Smt. Nishu Singh, New Delhi V. ITO, New Delhi

ITA 2534/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1826 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 07-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY SINGH CA SH AMRIT LAL
• Keywords: Salary income; Revised return
• Section: 143(3); 139(5)

Judgement Text

1 ITA NO. 2534/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .N O.-2534/DEL/2014 (ASSESSMENT YEAR-2009-10) NISHU SINGH C-157, MAYAPURI INDUSTRIAL AREA, PHASE-II NEW DELHI ACFPS6732G (APPELLANT) VS ITO WARD-27(4) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 24/2/ 2014 PASSED BY LD. CIT(A) XXIV, NEW DELHI ON THE FOLLOWING GROU NDS:- 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON F ACTS IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER (A. O) IN LEVYING THE PENALTY OF RS.69,178/- RELYING UPON THE IMPUGNED PENALTY ORDER IS LIABLE TO BE QUASHED. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER IN IMPOSING PENALTY WITHOUT APPRECIATING THE FACT THAT THE OMIS SION OF APPELLANT BY SH. AJAY SINGH, CA RESPONDENT BY SH. AMRIT LAL, SR. DR. DATE OF HEARING 08.12.2015 DATE OF PRONOUNCEMENT 28.12.2015 2 ITA NO. 2534/DEL/2014 THE INCOME IS DUE TO INADVERTENT MISTAKE AND OVERSI GHT AND THE ASSESSEE SUO MOTU SURRENDERED THE INCOME AN D PAID TAX THEREON WITH INTEREST WITHOUT ANY QUESTION RAISED ON IT DURING ASSESSMENT PROCEEDINGS. 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN WRONGLY APPLYING DECISION OF HON'BLE SUPREME COURT IN THE C ASE OF MAK DATA P. LTD. VS. CIT, 358 ITR 593. 2. THE ASSESSEE IS AN INDIVIDUAL AND MAIN SOURCE OF HER INCOME IS FROM THE BUSINESS OF EXPORTS OF READYMADE GARMEN TS UNDER THE NAME AND STYLE OF M/S EASTERN BASE. THE ASSESSEE H AS BEEN INTO THIS BUSINESS FOR LAST SO MANY YEARS AND HAS STAFF INCLUDING CEO, DESIGNERS AND PRODUCTION & MARKETING HEADS TO LOOK AFTER THE AFFAIRS OF THE BUSINESS. APART FROM THE BUSINESS I NCOME THE ASSESSEE ALSO EARNS SOME INTEREST ON THE DEPOSITS M ADE BY HER AND ALSO CARRIES ON PART TIME TEACHING ACTIVITIES. THE ASSESSEE IS A LARGE TAX PAYER FOR MANY YEARS. DURING THE YEAR UNDER CO NSIDERATION THE ASSESSEE FILED HER INCOME TAX RETURN WITH TOTAL INC OME OF RS.15,26,234/- AND PAID TAX LIABILITY OF RS.4,44,71 5/-. THE CASE OF THE ASSESSEE FOR AY 2009-10 WAS SELECTED FOR SCRUTI NY UNDER CASS AND AIR DETAILS AND A DETAILED QUESTIONNAIRE ASKING FOR VARIOUS DETAILS WAS ISSUED ON 07.10.2011 AND 17.10.2011 RES PECTIVELY. WHILE RECONCILING THE AIR DETAILS, IT CAME TO THE N OTICE OF THE ASSESSEE THAT DURING THE YEAR UNDER CONSIDERATION T HE ASSESSEE HAD ALSO EARNED A SALARY INCOME OF RS. 1,84,296/- FROM PATHWAYS WORLD SCHOOL, GURGAON ON WHICH A TDS OF RS.6,664/- WAS DE DUCTED AND APART FROM IT, THE ASSESSEE HAD ALSO EARNED PARTNER S SALARY FROM THE PERFECT FIT (THE PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS A PARTNER) AMOUNTING TO RS. 19,231/-. BUT DUE TO INAD VERTENT CLERICAL 3 ITA NO. 2534/DEL/2014 MISTAKE BOTH THESE INCOMES WERE NOT TAKEN INTO ACCO UNT WHILE COMPUTING THE TOTAL INCOME BEING THE FIRST YEAR FOR BOTH OF THESE INCOMES. 3. THE ASSESSEE ALWAYS HAS ITS MAIN SOURCE OF INCOM E FROM EXPORT OF READYMADE GARMENTS ONLY AND IN ABSENCE OF PROFESSIONAL ACCOUNTING TEAM, THE WHOLE EFFORTS TO CLOSE THE FIN ANCIALS AT THE YEAR-END ARE PUT UP DURING THE LAST DAYS TO FILE TH E INCOME TAX RETURNS UNDER SECTION 139(1) OF THE INCOME TAX ACT, 1961 AT THE TIME OF COMPLETION OF TAX AUDIT U/S. 44AB OF THE IN COME TAX ACT, 1961. DUE TO THIS THE AUDIT OF THE ACCOUNTS OF THE ASSESSEE IS GENERALLY CLOSED BY THE LAST DATE OF FILING INCOME TAX RETURN THAT IS CLEARLY EVIDENT FROM THE PAST RECORDS OF THE ASSESS EE. EVEN IN CURRENT YEAR ITSELF THE ASSESSEE HAS FILED HER RETU RN OF INCOME ON 30.09.2009. THEREFORE, THERE IS ALWAYS A PRESSURE T O COMPILE THE COMPUTATION OF INCOME AFTER FINALIZATION OF TAX AUD IT TO FILE THE TAX RETURNS IN TIME THAT LET TO OVERSIGHT OF THESE TWO INCOMES WHICH WERE EARNED BY THE ASSESSEE FOR THE FIRST TIME DURI NG THE YEAR UNDER CONSIDERATION AND THESE INCOMES WERE INADVERTENTLY MISSED TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE FOR TH E YEAR. THE ASSESSEE, ON NOTICING THESE FACTS THAT AFOREMENTION ED TWO INCOMES HAD NOT BEEN INCLUDED IN HER TOTAL INCOME AT THE TI ME OF FILING OF THE INCOME TAX RETURN, SUO MOTO TOOK THE EFFECT OF THES E TWO INCOMES AND PAID THE ADDITIONAL TAX LIABILITY INCLUDING INT EREST DUE ON THE SAME AMOUNTING TO RS. 85,605/- ON 17.10.2011 VIDE C HALLAN NO. 17011 THROUGH HDFC BANK. THE ASSESSEE COULD NOT REV ISE HER INCOME TAX RETURN AT THAT TIME AS THE TIME TO FILE THE REVISED RETURN 4 ITA NO. 2534/DEL/2014 AS PER THE PROVISIONS OF SECTION 139(5) HAD ALREADY BEEN LAPSED ON 31.03.2011. FURTHER, AFTER RECEIVING THE AIR DETAIL S AND DETAILED QUESTIONNAIRE ON 07.10.2011 AND 17.10.2011 RESPECTI VELY, THE ASSESSEE MADE VARIOUS SUBMISSIONS BEFORE THE ASSESS ING OFFICER (AO) AS ASKED IN THE QUESTIONNAIRE AND FILED THE RE CONCILIATION OF AIR DETAILS ON 02.12.2011 BUT NO SPECIFIC QUERY OR SHOW CAUSE WAS EVER ISSUED BY THE LD. ASSESSING OFFICER DURING THE COURSE OF PROCEEDINGS FOR ESCAPEMENT OF THE SALARY INCOME IN THE RETURN OF INCOME FILED BY THE ASSESSEE. EVEN AFTER SUBMITTING THE AIR RECONCILIATION AND AFTER DEPOSITING TAX ON THE SALA RY INCOME ON 17.10.2011, THE INCOME ESCAPEMENT WAS NOT DISCUSSED BY THE ASSESSING OFFICER AT ALL. IT IS PERTINENT TO MENTIO N IN THIS REGARD THAT THE DETAILS AS ASKED BY THE LD. ASSESSING OFFICER D URING THE ASSESSMENT PROCEEDINGS WERE LAST SUBMITTED / REPLIE D VIDE LETTER DATED 21.12.2011 AND WHEN THE ASSESSING OFFICER DID NOT ASK/MADE QUERY REGARDING THE ESCAPEMENT OF SALARY INCOME, TH E ASSESSEE SUO MOTO MADE THE FINAL DISCLOSURE BEFORE THE ASSESSING OFFICER ON 28.12.2011 TO BRING THIS FACT TO THE ATTENTION OF T HE ASSESSING OFFICER BEFORE THE ORDER U/S. 143(3) WAS PASSED ON 30.12.2011. 4. THE ASSESSMENT PROCEEDINGS OF THE ASSESSEE WERE COMPLETED ON 30/12/2011. THE TOTAL ADDITION WAS RS.2,03,526/ - & PENALTY U/S 271 (1)(C) READ WITH SECTION 274 OF THE I.T. AC T 1961,WERE INITIATED. THE ASSESSING OFFICER IN THE PENALTY OR DER STATED THAT THE ASSESSEE IS AN ESTABLISHED BUSINESS HOUSE AND HER A CCOUNTS ARE 5 ITA NO. 2534/DEL/2014 REGULARLY AUDITED. THE ASSESSEE HERSELF ADMITTED T O BE AN OLD ASSESSE AND IS PAYING GOOD AMOUNT OF TAX AND MAINTA INING MERCANTILE SYSTEM OF ACCOUNTING. AT THE TIME OF QU ESTIONNAIRE THE ASSESSING OFFICER HAS RAISED THE QUERY THAT RECONCI LIATION IN RESPECT OF THE AMOUNT/TRANSACTIONS REFLECTED IN AIR AND THE COPY WAS PROVIDED TO THE ASSESSEE ALONG WITH QUESTIONNAIRE D ATED 17/10/2011 ISSUED TO THE ASSESSEE. THE A.O. PASSED THE PENALTY ORDER. 5. BEING AGGRIEVED BY THE PENALTY ORDER U/S. 271 (1 )(C), THE ASSESSEE FILED AN APPEAL AGAINST THE PENALTY ORDER U/S 271(1)(C) TO THE CIT(A). BUT CIT(A) DISMISSED THE APPEAL AND CON FIRMED THE PENALTY ORDER OF AO VIDE ORDER DATED 24.02.2014. 6. THE LD. AR SUBMITTED THAT AS RELATED TO THE BUSI NESS THE ASSESSEE HAS FILED HER RETURN ON 17/10/2011. WHEN THE ASSESSEE CAME TO KNOW THAT THERE WAS ADDITION THE SAME WAS C OMPLIED WITH BY THE ASSESSEE ON THE VERY SAME DAY. THE SAID CHA LLAN WAS ANNEXED ON WRITTEN SUBMISSION SUBMITTED BY THE ASSE SSEE. THUS THERE WAS NO CONCEALMENT OF INCOME. THE SAID CHALL AN SHOWS THE GENUINENESS OF THE ASSESSEE. THE LD. AR FURTHER SUB MITTED THAT THE AMOUNTS OF INCOME WHICH WERE LEFT OUT DUE TO INADVE RTENT CLERICAL MISTAKE AND OVERSIGHT ARE RS. 1,84,296/- AND RS. 19 ,231/-. THE INCOME WAS CLEARLY VISIBLE TO THE DEPARTMENT FROM F ORM 26AS, THE 6 ITA NO. 2534/DEL/2014 SAID DETAILS WERE AVAILABLE WITH THE DEPARTMENT AS TDS HAD BEEN DEDUCTED ON THIS SALARY INCOME RECEIVED FROM PATHWA YS WORLD SCHOOL, GURGAON. THE PARTNER SALARY FROM THE PERFEC T FIT WAS VERY SMALL IN VALUE RS.19,231/- AND THEREFORE, CONCEALIN G THIS AMOUNT OF INCOME DOES NOT SERVE ANY PURPOSE ESPECIALLY, WHEN THE ASSESSEE IS ALREADY PAYING A HUGE AMOUNT OF TAX. THE LD. AR FUR THER SUBMITTED THAT IT WAS NOT THE INTENTION OF THE ASSESSEE TO DE LIBERATELY ATTEMPT TO CONCEAL THE INCOME KEEPING IN VIEW ALL THE FACTS AS STATED ABOVE. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFF ICER PASSED THE ORDER UNDER SECTION 143(3) ASSESSING THE TOTAL INCO ME AT RS. 19,13,030/- VIDE ASSESSMENT ORDER DATED 30.12.2011 BUT ALSO INITIATED THE PENALTY U/S. 271(1)(C) WITHOUT APPREC IATING THAT THE ASSESSEE SUO MOTO BROUGHT TO HIS NOTICE THE CLERICA L MISTAKE MADE WHILE FILING THE RETURN. THUS THE PENALTY OF RS. 69 ,178/- PASSED UNDER SECTION 271(1)(C) IS NOT PROPER AND JUST. 7. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE PENALTY ORDER AS WELL AS THE LD. CIT(A)S ORDER. 8. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE LD. CIT(A) HAS NOT TAKEN THE COGNIZANCE AND THE BONAFIDE OF THE ASSESSEE. WHEN THE ASSESSEE CAME TO KNOW THAT THER E WAS ADDITION THE SAME WAS COMPLIED WITH BY THE ASSESSEE ON THE V ERY SAME DAY. THE SAID CHALLAN WAS ANNEXED ON WRITTEN SUBMISSION SUBMITTED BY 7 ITA NO. 2534/DEL/2014 THE ASSESSEE. THE ASSESSEE IN HER FORM 26AS HAS G IVEN ALL THE DETAILS AS TDS WAS DEDUCTED IN RESPECT OF THE SALA RY INCOME RECEIVED FROM PATHWAYS WORLD SCHOOL, GURGAON AND TH E PARTNER SALARY FROM THE PERFECT FIT. THUS THERE WAS NO CONC EALMENT OF INCOME. THE SAID CHALLAN SHOWS THE GENUINENESS OF THE ASSESSEE. THE ASSESSEE WHO IS PROMPT TO PAY ITS TAX CANNOT BE SAID CONCEALING THE INCOME. THE RELIANCE OF MAK DATA (P) LTD. VS. COMMISSIONER OF INCOME TAX II (358 ITR 593) (2013) WILL NOT APPLY I N THE PRESENT CASE WHEN THERE IS A PROPER MATERIAL TO SHOW THE BO NAFIDE OF THE ASSESSEE. IN THIS PARTICULAR CASE THE ASSESSEE WAS FOR THE FIRST TIME ON 17/10/2011 ASKED BY A.O IN HIS QUESTIONNAIRE ABO UT THE RE- CONCILIATION IN RESPECT OF THE AMOUNT/TRANSACTIONS REFLECTED IN AIR AND THUS IT CAME TO THE KNOWLEDGE OF THE ASSESSEE. THEREAFTER THE ASSESSEE REALIZED THAT THERE IS SOME DEFECT IN HER RETURN AND PROMPTLY PAID THE TAX AMOUNT. THE ASSESSEE SUO MOT O HAD OFFERED THE INCOMES WHICH WERE INADVERTENTLY LEFT OUT TO BE INCLUDED IN THE TOTAL INCOME. THE ASSESSEE HAD OFFERED THE INCOME A ND PAID THE TAXES AND INTEREST WITHOUT ANY QUESTION OR QUERY BE ING RAISED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEED INGS. THERE WAS NOT SHOW CAUSE NOTICE ISSUED AT THAT PARTICULAR TIM E IN ASSESSEES CASE. THUS, THE LD. CIT(A) HAS IGNORED THIS FACTUAL MATRIX AND WITHOUT LOOKING INTO THE ASPECT OF GENUINENESS, CON FIRMED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. THE REFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A). 8 ITA NO. 2534/DEL/2014 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH OF DECEMBER 2015. SD/- SD/- ( S.V. MEHROTRA) (SUCHI TRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28/12/2015 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 08.12.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 09.12.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .12.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. .12.2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 30.12.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON .12.2015 PS 7. FILE SENT TO THE BENCH CLERK 30.12.2015 PS 9 ITA NO. 2534/DEL/2014 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.