ON RECORD, WE FIND THAT IN THE ASSESSMENT ORDER PASSED U/S. 143(3)/147 OF THE ACT, THE 3 PENALTY ORDER PASSED U/S. 271(1)(C) OF THE ACT AS W ELL AS THE ORDER OF THE FIRST APPELLATE AUTHORITY AGAINST WHICH THE ASSESSEE IS IN APPEAL, THE ONLY CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS OFFERED THE ADDITIONAL INCOME ON ACCRUED INTEREST ON NSC, FIXED DEPOSITS AS WELL AS SAVINGS BANK ACCOUNT ONLY ON TH E BASIS OF THE NOTICE U/S. 148. BUT, HOWEVER, ON CAREFUL PERUSAL OF THE NOTICE U/S. 148 AND THE ASSESSMENT ORDER PASSED U/S. 143(3)/147, IT IS OBSERVED THAT THE REVENUE HAS NEV ER POINTED OUT THAT THE INCOME OF THE ASSESSEE HAS BEEN ESCAPED ON ACCOUNT OF THE NON -DECLARATION OF THE INTEREST ON NSC, FIXED DEPOSITS AND SAVINGS BANK ACCOUNT. FROM THIS IT IS EVIDENT THAT THE ASSESSEE HAS OFFERED THE SAID INCOME OF INTEREST VO LUNTARILY ON RECEIPT OF THE NOTICE U/S. 148 OF THE ACT. IT IS FURTHER OBSERVED THAT T HE LD. C.I.T.(A) IN THE IMPUGNED ORDER STATED THAT THE ASSESSEE HAS OFFERED THE INTEREST I NCOME ONLY BECAUSE IT WAS DETECTED BY THE DEPARTMENT AND THE ASSESSEE DID NOT HAVE ANY CHOICE BUT TO ACCEPT THIS. IN ORDER TO SUPPORT THIS FACT, WE FIND NO MATERIAL ON RECORD. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE LD. A.O. NOT TO LEVY PENALTY U/S. 271(1)(C) OF THE ACT, AS BECAUSE THE REVENUE HAS NO WHERE MEN TIONED THAT REOPENING IS MADE TO ASSESS THE INTEREST INCOME ON THE NSC, FIXED DEPOSI TS AND SAVINGS BANK ACCOUNT. ON THE OTHER HAND, WE OBSERVE THAT THE ASSESSEE WAS UN DER THE BONA FIDE IMPRESSION THAT THE ACCRUED INTEREST ON NSC, FIXED DEPOSITS AND SAV INGS BANK ACCOUNT TO BE OFFERED AT THE TIME OF THEIR MATURITY. HOWEVER, SINCE THE REV ENUE HAS SERVED THE NOTICE U/S. 148 OF THE ACT, THE ASSESSEE OFFERED THE SAME VOLUNTARI LY. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLOWED. 5. THE FACTS FOR THE OTHER TWO ASSESSMENT YEARS 20 04-05 & 2005-06 ARE IDENTICAL TO THOSE OF ASSESSMENT YEAR 2003-04 DEALT WITH ABOV E. IN VIEW OF THE ABOVE, WE DIRECT THE LD. A.O. TO DELETE THE PENALTIES OF RS. 12,378/ - AND RS.8,905/- LEVIED U/S. 271(1)(C) OF THE ACT FOR THESE TWO ASSESSMENT YEARS AS WELL. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. SD/- SD/- ( ) ( . .. . . .. . ) !' (MAHAVIR SINGH) JUDICIAL MEMBER (C.D. RA O), ACCOUNTANT MEMBER ( (( ( ' ' ' ') )) ) DATE: 18 -11-2011 4 # # # # / ITA NOS. 1024 TO 1026 (KOL) OF 2010 !5 0 .6 7!6&8- COPY OF THE ORDER FORWARDED TO: 1. *+ / THE APPELLANT : TAPAN BHATTACHARYA, 22/3A, GANGULI PARA LANE, GROUND FLOO R, KOLKATA-700 037. 2 ./*+ / THE RESPONDENT : I.T.O., WARD-25(2), KOLKATA. 3. 5$ () : THE CIT(A) XIV, KOLKATA. 4. 5$/ THE C.I.T., KOL - 5 <= .$ / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 GUARD FILE . /6 ./ TRUE COPY, !5$2/ BY ORDER, (DKP) > ? / DY/ASSTT. REGISTRAR .