Sh. Lokesh Kaushal, Chandigarh V. ITO, Chandigarh

ITA 186/CHANDI/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6138 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.186/CHD/2014 ASSESSMENT YEAR : 2009-10 SHRI LOKESH KAUSHAL, VS THE INCOME TAX OFFICER, PROP. KAUSHAL SERVICE STATION, WARD 1(2), INDUSTRIAL AREA, CHANDIGARH. PHASE-II, CHANDIGARH. PAN : ACEPK3701C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI J.S.NAGAR DATE OF HEARING : 17.04.2014 DATE OF PRONOUNCEMENT : 28.04.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGAR H DATED 21.01.2014 AGAINST THE PENALTY ORDER PASSED UNDER S ECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 ( 'THE ACT' F OR SHORT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. INCOME TAX OFFICER HAS FAILED TO APPRE CIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN CONFIRMING PENALTY UNDER SECTION 271(1)(C) FOR FURN ISHING INACCURATE PARTICULARS OF INCOME. 2. THE APPELLATE ORDER IS DEVOID ON ANY MERITS AS THE LOSS UNDER PROPERTY INCOME WAS CLAIMED ON THE BASIS OF TDS CER TIFICATE ISSUED IN THE INDIVIDUAL NAME INSTEAD OF HUF. 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST LEVY OF PENALTY UNDER SECTION 271(1)(C)OF THE ACT AT RS. 92 ,110/-. 4. THE BRIEF FACTS OF THE CASE ARE THAT IN THE RETU RN OF INCOME FILED FOR THE CAPTIONED ASSESSMENT YEAR, THE ASSESS EE HAD DECLARED LOSS OF RS. 297,673/- UNDER THE HEAD INCOME FROM H OUSE PROPERTY WHICH WAS SET-OFF AGAINST OTHER INCOMES OF THE ASSE SSEE. THE ASSESSING OFFICER NOTED DURING THE COURSE OF ASSESS MENT PROCEEDINGS THAT THE SAID PROPERTY DID NOT BELONG T O THE ASSESSEE INDIVIDUAL BUT BELONG TO HIS HUF AND HENCE, THE ASS ESSEE WAS NOT ENTITLED TO CLAIM THE SET-OFF OF LOSS FROM PROPERTY IN HIS HANDS. THE PLEA OF THE ASSESSEE WAS THAT IN VIEW OF THE TD S CERTIFICATE BEING ISSUED IN THE NAME OF THE INDIVIDUAL, THE SAI D CLAIM WAS MADE IN THE HANDS OF ASSESSEE. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSEE AGREED FOR THE ADDITION O N ACCOUNT OF LOSS AND THE ASSESSING OFFICER DID NOT ALLOW THE BE NEFIT OF TDS OF RS. 81,600/- ON THE RENTAL INCOME. PENALTY PROCEED INGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED AGAINST THE ASSESSEE. IN THE COURSE OF SAID PENALTY PROCEEDINGS, THE ASSESSE E CLAIMED THAT THE SAID CLAIM WAS MADE BONAFIDELY AS THE TDS CERTI FICATE WAS ISSUED IN THE NAME OF THE INDIVIDUAL BUT THE ASSESS ING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS. 99,110/-. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT ACCEPT THE PLEA OF TECHNICAL MISTAKE RAISED BY THE ASSESSE E AND UPHELD THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3 6. SHRI TEJ MOHAN SINGH APPEARED FOR THE ASSESSEE A ND SHRI J.S.NAGAR APPEARED FOR THE REVENUE AND PUT FORWARD THEIR CONTENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE INDIVIDUAL HAD FILED ITS RETURN OF INC OME AT RS. 5,83,740/- AFTER CLAIMING LOSS UNDER THE HEAD INCO ME FROM PROPERTY AT RS. 279,673/-. HOWEVER, THE SAID PROP ERTY DID NOT BELONG TO THE ASSESSEE INDIVIDUAL BUT BELONGED TO H UF OF THE ASSESSEE AND AS SUCH, THE SAID LOSS FROM PROPERTY W AS NOT ALLOWED IN THE HANDS OF THE ASSESSEE. THE ASSESSEE CLAIMS THAT IT HAD MADE THE SAID CLAIM IN HIS HANDS AS THE TDS CERTIFICATE WAS ISSUED IN THE NAME OF THE ASSESSEE INDIVIDUAL. HOWEVER, ON THE M ISTAKE BEING POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSEE FURTHER CLAIMS THAT IT HAD DECLARED THE SAID LOSS IN THE HANDS OF THE HUF. HOWEVER, CREDIT OF TDS WAS NOT ALLOWED IN THE HANDS OF THE ASSESSEE INDIVIDUAL. THE PLEA OF THE ASSESSEE BEFO RE THE AUTHORITIES BELOW WAS THAT THE SAID MISTAKE WAS A TECHNICAL MIS TAKE ON ACCOUNT OF THE TDS CERTIFICATE BEING ISSUED IN THE NAME OF THE INDIVIDUAL AND THERE WAS NO FURNISHING OF INACCURATE PARTICULA RS OF INCOME IN THE HANDS OF THE ASSESSEE INDIVIDUAL. WE FIND MERI T IN THE SAID PLEA OF THE ASSESSEE THAT IN VIEW OF THE PECULIAR C IRCUMSTANCES WHERE THE TDS WAS DEDUCTED IN THE HANDS OF THE ASSE SSEE INDIVIDUAL AND IN ORDER TO CLAIM THE BENEFIT OF THE SAID TDS, THE INCOME RELATING THEREOF WAS OFFERED IN THE HANDS OF THE ASSESSEE INDIVIDUAL, ALTHOUGH THE INCOME THERE-FROM BELONGED TO THE HUF OF THE ASSESSEE. IN THE ABOVESAID CIRCUMSTANCES, WHERE THE ASSESSEE HAD, UNDER A BONAFIDE MISTAKE CLAIMED THE SAID LOSS ARISING FROM INCOME FROM PROPERTY IN HIS HANDS, WE FIND NO MERIT IN THE LEVY OF 4 PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE AS SESSING OFFICER IS DIRECTED TO DELETE THE PENALTY LEVIED UNDER SECT ION 271(1)(C) OF THE ACT. IN THE RESULT, THE GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH APRIL,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR ITA T,CHD.