Sh. Nitin Chauhan , Sirmour V. ITO, Ward, Nahan

ITA 1312/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3433 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Bonafide belief; Question of law; TDS
• Section: 271(1)(c); 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1312/CHD/2018 ASSESSMENT YEAR: 2008-09 SH. NITIN CHAUHAN VS. THE ITO C/O PARIKSHIT AGGARWAL, WARD CHARTERED ACCOUNTANT NAHAN, HIMACHAL PRADESH H.NO. 1238, SECTOR-22B CHANDIGARH PAN NO. AEAPC5728F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PARIKSHIT AGGARWAL, CA REVENUE BY : SHRI. MANJIT SINGH, SR. DR DATE OF HEARING : 20/02/2019 DATE OF PRONOUNCEMENT : 20/02/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 14/08/2018 OF LD. CIT(A)-SHIMLA, HIMACHAL PRADESH. 2. THE ONLY GRIEVANCE OF THE ASESSEE IN THIS APPEAL RELATES TO THE SUSTENANCE OF PENALTY OF RS. 85,376/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 30/03/2009 DECLARING AN INCOME OF RS. 1,52,030/- AN D AGRICULTURE INCOME OF RS. 4,50,000/-. HOWEVER THE ASSESSMENT WAS FRAMED AN IN COME OF RS. 4,28,320 + AGRICULTURE INCOME OF RS. 4,50,000/- VIDE ORDER DT. 11/03/2015 UNDER SECTION 147 / 143(3) OF THE ACT. THE ADDITION OF RS. 2,76,294/- WAS MADE TO THE INCO ME OF THE ASSESSEE ON ACCOUNT OF ACCRUED INTEREST ON FDRS WHICH WAS DECLARED IN THE RETURN OF INCOME. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE SUBMITTED THAT HE WAS UNDER THE BONAFIDE B ELIEF THAT INTEREST INCOME FROM H.P. STATE CO-OPERATIVE AGRICULTURE & RURAL DEVELOP MENT BANK LTD. WAS EXEMPT FROM INCOME TAX. THE ASSESSING OFFICER HOWEVER DID NOT F IND MERIT IN THE SUBMISSIONS OF THE ASSESEE AND LEVIED THE PENALTY OF RS. 85,376/- UNDE R SECTION 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) OF THE ACT. 5. NOW THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WHILE INITIATING THE PENALTY PROCEEDING WAS NOT SURE AS T O WHETHER THERE WAS CONCEALMENT OF 2 INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. HE DREW MY ATTENTION TOWARDS THE ASSESSMENT ORDER DT. 11/03/2015 WHEREIN IN PARA 3.2 THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDING FOR CONCEALMENT OF INCOME AN D FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT WAS FURTHER SUBMITTED THA T THE ASSESEE WAS UNDER BONAFIDE BELIEF THE INTEREST INCOME FROM THE CO-OPERATIVE BA NK WAS NOT SUBJECT TO TAX SINCE NO TDS WAS DEDUCTED ON THE INTEREST RECEIVED FROM THE SAID BANK, HOWEVER WHEN THIS WAS BROUGHT TO THE NOTICE OF THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDING, THE INCOME WAS DECLARED AND DUE TAXES WERE PAID. IT WAS CONTENDED THAT THE ASSESSEE DID NOT FURNISH WRONG PARTICULARS OF INCOME, THEREF ORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INITIATING THE PENALTY PROCEEDING FOR FURNISHING OF THE INACCURATE PARTICULARS OF INCOME. IT WAS ALSO STATED THAT IN THE PENALTY ORDE R THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) BY CONSIDERING BOTH THE LIMB I.E; FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ALSO FOR CONCE ALMENT OF INCOME. IT WAS STATED THAT THE ASSESSING OFFICER IN THE NOTICE UNDER SECT ION 274 R.W.S 271 OF THE ACT DID NOT POINTED OUT AS TO WHETHER THERE WAS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, COPY OF THE SAID NOTICE DT. 11/03/2015 WAS FURNISHED WHICH IS PLACED ON RECORD. IT WAS CONTENDED THAT TH IS ISSUE IS SQUARELY COVERED BY THE ORDER DT. 17/01/2019 OF THE ITAT, AMRITSAR, CAMP BE NCH AT JALANDHAR IN ITA NO. 709/ASR/2017 FOR THE A.Y. 2013-14 IN THE CASE OF SM T. HARPREET KAUR VS. ITO, WARD-3(4) JALANDHAR, COPY OF THE SAID ORDER WAS FURNISHED WHI CH IS PLACED ON RECORD. RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS: CIT & ANR. VS. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR HC) CIT & ANR VS. M/S SSAS EMERALD MEADOWS, CC NO. 114 85 OF 2016 (SC) CIT VS. DEE CONTOL AND ELECTRIC PVT.LTD. IN ITA NO. 82 OF 2017 (ALL HC) PR. CIT VS. BAISETTY REVATHI, 398 ITR 88 (AP HC) SMR. GURDEEP KARU & ANR. VS. DCIT IN ITA NO. 459 TO 462/CHD/2015 7. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AS SESEE DID NOT DECLARE THE INCOME RECEIVED AS AN INTEREST FROM THE CO-OPERATIVE BANK AND WHEN CONFRONTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS DECLARED BY THE ASSESSEE THEREFORE THE CONCEALMENT OF INCOME WAS THERE AND THE ASSESSING O FFICER RIGHTLY LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE RELIANCE WA S PLACED ON THE FOLLOWING CASE LAWS : SH MUNISH JAIN, LUDHIANA VS. THE DCIT, CC-II, LUDHI ANA IN ITA NO. 254 & 255/CHD/2017, A.Y. 2010-11 & 2 011-12, ORDER DT. 19/03/2018 MAK DATA PVT. LTD. VS. CIT 358 ITR 593 (SC) 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED F ACT THAT THE ASSESSING OFFICER IN THE NOTICE DT. 11/03/2015, ISSUED UNDER SECTION 274 R.W.S 271 OF T HE ACT HAS NOT CLEARLY MENTIONED AS TO WHETHER THERE WAS CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. HE SIMPLY TICKED THE PRINTED PERFORMA OF THE NOTICE. 3 A SIMILAR ISSUE HAVING IDENTICAL FACTS HAS BEEN ADJ UDICATED BY THE ITAT AMRITSAR CAMP BENCH AT JALANDHAR IN CASE OF SMR. HARDEEP KAUR VS. ITO, JAL ANDHAR (SUPRA) WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 7 AND 8 OF THE ORDER DT. 17 /01/2019 WHICH READ AS UNDER: 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT AN IDEN TICAL ISSUE HAVING SIMILAR FACTS HAS BEEN ADJUDICATED BY THE ITAT DELHI BENCH A, NEW DELHI IN THE CASE OF AMAN MEHTANI VS DCIT (SUPRA) WHEREIN ONE OF US (VICE PRESIDENT) IS A CO- SIGNATORY IN THE SAID ORDER DATED 22.11.2017, IT HAS BEEN HELD AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO CONCEALME NT IN THE PRESENT CASE. THE ASSESSEE HAS ALSO FILED ALL THE DETAILS DURING THE REGULAR A SSESSMENT PROCEEDINGS. FROM THE NOTICE DATED 28.12.2011 PRODUCED BY THE LD. AR DURING THE HEARING, IT CAN BE SEEN THAT THE ASSESSING OFFICER WAS NOT SURE UNDER WHICH PROVISIO NS OF SECTION 271 OF THE INCOME TAX ACT, 1961, THE ASSESSEE IS LIABLE FOR PENALTY. THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF M/S SSA EMERALD M EADOWS. THE EXTRACT OF THE HONBLE KARNATAKA HIGH COURT IN M/S. SSA EMERALD MEADOWS A RE AS UNDER WHICH WAS CONFIRMED BY THE HONBLE APEX COURT: '3. THE TRIBUNAL HAS ALL OWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(L)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT T HE ACT) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(L)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RE NDERED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTO RY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT O F THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDINGLY DISMISSED. 8. SINCE, THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE AFORESAID REFERRED TO CASE. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO OR DER DATED 22.11.2017, THE IMPUGNED PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. C IT(A) IS DELETED. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DT. 17/01/2019, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, LEVIED BY THE ASSESSING OFFIC ER AND SUSTAINED BY THE LD. CIT(A) IS DELETED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20/02/2019. ) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 20/02/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR