Walia Khanam, Kolkata V. DCIT, Circle - 37, Kolkata, Kolkata

ITA 1453/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75013 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 28-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SABOORUL HASAN USMANI SRDR
• Assessee Lawyers: GAUTAM B ANERJEE
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER ITA NO. 1453 - 1454 / KOL / 2011 ASSESSMENT YEARS :2006-07 & 2007-08 WALIA KHANAM C/O J.N.BANERJEE & CO., 5 & 6, FANCY LANE, KOLKATA 700 001 [ PAN NO.AFTPK 7364 P ] V/S . DCIT, CIRCLE-37, 18, RABINDRA SARANI, KOLKATA 700 001 / APPELLANT .. / RESPONDENT) /BY ASSESSEE SHRI GAUTAM BANERJEE, AR /BY REVENUE SRI SABOORUL HASAN USMANI, SR-DR /DATE OF HEARING 19-12-2013 /DATE OF PRONOUNCEMENT 27-01-2014 / // / O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THESE TWO APPEALS BY REVENUE ARE ARISING OUT OF DI FFERENT ORDERS OF COMMISSIONER OF INCOME-TAX (APPEALS)-XXIV, KOLKATA DATE 30-08-2011. ASSESSMENTS WERE FRAMED BY DCIT, CIRCLE-37 KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE THEIR DIFFERENT ORDERS DATED NIL AND DATED 31-12-2009 FOR ASSESSMEN T YEARS 2006-07 AND 2007-08 RESPECTIVELY. THE PENALTY FRAMED BY DCIT, C IRCLE-37, KOLKATA U/S. 271(1) OF THE ACT VIDE HIS ORDER DATED 11-06-2010. 2. THE ONLY ISSUE IN THESE TWO APPEALS OF ASSESSEE IS AGAINST THE DIFFERENT ORDERS OF CIT(A) CONFIRMING THE LEVY OF PENALTY IN BOTH THE AYS 2006-07AND ITA NO.1453-1454/KOL/2011 A.YS. 06-07 & 07-08 WALIA KHANAM KOL V. DCIT CIR-37 KOL PAGE 2 2007-08. FOR THIS, ASSESSEE HAS RAISED THE COMMON G ROUNDS AND THE RELEVANT GROUNDS AS RAISED IN AY 2006-07 IN ITA NO.1453/KOL/ 2011 READS AS UNDER:- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEVY OF PENALTY US. 271(1) OF RS.21898/- IS WRONG, ARBITRA RY, EXCESSIVE, ERRONEOUS, UNREASONABLE, UNLAWFUL, BEYOND JURISDICT ION, TIME-BARRED, UNJUST AND AGAINST THE PRINCIPLES OF EQUITY AND NAT URAL JUSTICE. 2. FOR THAT EITHER IN THE PROCESS OF ASSESSMENT OR IN THE PROCESS OF LEVY OF PENALTY, THE AO DID NOT SHOW HIS SATISFACTION AB OUT EXISTENCE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IN RESPECT OF THE ADDITION MADE TO TOTAL INCOME, WHICH IN FACT WAS DI SCLOSED VOLUNTARILY AND IN GOOD FAITH BY THE ASSESSEE, THUS MAKING THE CAUSE OF ACTION TO LEVY PENALTY U/S. 271(1) AS VOID, NON-EXISTENT AND NON-EST. SIMILAR IS THE ISSUE IN AY 2007-08 IN ITA NO. 1454/ KOL/2011, WHICH READS AS UNDER:- 4. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEVY OF PENALTY U/S.271(1) OF RS.19,855/- IS WRONG, ARBITR ARY, EXCESSIVE, ERRONEOUS, UNREASONABLE, UNLAWFUL, BEYOND JURISDICT ION, TIME-BARRED, UNJUST AND AGAINST THE PRINCIPLES OF EQUITY AND NAT URAL JUSTICE. 5. FOR THAT EITHER IN THE PROCESS OF ASSESSMENT OR IN THE PROCESS OF LEVY OF PENALTY, THE AO DID NOT SHOW HIS SATISFACTION AB OUT EXISTENCE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IN RESPECT OF THE ADDITION MADE TO TOTAL INCOME, WHICH IN FACT WAS DI SCLOSED VOLUNTARILY AND IN GOOD FAITH BY THE ASSESSEE, THUS MAKING THE CAUSE OF ACTION TO LEVY PENALTY U/S.271(1) AS VOID, NON-EXISTENT AN NON-EST. 3. BRIEFLY STATED FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER REQUIRED THE ASSESSE E TO EXPLAIN SHORT TERM CAPITAL GAINS (STCG) DISCLOSED IN THE RETURN OF INC OME. THE ASSESSEE STATED THAT STCG IN THE RETURNED INCOME FOR AYS 2006-07 & 2007-08 WERE UNDER- STATED BECAUSE THE AMOUNT OF SECURITY TRANSACTION T AX (STT) DEDUCTED FROM THE SALE PROCEED OF MUTUAL FUND WAS OMITTED TO BE C ONSIDERED. ACCORDINGLY, THE RESULTANT FIGURE BECAME LOWER AMOUNT OF SALE FI GURE WHILE COMPUTING STCG. THE QUANTUM OF STT OF RS.1,95,352/- IN AY 200 6-07 AND RS.1,76,960/- IN AY 2007-08. ACCORDING TO LD. COUNS EL FOR THE ASSESSEE, THIS WAS DUE TO BONA FIDE MISTAKE AS THE ASSESSEE COULD NOT ANTICIPATE FROM THE ITA NO.1453-1454/KOL/2011 A.YS. 06-07 & 07-08 WALIA KHANAM KOL V. DCIT CIR-37 KOL PAGE 3 BANK DOCUMENT THAT THERE WAS A PAYMENT OF STT WHICH WAS NEVER CAME IN THE BANK DOCUMENT OR BANK TRANSACTION. ACCORDINGLY, THERE WAS STCG RETURNED AT A LESSER FIGURE OR THERE WAS A UNDER-ST ATEMENT BUT AO LEVIED THE PENALTY U/S. 271(1) FOR AN AMOUNT OF RS.21,898/- IN AY 2006-07 AND AMOUNT OF RS.19,855/- IN AY 2007-08. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO BY FOLLOWING THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS V. DHARMENDRA TEXTILES PR OCESSORS (2008) 306 ITR 277 (SC) BY HOLDING AS UNDER:- THE EXPLANATIONS APPENDED TO SECTION 271(1) OF TH E INCOME-TAX ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILI TY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULAR S WHILE FILING THE RETURN. THE JUDGMENT IN DILIP N SHROFFS CASE [2007 ] 8 SCALE 304 (SC) (3) HAS NOT CONSIDERED THE EFFECT AND RELEVANC E OF SECTION 276C OF THE INCOME-TAX ACT. THE OBJECT BEHIND THE E NACTMENT OF SECTION 271(1) READ WITH THE EXPLANATIONS INDICATE S THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVI L LIABILITY. WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTI ON UNDER SECTION 276C OF THE INCOME-TAX ACT. SIMILAR IS THE POSITION IN FINDING OF AY 2007-08. AGGRIEVED, ASSESSEE CAME IN SECOND APPEAL BEFORE US. 4. WE FIND THAT THE ONLY VARIATION IN TOTAL INCOME AS PER RETURN OF INCOME AND THAT AS PER ASSESSMENT ORDER IS RS.1,95,352/- W HICH ARISES DUE TO WRONG REPORTING OF STCG. THE MISTAKE ARISES FOR THE REASO N THAT IN SOME CASES OF SALE OF SHARES /MUTUAL FUNDS, THE ENTRUSTED AGENCY REDUCED THE STT ELEMENT FROM THE SALE PROCEEDS THUS REDUCING THE STCG. THE DETAIL OF SUCH REDUCTION WHICH IS REFLECTED IN ACCOUNTS STATEMENT OF RESPECT IVE FUNDS WAS NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF FILING OF RETURN F OR WANT OF NECESSARY STATEMENTS. THE OMISSION COULD BE DETECTED ONLY ON RECEIPT OF THE DOCUMENTS ITA NO.1453-1454/KOL/2011 A.YS. 06-07 & 07-08 WALIA KHANAM KOL V. DCIT CIR-37 KOL PAGE 4 AT THE TIME OF ASSESSMENT. IMMEDIATELY ON DETECTION OF THIS OMISSION, THE MATTER WAS REPORTED AND ON ASSESSMENT, THE TAX WAS ALSO PAID. THE TAX EFFECT @ 10% AND APPLICABLE SURCHARGE ON THIS INCOME WORKS OUT TO A SMALL AMOUNT OF RS.19,925/. IT IS INCONCEIVABLE THAT FOR A SMALL AMOUNT OF RS.19,925/-, THE ASSESSEE WILL TRY TO CONCEAL HER INCOME OR FURNISH INACCURATE PARTICULARS TO EVADE TAX. THE ASSESSEE PAID TAX EXCEEDING RS.22.00 LAKHS IN PRESENT AY AND WAS NEVER REQUIRED TO PAY PENALTY US. 271(1). WE ARE OF THE VIEW THAT SIMPLY BECAUSE THERE IS DIFFERENCE IN ASSESSED INCO ME COMPARED TO RETURNED INCOME, DOES NOT MAKE THE ASSESSEE LIABLE TO PAY PE NALTY. HONEST, GENUINE, BONA FIE MISTAKES ARE VIEWED DIFFERENTLY FROM CONCE ALMENT OR INTENTIONAL INACCURACIES SO THAT THE ASSESSEE IS NOT VISITED WI TH PENALTY. THE ASSESSEE VOLUNTARILY AND IN GOOD FAITH INTIMATED THE AO IN C OURSE OF ASSESSMENT PROCEEDINGS ABOUT SORT REPORTING OF INCOME BY WAY O F STGC AMOUNTING TO RS.1,95,532/- AND ALSO AGREED TO PAY TAX THEREON AN D ACCEPTED AND ACTED ON THE BASIS OF THIS INTIMATION IN COURSE ASSESSMENT A ND ASSESSED THE ASSESSEE FOR INCREMENTAL INCOME STATED IN THE RETUNED INCOME . THE ASSESSEE PAID THE ASSESSED TAX OF RS.26,494/- ON 14-03-2009. THUS, TH ERE WAS FULLY COMPLIANCE OF LAW AND FULL COOPERATION ON BEHALF OF THE ASSESS EE IN COURSE OF ASSESSMENT AND TAX PAYMENT. ACCORDINGLY, WE ARE OF THE CONSIDE RED VIEW THAT THE ASSESSEE IN SUCH FACTS, IS NOT LIABLE FOR PENALTY U /S. 271(1) OF THE ACT. WE DELETE THE PENALTY. SIMILAR ARE THE FACTS IN BOTH Y EARS, HENCE, PENALTY OF BOTH THE YEARS ARE DELETED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 27/ 01/2014 SD/- SD/- (ABRAHAM P GORGE) ( MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP ITA NO.1453-1454/KOL/2011 A.YS. 06-07 & 07-08 WALIA KHANAM KOL V. DCIT CIR-37 KOL PAGE 5 #- 27/01/2014 . . . . /. /. /. /. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. 4 / CONCERNED CIT 4. 4- / CIT (A) 5. . , , / DR, ITAT, KOLKATA 6. ; / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,