ACIT, CIR-30, KOLKATA, Kolkata V. Sheela Devi Kanoria, Kolkata

ITA 1172/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1745 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 11-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2014
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Revised return
• Section: 143(3)

Judgement Text

I.T.A. NO. 1172/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1172/KOL/ 2014 ASSESSMENT YEAR: 2007-2008 ASSISTANT COMMISSIONER OF INCOME TAX,.............. ...................APPELLANT CIRCLE-30, KOLKATA, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 -VS.- SHEELA DEVI KANORIA,............................... ................................RESPONDENT 2, SUNNY PARK, KOLKATA-700 019 [PAN: AFQPK 5331 R] APPEARANCES BY: SHRI R.K. KUREEL, JCIT, D.R., FOR THE DEPARTMENT N O N E, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 11, 2017 DATE OF PRONOUNCING THE ORDER : MAY 12, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA D ATED 28.02.2014 ON THE FOLLOWING GROUNDS:- (1) THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING TH E FACT THAT ASSESSEE FOR MAKING A CLAIM FOR DEDUCTION, CAN NOT CLAIM TO AMEND A RETURN FILED BY HIM OTHER THAN BY FILING A REVISED RETURN AS HAS BEEN HELD BY HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS. CIT 157 TAXMAN 1(2006)(SC). 2) THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT POWERS OF APPELLATE AUTHORITY IS CO-EXTENSIVE WITH THAT OF ORIGINAL AUTHORITY AND IT IS NOT OPEN TO APPELLATE AUTHORITY TO EXERCISE A JURISDICTION, WHICH ASSESSING OFFICER DID NOT HAVE AS HAS BEEN HELD BY THE ALLAHABAD HIGH COURT I N THE CASE OF CIT, FAIZABAD VS UTPADAN MANDI SAMITI, 11 TAXMANN 270(2011). I.T.A. NO. 1172/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 5 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO DERIVES INCOME FROM CAPITAL GAIN AND OTHER SOURCES. THE RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HER ON 31.07. 2007 DECLARING TOTAL INCOME OF RS.95,71,176/-. VIDE AN ORDER DATED 04.1 2.2009 PASSED UNDER SECTION 143(3), THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER ASSESSING THE TOTAL INCOME AT THE SAME FIGURE OF RS .95,71,176/- AS DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) CLAIMING INTER ALIA EXEMPTION IN RESPECT OF DIVIDEND INCOME AMOUNTING TO RS.43,32,873/-, LONG-TERM CAPITAL GAIN OF RS.38,84,170/- ON WHICH STT HAD BEEN PAID AND INTEREST OF RS.64,642/- ON PPF AND RBI BONDS. DURING THE COURSE OF APPELLATE PROCEEDINGS B EFORE THE LD. CIT(APPEALS), IT WAS POINTED OUT THAT THE SAID INCO ME WAS DULY CLAIMED TO BE EXEMPT BY THE ASSESSEE IN SCHEDULE E-1 FORMING P ART OF THE INCOME-TAX RETURN AND EVEN THOUGH AT PAGE 2 OF THE INCOME-TAX RETURN, THE TOTAL INCOME WAS DECLARED AT RS.95,71,176/-, EXEMPTION IN RESPECT OF THE INCOME OF RS.82,81,685/- WAS CLEARLY AND DISTINCTLY CLAIMED IN THE INCOME-TAX RETURN ITSELF AND ALSO IN THE COMPUTATIO N OF TOTAL INCOME FILED ALONG WITH THE RETURN. IT WAS CONTENDED ON BEHALF O F THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO HAVE ALLOWED SUCH EXEMPTION AND HIS ACTION IN NOT A LLOWING THE SAME WAS TOTALLY UNJUSTIFIED AND UNCALLED FOR IN THE FACTS A ND CIRCUMSTANCES OF THE CASE. RELIANCE IN SUPPORT OF THIS CONTENTION WAS PL ACED ON BEHALF OF THE ASSESSEE, INTER ALIA, ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF WEST BENGAL STATE HOUSING CORPORATION VS.- CIT [157 ITR 149] AND THAT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS.- K.N. OIL INDUSTRIES [142 ITR 13]. 4. THE SUBMISSIONS MADE BY THE ASSESSEE WERE FORWAR DED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER SEEKING THE L ATTERS COMMENT I.T.A. NO. 1172/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 5 THEREON. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS), THE ASSESSING OFFICER OFFERED HIS COMMENTS AND AFTER CO NSIDERING THE SAME AS WELL AS THE OTHER MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOR EXEMPTION IN RESPECT OF LONG-TERM CAPITAL GAIN, DIVIDEND INCOME AND INTEREST AGGREGAT ING TO RS.82,81,685/- FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4. 1.1 TO 4.1.3 OF HIS IMPUGNED ORDER:- 4.1.1. THESE GROUNDS ARE AGAINST THE ACTION OF THE AO IN TREATING THE LONG-TERM CAPITAL GAIN OF RS.38,84,489 /-, DIVIDEND INCOME OF RS.43,32,873/ - AND INTEREST INC OME RELATING TO PPF OF RS.64,642/ - AS TAXABLE INCOME, THOUGH THE SAME WAS EXEMPT U/S 10. THE AO IN THE ASSESSMEN T PROCEEDINGS HAS FAILED TO APPRECIATE THE FACT THAT THOUGH THE TOTAL INCOME IN THE RETURN OF INCOME WAS SHOWN AT RS.95,71,176/- BUT EXEMPTION IN RESPECT OF INCOME O F RS.82,81,685/- WAS CLAIMED IN THE INCOME-TAX RETURN ITSELF. SINCE SUCH DEDUCTION IN RESPECT OF EXEMPT INCOME WA S MADE IN THE RETURN OF INCOME ITSELF. THE AO SHOULD HAVE EXCLUDED THE EXEMPT INCOME OF RS.38,84,170/ - BEING THE LONG TERM CAPITAL GAIN EXEMPT U/S 10(38) AND DIVIDE ND INCOME ON SHARES AND MUTUAL FUNDS OF RS.43,32,870/- EXEMPT U/S 10(34) & 10(35) AND INTEREST ON PPF OF RS.64,642/- EXEMPT U/S 10. IN SUCH RESPECT, IT HAS TO BE CONSIDERED THAT EVEN WHERE THE ASSESSEE HAS NOT CLA IMED ANY DEDUCTION/ EXEMPTION IT IS THE AO'S DUTY TO ALL OW DEDUCTION IN TERMS OF CIRCULAR NO. 14 (XL-35) OF 19 55 DT. 11.4.1955 WHICH ENJOINS UPON THE INCOME-TAX AUTHORI TY TO ALLOW AND/OR RELIEF EVEN THOUGH THE SAME HAS NOT BE EN CLAIMED BY THE AASEASEE. 4.1.2. AS REGARDS THE AO'S CONTENTION IN THE REMAND REPORT THAT THE SAID CLAIM WAS NOT MADE VIDE REVISED RETUR N. THE FACT REMAINS THAT THE CLAIM WAS ALREADY THERE IN TH E RETURN OF INCOME, ALTHOUGH THE SAME WAS NOT SHOWN CORRECTL Y IN THE CORRECT SCHEDULE OF THE RELEVANT RETURN OF INCO ME. HOWEVER, THE FACT REMAINS THAT IF ANY CLAIM WHICH I S EXEMPT IT CANNOT BE TAXED EVEN IF THERE IS AN ERROR IN CLAIMING THE SAME. IN SUCH RESPECT, RELIANCE IS PLA CED ON THE FOLLOWING JUDGMENTS:- (A) WEST BENGAL STATE HOUSING CORPORATION V. CIT (1 986) 157 ITR 149 (CAL); (B) CIT V. K. N. OIL INDUSTRIES (1983) 142 ITR 13 ( MP). 4.1.3. ON CAREFUL CONSIDERATION OF THE APPELLANT'S SUBMISSION ALONG WITH THE SUPPORTING DETAILS/EVIDEN CES I.T.A. NO. 1172/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 5 FURNISHED & PERUSING THE FACTS OF THE CASE INCLUDIN G THE IMPUGNED ASSESSMENT ORDER AND OTHER MATERIALS AVAIL ABLE ON RECORD AND RELYING ON THE CASE CITED ABOVE, I DE LETE THE DISALLOWANCE MADE BY THE A.O. THEREFORE, THE FIRST, SECOND AND THIRD GROUND OF APPEALS ARE ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING FIXED IN THIS CASE ON 11. 04.2017, NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. THIS APPEAL OF THE REVENUE IS, THEREFORE, BEING DISPOSED OF EX-PARTE QUA THE RESPONDENT-ASSESSEE AFTER HEARING THE ARGUMENTS OF THE LD. D.R. AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. 6. THE ONLY CONTENTION PUT FORTH BY THE LD. D.R. IN SUPPORT OF THE REVENUES CASE ON THE ISSUE IS THAT HER CLAIM FOR E XEMPTION IN RESPECT OF DIVIDEND INCOME, LONG-TERM CAPITAL GAIN AND INTERES T ON PPF AND RBI BONDS WAS NOT MADE BY THE ASSESSEE BY FILING THE RE VISED RETURN AND IN THE ABSENCE OF SUCH REVISED RETURN, THE ASSESSING O FFICER WAS FULLY JUSTIFIED IN NOT ALLOWING THE SAID CLAIM OF THE ASS ESSEE FOR EXEMPTION AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF GO ETZ INDIA LIMITED VS.- CIT (SUPRA). WE ARE UNABLE TO ACCEPT THIS CONT ENTION OF THE LD. D.R. FIRST OF ALL, THE CLAIM FOR EXEMPTION IN RESPECT OF DIVIDEND INCOME, LONG- TERM CAPITAL GAIN AND INTEREST ON PPF AND RBI BONDS WAS SPECIFICALLY MADE BY THE ASSESSEE IN SCHEDULE EE-1 OF HER INCOME -TAX RETURN FILED FOR THE YEAR UNDER CONSIDERATION AND EVEN IF THERE WAS SOME MISTAKE ON THE PART OF THE ASSESSEE IN INDICATING HER TOTAL INCOME AT RS.95,71,176/- INCLUDING EXEMPT INCOME AT PAGE 2 OF THE INCOME TAX RETURN, THE ASSESSING OFFICER WAS DUTY BOUND TO CONSIDER AND ALLOW THE SA ME. MOREOVER, THE SAID EXEMPTION WAS CLAIMED BY THE ASSESSEE EVEN IN THE STATEMENT OF TOTAL INCOME FILED BY HER ALONG WITH THE RETURN OF INCOME AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN IGNORING OR OVERLOOKIN G THE SAME WHEN THE ASSESSMENT WAS MADE BY HIM ON SCRUTINY UNDER SECTIO N 143(3) OF THE ACT. I.T.A. NO. 1172/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 5 OF 5 IN ANY CASE, AS CLARIFIED BY THE HONBLE SUPREME CO URT IN THE CASE OF GOETZ INDIA LIMITED (SUPRA), THE CLAIM MADE BY THE ASSESS EE EVEN OTHERWISE BY FILING THE REVISED RETURN CAN BE ENTERTAINED AND CO NSIDERED ON MERIT BY THE APPELLATE AUTHORITY AND THE LD. CIT(APPEALS), I N OUR OPINION, THEREFORE, WAS FULLY JUSTIFIED TO CONSIDER AND ALLO W THE CLAIM OF THE ASSESSEE FOR EXEMPTION IN RESPECT OF DIVIDEND INCOM E, LONG-TERM CAPITAL GAIN AND INTEREST ON PFF AND ON RBI BONDS AGGREGATI NG TO RS.82,81,685/- WHICH WAS OTHERWISE ALLOWABLE ON MERIT. WE, THEREFO RE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVIN G RELIEF TO THE ASSESSEE ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS TH IS APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 12, 2017. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 12 TH DAY OF MAY, 2017 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-30, KOLKATA, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 (2) SHEELA DEVI KANORIA, 2, SUNNY PARK, KOLKATA-700 019 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOL KATA; (4) COMMISSIONER OF INCOME TAX ,KOLKAT A (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.