Pradipta Kumar Das, Chennai V. ACIT, NCC-17(1), Chennai

ITA 26/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2166 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALMALSAWMA PACHUAU IRS
• Assessee Lawyers: SUHRITH PARTHASARATHY ADV
• Keywords: Depreciation; Reasonable cause
• Section: 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.26/CHNY/2019 ! / ASSESSMENT YEAR : 2013-2014 SHRI PRADIPTA KUMAR DAS, E/47, FLAT NO.3, 3 RD STREET, ANNA NAGAR (EAST), CHENNAI 600 102. [PAN ADIPD 5011B] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 17, CHENNAI. ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : MS. SUHRITH PARTHASARATHY, ADV. &' '# $ % /RESPONDENT BY : SHRI. LAL MALSAWMA PACHUAU, IRS, JCIT. ( ) $ * /DATE OF HEARING : 19-06-2019 +,! $ * /DATE OF PRONOUNCEMENT : 25-06-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5 , CHENNAI (CIT(A) FOR SHORT) DATED 20.03.2018 FOR THE ASSE SSMENT YEAR (AY) 2013-2014. ITA NO. 26/2019 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED COMMISSIONER HAS ERRED IN PASSING AN ORDER DECIDING THE APPEAL AGAINST THE PENALTY LEVIED UNDE R SECTION 271 (1) (C) OF THE INCOME TAX ACT, 1961 DATED 23.09 .2016, WHEN IN FACT, THE APPEAL FILED AGAINST THE ORDER PA SSED UNDER SECTION 143 (3) OF THE ACT, DATED 31.03 .2016 IS PE NDING BEFORE THE CIT (A). 2. THE LEARNED COMMISSIONER HAS FAILED TO APPRECIAT E THAT THE PENALTY LEVIED OUGHT NOT TO HAVE BEEN CONFIRMED INS OFAR AS THE ADDITION OF HOUSING RENT ALLOWANCE MADE VIDE ORDER DATED 31.03.2016 HAS BEEN CHALLENGED BEFORE THE CIT (A) A ND THE ADDITION HAS NOT BEEN CONFIRMED BY THE CIT (A). 3. THE LEARNED COMMISSIONER HAS FAILED TO RECOGNIZE THAT THE APPELLANT HAS DEPOSITED A SUM OF RS. RS. 32,673/- O N 18.06.2016, COMPLYING WITH THE INTERIM ORDERS PASSE D BY THE CIT (A). THEREFORE, WHILE THE APPEAL IS PENDING IN RELATION TO THE ADDITION OF HOUSING RENT ALLOWANCE, THE CIT (A) OUGHT NOT TO HAVE PASSED A FINAL ORDER AGAINST THE APPEAL PRE FERRED ON THE PENALTY LEVIED UNDER SECTION 271 (1) (C). 4. THE LEARNED COMMISSIONER HAS ERRED IN UPHOLDING THE PENALTY OF RS. 2,17,821/- UNDER SECTION 271 (1) (C) INSOFAR AS THE CONDITIONS STIPULATED UNDER THE PROVISION ARE N OT ATTRACTED IN THE PRESENT CASE AS THERE IS NEITHER ANY CONCEAL MENT OF INCOME NOR HAS THE APPELLANT FURNISHED INACCURATE P ARTICULARS OF HIS INCOME. 5. FURTHERMORE, IT IS RESPECTFULLY SUBMITTED THAT, IN ANY EVENT, MAKING AN INCORRECT CLAIM DOES NOT PER SE AMOUNT TO CONCEALMENT OF PARTICULARS UNDER THE INCOME TAX ACT , 1961. THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CA SE OF COMMISSIONER OF INCOME-TAX V. RELIANCE PETROPRODUCT S PVT. LTD [(2010) 322 ITR 158 (SC)J MAY BE SEEN IN THIS REGAR D. 6. THE LEARNED COMMISSIONER HAS FAILED TO CONSIDER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F COMMISSIONER OF INCOME-TAX V. RELIANCE PETROPRODUCT SPVT. LTD. [(2010) 322 ITR 158 (SC)J. IN THAT CASE, THEHONBLE SUPREME COURT AFFIRMED A DECISION OF THE HONBLEGUJARAT HIG H COURT, WHEREIN IT WAS HELD THAT, IN ORDER TO EXPOSE AN ASS ESSEE, THE CASE HAD TO BE STRICTLY COVERED BY THE PROVISION. F URTHER, IT IS SUBMITTED ONCE AGAIN, THAT A MERE INCORRECT CLAIM D OES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN THE ABOVE CASE, IT WAS ALSO HELD THAT MERELY BY MAKING A CLAI M, WHICH IS ITA NO. 26/2019 :- 3 -: NOT SUSTAINABLE IN LAW, THE SAME WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. THE APPELLANT THEREFORE STA TES THAT THE AFOREMENTIONED DECISION OF THE SUPREME COURT IS SQU ARELY APPLICABLE TO THE PRESENT CASE AND THE PENALTY PROC EEDINGS ARE LIABLE TO BE DISMISSED. 7.THE LEARNED COMMISSIONER HAS OTHERWISE CAUSED GRA VE INJUSTICE TO THE APPELLANT BY DENYING AN OPPORTUNIT Y TO THE APPELLANT FOR EXPLAINING THE CLAIM FOR EXEMPTION OF HOUSING RENT ALLOWANCE UNDER SECTION 10 OF THE INCOME TAX A CT, 1961, BY PROVIDING THE NECESSARY DOCUMENTS. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL, DERIVING INCOME UN DER THE HEAD INCOME FROM SALARIES. THE RETURN OF INCOME FOR THE AY 2013-14 WAS FILED ON 27.07.2014 DISCLOSING TOTAL INCOME OF G21 ,77,500/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPL ETED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORA TE CIRCLE-17(1), CHENNAI VIDE ORDER DATED 31.03.2016 PASSED U/S. 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DECLARIN G TOTAL INCOME OF G26,38,801/-. WHILE DOING SO, THE ASSESSING OFFIC ER DISALLOWED THE CLAIM OF EXEMPTION OF HRA U/S.10(13A) OF THE ACT OF G4,15,350/- AS ASSESSEE HAD FAILED TO PRODUCE THE EVIDENCE IN SUPP ORT OF THE CLAIM. THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM ON ACCOUNT OF DEPRECIATION, BANK CHARGES, REPAIRS ETC., OF G45,95 1/-. THE SAID ASSESSMENT ORDER ATTAINED FINALITY AS THE ASSESSEE HAD CHOSEN NOT TO FILE APPEAL BEFORE THE CIT(A). HOWEVER, THE ASSES SING OFFICER ISSUED SHOW CAUSE NOTICE CALLING UPON THE ASSESSEE TO EXPL AIN WHY AN ORDER ITA NO. 26/2019 :- 4 -: IMPOSING PENALTY U/S.271 (1) (C) OF THE ACT SHOULD NOT BE MADE FOR FURNISHING INACCURATE PARTICULARS OF INCOME RESULTI NG IN DISALLOWANCES OF CLAIM OF EXEMPTION U/S.10(13A) OF THE ACT FOR G4,15 ,350/- AND DISALLOWANCE OF BANK CHARGES AND REPAIRS OF G45,951 /. IT APPEARS THAT ASSESSEE HAD NOT FILED ANY EXPLANATION TO THE SHOW CAUSE NOTICE AND THEREFORE THE ASSESSING OFFICER PROCEEDED WITH LEVY OF PENALTY OF G2,17,821/- U/S.271(1) ( C) OF THE ACT. 4. BEING AGGRIEVED BY LEVY OF PENALTY, THE APPELLANT F ILED AN APPEAL BEFORE THE LD. CIT(A) CONTENDING THAT MERE DISALLOWANCE OF CLAIM DOES NOT AMOUNT TO FURNISHING INACCURATE PAR TICULARS OF INCOME. LD. CIT(A) AFTER CONSIDERING THE WRITTEN SUBMISSION S, GROUNDS OF APPEAL AND STATEMENT OF FACTS CONFIRMED THE ACTION OF THE ASSESSING OFFICER, ACCORDINGLY DISMISSED THE APPEAL OF THE A SSESSEE. 5. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE AP PELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. THE APPE AL HAS BEEN FILED WITH A DELAY OF TWO HUNDRED AND TWENTY NINE DAYS. ASSESSEE HAS FILED AN AFFIDAVIT PRAYING FOR CONDONING OF DELAY ON THE GROUND THAT HE WAS UNDERGOING TREATMENT FOR CANCER IN APOLLO H OSPITAL, VANAGARAM, TILL DECEMBER, 2018. IT IS SUBMITTED T HAT OWING TO HIS ILL HEALTH, THE APPEAL COULD NOT BE FILED WITHIN THE PR ESCRIBED TIME. IN SUPPORT OF HIS CONTENTION, HE ALSO FILED COPY OF D ISCHARGE SUMMARY. IT IS FURTHER SUBMITTED THAT THE DELAY IN FILING THE A PPEAL WAS NEITHER ITA NO. 26/2019 :- 5 -: WILLFUL NOR WANTON ONE, IF THE DELAY IS NOT CONDONE D IT WOULD CAUSE SEVERE HARDSHIP TO THE PETITIONER. 6. ON THE OTHER HAND, LD. SR. DEPARTMENTAL REPRESENTAT IVE OPPOSED CONDONATION OF DELAY. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. FROM THE PERUSAL OF THE CONDONATION PETITIO N, IT WOULD SUGGEST THAT THE ASSESSEE WAS DIAGNOSED WITH CANCER IN DEC EMBER, 2017 AND THE LD. CIT(A) PASSED THE ORDER ON 20.03.2018, WHI CH IS SUBSEQUENT TO THE DIAGNOSIS OF THE ILLNESS, NEEDLESS TO MENTION THAT TREATMENT OF CANCER IS VERY PAINFUL AND IT IS NOT POSSIBLE TO F OCUS ON OTHER ISSUES WHEN HE WAS UNDER THE TREATMENT AND THEREFORE IN OU R OPINION, THERE IS A REASONABLE CAUSE FOR NOT FLING THE APPEAL WITH IN THE DUE PERIOD AND THEREFORE WE ARE OF THE CONSIDERED OPINION TH AT IT IS A FIT CASE TO CONDONE THE DELAY AND ACCORDINGLY WE CONDONE THE D ELAY AND ADMIT THE APPEAL FOR ADJUDICATION. 8. AS REGARDS TO THE MERITS OF THE CASE, PERUSAL OF T HE ORDER PASSED U/S.271(1) (C) OF THE ACT WOULD SUGGEST THAT PENALTY WAS LEVIED FOR FILING INACCURATE PARTICULARS OF INCOME. BUT THE FACT REMAIN THAT PERUSAL OF THE ASSESSMENT ORDER WOULD SUGGEST THAT ASSESSEE HAD NOT FILED ANY DETAILS WHATSOEVER IN SUPPORT OF CLAIM OF HRA. AS REGARDS TO OTHER ADDITION OF G45,951/-, ORDER, IT IS CLEARLY S TATED THAT ASSESSEE ITA NO. 26/2019 :- 6 -: HIMSELF HAD AGREED FOR THE ADDITION AND THEREFORE I T CANNOT BE SAID THAT THE APPELLANT HAD FILED INACCURATE PARTICULARS OF INCOME RESULTING AN ADDITION TO THE RETURNED INCOME. THEREFORE THE V ERY BASIS OF LEVY OF PENALTY HAS NO LEGS TO STAND. FURTHER, IT IS SETTL ED LAW THAT MERE DISALLOWANCE OF CLAIM DOES NOT ENTITLE LEVY OF PEN ALTY AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD, 322 ITR 158. FURTHERMORE THE EMPLOYER HAD NOT DISPUTED THE CLAIM FOR EXEMPTION OF HRA. THEREFORE IN THE LIGHT OF THE ABOVE FINDINGS, IT IS NOT A FIT CASE FOR LEVY OF PENALTY . ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY OF G2,1 7,821/- MADE U/S.271(1) ( C) OF THE ACT 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED ON25TH DAY OF JUNE, 2019, AT CH ENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTA NT MEMBER - ) / CHENNAI . / DATED: 25TH JUNE, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF