HARUNKHAN PATHAN, MUMBAI V. ITO WD 26(2)(3), MUMBAI

ITA 1938/MUM/2011

• Counselvise Citation: 193819914 RSA 2011
• Duration Of Justice: 4 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 26-11-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Keywords: Salary income; Bonafide belief; Condonation of delay; Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C.SHARMA , ACCOUNTANT MEMBER ITA NO.1938/MUM/2011(A.Y. 2004-05) MR. HARUNKHAN PATHAN, C-22/CD-58, POOJA BHAVAN, SHRIRANG SOCIETY, THANE (WEST) 400 601 PAN: AAFPP 6501L (APPELLANT ) VS. INCOME TAX OFFICER, WARD 26(2) (3), MUMBAI. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI AKH ILENDRA P. YADAV DATE OF HEARING : 10/03/2015 DATE OF PRONOUNCEMENT : 10 /03/2015 ORDER PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)28, MUMBAI DATED 27/01/2011 FOR ASSESS MENT YEAR 2004-05. GROUNDS OF APPEAL READ AS UNDER: 1. THE HON CIT(A) HAS DISMISSED THE APPEAL ON THE G ROUNDS OF DELAY IN THE FILING OF APPEAL. HOWEVER, THE HON. SUPREME COURT IN THE CASE OF IMPROVEMENT TRUST V/S UJAGAR SINGH & OTHERS (AIT-2010-328-SC) HAS DECIDED THAT UNLESS MOLAFIDES ARE WRIT LARGE ON THE CONDUCT OF THE PARTY, GENERALLY A S A NORMAL RULE, DELAY SHOULD BE CONDONED. IN THE LEGAL ARENA AN ATTEMPT SHOULD ALWA YS BE MADE TO ALLOW THE MATTER TO BE CONTESTED ON MERITS RATHER THAN TO THROW IT O N SUCH TECHNICALITIES. ITA NO.1938/MUM/2011(A.Y. 2004-05) 2 2. THE APPELLANT IN THE ORIGINAL RETURN HAS NEITHE R DISCLOSED THE INCOME RECEIVED NOR CLAIMED DEDUCTION FOR ACCRUED INTEREST ON HOUSI NG LOAN, THEREBY CLEARLY INDICATING THAT HE HAD NO INTENTIONS OF EVADING TAX . IN FACT, HE WAS UNDER A BONAFIDE BELIEF THAT NECESSARY TAX HAD BEEN DEDUCTE D AND PAID BY THE EMPLOYER BECAUSE OF THE FOLLOWING FACTS A) THE EMPLOYER HAD INITIALLY BEEN PAYING HRA WHICH WAS SUBJECTED TO TAX AS PART OF SALARY INCOME. B) THE LEASE RENT WAS PAID BY THE EMPLOYER HIMSELF. C) THE PERQUISITE FOR RENT FREE ACCOMMODATION WAS S UBJECT TO TAX AS SALARY INCOME. 3. THE APPELLANT, IN THE ORIGINAL RETURN OF INCOME FILED AT THANE INCOME TAX OFFICE, HAD NOT CONSIDERED THE LEASE RENT RECEIVED FROM M/S . BPCL, THE EMPLOYER. THE ACCRUED INTEREST ON HOUSING LOAN, WHICH IS DEDUCTIB LE FROM THE LEASE RENT RECEIVED, WAS ALSO NOT CONSIDERED. THE PERQUISITE, IN THE FORM OF RENT FREE ACCOMMODATION, WAS ALSO SUBJECT TO TAX AS PART OF T HE SALARY INCOME OF THE APPELLANT. AS SUCH, THE REVENUE WAS NOT PUT TO LOS S FOR NON DISCLOSURE OF LEASE. 4. AS PER THE ORDER PASSED BY THE COMMISSIONER OF I NCOME TAX (APPEALS) - V., BANGALORE IN THE CASE OF ACIT V/S. V.MADHUSUDAN RAO THE APPLICABILITY OF SECTION 17 OF THE INCOME TAX ACT, 1961, AS REGARDS THE ACCO MMODATION PERQUISITE VALUATION WAS EXAMINED AND WAS DECIDED THAT SEC. 17 OF THE INCOME TAX ACT. 1961. I.E. PERQUISITES DOES NOT APPLY TO THE CASE FOR THE FOLLOWING REASONS: (A) PERQUISITE IS A GAIN OR PROFIT INCIDENTALLY MAD E FROM EMPLOYMENT IN ADDITION TO REGULAR SALARY OR WAGES. IN THIS CASE, THE SALARY E XTENDED IS WITHOUT HRA AND HENCE IS NOT REGULAR SALARY. (B) VALUE OF ANY RENT FREE ACCOMMODATION PROVIDED T O THE ASSESSEE BY HIS EMPLOYER OR AT CONCESSIONAL RENT: THE EMPLOYER IS NOT INCURR ING THE EXPENDITURE TO PROVIDE THE RENTS EITHER ON THE BASIS OF MARKET VALUE OR AT ANY PARAMETERS TO CONSTRUE THE CONCESSIONAL RENT. I HE EMPLOYER IS PAYING THE RENT S ON SELF LEASE. I.E. HOUSE OF EMPLOYEE TAKEN ON LEASE FOR SELF OCCUPATION BY THE EMPLOYEE HIMSELF, ON THE BASIS OF PAY SCALE WHICH IS IN LIEU OF HRA. (C) THE WORDS ENGROSSED IN SECTION 1 7 ARE RENT FRE E. HENCE, VALUE OF PERQUISITE IS CHARGEABLE ONLY IF THE EMPLOYER IS PROVIDING RENT-F REE ACCOMMODATION OR AT CONCESSIONAL RATE. IN THE HANDS OF EMPLOYEE, IT IS RENT RECEIVED. (RENTS RECEIVED BY EMPLOYEE HIMSELF). HENCE, THE APPLICABILITY OF THIS SECTION HAS NO JURISDICTION. 5. THE HIGH COURT, IN P.C.JOSEPH & BROS. V. CIT [20 00] 243 ITR 0818W, HAS STATED THAT, CONCEALMENT CAN BE SAID TO BE IN LAW THE INTENTIONAL SUPPRESSION OF ITA NO.1938/MUM/2011(A.Y. 2004-05) 3 TRUTH OR FACT KNOWN TO THE INJURY OR PREJUDICE OF A NOTHER. AS THE TAX ON LEASE RENT WAS ALREADY PAID BY THE APPELLANT TWICE, FIRSTLY BY WAY OF T.D.S. ON ACCOMMODATION PERQUISITE AND SECONDLY ON SELF ASSES SMENT ALONGWITH REVISED RETURN OF INCOME, THERE IS NO INTENTIONAL SUPPRESSI ON OF THE FACT TO THE INJURY OR PREJUDICE OF ANOTHER. HENCE, THERE IS NO CONCEALMEN T AND PENALTY U/S 271(1)(C) CANNOT BE ATTRACTED. 6. THE HON. ITAT MUMBAI, IN THE FOLLOWING IDENTICAL CASES OF OTHER BPCL EMPLOYEES, HAS DELETED THE PENALTY LEVIED U/S. 271( 1)(C) OF THE INCOME TAX ACT, 1961: ITA NO. BENCH NAME OF CASE DATE OF ORDER ASSESSMENT YEAR 3522/M/2008 B MR. MAKARAND C. JOSHI 17/09/2009 2001-02 2828/M/2008 D MR. RAVINDRA L. SATHE 22/12/2009 2001-02 6181/M/2009 A MR. KISHORE KUMAR NAIR 2 0/08/2010 2002-03 6183/M/2009 A MR. UDAY KUMAR SAWANT 20/ 08/2010 2002-03 5215/M/2009 A MR. PRAMOD L. SARANG 20/08/2010 2003-04 5216/M/2009 A MR. PRAMOD L. SARANG 20/08/2010 2004-05 4900/M/2009 A MR. SANTOSH S. NAMJOSHI 20/08/2010 2003-04 4901/M/2009 A MR. SANTOSH S. NAMJOSHI 20/08/2010 2004-05 6182/M/2009 A MR. BHAGWAN V. SURYAVANSHI 20/8/2010 2001-02 5217/M/2009 A MR. BHAGWAN V. SURYAVANSHI 20/8/2010 2002-03 5218/M/2009 A MR. BHAGWAN V. SURYAVANSHI 20/8/2010 2003-04 5219/M/2009 A MR. BHAGWAN V. SURYAVANSHI 20/8/2010 2004-05 6184/M/2009 F MR.UDAY KUMAR SAWANT 31/8/2010 2004-05 IN THE LIGHT OF THE ABOVE FACTS, THE APPELLANT HUM BLY REQUESTS YOU TO KINDLY SET ASIDE THE DEMAND RAISED AND DELETE THE PENALTY LEVI ED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT APPEAL IS AN EMPLOYE E OF BPCL AND HAS ENTERED INTO A LEASE AGREEMENT WITH ITS EMPLOYER ABOUT TAK ING ASSESSEES OWN FLAT ON LEASE RENT BY THE EMPLOYER AND GIVING RENT TO THE ASSESS EE AND RENT FREE ACCOMMODATION. THE ASSESSEE CLAIMED INTEREST ON BORROWED CAPITAL UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND CLAIMED REFUND. ACCORDINGLY, TH E AO IS OF THE VIEW THAT CLAIMING OF INTEREST WAS A DELIBERATE INTENTION TO DEFRAUD THE REVENUE AS ASSESSEE DID NOT SHOW LEASE RENT RECEIVED AND CLAIMING REFUN D. ON SUCH ADDITION CONCEALMENT PENALTY OF RS.15,694/- IS LEVIED. ITA NO.1938/MUM/2011(A.Y. 2004-05) 4 3. THE ASSESSEE FILED BELATED APPEAL BEFORE LD. CI T(A) AS THE SAME WAS DUE TO BE FILED ON 22/7/2008 BUT IT WAS FILED ON 24/11/200 8. THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE G ROUND THAT ASSESSEE DID NOT FILE REQUEST FOR CONDONATION OF DELAY ALONGWITH REASON/ EXPLANATION AND THUS, APPEAL FILED BY THE ASSESSEE IS NOT ENTERTAINABLE. THEREF ORE, LD. CIT(A) WITHOUT GOING INTO THE MERITS WITHOUT ALLOWING THE ASSESSEE ANY OPPORTUNITY TO EXPLAIN THE DELAY HAS DISMISSED THE APPEAL. THE ASSESSEE IS AGGRIEV ED, HENCE, HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 4. NOTICE OF HEARING WAS SENT TO THE ASSESSEE, HOWE VER, NONE WAS PRESENT ON THE DATE OF HEARING. AS THE APPEAL IS SMALL, WE PROCEE D TO DECIDE THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE. 5. WE HAVE HEARD LD. DR, WHO RELIED UPON THE ORDER PASSED BY AO & LD. CIT(A). 5.1 THE GROUNDS OF APPEAL WHICH HAVE BEEN REPRODUC ED ABOVE, AT SL.NO.6, IT HAS DESCRIBED SEVERAL DECISIONS OF TRIBUNAL LIKE THE CA SE OF THE ASSESSEE WHERE SUCH CONCEALMENT PENALTY HAS BEEN DELETED. THEREFORE, THIS CASE IS COVERED BY THE AFOREMENTIONED DECISIONS. WE ARE AWARE THAT THE AP PEAL FILED BY THE ASSESSEE BEFORE LD. CIT(A) WAS BELATED ONE, BUT IN THE INT EREST OF JUSTICE LD. CIT(A) SHOULD HAVE REQUIRED THE ASSESSEE TO FILE APPLICATI ON FOR CONDONATION OF DELAY WHICH HAS NOT BEEN DONE BY LD. CIT(A). IN THE FACT S AND CIRCUMSTANCES OF THE CASE, EVEN RESTORATION OF THE APPEAL BEFORE LD. CIT (A) WILL NOT SERVE THE INTEREST OF JUSTICE AS THE SAME WOULD INVOLVE MULTIPLE PROCEEDI NGS AND THE AMOUNT INVOLVED IN THE PRESENT APPEAL IS VERY SMALL. THEREFORE, WE AR E OF THE OPINION THAT FOLLOWING THE AFOREMENTIONED DECISIONS MENTIONED IN GROUNDS OF APPEAL WE HAVE TO DELETE ITA NO.1938/MUM/2011(A.Y. 2004-05) 5 THE PENALTY. ACCORDINGLY, THE IMPUGNED PENALTY IS DELETED AND APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/03/2015 ! ' 10/03/2015 # $ SD/- SD/- ( . . /R.C.SHARMA ) ( . . / I.P. BANSAL ) /ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; %& DATED 10/03/2015 '() '() '() '() *)!( *)!( *)!( *)!( / COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT 2. '-+, / THE RESPONDENT. 3. . ( ) / THE CIT(A)- 4. . / CIT 5. )/# '(& , , / DR, ITAT, MUMBAI 6. #0 1 / GUARD FILE. & & & & / BY ORDER, -)( '( //TRUE COPY// 2 22 2 / 3 3 3 3 4 4 4 4 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . & . ./ VM , SR. PS