Suresh Jaganathan, CHENNAI V. ACIT, CHENNAI

ITA 1895/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5248 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Assessee Lawyers: G BASKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH C BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A. NO. 1895/MDS/2010 ASSESSMENT YEAR : 2006-07 SURESH JAGANATHAN, NO.407, VASU BLOCK, CHITRA AVENUE, NO.9, CHOOLAIMEDU HIGH ROAD, CHENNAI-600 094. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE V, CHENNAI-600 078. PAN AERPJ 9461 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. BASKAR RESPONDENT BY : SHRI B. SRINIVAS O R D E R PER DR. O.K.NARAYANAN, VICE PRESIDENT THIS IS A PENALTY APPEAL FILED BY THE ASSESSEE. TH E PENALTY HAS BEEN LEVIED UNDER SEC.271(1)(C) OF THE I.T.ACT, 1961. THE ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ITA 1895/10 :- 2 -: ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V III, AT CHENNAI DATED 16.08.2010. 2. IN THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSE SSEE ALONG WITH HIS RETURN OF INCOME, PROFESSIONAL CHARGES OF ` 1,54,280/- WERE CREDITED. AGAINST THE ABOVE PROFESSIONAL CHAR GES, THE ASSESSEE CLAIMED EXPENSES AT ` 1,08,990/- AND DECLARED AN INCOME OF ` 45,290/- UNDER THE HEAD PROFESSION. ALONG WITH THE RETURN OF INCOME, FORM 16A CERTIFICATES WERE ALSO E NCLOSED BY THE ASSESSEE TO PROVE THE DEDUCTION OF TAX AT SOURCE MA DE FOR M/S. WHIRLPOOL INDIA LTD. AT THE TIME OF MAKING PAYMENT OF PROFESSIONAL CHARGES TO THE ASSESSEE. IN THE SAID TDS CERTIFICATES, THE DEDUCTOR HAS CERTIFIED THAT THE A SSESSEE WAS PAID ` 1,54,280/- FOR THREE MONTHS OF APRIL, MAY AND JUNE OF 2005. BUT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAS DISCLOSED PROFESSIONAL CHARGES ONLY FOR ONE MONTH. WHEN THIS MATTER WAS DISCUSSED AT THE TIME OF HEARING, THE AS SESSEE FILED REVISED COMPUTATION DECLARING PROFESSIONAL CHARGES RECEIVED FOR ALL THE THREE MONTHS. THE ASSESSEE IN THE REVISED COMPUTATION, CLAIMED A HIGHER AMOUNT OF EXPENDITURE OF ` 3,13,990/- AS AGAINST THE CLAIM OF EXPENDITURE ORIGINALLY AT ` 1,08,990/-. THE ITA 1895/10 :- 3 -: ASSESSMENT WAS COMPLETED AFTER REJECTING THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE AGAINST THE PROFES SIONAL INCOME. IN FIRST APPEAL, THE COMMISSIONER OF INCOM E-TAX (APPEALS) ALLOWED THE EXPENDITURE AT 40% OF THE GRO SS RECEIPTS. 3. THE PENALTY ORDER HAS BEEN PASSED IN THE LIGHT OF T HE ABOVE BACKGROUND FACTS. THE MAIN GROUND FOR LEVYING PENA LTY IS THAT THE ASSESSEE HAS CONCEALED HIS INCOME BY NOT DISCLOSING THE PROFESSIONAL CHARGES RECEIVED FOR ALL THE THREE MON THS. THE ASSESSING OFFICER HAS LEVIED A PENALTY OF ` 78,228/- UNDER SEC.271(1)(C) OF THE I.T. ACT, 1961. 4. WE HEARD BOTH SIDES IN DETAIL. EVEN THOUGH THE AS SESSEE HAS OMITTED TO FURNISH THE DETAILS OF PROFESSIONAL CHARGES RECEIVED FOR TWO MONTHS, TDS CERTIFICATES ENCLOSED BY THE AS SESSEE HAVE ALREADY GIVEN THE COMPLETE PICTURE OF PROFESSIONAL CHARGES EARNED BY THE ASSESSEE. FROM M/S. WHIRLPOOL INDIA LTD., P ROFESSIONAL CHARGES WERE PAID TO THE ASSESSEE FOR THREE MONTHS VIZ., APRIL, MAY AND JUNE, 2005. IN THE ORIGINAL COMPUTATION OF INCOME THE ASSESSEE HAS DISCLOSED PROFESSIONAL CHARGES ONLY FO R ONE MONTH. EVEN THOUGH THAT IS A LAPSE ON THE PART OF THE ASSE SSEE, THE SAID LAPSE HAS BEEN MADE GOOD BY THE DETAILS VERY MUCH R EFLECTED IN ITA 1895/10 :- 4 -: THE TDS CERTIFICATES ENCLOSED BY THE ASSESSEE ALONG WITH HIS RETURN OF INCOME. THE LAPSE ON THE PART OF THE ASS ESSEE WAS NOT FOUND OUT BY THE ASSESSING AUTHORITY THROUGH ANY IN VESTIGATION BUT FROM THE DETAILS FILED ALONG WITH THE RETURN OF INCOME THEMSELVES. THEREFORE, WE HAVE TO SEE THAT IN ONE OR THE OTHER WAY, THE ASSESSEE HAS DISCLOSED THE ENTIRE AMOUNT O F PROFESSIONAL CHARGES RECEIVED BY HIM FOR THREE MONT HS OF APRIL, MAY AND JUNE, 2005. THEREFORE, THERE IS NO HARD GR OUND TO FRAME A CASE OF CONCEALMENT AGAINST THE ASSESSEE. FURTHE R ON THE MATTER OF COMPUTATION OF INCOME, THE COMMISSIONER O F INCOME-TAX (APPEALS) HAS ACCEPTED THE CONTENTION OF THE ASSESS EE REGARDING THE INSTANCE OF EXPENDITURE AGAINST THE RECEIPT OF PROFESSIONAL INCOME. THE ONLY MATTER IS THAT THE QUANTUM DISCLO SED BY THE ASSESSEE WAS NOT ACCEPTED BUT THE EXPENSES WERE EST IMATED AT 40% OF THE GROSS COLLECTION. ONCE THE COMMISSIONER OF INCOME- TAX (APPEALS) HAS ACCEPTED THE INSTANCE OF EXPENDIT URE AS LEGITIMATE, THERE CANNOT BE ANY CASE OF FURNISHING OF INACCURATE PARTICULARS AGAINST THE ASSESSEE WHEN INCOME OR EXP ENDITURE IS ESTIMATED. IT IS VERY DIFFICULT TO TAKE UP A CASE OF CONCEALMENT. ITA 1895/10 :- 5 -: 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE F IND THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SE C.271(1)(C). ACCORDINGLY, THE PENALTY LEVIED BY THE ASSESSING AU THORITY IS HEREBY DELETED. 6. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 12 TH DAY OF APRIL, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) JUDICIAL MEMBER (DR. O.K.NARAYANAN) VICE-PRESIDENT CHENNAI, DATED : 12 TH APRIL, 2011 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR