BHARAT MOHANLAL SHAH, MUMBAI V. ASST. CIT,RANGE- 16(3), MUMBAI

ITA 3430/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3070 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 09-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Keywords: Revised return
• Section: 142(1); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 3430 /MUM/ 20 14 (ASSESSMENT YEAR 200 9 - 1 0 ) SHRI BHARAT MOHANLAL SHAH 194, GAIWADI COMPOUND GIRGAUM ROAD MUMBAI - 400 004. VS. ACIT, RANG E 16(3) 2 ND FLOOR MATRU MANDIR MUMBAI - 400 007. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAFPS3010F ASSESSEE BY SHRI VIJAY MEHTA DEPARTMENT BY SMT. VINITA MENON DATE OF HEARING 14 . 6. 201 6 DATE OF PRONOUNCEMENT 14 . 6 . 201 6 O R D E R PER B.R. BASKAR AN, A M : - THE A SSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 14.2.2014 PASSED BY LEARNED CIT(A) - 27, MUMBAI AND IT RELATES TO A.Y. 200 9 - 1 0. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED CIT(A) IN CONFIRMING THE PENALTY OF ` 3 ,03,319 / - LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 3. FACTS RELATING TO LEVY OF PENALTY ARE DISCUSSED IN BRIEF. THE ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME ON 29.3.2010 , I.E. BELATEDLY U/S. 139(4) OF THE ACT. THE ASSESSING OFFICER SELECTED THE RETURN FOR SCRUTINY AND ACCORDINGLY ISSUED NOTICE U/S. 143(2) OF THE ACT ON 20.8.2010. SUBSEQUENTLY, THE AS SESSEE FILED REVISED RETURN OF INCOME ON 30.3.2011 BEFORE THE ASSESSING OFFICER, WHEREIN THE ASSESSEE REVISED UPWARDS THE INCOME DECLARED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ALSO THE INTEREST INCOME EARNED ON FIXED DEPOSITS MAINTAINED WITH THE BANK S . THE A DDITIONAL INCOME DISCLOSED BY THE ASSESSEE ARE AS GIVEN BELOW : 2 (A) INCOME FROM HOUSE PROPERTY ` 1,64,640/ - (B) INCOME FROM OTHER SOURCES ` 7,27,737/ - THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ACCEPTING ADDITIONAL INCOME DISCLOSED IN THE REVISED COMPUTATION OF INCOME. THE ASSESSING OFFICER, HOWEVER, HELD THAT THE ASSESSEE WAS NOT ENTITLED TO FILE REVISED RETURN OF INCOME U/S 139(5) OF THE ACT, SINCE THE ORIGINAL RETURN OF INCOME WAS NOT FILED WITHIN THE TIME PRESCRIBED U/S 139(1) OF THE ACT. THEREFORE THE AO HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN THE ORIGINAL RETURN OF INCOME AND ACCORDINGLY INITIA TED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED A PENALTY OF ` 3,03,319/ - ON ADDITIONAL INCOME DECLARED BY THE ASSESSEE . LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. LEARNED AR SUBMITTED THA T THE ASSESSEE HAS BEEN CLAIMING SOCIETY MAINTENANCE CHARGES AS A DEDUCTION WHILE COMPUTING INCOME FROM HOUSE PROPERTY FOR THE PAST SEVERAL YEARS AND THE SAID CLAIM WAS SUPPORTED BY THE DECISION RENDERED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CAS E OF SHARMILA TAGORE VS. JCIT (2005) 93 TTJ (MUM) 483. THE PAST YEARS RETURNS WERE ACCEPTED U/S 143(1) OF THE ACT. HOWEVER, THE ASSESSEE WAS SUBSEQUENTLY ADVISED THAT THE SOCIETY MAINTENANCE CHARGES MAY NOT BE ALLOWABLE AS A DEDUCTION WHILE COMPUTING INC OME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ACCORDINGLY , IN ORDER TO AVOID ANY CONTROVERSY, THE ASSESSEE HAS REVISED THE INCOME DECLARED UNDER THAT HEAD BY OMITTING THE SAID CLAIM. LEARNED COUNSEL SUBMITTED THAT THE COORDINA TE BENCH OF THE TRIBUNAL , IN A RECENT DECISION DATED 18.5.20 1 6 RENDERED IN THE CASE OF ASHA ARUN ASHAR IN ITA NO. 3030/MUM/2014 , HAS HELD THAT DEDUCTION CLAIMED IN RESPECT OF SOCIETY MAINTENANCE CHARGES IS ALLOWABLE AS DEDUCTION AGAINST INCOME COMPUTED UNDER THE HEAD INCOME FROM HOU S E PROPERTY. ACCORDINGL Y, THE LD A.R SUBMITTED THAT THIS ISSUE IS A DEBATABLE ONE AND HENCE THE LEVYING OF PENALTY ON THIS ISSUE IS NOT JUSTIFIED. 3 5. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAD DECLARED INTEREST ON FIXED DEPOSITS IN THE O RIGINAL RETURN OF INCOME AS PER HIS OWN WORKINGS. HOWEVER, WHEN HE RECEIVED THE TDS CERTIFICATE FROM THE BANK SUBSEQUENTLY, IT CAME TO HIS NOTICE THAT THE INTEREST INCOME SHOWN IN THE TDS CERTIFICATE WAS HIGHER. SINCE THE INCOME SHOWN IN THE TDS CERTIFIC ATE HAS TO BE DECLARED, THE ASSESSEE H AS REVISE D THE INTEREST INCOME ALSO BY DECLARING THE SAME AS PER THE TDS CERTIFICATE. LEARNED AR SUBMITTED THAT THE ASSESSEE HAS FILED REVISED COMPUTATION OF INCOME VOLUNTARILY AND THERE WERE VALID REASONS FOR NOT DECL ARING THE CORRECT AMOUNT OF INCOME IN THE ORIGINAL RETURN OF INCOME. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED REVISED RETURN OF INCOME EVEN PRIOR TO THE ISSUE OF ANY NOTICE U/S 142(1) OF THE ACT BY THE AO. THE LEARNED AR ALSO INVITED OUR ATTENTI ON TO THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ST R UCK OF INAPPLICABLE LIMBS IN THAT NOTICE AND ON THAT COUNT ALSO THE IMPUGNED PENALTY PROCEEDING IS LIABLE TO THE QUASHED. IN THIS REGARD HE PLACED RELIANCE ON THE DECISION RENDERED BY THE COORDINATE BENCH IN THE CAS E OF SHRI HAFEEZ S. CONTRACTOR (ITA NO. 6222 & 6223/MUM/2013 DATED 2.9.2015). 6. ON THE CONTRARY LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FILED HIS ORIGINAL RET URN OF INCOME BELATEDLY AND HENCE REVISED RETURN OF INCOME FILED BY THE ASSESSEE CANNOT BE CONSIDERED TO BE A VALID RETURN U/S. 139(5) OF THE ACT. THE ASSESSEE WAS CONSTRAINED TO REVISE COMPUTATION , ONLY UPON RECEIPT OF SCRUTINY NOTICE U/S. 143(2) OF THE A CT AND HENCE DISCLOSURE MADE BY THE ASSESSEE COULD NOT BE CONSI DER ED TO BE VOLUNTARY. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IT IS S EEN THAT THE ASSESSEE HAS REVISED THE INCOME DECLARED IN THE ORIGINAL RETURN OF INCOME BY FILING A REVISE D RETURN OF INCOME. AS HELD BY THE ASSESSING OFFICER, THE REVISED RETURN OF INCOME MAY NOT BE A VALID RETURN, SINCE THE ORIGINAL RETURN OF INCOME WAS NOT FILED WITHIN THE STATUTORY PERIOD PRESCRIBED U/S 139(1) OF THE ACT. HOWEVER, THE FACT REMAINS THAT T HE ASSESSING OFFICER HAS ACTED UPON THE REVISED 4 RETURN OF INCOME AND ASSESSED THE INCOME AS DECLARED THEREIN. SINCE HE HAS HELD THAT THE REVISED RETURN OF INCOME WAS NOT A VALID ONE, HE HAS TAKEN THE VIEW THAT THE DIFFERENCE BETWEEN THE INCOME DECLARED IN THE ORIGINAL RETURN OF INCOME AND REVISED RETURN OF INCOME WOULD ATTRACT PENALTY U/S 271(1)(C) OF THE ACT. 8. THERE IS ALSO CONFUSION ABOUT THE LIMB UNDER WHICH THE PENALTY PROCEEDINGS WERE INITIATED. THE PROVISIONS OF SEC. 271(1)(C) PROVIDE FOR LEVY ING OF PENALTY FOR CONCEALMENT OF PARTICULAR OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE BODY OF ASSESSMENT ORDER, THE AO HAS STATED THAT THE INCOME REVISED BY THE ASSESSEE GIVES RISE TO FURNISHING OF INACCURATE PARTICULARS OF INCO ME. HOWEVER, IN THE PENALTY NOTICE THE AO DID NOT STRUCK OFF INAPPLICABLE LIMB. IN THE PENALTY ORDER, THE AO HAS STATED THAT THERE IS CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME. ALL THESE FACTS SHOW THAT THE ASSESSING OFFICER ALSO WAS NOT SURE AS TO THE LIMB UNDER WHICH HE HAS INITIATED PENALTY PROCEEDINGS. 9. BE THAT AS IT MAY, WE NOTICE THAT THE ASSESSEE HAS INCREASED THE INCOME DECLARED UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY OMITTING THE CLAIM MADE FOR SOCIETY MAINTENANCE CHA RGES. IT IS STATED THAT THE ASSESSEE HAS BEEN CLAIMING IDENTICAL DEDUCTION IN THE EARLIER YEARS ALSO AND THE SAID CLAIM GOT SUPPORT FROM THE DECISIONS RENDERED BY THE TRIBUNALS. HENCE, THE QUESTION OF DEDUCTION OF SOCIETY MAINTENANCE CHARGES BECOMES DEBA TABLE ONE AND THE DECISION TO GIVE UP THE SAID DEDUCTION CANNOT BE, IN OUR VIEW, CONSIDERED TO BE A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 10. IN RESPECT OF INTEREST INCOME FROM FIXED DEPOSITS, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS SUPPRESSED THE FIXED DEPOSITS ITSELF. IN FACT, THE ASSESSEE HAS DECLARED INTEREST INCOME ACCRUED/RECEIVED ON FIXED DEPOSITS AS PER HIS WORKINGS AND HE WAS CONSTRAINED TO REVISE THE INTEREST INCOME UPWARDS UPON RECEIPT OF THE TDS CERTIFICATE, SINCE THE INTEREST INCOME 5 SHOWN THEREIN WAS HIGHER. HENCE, IN OUR VIEW, THE EXPLANATION FURNISHED BY THE ASSESSEE IN REVISING INTEREST INCOME UPWARDS CANNOT ALSO BE FOUND FAULT WITH, SINCE THE INCOME - TA X PROVISIONS MA N DATE MATCHING OF TDS AMOUNT AND THE RELEVANT INCOME. 11. IN VIEW OF THE FOREGOING, WE ARE OF THE VIEW THAT THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE WAS ON ACCOUNT OF BONAFIDE REASONS AND THE EXPLANATIONS OFFERED IN THIS REGARD COU LD NOT BE FOUND TO BE FALSE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE SAME WOULD NOT GIVE RISE TO PENALTY U/S 271(1)(C) OF THE ACT ON EITHER OF THE LIMBS. 12. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY AG ITATED BEFORE US. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 14 . 6 .2016 . SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 14 / 6/ 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. RE GISTRAR) ITAT, MUMBAI PS