M/s. Rajeshwar Kaur, Muktsar (Punjab) V. The Income-tax Officer, Muktsar

ITA 170/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8774 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.170(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN: ACLPK7925P SMT. RAJESHWAR KAUR VS. INCOME TAX OFFICER, MUKTSAR. WARD 2(II), MUKTSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. ASHWANI KUMAR, CA RESPONDENT BY: SH. R.K. SHARDA, DR DATE OF HEARING: 29/02/2016 DATE OF PRONOUNCEMENT: 31/03/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2008-09, AGAINST THE ACTION OF THE LD. CIT(A) IN UPHOLDING T HE LEVY OF PENALTY OF RS.90,600/- UNDER SECTION 271(1)(C) OF THE I.T. AC T, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, AN OLD LADY, FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-0 9, DECLARING AN INCOME OF RS.3,77,620/-. BY THE ASSESSMENT ORDER, T HE AO ASSESSED HER INCOME AT RS.6,83,610/- BY MAKING THE ADDITION FOR BANK FDR INTEREST NOT DECLARED IN THE RETURN OF INCOME, AMOUNTING TO RS.2,93,187/- AND AN ADDITION OF THE DIFFERENCE IN RATE OF INTEREST, AMOUNTING TO RS.17,800/-, WAS ALSO MADE. ITA NO.170(ASR)/2014 ASSESSMENT YEAR: 2008-09 2 3. IN THE PENALTY PROCEEDINGS, THE ASSESSEE STATED THAT SHE WAS AN OLD HOUSELADY; THAT HER SOURCE OF INCOME WAS FROM RENT AND THE INTEREST FROM HER BANK DEPOSITS; THAT DURING HER LIFETIME, SHE HA D TO OPEN ABOUT ELEVEN SAVINGS ACCOUNTS WITH A NUMBER OF BANKS AT MUKTSAR AND CHANDIGARH; THAT THE INTEREST PAID BY THE BANKS WAS VERY LOW, I.E., @ 2.5% TO 3.5% PER ANNUM; THAT FOR THE LAST 30 YEARS, SHE HAD BEEN FILING HER RETURN OF INCOME AND HAD BEEN PAYING TAX DILIGENTLY; THAT DUE TO OLD AGE, THE ASSESSEE WAS LOSING HER PHYSICAL CAPACITY AND MEM ORY; THAT SHE USED TO FILE HER RETURN WITH THE HELP OF HER HUSBAND, WH O IS OLDER THAN HER; THAT BEFORE FILING HER RETURN OF INCOME, SHE USED T O COLLECT VARIOUS CERTIFICATES FROM THE BANK ON ACCOUNT OF INTEREST A CCRUED IN EACH OF THE DEPOSIT ACCOUNTS; THAT THIS WAS BEING DONE EVERY Y EAR, THOUGH IT WAS DIFFICULT AND TIME CONSUMING FOR HER TO DO SO; TH AT SHE COULD NOT CLOSE THE SAID SAVINGS ACCOUNTS, BECAUSE SHE HAD GIVEN TH ESE NUMBERS FOR REDEMPTION OF SOME INSURANCE POLICIES, AS WELL AS MUTUAL FUNDS; THAT ALSO, SOME OF THE RENT PAYMENTS CAME TO HER BANK AC COUNTS DIRECTLY AND DURING THE YEAR, IN THE MONTH OF MARCH, 2007, WHEN SHE WAS FILING HER RETURN, SHE HAD BEEN ADVISED BY THE BANK MANAGER TO TRANSFER SOME OF HER FUNDS TO FIXED DEPOSITS ACCOUNT, WHERE SHE WOU LD GET MORE INTEREST IN COMPARISON TO THAT IN THE SAVINGS BANK ACCOUNT; THAT THE ASSESSEE WAS ALWAYS IN THE HIGHEST TAX BRACKET AND HAD BEEN PAYI NG INCOME TAX AT THE HIGHEST SLAB OF 30% ON THE INTEREST ACCRUED IN TH E SAVINGS BANK ACCOUNTS, WHERE THE RATE WAS LESS THAN 3.5%; THAT A FTER PAYING THE TAXES, ITA NO.170(ASR)/2014 ASSESSMENT YEAR: 2008-09 3 SHE HAD ALWAYS BEEN LEFT WITH AN INTEREST INCOME OF ABOUT 2% PER ANNUM; THAT SHE ACCEPTED THE ADVICE GIVEN BY THE B ANK MANAGER AND TRANSFERRED SOME OF HER FUNDS TO FDR ACCOUNTS WITH STATE BANK OF PATIALA AS WELL AS PUNJAB & SIND BANK; THAT AFTER T RANSFERRING THE FUNDS, AT THE TIME OF FILING THE RETURN FOR THE YEAR ENDED 31.03.2009, SHE FORGOT TO GET A CERTIFICATE FROM THE BANK ON ACCOUNT OF AC CRUAL OF INTEREST; THAT THE BANK ALSO DID NOT SUPPLY HER ANY DOCUMENT/CER TIFICATE FOR INTEREST INCOME IN THE SAVINGS ACCOUNTS AND RENT; THAT THIS OMISSION OF NON- DECLARATION OF FDR INTEREST IN THE RETURN OF INCOME WAS INADVERTENT ON THE PART OF THE ASSESSEE; THAT BESIDES, THE ASSESSE E HAD ALSO NOT TAKEN CREDIT FOR THE TAX DEDUCTED AT SOURCE IN HER RETUR N OF INCOME; THAT DURING THE ASSESSMENT PROCEEDINGS, SHE HAD FURNISHED ONE F ORM NO.16A, AS OBTAINED FROM THE STATE BANK OF PATIALA, CHANDIGAR H; THAT THIS FORM HAD BEEN ISSUED IN THE YEAR 2010 ITSELF AND HAD IT BEEN ISSUED TO HER IN TIME, SHE COULD HAVE AVOIDED THE AFORESAID INADVERTENT MISTAKE AND ITS CONSEQUENCES; AND THAT IN THE ASSESSMENT PROCEEDING S, SHE IMMEDIATELY AND VOLUNTARILY ACCEPTED THE FACTS AND DEPOSITED TH E BALANCE TAX. THE ASSESSEE, THUS, REQUESTED THAT SHE BE NOT TREATED A S AN ASSESSEE IN DEFAULT AND THE PENALTY PROCEEDINGS BE FILED. 4. THE AO, HOWEVER, DID NOT ACCEPT THE ASSESSEES ARGUMENTS AND LEVIED THE PENALTY OF RS.90,600/-. 5. THE LD. CIT(A) CONFIRMED THE PENALTY. ITA NO.170(ASR)/2014 ASSESSMENT YEAR: 2008-09 4 6. CHALLENGING THE IMPUGNED ORDER, THE LD. COUNSEL FOR THE ASSESSEE HAS BROADLY MAINTAINED THE STAND TAKEN BY THE ASSES SEE BEFORE THE TAXING AUTHORITIES. 7. THE LD. DR, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 8. THE FACTS ARE NOT DISPUTED. THE LD. CIT(A) HAS E RRED IN HOLDING THE FACTUM OF THE ASSESSEE TO HAVE ENGAGED A QUALIFIED COUNSEL FOR FILING THE RETURN OF INCOME AS GOING AGAINST THE ASSESSEE. IT GOES WITHOUT GAIN- SAYING THAT THE MISTAKE COMMITTED BY THE ASSESSEE C AME ABOUT BEFORE FILING OF THE RETURN. THE FACTUM OF THE ASSESSEE HA VING ADMITTED THE FACTS AND HAVING AGREED TO PAY THE TAX IMMEDIATELY HAS AL SO ERRONEOUSLY BEEN TAKEN BY THE LD. CIT(A) TO BE AGAINST THE ASSESSEE. RATHER, THIS SITUATION GOES TO SHOW THAT THE ASSESSEE, IMMEDIATELY UPON R EALIZING HER MISTAKE, WAS WILLING TO PAY DUE TAX. RELIANCE HAS WRONGLY BE EN PLACED ON CIT VS. ZOOM COMMUNICATION (P) LTD., 327 ITR 510 (DELHI) BY THE LD. CIT(A) IS ALSO INAPPROPRIATE. THIS DECISION IS NOT APPLICABLE TO AN INADVERTENT MISTAKE, LIKE THE ONE COMMITTED BY THE ASSESSEE. 9. LIKEWISE, RELIANCE ON RAJESH CHAWLA VS. CIT, 2 03 CTR 209 (P&H) IS ALSO MISPLACED, FOR SIMILAR REASONS. 10. IT IS NOT DISPUTED THAT THE MISTAKE COMMITTED BY THE ASSESSEE WAS THE FIRST AND LAST MISTAKE ON HER PART. IT HAS ALSO NOT BEEN SHOWN THAT IT WAS A DELIBERATE ACTION ON THE PART OF THE ASSESSEE NOT TO FURNISH BANK CERTIFICATE FOR INTEREST INCOME. ITA NO.170(ASR)/2014 ASSESSMENT YEAR: 2008-09 5 11. MOREOVER, IT HAS ALSO NOT BEEN DISPUTED THAT TH E INCOME ACCRUED IN THE SHAPE OF INTEREST ON A BANK FDR CANNOT BE CONCE ALED, SINCE THE INFORMATION ABOUT THE INTEREST ACCRUED AND TDS MADE THEREON IS REPORTED BY THE PAYER TO THE INCOME TAX DEPARTMENT AND IT IS REFLECTED IN THE FORM 26AS AVAILABLE UNDER THE NAME OF THE PAYEE ON THE WEBSITE OF THE DEPARTMENT. 12. THEN, AS MAINTAINED, IF THE ASSESSEES INTENTIO N WAS TO DELIBERATELY AVOID ANY TAX, IT WAS INCOME ON INTEREST AMOUNTING TO RS.2,42,316/- ACCRUED IN HER SAVINGS ACCOUNTS, WHICH WOULD HAVE B EEN CONCEALED, SINCE THEREON, THERE IS NO TDS AND NO REPORTING BY THE PAYER TO THE INCOME TAX DEPARTMENT. 13. IN FACT, THERE HAD BEEN A NON SUPPLY OF INFORMA TION BY THE BANK AND THE ASSESSEE, DUE TO HER OLD AGE, FORGOT TO OBT AIN THE REQUISITE CERTIFICATES FROM THE BANK ON ACCOUNT OF ACCRUAL OF INTEREST. 14. FOR THE ABOVE REASONS, IN MY CONSIDERED OPINION , THE LEVY OF CONCEALMENT PENALTY, AS CONFIRMED BY THE LD. CIT(A ) IS ENTIRELY UNCALLED FOR. THE SAME IS ACCORDINGLY DELETED. 15. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 /03/ 2016 . SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 31/03/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. RAJESHWAR KAUR, MUKTSAR 2. THE ITO WARD2 (II), MUKTSAR. ITA NO.170(ASR)/2014 ASSESSMENT YEAR: 2008-09 6 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL