Tejbir Singh Bhandari, Kolkata V. ACIT, CIR-21, KOLKATA, Kolkata

ITA 1476/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1757 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2014
• Court: TRIBUNAL
• Department Lawyers: S ALLONG YADEN CIT LD
• Assessee Lawyers: S N GANGULI L D
• Keywords: Revised return
• Section: 148; 154

Judgement Text

1 ITA NO.1476/KOL/2014 TEJBIR SINGH BHANDARI IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDIC IAL MEMBER I.T.A NO. 1476/KOL/2014 A.Y: 2006-07 TEJBIR SINGH BHANDARI VS. ASSTT. COMMISSIONER OF PAN: ADEPB 6799G INCOME-TAX , CIR-21, KOL [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI S.N GANGULI, ADVOCATE, L D.AR FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL.CIT , LD.SR.DR DATE OF HEARING : 16-03-2017 DATE OF PRONOUNCEMENT : 24-05-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY ASSESSEE IS AGAINST THE ORDER DT. 06 -03-2014 OF CIT(A), XXIV, KOLKATA FOR THE ASSESSMENT YEAR 2006- 07, WHEREIN HE CONFIRMED THE IMPUGNED PENALTY OF RS.27,225/- IMPOS ED BY THE AO U/S. 271(1)(C) OF THE ACT. 2. THE ONLY ISSUE IN THIS APPEAL IS TO BE DECIDED A S TO WHETHER THE CIT- A JUSTIFIED IN CONFIRMING THE IMPUGNED PENALTY OF R S.27,225/- IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT IN THE FACTS AND C IRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,06,340/-. A CLAIM OF REFUND WAS ALLOWED AND RESPONDENT REVENUE ISSUED INTIMATION U/S. 143(1) OF THE ACT. THEREAFTER ON EXAMINATION O F FORM 16A, THE AO FOUND THAT THE ASSESSEE RECEIVED AN INCOME OF RS.36 ,920/- UNDER THE HEAD RENT INDIVIDUAL EMPLOYEE. ACCORDINGLY, THE A SSESSMENT WAS REOPENED BY ISSUING A NOTICE U/S. 148 OF THE ACT. I N RESPONSE TO WHICH, THE ASSESSEE FILED RECTIFIED RETURN ON 22-06-2007 S HOWING AN INCOME SUM OF RS.36,920/- UNDER THE HEAD INCOME FROM HOUSE P ROPERTY. BASING ON 2 ITA NO.1476/KOL/2014 TEJBIR SINGH BHANDARI WHICH, THE AO DETERMINED THE TOTAL INCOME OF THE AS SESSEE AT RS.6,97,610/-. THEREAFTER, THE ASSESSEE FILED APPLI CATION U/S. 154 OF THE ACT BEFORE THE AO, WHICH WAS ACCEPTED AND ACCORDING LY, THE TOTAL INCOME WAS ASSESSED AT RS.5,95,310/- AND ASSESSEE PAID A S UM OF RS.3,410/- TOWARDS TAX. 4. THE PENALTY PROCEEDINGS WERE INITIATED ON THE GR OUND THAT THE ASSESSEE INTENTIONALLY OMITTED TO DISCLOSE THE RECE IPT OF RS.36,920/- UNDER THE HEAD RENT INDIVIDUAL EMPLOYEE WITH A DESIRE T O CONCEAL THE SAID INCOME. IN RESPONSE TO WHICH, THE ASSESSEE SUBMITTE D MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIPT DOES NOT ATTRACT T HE CONDITIONS OF CONCEALMENT OF INCOME OR FURNISHING OF ANY INACCUR ATE PARTICULARS OF INCOME AND PLACED HIS RELIANCE ON THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF K.C. BUILDERS (2004) 265 ITR 5 62(SC). THE AO DID NOT ACCEPT THE CONTENTIONS OF ASSESSEE AND BY REJECTING THE SAME IMPOSED PENALTY OF RS.27,225/- U/S. 271(1)(C) OF THE ACT. 5. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT DUE TO MISJUDGMENT OF SALARY CERTIFICATE RECEIPT UNDER SELF LEASE SCHE ME FROM THE EMPLOYER, WAS MISTAKENLY NOT DISCLOSED IN THE ORIGINAL RETURN . SUBSEQUENTLY, IN THE REOPENING PROCEEDING THE ASSESSEE DISCLOSED THE SAM E AND PAID TAXES THEREON. THE ASSESSEE FURTHER SUBMITTED THAT HE COO PERATED IN THE RE- OPENING PROCEEDING AND DISCLOSED THE LEASE RENTAL I NCOME AS SOON AS THE MISTAKE CAME TO THE KNOWLEDGE OF THE ASSESSEE. THE CIT-A DID NOT CONSIDER THE SUBMISSIONS OF THE ASSESSEE AND CONFIR MED THE IMPUGNED PENALTY BY STATING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE MATERIAL BEFORE. I FOUND THAT THE APPELLANT NOT SHOWN INCOME OF RS.36,920/- AS SELF OCCUPIED H.P IN COME. THE ARGUMENT OF THE APPELLANT THAT THERE WAS NO DELIBERATE SUPPRESSION OR CONCEALMENT OF INCOME OF FACTS IS NOT CORRECT BECAUSE THE APPELLANT ONE SIDE TAKING T HE CREDIT OF TDS AND ANOTHER SIDE HE IS NOT SHOWING THE CORRECT INCOME. THE APPELLANT AT THE TIME OF FILING ORIGINAL RETURN THE ASSESSEE SUBMITTED FORM 16A ISSUED BY THE EMPLOYER SHOWING THE NATURE OF PAYMENT AS RENT INDIVIDUAL EMPLOYEE . THE FORM 16A ALSO SHOW ED THE DATE OF PAYMENT, AMOUNT CREDITED, INCOME TAX DEDUCTED. SO, THERE WAS ENOUGH EVIDENCE TO SHOW THAT THE OMISSION IS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PA RT OF THE ASSESSEE TO CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. WHEN THE ASSESSEE HAS KNOWLEDGE THAT HE HAS EARNED SOME INCOME IT WAS HIS OBLIGATION TO PAY TAX THEREON, PARTICULARLY WHEN HE HAS CLAIMED TDS OF RS.20,350/- IN THE ORIGINAL RETU RN, WHICH WAS DEDUCTED BY HIS EMPLOYER, WHILE ISSUING A CERTIFICATE IN FORM 16A T O COMPLY WITH THE PROVISIONS OF SEC. 3 ITA NO.1476/KOL/2014 TEJBIR SINGH BHANDARI 194J OF I.T ACT, 1961. THE ASSESSEE FAILED TO DISCL OSE HIS INCOME, BUT DID NOT FORGET TO CLAIM TDS ON THE UNDISCLOSED INCOME. THIS IS HARD T O BELIEVE. FROM THE ABOVE FACTS IT IS CLEARLY ESTABLISHED THAT APPELLANT DELIBERATELY NOT SHOWN THE INCOME. THEREFORE, I AM OF THE VIEW THAT THE AO RIGHTLY IMPOSED THE PENALTY OF RS.27,225/- U/S. 271(1) (C) OF THE I.T ACT. HEN CE, I CONFIRM THE PENALTY IMPOSED BY THE AO OF RS.27,225/- U/S. 271(1) (1) ( C) OF THE I.T ACT. THESE GROUNDS ARE NOT ALLOWED. 6. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE AO IMPOSED THE IM PUGNED PENALTY OF RS. 27,225/- FOR CONCEALMENT OF INACCURA TE PARTICULARS OF INCOME AND AS SUCH, THE CIT-A CONFIR MED THE SAME. IT IS ALSO OBSERVED THAT THE ASSESSEE OFFERED THE QUESTIONED AMOUNT IN HIS REVISED RETURN FILED IN RE SPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT AND PAID TAXES TH EREON WITH INTEREST. 7. THE OFFENCE OF CONCEALMENT IS A DIRECT ATTEMPT T O HIDE AN ITEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF T HE INCOME-TAX AUTHORITIES. IN THE INSTANT CASE THE LD. AR HAS CLA IMED THAT THERE WAS NO DELIBERATE ACT ON THE PART OF THE ASSESSEE FOR THE CONCEALMENT OF THE INCOME BUT THE ASSESSEE ON MISCONCEPTION OMITTED TO INCORPORATE THE ABOVE STATED INCOME IN THE ORIGINAL RETURN, BUT, RE CTIFIED THE SAME IN REOPENING PROCEEDING. 8. AT THIS JUNCTURE WE FIND IMPORTANT TO REPRODUCE THE PROVISIONS AS SPECIFIED IN EXPLANATION 1 TO SECTION 271 (1) OF TH E ACT WHICH READS AS UNDER 'EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE T O SUBSTANTIATE (AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS REL ATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM) THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PE RSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED'. 9. THE ABOVE EXPLANATION MAKES IT CLEAR THAT THE ST ATUTE VISUALIZED THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS TO B E WHOLLY DISTINCT AND 4 ITA NO.1476/KOL/2014 TEJBIR SINGH BHANDARI INDEPENDENT OF EACH OTHER. THE ABOVE STATED EXPLANATION 1 COMES INTO OPERATION WHEN, IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME OF ANY PERSON, THERE IS FAILURE TO OFF ER AN EXPLANATION OR AN EXPLANATION IS OFFERED WHICH IS FOUND TO BE FALSE B Y THE ASSESSING OFFICER OR THE FIRST APPELLATE AUTHORITY, OR AN EXPLANATION IS OFFERED WHICH IS NOT SUBSTANTIATED. IN SUCH A CASE, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME IS DEEMED TO REPRESENT T HE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. AS PER TH E PROVISION OF EXPLANATION 1 , THE ONUS TO ESTABLISH THAT THE EXPLANATION OFFERE D WAS BONA FIDE AND ALL FACTS RELATING TO THE SAME AND MATERIA L TO THE COMPUTATION OF HIS INCOME HAVE BEEN DISCLOSED BY ASSESSEE WILL BE ON THE PERSON CHARGED WITH CONCEALMENT. THE EXPLANATION OF THE ASSESSEE F OR THE PURPOSE OF AVOIDANCE OF PENALTY MUST BE AN ACCEPTABLE EXPLANAT ION. THE BURDEN IS ON THE ASSESSEE. IF HE FAILS TO DISCHARGE THAT BURDEN, THE PRESUMPTION THAT HE HAD CONCEALED THE INCOME OR FURNISHED INACCURATE PA RTICULARS THEREOF IS AVAILABLE TO BE DRAWN. HOWEVER IN THE INSTANT CASE THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT INCLUDING THE PARTICU LARS OF INCOME AS DISCUSSED ABOVE WHICH APPEARS TO BE BONAFIDE CONSID ERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WE ARE, THEREFORE, OF THE VIEW THAT THE ASSESSE E COULD NOT BE SAID TO HAVE FILED 'FALSE' RETURN WHEN IT DID NOT INCLUDE T HE AMOUNT OF RS.36,920/- UNDER LEASE RENTAL INCOME IN THE TAXABLE INCOME IN THE ABOVE FACTS & CIRCUMSTANCES. WE ALSO FIND FORCE IN THE SUBMISSION S OF THE LD.AR THAT THE ASSESSEE MISJUDGED THE FORM 16A AND DISCLO SURE OF AMOUNT IN REVISED RETURN AND PAYMENT OF TAXES THERE ON WITH INTEREST AND TAKING INTO CONSIDERATION THE SUBMISSI ONS, FACTS AND CIRCUMSTANCES OF THE CASE AND WE CANCEL THE IMP UGNED PENALTY OF RS.27,225/- IMPOSED BY THE AO AND CONFIR MED BY THE CIT-A. THEREFORE, THIS GROUND OF ASSESSEE IS ALLOWE D. 5 ITA NO.1476/KOL/2014 TEJBIR SINGH BHANDARI 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 -05-2017 SD/- SD/- P.M JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24 -05-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: SHRI TEJBIR SINGH BHANDARI, BUI LDING-2, FLAT- 4A, 9B, BECHULAL ROAD, KOLKATA-46. 2 RESPONDENT/RESPONDENT: THE ASSTT. COMMISSIONER OF I NCOME TAX, CIR-21, BAMBOO VILLA, KOLKATA-14. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR. P RIVATE SECRETARY H EAD OF OFFICE I TAT KOLKATA