Shri Aditya Malla, Noida V. ITO, Noida

ITA 2457/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6911 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Unexplained cash credit; Salary income; Bonafide belief; Tangible material; Wrong claim; Onus to prove
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C, NEW DELHI BEFORE SHRI G. D. AGRAWAL, HONBLE VICE PRESIDENT AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO.2457/DEL/2016 (ASSESSMENT YEAR 2011-12) ADITYA MALLA, VS. ITO, WAD 1(1), C/O COL. L. B. MALLA (RETD.) NOIDA 1796, SECTOR 29, NOIDA GIR / PAN :ACIPM2637F (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI PRADIP DINODIA. CA SHRI R. K. KAPOOR, CA RESPONDENT BY :SHRI T. VASANTHAN, SR. DR DATE OF HEARING: 11.07.2016 DATE OF PRONOUNCEMENT: 27.07.2016 ORDER PER BEENA A. PILLAI, JM: THE PRESENT PENALTY APPEAL HAS BEEN PREFERRED BY T HE ASSESSEE AGAINST THE ORDER DATED 29.02.2016 PASSED BY LD. CIT(A) NOIDA FOR THE ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS OF APPEAL: 1.0 THAT THE PENALTY ORDER PASSED BY THE LD.AO AND UPHELD BY HON'BLE CIT(A) IS BAD IN LAW. THE PROVISI ONS OF SEE 271 (1)( C) HAVE BEEN WRONGLY INTERPRETED AN D APPLIED IN THIS CASE. 2.0 THAT THE LD. AO AND CONSEQUENTLY CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE ASSESSEE'S CAS E IN NOT APPRECIATING THAT WHEN ASSESSEE HAS FAILED TO SHOW COMPLETE SALARY INCOME IN RETURN OF INCOME, HE 2 I.T.A.NO.2457./DEL/2016 HAS ALSO NOT CLAIMED THE CORRESPONDING TAX DEDUCTED AND DEPOSITED ON THE SAME AND THUS IT WAS NOT CONCEALMENT OF INCOME. 3.0 THAT THE LD. AO AND CONSEQUENTLY CIT(A) FAILED TO APPRECIATE THAT SUCH A MISTAKE OF NON- DISCLOSUR E OF SALARY INCOME WAS UNDER BONAFIDE BELIEF THAT TAX HA S ALREADY BEEN DEDUCTED ON SUCH SALARY INCOME AND THERE IS NO FURTHER REQUIREMENT OF DISCLOSING IT IN RETURN OF INCOME AND THUS IT WAS NOT CONCEALMENT OF INCOME. 4.0 THAT THE LD. AO AND CONSEQUENTLY CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS VOLUNTARILY ACCEPTED SUCH INCOME IN ASSESSMENT PROCEEDINGS AND PAID THE DEMAND IN QUESTION WITHOUT GOING IN FURTHE R APPEAL ALTHOUGH SOME OF THE ADDITIONS WERE UNWARRANTED. 5.0 THAT THE LD. AO HAS ERRED IN LAW IN LEVYING TH E PENALTY BY TREATING THE CREDIT CARD EXPENSE AS INCO ME OF THE ASSESSEE WHICH IN ANY WAY HAS BEEN PAID OUT OF SALARY INCOME CREDITED IN THE BANK AND ALREADY ASSESSED TO TAX. 6.0 THAT THE LD. AO/CIT(A) HAS ERRED IN LAW IN LEVYING/CONFIRMING PENALTY ON DISALLOWANCE OF HOUSING LOAN INTEREST AND CREDIT CARD EXPENSES ON WHICH NO PENALTY PROCEEDINGS WAS INITIATED IN THE ASSESSMENT ORDER. 7.0 WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LD . AD AND CONSEQUENTLY CIT(A) HAS ERRED IN LAW IN NOT CONSIDERING TAX ALREADY DEDUCTED AND DEPOSITED TO THE CREDIT OF CENTRAL GOVERNMENT FOR LEVYING PENALT Y U/S 271(1)(C), PENALTY LEVIED AND CONFIRMED AT RS.9,99,011/- IS BAD IN LAW. 8.0 THAT THE LD. AO AND CONSEQUENTLY CIT(A) FAILED TO APPRECIATE THAT FOR LEVY OF PENALTY THE TAX SOUG HT TO BE EVADED CANNOT INCLUDE THE PORTION OF TAX ALREADY 3 I.T.A.NO.2457./DEL/2016 DEDUCTED AND DEPOSITED TO THE CREDIT OF CENTRAL GOVERNMENT. 9.0 THAT LD. AO/CIT(A) ERRED IN LAW IN LEVYING PENALTY U/S 271(1)(C) ON ROUTINE ADDITIONS MADE IN A GROSSLY ILLEGAL MANNER. 10.0 THAT WITHOUT PREJUDICE THE PENALTY LEVIED IS HIGHLY EXCESSIVE. 2. THE FACTS OF THE CASE AS RECORDED BY THE AUTHORI TIES BELOW ARE AS UNDER: 2.1 THE ASSESSEE IS AN INDIVIDUAL AND HAD FILE ITS RETURN OF INCOME ON 20.07.2011 DISCLOSING TOTAL INCOME OF RS.7,39,676/- UNDER THE HEAD INCOME FROM SALARY. T HE ASSESSEE HAD CLAIMED DEDUCTION OF HOUSING LOAN INTE REST AMOUNTING TO RS.1.50 LACS AND DEDUCTION U/S 80C AT RS.1,00,000/-, THE ASSESSEE HAD CLAIMED TDS AT RS.84,394/-. THE CASE WAS SELECTED FOR SCRUTINY UN DER CASS TO EXAMINE THE CONTENTS AND DIFFERENCE AS PER 26 AS AND RETURN OF INCOME. 2.2 LD. A.O. AFTER EXAMINATION, FOUND THAT THE ASSE SSEE HAD NOT DISCLOSED SALARY INCOME OF RS.30,47,245/ RE CEIVED FROM TWO OTHER INSTITUTIONS AGAINST WHICH TDS AMOUN TING TO RS.7,88,334/-HAD BEEN DEDUCTED. ACCORDINGLY, ASSESSEE WAS ASKED TO EXPLAIN THE REASONS WHY THE S ALARY OF RS.30,.47,245/- WAS NOT SHOWN IN THE RETURN OF I NCOME. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D CLAIMED INTEREST ON HOUSING LOAN WHICH WAS IN THE J OINT NAME OF SHRI ADITYA MALLA AND HIS WIFE. HE HELD TH AT THE 4 I.T.A.NO.2457./DEL/2016 ASSESSEE IS ELIGIBLE FOR ONLY 50% OF THE INTEREST A S DEDUCTION U/S 24(B) OF THE ACT, WHICH COMES TO RS.1,18,244/-. 2.3 LD. ASSESSING OFFICER ALSO OBSERVED THAT THE AS PER AIR INFORMATION, EXPENSES OF RS,3,12,137/- WAS MADE THROUGH CREDIT CARD BY THE ASSESSEE. FROM THE DETA ILS FILED BY THE ASSESSEE, LD. A.O. OBSERVED THAT AN AM OUNT OFRS.1,50,843/- WAS VERIFIABLE FORM THE BANK ACCOUN T STATEMENT. HOWEVER, THE BALANCE COULD NOT BE VERIF IED AS THE ASSESSEE DID NOT SUBMIT CREDIT CARD STATEMENT. THE ASSESSING OFFICER THUS, ADDED THE DIFFERENCE TO THE INCOME OF THE ASSESSEE AND COMPUTED THE TAX ASSESSABLE IN THE HANDS OF ASSESSEE AS UNDER: TOTAL INCOME AS PER RETURN RS.7,39,680/- ADD: 1. UNDISCLOSED SALARY INCOME RS.30,47,245/- 2. HOUSE PROPERTY LOSS DISALLOWED RS. 31,756/- 3. CREDIT CARD EXPENSES DISALLOWED RS. 1,61,294/- 4. CONCEALMENT OF SAVINGS RS. 12,863/- BANK INTEREST. RS.32,53,158/- RS.39,92,838/- ASSESSED INCOME RS.39,92,830/- ROUNDED OFF RS.39,92,830/- 2.3 THE LD. A.O. INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PART ICULARS OF SALARY AND FOR CONCEALMENT OF INTEREST INCOME IN TH E RETURN. HE LEVIED 100% PENALTY WHICH WORKED OUT TO RS.9,99,011/-. 3. AGGRIEVED BY THE ORDER OF THE A.O., ASSESSEE PRE FERRED THE APPEAL BEFORE LD. CIT(A). BEFORE LD. CIT(A), T HE 5 I.T.A.NO.2457./DEL/2016 ASSESSEE CONTENDED THAT HE WAS UNDER THE BONA FIDE BELIEF THAT SALARY RECEIVED FROM THE EMPLOYERS WAS INCLUDE D IN THE RETURN OF INCOME AND NO TAX WAS REQUIRED TO BE PAID AS TDS HAD ALREADY BEEN DEDUCTED. THE ASSESSEE SUBMITTED THAT HE WAS NOT AWARE ABOUT THE INTEREST ON S/B ACCOUNT BEING TAXABLE IN NATURE. 3.1 LD. CIT(A) DID NOT APPRECIATE THE FACTS THAT TH E ASSESSEE HAD NOT INCLUDED THE SALARY RECEIVED FROM THE PREVIOUS EMPLOYERS DURING THE FINANCIAL DUE TO BONA FIDE MISTAKE AND THE INTEREST ON SAVING BANK ACCOUNT WAS MISSED OUT AS THE ASSESSEE WAS NOT AWARE THAT THE S AME BEING TAXABLE. LD. CIT(A) DID NOT ACCEPT THE BONA FIDE MISTAKE ON BEHALF OF THE ASSESSEE AS THE ASSESSEE W AS NOT AN UNEDUCATED PERSON. HE CONFIRMED THE PENALTY LEV IED BY THE ASSESSING OFFICER. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US NOW. 5. LD. A.R. SUBMITTED THAT THE PENALTY HAS BEEN LEV IED ON THE FOLLOWING ITEMS: I) NON DISCLOSURE OF SALARY AMOUNTING TO RS.30,47,245/- OMITTED TO BE INCLUDED BY THE ERSTWHILE EMPLOYER; II) INTEREST ON HOUSING LOAN PROPORTIONATELY DISALL OWED BEING RS.31,756/-; AND III) INTEREST ON SAVING BANK ACCOUNT OF RS.12,863/- /- IV) CREDIT CARD EXPENSES OF RS.1,61,294/-. 6 I.T.A.NO.2457./DEL/2016 5.1 LD. A.R. SUBMITTED THAT THE ASSESSEE IS WORKING IN HOTEL INDUSTRY. DURING THE FINANCIAL YEAR, RELEVAN T TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE H AD SHIFTED HIS EMPLOYMENT THRICE. HE SUBMITTED THAT S UCH QUICK CHANGE IN THE EMPLOYMENT BY THE ASSESSEE HAS HAPPENED FOR THE FIRST TIME. THE ASSESSEE AT THE T IME OF FILING THE RETURN, OMITTED THE SALARY RECEIVED FROM THE PREVIOUS EMPLOYERS DUE TO IGNORANCE AND HE ONLY CONSIDERED THE INCOME RECEIVED FROM THE LAST SERVIN G EMPLOYER WITH WHOM HE WAS WORKING AGAINST WHICH ASSESSEE CLAIMED TDS OF RS.84,394/- ONLY. 5.2 LD. A.R. SUBMITTED THAT IT IS NOT THE CASE THAT NO TAX HAS BEEN DEDUCTED IN RESPECT OF SALARY RECEIVED BY THE ASSESSEE FOR HIS PREVIOUS EMPLOYERS. FROM 26AS, TH E LD. A.O. HAS HIMSELF OBSERVE THAT THE TDS DEDUCTED FROM THE SALARY RECEIVED FROM PREVIOUS EMPLOYERS AMOUNTED RS,.7,88,334/-. HE SUBMITTED THAT MERELY BECAUSE T HE ASSESSEE OMITTED TO INCLUDE THE SALARY DUE TO IGNOR ANCE, CANNOT BE THE REASON FOR LEVY OF PENALTY AS SUFFICI ENT CAUSE, AS THE TAX HAS BEEN DEDUCTED AT SOURCE FROM SUCH SALARY. LD. A.R. ALSO SUBMITTED THAT THE BONA FIDE MISTAKE ON BEHALF OF THE ASSESSEE IS ESTABLISHED IN RESPECT OF OMISSION OF SUCH SALARY IN THE RETURN OF INCOME AS THE ASSESSEE HAD NOT CLAIMED THE TDS DEDUCTED FROM SUCH OMITTED SALARY AMOUNTING TO RS.7,8,334/-. HE PLACE D RELIANCE UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS VS CIT 211 7 I.T.A.NO.2457./DEL/2016 TAXMANN 40. HON'BLE SUPREME COURT HAS HELD IN PARA 19 THAT EVEN PROFESSIONALS CAN COMMIT BONA-FIDE INADV ERTENT ERRORS. THIS CAN ONLY BE DEFINED S HUMAN ERROR WHI CH WE ARE ALL PRONE TO MAKE. THE CALIBER AND EXPERTISE O F THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE INADV ERTENT ERROR. IT SHOULD NOT MEAN THAT THE ASSESSEE IS GUI LTY OF EITHER FURNISHING INACCURATE PARTICULARS OF ATTEMPT ING TO CONCEAL ITS INCOME. 5.3 IN RESPECT OF INTEREST ON HOUSING LOAN, THE LD. A.R. SUBMITTED THAT IT IS A LEGAL ISSUE REGARDING ELIGIB ILITY OF CLAIM OF INTEREST. HE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED 50% OF INTERESTS AS THE HOUSING LOAN AS THE LOAN WAS IN THE JOINT NAME OF THE ASSESSEE AND HIS WIFE. LD. A.R. FURTHER SUBMITTED THAT HE ASSESSING OFFICE R WHILE MAKING ADDITION IN RESPECT OF INTEREST ON HOUSING L OAN HAS NOT RECORDED HIS SATISFACTION AND THUS HAS NOT INIT IATED PENALTY PROCEEDINGS ON THE DISALLOWANCE MADE IN THE ASSESSMENT ORDER AS PER LAW. 5.3 IN RESPECT OF DISALLOWANCE ON CREDIT CARD EXPEN SES, LD. A.R. SUBMITTED THAT THE ASSESSEE HAD NOT CLAIME D ANY SUCH EXPENSES IN HIS RETURN OF INCOME. THEREFORE, NO PENALTY CAN BE LEVIED ON ANY ADDITION SO MADE. HE ALSO SUBMITTED THAT IN RESPECT OF CREDIT CARD EXPENSES, THE ASSESSING OFFICER HAS NOT RECORDED HIS SATISFACTION AND THUS HAS NOT INITIATED PENALTY PROCEEDINGS ON THE DISALLOWANCE. 8 I.T.A.NO.2457./DEL/2016 6. ON THE CONTRARY, LD. D.R. REFERRED TO THE WRITTE N SUBMISSIONS BEFORE US IN SUPPORT OF HIS ARGUMENTS W HICH ARE REPRODUCED AS UNDER: WRITTEN SUBMISSION ON BEHALF OF REVENUE REGARDING PENALTY U/S 271(1)(C): THE CASE OF THE ASSESSEE IS SQUARELY COVERED UNDER GENERAL PROVISIONS OF THE SECTION 271(1)(C) AS WELL AS MISCHIEF OF EXPLANATION 1 TO THE SECTION 271(1). 1.1 THE ASSESSEE HAD CONCEALED SALARY INCOME FROM TWO EMPLOYERS, CLAIMED EXCESS DEDUCTION ON ACCOUNT OF HOUSING LOAN, UNEXPLAINED CREDIT CARD EXPENSES AND HAD NOT DECLARED THE INTEREST INCOME. THEREFORE , THE ASSESSEE HAS CONCEALED INCOME AND THE PARTICULARS FURNISHED BY ASSESSEE ARE CERTAINLY 'INACCURATE'. 1.2 THE CASE IS SQUARELY COVERED BY THE BINDING RAT IO OF JURISDICTIONAL HIGH COURT IN CASE OF COMMISSIONE R OF INCOME-TAX VS. NG TECHNOLOGIES LTD. [2015] 57 TAXMANN.COM 389 (DEL) WHICH HAS BEEN CONFIRMED BY THE HON'BLE SUPREME COURT BY WAY OF DISMISSAL OF SL P IN CASE OF N.G. TECHNOLOGIES (IN LIQUIDATION) VS. COMMISSIONER OF INCOME-TAX [2016] 70 TAXMANN.COM37 (SC). 1.3 IN THIS PARTICULAR CASE, THE HON'BLE DELHI HIG H COURT HAS EXPLAINED THE MEANING OF 'INACCURATE PARTICULARS'. HON'BLE HC HAS STATED AS UNDER:- '10. THE WORD 'CONCEALMENT' WOULD REFER TO SOMEWHAT MALICIOUS AND MALA FIDE CONDUCT ON THE PART OF THE ASSESSEE. THE EXPRESSION 'INACCURATE PARTICULARS' I S COPIOUSLY WIDER AND BROADER AND WOULD INCLUDE CASES WHERE PARTICULARS FURNISHED ARE NOT ACCURATE AND WHICH RESULTS IN AVOIDANCE OR EVASION OF TAX. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEE N DEFINED AS 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. THE WORD 'PARTICULAR' MEANS DETAIL OR DETAILS OF A CLAIM OR SEPARATE ITEMS OF AN ACCOUNT. THUS, THE WORDS ''FURNISHED INACCURATE PARTICULARS' WOULD REF ER 9 I.T.A.NO.2457./DEL/2016 TO INACCURACY WHICH WOULD CAUSE UNDER DECLARATION O R ESCAPEMENT OF INCOME. IT MAY ALSO REFER TO PARTICUL ARS WHICH SHOULD HAVE BEEN FURNISHED OR WERE REQUIRED T O BE FURNISHED OR RECORDED IN THE BOOKS OF ACCOUNT, E TC. SEE CIT V. RAJ TRADING CO. [1996] 217 ITR 208/86 TAXMAN 282 (RAJ). INACCURACY OR WRONG FURNISHING OF INCOME WOULD BE COVERED BY THE SAID EXPRESSION. II IN THE LIGHT OF WHAT HAS BEEN STATED BY THE HON'BLE JURISDICTIONAL HIGH COURT, IT CAN BE SEEN THAT THE FURNISHED PARTICULARS IN THE PRESENT CASE ARE CERTA INLY 'INACCURATE'. 2.1 THIS CASE IS ALSO COVERED UNDER THE PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C) WHICH READS AS UNDER. 'EXPLANATION 1. - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS REL ATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-S ECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHI CH PARTICULARS HAVE BEEN CONCEALED.' 2.2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS ADMITTED FOR THE ADDITION AFTER DETECTION BY THE DEPARTMENT. IT CAN BE SEEN THAT THE REPLY HAS NOT OFFERED ANY VALID EXPLANATION. THEREFORE, CASE OF ASSESSEE IS COVERED UNDER SUB CLAUSE (A). 2.3 IN FACT, DURING THE PENALTY PROCEEDINGS ALSO, T HE ASSESSEE STATED THAT IT WAS A HUMAN ERROR BUT HAS N OT FURNISHED ANY VALID EXPLANATION. 2.4.1 THE ASSESSEE HAS NOT DISCHARGED ITS ONUS. JURISDICTIONAL HIGH CO URT 10 I.T.A.NO.2457./DEL/2016 IN CASE OF COMMISSIONER OF INCOME-TAX VS. HCLL KALINDEE ARSSPL [2013] 37 TAXMANN.COM 347 (DEL) HAS LAID DOWN THE RATIO THAT INITIAL BURDEN OF PROOF IS UPON ASSESSEE TO PROVE THAT HIS EXPLANATION WAS BONA-FID E. THE HON'BLE HC ALSO LAID DOWN THE RATIO THAT THIS BURDEN CAN ONLY BE DISCHARGED BY PRODUCING COGENT MATERIAL. HON'BLE HC HAS STATED AS UNDER:- '8 THE ASSESSEE HAD MADE A WRONG CLAIM FOR DEDUCTION UNDER SECTION 80LA AND, THEREFORE, HAD FURNISHED INACCURATE PARTICULARS AS THE CLAIM WAS N OT ADMISSIBLE. SUB-CLAUSE (B) OF THE EXPLANATION IS, THEREFORE, APPLICABLE AND WE HAVE TO EXAMINE THE TW O CONDITIONS WHETHER: (1) THE ASSESSEE HAS BEEN ABLE TO SHOW THAT THE EXPLANATION WAS BONA FIDE; AND (2) FACTS AND MATERI AL RELATING TO COMPUTATION OF HIS INCOME HAD BEEN DISCLOSED. 9. ONUS OF ESTABLISHING THAT THE ASSESSEE SATISFIED THE TWO CONDITIONS IS ON HIM I.E. THE ASSESSEE .. 2.4.2 THE HON'BLE HC ALSO LAID DOWN THE RATIO THAT THIS BURDEN CAN ONLY BE DISCHARGED BY PRODUCING COGENT MATERIAL. HON'BLE HC HAS STATED AS UNDER:- '11 TO SHOW AND ESTABLISH BONA FIDES, THE ASSESSEES HAD TO SHOW SOME MORE 'TANGIBLE MATERIAL' OR BASIS AS TO WHY A CLEAR STATUTORY PROVISION WHIC H EXCLUDES WORKS CONTRACTS WAS IGNORED.' 3. THE CASE IS SQUARELY COVERED BY THE BINDING RATI O OF JURISDICTIONAL HIGH COURT IN CASE OF COMMISSIONER O F INCOME-TAX, DELHI-IV VS. ESCORTS FINANCE LTD. [2009 ] 183 TAXMAN 453 (DEL). IN THIS CASE, THE HON'BLE HC DELHI HAS HELD THAT IF THE CLAIM MADE IN RETURN OF INCOME APPEARS TO BE EX FACIE BOGUS, IT WOULD BE TREATED AS A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS AND PENALTY PROCEEDING WOULD BE JUSTIFIED. IN THAT CASE, DEDUCTION UNDER SECTION 35D WAS CLAIMED RELATING TO PUBLIC ISSUE OF SHARES. ON APPEAL, COMMISSIONER (APPEALS) DELETED THE PENALTY, HOLDING THAT ASSESSEE HAD NOT CONCEALED INCOME. ITA T UPHELD ORDER OF COMMISSIONER (APPEALS). ON FURTHER APPEAL, THE HON'BLE HC HELD THE CASE WOULD ATTRACT 11 I.T.A.NO.2457./DEL/2016 PENALTY U/S 271(1)(C). THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE STRIKINGLY SIMILAR BECAUSE AFT ER THE JUDGMENT OF HON'BLE SC IN CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LIMITED (SUPRA), SUCH CLAIM WAS EX-FACIE INADMISSIBLE. 4. (I) THE CASE IS SQUARELY COVERED BY THE RATIO OF CO- ORDINATE BENCH OF ITAT MUMBAI IN CASE OF S H R TRADING PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME - TAX [2014]-TIOL-1348- ITAT-MUM. (II) IN PARA 7, THE HON'BLE ITAT HAS HELD THAT THE RE IS A BASIC AND FUNDAMENTAL DIFFERENCE BETWEEN A DEBATABLE CLAIM AND AN INADMISSIBLE CLAIM I.E. A PATENTLY WRONG OR FALSE CLAIM. IN THE CASE OF FIRST KIND OF CLAIM, THERE CAN BE TWO OPINION AS TO WHETHER OR NOT THE ASSESSEE COULD MAKE SUCH A CLAIM ON THE BASIS O F CERTAIN FACTS OF THAT PARTICULAR YEAR. PROVISIONS O F THE ACT DO NOT DISENTITLE THE ASSESSEE TO MAKE SUCH CLA IM. BUT, IN THE SECOND TYPE OF CLAIM, THERE IS CLEAR AN D EMPHATIC BAR IN THE ACT- ASSESSEES ARE NOT ENTITLED TO CLAIM SUCH EXPENDITURE/DEDUCTION/REBATE/ EXEMPTION. ABSENCE OF A VALID BASIS FOR MAKING ANY CLAIM OF DEDUCTION, RESULTING IN LOW TAX OR NO TAX, IS LIKE GOING AGAINST THE LETTER AND SPIRIT OF THE LAW. IN OTHER WORDS, CLAIMS MADE UNDER THE SECOND CATEGORY HAVE NO LEGS OF THEIR OWN TO STAND, BECAUSE SUCH CLAIMS ARE TENA BLE NEITHER LEGALLY NOR FACTUALLY. COURTS ARE OF THE VI EW THAT DISPUTABLE CLAIMS AND INADMISSIBLE CLAIMS ARE TO BE TREATED DIFFERENTLY. (III) IN PARA 12, THE HON'BLE ITAT HAS TAKEN A NOTE OF THE SETTLED LAW POSITION THAT COURTS HAVE HELD THAT THE OBJECT BEHIND ENACTMENT OF SECTION 271(1)(C) READ W ITH THE EXPLANATIONS INDICATE THAT THE SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE , THAT THE PENALTY UNDER THAT PROVISION IS A CIVIL LI ABILITY, THAT WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGRED IENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN TH E MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. (IV) THE HON'BLE ITAT ANALYSED VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE JUDGMENT OF HON'BLE MADRAS HC IN CASE OF SHARMA ALLOYS (INDIA) LTD.(MAD ) (357 ITR 379) = 2013-TIOL- 559-HC-MAD-IT .AND 12 I.T.A.NO.2457./DEL/2016 JUDGEMENTS OF HON'BLE DELHI HC IN THE CASES OF ECS LTD.(DEL) (336 ITR 162) = 2010-TIOL-287-HC-DEL-IT, HARPARSHAD AND COMPANY LTD.(DEL) (328 ITR 53), ESCORTS FINANCE LTD.(DEL)(328 ITR 44) = 2009-TIOL- 483-HC-DEL-IT AND CLT VS. ZOOM COMMUNICATION PVT. LTD.(2010-TIOL-361-HC-DEL-IT). (V) IN PARA 17, THE HONBLE ITAT REPRODUCED THE RELEVANT PORTION OF JUDGMENT OF HON'BLE DELHI HC IN THE CASE OF ZOOM COMMUNICATION PVT. LTD.(SUPRA) INCLUDING THE FOLLOWING: 'THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMA LL PERCENTAGE OF THE INCOME- TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSESSEE MAKES A C/.AIM WHICH IS NOT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOU T ANY BASIS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE, I T WOULD BE DIFFICULT TO SAY THAT HE WOULD STILL NOT B E LIABLE TO PENALTY UNDER SECTION 271(L)(C) OF THE AC T. IF WE TAKE THE VIEW THAT A CLAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION O N WHICH IT COULD BE MADE, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOSITION OF PENALTY, EVEN IF HE WAS NOT ACTING BONA FIDE WHILE MAKING A CLAIM OF THIS NATUR E, THAT WOULD GIVE A LICENCE TO UNSCRUPULOUS ASSESSEES TO MAKE WHOLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BEING ANY BASIS FOR MAKING THEM, IN T HE HOPE THAT THEIR RETURN WOULD NOT BE PICKED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED ON THE BASIS OF SELF-ASSESSMENT UNDER SECTION 143(1) OF THE ACT AND EVEN IF THEIR CASE IS SELECTED FOR SCRUTINY, THEY C AN GET AWAY MERELY BY PAYING THE TAX, WHICH IN ANY CASE, WAS PAYABLE BY THEM. THE CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAIMS OF THIS NATURE, ACTUATE D BY A MALAFIDE INTENTION TO EVADE TAX OTHERWISE PAYABLE BY THEM WOULD GET AWAY WITHOUT PAYING THE TAX LEGALLY PAYABLE BY THEM, IF THEIR CASES ARE NOT PICKED UP FOR SCRUTINY. THIS WOULD TAKE AWAY THE DETERRENT EFFECT, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE' (VI) AFTER ANALYZING THE JUDGMENTS MENTIONED IN SUB - PARA(IV)ABOVE, THE HON'BLE ITAT HELD (IN PARA 24) T HAT 13 I.T.A.NO.2457./DEL/2016 THE COURTS ARE DISTINGUISHING BETWEEN THE DEBATABLE CLAIMS AND PATENTLY WRONG/INADMISSIBLE CLAIMS. THEY(COURTS) ARE OF THE FIRM VIEW THAT IF AN ASSESS EE CLAIMS ANY DEDUCTION, HE HAS TO SUBSTANTIATE THE CLAIM BY PRODUCING POSITIVE EVIDENCE- OTHERWISE IT CANNOT ESCAPE THE RIGOR OF THE PENAL PROVISIONS. IN OTHER WORDS, PENALTY U/S 271(1)(C) CANNOT BE IMPOSE D BECAUSE AN ASSESSEE TAKES A PARTICULAR LEGAL STAND. BUT, THIS DOES NOT MEAN THAT IT CAN CLAIM WRONG DEDUCTIONS OR CLAIM WITHOUT ANY BASIS OR FOUNDATION , BECAUSE, FALSE, SPURIOUS AND MENDACIOUS CLAIMS DO NOT FALL UNDER THE CATEGORY OF A LEGAL STAND. (VII) IN PARA 26, THE HON'BLE ITAT HAS HELD THAT JU ST BECAUSE SOMETHING IS MENTIONED IN THE RETURN OF INCOME DOES NOT PROVE THAT THE CLAIM MADE IN IT IS JUSTIFIED AND ALLOWABLE. FILING OF RETURN DOES NOT TIE DOWN THE HANDS OF AN AO. A FINAL DECISION DEPENDS UPON THE TRUTHFULNESS OF THE PARTICULARS OF INCOME FILED BY THE ASSESSEE. THE HON'BLE ITAT INTERPRETED THE PHRASE 'PARTICULARS OF INCOME' APPEARING IN SECTION 271(1)(C) AND REMARKED THAT IT HAS TO BE INTERPRETE D AS FACTS LEADING TO CORRECT COMPUTATION OF INCOME AND HELD THAT WHENEVER ANY MATERIAL FACT IS NOT FILED F OR CORRECT COMPUTATION OF INCOME OR IF FILED IS INACCU RATE, THEN PENALTY HAS TO BE IMPOSED. (VIII) HON'BLE ITAT IN THE PARA 27 STATED THAT BONA FIDE BELIEF OF AN ASSESSEE IN MAKING A CLAIM HAS LIMITED ROLE FOR DECIDING THE ISSUE OF PENALTY TO BE IMPOSE D U/S.271(1)(C). FACT OF THE CASE DECIDE WHETHER SUCH A BELIEF COULD BE TREATED AS BONAFIDE OR NOT. IN OTHE R WORDS, IT CAN SAFELY BE HELD THAT IF AN ASSESSEE, DISREGARDING ALL THE RELEVANT FACTS AND CIRCUMSTANC ES, INTERPRETS A SECTION THAT SUITS ITS INTEREST THEN S UCH INTERPRETATION CANNOT BE HELD BONA FIDE BELIEF. IN THE GARB OF THE BONAFIDE CLAIM, AN ASSESSEE CANNOT ESCAPE THE LEVY OF PENALTY. 5. (I) THE CASE IS SQUARELY COVERED BY THE RATIO OF CO- ORDINATE BENCH OF ITAT MUMBAI IN CASE OF M/S DEVELOPMENT CREDIT BANK LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX [2012]- TIOL-722-ITAT- MUM. 14 I.T.A.NO.2457./DEL/2016 1. (II) IN PARA 7, THE HON'BLE ITAT HAS NOTED THAT THE ASSESSEE IS NOT AN ORDINARY PERSON OR A LAY MAN WHO MAY NOT HAVE THE PROPER KNOWLEDGE OF LAW AND CHANGES IN THE LAW. THE ASSESSEE WAS A WELL KNOWN COMPANY CARRYING ON THE BUSINESS IN INDIA FOR THE L AST MANY YEARS AND, FURTHER, THE ASSESSEE'S BUSINESS WAS DEALING IN THE FINANCIAL MATTERS AND THE BUSINE SS DECISION AS TAKEN BY THE ASSESSEE KEEPING IN VIEW T HE PROVISIONS OF THE INCOME TAX ACT. THE ASSESSEE WAS MANAGED BY THE BODY OF EXPERTS. APART FROM THIS, TH E ASSESSEE WAS ALSO AVAILING THE SERVICES OF THE PROFESSIONALS AND TAX EXPERTS IN DAY TO DAY AFFAIRS AND PARTICULARLY FOR TAX MATTERS. THEREFORE, THE HON'BLE ITAT HELD THAT IT WAS NOT EXPECTED FROM THA T ASSESSEE THAT THEY WERE NOT AWARE OF THE CHANGES IN THE INCOME TAX ACT. IN THE PRESENT CASE, ALSO, THE ASSESSEE IS A WELL KNOWN NBFC COMPANY CARRYING ON THE BUSINESS IN INDIA FOR THE LAST MANY YEARS AND, FURTHER, THE ASSESSEE'S BUSINESS IS DEALING IN THE FINANCIAL MATTERS AND THE BUSINESS DECISION ARE TAK EN BY THE ASSESSEE KEEPING IN VIEW THE PROVISIONS OF T HE INCOME TAX ACT. THE ASSESSEE IS MANAGED BY THE BODY OF EXPERTS. THE ASSESSEE WAS ALSO AVAILING THE SERVICES OF THE PROFESSIONALS AND TAX EXPERTS IN DA Y TO DAY AFFAIRS AND PARTICULARLY FOR TAX MATTERS. HENCE , IT HAS TO PRESUMED THAT THE ASSESSEE WAS AWARE OF THE CORRECT POSITION OF LAW SETTLED BY THE JUDGMENT OF HON'BLE SC IN CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LIMITED (SUPRA). B. THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC) = 2010-TIDL-21-SC- IT DOES NOT HELP THE CASE AT HAND. THE FACTS OF THE RELIANC E PETRO PRODUCTS PVT. LTD. ARE NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. IN THE MATTER OF T HE RELIANCE PETRO PRODUCTS PVT. LTD., THE ASSESSEE HAD MADE A CLAIM OF DEDUCTION U/S. 36(1)(III) OF THE AC T IN RESPECT OF INTEREST. THIS DEDUCTION HAD ALSO BEEN CLAIMED BY THE ASSESSEE IN THE EARLIER YEAR AND THE FIRST APPELLATE AUTHORITY (FAA) HAD ALLOWED THE DEDUCTION, WHILE THE ITAT HAD RESTORED THE ISSUE BA CK TO THE FILE OF THE AD. DECIDING THE APPEAL, TRIBUNA L 15 I.T.A.NO.2457./DEL/2016 HELD THAT THE ASSESSEE HAD DULY FILED AN EXPLANATIO N GIVING THE REASONS FOR MAKING A CLAIM, THAT ONCE TH E ASSESSEE OFFERED AN EXPLANATION THE ONUS WOULD SHIF T ON THE REVENUE TO PROVE THAT THE EXPLANATION OFFERE D BY THE ASSESSEE WAS FALSE, THAT BONAFIDES OF THE EXPLANATION WERE CLEARLY PROVED, THAT NO MATERIAL O R EVIDENCE WAS BROUGHT ON RECORD OR POINTED OUT BY T HE DR PROVING THAT THE REVENUE HAD DISCHARGED ITS ONUS FOR PROVING THE FALSENESS OF EXPLANATION OF THE ASSESSEE, THAT THE ASSESSEE HAD ALSO DULY DISCHARGE D ITS ONUS WHICH WAS CAST ON THE ASSESSEE. WHEN THE MATTER TRAVELLED UP TO THE HON'BLE SUPREME COURT, I T WAS OBSERVED BY THE APEX COURT THAT IN THAT CASE, THERE WAS NO FINDING THAT ANY DETAILS SUPPLIED BY T HE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT O R ERRONEOUS OR FALSE, THAT SUCH NOT BEING THE CASE TH ERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(L)(C} OF THE ACT. HOWEVER, IN THE PRESE NT CASE, ASSESSEE HAS NOT ONLY TRIED TO DISREGARD CORR ECT POSITION OF LAW SETTLED BY HON'BLE SC BUT ALSO REFRAINED FROM MENTIONING THE SAID JUDGMENT OF THE HON'BLE SC IN THE NOTE FURNISHED ALONG WITH COMPUTATION OF INCOME. 7. WE HAVE PERUSED THE ORDERS PASSED BY AUTHORITIES BELOW AND THE JUDGMENTS RELIED UPON BY THE PARTIES. IN RESPECT OF PENALTY LEVIED ON SALARY THAT WAS OMITTE D TO BE DECLARED IN THE RETURN OF INCOME, WE OBSERVED THAT THE TAX HAS BEEN DEDUCTED BY THE PREVIOUS EMPLOYERS OF THE ASSESSEE TO THE EXTENT OF RS.7,88,334/-. ON PERUSA L OF THE RETURN OF INCOME FILED BY THE ASSESSEE, IT IS OBSER VED THAT THE ASSESSEE HAS NOT CLAIMED THE TDS SO DEDUCTED BY PREVIOUS EMPLOYERS AND HAS ONLY CLAIMED THE TDS IN RESPECT OF EMPLOYER FROM WHOM HE DREW HIS LAST SALA RY DURING THE END OF THE FINANCIAL YEAR RELEVANT TO 16 I.T.A.NO.2457./DEL/2016 ASSESSMENT YEAR UNDER CONSIDERATION. IN SUCH A SITUATION, THE POSSIBILITY OF BONA FIDE MISTAKE CAN NOT BE OVERRULED. LD. ASSESSING OFFICER HAS ALSO NOT MADE ANY CASE AGAINST THE ASSESSEE IN RESPECT OF TDS NOT BEI NG DEDUCTED AGAINST THE SALARY DRAWN DURING THE YEAR U NDER CONSIDERATION BEING INSUFFICIENT. IT IS ALSO OBSER VED THAT THE ASSESSEE HAD FULLY COOPERATED DURING THE ASSESS MENT PROCEEDINGS AND HAD SUBMITTED SUFFICIENT DETAILS TO ESTABLISH THE BONA FIDE MISTAKE THAT WAS COMMITTED INADVERTENTLY. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE TO THE EXPLANATION OF THE ASSESSEE AND HE INI TIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FI LING INACCURATE PARTICULARS OF INCOME. 7.1 IN OUR CONSIDERED OPINION, THE ASSESSEE CANNOT BE MADE LIABLE FOR PENALTY AS THERE IS A BONA FIDE MIS TAKE OF OMISSION IN NOT SHOWING THE SALARY RECEIVED FROM TH E PREVIOUS EMPLOYERS. AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT O F A QUASI- CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARIL Y BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMA CIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF IT S OBLIGATION. FROM THE ROI FILED BY THE ASSESSEE, I T HAS BEEN DEMONSTRATED THAT THE ASSESSEE HAS FAILED TO C LAIM THE TDS DEDUCTED BY THE EARLIER EMPLOYERS. THE CON DUCT OF THE ASSESSEE SUPPORTS THE EXPLANATION TENDERED A ND 17 I.T.A.NO.2457./DEL/2016 THEREFORE, A DELIBERATE OMISSION TO INCLUDE THE SAL ARY RECEIVED FROM PREVIOUS EMPLOYER CANNOT BE ESTABLISH ED. 7.2 WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECIS ION RELIED UPON BY THE ASSESSEE IN THE CASE OF PRICE WA TER HOUSE COOPERS PVT. LTD. (TS-731-SC-212), ARE OF THE OPINION THAT ASSESSEES CONDUCT CANNOT BE SAID TO B E A DELIBERATE ACT SO AS TO WARRANT LEVY OF PENALTY. ACCORDINGLY, WE DELETE THE PENALTY LEVIED BY THE AS SESSING OFFICER IN RESPECT OF OMISSION TO DISCLOSE THE SALA RY RECEIVED FROM THE PREVIOUS EMPLOYERS ON WHICH TDS H AD ALREADY BEEN DEDUCTED BY THEM. 8. REGARDING INTEREST ON HOUSING LOAN, IT IS OBSERV ED THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS.31,756/- IN RESPECT OF INTEREST ON HOUSING LOAN WHICH HAS BEEN CLAIMED IN EXCESS BY THE ASSESSEE. LD. ASSESSING OFFICER / CIT(A) ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR 50% OF THE INTEREST COMPONENT OF RS,2,36,488/- U/S 24(B), AS THE HOUSING LOAN STANDS IN THE JOINT NAME OF THE ASSESSEE AND HIS WIFE. AS TH E ASSESSEE HAD CLAIMED RS.1.50 LACS IN ITS RETURN OF INCOME, AND ELIGIBLE FOR CLAIMING INTEREST AT RS.1,18,244/- . THE ASSESSING OFFICER DISALLOWED THE DIFFERENCE OF BALA NCE OF RS.31,756/-. LD. A.R. ALSO SUBMITTED THAT THERE IS NO CONCEALMENT IN RESPECT OF INTEREST ON HOUSING LOAN AS THE EMPLOYER HAS ALSO GRANTED THE DEDUCTION OF RS.1.50 LACS IN THE FORM 16A ISSUED BY HIM. 18 I.T.A.NO.2457./DEL/2016 8.1 ON THE CONTRARY, LD. D.R. HAS REFERRED TO THE W RITTEN SUBMISSIONS, REPRODUCED HEREINABOVE. 8.2 WE HAVE PERUSED THE RELEVANT RECORDS PLACED BEF ORE US AND SUBMISSIONS ADVANCED BY BOTH THE PARTIES. F ROM THE PAPER BOOK FILED BEFORE US, THE ASSESSEE HAS RE FERRED PAGE 22 WHICH IS THE CERTIFICATE OF INTEREST ISSUED BY HDFC BANK. IT HAS BEEN SUBMITTED THAT THE HOUSING LOAN IS IN THE JOINT NAME OF HIS WIFE AS THE HOUSE PROPERTY WA S PURCHASED IN THE JOINT NAME. HOWEVER LD. A.R. SUBM ITTED THAT THE INTEREST WAS PAID BY THE ASSESSEE FROM HIS ACCOUNT; THEREFORE THE ASSESSEE HAS CLAIMED DEDUCTI ON OF TOTAL AMOUNT IN HIS RETURN OF INCOME. LD. A.R. SUB MITTED THAT THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF TH AT AS HE WAS PAYING THE INTEREST, THE DEDUCTION SHOULD ALSO BE CLAIMED BY HIM ALONE. 9. WE FIND THAT EXPLANATION GIVEN BY THE ASSESSEE H AS NOT BEEN ACCEPTED BY THE LD. A.O. FOR WHICH A PENAL TY CANNOT BELIEVED U/S 271(1)(C) OF THE ACT. RELIANCE HAS BEEN PLACED ON THE DECISION OF HON'BLE SUPREME COUR T IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. REPORTED I N 322 ITR 158 WHICH HOLD THAT MERE DISALLOWANCE OF ANY CL AIM WILL NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. FURTHER, THERE IS NO MATERIAL THAT HAS BEEN BROUGHT ON RECORD BY THE LD. A.O. TO PROVE THAT THE ASSESSEE HAS CONSCIOUSLY CONCEALED ANY PARTICULARS PERTAINING TO HIS INCOME OR HAS SUPPLIED INACCURATE PARTICULARS DELIBERATELY. WE ARE THEREFORE, INCLIN ED TO 19 I.T.A.NO.2457./DEL/2016 DELETE THE PENALTY LEVIED BY THE A.O. IN RESPECT OF INTEREST ON HOUSING LOAN. 9.1 IN RESPECT OF INTEREST EARNED BY THE ASSESSEE O N SAVING BANK ACCOUNT, THE DISALLOWANCE THAT HAS BEEN MADE BY THE ASSESSING OFFICER IS TO THE EXTENT OF RS.12,863/-. LD. A.R. HAS SUBMITTED THAT THE ASSES SEE HAS BEEN FILING HIS RETURN WITHOUT ANY PROFESSIONAL ASSISTANCE AND WAS NOT AWARE ABOUT THE INTERESTS SO EARNED ON SAVING BANK IS TAXABLE IN THE HANDS OF TH E ASSESSEE. THEREFORE, EXPLANATION ADVANCED BY THE ASSESSEE CANNOT BE ACCEPTED AS SUCH INTEREST ON SAV ING BANK ACCOUNTS IS CREDITED TO THE ASSESSEES BANK AC COUNT DURING EVERY FINANCIAL YEAR. IT CANNOT BE A CASE W HERE ASSESSEE HAS BEEN CONSISTENTLY FILING HIS RETURNS PERSONALLY WAS IGNORANT THAT INTEREST SO EARNED FRO M SAVING BANK BEING TAXABLE. THE EXPLANATION TENDERE D BY THE ASSESSEE IS NOT ACCEPTABLE FOR THE SIMPLE REASO N THAT THE ASSESSEE HAS BEEN FILING HIS RETURN EVERY YEAR AND INTEREST ON SAVING BANK ACCOUNT ACCRUES TO ASSESSEE IN EVERY ASSESSMENT YEAR. WE, THEREFORE, UPHELD THE PENALTY LEVIED BY THE LD. A.O. ON SUCH INTEREST ON SAVING B ANK ACCOUNT. 9.2 IN RESPECT OF CREDIT CARD EXPENSES, IT IS OBSER VED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAD MADE EXPENSES OF RS.3,12,137/- AS SEEN FROM THE AIR INFORMATION, THROUGH CREDIT CARD. ON CALLING FOR T HE DETAILS BY LD. A.O., ASSESSEE SUBMITTED THE BANK AC COUNT 20 I.T.A.NO.2457./DEL/2016 AND WAS NOT ABLE TO SUBMIT THE CREDIT CARD STATEMEN T FOR VERIFICATION OF SUCH EXPENSES. LD. A.O. HAS VERIFI ED THE EXPENSE AMOUNTING TO RS.1,50,843/- WHICH APPEARS IN THE BANK STATEMENT. AS THE REMAINING EXPENSE HAVE BEEN RS.1,61,294/- FOR THE EXPENSES MADE THROUGH CREDIT CARD WHICH WAS NOT VERIFIABLE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 9.3 IT HAS BEEN OBSERVED THAT THE ADDITION HAD BEEN MADE FOR WANT OF EVIDENCE / EXPLANATION. AS THE AS SESSEE HAS NOT SUBMITTED PROPER EXPLANATION IN SUPPORT OF EXPENSES MADE THROUGH CREDIT CARD. WE DO NOT FIN D ANY INFIRMITY IN LEVYING PENALTY ON SUCH AMOUNT. IN VI EW OF ABOVE, WE CONFIRM THE PENALTY LEVIED BY THE ASSESSI NG OFFICER FOR SUBMITTING WRONG EXPLANATION IN RESPECT OF CREDIT CARD EXPENSES. 10. ACCORDINGLY, THE GROUNDS OF APPEAL FILED BY THE ASSESSEE IN RESPECT OF SALARY AND INTEREST ON HOUSI NG LOAN STAND PARTLY ALLOWED AND WE CONFIRM THE PENALTY LEV IED BY THE ASSESSING OFFICER IN RESPECT OF INTEREST ON SAV ING BANK ACCOUNT AND CREDIT CARD EXPENSES. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2016. SD./- SD./- (G. D. AGRAWAL) (BEENA A. PILLAI) VICE PRESIDENT JUDICIAL MEMBER DATE: 27.07.2016 /SP. 21 I.T.A.NO.2457./DEL/2016 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI) S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 27/7/16 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 27/7 SR. PS/PS 7 FILE SENT TO BENCH CLERK 29/7 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER