Naresh Chandra Gupta, Cuttack V. ACIT, Cuttack

ITA 315/CTK/2012

• Counselvise Citation: 31522114 RSA 2012
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: B K MOHAPATRA
• Keywords: Salary income
• Section: 147; 148; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 315/CTK/2012 / ASSESSMENT YEAR 2007 - 08 NARESH CHANDRA GUPTA, C/O. ABHAYA CHARAN JENA, PLOT NO.C17,SECTOR 7, CDA, CUTTACK. PAN: AAUPG 8666 Q - - - VERSUS - ACIT, CIRCLE 2(2) , CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI B.K.MOHAPATRA, AR / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / DATE OF HEARING: 28.08.2012 / DATE OF PRONOUNCEMENT: 14.09.2012 / ORDER . . . , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED CITA) DT. 20.01.2012 FOR THE ASSESS MENT YEAR 2007 - 08 IN CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN THIS APPEAL. 1. FOR THAT THE LEARNED C IT (APPEAL) SHOULD NOT HAVE CONFIRM THE PENALTY IMPOSED U/S .271(1) (C) OF THE I T ACT 1961, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE. 2. FOR THAT THE REASONS GIVEN BY THE LEARNED CIT (APPEAL ) FOR CONFIRMING THE PENALTY ARE NOT MATERIALLY CORRECT, LEGALLY SUSTAINABLE AND COMMENSURATE WITH THE WRITTEN EXPLANATION AND CASE LAW CITED THEREIN , ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE THIS APPEAL AND THEIR LEGAL IMPLICATIONS . 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBM ISSIONS OF BOTH THE PARTIES, I.T.A.NO. 315/CTK/2012 2 THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY FROM L.T. OVERSEAS LTD., A - 21, GREEN PARK, AUROBINDO MARG, NEW DELHI - 110016 . HE FILED HIS RETURN OF INCOME FOR THE P ERIOD UNDER CONSIDERATION DISCLOSING A TOTAL INCOME OF 11,57,840 AND CLAIM ED TAX REFUND OF 97,536. ON PERUSAL FROM FORM NO.16 ENCLOSED IN THE RETURN, I T WAS NOTICED BY THE ASSESSING OFFICER THAT THE TAXABLE INCOME UNDER THE HEAD SALARY IS 14,45,840 AFTE R CLAIMING DEDUCTIONS U/S 80 . TDS OF 4,30,570 HAS BEEN DEDUCTED THERE FROM. IT WAS FURTHER NOTICED FROM FORM NO. 12BA ATTACHED WITH THE FORM NO. 16 THAT THE ASSESSEE HAS RECEIVED HOUSE RENT ALLOWANCE OF RS 2,88,000 AND THE ASSESSEE CLAIMED EXEMPTION OF T HE ENTIRE HRA BUT ACTUALLY THAT CLAIM IS EXCESS OF THE AMOUNT ALLOWABLE U/S 10 (13A) READ WITH RULE 2A OF THE I T RULES . THEREFORE, NOTICE U/S.148 OF THE I.T.ACT WAS ISSUED TO THE ASSESSEE ON THE BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSM ENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT. IN REPLY TO THE SAID NOTICE, THE ASSESSEE HAS STATED THAT HIS RETURN FILED ON 7.9.2007 AS RETURN IN RESPONSE TO NOTICE U/S 148 OF THE I.T.ACT. THERE AFTERWARDS AFTER ISSUING NOTICE U/S.142(1) AND AFTER HEARING THE ASSESSEE AND PERUSING THE MATERIAL PRODUCED BY THE ASSESSEE IT WAS NOTICED THAT TWO PHOTOCOPIES OF RENT RECEIPTS BY THE OWNER OF HOUSE PROPERTY FOR RENT PAID BY THE ASSESSEE FOR TWO MONTHS I.E. APRIL 2006 AND MARCH 2007 FOR 6,800 EACH AND A PH OTOCOPY OF HOUSE RENT AGREEMENT BETWEEN THE SAID OWNER AND ASSESSEE FOR A PERIOD OF 11 MONTHS W.E.F. 1.4.2006 . THE ASSESSEE HAS EXPRESSED HIS INABILITY TO PRODUCE ANY EVIDENCE IN SUPPORT OF HOUSE RENT CLAIMED OF 2,88,000.THEREFORE, HOUSE RENT ALLOWANCE WA S FIXED AT 18,600 AND THIS AMOUNT WAS ALLOWED FROM THE HOUSE RENT ALLOWANCE OF 2,88,000 THEREBY 2,06,400 WAS FOUND EXCESS CLAIMED BY THE ASSESSEE AND WAS ADDED TO THE INCOME OF ASSESSEE. ACCORDINGLY, ASSESSMENT ORDER WAS PASSED I.T.A.NO. 315/CTK/2012 3 WHEREIN IT IS OBSERVED FO R INITIATING PENALTY U/S.271(1)(C) AGAINST THE ASSESSEE. ACCORDINGLY A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE FOR WHICH THE ASSESSEE HAS GIVEN REPLY WHERE HE STATED THAT DUE TO SHIFTING OF HOUSE HE HAD LOST THE HOUSE RENT RECEIPTS AMOUNTING TO 2,06, 400, THEREFORE NON - FILING OF SUCH RECEIPTS DOES NOT CONSTITUTE CONCEALMENT OF INCOME. THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND HE FOUND THE ASSESSEE GUILTY OF THE DEFAULT OF GIVING INACCURATE PARTICULARS AND ACCORDINGLY THE AO IMPOSED PENALTY OF 69,474 AGAINST THE ASSESSEE WHICH IS EQUAL TO 100% OF THE TAX SOUGHT TO BE EVADED. 5. HAVING BEEN AGGRIEVED WITH THIS ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE LEARNED CIT(A) AFTER HEARING THE ASSESSEE AND CONSID ERING THE MATERIAL MADE AVAILABLE IN THE PENALTY FOLDER, HAS COME TO THE CONCLUSION THAT THE ACTION TAKEN BY THE AO IN LEVYING PENALTY AGAINST THE ASSESSEE IS VERY MUCH CORRECT AND THEREBY HE UPHELD THE SAME BY DISMISSING THE APPEAL OF THE ASSESSEE. 6. DUR ING THE COURSE OF HEARING, THE AR OF THE ASSESSEE VEHEMENTLY ARGUED CONTENDING INTER ALIA THAT THE EXCESS CLAIMED BY THE ASSESSEE TOWARDS HOUSE RENT, EVEN IT IS TRUE IT WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS INSOFAR AS THE ASSESSEE IS NOT ABLE TO PROVE THE CLAIM MADE BY HIM BY PRODUCING NECESSARY COGENT EVIDENCE IN VIEW OF THE SAID EVIDENCE HAVING BEEN LOSE WHILE VACATING HIS HOUSE AS PLEADED BY HIM IN HIS REPLY TO THE SHOW - CAUSE NOTICE ISSUED BY THE AO INITIATING PENALTY PROCEEDINGS. THE P ROVISIONS CONTAINED IN SECTION 271(1)(C) CLEARLY MANDATES FOR INACCURATE PARTICULARS OF INCOME. THEREFORE HERE WHAT THE ASSESSEE HAS DONE ASSUMING BUT ADMITTING THAT THERE IS EXCESS CLAIM OF EXEMPTION FOR HOUSE RENT ALLOWANCE, THIS IS NOT AT ALL AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, THE ACTION OF THE DEPARTMENT IN INITIATING I.T.A.NO. 315/CTK/2012 4 PE NALTY PROCEEDINGS U/S.271(1)( C) IS NOT AT ALL COMPREHENDED BY THE PROVISIONS CONTAINED IN SECTION 271(1)(C). RELIANCE AS PLACED BY THE AUTHORITIES BELOW N THE DECISION OF HONBLE APEX COURT IN THE CASE OF UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2007] 15 SCC 109 IS MISPLACED FOR LEVYING PENALTY AGAINST THE ASSESSEE. THE LATEST JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (322 ITR 158) CLEARLY STATES THAT CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME ONLY ARE COMPREHENDED IN THE PROVISIONS CONTAINED IN SECTION 271(1)(C) BUT NOT ANY EXCESS CLAIM MADE FOR DEDUCTION OF EX PENDITURE. IN THAT VIEW OF THE MATTER, THE PENALTY LEVIED U/S.271(1)(C) IN THE PRESENT CASE IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND REQUIRES TO BE CANCELLED. HE RELIED ON THE DECISION OF ITAT, LUCKHNOW BENCH RENDERED IN THE CASE OF ASHOK GRIH UDYOG KENDR A (P) LTD., V. ACIT (120 ITD 151), WHEREIN IT IS HELD THAT THE DISALLOWANCE OF EXPENDITURE HAS BEEN UPHELD BY THE TRIBUNAL BUT THE DEPARTMENT HAS NEVER CHALLENGED THE FINDINGS OF THE EXPENDITURE. WHEN ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT INSPITE OF THE EXPENDITURE IS DISALLOWED, PENALTY U/S.271(1)(C) OF THE I.T.ACT FOR CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, CANNOT BE IMPOSED. ACCORDINGLY HE SOUGHT FOR ALLOWING THE APPEAL OF THE ASSESSEE BY CANCELLING THE PENALTY LEVIED BY THE DEPARTMENT AGAINST THE ASSESSEE. 7. CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY ARGUED SUPPORTING THE ORDERS PASSED BY THE LOWER AUTHORITIES AND RELYING ON THE CITATIONS QUOTED IN THE IMPUGNED ORDERS. HE SOUGHT FOR UPHOLDING THE IMPUGNED ORDERS AND THEREBY DISMISSING THE APPEAL OF THE ASSESSEE. 8. ON CAREFUL ANALYSIS OF THE IMPUGNED ORDERS, IT IS FOUND THAT UNDISPUTEDLY THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS BUT EXEMPTION I.T.A.NO. 315/CTK/2012 5 CLAIMED BY THE ASSESSEE FOR HOUSE RENT ALLOWANCE HAS PARTLY BEEN DISALLOWED AS THE ASSESSEE COULD NOT PRODUCE NECESSAR Y EVIDENCE IN SUPPORT OF THE CLAIM. FROM THIS, IT IS CLEAR THAT THE ASSESSEE HAS OT GIVEN ANY INACCURATE PARTICULARS OF INCOME. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE DECISIONS OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (322 ITR 158) AND ITAT, LUCKHNOW BENCH RENDERED IN THE CASE OF ASHOK GRIH UDYOG KENDRA (P) LTD., V. ACIT (120 ITD 151), IN ALL FORCE COME TO RESCUE OF THE ASSESSEE. HENCE, THE PENALTY LEVIED BY THE DE PARTMENTAL AUTHORITIES IN THE PRESENT CASE IS FOUND INVALID AND UNSUSTAINABLE IN LAW. HENCE, THE SAME IS HEREBY CANCELLED BY ALLOWING THE APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/ - SD/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( ) DATE: 14.09.2012 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : NARESH CHANDRA GUPTA, C/O. ABHAYA CHARAN JENA, PLOT NO.C17, SECTOR 7, CDA, CUTTACK. 2 / THE RESPONDENT: ACIT, CIRCLE 2(2), CUTTACK. 3. / THE CIT, 4. ( ) / THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 315/CTK/2012 6 1. DATE OF DICTATION 06.09.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 07.09.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 14.9.2012 . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.09.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..