AKEEL A MASTER, MUMBAI V. DCIT 20(1), MUMBAI

ITA 2283/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2526 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.2283/M/2015 ASSESSMENT YEAR: 2009-10 SHRI AKEEL A. MASTER, 1501/04, LOKHANDWALA GALAXY, KESHAVRAO KHADEY MARG, BYCULLA, MUMBAI 400 011 PAN: AAFPM 3995H VS. DCIT-20(1), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI C.W. ANGOLKAR, A.R. DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 20.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 20.03.2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] AGITATING THE LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. NONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE DESPITE NOTICE. HOWEVER, CONSIDERING THE ISSUE INVOLVED AND THE FAC TS OF THE CASE, WE ARE OF THE VIEW THAT THE CASE CAN BE DECIDED AFTER HEARING THE LD. D.R AND HENCE, WE PROCEED TO DECIDE THE APPEAL ON MERITS. 3. THE ONLY ISSUE INVOLVED IN THIS CASE IS THAT WHI LE FILING RETURN OF INCOME THE ASSESSEE IN THE SELF COMPUTATION FAILED TO INCL UDE THE INTEREST INCOME EARNED ON THE BANK DEPOSITS IN THE NAME OF HIS MINOR TWO C HILDREN. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FAIRLY ADMITTE D THE ABOVE MISTAKE AND ITA NO.2283/M/2015 SHRI AKEEL A. MASTER 2 PLEADED THAT THE SAME WAS INADVERTENTLY ESCAPED THE NOTICE OF THE ASSESSEE. HE ACCORDINGLY AGREED TO THE ABOVE ADDITIONS DURING TH E ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS T HE AO) HAD ALSO OBSERVED THAT THE ASSESSEE HAD NOT MADE ANY SUO-MOTO DISALLO WANCE UNDER SECTION 14A IN RESPECT OF EXEMPTED INCOME BEING SHARE OF PROFIT FROM FIRMS OF BSR GROUP. HE ACCORDINGLY MADE A DISALLOWANCE OF RS.3,40,622/- UNDER SECTION 14A. THE AO ALSO INITIATED THE PENALTY PROCEEDINGS AND LEVIE D THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT HOLDING THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND HAD CONCEALED THE INTERES T INCOME ON THE DEPOSITS IN THE NAME OF HIS TWO MINOR CHILDREN. BEING AGGRIEVE D BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) . IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT DUE TO INADVERTENCE, THE INCOME OF THE MINOR COULD NOT BE TAKEN INTO CONSIDERATION THAT THERE WAS NO WILLFUL DEFAULT OR INTENTION ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PARTICUL ARS OF INCOME OR TO CONCEAL HIS INCOME. 4. THE LD. CIT(A), HOWEVER, DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HIMSELF WAS A CHARTERED ACCOUNTANT AND WORKING WITH A REPUTED FIRM M/S. BSR & CO. CHARTER ED ACCOUNTANTS AND THAT HE WAS WELL VERSED WITH THE PROVISIONS OF THE ACT. HE, HOWEVER, DELETED THE PENALTY IN RESPECT OF ADDITIONS MADE UNDER SECTION 14A WHILE RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. RELIANCE PETRO PRODUCTS (2010) 322 ITR 158 (SC) WHEREIN IT HAS BE EN HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING T HE INCOME OF THE ASSESSEE. HE, HOWEVER, CONFIRMED THE PENALTY IN RESPECT OF NO N INCLUSION OF THE INTEREST INCOME OF THE MINOR CHILDREN INTO THE INCOME OF THE ASSESSEE. 5. WE HAVE HEARD THE LD. D.R. AND HAVE ALSO GONE TH ROUGH THE RECORDS. THE FACTS OF THE CASE REVEAL THAT NON INCLUSION OF THE INTEREST INCOME ON THE BANK DEPOSITS IN THE NAME OF MINOR CHILDREN, IN OUR VIEW , DOES NOT SEEM TO BE ITA NO.2283/M/2015 SHRI AKEEL A. MASTER 3 INTENTIONAL ON THE PART OF ASSESSEE. THE ASSESSEE STATED THAT INADVERTENTLY IT ESCAPED THE NOTICE OF THE ASSESSEE AND THE ASSESSEE IMMEDIATELY OFFERED THE SAME DURING THE ASSESSMENT PROCEEDINGS. IN OUR VIE W, IT IS NOT A CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF P RICE WATERHOUSE COOPERS PVT. LTD. VS. CIT (2012) 348 ITR 306 (SC) IS APPLI CABLE TO THE CASE OF THE ASSESSEE WHEREIN IT HAS BEEN HELD THAT THE PENALTY IS NOT LEVIABLE IF THE MISTAKE IS BONAFIDE AND DUE TO INADVERTENT ERROR. 6. IN VIEW OF OUR ABOVE FINDINGS, THE PENALTY LEVIE D BY THE LOWER AUTHORITIES IS HEREBY ORDERED TO BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 20.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.