Shri Rajendra J.Patel, Ahmedabad V. The ACIT.,(OSD),Range-1, Ahmedabad

ITA 2308/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80412 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 15-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Business income; Bonafide belief

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , 00 ' , #$ # % BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 2308/AHD/2010 ASSESSMENT YEAR: 2008-09 RAJENDRA J. PATEL, 1, HASUBHAI CO-OP SOCIETY, NR. GULAB TOWER, THALTEJ, AHMEDABAD-380054. PAN: AFUPP6840E VS. ASSISTANT COMMISSIONER OF INCOME TAX (OSD), RANGE-1, AHMEDABAD. / APPELLANT / RESPONDENT REVENUE BY : SHRI NIMESH YADAV, SR. DR ASSESSEE(S) BY : SHRI S.N. DIVETIA, AR / DATE OF HEARING : 14/10/2014 / DATE OF PRONOUNCEMENT: 17/10/2014 #'/ O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XXI DATED 24.09.20 12. 2. THE SOLE GROUND OF APPEAL OF THE ASSESSEE RELATES T O THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING PEN ALTY OF RS 3,91,041/- LEVIED U/S. 271(1)(C) OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, PENALTY U/S. 271(1)(C) OF THE ACT OF RS 3,91,041/- W AS LEVIED ON THE ITA NO. 2308/AHD/201 2 SHRI RAJENDRA J. PATEL , AHMEDABAD. AY 2008-0 9 - 2 - ASSESSEE ON THE GROUND OF FURNISHING INACCURATE PARTI CULARS OF INCOME OF RS 11,50,459/-. THE RELEVANT FACTS ARE THAT THE ASSES SEE IN HIS RETURN OF INCOME DISCLOSED TOTAL INCOME AT RS 30,000/- AFTER SETTING OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS 11,50,459/- FROM THE INCO ME OF RS 11,80,459/- UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THE ASSESSMENT MADE, IT WAS OBSERVED THAT BROUGHT FORWARD BUSINESS LOSS CAN BE SET OFF AGAINST BUSINESS INCOME OF THE CURRENT YEAR AND THE SAME CANN OT BE SET OFF AGAINST INCOME OF THE CURRENT YEAR WHICH IS CHARGEABLE UNDER T HE HEAD INCOME FROM OTHER SOURCES. ON THE ABOVE FACT, THE ASSESSEE WA S HELD GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME. 4. BEFORE THE HONBLE GUJARAT HIGH COURT, THE ASSES SEE FILED AN AFFIDAVIT OF SHRI VINOD H. DESAI, CHARTERED ACCOUNTANT AND THE MATTER WAS REMANDED BACK TO THE TRIBUNAL FOR DECIDING THE ISSUE OF PENALTY AFRESH AFTER TAKING INTO CONSIDERATION THE SAID AFFIDAVIT. 5. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE POINTED OUT ON THE BASIS OF THE AFFIDAVIT THAT THE ASSESSEE R ELIED UPON THE ADVICE GIVEN BY A QUALIFIED PROFESSIONAL IN SETTING OFF OF B ROUGHT FORWARD BUSINESS LOSS OF RS 11,50,459/-AGAINST THE INCOME OF THE CURR ENT YEAR ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. 6. THE FACT OF THE ASSESSEE HAVING BROUGHT FORWARD BU SINESS LOSS AND ALL THE PARTICULARS IN RESPECT OF INCOME OF THE CU RRENT YEAR WAS TRULY AND COMPLETED DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND AS THE CLAIM OF SET OFF WAS BASED ON THE OPINION OF A QUALIFI ED PERSON, THE ASSESSEE SHOULD NOT BE VISITED WITH THE LIABILITY OF PENALTY. 7. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIVE CONTENDED THAT A PROFESSIONAL QUALIFIED PERSON COULD NOT HAVE MAD E SUCH A MISTAKE AND THEREFORE THE ASSESSEE WAS CORRECTLY PENALIZED U/S. 2 71(1)(C) OF THE ACT. ITA NO. 2308/AHD/201 2 SHRI RAJENDRA J. PATEL , AHMEDABAD. AY 2008-0 9 - 3 - 8. WE FIND THAT THE GENUINENESS OF THE AFFIDAVIT IS NOT IN DISPUTE. IN THE AFFIDAVIT, THE DEPONENT HAS CLEARLY STATED IN A SOLEMNLY AFFIRMED STATEMENT THAT THE ASSESSEE WAS HIS CLIENT SINCE ABO UT 15 YEARS AND HIS ENTIRE AUDIT AND TAXATION WORK WAS HANDLED BY HIM. A CCORDINGLY, HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 WAS PREPARED BY HIM AND FILED WITH THE INCOME TAX DEPARTMENT ON 18.09.2008 DECLARING INCO ME OF RS 30,000/-. THE CASE OF HIS CLIENT WAS SELECTED FOR SCRUTINY AND WHILE PREPARATION BEFORE APPEARING IN THE ASSESSMENT, IT CAME TO HIS NOTICE THA T THE SET OFF OF CARRIED FORWARD BUSINESS LOSS WAS WRONGLY MADE AGAINST INCOME FROM OTHER SOURCES IN THE SAID RETURN OF INCOME. HENCE, REVISED WORKING WAS FILED DURING THE COURSE OF ASSESSMENT BEFORE IT WAS DETECTED BY THE ASS ESSING OFFICER. IT WAS AN INADVERTENT MISTAKE ON PART OF HIM WHILE PREPAR ING THE RETURN OF INCOME OF THE ASSESSEE. HE HAS FURTHER STATED THAT THE MISTAKE WAS COMMITTED DUE TO PRESSURE OF WORK AND IT WAS NEITHER DE LIBERATE NOR WILFUL NOR LAPSE OF PROFESSIONAL DUTY. 9. WE THUS FIND THAT THE CLAIM OF THE SET OFF OF BRO UGHT FORWARD LOSS WAS CLAIMED BY THE ASSESSEE ON THE ADVICE OF THE DEPONEN T NAMELY SHRI VINOD H. DESAI, CHARTERED ACCOUNTANT. 10. FURTHER, IT IS ALSO NOT IN DISPUTE THAT SHRI VI NOD H. DESAI IS A QUALIFIED PROFESSIONAL AND ACTIVELY ENGAGED IN THE PROFESS ION OF TAX CONSULTANCY. IN THE ABOVE CIRCUMSTANCES, THE RELIAN CE PLACED BY THE ASSESSEE ON THE ADVICE OF SUCH A PROFESSIONAL, THE A SSESSEE CANNOT BE HELD GUILTY OF GROSS NEGLIGENCE. 11. FURTHER, IN THE CIRCUMSTANCES, IT CAN BE HELD T HAT THE ASSESSEE CLAIMED SET OFF OF BROUGHT FORWARD BUSINESS LOSS ON HI S BONAFIDE BELIEF THAT THE ADVICE GIVEN BY THE PROFESSIONAL PERSON WHO IS ACT IVELY ENGAGED IN THE PROFESSION OF TAX CONSULTANCY WAS CORRECT. IN THE A BOVE CIRCUMSTANCES, WHEN THE ASSESSEE MAKES A CLAIM ON THE ADVICE OF A TAX EXPERT, THOUGH ITA NO. 2308/AHD/201 2 SHRI RAJENDRA J. PATEL , AHMEDABAD. AY 2008-0 9 - 4 - ERRONEOUS, AND WHEN COMPLETE PARTICULARS RELATING TO T HE CLAIM WERE TRULY AND COMPLETELY FURNISHED BY THE ASSESSEE BEFORE THE ASSE SSING OFFICER, IN OUR CONSIDERED VIEW, THE ASSESSEE CANNOT BE VISITED WI TH PENALTY U/S. 271(1)(C) OF THE ACT ON THE GROUND OF FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. WE, THEREFORE, DELETE THE PENALTY OF RS 3,9 1,041/- LEVIED U/S. 271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 17 TH OF OCTOBER, 2014 AT AHMEDABAD. SD/- SD/- ( MUKUL KR. SHRAWAT ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 17/10/2014 GHANSHYAM MAURYA TRUE COPY #' ( )*+ ,#+- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A)-III, AHMEDABAD 5. $%& '' , , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. #' / BY ORDER, ./ / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD