Sri Dilip Datta, Kolkata V. ITO, Ward-21(3), Kolkata, Kolkata

ITA 2094/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1344 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: MIRAZ D SHAH
• Keywords: Salary income; Bonafide belief; Reasonable cause
• Section: 273B; 148

Judgement Text

1 ITA NO.2094/KOL/2014 DILIP DATTA, AY, 2011-12 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE .., /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 2094/KOL/2014 ASSESSMENT YEAR: 2011-12 DILIP DATTA (PAN: ADBPD3139K) VS. INCOME-TAX OFFICE R, WD-21(3), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 08.08.2017 DATE OF PRONOUNCEMENT 04.10.2017 FOR THE APPELLANT SHRI MIRAZ D. SHAH, ADVOCATE FOR THE RESPONDENT N O N E ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER CONFIRMED BY THE LD. CIT(A)-XXIV, KOLKATA DATED 20.08.2014 FOR AY 2011-1 2. 2. NONE APPEARED FOR THE REVENUE. HOWEVER, AFTER G OING THROUGH THE RECORDS WE ARE OF THE OPINION THAT IT CAN BE DISPOSED OFF WITHOUT HEA RING THE LD. DR. SO WE PROCEED TO ADJUDICATE THE PENALTY ORDER CONFIRMED BY THE LD. C IT(A). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN EMPLOYEE OF M/S. GARDEN REACH SHIP BUILDERS & ENGINEERS LTD., KOLKATA WHICH IS AN UNDERTAKING OF MINISTRY OF DEFENCE. THE ASSESSEE IS AN ENGINEER AND HAS FILED HIS RETUR N OF INCOME SHOWING A GROSS TOTAL INCOME OF RS.9,69,116/-. LATER THE CASE WAS TAKEN UP FOR SCRUTINY BASED ON ITS 26AS. RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) AND REFUND WAS GIVEN TO THE ASSESSEE. AS PER THE ITS D ATA 26AS, THE AO NOTED THAT THE ASSESSEE HAS RECEIVED A TOTAL AMOUNT OF RS.14,85,591/- ON AC COUNT OF SALARY AND INTEREST FROM BANK. THEREAFTER, NOTICE U/S. 148 OF THE ACT WAS ISSUED AND THE ASSESSMENT WAS REOPENED. THE AO NOTES THAT THE ASSESSEE HAS SHOWN ONLY RS.7,26,209/ - AS SALARY INCOME WHEREAS HE HAS RECEIVED A TOTAL SALARY OF RS.12,41,040/- AS PER FO RM 16 ISSUED BY M/S. GB MARINE SERVICES LTD. AND M/S. GRSE LTD. THE AO ALSO NOTED THAT THE ASSESSEE HAS RECEIVED A TOTAL AMOUNT 2 ITA NO.2094/KOL/2014 DILIP DATTA, AY, 2011-12 OF RS.16,524/- AS PENSION DURING THE RELEVANT ASSES SMENT YEAR BUT HE HAS NOT DISCLOSED THE SAME. THEREAFTER, THE AO TREATED THE SAME AS UNDISC LOSED INCOME OF THE ASSESSEE. ACCORDING TO AO, WHEN THE ASSESSEE WAS CONFRONTED A S TO WHY BOTH THE UNDISCLOSED INCOME I.E. RS.5,14,831/- AND RS.16,524/- SHOULD NOT BE TR EATED AS HIS CONCEALED INCOME AND THE PENALTY SHOULD NOT BE IMPOSED U/S. 271(1)(C) OF THE ACT THE ASSESSEE COULD NOT GIVE ANY SATISFACTORY REPLY, THEREFORE, HE LEVIED THE PENALT Y @ 100% OF THE TAX SOUGHT TO BE EVADED U/S. 271(1)(C) READ WITH SECTION 274 OF THE ACT AND LEVIED PENALTY OF RS.1,64,189/-. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CONFIRM THE SAME. AGGRIEVED, ASSESSEE IS BEFORE US . 4. WE HAVE HEARD LD. AR AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT ASSESSEE IS AN ENGINEER WHO RETIRED FR OM M/S. GRSE LTD., A GOVT. OF INDIA UNDERTAKING UNDER THE MINISTRY OF DEFENCE IN APRIL, 2009. THE ASSESSEE HAS FILED THE RETURN OF INCOME WITHOUT THE HELP OF ANY PROFESSIONAL. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED GRATUITY AMOUNT OF RS.6,50,000/- WHICH HE THOUGHT WAS NOT TAXABLE AND, THEREFORE, HE DID NOT ADD IT TO THE SALARY WHICH HE RECEIVED FROM M/S. GRSE LTD. THE LD. AR FOR THE ASSESSEE CONTENDED THAT IN THE FINANCIAL YEAR UNDER CONSIDERATION, THE PARLIAMENT MADE AN AMENDMENT IN THE PAYMENT OF GRATUITY ACT, 1 972 BY AN AMENDMENT NO. 15/2010 WHEREIN SECTION 4 OF THE PAYMENT OF GRATUITY ACT, 1 972 WAS AMENDED BY SUBSTITUTING THE WORD RS.3,50,000/- TO RS. 10,00,000/-. THIS FACT T HE ASSESSEE CAME TO KNOW FROM THE NEWSPAPER AND TV. THE LD. AR URGED BEFORE US THAT BEFORE 2010, THE GRATUITY AMOUNT UP TO RS.3.5 LACS WAS OUT OF TAX NET. HOWEVER, BY AN AME NDMENT I.E. THE PAYMENT OF GRATUITY (AMENDMENT) ACT, 2010, SECTION 4 OF THE ACT 39 OF 1 972 WAS AMENDED AND IN PLACE OF RS.3.5 LACS THE WORD RS.10 LACS WAS SUBSTITUTED. T HEREFORE, THE ASSESSEE WAS UNDER THE BONAFIDE IMPRESSION THAT IN THIS RELEVANT ASSESSMEN T YEAR, THE AMOUNT OF RS.6,50,000/- WHICH WAS BELOW RS. 10 LAKHS WAS NOT TAXABLE. THE LD. AR TOOK OUR ATTENTION TO THE NOTIFICATION MADE BY THE GOVT. OF INDIA DATED 17.05 .2010 WHEREIN THE FACT OF GRATUITY AMENDMENT ACT, 2010 HAS RAISED THE LIMIT OF PAYMENT OF GRATUITY OUTSIDE TAXABLE NET UPTO RS. 10 LACS WAS NOTIFIED BY THE GOVT. OF INDIA WHIC H MEANS, THOUGH THE PARLIAMENT ENACTED THE LAW OF RAISING THE CEILING OF RS.3.5 LAKH TO RS .10 LAKH OUT OF TAX NET IN THE RELEVANT ASSESSMENT YEAR, HOWEVER, THE NOTIFICATION IN THE O FFICIAL GAZETTE WAS PUBLISHED ONLY IN MAY, 2010, THEREFORE, IT WAS APPLICABLE FOR NEXT YEAR ON WARDS. IN SUCH A SCENARIO, ACCORDING TO 3 ITA NO.2094/KOL/2014 DILIP DATTA, AY, 2011-12 LD. AR, THE ASSESSEE WHO IS AN ENGINEER BY PROFESSI ON AND WHO HAS FILED THE RETURN OF INCOME HIMSELF WITHOUT THE ASSISTANCE OF ANY PROFES SIONAL CANNOT BE FAULTED AND THERE IS A REASONABLE CAUSE AS ENVISAGED IN SECTION 273B OF TH E ACT FOR COMMITTING THE MISTAKE WHICH IS IN THE FACTS AND CIRCUMSTANCES IS BONAFIDE. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR THAT THE ASSESSEE WAS ON A BONAFIDE BELIEF THAT THE GRATUITY WHICH HE RECEIVED FROM THE EMPLOYER WHICH WAS ADMITTEDLY BELOW RS. 10 LACS WAS EXEMPTED FOR COMPUTATION OF TAX AND, THEREFORE, ON THAT BONAFIDE BELIEF THE GRATUIT Y AMOUNT WAS NOT INCLUDED BY THE ASSESSEE IN HIS RETURN. WE ALSO TAKE NOTE THAT FROM THE REC ONCILIATION FILED FROM PAGE 2 OF THE PAPER BOOK, WE NOTE THAT THE PENSION AMOUNT OF RS.16,524/ - HAS ALSO BEEN INCLUDED BY THE ASSESSEE IN COMPUTING THE TOTAL INCOME OF RS.9,69,116/- AND NOT RS.7,26,209/- AS HELD BY THE AO. SO, FROM THE FACTS AND CIRCUMSTANCES NARRATED ABOVE WE HOLD THAT SINCE THERE IS A REASONABLE CAUSE FOR THE ASSESSEE IN NOT REFLECTING THE GRATUI TY AMOUNT IN HIS RETURN OF INCOME NO PENALTY U/S. 271(1)(C) OF THE ACT WAS WARRANTED. S O, WE DIRECT DELETION OF THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD. CIT(A). APPEAL OF ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 4 TH OCTOBER, 2017 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4 TH OCTOBER, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI DILIP DATTA, C/O D. J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700 020. 2 RESPONDENT ITO, WARD-21(3), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY