T S PANEERSELVAM, CHENNAI V. ITO, NCC 20(1), CHENNAI

ITA 3515/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2369 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 27-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALMALSAWMA PACHUAU
• Assessee Lawyers: J SREE VIDYA
• Keywords: Revised return; Set aside
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.3515/CHNY/2018 [ [ / ASSESSMENT YEAR : 2014-15 SHRI T.S. PANEERSELVAM, NO.42, TIRUPUR KUMARAN STREET, MAJESTIC COLONY, VALASARAVAKKAM, CHENNAI - 600 087. PAN : AAGPP 8887 N V. THE INCOME TAX OFFICER, NON-CORPORATE CIRCLE - 20(1), CHENNAI - 600 034. ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : MS. J. SREE VIDYA, ADVOCATE / RESPONDENT BY : SHRI LALMALSAWMA PACHUAU, JCIT / DATE OF HEARING : 18.06.2019 / DATE OF PRONOUNCEMENT : 21.06.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -12, CHENNAI, DATED 27.09.2018, FOR THE ASSESSMENT YEAR 2014-15, CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.3515/CHNY/18 2. MS.J. SREE VIDYA, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT ON THE BASIS OF THE STATEMENT IN FORM 26AS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS OMITTED TO DECLARE INTEREST INCOME IN RESPECT OF TWO PARTIES, NAMELY, THIRUMURUGA KRIPANANDA VARIAR THAVATHIRU SUNDARASWAMIGAL MEDICAL EDUCATION AND PEARL PRINTERS & PUBLISHERS PVT. LTD. TO THE EXTENT OF 2,19,375/- AND 85,000/- RESPECTIVELY. ACCORDING TO THE LD. COUNSEL, ADMITTEDLY, THE ASSESSEE IS IN THE BUSINESS OF MONEY LENDING. THE INTEREST INCOME RECEIVED BY THE ASSESSEE FROM THE ABOVE TWO ENTITIES WAS CREDITED IN ANOTHER BANK ACCOUNT. INADVERTENTLY, ACCORDING TO THE LD. COUNSEL, THE COPY OF BANK ACCOUNT IN WHICH THE INTEREST WAS CREDITED COULD NOT BE PRODUCED BEFORE THE AUDITOR WHO PREPARED THE RETURN OF INCOME. THEREFORE, ACCORDING TO THE LD. COUNSEL, THERE WAS AN INADVERTENT ERROR / OMISSION TO INCLUDE THE INTEREST RECEIVED FROM THIRUMURUGA KRIPANANDA VARIAR THAVATHIRU SUNDARASWAMIGAL MEDICAL EDUCATION AND PEARL PRINTERS & PUBLISHERS PVT. LTD. ACCORDING TO THE LD. AR, THE ASSESSEE ADMITTEDLY OFFERED THE INCOME IN THE EARLIER ASSESSMENT YEAR AND ALSO OFFERED THE INCOME DURING THE YEAR UNDER CONSIDERATION VOLUNTARILY, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 3 I.T.A. NO.3515/CHNY/18 3. ON THE CONTRARY, SHRI LALMALSAWMA PACHUAU, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE RECEIPT OF INTEREST FROM THIRUMURUGA KRIPANANDA VARIAR THAVATHIRU SUNDARASWAMIGAL MEDICAL EDUCATION AND PEARL PRINTERS & PUBLISHERS PVT. LTD. WAS NOT DISCLOSED IN THE RETURN OF INCOME. ON THE BASIS OF STATEMENT IN FORM 26AS, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER CAME TO KNOW THAT THERE WAS OMISSION TO DISCLOSE THE INTEREST FOR TAXATION. THEREAFTER THE ASSESSEE FILED A REVISED RETURN DISCLOSING THAT INCOME. THE RETURN FILED BY THE ASSESSEE IS NOT VOLUNTARY. HENCE, ACCORDING TO THE LD. D.R., THERE WAS CLEAR CASE OF CONCEALMENT OF INCOME. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE RECEIPT OF INTEREST INCOME FROM THIRUMURUGA KRIPANANDA VARIAR THAVATHIRU SUNDARASWAMIGAL MEDICAL EDUCATION AND PEARL PRINTERS & PUBLISHERS PVT. LTD. IS NOT IN DISPUTE. THE ASSESSEE ADMITTEDLY DISCLOSED THE INCOME IN THE EARLIER ASSESSMENT YEAR. DURING THE YEAR ALSO, THE ASSESSEE OFFERED THE SAME FOR TAXATION BY WAY OF REVISED RETURN. THE ONLY CONTENTION OF THE LD. D.R. IS THAT THE REVISED RETURN WAS NOT FILED VOLUNTARILY. THE ASSESSEE CLAIMS THAT BY 4 I.T.A. NO.3515/CHNY/18 INADVERTENT ERROR / OMISSION, A PARTICULAR BANK ACCOUNT WAS NOT PRODUCED BEFORE THE AUDITOR WHILE PREPARING THE RETURN OF INCOME. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER AN INADVERTENT ERROR IN DISCLOSING A PART OF INTEREST INCOME WOULD ATTRACT PENALTY UNDER SECTION 271(1)(C) OF THE ACT? THE APEX COURT IN PRICE WATERHOUSE COOPERS PVT. LTD. V. CIT (2012) 348 ITR 306 FOUND THAT WHEN THE ASSESSEE INADVERTENTLY FAILED TO INCLUDE A PARTICULAR INCOME, THAT CANNOT BE A REASON FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THIS CASE ALSO, THE INTEREST RECEIVED BY THE ASSESSEE, EVEN AFTER TAX WAS DEDUCTED AT SOURCE AND THE SAME WAS REFLECTED IN FORM 26AS, COULD NOT BE INCLUDED INADVERTENTLY SINCE THE SAME WAS SAID TO BE CREDITED IN A SEPARATE BANK ACCOUNT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE JUDGMENT OF THE APEX COURT IN PRICE WATERHOUSE COOPERS PVT. LTD. (SUPRA), THERE IS NO JUSTIFICATION IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HENCE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT AS CONFIRMED BY THE CIT(APPEALS) IS DELETED. 5 I.T.A. NO.3515/CHNY/18 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21 ST JUNE, 2019 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 21 ST JUNE, 2019. KRI. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. () /CIT(A)-12, CHENNAI 4. PRINCIPAL CIT- 3, CHENNAI 5. /DR 6. [ /GF.