Ramadurai Ravichandran, CHENNAI V. ACIT, CHENNAI

ITA 2673/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4577 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 07-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 15-09-2016
• Court: TRIBUNAL
• Department Lawyers: K V SREEKANTH
• Assessee Lawyers: K B MURALIDHARAN
• Keywords: Double taxation relief; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . . . , !.. $ , ) BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2673/MDS/2016 * * /ASSESSMENT YEAR: 2012-13 SHRI RAMADURAI RAVICHANDRAN, ABBOTSBURY BLOCK II 6C, NO.74, C.P.RAMASAMY ROAD, CHENNAI-600 018. VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-17(1), CHENNAI-600 034. [PAN: ABDPR 6075 Q ] ( - /APPELLANT) ( ./- /RESPONDENT) - 0 / APPELLANT BY : MR.K.B.MURALIDHARAN, CA ./- 0 /RESPONDENT BY : MR.K.V.SREEKANTH, JCIT 0 /DATE OF HEARING : 07.03.2017 0 /DATE OF PRONOUNCEMENT : 03.05.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 26.07.2016 OF COMMISSIONER OF INCOME TAX (APPEALS)- 5, CHENNAI, IN ITA NO.108/CIT(A)-5/15-16 FOR THE AY 2012-13. ITA NO.2673/MDS/2016 :- 2 -: 2.0 ALL THE GROUNDS OF THE APPEAL ARE RELATED TO THE L EVY OF PENALTY U/S.271(1)(C) OF INCOME TAX ACT (IN SHORT ACT). THE ASSESSEE WAS EMPLOYED WITH M/S.INTEL TECHNOLOGY INDIA PVT. LTD., FOR THE PERIOD FROM APRIL, 2011 TO JANUARY 2012 AND JOINED INTEL TECHNO LOGY ASIA IN FEBRUARY, 2012 AND RECEIVED THE SALARY OF RS.1,95,91,901/- AN D FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,95,32,489/-. SUBSEQUENTLY, THE ASSESSEE REVISED THE RETURN OF INCOME ON 26.10.2013 ADMITTING TOTAL INCOME OF RS.1,35,35,920/- AND CLAIMED A REFUND OF RS.19,96,270/-. THE REVISED RETURN OF INCOME WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.1,99,18,810/- A ND INITIATED PENALTY U/S.271(1)(C) OF THE ACT. DURING THE PENALTY PROCE EDINGS, THE ASSESSEE SUBMITTED EXPLANATION STATING THAT THE REVISED RETU RN OF INCOME WAS FILED UNDER THE IMPRESSION THAT THE SALARY RECEIVED OUTSI DE INDIA WAS EXEMPTED AS PER THE TREATY. FURTHER, THE INTEREST INCOME WA S VOLUNTARILY OFFERED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS AND REQUESTED THE AO TO DROP THE PENALTY PROCEEDINGS. NOT BEING CONVINCED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, THE AO IMPOSED PENALTY OF RS.11,06,988/- BEING 100% AMOUNT OF TAX SOUGHT TO B E EVADED. 3.0 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WEN T ON APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) CONFIRMED TH E PENALTY IMPOSED BY THE AO AND DISMISSED THE ASSESSEES APPEAL. ITA NO.2673/MDS/2016 :- 3 -: 4.0 AGGRIEVED BY THE LD.CIT(A)S ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. APPEARING FOR THE ASSESSEE, THE LD.AR ARGUED THAT THE ASSESSEE HAS FILED THE ORIGINAL RETURN OF INCOME DISCLOSING ALL THE PARTICULARS ADMITTING THE TOTAL SALARY RECEIVED AS INCOME. SUBSEQUENTLY PLACING RELIANCE ON THE INDIA AND SINGAPORE TAX TREATY THE ASSESSEE HAS REV ISED THE RETURN OF INCOME EXCLUDING THE SALARY RECEIVED IN SINGAPORE W HICH WAS TAXED IN SINGAPORE UNDER THE WRONG IMPRESSION. THE ASSESSEE S EMPLOYER IS RESIDENT OF SINGAPORE AND AS PER THE DTAA, THE SALA RY RECEIVED FROM THE RESIDENT OF THE SINGAPORE IS LIABLE TO BE TAXED IN SINGAPORE BUT NOT IN INDIA. THEREFORE, THE ASSESSEES A.R HAS VEHEMENT LY ARGUED THAT THERE IS NO CASE FOR LEVY OF PENALTY U/S.271(1)(C). FURTHER , THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIG H COURT IN THE CASE OF CIT V. MANJUNATHA COTTON GINNING 35 TAXMANN.COM 25 AND ARGUED THAT THE AO HAS ISSUED NOTICE U/S.271(1)(C) WITHOUT STRI KING THE IRRELEVANT COLUMN RELATING THE RELATING TO THE REASON FOR INIT IATING PENALTY CAUSING A CONFUSION WHETHER THE PENALTY WAS INITIATED FOR INA DEQUATE PARTICULARS OR THE CONCEALMENT OF INCOME AND ARGUED THAT THE NOTIC E ISSUED U/S.271(1)(C) IS INVALID AND CONSEQUENT PENALTY REQ UIRED TO BE QUASHED. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDERS O F THE LOWER AUTHORITIES. 5.0 WE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. ITA NO.2673/MDS/2016 :- 4 -: 5.1 DURING THE APPEAL, THE LD.A.R ARGUED THAT THE ASSE SSING OFFICER NOT INTIMATED THE NATURE OF OFFENCE FOR INITIATING THE PENALTY BY STRIKING IRRELEVANT COLUMN WHETHER THE PENALTY IS INITIATED FOR FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. WE HAVE GONE THROUGH THE PENALTY ORDER. THE ASSESSING OFFICER IMPOSED THE PENALTY FO R FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME AND HENCE ACCO RDING TO THE AO PENALTY WAS INITIATED FOR FURNISHING INACCURATE PAR TICULARS AND CONCEALMENT OF INCOME, HENCE NO COLUMN NEED TO BE STRUCKED OFF FROM THE PRINTED NOTICE AND THIS ARGUMENT OF THE ASSESSEE CANNOT HOL D WATERS AND DISMISSED. 5.2 THE ASSESSEE HAS FILED ORIGINAL RETURN OF IN COME DISCLOSING ALL THE PARTICULARS. THE ASSESSEE HAS FILED THE REVISED RE TURN OF INCOME UNDER THE IMPRESSION THAT THE INCOME RECEIVED FROM THE EMPLOY MENT AT SINGAPORE WAS NOT TAXABLE IN INDIA AS PER THE DTAA AND ACCORD INGLY, FILED THE REVISED RETURN OF INCOME CLAIMING THE RELIEF TO THE EXTENT OF THE SALARY RECEIVED IN SINGAPORE. THE AO HAS SELECTED THE REVISED RETURN OF INCOME FOR SCRUTINY AND COMPLETED THE ASSESSMENT WITHOUT CONSIDERING TH E ORIGINAL RETURN OF INCOME FILED ON 31.07.2012. BY THE TIME, THE REVIS ED RETURNS WAS SELECTED FOR SCRUTINY, ALL THE PARTICULARS ARE AVAILABLE WIT H THE AO AND THE AO HAS NOT MADE OUT A CASE FOR PENALTY. THERE WAS A DTAA WITH THE SINGAPORE WHICH GIVES RELIEF TO THE ASSESSEE ON PAYMENT OF TA XES IN THE CONTRACT STATE. THEREFORE, IT IS APPARENT THAT THE CLAIM WA S MADE BY THE ASSESSEE WITH A MISTAKEN IMPRESSION. THEREFORE, WE HOLD THA T REVISED RETURN OF ITA NO.2673/MDS/2016 :- 5 -: INCOME WAS FILED WITH A BONA FIDE MISTAKEN IMPRESSI ON THAT THE SALARY RECEIVED AT SINGAPORE WAS EXEMPTED FROM TAX. EVEN OTHERWISE ALSO THE ENTIRE INFORMATION WAS AVAILABLE WITH THE AO IN THE FORM OF ORIGINAL RETURN OF INCOME AND THERE WAS NO CASE FOR FURNISHING OF I NACCURATE PARTICULARS OR CONCEALMENT OF INCOME TO THE EXTENT OF SALARY RECEI VED AT SINGAPORE. THE AO DID NOT MAKE ANY DISCUSSION REGARDING THE ADDITI ONS MADE AND THE REASONS FOR THE ADDITIONS SO MADE IN THE ASSESSMENT ORDER. THEREFORE, WE HOLD THAT THE REVENUE HAS NOT MADE OUT A CASE FOR I MPOSING PENALTY U/S.271(1)(C) AND ACCORDINGLY, THE PENALTY LEVIED U /S.271(1)(C) REPRESENTING THE DIFFERENCE AMOUNT OF SALARY IS CAN CELLED AND ORDERS OF THE LOWER AUTHORITIES TO THE EXTENT OF PENALTY ON AMOUN T OF RS.59,97,565/- ARE SET-ASIDE. 5.3 DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND TH AT THE ASSESSEE HAS RECEIVED INTEREST INCOME OF RS.3,86,316/- FOR W HICH ALSO PENALTY WAS IMPOSED U/S.271(1)(C), RELATING TO INTEREST RECEIPT S FROM THE BANK. THOUGH, THE ASSESSEE HAS STATED THAT THE SAID INCOM E WAS VOLUNTARILY ADMITTED IN THE ASSESSMENT PROCEEDINGS, THE ASSESSE E HAS NEITHER ADMITTED THE INTEREST IN THE ORIGINAL RETURN OF INC OME NOR THE REVISED RETURN OF INCOME. THE ASSESSEE HAS ADMITTED THE IN TEREST INCOME ONLY IN SCRUTINY ASSESSMENT PROCEEDINGS AFTER DETECTION OF OMISSION FROM FORM- 26AS. THEREFORE, THE LD.ARS ARGUMENT THAT THE INC OME WAS OFFERED VOLUNTARILY IS NOT ACCEPTABLE. THE ASSESSEE HAS FA ILED TO INCLUDE THE INCOME RELATING TO INTEREST THOUGH IT IS TAXABLE IN THE YEAR UNDER ITA NO.2673/MDS/2016 :- 6 -: CONSIDERATION. IF THE CASE IS NOT SELECTED FOR SCR UTINY, THE INCOME WOULD HAVE ESCAPED FROM ASSESSMENT. THEREFORE, THE ADDIT ION OF RS.3,86,316/- IS A CLEAR CONCEALMENT OF INCOME AND THE PENALTY IM POSED U/S.271(1)(C) ON THE ADDITION OF RS.3,86,316/- IS CONFIRMED AND W E UPHOLD THE ORDERS OF THE LD.CIT(A). 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! . . $ ) (D.S.SUNDER SINGH) /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 3 RD MAY, 2017. TLN 0 .$6 76 /COPY TO: 1. - /APPELLANT 4. 8 /CIT 2. ./- /RESPONDENT 5. 6 . /DR 3. 8 ( ) /CIT(A) 6. * /GF