HARIHAR BRAHMA, BHARATPUR V. ITO, BHARATPUR

ITA 215/JPR/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5149 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Salary income; Bonafide belief; Initiation of penalty proceedings; Revised return; Bonafide mistake
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 215/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI HARIHAR BRAHMA HOUSE NO. 10, GIRRAJ COLONY INSIDE FORT, BHARATPUR CUKE VS. THE ITO WARD- 3 BHARATPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFGPB 7989 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJENDRA AGARWAL JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/07/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 15 /07/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 21-12-2015 FOR THE ASSESSMEN T YEAR 2010-11 RAISING THEREIN FOLLOWING GROUND:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1 ,43,298/- IMPOSED BY THE AO U/S 271(1)(C ) OF THE I.T. ACT. ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED HIS RETURN DECLARING INCOME OF RS. 3,53,080/- ON 30-03-2011 WHICH WAS PR OCESSED U/S 143(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED F OR SCRUTINY THROUGH SYSTEM (CASS). ACCORDINGLY NOTICE U/S 143(2) OF THE ACT WAS ISSUED FOR FIXING THE CASE OF HEARING ON 14-08-2011 WHICH WAS SERVED UPON THE ASSESSEE. AS PER NOTICE, THE LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED THE REQUIRED DETAILS AND DOCUMEN TS. THE AO OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE HAS SHOWN HIS INCOME FROM SALARY FROM INFOSYS TECHNOLOGIES LTD. T HE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE H AD RECEIVED INTEREST OF RS. 5,10,330/- FROM ICICI BANKING CORPORATION LT D. AND TDS OF RS. 51,033/- HAD BEEN DEDUCTED THEREON. THE AO DURI NG VERIFICATION OF THE DETAILS OBSERVED THAT THE ASSESSEE HAD NOT DISC LOSED THE SAID INCOME IN THE RETURN OF INCOME. ACCORDINGLY SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY THE INTEREST INCOME OF RS. 5,10, 330/- MAY NOT BE ADDED TO HIS TOTAL INCOME. IN RESPONSE THERETO, THE ASSES SEE VIDE HIS REPLY DATED 14-12-2012 HAD STATED THAT HE HAD FURNISHED THE REV ISED RETURN FOR THE YEAR UNDER CONSIDERATION ON 1-11-2012 IN WHICH INTE REST INCOME OF RS. 5,10,330/- HAD BEEN DISCLOSED. THE AO CONSIDERED TH E REPLY OF THE ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 3 ASSESSEE AND FOUND THAT THE ASSESSEE HAD ADMITTED T HE CONCEALMENT OF INCOME OF RS. 5,10,330/- THROUGH THE REVISED COMPUT ATION BUT THE CLAIM OF DISCLOSING THE INCOME THROUGH THE REVISED RETURN OF INCOME WAS NOT ACCEPTABLE TO THE AO AS THE REVISED RETURN IS NOT V ALID RETURN AND THE ORIGINAL RETURN FILED IN THE CASE WAS NOT AS PER TH E PROVISIONS OF SECTION 139(1) OF THE ACT. THE AO OBSERVED THAT THE ASSESSE E HAD ADMITTED THE INTEREST INCOME ONLY AFTER THE ISSUE HAD BEEN RAISE D BY THE REVENUE AND THE ASSESSEE HAD WILLFULLY FAILED TO DISCLOSE HIS F ULL PARTICULARS OF HIS INCOME IN HIS RETURN OF INCOME. ACCORDING TO THE AO , THE ASSESSEE HAD ADMITTED THE CONCEALMENT OF INCOME OF RS. 5,10,330/ - AND THERE WAS NO DISPUTE IN THE MATTER AND UNDISCLOSED INTEREST INCO ME OF RS. 5,10,330/- WAS ADD TO THE TOTAL INCOME OF THE ASSESSEE. THUS I T IS EVIDENT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOM E AND FURNISHED INACCURATE PARTICULARS OF INCOME AND IT IS A FIT C ASE OF INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(B) AND 271(1)(C) R.W.S. 274 OF THE ACT. 2.2 BASED ON THE ASSESSMENT ORDER, THE PROCEEDINGS WERE INITIATED BY THE AO U/S 271(1) OF THE ACT ON THE ASSESSEE AS TO CONCEALMENT OF INTEREST INCOME OF RS. 5,10,330/- . THE AO VIDE HIS ORDER DATED 31-07- ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 4 2013 TAKING INTO CONSIDERATION ALL THE FACTS OF THE CASE IMPOSED MINIMUM PENALTY OF RS. 1,43,298/-U/S 271(1) OF THE ACT ON THE ASSESSEE. 2.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WAS CONFIRMED THE PENALTY OF RS. 1,43,298 U /S 271(1)(C) OF THE ACT BY OBSERVING AS UNDER:- 4.3. I HAVE GONE THROUGH THE PENALTY ORDER AS WEL L AS THE SUBMISSION MADE BY THE APPELLANT INCLUDING JUDICIAL CITIATIONS GIVEN THEREIN AND FIND THAT A PENALTY OF RS. 1,43,2 98/- HAS BEEN IMPOSED U/S 271(1) OF THE I.T. ACT BY THE AO. THE PENALTY WAS IMPOSED ON THE GROUND THAT UNDISCLOSED INTEREST INC OME OF RS. 5,10,330/- EARNED ON BANK FDRS WAS FOUND BY THE AO. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ADDITION OF RS. 5 ,10,330/- WAS MADE AND HAS BEEN ACCEPTED BY THE APPELLANT. IN THE ABSENCE OF ANY DISCLOSURE BEING MADE BY THE APPELLANT IN THIS REGA RD IN THE RETURN OF INCOME FILED, PENALTY FOR FURNISHING OF INACCURA TE PARTICULARS AND CONCEALMENT OF INCOME HAS BEEN IMPOSED BY THE AO. 4.4 THE APPELLANT HAS STATED THAT AO HAD MADE ADDIT IONS OF RS. 5,10,330/- ON ACCOUNT OF INTEREST INCOME AN D NO PENALTY COULD BE IMPOSED AS THE APPELLANT HAD ACCEPTED THE ADDITION SO MADE AND NO APPEAL AGAINST THIS WAS FILED. THE APPE LLANT HAS PAID ALL THE TAXES AND INTEREST THEREON BY ADMITTING THE EARNING OF INTEREST INCOME ON FDRS. THE APPELLANT HAS ALSO PLA CED RELIANCE ON JUDICIAL DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HANS CHRISTIAN GASS. 4.5 I HAVE CAREFULLY EXAMINED THE FACTS OF THIS CAS E AD FIND THAT ADDITION ON ACCOUNT OF INTEREST ON BANK FDRS AMOUNTING TO RS. 5,10,330/- COULD BE MADE BY THE AO BASED ON THE INFORMATION RECEIVED THROUGH ITD SOFTWARE. THE APPELLANT HAD FA ILED TO DISCLOSE INTEREST INCOME ON THESE FDRS IN THE RETUR N OF INCOME ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 5 FILED. BASED ON THESE FACTS AND EVIDENCES GATHERED AT THE TIME OF ASSESSMENT, AO HAS GIVEN A FINDING THAT APPELLANT H AS INTENTIONALLY FAILED TO DISCLOSE THE FDRS MAINTAINED WITH ICICI B ANK. IT IS FURTHER STATED THAT THERE HAVE BEEN FREQUENT TRANSA CTION WITH THE BANK AND GIVEN THE FACT THAT APPELLANT IS A SALARIE D EMPLOYEE THE PLEA TAKEN BY THE APPELLANT DOES NOT CORRESPOND TO THE FACTS ON RECORD. THERE HAS BEEN A CLEAR CUT EFFORT AND WILLF UL ATTEMPT TO EVADE THE PAYMENT OF TAXES ON THE INTEREST INCOME E ARNED BY THE APPELLANT . 4.6 THE APPELLANT HAS FAILED TO DISCLOSE THE INTERE ST INCOME ON THE FDRS. THUS THE CONDUCT OF THE APPELLANT HAS ALL ALONG BEEN TO EVADE THE PAYMENT OF TAXES ON THE INTEREST INCOM E AND TO HIDE THE INCOME EARNED FROM THE INCOME TAX DEPARTMENT. T HEREFORE, THE CLAIM OF THE APPELLANT THAT THE AMOUNT OF INTEREST EARNED ON FDRS WAS DECLARED ON RECEIPT OF NOTICE FROM THE AO AND D UE TAXES HAS BEEN PAID WITH INTEREST CANNOT BE ACCEPTED ON FACE VALUE. 4.7 I HAVE CONSIDERED THE JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT AND FIND THE SAME TO BE DISTINGUISHAB LE ON FACTS AND HENCE TO BE NOT APPLICABLE IN THE PRESENT CASE. THE ADDITION OF INTEREST INCOME MADE BY THE AO IS ON ACCOUNT OF EV IDENCE COLLECTED BY THE DEPARTMENT AND EFFORTS HAVE BEEN M ADE BY THE APPELLANT NOT TO DISCLOSE THE SAME. THEREFORE, I HO LD THAT AO HAS BEEN JUSTIFIED IN INITIATING AND IMPOSING THE PENAL TY PROCEEDINGS U/S 271(1)(C ) OF THE I.T. ACT AS THE APPELLANT HAS CLEARLY CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME. 4.8 IN VIEW OF THE ABOVE DISCUSSION, I CONFIRM THE LEVY OF PENALTY OF RS.,143,298/- IMPOSED BY THE AO U/S 271( 1) OF THE I.T. ACT. 2.4 DURING THE COURSE OF HEARING, THE LD. AR FILED THE FOLLOWING WRITTEN SUBMISSION PRAYING THEREIN TO DELETE THE PENALTY OF RS. 1,43,298/- ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 6 CONFIRMED BY THE LD. CIT(A) U/S 271(1)(C) OF THE AC T WHICH WAS LEVIED BY THE AO. THE ASSESSEE FILLED HIS RETURN OF INCOME ON 30.03 .2011 (PB-1) ALONGWITH COMPUTATION OF INCOME (PB-2) WHICH WAS PROCESSED U/ S 143(1) OF THE I.T.ACT,1961. DURING THE COURSE OF ASSESSMENT PROCE EDINGS U/S 143(3) IT CAME TO THE KNOWLEDGE OF THE ASSESSEE AND THE LD.AO THAT TH E INTEREST ON FDRS WITH ICICI BANK OF RS.5,10,330/- HAS NOT BEEN DECLARED I N THE RETURN OF INCOME AND SIMULTANEOUSLY TDS OF RS.51,033/- DEDUCTED BY ICICI BANK ON THE INTEREST AMOUNT HAS NOT BEEN CLAIMED IN THE RETURN OF INCOME (PB-1 & 2). AT THE TIME OF FILLING THE RETURN OF INCOME THE ASS ESSEE WAS OF THE VIEW THAT THE INTEREST ON FDRS SHALL BE SHOWN AND TAXABL E IN THE RETURN OF INCOME AT THE TIME OF MATURITY OF FDRS FROM ICICI BANK DUE THE RE ASONS THAT THE ASSESSEE WAS EMPLOYED IN INFOSYS IN USA AND WAS NOT SO MUCH AWAR E WITH THE PROVISIONS OF THE INCOME TAX ACT,1961 IN INDIA BUT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AS PER DISCUSSION HELD WITH HIS AR/CA AND THE LD.AO IMMEDIATELY THE ASSESSEE FILED REVISED RETURN OF INCOME ON 01.11.2012 (PB-3) ALONGWITH COMPUTATION OF INCOME (PB-3) DECLARING THE INTEREST ON FDRS FROM I CICI BANK RS.5,10,330/- AND CLAIMING TDS OF RS.51,033/- ON THIS INTEREST AMOUNT AND VOLUNTARILY OFFERED RS.5,10,330/- FOR TAXATION AND IMMEDIATELY DEPOSITE D THE TAX AND INTEREST AMOUNT OF RS.105410/- BY WAY OF SELF ASSESSMENT TAX CHALLA N ON 14.08.2012 AS EVIDENT FROM PB-3 & 4. DURING THE COURSE OF A.Y.2010-11 THE FACILITY OF DO WNLOADING 26AS FROM THE DEPARTMENTAL WEBSITE WAS NOT ALLOAWALBE AND DUE TO THE FACT THAT THE ASSESSEE WAS WORKING AND RESIDING IN USA, THE MISTAKE WAS HA PPENED DUE TO BONAFIDE BELIEF. SINCE THE ASSESSEE ADMITTED THIS BONAFIDE MISTAKE I MMEDIATELY AND THE LD.AO COMPLETED THE ASSESSMENT U/S 143(3) BY MAKING A SOLE ADDITION OF THIS INTEREST AMOUNT OF RS.5,10,330/- AND THE ASSESSEE A CCEPTED THE SAME AS SUCH WITHOUT MAKING ANY DISPUTE. FURTHER WHATEVER INFORMATION AVAILABLE AT 26AS IS A VAILABLE TO BOTH THE ASSESSEE AS WELL AS TO THE DEPARTMENT AND AVAILABLE TO BOTH SINCE BEGINNING AND NO ESCAPEMENT OR CONCEALMENT ON THE PART OF THE ASSESS EE WAS POSSIBLE AND SO FAR AS INFORMATION AVAILABLE AT 26AS, THE QUESTION OF ESCA PEMENT OF INCOME OR PARTICULARS FROM THE DEPARTMENT DOES NOT ARISES AS THE SAME IS READILY AVAILABLE BEFORE THE LD.AO AT EACH AND EVERY TIME. BUT THE LD.AO LEVIED THE PENALTY OF RS.1,43,298/- U /S 271(1)(C) OF THE INCOME TAX ACT,1961. ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 7 IN THE SIMILAR FACTS AND CIRCUMSTANCES, IN THE CASE OF CIT VS. HANS CHRISTIN GASS, HONLE BOMBAY HIGH COURT (PB- 7) HAS DECIDED THAT THE PENALTY IMPOSED U/S 271(1)(C) BY THE AO WAS DELETED BY THE ITAT AFTER RECORDING DETAILED REASONS THAT IT WAS A CASE OF BONAFIDE MISTAKE AND THAT WAS NO INTENTION TO EVDA TAX. THE DISCRETION EXERCISED BY THE ITAT IN ACCEPT ING THE EXPLANATION GIVEN BY THE ASSESSEE IS REASONABLE AND WE HAVE NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL WHICH IS BASED ON FINDING OF FACTS. I N THIS CASE IN THE ROI, THE ASSESSEE HAD NOT OFFERED THE REIMBURSED AMOUNT TO TAX UNDER THE BONAFIDE BELIEF THAT THE SAME WERE NOT TAXABLE. HOWEVER WHEN A QUER Y WAS RAISED BY THE AO DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE IMM EDIATELY OFFERED THAT AMOUNT TO TAX FOR ALL THE YEARS. IN THE SIMILAR FACTS AND CIRCUMSTANCES THE HONLE A PPEX COURT IN THE CASE OF CIT V.RELIANCE PETRPRODUCTS P.LTD. (2010) ITR 15 8, 230 CTR 320 & 189 TAXMAN 322, DISMISSED THE APPEAL OF THE REVENUE AND DECIDED THAT PENALTY U/S 271(1)(C) CAN NOT BE IMPOSED WHICH WERE NOT INCLUD ED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANTS ACCOUNT BOOKS . KEEPING IN VIEW OF THE ABOVE SUBMISSIONS AND JUDICI AL PRONOUNCEMENTS THE PENALTY U/S 271(1)(C) IS NOT LEVIABLE AND NEEDS TO BE DELETED. 2.5 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I HAVE CONSIDERED THE CASE LAW S RELIED ON BOTH SIDES.. THE BANK HAS DEDUCTED TDS ON INTEREST INCOME. AT TH E RELEVANT TIME, THE ASSESSEE WAS NOT HAVING FACILITY TO DOWNLOAD THE FO RM 26AS FROM THE DEPARTMENTAL WEBSITE. THE ASSESSEE WAS SALARIED PER SON AND WORKING IN INFOSYS LTD., USA. THE ASSESSEE WAS RESIDING IN USA AND THE AGED PARENTS WERE RESIDING IN INDIA. THE ASSESSEE HAS NO T CLAIMED THE CREDIT OF TDS ON INTEREST INCOME IN HIS RETURN OF INCOME. THE RE APPEARS TO BE NO INTENTION TO CANCEL THE INTEREST INCOME. THE ASSESS EE HAS DEPOSITED THE ITA NO. 215/JP/2016 SHRI HARIHAR BRAHMA VS. ITO, WARD- 3, BHRATPUR . 8 ENTIRE TAX AND INTEREST THEREON AS SOON AS HE GOT I NFORMATION ABOUT SUCH MISTAKE. THUS THE OMISSION WAS NOT DELIBERATE BUT IT WAS A BONA FIDE MISTAKE. THEREFORE, IN MY CONSIDERED VIEW, THE ASSE SSEE DOES NOT DESERVE TO BE VISITED BY THE PENALTY PROCEEDINGS U/S 271(1) AS THERE WAS NO INTENTION TO EVADE THE TAX. IN THIS VIEW OF THE MAT TER, I DIRECT TO DELETE THE PENALTY OF RS. 1,43,298/- U/S 271(1) CONFIRMED BY THE LD. CIT(A). THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED ORDER PRONOUNCED IN THE OPEN COURT ON 15 /07/2 016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 /07/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI HARIHAR BRAHMA,BHARATPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 3, BHARATPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 215/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR