M.Tamilselvan, CHENNAI V. ITO, CHENNAI

ITA 2266/CHNY/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7823 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: T VASUDEVAN
• Keywords: Revised return
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2266/MDS/2014 / ASSESSMENT YEAR : 2009-10 SHRI M. TAMILSELVAN, NO.8, SABATHY STREET, NARMADA NAGAR, ULLAGARAM, CHENNAI 603091. PAN : ABTPT0617L V. THE INCOME-TAX OFFICER, BUSINESS WARD 1(5), CHENNAI 600045. ( /APPELLANT) ( !' /RESPONDENT) # /APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE !' # /RESPONDENT BY : SHRI R. DURAIPANDIAN, SR. AR. # /DATE OF HEARING : 21.12.2016 # /DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNAI DA TED 11.06.2014 AND PERTAINS TO THE ASSESSMENT YEAR 2009-10. 2 I.T.A. NO. 2266/MDS/2014 2. SHRI T. VASUDEVAN, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAS SOLD A LANDED PROPERTY FOR 65 LAKHS. HOWEVER, BY OVERSIGHT, THE SALE OF PROPERTY WAS NOT DECLARED IN THE RETURN FILED BY THE ASSESSEE IN THE REGULAR COURSE. WHEN THE R ETURN WAS TAKEN UP FOR SCRUTINY, THE ASSESSEE FILED THE REVISED COMPUT ATION INCLUDING THE PROFIT ON SALE OF LAND AT 18,48,013/-. THE ASSESSING OFFICER ALSO ACCEPTED THE REVISED COMPUTATION FILED BY THE ASSES SEE. NO FURTHER ADDITION WAS MADE BY THE ASSESSING OFFICER. THEREF ORE ACCORDING TO THE LD. COUNSEL, THERE WAS NO CONCEALMENT OF ANY PA RTICULARS OF INCOME. THE OMISSION IN DISCLOSING PROFIT ON SALE OF LAND TO THE EXTENT OF 18,48,013/- WAS INADVERTENT ERROR. THEREFORE ACCOR DING TO THE LD. COUNSEL, THERE WAS NO CONCEALMENT OF INCOME. HENCE , THE ASSESSING OFFICER IS NOT JUSTIFIED IN LEVYING PENALTY UNDER S ECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE LD . COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN PR ICE WATERHOUSE COOPERS PVT. LTD. V CIT AND ANOTHER IN [2012] 348 IT R 306 (SC). 3. ON THE CONTRARY, SHRI R. DURAIPANDIAN, THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE PROFIT ON SALE OF LAND WAS NOT DECLARED BY THE ASSESSEE IN THE RETURN FILED BY HIM . THE ASSESSING OFFICER RECEIVED ANNUAL INFORMATION REPORT AND THE SAME WAS COMMUNICATED TO THE ASSESSEE DURING THE COURSE OF A SSESSMENT 3 I.T.A. NO. 2266/MDS/2014 PROCEEDING. THE ASSESSEE IMMEDIATELY ACCEPTED AND F ILED REVISED COMPUTATION INCLUDING THE PROFIT ON SALE OF THE LAN D TO THE EXTENT OF 18,48,013/-. ACCORDING TO THE LD. D.R., BUT FOR TH E ANNUAL INFORMATION REPORT, THE INCOME WOULD NOT HAVE BEEN BROUGHT FOR TAXATION. THE LD. D.R., FURTHER SUBMITTED THAT THE ASSESSEES ADMISSION OF PROFIT ON SALE OF THE LAND BY WAY OF A REVISED COMPUTATION BEFORE THE ASSESSING OFFICER CANNOT BE CONSTRUED AS VOLUNTARY DISCLOSURE. THEREFORE, IT IS OBVIOUS THAT THE ASSES SEE HAS CONCEALED PART OF HIS INCOME. THEREFORE, THE CIT (APPEALS) HAS RIGHTLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PROF IT ON SALE OF THE LAND TO THE EXTENT OF 18,48,013/- WAS NOT DISCLOSED BY THE ASSESSEE IN THE COURSE OF FILING THE REGULAR RETURN OF INCOM E. FROM THE ORDER OF THE LOWER AUTHORITIES IT APPEARS, THE RETURN FILED BY THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSING OFFICER ALS O HAD THE BENEFIT OF GOING THROUGH THE ANNUAL INFORMATION REPORT SAID TO BE FILED BY THE SUB-REGISTRAR OF THE STATE REGISTRATION DEPARTMENT. THE MOMENT IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE ABOUT THE NON-DECLARATION OF THE PROFIT ON SALE OF LAND, THE ASSESSEE FILED THE REVISED COMPUTATION OF 4 I.T.A. NO. 2266/MDS/2014 INCOME INCLUDING THE PROFIT ON SALE OF THE LAND TO THE EXTENT OF 18,48,013/-. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE ASSESSEE CONCEALED ANY PART OF HIS INCOME OR FURNIS HED ANY INACCURATE PARTICULARS OF HIS INCOME. WE HAVE CAR EFULLY GONE THROUGH THE JUDGMENT OF THIS APEX COURT IN THE CASE OF PRIC E WATERHOUSE COOPERS PVT. LTD. V CIT (SUPRA). 5. IN THE CASE BEFORE THE APEX COURT, THE ASSESSEE IS A PRACTICING CHARTERED ACCOUNTANT FIRM, CLAIMING DEDUCTION UNDER SECTION 40A(7) OF THE ACT IN RESPECT OF PROVISION MADE FOR PAYMENT OF GRATUITY. IN FACT, ORIGINALLY THE ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER R EOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF T HE ACT. IMMEDIATELY AFTER RECEIVING NOTICE UNDER SECTION 14 8 OF THE ACT, THE ASSESSEE COMPANY REALIZED THAT THERE WAS A MISTAKE IN CLAIMING DEDUCTION UNDER SECTION 40A(7) OF THE ACT AND INFOR MED THE ASSESSING OFFICER THAT THERE WAS A GENUINE MISTAKE OR OMISSIO N IN CLAIMING DEDUCTION UNDER SECTION 40A(7) OF THE ACT. THE ASSE SSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE APEX COURT AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE FOUND THAT ALL THAT HAP PENED WAS A BONA FIDE AND INADVERTENT ERROR WHILE SUBMITTING THE RET URN OF INCOME. THE 5 I.T.A. NO. 2266/MDS/2014 APEX COURT FURTHER FOUND THAT THIS CAN BE DESCRIBED AS HUMAN ERROR WHICH WE ALL PRONE TO MAKE. THE CALIBRE AND EXPERT ISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH INADVERTE NT ERROR. THE ABSENCE OF DUE CARE DOES NOT MEAN THAT THE ASSESSEE WAS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPT ING TO CONCEAL ITS INCOME. IN FACT, THE APEX COURT OBSERVED AS FOLLOW S: THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT T HERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THERE IS AL SO NO QUESTION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. IT APPEARS TO US THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FA ILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME. THIS CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CALIBRE AND EX PERTISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ER ROR. THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. WE ARE OF THE OPINION, GIVEN THE PECULIAR FACTS O F THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIF IED. WE ARE SATISFIED THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCO ME OR FURNISH INACCURATE PARTICULARS 6. IN THE CASE BEFORE US ALSO, DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSING OFFICER BROUGHT TO THE NOT ICE OF THE ASSESSEE ABOUT THE ANNUAL INFORMATION REPORT RECEIV ED BY HIM. IMMEDIATELY, THE ASSESSEE REALIZED THE MISTAKE AND FILED THE REVISED RETURN, ADMITTING THE PROFIT ON SALE OF LAND. THERE FORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT IS ONLY AN INADVE RTENT ERROR ON THE PART 6 I.T.A. NO. 2266/MDS/2014 OF THE ASSESSEE, AS OBSERVED BY THE APEX COURT. THI S KIND OF ERROR MAY HAPPEN TO ANY. THE CALIBRE AND EXPERTISE OF THE ASSESSEE HAS NOTHING TO DO WITH AN INADVERTENT ERROR. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ABSENCE OF DUE CARE IN DISCLOSING THE INCOME ON SALE OF LAND, DOES NOT IN ANY WAY MEAN TH AT THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED ANY INACCURAT E PARTICULARS OF HIS INCOME. THEREFORE LEVYING OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT JUSTIFIED. ACCORDINGLY, THE ORDERS OF T HE LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING O FFICER IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 31 ST JANUARY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 31 ST JANUARY, 2017. JR. # ! $ % $ /COPY TO: 1. /APPELLANT 2. !' /RESPONDENT 3. &' ( )/CIT(A) II, CHENNAI 4. &' /CIT 5. ! $ /DR 6. () /GF.