Ashish Pal Singh Arneja, New Delhi V. ITO, New Delhi

ITA 3485/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4177 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 23-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-1 : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.3485/DEL/2016 ASSESSMENT YEAR : 2011-12 ASHISH PAL SINGH ARNEJA, BH-45, POORVI SHALIMAR BAGH, NEW DELHI. PAN: AFIPA6803L VS. ITO, WARD-72(4), CIVIC CENTRE, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, CA DEPARTMENT BY : NONE DATE OF HEARING : 23.11.2016 DATE OF PRONOUNCEMENT : 23.11.2016 ORDER THIS APPEAL BY THE ASSESSEE RELATING TO THE ASSESS MENT YEAR 2011- 12 ARISES OUT OF THE ORDER PASSED BY THE CIT (APP EALS) ON 28.03.2016 UPHOLDING THE PENALTY OF RS.3,31,433/- IMPOSED BY T HE AO U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLE D THE ACT) 2. SUCCINCTLY, THE ASSESSEE IS A SALARIED EMPLOYEE WHO FILED HIS RETURN DECLARING TOTAL INCOME OF RS.4,54,966/-. ON PERUSAL OF THE FORM 26AS, IT ITA NO.3485/DEL/2016 2 WAS OBSERVED THAT THERE WAS DIFFERENCE IN THE AMOUN T OF TDS AS ACTUALLY DEDUCTED AND THE AMOUNT OF TDS AS DECLARED IN THE R ETURN OF INCOME. FURTHER INVESTIGATION TRANSPIRED THAT THE ASSESSEE RECEIVED SALARY FROM TWO EMPLOYEES, NAMELY, M/S IBM INDIA AND M/S SYNTEL . SALARY RECEIVED FROM IBM INDIA WAS DECLARED ALONG WITH THE CLAIM FO R THE AMOUNT AS PER THE TDS CERTIFICATE. HOWEVER, THE SALARY RECEIVED FROM M/S SYNTEL AMOUNTING TO RS.9,48,080/- WAS NOT OFFERED FOR TAXA TION AND, IN THE LIKE MANNER, CREDIT FOR TDS ON SUCH SALARY AMOUNTING TO RS.1,57,182/-, WAS ALSO NOT CLAIMED. ON BEING CONFRONTED, THE ASSESSE E SURRENDERED SUCH AMOUNT AND THE AO ADDED SALARY OF RS.9,48,080/- IN THE INCOME AND ALSO ALLOWED CREDIT FOR THE TAX DEDUCTED AT SOURCE. THE REAFTER, PENALTY WAS IMPOSED ON SUCH ADDITION, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 3. THERE IS NO APPEARANCE ON BEHALF OF THE REVENUE. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. AR AND PERUS ING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSEE EARNED SALARY FROM TWO EMPLOYERS DURING THE YEAR, NAMELY, M/S IBM AND M/S SYNTEL. SALARY FROM THE LATER EMPLOYMENT OF IBM WAS PROPERLY DECLA RED. HOWEVER, ITA NO.3485/DEL/2016 3 SALARY RECEIVED FROM THE EARLIER APPOINTMENT WITH M /S SYNTEL WAS NOT SHOWN IN THE RETURN OF INCOME AND, SIMULTANEOUSLY, NO CREDIT FOR TDS WAS TAKEN ON SUCH SALARY. THE REASONS FOR SUCH DEF AULT HAVE BEEN EXPLAINED, BEING, THE COURT PROCEEDINGS PENDING AGA INST THE ASSESSEE AND HIS PARENTS DUE TO DIVORCE PROCEEDINGS WITH HIS WIF E, WHICH LED TO THE MENTAL HARASSMENT AND THE CONSEQUENTIAL FURNISHING OF RETURN BY THE ASSESSEE HIMSELF DECLARING IMPROPER PARTICULARS. T HIS FACT IS APPARENT FROM THE COPY OF THE ORDER PASSED BY THE COURT DIRE CTING THE ASSESSEE TO PAY A PARTICULAR AMOUNT AS MAINTENANCE TO HIS ESTRA NGED WIFE. IN MY CONSIDERED OPINION, THERE WAS A REASONABLE AND BONA FIDE GROUND FOR THE ASSESSEE IN NOT DISCLOSING THE CORRECT INCOME OF SA LARY AND, SIMULTANEOUSLY, NOT TAKING CREDIT FOR THE TDS ON SU CH AMOUNT. THE HONBLE SUPREME COURT IN PRICEWATER HOUSE COOPERS PVT. LTD. VS. CIT (2012) 348 ITR 306 (SC) , HAS HELD THAT NO PENALTY U/S 271(1)(C) SHOULD BE IMPOSED FOR A BONA FIDE MISTAKE OR A NORMAL HUMAN ERROR. SIMILAR VIEW HAS BEEN REITERATED BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SOMANY EVERGREE KNITS LTD. (2013) 352 ITR 592 (BOM) . THE LD. AR HAS ALSO PLACED ON RECORD A COPY OF THE ORDER DATED 27. 7.2016 PASSED BY THE ITA NO.3485/DEL/2016 4 DELHI BENCH OF THE TRIBUNAL IN ADITYA MALLA VS. ITO (ITA NO.2457/DEL/2016) , IN WHICH PENALTY U/S 271(1)(C) IMPOSED BECAUSE OF THE ASSESSEE OMITTING TO INCLUDE SALARY FROM HIS PR EVIOUS EMPLOYER ON WHICH DEDUCTION OF TAX AT SOURCE WAS MADE, CAME TO BE DELETED. IN VIEW OF THE FOREGOING CIRCUMSTANCES, I AM CONVINCED THAT THE PENALTY ON THE UNDISCLOSED BUT SURRENDERED SALARY INCOME OF RS.9,4 8,080/- WAS WRONGLY IMPOSED AND CONFIRMED. THE SAME IS DIRECTED TO BE DELETED. 4. THE OTHER ISSUE ON WHICH PENALTY HAS BEEN IMPOSE D IS AN ADDITION OF RS.2,20,500/-, BEING, THE AMOUNT OF CASH DEPOSI T BY THE ASSESSEE IN HIS SAVING BANK ACCOUNT. ON BEING CALLED UPON TO E XPLAIN THE SOURCE OF THIS AMOUNT, THE ASSESSEE SUBMITTED THAT HE BORROWE D MONEY FROM HIS FRIENDS AND RELATIVES AND EVEN SELLING HOUSEHOLD GO ODS IN ORDER TO PROVIDE IMMEDIATE PAYMENT TO HIS ESTRANGED WIFE. N OT CONVINCED, THE AO MADE ADDITION FOR THIS SUM AND, THEREAFTER, IMPO SED PENALTY ON THE SAME. THE LD. CIT(A) CONFIRMED SUCH PENALTY. 5. ON GOING THROUGH THE RELEVANT MATERIAL ON RECORD , IT IS SEEN THAT THE ASSESSEE WAS PASSING THROUGH A TRAUMATIC PHASE OF H IS LIFE BECAUSE OF THE ITA NO.3485/DEL/2016 5 ON-GOING DIVORCE PROCEEDINGS, IN WHICH HE WAS DIREC TED TO MAKE PAYMENT TO HIS ESTRANGED WIFE. A COPY OF COURT ORD ER IN RESPECT OF PAYMENT OF MAINTENANCE EXPENSES IS AVAILABLE ON PAG E 6 OF THE PAPER BOOK. IN ORDER TO COMPLY WITH THE DIRECTION OF THE COURT FOR PAYING THE MAINTENANCE CHARGES, THE ASSESSEE SOLD HIS HOUSEHOL D ARTICLES AND ALSO RAISED FUNDS FROM HIS FAMILY, FRIENDS AND RELATIVES WHICH AMOUNT WAS DEPOSITED IN THE BANK FOR THE PURPOSE OF ONWARD PAY MENT TO THE ESTRANGED WIFE. IN MY CONSIDERED OPINION, THIS ADD ITION, FOR LACK OF ADDUCING NECESSARY EVIDENCE IN SUPPORT OF THE CLAIM ABOUT THE SOURCE OF DEPOSIT, CANNOT BE A GOOD GROUND FOR IMPOSITION OF PENALTY. IT IS A SETTLED POSITION THAT THE CRITERIA FOR MAKING AN ADDITION I N QUANTUM PROCEEDINGS AND IMPOSING PENALTY ARE DIFFERENT. SIMPLY BECAUSE THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN HIS CASE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, CANNOT BE A GROUND FOR AUTOMATIC IMPOS ITION OF PENALTY ON SUCH DISALLOWANCE. UNDER THE GIVEN CIRCUMSTANCES, I AM SATISFIED THAT THE PRESENT FACTS DO NOT WARRANT THE IMPOSITION OF PENALTY U/S 271(1)(C) IN RESPECT OF THIS ADDITION. THE SAME IS DIRECTED TO BE DELETED. ITA NO.3485/DEL/2016 6 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.11.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 23.11.2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.