Shri Timir J. Shah (Indl.), Ahmedabad V. The Income Tax Officer, Ward-10(4), Now Ward-5(2)(4), Ahmedabad

ITA 2992/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9636 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 26-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B
• Keywords: Business income; Bonafide mistake
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2992/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) SHRI TIMIR J.SHAH (INDL.) PROP. M/S.CALCUTTA COMMUNICATION C/O. /S.CALCUTTA MOTORS 6, URVASHI COMPLEX MITHAKHALI SIX ROADS AHMEDABAD-380 006 / VS. THE INCOME TAX OFFICER WARD-10(4) AHMEDABAD-380 006 ./ ./ PAN/GIR NO. : AHEPS 2663 Q ( ' / APPELLANT ) .. ( #' / RESPONDENT ) ' $ / APPELLANT BY : MS.URVASHI SHODHAN, AR #' % $ / RESPONDENT BY : SHRI B.PANDA SR.DR &'( % ) / DATE OF HEARING 11/02/2016 *+, % ) / DATE OF PRONOUNCEMENT 18/02/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-5, AHMEDABAD [CIT(A) IN SHORT] DATED 14/08/2015 PERTAINING TO ASSESSMENT Y EAR (AY) 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.2992/AHD /2015 SHRI TIMIR J.SHAH (INDL.) VS. ITO ASST.YEAR 2011-12 - 2 - 1. ORDER U/S.250 DT.14.08.2015 JUSTIFYING LEVY OF PENALTY OF RS.1,78,405/- U/S.271(1)(C) OF THE ACT BEING ERRONE OUS AND ARBITRARY BE CANCELLED AND PENALTY LEVIED BE DELETE D. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 5 HAS ERRED IN LAW IN NOT CONSIDERING JUDICIALLY THAT (I) RETURN WAS FILED ON THE LAST DAY OF LIMITATION PER IOD IN A HURRIEDLY MANNER. (II) BOOKS OF ACCOUNTS OF THE APPELLANT WAS AUDITED WITH IN THE TIME PRESCRIBED AS PER THE ACT. (III) NO MALAFIDE INTENTION IN NOT CONSIDERING INCOME OF THE PROPRIETARY BUSINESS IN MAKING RETURN OF INCOME. (IV) EVEN A BUSINESSMAN WOULD NEVER LET GO CLAIM OF SUCH HUGE AMOUNT OF T.D.S. OF RS.2,28,198/- KNOWINGLY. (V) APPELLANT VOLUNTARILY DISCLOSED THE INCOME OF THE PROPRIETARY BUSINESS PRIOR TO COMPLETION OF THE ASS ESSMENT IN THE COURSE OF PROCEEDINGS WHICH IS SELF EXPLANAT ORY. (VI) IT WAS A SHEER MISTAKE IN SUBMITTING RETURN. (VII) ADDITION OF RS.3,83,777/- IN EXCESS OF INCOME DECLA RED RS.3,07,071/- IS ON ACCOUNT OF DIFFERENCE OF OPINIO N AND NOTHING BROUGHT ON RECORD TO SUBSTANTIATE CONCEALME NT OF INCOME. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT TH E TIME OF OR BEFORE THE HEARING OF THE APPEAL. APPELLANT THEREFORE PRAYS THAT ORDER U/S.250 DT.14.08.2015 BE CANCELLED AND PENALTY LEVIED RS.1,78,405/- BE DELETED AS PER GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 14/02/2014, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ITA NO.2992/AHD /2015 SHRI TIMIR J.SHAH (INDL.) VS. ITO ASST.YEAR 2011-12 - 3 - ADDITION OF RS.6,90,848/- (RS.3,83,777 AND RS.3,07, 071) ON ACCOUNT OF THE REVISED COMPUTATION OF INCOME FILED BY THE AUTH ORIZED REPRESENTATIVE OF THE ASSESSEE. THE AO ALSO INITI ATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. SUBSEQUENTLY , A PENALTY OF RS.1,78,405/- WAS LEVIED BY THE AO VIDE ORDER DATE D 27/08/2014. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, P REFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT DUE TO BONAFIDE MISTAKE, SOME INCOME WAS NOT TAKEN IN THE ORIGINAL RETURN, HOWEVER, WHICH WAS CORRECTED BY FILING A REVISED COMPUTATION OF INCOME. UNDER THESE FACTS, THE AUTHORITIES BELOW OUGHT NOT TO HAV E IMPOSED PENALTY AND CONFIRMED THE ADDITION. THE LD.COUNSEL FOR THE ASS ESSEE RELIED UPON THE DECISION OF COORDINATE BENCH (ITAT DELHI BENCH A) IN THE CASE OF ACIT VS. ASHOK RAJ NATH PASSED FOR AY 2006-07 REPO RTED AT [2013] 33 TAXMANN.COM 588 (DELHI TRIB.) :: ITA NO.2970 (DEL HI) OF 2012, DATED 31/08/2012. 3.1. ON THE OTHER HAND, LD.SR.DR OPPOSED THE SUBMIS SION OF THE LD.COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT IT W AS ONLY FILED THE REVISED COMPUTATION OF INCOME, WHEN THE AO POINTED OUT TO T HE REPRESENTATIVE OF ITA NO.2992/AHD /2015 SHRI TIMIR J.SHAH (INDL.) VS. ITO ASST.YEAR 2011-12 - 4 - THE ASSESSEE. UNDER THESE FACTS, IT CANNOT BE I NFERRED THAT THERE WAS ANY BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION RELIED UPON BY THE LD.COUNS EL FOR THE ASSESSEE. THE LD.CIT(A) HAS REJECTED THE APPEAL BY OBSERVING AS UNDER:- DECISION: 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSION MADE BY THE APPELLANT. THE APPELLANT HAS RAISED FOLLOWING CONTE NTIONS DURING THE APPELLATE PROCEEDINGS:- (1) THERE IS NO MALAFIDE INTENTION IN NOT SHOW ING PROPRIETARY BUSINESS IN THE RETURN OF INCOME AS THE RETURN OF I NCOME WAS FILED ON THE LAST DATE OF THE YEAR 31 ST MARCH, 2012 IN A HURRIEDLY MANNER. (2) THERE IS A BONAFIDE ACT ON THE PART OF THE APP ELLANT THAT PROPRIETARY BUSINESS INCOME LEFT OUT IN MAKING RETU RN OF INCOME WAS OFFERED TO TAX VOLUNTARILY PRIOR TO THE COMPLET ION OF THE ASSESSMENT. IN THE PRESENT CASE, THE APPELLANT HAS FILED RETURN OF INCOME ON 31.3.2012 DECLARING TOTAL INCOME AT RS.4,85,440/- IN WHICH TH E APPELLANT HAS NOT SHOWN INCOME EARNED THROUGH THE BUSINESS ACTIVITY O F RE-CHARGE COUPON IN THE NAME OF PROPRIETARY CONCERN NAMELY M/S.CALCU TTA COMMUNICATION. DURING THE ASSESSMENT PROCEEDINGS ON VERIFICATION, THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS RECEIVED COMMISSION /BROKERAGE INCOME ITA NO.2992/AHD /2015 SHRI TIMIR J.SHAH (INDL.) VS. ITO ASST.YEAR 2011-12 - 5 - OF RS.22,81,752/- FROM AIR CELL AGAINST THE BUSINES S OF RE-CHARGE COUPON FOR MOBILE TELEPHONES. THE SAID TRANSACTION AS WELL AS INCOME EARNED THROUGH THE SAID ACTIVITY HAS NOT BEEN SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME. THE ASSESSING OFFICER HAS RAISED SPECIFI C QUERRY IN THIS REGARD VIDE NOTICE U/S.-142(1) DTD. 22.7.2013. IN RESPONSE TO THIS NOTICE THE ASSESSEE HAS FILED REVISED COMPUTATION OF TOTAL INC OME ON 14.10.2013. FROM THIS IT IS VERY MUCH CLEAR THAT ASSESSEE HAS N OT ACTED VOLUNTARILY BUT REVISED HIS COMPUTATION OF INCOME AFTER THE SPECIFI C QUERRIES RAISED BY THE ASSESSING OFFICER. IN FACT THIS DEFINITE INFORM ATION IN POSSESSION OF THE ASSESSING OFFICER WHICH PROMPTED THE ASSESSEE TO DE CLARE THE INCOME OF THE PROPRIETARY CONCERN BY WAY OF FILING REVISED CO MPUTATION. THE WORD VOLUNTARY MEANS SOMETHING OUT OF OWN VOLITION WITHO UT BEING PROMPTED BY ANY ENQUIRY BY ANY DEPARTMENTAL AUTHORITY, SOMET HING WHICH IS A RESULT OF REALIZATION OF OMISSION OR MISTAKE IN THE ORIGINAL RETURN FILED BY THE ASSESSEE AND NOT A RESULT OF DISCOVERY MADE BY THE DEPARTMENT THAT THE ASSESSEE HAS CONCEALED THE INCOME. THIS OBSERVA TION IS ALSO MADE BY THE JURISDICTIONAL ITAT, AHMEDABAD BENCH 'D' IN THE CASE OF KAILASHBHAI AMBALAL SHAH (129 ITD 135). 4.4. THE SUBMISSION OF THE APPELLANT THAT IT IS A B ONAFLDE MISTAKE AS THE RETURN WAS FILED IN A HURRIEDLY MANNER IS NOT ACCEP TABLE AS IT IS NOT A SMALL TYPOGRAPHICAL MISTAKE BUT IT IS A DELIBERATE ATTEMPT OF NOT SHOWING INCOME IN THE RETURN OF INCOME FILED BY THE APPELLA NT. THE APPELLANT WAS DOING THE PROPRIETARY BUSINESS IN THE RELEVANT PERI OD AND WHILE FILING THE RETURN OF INCOME, INCOME FROM THIS PROPRIETARY BUSI NESS WAS NOT SHOWN. IT CANNOT BE SAID A BONAFLDE MISTAKE AS THE ASSESSE E WAS HAVING FULL KNOWLEDGE OF HIS ACTIVITIES AND INCOME. THE APPELLA NT RELIED ON CERTAIN DECISIONS BUT THESE DECISIONS ARE NOT HELPFUL FOR T HE ASSESSEE AS ALL THESE JUDGMENTS PRESCRIBED THE GENERAL PRINCIPLES OF CASE S WHERE PENALTY FOR CONCEALMENT IS LEVIABLE. THE FACTS OF THE CASE OF T HE APPELLANT ARE ENTIRELY DIFFERENT FROM THE FACTS OF THE CASES CITED BY THE APPELLANT. CONSIDERING THE FACTS OF THE CASE, THE AO IS JUSTIFIED IN LEVYI NG THE PENALTY AND THE SAME IS CONFIRMED. THUS, THE GROUNDS OF APPEAL ARE DISMISSED. ITA NO.2992/AHD /2015 SHRI TIMIR J.SHAH (INDL.) VS. ITO ASST.YEAR 2011-12 - 6 - 4.1. WE ARE UNABLE TO SUSTAIN THE AFORESAID FINDING S OF THE LD.CIT(A) AS THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E ASSESSEE HAD FILED A REVISED COMPUTATION OF INCOME. IT CANNOT BE GATHER ED FROM THE MATERIAL AVAILABLE ON RECORD THAT THIS ACT WAS DELIBERATE ON THE PART OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE COORDINATE BENCH IN THE CASE OF ACIT VS. ASHOK RAJ NATH (SUPRA), WE HER EBY DIRECT THE AO TO DELETE THE PENALTY. THUS, ASSESSEES GROUNDS OF AP PEAL ARE ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 18 TH DAY OF FEBRUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18/ 02 /2016 0)..& , '.&../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-5, AHMEDABAD 5. 5'6 &23 , ) 23 , , 1 / DR, ITAT, AHMEDABAD 6. 689 :( / GUARD FILE. / BY ORDER, #5 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD