Sri.Ravikiran Netla , Bangalore V. Income Tax Officer Ward-5(3)(2), Bangalore

ITA 2123/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6916 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 04-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI J C IT BENGALURU
• Assessee Lawyers: A RAVISH RAO
• Keywords: Revised return; TDS
• Section: 271(1)(c); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 2123/BANG/2018 ASSESSMENT YEAR: 2014-15 SHRI RAVIKIRAN NETLA, A-302, MANTHRI GREENS, NO.1, SAMPIGE ROAD, BENGALURU - 560003 PAN: AEDPR 1751C VS. THE INCOME TAX OFFICER, WARD-5(3)(2), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI. A. RAVISH RAO, CA RESPONDENT BY : SMT. R.PREMI, JC IT(DR)(ITAT), BENGALURU. DATE OF HEARING : 09.09.2020 DATE OF PRONOUNCEMENT : 10.09.2020 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 03.05.2018 OF THE CIT(APPEALS)-6, BENGALURU RELATIN G TO ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED VARIOUS GROUNDS W ITH REGARD TO PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 [ THE ACT]. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED RETURN OF INCOME AFTER DECLARING TOTAL INCOME OF RS.27,79,800 WITH TDS CLAIM OF RS.6,83,858. LATER THE ASSESSEE FILED REVISED RETU RN DECLARING TOTAL INCOME OF RS.16,62,000 AND REFUND CLAIM OF RS.3,45,400. I T WAS FOUND THAT ASSESSEES CLAIM OF HOUSING LOAN INTEREST AND OTHER DEDUCTIONS UNDER CHAPTER VIA WERE NOT SUPPORTED BY PROPER EVIDENCE. ACCORDINGLY, THESE ITA NO. 2123/BANG/2018 PAGE 2 OF 3 CLAIMS UNDER CHAPTER VIA WERE DISALLOWED BY THE AO. CONSEQUENTLY, PENALTY U/S. 271(1)(C) OF THE ACT WAS LEVIED AT RS. 3,45,400. 3. BEFORE THE CIT(APPEALS), THE ASSESSEE CHALLENGED THE LEVY OF PENALTY U/S. 271(1)(C) ON THE GROUND THAT PENALTY N OTICE U/S. 274 OF THE ACT WAS BAD IN LAW. HOWEVER, THE CIT(APPEALS) HELD THA T ISSUE OF NOTICE U/S. 274 IS VALID AND CONSEQUENT FRAMING OF PENALTY ORDE R IS ALSO VALID. EVEN ON MERITS, LEVY OF PENALTY WAS CONFIRMED BY THE CIT(AP PEALS). 4. BEFORE US, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE CASE WAS MISHANDLED BY ONE MR. NAGESH SHASTRY, INCOME TAX PR ACTITIONER, WHO HAS BEEN INDULGING IN CLAIM OF FRAUDULENT REFUNDS BY FI CTITIOUS CLAIM OF DEDUCTIONS, WHICH WAS UNEARTHED BY THE INVESTIGATIO N WING OF THE INCOME TAX DEPARTMENT. IT WAS SUBMITTED THAT WITHOUT THE K NOWLEDGE OF ASSESSEE, MR. NAGESH SHASTRY HAS FILED REVISED RETURN AND ALL REQUISITE PASSWORD, ETC. WAS KEPT WITH HIM AND BY GIVING THE MOBILE NUMBER O F MR. NAGESH SHASTRY ONLY. IT WAS SUBMITTED THAT THE MOBILE NO. & EMAIL ADDRESS GIVEN TO THE DEPARTMENT IN ORIGINAL RETURN AND REVISED RETURN WE RE DIFFERENT, WHICH CAN BE LOOKED INTO SO AS TO SEE THE VERACITY OF THE ASS ESSEES STATEMENT. FURTHER IT WAS SUBMITTED THAT THE ENTIRE REFUND ISS UED IS RECOVERED BACK BY THE INCOME-TAX AUTHORITIES BY WAY OF ATTACHING BANK ACCOUNT OF ASSESSEE. ACCORDING TO THE LD. AR, THERE WAS NO FAULT OF ASSE SSEE IN FILING THE REVISED RETURN SO AS TO CLAIM THE FRAUDULENT REFUND. THE E NTIRE ISSUE OF CLAIM OF FRAUDULENT REFUND IS BY MR. NAGESH SHASTRY ONLY AND THE ASSESSEE WAS BONAFIDE IN HIS ACTION AND THERE WAS NO FAULT FROM THE ASSESSEES SIDE. 5. THE LD. DR SUBMITTED THAT THE ENTIRE CLAIM OF FR AUDULENT REFUND WAS WITH FULL KNOWLEDGE OF ASSESSEE AND THE ASSESSEE AT THIS STAGE CANNOT SAY THAT IT WAS HANDIWORK OF MR. NAGESH SHASTRY. ITA NO. 2123/BANG/2018 PAGE 3 OF 3 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN THE QUANTUM APPEAL ORDER DATED 19.2.2018, THE CI T(APPEALS) RECORDED THESE FACTS IN PARA 5 OF HIS ORDER THAT MR. NAGESH SHASTRY WAS INSTRUMENTAL IN FLING THE REVISED RETURN. HOWEVER, THE SAME FAC TS AND ARGUMENTS IN THE PENALTY PROCEEDINGS ARE NOT CONSIDERED BY THE CIT(A PPEALS). IN OUR OPINION, IT IS PROPER TO EXAMINE WHETHER MR. NAGESH SHASTRY IS INSTRUMENTAL IN CLAIMING FRAUDULENT REFUND ON BEHALF OF ASSESSEE BY INDULGING IN MALPRACTICES. IF MR. NAGESH SHASTRY IS FOUND SOLEL Y RESPONSIBLE FOR SUCH FRAUDULENT ACT AND THAT ASSESSEES ACT IS BONAFIDE, PENALTY CANNOT BE LEVIED. WITH THESE OBSERVATIONS, WE REMAND THIS IS SUE TO THE FILE OF THE CIT(APPEALS) TO CONSIDER ALL THESE FACTS AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER AFFORDING ASSESSEE OPPOR TUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF SEPTEMBER, 2020. SD/- SD/- ( N V VASUDEVAN ) ( CHANDRA POOJARI ) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 10 TH SEPTEMBER, 2020. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.