DCIT 22(1), NAVI MUMBAI V. ANANDKUMAR GUPTA, MUMBAI

ITA 3089/MUM/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59690 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Onus to prove; Revised return; Bonafide mistake
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO.3089/M/2009 ASSESSMENT YEAR:2005-2006 DEPUTY COMMISSIONER OF INCOME TAX-(22)(1), 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI. VS. SHRI ANAND KUMAR GUPTA, C/O NAVIN D. THAKKAR & CO., B-8, SATYAM SHOPPING CENTRE, M.G. ROAD, GHATKOPAR (E), MUMBAI 400 077. PAN: ADNPG8488J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAVAN VED RESPONDENT BY : SHRI JAYAN T BHATT DATE OF HEARING : 30-1 1-2011 DATE OF PRONOUNCEMENT : 13-01-201 2 O R D E R PER V. DURGA RAO, J.M: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT (A)-XXII, MUMBAI DATED 20 TH JANUARY, 2009 FOR THE ASSESSMENT YEAR 2005-2006. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN EMPLOYEE OF MADURA COATS PVT. LTD., FILED HIS ORIGI NAL RETURN OF INCOME FOR AY 2005-06 ON 25.7.2005 DECLARING TOTAL INCOME OF R S. 2,04,26,175/-. THEREAFTER, DURING THE COURSE OF ASSESSMENT PROCEED INGS FOR AY 2004-05 ON INVESTIGATION AND ENQUIRY WITH KARVI COMPUTER SHARE PVT. LTD., IT WAS FOUND THAT THE ASSESSEE HAD SUPPRESSED HIS CAPITAL GAINS ON REDEMPTION OF BONUS UNITS ILFS ON 16.5.2005 TO THE TUNE OF RS. 54,20,575/-. ASSESSEE AFTER INVESTIGATION AND ENQUIRY PAID THE TAXES ON 1 6.8.2006 WHICH WAS CLEARED ON 19.6.2008. ACCORDING TO THE ASSESSING O FFICER, ASSESSEE HAD SUPPRESSED INCOME OF RS. 54,20,575/- AND, THEREFORE , ISSUED NOTICE U/S 148, WHICH WAS SERVED ON THE ASSESSEE ON 24.8.2005. ASSESSEE HAD FILED RETURN IN RESPONSE TO THE NOTICE U/S 148 ON 25.8.20 05 DECLARING TOTAL ITA NO: 3089/M/2009 2 INCOME OF RS.2,60,21,170/- INCLUDING SUPPRESSED INC OME OF RS.54,20,575/-. SUBSEQUENTLY, ASSESSING OFFICER HA D INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 5.6.2008. IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, THE ASSESSEE HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE IS AN EMPLOYEE AND HAS NOT BEEN MAINTAINING THE BOOKS OF ACCOUNT AND AS A PART OF INVESTMENT, HE HAD PURCHASED 3,10,723.759 U NITS OF IL & FS GROWTH AND VALUE FUNDS BONUS PLAN ON 25.3.2004 FOR RS. 82, 00,000/- AT NAV OF RS. 26.39 PER UNIT. DURING THE FINANCIAL YEAR 2003 -04, THE SAID ILFS HAD DECLARED THE BONUS IN THE RATIO OF 3:2 UNITS AND AS SUCH ON 26.3.2004 THE ASSESSEE GOT 4,66,085.639 UNITS AS BONUS. THEREAFT ER, THE ASSESSEE HAD REDEEMED THE ORIGINAL 3,10,723.59 UNITS ON 29.3.200 4 AT RS.33,62,031.07 AND HAD CLAIMED SHORT TERM CAPITAL LOSS OF RS.48,37 ,969/- WHICH HAD BEEN ALLOWED IN THE AY 2004-05. THE ILFS HAD FURTHER RE DEEMED THE BONUS UNITS ON 6.5.2004 AND MADE THE PAYMENT OF RS. 54,2 0,575.98 @ NAV OF RS. 11.63 AFTER DEDUCTION OF TDS OF RS. 2,50,708/- ON SUCH REDEMPTION. THE SAID ILFS HAD CREDITED THE SAID AMOUNT DIRECTLY BY ECS TO THE ACCOUNT OF THE ASSESSEE. IT IS PERTINENT TO NOTE THAT PRIO R TO REDEMPTION OF SUCH BONUS UNITS THE SAID ILFS HAD SOLD THE ENTIRE SCHEM E TO UTI MUTUAL FUND WHICH WAS THEN TERMED AS UTI GROWTH AND VALUE FUND BONUS PLAN. SINCE, THE ASSESSEE HAD NOT RECEIVED ANY STATEMENT EITHER FROM UTI OR FROM ILFS IN THIS REGARD, THIS EVENT DID NOT REGISTER IN THE ASSESSEES MIND AND CONSEQUENTLY HE INADVERTENTLY MISSED INCLUDING IT I N HIS INCOME TAX RETURN FOR THAT PARTICULAR YEAR. THAT THE STATEMENT WAS N OT RECEIVED BY THE ASSESSEE IS ALSO ESTABLISHED BY THE FACT THAT NO TD S CREDIT WAS CLAIMED BY THE ASSESSEE DESPITE IT HAVING BEEN AFFECTED BY THE CONCERNED MUTUAL FUND COMPANY. IT SHOULD ALSO BE BROUGHT TO THE NOTICE O F YOUR GOOD SELF THAT DURING THAT PERIOD THE ASSESSEE WAS UNDERGOING A MA JOR RELOCATION FROM HIS OVERSEAS JOB TO INDIAN SHORES WHICH ALSO CREATED SI GNIFICANT DISTRACTIONS FOR HIM CONTRIBUTING TO INADEQUATE ATTENTION ON VAR IOUS DETAILS OF HIS AFFAIRS. IT WAS SUBMITTED THAT THE AO WOULD APPREC IATE THAT SUCH A MAJOR DISLOCATION IN ANY PERSONS LIFE WHEN ALL HIS BELON GINGS, INCLUDING DOCUMENTS AND RECORDS, ARE NOT EVEN IN ONE LOCATION AND DEFINITELY NOT WELL ORGANIZED COULD EASILY CONTRIBUTE TO THIS DETAIL BE ING MISSED SPECIALLY WHEN THE PARTICULAR STATEMENT WAS ALSO NOT RECEIVED FROM THE CONCERNED MUTUAL FUND COMPANY. THEREFORE, IT WOULD BE QUITE CLEAR T O YOUR KIND SELF THAT ITA NO: 3089/M/2009 3 QUITE A FEW IMPORTANT AND SIGNIFICANT EVENTS, SOME RELATED TO HIS LIFE AND CAREER AND OTHERS RELATED TO SLIP-UPS BY THE CONCER NED MUTUAL FUND COMPANY, CONTRIBUTED TO THIS INADVERTENT OMISSION. 3. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT THE ASSESSEE UNDER BONAFIDE BELIEF IGNORED THE CREDIT WHILE FILING THE RETURN FOR AY 2005-06 AND WHEN IT CAME TO HIS NOTICE THAT MISTAKE COMMITT ED BY HIM, HE PAID THE TAXES ON 16.8.2006. THE ASSESSING OFFICER, DURING THE COURSE OF PENALTY PROCEEDINGS, AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE, DISBELIEVED THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT T HE ILFS REDEEMED BONUS UNITS AS IT WAS WITHOUT THE CONSENT OF THE AS SESSEE IS UNBELIEVABLE AND THE ILFS HAD CREDITED THE SAID AMOUNT DIRECTLY BY ECS TO THE ACCOUNT OF THE ASSESSEE AND THE ASSESSEE HAD NOT RECEIVED A NY STATEMENT EITHER FROM ILFS OR UTI IS ALSO NOT BELIEVABLE FOR THE REA SON THAT THIS INFORMATION IS AVAILABLE IN NET BANKING AND AFTER ASSESSING OFF ICER HAS CONDUCTED AN ENQUIRY WITH THIRD PARTY, IT CAME TO THE NOTICE OF THE ASSESSEE AND THE ASSESSEE HAS NO OTHER ALTERNATIVE, DISCLOSED THE SU PPRESSED CAPITAL GAINS AND PAID TAXED ON IT. BY FOLLOWING THE VARIOUS CAS E LAWS THE AO LEVIED PENALTY U/S 272(1)(C) ON RS. 19 LAKHS, ON WHICH, TH E ASSESSEE SOUGHT TO BE EVADED THE TAX. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRI ED MATTER IN APPEAL BEFORE THE LD. CIT (A) AND IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT THE ASSESSEE IS AN EMPLOYEE WORKING WITH MADURA COATS P .LTD. DRAWING A TOTAL SALARY OF RS. 28,37,0001- AND ALSO DERIVES INCOME B Y WAY OF CAPITAL GAINS, INTEREST, AND DIVIDEND. HE FURTHER SUBMITTED THAT S INCE HE IS NOT DOING ANY BUSINESS, NO BOOKS OF ACCOUNT WERE MAINTAINED AND A S A PART OF INVESTMENT HE HAD PURCHASED 3,10,723.759 UNITS OF IL & FS GROW TH AND VALUE FUNDS BONUS PLAN ON 25.3.2004 FOR RS. 82 LAKHS AT NAV OF RS. 26.39 PER UNIT. DURING A.Y.2004-05 ILFS HAD DECLARED A BONUS AND ON 26.3.20O4 THE APPELLANT HAD 466085639 UNITS AS BONUS. HE REDEEMED THE ORIGINAL UNITS ON 29.03.2004 AND DECLARED SHORT TERM CAPITAL LOSS AT RS. 48,37,969/- WHICH HAD BEEN ACCEPTED IN A.Y.2004-05. ON 6.5.2004 ILFS FURTHER REDEEMED BONUS UNITS AND PAID RS.54,20,575/- @ NAV OF RS. 11.03 AFTER DEDUCTING TDS OF RS. 2,50,708/-. THIS AMOUNT WAS CR EDITED DIRECTLY BY ITA NO: 3089/M/2009 4 ECS TO THE ACCOUNT OF THE ASSESSEE. THE ILFS IN THE MEANTIME HAD SOLD THE ENTIRE SCHEME TO UTI MUTUAL FUND AND AS SUCH NO STA TEMENT FROM LLFS OR UTI WAS RECEIVED BY THE ASSESSEE. THE ASSESSEE HAD ALSO NOT CLAIMED ANY CREDIT OF THE TDS AS HE WAS UNAWARE OF THE ABOVE SC HEME OF THINGS. 4.1 DURING THIS PERIOD THE ASSESSEE WAS RELOCATING FROM OVERSEAS AND HAD APPOINTED A BROKER TO LOOK INTO HIS AFFAIRS WHO IN TURN FAILED TO INFORM HIM OF THE SAID INCOME/TDS AND AS SUCH THE SAME WA S NOT SHOWN IN HIS RETURN OF INCOME FILED FOR A.Y. 2005-06. HOWEVER, A S SOON AS THE ASSESSEE BECAME AWARE OF THIS FACT HE AT ONCE TOOK ACTION AN D FILED REVISED RETURN ON 25.08.2006 AFTER AFTER PAYING TAX THEREON ON 16.08. 2006 REALISED BY THE DEPARTMENT ON 19.08.2006 SUO-MOTO INFORMING THE DE PARTMENT OF THE SAID ACTION VIDE LETTER DATED 22.08.2006. HE HAS ADMITTE D THAT THERE HAD BEEN A BONAFIDE MISTAKE WHICH WAS THE RESULT OF THE FACT T HAT THE SCHEME IN WHICH THE ASSESSEE HAD INVESTED HAD CHANGED HANDS FROM IL FS TO UTI AND NO STATEMENT HAD BEEN RECEIVED. 4.2 REGARDING THE NOTICE U/S 148 SAID TO BE ISSUED AND SERVED ON THE ASSESSEE ON 24.08.2006, THE ASSESSEE HAD CLAIMED TH AT THIS NOTICE WAS NEITHER SERVED ON THE ASSESSEE NOR HIS AUTHORISED R EPRESENTATIVE. THE ASSESSEE HAD FILED A COPY OF THE SAID NOTICE BEFORE THE CIT(A) TO ESTABLISH THAT IT HAS NOT BEEN RECEIVED EITHER BY THE ASSESSE E OR HIS AUTHORISED REPRESENTATIVE. HE HAD STATED THAT EVEN IF THE SERV ICE OF NOTICE IS ACCEPTED AS VALID HIS FILING OF REVISED RETURN OF INCOME ON 25.O6.2006 AND HIS PAYMENT OF TAXES ON 16.06.2006 WOULD SHOW THAT HE H AD ALL INTENTIONS OF CORRECTING HIS RETURN OF INCOME AND DECLARING ALL I NCOME FOR TAXATION SUO- MOTO. IF IT HAD NOT BEEN SO, IT WOULD HAVE BEEN IMP OSSIBLE TO FILE REVISED RETURN OF INCOME ON 25.06.2006 ON NOTICE RECEIVED O N 24.06.2006. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE LEARNED CIT (A) HELD AS UNDER: I HAVE CAREFULLY EXAMINED THE ORDER OF THE ASSESSIN G OFFICER THE SUBMISSION APPELLANT AND THE CASE LAWS CITED. I FIND THAT THE ASSESSEE HAS BASED HIS ARGUMENT ON THE FAC T THAT THE MISTAKE MADE BY HIM WAS BONAFIDE AND SUO-MOTO CORRE CTED AND AS SUCH WOULD NOT ATTRACT PENALTY U/S. 271(1)(C) OF THE I.T. ACT. I FIND REASON TO ACCEPT THE PLEA OF THE ASSESSEE THAT THE MISTAKE ITA NO: 3089/M/2009 5 WAS BONAFIDE AND WAS ATTRIBUTABLE TO THE FACT THAT DUE TO RELOCATION FROM OVERSEAS HE WAS NOT ABLE TO LOOK IN TO HIS AFFAIRS PROPERLY AND THAT THE PROBLEM STOOD FURTHER AGGRAVA TED DUE TO NON RECEIPT OF STATEMENT FROM ILFS. THERE IS MORE R EASON TO BELIEVE THE ASSESSEE AS IT IS SEEN THAT AS SOON AS HE RECEIVED THE STATEMENT FROM UTI AND HE WAS MADE AWARE OF THE MIS TAKE MADE IN COMPUTING HIS INCOME FOR A.Y. 2005-06 HE IMMEDIA TELY RECTIFIED THE SAME BY WAY OF PAYING THE CONCERNED TAXES AND F ILING REVISED RETURN. THE QUESTION THAT OF RETURN OF INCOME WAS F ILED IN RESPONSE TO NOTICE U/S. 148 OF THE I.T. ACT IS DEBA TABLE ONE ON ACCOUNT OF THE DETAILS GIVEN EARLIER ON THE ORDER A ND NEEDS TO BE SEEN IN THAT LIGHT. WHAT IS TO BE CONSIDERED HERE IS WHETHER THE MISTAKE THAT THERE WAS A BONAFIDE ERROR ON THE PART OF THE ASSESSEE AND THIS BY ITSELF WOULD ABSOLVE THE ASSES SEE FROM LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. 2.8 FOR LEVYING PENALTY U/S. 271(1)(C) OF THE IT. A CT, THERE HAS TO BE A CONSCIOUS EFFORT ON THE PART OF THE ASSESSEE T O HIDE INCOME AND THE SAME NEEDS TO BE PROVED AS SUCH. WHEN AN AS SESSEE FILES REVISED RETURN OF INCOME AND PAYS TAXES SUO-M OTO THERE WOULD BE NO REASON OF CONCEALMENT OF INCOME. I FIND THE HOLDING OF UNITS WERE DECLARED TO THE DEPARTMENT. MERE OMIS SION FROM THE RETURN OF INCOME OF AN ITEM OF RECEIPT DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO S HOW OR SOME CIRCUMSTANTIAL EVIDENCE FOUND TO PROVE THAT THE ASS ESSEES INTENTION WAS TO CONCEAL INCOME AND AVOID PAYMENT O F TAX. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MAT ERIAL OR EVIDENCES ON THE BASIS OF WHICH IT COULD BE CONCLUD ED THAT THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURA TE PARTICULARS OF INCOME INTENTIONALLY. THE ASSESSING OFFICER HAS NOWHERE IN HIS ORDER REBUTTED WITH FINDINGS THAT TH E CLAIM OF ASSESSEE REGARDING REASONS FOR THE MISTAKE MADE OR CHALLENGED THE BONAFIDE OF THE ASSESSEE. 2.9 THE ASSESSEE HAS SUBMITTED A COPY OF HIS PASSPO RT AND LETTER FROM MADURA COATS TO PROVE THAT DURING THE PERIOD U NDER CONSIDERATION HE WAS MOSTLY TRAVELLING AND RELOCATI NG FROM OVERSEAS. HIS CONTENTION THAT DUE TO THIS REASON HE HAS NOT BEEN ABLE TO GIVE DUE ATTENTION TO HIS AFFAIRS SEEMS PRO BABLE AND CAN BE ACCEPTED. FURTHER, THE ASSESSEE HAS ALSO SUBMITT ED A LETTER FROM ONE SHRI ASHISH A. GOPANI OF GOPANI SECURITIES AND INVESTMENTS PVT. LTD., MEMBER BSE & NSE, WHEREIN, I T HAS BEEN STATED THAT THE CONCERN LOOKED AFTER THE INVESTMENT OF THE ASSESSEE DURING 1997-2005 WHEN HE WAS POSTED ABROAD OR TRAVELLING AND THAT THE SIGNED DOCUMENTS/PAPERS REQ UIRED FOR SUCH INVESTMENTS WERE IN THEIR CUSTODY. I FIND THAT THE ASSESSING OFFICER IN HIS PENALTY ORDER HAS NOT TOUCHED ON THI S ASPECT AT ALL WHEN HE HAS AT LENGTH DISCUSSED THE ASSESSEES PLEA OF RELOCATION. REGARDING THE TRAVELLING ASPECT AND OF RELOCATION, I FIND THAT BOTH IN THE ASSESSMENT ORDER AND IN THE P ENALTY ORDER THE ASSESSING OFFICER HAS NOWHERE CHALLENGED THE AS SESSEES PLEA OR CHECKED INTO HIS PASS PORT ETC. I FIND NO R EASON TO DOUBT THE ASSESSEE ON THIS ISSUE AS IT IS AN ACCEPTED PRA CTICE BY MANY ITA NO: 3089/M/2009 6 PERSONS TO APPOINT AGENTS WHO ARE TRUSTED WITH THEI R INVESTMENTS. NOTHING HAS BEEN BROUGHT ON RECORD TO REBUT THIS CLAIM OF THE ASSESSEE IN THE ASSESSMENT ORDER OR TH E PENALTY ORDER. IN FACT IN THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE I.T. ACT PASSED ON 26.12.2007, I FIND THE ASSES SING OFFICER HAS NOT DISCUSSED THE ISSUE AT ALL. THE REVISED RET URN OF INCOME FILED HAS BEEN ACCEPTED IN TOTALITY AND NOTHING HAS BEEN BROUGHT ON RECORD TO SAY THAT THERE WAS PROVED CONCEALMENT, AND THAT THE ASSESSEE HAD DELIBERATELY CONCEALED INCOME. IN FACT THE SUBMISSIONS AS MADE BY THE ASSESSEE DO NOT STAND RE BUTTED OR DISCUSSED AT ALL. IN VIEW OF THIS, IT CANNOT BE SAI D THAT A CASE FOR CONCEALMENT PENALTY EXISTED. NO INQUIRY SEEMS TO HA VE BEEN MADE FROM EITHER UTI OR ILFS REGARDING THE FORWARDI NG OF STATEMENTS TO PROVE THAT THE ASSESSEE WAS AWARE OF HIS LIABILITIES. IN FACE OF THIS THE ASSESSEE CLAIM CAN NOT BE REJECTED REGARDING IGNORANCE OF THE REMITTED AMOUNT. IN FACT IT IS SEEN THAT THE ASSESSING OFFICER HAS OFFERED NO OPINION O R RECORDED SATISFACTION FOR INVOKING SEC. 271(1)(C) OF THE I.T . ACT REGARDING THE FINDINGS THAT THE ASSESSEE HAS CONCEALED HIS I NCOME. FOR CONCEALMENT THERE HAS TO BE A DELIBERATE ACT ON THE PART OF THE ASSESSEE AND THE ASSESSING OFFICER IS REQUIRED TO P ROVE THE SAME WITH CORROBORATIVE EVIDENCE AND MATERIAL. PENALTY C ANNOT BE A RESULT OF SURMISES AND CONJECTURES. THE CLAIM OF TH E ASSESSEE NEEDED TO BE REBUTTED FOR LEVYING PENALTY. THIS HAS NOT HAPPENED. THE EXPLANATION HAS NOT BEEN PROVED TO BE IMPROBABL E. I FIND THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS A CCEPTED THE REVISED RETURN WITHOUT ANY ANALYSIS OR FURTHER CORR OBORATION OF EVIDENCE TO PROVE CONCEALMENT. THE ONUS TO PROVE TH E CONCEALMENT HAS NOT BEEN DISCHARGED. AN INDEPENDENT INQUIRY WHICH IS A MUST IS ABSENT. THE ACTION OF THE ASSESS ING OFFICER IN ADDING THE ADDITIONAL AMOUNT WHILE MAKING ASSESSMEN T WITHOUT ASSESSING OFFICER IN ADDING THE ADDITIONAL AMOUNT W HILE MAKING ASSESSMENT WITHOUT ANY FURTHER INVESTIGATION SHOWS THAT THE OFFER WAS ACCEPTED. AS THIS HAS BEEN DONE WITHOUT I NQUIRY OR FINDINGS OR REBUTTING OF ASSESSEES CLAIM CONCEALME NT HAS NOT BEEN PROVED. HENCE, IT IS CLEAR SECTION 271(1)(C) W OULD NOT BE ATTRACTED. PENALTY FOR CONCEALMENT IS NOT AUTOMATIC . IT IS FOR THE ASSESSING OFFICER TO PROVE THE CONCEALMENT. THIS, I T IS SEEN, HAS NOT BEEN DONE. THE ASSESSING OFFICER IN THE PENALTY ORDER ALSO HAS SIMPLY RELIED UPON THE FINDINGS IN THE ASSESSME NT ORDER AND AUTOMATICALLY LEVIED PENALTY, THUS MAKING THE GROUN D WEAK AS NO OBJECTIVE MATERIAL HAS BEEN BROUGHT ON RECORD. THE ISSUE HAS REMAINED CONFINED BETWEEN ORIGINAL RETURN OF INCOME AND REVISED RETURN OF INCOME AND PENALTY U/S 271(1)(C), IT IS S EEN, CANNOT BE LEVIED ON SURRENDER UNLESS CONCEALMENT IS ESTABLISH ED. MERE SURRENDER MADE IS NOT ESTABLISHMENT OF CONCEALMENT AS SURRENDER MAY BE A RESULT OF VARIOUS CIRCUMSTANCES THAT NEED TO BE EXAMINED AND INVESTIGATED INTO. IN THIS CASE, IT IS SEEN, SURRENDER WAS ON ACCOUNT OF THE FACT THAT CERTAIN INCOME HAD NOT BEEN CONSIDERED IN THE ORIGINAL RETURN DUE TO OVERSIGHT AND AS SOON AS THE MISTAKE WAS REALIZED THE SAME WAS CORRECTED AND TAXES PAID. THERE IS AN ABSENCE OF POSITIVE EVIDENCE OF CONCEAL MENT. THE EXPLANATION OF THE ASSESSEE IS NOT FOUND TO BE FALS E. THE ONUS ITA NO: 3089/M/2009 7 HAD SHIFTED TO THE DEPARTMENT TO PROVE THAT CONCEAL MENT EXISTED REGARDING THE DIFFERENTIAL INCOME DECLARED BY THE A SSESSEE BY WAY OF FURNISHING REVISED INCOME. 2.10 PENALTY AND ASSESSMENT ARE TWO DISTINCT PROCEE DINGS. THOUGH ADDITIONS MADE IN THE ASSESSMENT ORDER CONST ITUTE MATERIAL FOR THE PURPOSE OF PENALTY PROCEEDINGS THE ASSESSING OFFICER IS REQUIRED TO BRING COGENT MATERIAL ON REC ORD ON THE BASIS OF WHICH IT COULD BE ESTABLISHED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OR HAD FURNISHED INACCURA TE PARTICULARS. I FIND NO SUCH MATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY THE IMPOSITION OF PENALTY U/S. 271(1)(C). I FIND THAT T HE ASSESSEE HAD DISCLOSED HIS BANK ACCOUNT TO THE DEPARTMENT AND HA S REGULARLY BEEN FILING HIS RETURN OF INCOME AND PAYING TAXES. FROM RECORDS IT IS SEEN THAT THE DEPARTMENT HAS NEVER HELD THE A SSESSEE AS A DEFAULTER, THEREFORE, ONE SOLITARY INCIDENT CANNOT PROVE MENSREA IN HIS CASE. THE CONDUCT OF THE ASSESSEE CAN BE STA TED TO BE BONAFIDE AND MERE FACT THAT ADDITIONAL INCOME HAS B EEN DECLARED BY FILING A REVISED RETURN OF INCOME WOULD NOT BY I TSELF WARRANT AN INFERENCE THAT ASSESSEE HAD DELIBERATELY CONCEAL ED INCOME AND ATTRACTED THE INVOCATION OF SECTION 271(1)(C) O F THE I.T. ACT. I FIND THAT THE ASSESSEE HAS ACTED IN GOOD FAITH AS I S EVIDENT FROM THE DATES REGARDING THE SEQUENCE OF EVENTS. ALTERNA TIVELY AS CLAIMED BY THE ASSESSEE, THE CASE ALSO STAND COVERE D U/S. 271(1)(C) EXPLANATION (4) CLAUSE(B) OF THE L.T. ACT AS THE ASSESSEE HAD PAID THE DUE TAXES MUCH BEFORE THE ISSUE OF NOT ICE U/S. 148 OF THE IT. ACT. 2.11 IN VIEW OF THIS DETAILED DISCUSSION AND RELYI NG ON THE RATIO OF JUDGEMENT IN THE CASES MENTIONED EARLIER OR IN T HE ORDER AND THE PROVISIONS OF SECTION 271(1)(C) EXPLANATION (4) CLAUSE (B) OF THE IT. ACT, IT IS SEEN THAT THE LEVY OF PENALTY U/ S. 271(1)(C) OF THE IT. ACT IN THIS CASE CANNOT SURVIVE AND I HAVE NO O PTION BUT TO DELETE THE PENALTY U/S. 271(1)(C) OF THE IT. ACT LE VIED AND ALLOW THE GROUND OF APPEAL . 6. ON BEING AGGRIEVED, THE REVENUE CARRIED THE MATT ER IN APPEAL BEFORE THE TRIBUNAL. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBM ITTED THAT ASSESSEE HAS FILED REVISED RETURN OF INCOME AND PAI D TAXES THEREON WHEN IT CAME TO THE NOTICE OF THE ASSESSEE THAT ASSESSING O FFICER MADE AN ENQUIRY WITH REGARD TO THE SAID CAPITAL GAINS OF RS.54,20,5 75/. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS FILED REVISED RETURN VOLUNTARILY. THE TAX WAS PAID BY THE ASSESSEE WHEN THE DEPARTMENT DE TECTED THE CONCEALMENT OF INCOME BY THE ASSESSEE AND, THEREFO RE, IT CANNOT BE SAID THAT THE ASSESSEE HAD PAID THE TAXES VOLUNTARILY. ITA NO: 3089/M/2009 8 8. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE HAS SUBMITTED THAT THE ASSESSEE IS AN EMPLOYEE, WORKING IN OVERSEAS. HE APPOINTED TWO EXPERT AGENCIES TO LOOK AFTER THE INV ESTMENT AND ALSO TO LOOK AFTER THE INCOME TAX MATTERS. IT IS FURTHER SUBMIT TED THAT AN AMOUNT OF RS. 54,20,575/- CREDITED TO HIS ACCOUNT BY ILFS WAS NOT NOTICED BY THE ASSESSEE AND THE CONCERNED CHARTERED ACCOUNTANT WHO IS LOOKING AFTER THE INVESTMENT HAS COMMITTED A MISTAKE, THEREFORE, THE ASSESSEE COULD NOT BE PENALIZED FOR THE MISTAKE COMMITTED BY THE AUDITOR OF THE ASSESSEE. IT IS ALSO SUBMITTED THAT WHEN THE MISTAKE CAME TO THE N OTICE OF THE ASSESSEE, ASSESSEE PAID TAXES IMMEDIATELY ON 16.8.2006 BEFORE RECEIVING NOTICE AND REVISED RETURN ALSO FILED ON 25.8.2008 IMMEDIATELY AFTER THE NEXT DAY OF RECEIVING NOTICE. THE LEARNED COUNSEL, THEREFORE, POINTED OUT THAT THE ASSESSEE HAS FILED REVISED RETURN VOLUNTARILY AND P AID TAXES THEREON BEFORE ISSUING THE NOTICE BY THE ASSESSING OFFICER. IT IS SUBMITTED THAT THE ASSESSEE NEITHER CONCEALED THE INCOME NOR FILED INA CCURATE PARTICULARS OF HIS INCOME AND, THEREFORE, THE PROVISIONS OF SEC. 271(1)(C) ARE NOT ATTRACTED TO THE CASE OF THE ASSESSEES CASE. 9. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD AND GONE TO THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE ORIG INALLY FILED HIS RETURN OF INCOME FOR AY 2005-06 ON 25.7.2005 DECLARING TOTAL INCOME OF RS. 2,04,26,175/-. THEREAFTER, DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS FOR AY 2004-05 IT CAME TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESSEE SUPPRESSED HIS CAPITAL GAINS ON R EDEMPTION OF BONUS UNITS ILFS ON 6.5.2005 TO THE TUNE OF RS. 54,20,57 5/-. THE ASSESSING OFFICER RECORDED THE REASONS ON 17.8.2005 AND ISSUE D A NOTICE U/S 148 SERVED ON THE ASSESSEE ON 24.8.2005. THE ASSESSEE HAS FILED A RETURN IN RESPONSE TO THE NOTICE U/S 148 ON 25.8.2005, DECLAR ING TOTAL INCOME OF RS.2,60,21,170/- INCLUDING INCOME OF RS. 54,20,575/ -. SUBSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED BY THE ASSESSING OFFICER AND A NOTICE WAS ISSUED TO THIS EFFECT. IN RESPONS E TO THE NOTICE, ASSESSEE HAS EXPLAINED THE DETAILS, WHEREIN, HE HAS SUBMITTE D THAT ASSESSEE IS AN EMPLOYEE, WORKING IN OVERSEAS AND HE HAS APPOINTED TWO CHARTERED ACCOUNTANTS TO LOOK AFTER HIS INVESTMENTS AS WELL A S TAX MATTERS. IT WAS PARTICULARLY SUBMITTED BEFORE THE ASSESSING OFFICER IN RESPECT OF ITA NO: 3089/M/2009 9 REDEMPTION OF BONUS UNITS ILFS ON 6.5.2005 TO THE T UNE OF RS.54,20,575/-. THE ABOVE AMOUNT WAS CREDITED TO THE ASSESSEES ACC OUNT AND IT WAS NOT NOTICED BY HIM BECAUSE DURING THE RELEVANT TIME HE WAS NOT IN INDIA. THE AUDITOR WHO IS LOOKING AFTER HIS INVESTMENT AND TAX MATTERS MISTAKENLY OVERLOOKED THE SAME, THEREFORE, THE SAME WAS NOT OF FERED FOR TAXATION. HOWEVER, THE ASSESSING OFFICER HAS NOT BELIEVED THE ABOVE SUBMISSIONS OF THE ASSESSEE AND IMPOSED PENALTY. WHEN THE APPEAL WENT TO CIT (A), THE LEARNED CIT (A) HAS EXAMINED THE MATTER CAREFULLY A ND OBSERVED THAT THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE WAS ACCEPTED TOTALLY AND NOTHING HAS BEEN BROUGHT ON RECORD TO SAY THAT THE ASSESSEE HAS DELIBERATELY CONCEALED THE INCOME OR FURNISHED INAC CURATE PARTICULARS OF HIS INCOME. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY EITHER FROM UTI OR ILFS WITH REGARD TO FORWARDING OF STATEMENTS TO PROVE THAT THE ASSESSEE AWARE OF HIS LIABILITIES. HE FURTHER OBSE RVED THAT ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD ON T HE BASIS OF WHICH IT COULD BE ESTABLISHED THAT THE ASSESSEE HAS CONCEALE D THE PARTICULARS OF INCOME OR HAD FURNISHED THE INACCURATE PARTICULARS. THE ASSESSEE ACTED ON GOOD FAITH, PAID THE TAXES AND FILED THE REVISED RE TURN AND, THEREFORE, ON THE ABOVE SPECIFIC OBSERVATION DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. APART FROM THE ABOVE FINDINGS G IVEN BY THE LEARNED CIT (A), WE FIND FROM THE DETAILS FILED BY THE ASSESSEE THAT THE ASSESSEE HAD PAID TAXES ON 16.8.2006 MUCH BEFORE THE DATE OF NOT ICE SENT BY THE ASSESSING OFFICER DATED ON 24.8.2008 AND REVISED RE TURN ALSO FILED ON 25.8.2008. ASSESSEE HAS SPECIFICALLY SUBMITTED BEF ORE THE ASSESSING OFFICER THAT AT THE RELEVANT POINT OF TIME HE WAS N OT IN INDIA AND THE AMOUNT OF RS. 54,20,575/- CREDITED TO HIS ACCOUNT W AS NOT AWARE OF HIM AND HE HAS NOT RECEIVED ANY STATEMENT FROM ILFS OR UTI. IN THIS REGARD, THE LEARNED CIT (A) HAS GIVEN A SPECIFIC FINDING T HAT ASSESSING OFFICER HAS NOT MADE ANY INQUIRY EITHER FROM UTI OR FROM ILFS, WHETHER THE ASSESSEE IS AWARE OF THE TRANSACTIONS RELATING TO ABOVE TWO COM PANIES AND WHETHER THE ASSESSEE HAS SIGNED ON ANY DOCUMENT EITHER OF THE C OMPANIES. IN VIEW OF THE SPECIFIC FINDINGS GIVEN BY THE LEARNED CIT (A) AND ALSO CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INF IRMITY IN THE ORDER OF THE LEARNED CIT (A) AND, THEREFORE, THE ORDER OF TH E LEARNED CIT (A) IS HEREBY UPHELD. ACCORDINGLY, THE GROUNDS RAISED BY T HE REVENUE ARE DISMISSED. ITA NO: 3089/M/2009 10 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JANUARY, 2012 SD/- SD/- (P.M. JAGTAP) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 13 TH JANUARY, 2012. OKK* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- CONCERNED 4. COMMISSIONER OF INCOME TAX, CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH G, MUMBAI TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI