SANJAY BABU KAMBLE, PUNE V. DCIT 26(2), MUMBAI

ITA 1253/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83583 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y P PANDIT
• Keywords: Bonafide belief; Period of limitation; Condonation of delay
• Section: 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 SANJAY BABU KAMBLE, C/O. MR.D.Y.PANDIT ADV., 1187/10, KRUPA, SHIVAJI NAGAR, PUNE 411 055. PAN:AAKPK 8303Q (APPELLANT ) VS. THE DCIT 26(2), MUMBAI 400002. (RESPONDENT) ITA NO.1249/MUM/2011, A.Y. 2003-04 SUHAS YASHWANT AMBEDKAR, C/O. MR.D.Y.PANDIT ADV., 1187/10, KRUPA, SHIVAJI NAGAR, PUNE 411 055. PAN:AADPA 3583B (APPELLANT ) VS. THE INCOME TAX OFFICER, WARD 26(2)(3), MUMBAI 400002 (RESPONDENT) APPELLANTS BY : SHRI Y.P.PANDIT RESPONDENT BY : SHRI TUSHAR DHAWAL SINGH DATE OF HEARING : 20/08/2014 DATE OF PRONOUNCEMENT : 20 /08/2014 ORDER PER I.P.BANSAL, J.M, ITA NO.1253 & 1254/MUM/2011 ARE APPEALS FILED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS DATED 06.09.2010 OF LD. CIT( A)-28, MUMBAI FOR ASSESSMENT YEARS 2002-03 AND 2003-04 RESPECTIVELY. ITA NO.12 49/MUM/2011 IS ALSO AN APPEAL FILED BY ANOTHER ASSESSEE AGAINST ORDER DAT ED 02.08.2010 PASSED BY LD. CIT(A)-28, MUMBAI FOR ASSESSMENT YEAR 2003-04. ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 2 2. FOR THE SAKE OF CONVENIENCE WE WILL TAKE UP TH E APPEALS FILED BY SHRI SANJAY BABU KAMBLE IN ITA NO.1253 & 1254/MUM/2011. THE DE CISION TAKEN IN THIS CASE WILL BE EQUALLY APPLICABLE TO ITA NO.1249/MUM/2011, IN WHICH ASSESSEE IS AGITATING CONFIRMATION OF CONCEALMENT PENALTY AMOUNTING TO RS .32,400/- AND THE APPEAL FILED BEFORE US IS BELATED BY 110 DAYS AND APPEAL FILED B EFORE LD. CIT(A) WAS ALSO BELATED BY EIGHT MONTHS AND APPEAL WAS DISMISSED BY LD. CI T(A) ON THE GROUND OF NON CONDONATION OF DELAY. 3. IN ITA NO.1253 & 1254/MUM/2011 THE ASSESSEE I S AGITATING THE LEVY OF CONCEALMENT PENALTY OF RS.7,884/- AND RS.42,969/- F OR ASSESSMENT YEARS 2002-03 AND 2003-04 RESPECTIVELY. THE LD. CIT(A) HAS DISMI SSED THE APPEAL FOR BOTH THE YEARS ON THE GROUND THAT APPEALS BEFORE HIM WERE FILED BE LATEDLY. APPEAL FOR ASSESSMENT YEAR 2002-03 WAS FILED LATE BY 19 MONTHS AND APPEAL FOR A.Y 2003-04 WAS LATE BY ONE YEAR. THE ASSESSEE IN THE PRESENT CASE IS AN EMPL OYEE OF BHARAT PETROLEUM CORPORATION LTD. (BPCL). THE COMPANY AS A STAFF WE LFARE MEASURE HAS TAKEN THE PREMISES OF ITS EMPLOYEES ON LEASE OF WHICH LEASE RENT AND MAINTENANCE CHARGES ARE PAID WHICH ARE TREATED AS PERQUISITE IN THE NATURE OF RENT FREE ACCOMMODATION. THE ASSESSEE DID NOT DISCLOSE THE LEASE RENT AND MAINTE NANCE CHARGES RECEIVED BY HIM AND ON SUCH ADDITION THE IMPUGNED CONCEALMENT PENAL TIES HAVE BEEN IMPOSED. 4. BEFORE US ALSO THE APPEALS FILED ARE BELATED. T HESE APPEALS ARE BELATEDLY FILED BY 76 DAYS FOR BOTH THE YEARS. 5. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT THERE ARE SEVERAL CASES IN WHICH SIMILAR ISSUE REGARDING CONCEALMENT PENALTY WAS RAI SED BY THE REVENUE AND PENALTIES WERE IMPOSED. IT WAS ALSO SUBMITTED THAT IN THOSE CASES ALSO THE APPEALS WERE BELATEDLY FILED BEFORE THE TRIBUNAL AS WELL AS BEFO RE LD. CIT(A) AND AFTER CONSIDERING THE FACTS IN THEIR ENTIRETY THE TRIBUNAL HAS COME TO A CONCLUSION THAT CONCEALMENT PENALTY WAS NOT LEVIABLE. IN THIS REGARD LD. AR HA S PLACED ON RECORD FOLLOWING DECISIONS OF THE TRIBUNAL IN WHICH ALL THE EMPLOYEE S OF BPCL WHO HAVE RECEIVED ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 3 SIMILAR RECEIPTS AND UPON WHOM CONCEALMENT PENALTI ES WERE LEVIED AND APPEALS WERE BELATEDLY FILED BEFORE ITAT AS WELL AS LD. CIT(A). 1. ITA NOS.1233,1234 & 1235/MUM/2011, A.Y.2003-04 IN THE CASE OF SHRI ANIL KUMAR DOKE VS. ITO ORDER DATED 27/11/2013. 2. ITA NO.1238 &1239/MUM/2011 FOR A.YS. 2002-03 & 2 003-04 IN THE CASE OF DEEPAK PANDURANG MORE VS. DCIT, ORDER DATED 27/11/2 013, 3. ITA NOS. 1250, 1251, 1252/MUM/2011 FOR A.YS. 200 2-03 TO 2004-05 IN THE CASE OF SHRI KRISHNAN RAMACHANDRAN VS. ITO, ORDER DATED 27/11/2013. 4. ITA NO.1922,1923,1924 &1925/MUM/2010 FOR A.Y 20 01-02 TO 2004-05 IN THE CASE OF SHRI ADRIN JOHN AUGUSTINE VS. ITO ORDER DAT ED 7 TH JAN.2011. IT WAS FURTHER SUBMITTED BY LD. AR THAT EVEN LD. CI T(A), AFTER RECEIVING THE ORDERS FROM ITAT, IN OTHER CASES HAS CONDONED THE DELAY AN D DELETED THE PENALTY. REFERENCE WAS MADE TO THE ORDER OF CIT(A) APPE AL NO.CIT(A)28/ITO26(2)(4)/73/10- 11 ORDER DATED 01.06.2011 IN THE CASE OF SHRI VIJAY D. PARULEKAR. COPY OF ALL THE ABOVE ORDERS ARE PLACED ON OUR RECORD IN THE SHAPE OF PAPER BOOK WHICH WAS ALSO GIVEN TO LD. DR. 5.1 FOR THE SAKE OF COMPLETENESS ORDER PASSED IN TH E CASE OF SHRI ANIL KUMAR DOKE VS. ITO (SUPRA) IS REPRODUCED BELOW: THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE SEPARATE ORDERS OF THE LD.CIT(A)-28, MUMBAI, COMMONLY DATED 29.07.2010, CONFIRMING THE PENALTY OF RS.33,115/-, RS.10,000/- AND RS.5000/- LEVIED BY THE AO UNDER SECTIONS 271(1)(C), 271(1)(B) AND 271F OF THE INCOME TAX ACT RESPECTIVE LY FOR THE ASSESSMENT YEAR 2003- 04. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 111 DAYS IN FILING THESE APPEALS. THE ASSESSEE HAS FILED PETITIONS FOR CONDONATION OF DELAY AND THE LD.AR OF THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT FILING THE APPEAL S WITHIN THE TIME PERIOD OF LIMITATION STATING THAT THE ASSESSEE COULD NOT REACH THE CHART ERED ACCOUNTANT IN TIME AND ALSO THE ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 4 ASSESSEE WAS NOT AWARE OF THE TIME FACTOR IN FILING THE APPEAL. THE LD.AR OF THE ASSESSEE HAS FURTHER DRAWN OUR ATTENTION THAT THE T RIBUNAL, IN SIMILAR MATTERS OF BPCL EMPLOYEES HAS CONDONED THE DELAY IN FILING THE APPE AL BEFORE THE TRIBUNAL. AFTER CONSIDERING THE RELEVANT RECORD, FACTS AND CIRCUMST ANCES OF THE CASE AS WELL AS THE REASONS EXPLAINED BY THE LD.AR, WE FIND THAT THE AS SESSEE HAS SUFFICIENT REASONS FOR NOT FILING OF THE APPEALS WITHIN TIME. IT IS A SETTLED LAW THAT WHILE CONDONING THE DELAY, THE COURT SHOULD TAKE A LENIENT VIEW. IT IS ALWAYS A QU ESTION WHETHER THE EXPLANATION AND REASONS FOR DELAY IS BONA FIDE OR MERELY A DEVISE T O COVER AN ULTERIOR PURPOSE SUCH AS LACHES ON THE PART OF THE LITIGANT OR AN ATTEMPT TO SAVE LIMITATION IN AS UNDERHAND WAY. WHEN IT IS FOUND ON RECORD THAT THE PARTY HAS NOT A CTED IN MALA FIDE BUT THE REASONS EXPLAINED ARE FACTUALLY CORRECT, THEN COURT SHOULD BE LIBERAL IN CONSTRUING THE SUFFICIENT CAUSE AND SHOULD LEAN IN FAVOUR OF SUCH PARTY. WHEN EVER SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE OPPOSED TO EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE HAS TO BE PREFERRED. JUSTICE ORIENTED APPROACH HAS TO BE TAKE N BY A COURT WHILE DECIDING THE MATTER FOR CONDONATION OF DELAY. HOWEVER, THIS DOES NOT MEAN THAT A LITIGANT GETS FREE LICENSE TO APPROACH THE COURT AT HIS WILL. IN VIEW OF THIS LEGAL AND FACTUAL POSITION, WE CONDONE THE DELAY OF 111 DAYS IN FILING THESE APPEA LS BEFORE THE TRIBUNAL AND TAKE UP THE MATTER FOR ADJUDICATION. 3. BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL WAS A SALARIED EMPLOYEE OF BHARAT PETROLEUM CORPORATION LTD. (BPCL). DURING THE ASSES SMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED A LEASE RENT OF RS.1 ,50,180/-, WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND THE SAM E WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS INCOME FROM HOUS E PROPERTY. CONSEQUENTLY, THE AO LEVIED THE IMPUGNED PENALTY OF RS.33,115/-, RS.10,0 00/- AND RS.5000/- RESPECTIVELY UNDER SECTIONS 271(1)(C), 271(1)(B) AND 271F U/S OF THE ACT. ON APPEAL AGAINST THE SAID PENALTIES, THE LD.CIT(A) SUMMARILY DISMISSED THE AP PEALS IN LIMINE AS THE APPEALS WERE FILED DELAY BY 21 MONTHS BY REJECTING THE APPLICATI ON FILED BEFORE HIM FOR CONDONATION OF DELAY. AGGRIEVED BY THE IMPUGNED ORDERS, THE ASSESS EE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.AR HAS STATED THAT THE EMPLOYE R M/S BPCL AND EMPLOYEES UNION, DURING WAGE NEGOTIATION, PREPARED SCHEME SO AS TO ENCOURAGE EMPLOYEES TO HAVE THEIR OWN HOUSES. UNDER THE SAID SCHEME, BPCL HAS P ROVIDED LOAN TO THE EMPLOYEES FOR CONSTRUCTING THEIR OWN HOUSE OR TO BUY PREMISES WIT H AN OPTION THAT THE EMPLOYEE HAS TO RECEIVE HOUSE RENT ALLOWANCE OR TO RECEIVE LEASE RE NT, IF HE HAS SELF OWNED PREMISES. AFTER THE END OF THE YEAR BPCL HAS CALCULATED THE V ALUE OF PERQUISITE IN RESPECT OF LEASE RENT PAID TO THE EMPLOYEES AS PER THE PROVISIONS OF INCOME TAX ACT AND ADDED THE SAID SUM IN THE SALARY CERTIFICATE. THE ASSESSEE LIKE OT HER EMPLOYEES THEREFORE, HAS BELIEVED THAT BPCL HAS PROPERLY COMPUTED HIS INCOME AND ACCO RDINGLY FILED INCOME OF RETURN ON BASIS OF SALARY CERTIFICATE. WHEN THE AO HAS ISSUED THE NOTICE U/S 148 OF THE INCOME TAX ACT, IN RESPONSE THE ASSESSEE HAS FILED THE RETURN OF INCOME BY SHOWING THE INCOME FROM HOUSE PROPERTY AS ADVISED BY THE TAX CONSULTANT. AC CORDINGLY, THE ASSESSEE WAS OF THE BONAFIDE BELIEF THAT THE MATTER WAS THEN CLOSED. SI NCE THE ASSESSEE WAS NOT AWARE OF ANY PROCEDURE IN RESPECT OF INCOME TAX ACT HE APPRO ACHED THE UNION LEADERS TO RESOLVE THE ISSUE. THE UNION LEADER HAD SEVERAL DISCUSSIONS WITH BPCL AND ALSO WITH INCOME TAX DEPARTMENT. THESE NEGOTIATIONS FAILED AND ALL T HESE EMPLOYEES WERE FINALLY TOLD TO INDIVIDUALLY HANDLE THE MATTER BY UNION LEADER. THE REAFTER THE EMPLOYEES CONSULTED TAX EXPERTS/C.A. ON THEIR OWN, WHO ADVISED THE EMPLOYEE S INCLUDING THE ASSESSEE TO FILE AN APPEAL BEFORE THE LD.CIT(A). ACCORDINGLY, ASSESSEE FILED THE APPEAL TO THE LD.CIT(A) ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 5 WHICH WAS DELAYED BY 21 MONTHS. WHEN THESE REASONS ARE EXPLAINED BEFORE THE THE LD.CIT(A), THE LD.CIT(A) OUGHT NOT TO HAVE REJECTED THE APPLICATION FOR CONDONATION OF DELAY. ON MERITS, THE LD.AR HAS STATED THAT THE CAS E OF THE ASSESSEE IS COVERED IN HIS FAVOUR BY VARIOUS DECISIONS OF THE TRIBUNAL AND CON TENTED THAT THE IMPUGNED PENALTIES ARE TO BE DELETED. ON THE OTHER HAND, THE LD.DR HAS RELIED ON THE ORDERS OF THE AO AND THE LD.CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE . 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS EXPLAINED THE REASON FOR THE DELAY IN FILING THE APPEALS BEFORE THE LD.CIT(A) AND THE CIT(A) WITHOUT CONSIDE RING THE EXPLANATION OF THE ASSESSEE, DISMISSED THE APPEAL. WE FIND THAT THERE IS A GENUI NE REASON FOR THE ASSESSEE IN NOT FILING THE APPEALS IN TIME, THEREFORE, WE CONDONE T HE DELAY BY TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO TH E ASSESSEE BEING A SMALL EMPLOYEE. GENERALLY, WHEN THE LD.CIT(A) HAS NOT DECIDED THE I SSUE ON MERITS, THE APPEAL IS RESTORED TO THE FILE OF THE LD.CIT(A) TO DECIDE THE SAME ON MERITS. IN THIS CASE WE FIND THAT THE ISSUE INVOLVED IS COVERED BY THE DECISIONS OF CO-ORDINATE BENCHES OF THE TRIBUNAL AND TAKING INTO CONSIDERATION THE POSITION OF THE A SSESSEE, NO PURPOSE IS GOING TO SERVE, IF THE ISSUE IS RESTORED TO THE FILE OF THE CIT(A), WHICH HAS ALREADY BEEN COVERED AS MENTIONED ABOVE. THEREFORE, WE PROCEED TO DECIDE TH E ISSUE ON MERITS. 5. IT IS PERTINENT TO MENTION THAT THE ISSUE OF LEV Y OF PENALTY U/S 271(1) (C) IN THE CASE OF THE PRESENT ASSESSEE IS COVERED BY VARIOUS DECIS IONS OF THE TRIBUNAL INCLUDING THE ONE IN THE CASE OF MR. RAVINDRA LAXMAN SATHE VS. ITO IN ITA NO. 2828/MUM/2008 FOR THE A.Y. 2001-02 WHICH HAS BEEN FOLLOWED BY THE TRIBUNA L IN THE CASE OF KIRAN BHAGWANT MHATRE IN ITA NOS. 6811 & 6812/MUM/2010 FOR THE AYS 2002-03 & 2003-04 ON SIMILAR FACTS PERTAINING TO THE EMPLOYEES OF BPCL. FOLLOWIN G THE SAID ORDERS OF THE TRIBUNAL, CONSIDERING THE SIMILAR FACTS, WE SET ASIDE THE ORD ER OF THE LD.CIT(A) AND DELETE THE IMPUGNED PENALTY OF RS.33,115/- LEVIED U/S 271(1)(C ) OF THE ACT. SINCE THE SAME REASONS CITED BY THE ASSESSEE ARE THE CAUSES FOR THE NON- C OMPLIANCE OF NOTICES AND NOT PROVIDING THE EXPLANATION FOR THE DELAY IN FILING THE RETURN, WHICH WE CONSIDER REASONABLE AND JUSTIFIED, THE PENALTIES OF RS.10,000/- AND RS.5000 /- LEVIED U/S 271(1)(B) AND 271-F ALSO STANDS DELETED. 6. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED . IN OTHER CASES ALSO SIMILAR DECISION HAS BEEN REND ERED BY THE TRIBUNAL. 5.2 KEEPING IN VIEW THE ABOVE POSITION AFTER HE ARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE ISSUES IN THE PRESENT APPEALS ARE COVERED BY THE AFOREMENTIONED DECISIONS OF THE TRIBUNAL AS THE FACTS IN THE PRESE NT APPEALS ARE IDENTICAL TO THE FACTS IN THE ABOVE CASES DECIDED BY THE TRIBUNAL. RESPEC TFULLY FOLLOWING THE ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 6 AFOREMENTIONED DECISIONS OF THE TRIBUNAL, WE CONDON E THE DELAY AND DELETE THE PENALTY. 6. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/08/2 014 ! ' #$ % &'( 20/08/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 20/08/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS ITA NO.1253/MUM/2011, A.Y. 2002-03 ITA NO.1254/MUM/2011, A.Y. 2003-04 ITA NO.1249/MUM/2011, A.Y. 2003-04 7 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 20/08/2014 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20/08/2014 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER