BHARAT DHANYAKUMAR WADKAR, PUNE V. ITO 26(2)(2), MUMBAI

ITA 1236/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100671 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 22-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 10-02-2011
• Court: TRIBUNAL
• Department Lawyers: RAKESH KUMAR AGARWAL
• Assessee Lawyers: D Y PANDIT
• Keywords: Salary income; Bonafide belief; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 1236/M/2011 (AY:2003 - 2004 ) I.T.A. NO. 1237/M/2012 (AY:2004 - 2005 ) MR. BHARAT DHANYAKUMAR WADKAR, C/O.MR. D.Y. PANDIT, ADV. 1187/10, KRUPA, SHIVAJINAGAR, PUNE - 411005. / VS. INCOME TAX OFFICER, WARD 26(2)(2), MUMBAI - 400002. ./ PAN : AAAPW4546K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI D.Y. PANDIT / RESPONDENT BY : SHRI RAKESH KUMAR AGARWAL / DATE OF HEARING : 22.07.2015 / DATE OF PRONOUNCEMENT : 05 .0 8 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE CIT (A) - 28, MUMBAI COMMONLY DATED 3.9.2010 FOR THE ASSESSMENT YEARS 2003 - 2004 AND 2004 - 20 05. SINCE, THE IDENTICAL ISSUE I.E., THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, IS RAISED BY THE ASSESSEE IN BOTH THE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. 2. SINCE, THE GROUNDS RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF REFERENCE, THE GROUNDS RAISED IN THE ASSESSMENT YEAR 2003 - 04 ARE EXTRACTED AS UNDER: 1. THE LD CIT (A) ERRED IN CONFIRMING THE PENALTY OF RS. 11,086/ - LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. 2. (A) THE AO WHILE TREATING THE RENT OF RS. 53,520/ - PAID BY EMPLOYER OF THE ASSESSEE BPCL TO THE ASSESSE AS INCOME FROM HOUSE PROPERTY, FAILED TO TAKE INTO ACCOUNT THAT THE EMPLOYER BPCL HAS ALREADY CALCULATED THE AMOUNT OF RS. 44,235/ - AS VALUE OF PERQUISIT E OF PROVIDING RENT FREE ACCOMMODATION AS PERQUISITE U/S 17(2) OF THE ACT AND ADDED IT AS A PART OF SALARY BY APPLYING THE PROVISION OF RULE 3(1) OF IT RULES AND DID NOT REDUCE THE SAID VALUE OF 2 PERQUISITE OF RS. 44,235/ - FROM THE COMPUTATION OF INCOME AT THE TIME OF REASSESSMENT. THIS RESULTED IN THE DOUBLE TAXATION OF INCOME. (B) IN VIEW OF THE ABOVE FACT, THE AO AS WELL AS THE CIT (A) OUGHT TO HAVE HELD THERE WAS NO WILFUL CONCEALMENT OF ANY INCOME BUT THERE WAS CHANGE OF VIEW BY TAXING INCOME UNDER DIF FERENT HEAD IE TAXING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM SALARY AND NO PENALTY SHOULD HAVE BEEN LEVIED. (C) THE LD CIT (A) FAILED TO CONSIDER APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL. THE LD CIT (A) SHOULD HAVE CONSIDERED THE DELAY AS A GENUINE REASON SINCE THE APPELLANT BY THE COMPANY AND THE EMPLOYEES UNION, WHICH WITHHELD HIM FROM GOING FOR INDIVIDUAL APPEAL. NO SOONER THE APPELLANT CAME TO KNOW ABOUT THE TECHNICAL PROCEDURES HE IMMEDIATELY COMPL IED WITH BY FILING THE APPEAL. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS SUBMITTED THAT THE APPELLANT HAD NO WILFUL INTENTION TO CONCEAL THE INCOME OR ANY DELIBERATE INTENTION TO DEFRAUD THE REVENUE AS HE WAS UNDER THE BONAFIDE BELIEF THAT WHATE VER INCOME RECEIVED FROM THE EMPLOYER WAS INCLUDED IN THE SALARY BY EMPLOYER COMPANY AND SUBJECTED TDS. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THERE IS A DELAY OF 76 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME LIMITATION. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE APPLICATION FOR CONDONATION OF DELAY IN BOTH THE APPEALS, COPY OF WHICH IS PLACED AT PAGE 45 OF THE PAPER BOOK, AND READOUT THE RELEVANT CONTENTS OF THE S AID APPLICATION WHICH READ AS UNDER: .......... .......... .........I FILED, APPEALS TO THE CIT (A). THE SAID APPEALS WERE DELAYED BY 10 MONTHS FOR AY 2003 - 04 AND 5 DAYS FOR AY 2004 - 05. APPLICATION OF CONDONATION OF DELAY WAS MADE TO THE CIT (A) - 28, MUM BAI WHO SUMMARILY REJECTED THE APPLICATION AND DISMISSED BOTH THE APPEALS IN LIMINE. AGAINST THE SAID ORDERS OF THE CIT (A), AN APPEAL IS FILED BEFORE THE HONBLE TRIBUNAL . UNFORTUNATELY, I COULD NOT APPROACH C.A. BAY JOSE, WHO WAS HANDLING SIMILAR CASES OF OTHER EMPLOYEES OF BPCL, IN TIME, BECAUSE OF PLACE OF MY JOB. I WAS ALSO NOT AWARE ABOUT THE TIME FACTOR IN FILING THE APPEAL. THUS, THERE IS A DELAY OF 76 DAYS IN FILING APPEALS FOR AY 2003 - 2004 & 2004 - 05 BEFORE YOUR HONOUR. THE DELAY IS NOT INTENTI ONAL BUT MAINLY BECAUSE OF LACK OF KNOWLEDGE OF LEGAL PROCEEDINGS PARTICULARLY OF TAX MATTERS. ............. ............. 4. AFTER HEARING THE SUBMISSIONS OF THE LD COUNSEL AS WELL AS THE REASONS FOR DELAY, WE ARE OF THE OPINION THAT THERE IS A SUFFICIENT REASON THAT PREVENTED THE ASSESSEE TO FILE THE PRESENT APPEALS BEFORE THE TRIBUNAL WITH A DELAY OF 76 DAYS. CONSIDERING THE SAME, WE CONDONE THE DELAY AND PROCEED TO ADJUDICATE THE APPEALS ON MERITS. 3 5. REFERRING THE TO THE ABOVE GROUNDS OF APPEAL, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT RELATING TO ADDITION ON ACCOUNT OF TREATMENT GIVEN TO THE RENTAL RECEIPT / PERQUISITE IS THE ISSUE. IT IS IDENTICAL TO THAT OF THE ONE DECIDED BY THE ITAT IN VARIOUS DECISIONS NAMELY; (I) DEEPAK PANDURANG MORE VS. DCIT IN ITA NOS. 1238 & 1239/M/2011 (AYS 2002 - 03 AND 2003 - 04); (II) SHRI ADRIAN JOHN AUGUSTINE VS. ITO IN ITA NOS. 1922, 1923, 1924 AND 1925/MUM/2010 (AYS 2001 - 02 TO 2004 - 05); (III) SHRI A NIL KUMAR DOKE VS. ITO IN ITA NOS. 1233, 1234 AND 1235/M/2011 (AY 2003 - 2004); (IV) SHRI KRISHNAN RAMACHANDRAN VS. ITO IN ITA NOS. 1250, 1251, 1252/M/2011 (AYS 2002 - 03 TO 2004 - 05) AND OTHERS, WHEREIN THE ITAT DECIDED THE ISSUE OF LEVY OF PENALTY IN FAVOUR O F THE ASSESSEE. IT IS THE PRAYER OF THE LD COUNSEL THAT CONSIDERING THE COMMONNESS OF THE ISSUE DECIDED BY THE TRIBUNAL IN VARIOUS DECISIONS (SUPRA), THE ISSUE INVOLVED IN THE PRESENT APPEALS MAY ALSO BE DECIDED THE IN THE SAME LINES. 6. ON THE OTHER HAND , LD DR FOR THE REVENUE DUTIFULLY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISIONS OF THE TRIBUNAL (SUPRA). ON PERUSAL OF THE SAID ORDERS OF THE ITAT, WE FIND THE SAME ARE RELEVANT TO THE ISSUE UNDER CONSIDERATION. CONSIDERING THE COMMONNESS OF THE ISSUE INVOLVED IN ALL THE ABOVE CITED TRIBUNALS ORDER AS WELL AS THE PRESENT APPEALS, WE FIND IT RELEVANT TO EXTRACT THE RELEVANT PORTION FROM TH E DECISION OF THE TRIBUNAL IN THE CASE OF SHRI KRISHNAN RAMACHANDRAN (SUPRA) AND PARA 5 IS EXTRACTED CONSIDERING ITS SIGNIFICANCE AS WELL AS FOR THE SAKE COMPLETENESS OF THIS ORDER AS FOLLOWS: - 5. IT IS PERTINENT TO MENTION THAT THE ISSUE OF LEVY OF PENA LTY U/S 271(1)(C) IN THE CASE OF PRESENT ASSESSEE IS COVERED BY VARIOUS DECISIONS OF THE TRIBUNAL INCLUDING THE ONE IN THE CASE OF MR. RAVINDRA LAXMAN SATHE VS. ITO IN ITA NO.2828/M/2008 FOR THE AY 2001 - 2002, WHICH HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF KIRAN BHAWANT MHATRE IN ITA NOS. 6811 & 5812/MUM/2010 FOR THE AYS 2002 - 2003 AND 2003 - 2004 ON SIMILAR FACTS PERTAINING TO THE EMPLOYEES OF BPCL. FOLLOWING THE SAID ORDERS OF THE TRIBUNAL, CONSIDERING THE SIMILAR FACTS, WE SET ASIDE THE ORDER OF THE CIT (A) AND DELETE THE IMPUGNED PENALTIES OF RS. 9,792/ - ; RS. 22,832/ - AND RS. 14,421/ - LEVIED / CONFIRMED UNDER SECTION 271(1)(C) OF THE ACT, RESPECTIVELY FOR THE AYS 2002 - 2003, 2003 - 04 AND 2004 - 05. 8. THUS, THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED IN THIS CASE ON THE PERQUISITE VALUE OF RENT FREE ACCOMMODATION. THERE IS DIFFERENCE IN THE TREATMENT 4 GIVEN TO THE SAID RENT. ON IDENTICAL ISSUE AND IN RESPECT OF THE BPCL EMPLOYEES, THE TRIBUNAL HELD THAT THEY ARE NOT CASES FOR LEVY OF SAID PENA LTY. THIS ISSUE IS COMMON IN BOTH THE YEARS UNDER CONSIDERATION. CONSIDERING THE COVERED NATURE OF THE ISSUE BY THE VARIOUS ORDERS OF THE TRIBUNAL, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) IS REQUIRED TO BE SET ASIDE. WE ORDER ACCORDINGLY, AN D DELETE THE PENALTIES IE RS. 43,034/ - FOR AY 2003 - 04 AND RS. 11,086/ - FOR THE AY 2004 - 05. THUS, THE ALL THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 05 TH A U G U S T , 2015. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKRA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 5 . 8 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI