Sunila Awasthi, New Delhi V. ACIT Circle-61(1), New Delhi

ITA 3611/DEL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2147 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YOJIT PAREEIL
• Keywords: Bonafide mistake; TDS; FORM 26AS
• Section: 271(1)(c); 44AB

Judgement Text

1 (ITA NO. 3611/DEL/2019) IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI SH. AMIT SHUKLA, JUDICIAL MEMBER AND SH. DR. B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 3611/DEL/2019 ASSESSMENT YEAR: 2014-15 SUNILA AWASTHI HOUSE NO. 239, 3 RD FLOOR SUKHDEV VIHAR, NEW DELHI-110025 PAN : AAEPA9591J (APPELLANT) VS ACIT, CIRCLE-61(1), E-2 BLOCK, PRATYAKSH KAR BHAWAN, CIVIC CENTRE, NEW DELHI (RESPONDENT) APPELLANT BY SH. DEEPAK CHOPRA, SH. HARPREET SINGH, AJMANI AND SH. YOJIT PAREEIL, ADV. RESPONDENT BY SH. N.K.BANSAL , SR. DR ORDER PER AMIT SHUKLA, JM: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 15.03.2019, PASSED BY LD. CIT (APPEALS)- 38, NEW DELHI, IN RELATION TO THE PENALTY PROCEEDIN GS U/S 271(1)(C). 2. ASSESSEE IS MAINLY AGGRIEVED BY LEVY OF PENALTY OF RS. 14,08,240/- U/S 271(1)(C) ON ACCOUNT OF ADDITION OF RS. 40,00,0053/- AN INTEREST OF RS. 1,43,578/-. DATE OF HEARING 20.08.2019 DATE OF PRONOUNCEMENT 22.11.2019 2 (ITA NO. 3611/DEL/2019) 3. THE FACTS IN BRIEF ARE THAT ASSESSEE IS AN INDIV IDUAL ENGAGED IN LEGAL PROFESSION AND PRACTICING AS A CORPORATE L AWYER AND IS A SENIOR MEMBER OF AZB PARTNER & LLP FIRM DELHI. SHE HAD FILED HER RETURN OF INCOME ON 15.11.2014 DECLARING INCOME OF RS. 1,13,94,100/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE AO NOTED THAT THERE WAS MISMATCH OF PROFESSIONAL RE CEIPTS AS REFLECTED IN FORM 26AS AND AS SHOWN IN INCOME TAX R ETURN. IN RESPONSE TO THE SHOW CAUSE NOTICE IT WAS SUBMITTED THAT IT WAS A BONAFIDE MISTAKE DUE TO NEGLIGENCE OF CHARTERED ACC OUNTANT WHO HAS CARRIED OUT THE AUDIT AND PREPARED THE INCOME T AX RETURN AND SHE HAD NO INTENTION NOT TO DISCLOSE THE ENTIRE PROFESSIONAL RECEIPTS, SPECIFICALLY WHEN ENTIRE FEES HAVE BEEN R ECEIVED BY WAY OF CHEQUE. HOWEVER, THE LD. AO HELD THAT THE DIFFER ENCE OF RS. 40,00,053/- SHOULD BE TAXED AS THE PROFESSIONAL REC EIPTS FOR THE YEAR. 4. SIMILARLY AO NOTED THAT AS PER 26AS, ASSESSEE HAS RECEIVED INTEREST INCOME OF RS. 14,35,863/- HOWEVER, THE INT EREST INCOME OFFERED IN THE INCOME TAX RETURN WAS RS. 12,92,285/ - ACCORDINGLY ADDITION OF RS. 1,43,578/- ON ACCOUNT OF INTEREST I NCOME WAS MADE. 5. THE AO HAS LEVIED THE PENALTY ON THE AFORESAID A DDITIONS REJECTING THE ASSESSEES EXPLANATION AS INCORPORATE D IN THE IMPUGNED ORDERS AND IMPOSED PENALTY OF 14,08,420/-. THIS PENALTY HAS BEEN CONFIRMED BY THE LD. CIT(A) HOLDIN G THAT IF ASSESSEES CASE WOULD NOT HAVE COME FOR SCRUTINY PR OCEEDINGS, THE CONCEALMENT WOULD HAVE REMAIN UNDETECTED AND IT IS DIFFICULT TO BELIEVE THAT THE CHARTERED ACCOUNTANT WHO HAS CA RRIED OUT THE 3 (ITA NO. 3611/DEL/2019) AUDIT U/S 44AB AND FILED THE INCOME TAX RETURN COUL D HAVE COMMITTED MISTAKE. 6. BEFORE US LD. COUNSEL MR. DEEPAK CHOPRA, SUBMITT ED THAT FIRST OF ALL THE PROFESSIONAL FEES AMOUNTING TO RS. 40,00,053/- WAS REFLECTED UNDER THE HEAD ADVANCES IN THE BOOKS OF A CCOUNT INSTEAD OF INCLUDING IT IN THE RECEIPTS AND SUCH AN AMOUNT OF ADVANCE SHOWN HAS BEEN OFFERED TO TAX IN THE SUBSEQ UENT YEAR, WHICH WAS MUCH BEFORE THE COMMENCEMENT OF THE ASSES SMENT PROCEEDINGS. HE FURTHER SUBMITTED THAT ASSESSEE HAS ENTRUSTED ENTIRE ACCOUNTING, AUDIT AND TAX COMPUTATION WORK T O HER CHARTERED ACCOUNTANT AND HE HAS WRONGLY SHOWN THE P ART OF RECEIPTS AS ADVANCE FAILED TO RECONCILE THE RECEIPT S WITH FORM 26AS. FURTHER THE FIXED DEPOSIT INTEREST INCOME HAS BEEN OFFERED NET OF TDS INSTEAD OF GROSS AMOUNT AND THEREFORE, T HIS WAS PURE CLERICAL MISTAKE AND IT CANNOT BE HELD THAT IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF PARTICULARS OF INCOME. RELIANCE WAS PLACED ON VARIOUS DECISIONS INCLUDING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF P RICE WATER HOUSE COOPERS (P) LTD. VS. CIT-SC (2012) 348 ITR 30 6. 7. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE ORDER OF THE CIT (A) AND FURTHER SUBMITTED THAT THERE WAS A CLEAR CUT CONCEALMENT OF PROFESSIONAL RECEIPTS DURING THE YEA R AS THE CORRECT AMOUNT WAS NOT OFFERED TO TAX AND THEREFORE , IT IS A FIT CASE FOR LEVY OF PENALTY. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS. AS STATED ABOVE, ASSESSEE IS PRACTICING CORPORATE LAWYER WHOS E ACCOUNTS 4 (ITA NO. 3611/DEL/2019) ARE DULY AUDITED AND ENTIRE COMPUTATION OF INCOME A ND FILING OF INCOME TAX RETURN IS HANDLED BY PROFESSIONAL CHARTE RED ACCOUNTANT. IN SO FAR AS THE PROFESSIONAL FEES AMOU NTING RS. 40,00,053/- WHICH WAS REFLECTED IN FORM 26AS BUT NO T IN THE INCOME TAX RETURN, THEN DEFINITELY IT IS A MISTAKE ON THE PART OF THE PROFESSIONAL WHO HAS AUDITED THE ACCOUNTS AND F ILED THE INCOME TAX RETURN. IT HAS BEEN STATED BEFORE THE AU THORITIES THAT THIS AMOUNT WAS SHOWN UNDER THE HEAD ADVANCES AND SAME HAS BEEN OFFERED TO TAX IN THE SUBSEQUENT YEAR. THOUGH SUCH A PROFESSIONAL RECEIPT HAS WRONGLY BEEN REFLECTED UND ER THE HEAD ADVANCE WHEN ASSESSEE IS FOLLOWING CASH SYSTEM OF A CCOUNTING, BUT IT CANNOT BE HELD THAT THERE IS ANY KIND OF CON CEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. ONC E, EVEN BEFORE THE SCRUTINY PROCEEDINGS THE ASSESSEE HAD OFFERED T HE AMOUNT FOR TAX ON THE SAME PROFESSIONAL RECEIPTS IN THE SUBSEQ UENT YEAR, THEN THAT GOES TO PROVE THAT ASSESSEE HAD NOT DELIB ERATELY TRIED TO CONCEAL HER INCOME OR FURNISH ANY INACCURATE PARTIC ULARS. THIS AMOUNT HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNTS AND IN THE AUDIT REPORT THOUGH WRONGLY TAKEN UNDER THE HEAD A DVANCES. UNDER THESE CIRCUMSTANCES CAN IT BE HELD THAT ASSES SEE HAD CONCEALED ANY INCOME WHEN ENTIRE INCOME IS THROUGH CHEQUE AND DULY DISCLOSED IN THE BOOKS AND EVEN TAX HAS BEEN P AID IN SUBSEQUENT YEAR WHEN RATES OF TAXES ARE SAME AND TH ERE IS NO LOSS OF REVENUE. THUS, PENALTY ON SUCH AMOUNT CANNO T BE UPHELD. THE SAME IS DIRECTED TO BE DELETED. 9. SIMILARLY THE ADDITION ON ACCOUNT OF INTERES T IS MAINLY ON THE GROUND THAT ASSESSEE HAD SHOWN THE INTEREST INC OME NET OF TDS INSTEAD OF GROSS AMOUNT. THIS AGAIN IS A MISTAK E OF 5 (ITA NO. 3611/DEL/2019) PROFESSIONAL WHO HAS FILED THE INCOME TAX RETURN. S UCH A MISTAKE DOES NOT LEAD TO ANY CONCLUSION AT ASSESSEE HAS DEL IBERATELY CONCEALED THE INCOME OR NOT PAID ANY TAXES. ON THIS ADDITION ALSO NO PENALTY CAN BE SUSTAINED. ACCORDINGLY THE SAME I S DIRECTED TO DELETE. 10. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER, 2019 . SD/- SD/- (DR. B.R.R.KUMAR) (AM IT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22/11/2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 (ITA NO. 3611/DEL/2019) DATE OF DICTATION .11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER