REKHA J. SARVAIYA, MUMBAI V. ITO 16(2)(1), MUMBAI

ITA 177/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8018 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 12-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Salary income; Bonafide mistake

Judgement Text

P A G E | 1 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, M UMBAI BEFORE SHRI P.K. BANSAL , VICE PRESIDENT AND SHRI RAVISH SOOD, JM ITA NO. 177 /MUM/201 6 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) MRS. REKHA J SARVAIYA , 122 MIAMI APARTMENTS, 70A, BHULABHAI DESAI ROAD, BREACH CANDY , MUMBAI - 4000 26 . / VS. ITO 16(2)(1) , MATRU MANDIR, INCOME TAX OFFICE, TARDEO ROAD, MUMBAI 400 007 . ./ ./ PAN NO. AAQPS1478Q ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI JIGNESH SHAH, A.R. / RESPONDENT BY : SHRI SAURABH DESHPANDE , D .R. / DATE OF HEARING : 29 .1 1 .2017 / DATE OF PRONOUNCEMENT : 20 .1 2 .2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT(A) - 30 , MUMBAI, DATED 09 .11.2015 WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 30.07.2014 . THE P A G E | 2 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 3,68,827/ - IMPOSED UPON THE APPELLANT BY THE ASSESSING OFFICER (AO) UNDER SECTION 271(1)(C) OF THE ACT, WITHOUT APPRECIATING THE FACTS AND THE APPELLANTS SUBMISSIONS IN RIGHT PERSPECTIVE, ESPECIALLY THE FACT THAT THE AMOUNT OF BROUGHT FORWARD CAPITAL LOSS SET OFF AGAINST THE CURRENT YEARS INCOME WAS CALCULATED INCORRECTLY PURELY DUE TO AN INADVERTENT CLERICAL ERROR ON THE PART OF THE A PPELLANTS CHARTERED ACCOUNTANT AND NOT DELIBERATELY, AND MOREOVER THE CORRECT AMOUNT OF EARLIER YEARS CARRIED FORWARD CAPITAL LOSS WAS ALREADY ON THE RECORD OF THE INCOME - TAX DEPARTMENT AND AS SUCH THERE WAS NEITHER ANY CONCEALMENT NOR ANY FURNISHING OF INACCURATE PARTICULARS ON THE APPELLANTS PART. THE APPELLANT PRAYS THAT THE PENALTY OF RS. 3,68,827/ - IMPOSED UPON THE APPELLANT UNDER SECTION 271(1)(C) BE DELETED AS THE APPELLANTS CASE DOES NOT FALL WITHIN THE PURVIEW OF SECTION 271(1)(C) AT ALL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 3,68,827/ - IMPOSED UPON THE APPELLANT BY THE AO UNDER SECTION 271(1)(C) AS THE AO HAS NOT SPECIFIED, IN THE OPERATIVE PART OF HIS PEN ALTY ORDER, WHETHER HE IS IMPOSING THE PENALTY FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME (WHICH ARE TWO DISTINCT DEFAULTS) AND AS SUCH THE AOS ORDER IS VAGUE AND BAD IN LAW, DESERVING TO BE QUASHED. THE APPELLANT TH EREFORE PRAYS THAT SUCH VAGUE PENALTY ORDER BE QUASHED AS BAD IN LAW AND PENALTY IMPOSED OF RS. 3,68,827/ - BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT PRAYS YOUR HONOURS TO GRANT SUCH OTHER AND/OR FURTHER AND/OR CONSEQUENTIAL RELIEFS AS MAY BE DEEMED FIT AND AS PER LAW THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR WITHDRAW ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THIS APPEAL . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD E - FILED H ER RETURN OF INCOME FOR A.Y. 2011 - 12, DECLARING TOTAL INCOME AT RS. 17,47,910/ - COMPRISING OF INCOME FROM SALARY, LONG TERM CAPITAL GAIN, SHORT TERM CAPITAL GAIN AND INCOME FROM OTHER SOURCES ON 16.07.2011 . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS P A G E | 3 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) THEREAFTER SELECTED FOR SCRUTINY ASSESSMENT THROUGH CASS UNDER SEC. 143(2) . 3. THE A.O WHILE FRAMING THE ASSESSMENT OBSERVED THAT THE ASSESSEE HAD IN HER RETURN OF INCOME CLAIMED BROUGHT FORWARD LOSS OF THE PRECEDING YEARS AMOUNTING TO RS. 48,80,364/ - WHICH WERE SET OFF AGAINST THE LONG TERM CAPITAL GAIN (FOR SHORT LTCG) AND SHORT TERM CAPITAL GAIN (FOR SHORT STCG) FOR THE YEAR U NDER CONSIDERATION , AS UNDER : A.Y. LONG TERM CAPITAL LOSS SHORT TERM CAPITAL LOSS TOTAL B/F LOSS SET OFF 2003 - 04 RS. 25,746 - RS. 25,746 2004 - 05 RS. 10,12,995 - RS. 10,12,995 2005 - 06 - - - 2006 - 07 - RS. 4,08,341 RS. 4,08,341 2007 - 08 - - 2008 - 09 - RS. 31,35,102 RS. 31,35,102 2009 - 10 - - - 2010 - 11 - RS. 2,98,180 RS. 2,98,180 TOTAL RS. 48,80,364 THE A.O AFTER DELIBERATING ON THE AFORESAID CLAIM OF THE ASSESSEE OBSERVED THAT THE ENTITLE MENT OF THE ASSESSEE AS REGARDS THE BROUGHT FORWARD LOSSES WAS LIABLE TO BE RESTRICTED TO AN AMOUNT OF RS. 22,88,013/ - , AS UNDER : P A G E | 4 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) A.Y. DUE DATE OF RETURN DATE OF RETURN FILED RECEIPT NO. STC LOSS LTC LOSS B/F LOSS SET OF AGAINST EARLIER A.Y. BALANCE LOSS AVAILABLE FOR SET OFF FOR A.Y. 2011 - 12 2003 - 04 30.09.2003 25.09.2003 104423 NIL RS. 25,746 NIL RS. 25,746 2004 - 05 31.10.2004 28.10.2004 1621111568 NIL RS. 10,12,995 NIL RS. 10,12,995 2005 - 06 31.07.2005 09.08.2005 1621122261 RS.9,12,071 NIL NIL RETURN OUT OF TIME NOT ELIGIBLE FOR SET OFF 2006 - 07 31.07.2006 26.07.2006 1621139242 RS.31,81,134 NIL RS. 22,30,042 SET OFF AGAINST THE A.Y. 2008 - 09 RS. 9,51,092 2010 - 11 31.07.2010 21.07.2013 E - FILED RS. 2,98,180 NIL NIL RS. 2,98,180 TOTAL RS. 22,80,013 4. THE A.O ON THE BASIS OF HIS AFORESAID OBSERVATION S CALLED UPON THE ASSESSEE TO EXPLAIN HER CLAIM OF EXCESS UNABSORBED CAPITAL LOSS AS WAS RAISED BY HER IN THE RETURN OF INCOME. THE ASSESSEE IN HER REPLY SUBMITTED THAT THE EXCESS CLAIM OF BROUGHT FORW ARD LOSSES HAD OCCASIONED ON ACCOUNT OF AN INADVERTENT MISTAKE ON THE PART OF HER CHARTERED ACCOUNTANT . I T WAS SUBMITTED BY THE ASSESSEE THAT EARLIER HER TAX RELATED ISSUES WERE ATTENDED AND HANDLED BY HER HUSBAND MR. JATIN SARVAIYA WHO IS A CHARTERED ACCO UNTANT BY PROFESSION, HOWEVER, AS HE SUFFERED AN ACUTE RF TEMPORO PAIRED BLEED AND HAD SLIPPED INTO COMA , SINCE JUNE, 2008, THEREFORE, HER RETURNS OF INCOME WERE THEREAFTER FILED BY ANOTHER CHARTERED ACCOUNTANT. IT WAS SUBMITTED BY THE ASSESSEE THAT THOUGH IT REMAIN ED AS A MATTER OF FACT THAT THE CAPITAL LOSS FOR THE PREVIOUS YEAR ENDED 31.03.2006 RELEVANT TO A.Y. 2006 - 07 WAS SET OFF AGAINST THE CAPITAL GAIN OF THE PREVIOUS YEAR ENDED 31.03.2008 RELEVANT TO A.Y. 2008 - 09 , HOWEVER , THE CHARTE RE D ACCOUNTANT WH O WAS LOOKING AFTER THE INCOME TAX MATTERS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION , HAD BY WAY OF A BONAFIDE MISTAKE CLAIMED THE SET OFF OF THE CAPITAL LOSS FOR A.Y 2006 - 07 WHILE FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ . A.Y. 2011 - 12 , AS THE INCOME TAX RECORDS OF THE ASSESSEE FOR THE YEAR IN WHICH THE SAME HAD BEEN SET OFF, VIZ. A.Y. 2008 - 09 WERE NOT AVAILABLE P A G E | 5 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) BEFORE HIM. THUS, IT WAS SUBMITTED BY THE ASSESSEE THAT THE BROUGHT FORWARD CAPITAL LOSS FOR A.Y. 2006 - 07 WHICH THOUGH HAD BEEN EXHAUSTED AGAINST THE CAPITAL GAIN FOR A.Y. 2008 - 09, WAS SET OFF AGAINST THE CAPITAL GAIN OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ON ACCOUNT OF A BONAFIDE MISTAKE. THAT AS REGARDS THE OBSERVATIONS OF THE A.O THAT THE ASSESSEE HAD W RONGLY SET OFF THE CAPITAL LOSS OF A.Y. 2005 - 06 OF RS. 9,12,071/ - FOR THE REASON THAT THE RETURN OF INCOME FOR THE SAID YEAR WAS FILED BEYOND THE STIPULATED TIME PERIOD, VIZ. 09.08.2005, IT WAS CLARIFIED BY THE ASSESSEE THAT THE DUE DATE FOR FILING OF TH E RETURN OF INCOME FOR A.Y. 2005 - 06 WAS EXTENDED UPTO 31.08.2005 IN THE STATE OF MAHARASHTRA, AS A RESULT WHEREOF THE RETURN OF INCOME FILED BY HER FOR THE SAID YEAR WAS WITHIN THE STIPULATED TIME PERIOD AND AS SUCH THE CLAIM OF SET OFF OF THE BROUGHT FORW ARD CAPITAL LOSS OF THE RS. 9,12,071/ - FOR A.Y. 2005 - 06 WAS WELL IN ORDER. THE CONTENTION ADVANCED BY THE ASSESSEE IN RESPECT OF THE SETTING OFF OF THE BROUGHT FORWARD LOSS FOR A.Y. 2005 - 06 DID FIND FAVOUR WITH THE A.O , WHO ACCEPTED THE SAME. THE A.O AFTER DELIBERATING O N THE AFORESAID ISSUE, AFTER DISALLOWING THE CLAIM OF THE ASSESSEE AS REGARDS THE SET OFF OF THE BROUGHT FORWARD CAPITAL LOSS FOR A.Y. 2006 - 07 AGAINST THE CAPITAL GAIN OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12, THER EIN RESTRICTED THE CLAIM OF THE ASSESSEE FOR SET OFF OF LOSS AT RS. 32,00,084/ - INSTEAD OF RS. 48,80,364/ - AS WAS RAISED BY HER IN THE RETURN OF INCOME. THE A.O WHILE ASSESSING THE INCOME OF THE ASSESSEE AT RS. 34,28,190/ - ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS REGARDS THE EXCESS CLAIM OF SET OFF OF THE BROUGHT FORWARD CAPITAL LOSS FOR THE PR ECEDING YEAR AGAINST THE CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION. P A G E | 6 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) 5. THE A.O THEREAFTER INITIATED PENALTY PROCEEDING S U/S 271(1)(C) AND CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY MAY NOT BE IMPOSED ON HER FOR CLAIM OF EXCESS BROUGHT FO RWARD LOSSES AGAINST THE CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE SUBMITTED BEFORE THE A.O THAT THE MISTAKE IN CLAIMING OF EXCESS BROUGHT FORWARD CAPITAL LOSSES HAD OCCASIONED ON ACCOUNT OF A BONAFIDE MISTAKE ON THE PART OF HER CHARTERED ACCOUNTANT WHO HAD RAISED THE CLAIM REMAINING UNAWARE OF THE FACT THAT THE CAPITAL LOSS FOR A.Y. 2006 - 07 HAD ALREADY BEEN EXHAUSTED AGAINST THE CAPITAL GAIN OF THE ASSESSEE FOR A.Y. 2008 - 09. HOWEVER, THE A.O DID NOT FIND FAVOUR WITH THE EXPLANATION OF THE ASSESSEE AND IMPOSED A PENALTY OF RS. 3,68,827/ - U/S 271(1)(C). AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO AFTER DELIBERATING ON THE FACTS OF THE CASE CONCLUDED THAT THE PENALTY IMPOSED BY THE A.O U/S 271(1)(C) IN RESPECT OF THE EXCESS CLAIM OF SET OFF OF BROUGHT FORWARD LOSS OF RS. 16,80,280/ - AGAINST THE INCOME FOR THE YEAR UNDER CONSIDERATION, WAS WELL IN ORDER AND THUS DID NOT CALL FOR ANY INTERFERENCE ON HIS PART. 6. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THE LEARNED AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) SUBMITTED THAT THE EXCESS CLAIM OF SET OFF OF BROUGHT FORWARD LOSS OF RS. 16,80,280/ - AGAINST THE INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 1 2 HAD OCCASIONED DUE TO THE BONAFIDE MISTAKE ON THE PART OF THE CHARTERED ACCOUNTANT WHO HAD FILED THE RETURN OF INCOME OF THE ASSESSEE. THE LD. A.R. REITERATED THE FACTS SUBMITTED BEFORE THE LOWER AUTHORITIES AND THEREIN AVERRED THAT EARLIER THE TAX RELAT ED ISSUES OF THE ASSESSEE WERE BEING LOOKED AFTER BY HER HUSBAND MR. JATIN SARVAIYA WHO IS A CHARTERED ACCOUNTANT BY PROFESSION, BUT HOWEVER, AS HE SUFFERED AN ACUT E RF TEMPORO PAIRED BLEED AND HAD SLIPPED INTO COMA SINCE JUNE, 2008, THEREFORE, HER P A G E | 7 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) RETURNS OF INCOME WERE THEREAFTER FILED BY ANOTHER CHARTERED ACCOUNTANT. IT WAS SUBMITTED BY THE LD. A.R. THAT THOUGH IT REMAINED AS A MATTER OF FACT THAT THE CAPITAL LOSS FOR THE PREVIOUS YEAR ENDED 31.03.2006 RELEVANT TO A.Y. 2006 - 07 WAS SET OFF AGAINST THE CAP ITAL GAIN OF THE PREVIOUS YEAR ENDED 31.03.2008 RELEVANT TO A.Y. 2008 - 09, HOWEVER , THE CHARTE RE D ACCOUNTANT WHO WAS LOOKING AFTER THE INCOME TAX MATTERS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD , BY WAY OF A BONAFIDE MISTAKE CLAIMED THE SET OFF OF THE CAPITAL LOSS FOR A.Y 2006 - 07 WHILE FILING THE RETURN OF INCOME FOR A.Y. 2011 - 12, AS THE INCOME TAX RECORDS OF THE ASSESSEE FOR THE YEAR IN WHICH THE SAME HAD BEEN SET OFF, VIZ. A.Y. 2008 - 09 WERE NOT AVAILABLE BEFORE HIM . THE LD. A.R IN ORDER TO FORTIFY THE FACT THAT THE HUSBAND OF THE ASSESSEE, SH. JATIN SARVAIYA, C.A HAD SUFFERED AN ACUTE RF TEMPORO PAIRED BLEED AND HAD SLIPPED INTO COMA SINCE JUNE, 2008, THEREIN DREW OUR ATTENTION TO THE MEDICAL CE RTIFICATE DATED 09.07.2012 ( PAGE 19 ) OF THE ASSESSES PAPER BOOK (FOR SHORT APB) CONFIRMING THE SAID FACTUAL POSITION. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R.) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT A S THE ASSESSEE HAD IN HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12 CLAIMED EXCESS SET OFF OF BROUGHT FORWARD LOSSES FOR THE PRECEDING YEARS, THEREFORE , PENALTY U/S 271(1)(C) WAS RIGHTLY IMPOSED BY THE A.O AND SUSTAINED BY THE CI T(A). 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT OUR INDULGENCE IN THE PRESENT CASE IS SOUGHT FOR ADJUDICATING AS TO WHETHER THE IMPOSITION OF PENALTY U/S 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS REGARDS THE EXCESS CLAIM OF SET OFF OF BROUGHT FORWARD CAPITAL LOSS OF RS. 16,80,280/ - AGAINST THE CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION P A G E | 8 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) IS IN ORDER, OR NOT. WE FIND THAT IT REMAINS AS A MATTER OF CONCEDED FACT THAT THE ASSESSEE HAD RAISED AN EXCESS CLAIM OF SET OFF OF BROUGHT FORWARD CAPITAL LOSS OF RS. 48,80,364/ - AS AGAINST ITS ACTUAL ENTITLEMENT OF RS. 32,00,084/ - . WE FIND THAT THE ASSESSEE HAD SUBMITTED BE FORE THE LOWER AUTHORITIES , BOTH DURING THE COURSE OF THE ASSESSMENT AND THE PENALTY PROCEEDINGS , THAT THE EXCESS CLAIM OF THE SET OFF OF BROUGHT FORWARD CAPITAL LOSS OF RS. 16,80,280/ - PERTAINING TO A.Y. 2006 - 07 , WHICH AS A MATTER OF FACT HAD BEEN EXHAUSTED FOR SETTING OF F THE CAPITAL GAIN TO THE SAID EXTENT IN THE HANDS OF THE ASSESSEE FOR A.Y. 2008 - 09 , HAD OCCASIONED ON ACCOUNT OF AN INADVERTENT BONAFIDE MISTAKE ON THE PART OF HER CHARTERED ACCOUNTANT WHO HAD FI LED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12 . WE FIND THAT THE ASSESSEE HAD THROUGHOUT SUBMITTED THAT THE INADVERTENT MISTAKE IN CLAIMING OF EXCESS SET OFF OF CAPITAL LOSS DURING THE YEAR UNDER CONSIDERATION HAD CREPT IN FOR THE REASON THAT EARLIER HER TAX RELATED ISSUES WERE BEING LOOKED AFTER BY HER HUSBAND MR. JATIN SARVAIYA WHO IS A CHARTERED ACCOUNTANT BY PROFESSION, BUT HOWEVER, AS HE UNFORTUNATELY SUFFERED AN ACUTE RF TEMPORO PAIRED BLEED AND HAD SLIPPED INTO COMA SINC E JUNE, 2008, THEREFORE, HER RETURNS OF INCOME WERE THEREAFTER FILED BY ANOTHER CHARTERED ACCOUNTANT. IT WAS SUBMITTED BY THE LD. A.R. THAT THOUGH IT REMAINED AS A MATTER OF FACT THAT THE CAPITAL LOSS FOR THE PREVIOUS YEAR ENDED 31.03.2006 RELEVANT TO A.Y. 2006 - 07 WAS SET OFF AGAINST THE CAPITAL GAIN OF THE PREVIOUS YEAR ENDED 31.03.2008 RELEVANT TO A.Y. 2008 - 09, HOWEVER, THE CHARTERED ACCOUNTANT WHO WAS LOOKING AFTER THE INCOME TAX MATTERS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, BY WAY OF A BO NAFIDE MISTAKE HAD CLAIMED THE SET OFF OF THE CAPITAL LOSS FOR A.Y 2006 - 07 WHILE FILING THE RETURN OF INCOME FOR A.Y. 2011 - 12, AS THE INCOME TAX RECORDS OF THE ASSESSEE FOR THE YEAR IN WHICH THE SAME HAD ALREADY BEEN SET OFF, VIZ. A.Y. 2008 - 09 WERE NOT AV AILABLE WITH HIM. WE P A G E | 9 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) HAVE GIVEN A THOUGHTFUL CONSIDERATION AND DELIBERATED AT LENGTH ON THE SUBMISSION OF THE ASSESSEE AND FIND SUBSTANTIAL FORCE IN THE SAME. WE FIND THAT THE VERY FACT THAT THE HUSBAND OF THE ASSESSEE SH. JATIN SARVAIYA, CHARTERED ACCOUNT ANT WHO WAS EARLIER LOOKING AFTER THE INCOME TAX MATTER S OF THE ASSESSEE WAS TAKEN SERIOUSLY UNWELL AND HAD SLIPPED INTO COMA SINCE JUNE, 2008, IS NOT AN EYE WASH OR A CONCOCTED STORY MADE UP BY THE ASSESSEE TO WRIGGLE OUT OF THE TAX RAMIFICATIONS EMERGING FROM THE CLAIM OF EXCESS SET OFF OF BROUGHT FORWARD CAPITAL LOSS AGAINST THE CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12. WE FIND THAT OUR AFORESAID CONVICTION STAND S DULY FORTIFIED BY A PERUSAL OF THE MEDICAL CERTIFICATE CONFIRMING T HE SAID SERIOUS STATE OF HEALTH OF SH . JATIN SARVAIYA, THE EARLIER CHARTERED ACCOUNTANT OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE EXPLANATION OF THE ASSESSEE THAT THE NEW CHARTERED ACCOUNTANT WHO HAD FILED HER RETURN OF INCOME FOR A.Y. 2011 - 1 2 HAD CLAIMED THE SET OFF OF THE BROUGHT FORWARD CAPITAL LOSS OF A.Y. 2006 - 07 AGAINST THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE FOR A.Y. 2011 - 12, MERELY GOING BY THE FACT THAT THERE WAS UNABSORBED CAPITAL LOSS IN THE HANDS OF THE ASSESSEE IN A.Y. 2006 - 07, WITHOUT REALIZING THAT THE SAME TO THE EXTENT OF RS. 16,80,280/ - HAD BEEN SET OFF AGAINST THE CAPITAL GAIN OF THE ASSESSEE IN A.Y. 2008 - 09 CARRIES SUBSTANTIAL FORCE . WE ARE OF THE CONSIDERED VIEW THAT IN TOTALITY OF THE FACTS BEFORE US , IT I S DIFFICULT FOR US TO COMPREHEND THAT THE ASSESSEE HAD FAILED TO COME FORTH WITH A DULY SUBSTANTIATED EXPLANATION WHICH WOULD GO TO IRREFUTABLY PROVE THE BONAFIDES OF HER AFORESAID CLAIM. WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAD FURNISH ED A FALSE EXPLANATION AS REGARDS RAISING OF AN EXCESS CLAIM OF SET OFF OF BROUGHT FORWARD LOSSES FOR A.Y. 2006 - 07 AGAINST HER INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12. WE ARE OF THE CONSIDER ED VIEW THAT IN THE BACKDROP OF THE AFORESAID P A G E | 10 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1) FACTS, NO PENALTY U/S 271(1)(C) R.W. EXPLANATION 1 IS LIABLE TO BE IMPOSED IN THE HANDS OF THE ASSESSEE. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS SET ASIDE THE ORDER OF THE CIT(A) AND QUASH THE PENALTY OF RS. 3,68,827/ - IMPOSED BY THE A.O. 8 . THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS . ORDER PRON OUNCED IN THE OPEN COURT ON 20. 1 2. 2017 SD/ - SD/ - ( P.K. BANSAL ) ( RAVISH SOOD ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; 20 .1 2 .2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 11 ITA NO. 177 /MUM/201 6 AY: 2011 - 12 REKHA J. SARVAIYA VS. ITO 16(2)(1)