Jogesh Kumar Purusottam Thacker, Jharsuguda V. ITO, Jharsuguda

ITA 365/CTK/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52417 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-10-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 01-08-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: B PANDAAR
• Keywords: Opportunity of being heard; Assessment record; Set aside

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 365/CTK/2011 (ASSESSMENT YEAR 2000 - 01) JOGESH KUMAR PURUSOTTAM THACKER,S/O. LAE PURUSOTTAM NANU THACKER, GUJARATI COLONY, J HARSUGUDA, PAN: AAXPT 7732 R VERSUS INCOME - TAX OFFICER, WARD 1, JHARSUGUDA. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI B.PANDA,AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 20.10.2011 DATE OF PRONOUNCEMENT : 09.11.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED CITA) DT. 30.3.2011 FOR THE ASSESSMENT YEAR 2000 - 01 IN CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE SOLE ISSUE CHALLENGING LEV Y PENALTY U/S.271(1)(C) OF THE INCOME - TAX ACT,1961 AGAINST THE ASSESSEE. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE RESPECTIVE APPEALS AND THEIR LEGAL IMPLICATIONS. 4. ON CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVING HIS INCOME FROM HOUSE RENT. THE ASSESSEE FILED ITS RETURN SHOWING A TOTAL INCOME OF 76,660. THIS RET URN WAS PROCESSED/S.143(1) OF THE INCOME - TAX ACT,1961 BY ISSUING INTIMATION ON 28.3.2003. LATER ON SCRUTINY ASSESSMENT PROCEEDINGS WERE STARTED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAD CLAIMED D EDUCTION IN RESPECT OF LESSORS SHARE OUT OF THE RECEIPT OF THE RENT. THE DEDUCTION WAS ALSO CLAIMED IN RESPECT OF THE ENTIRE ARREAR RENTAL RECEIPT. THEREFORE, ASSESSMENT ORDER 2 WAS PASSED ON 23.07.2004 ON A TOTAL INCOME OF 13. 14,430 AS AGAINST RETURNED INCOME OF 76,660. THE ASSESSMENT WAS REOPENED US. 147 OF THE IT. ACT ON RECEIPT OF ARREAR RENT OF 10, 98,856. ACCORDINGLY THE ASSESSING OFFICER HAS PASSED THE FRESH ASSESSMENT ORDER ON25.11.2008 AND INITIATED PENALTY PROC EEDING U/S. 271 (1)(C) OF THE INCOME - TAX ACT,1961. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE WENT IN APPEAL TO THE CIT(A) WHERE HE GOT PART RELIEF. AGGRIEVED WITH THAT ORDER OF THE CIT(A), THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE FILED APPEALS BEFOR E THE TRIBUNAL. THETRIBUNAL,BY ITS ORDER IN ITA NOS.67 & 68/CTK/2005 HAD SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES BY OBSERVING AS FOLLOWS : FURTHER, THE REVENUE WAS ALSO NOT JUSTIFIED IN COMPUTING THE ARREARS RENT RECEIVED BY THE ASSESSEE UNDER T HE HEAD INCOME FROM OTHER SOURCE. HOWEVER, THE REVENUE IN TERMS OF PROVISIONS OF I.T.ACT,1961,DOES NOT DECIDE THE FACTS OF THECAE. HENCE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DIRECT THE A.O. TO RECOMPUTE THE TAXABLE INCOME UNDER THE HEA D INCOME FROM HOUSE PROPERTY AS PER THE LAW AFTER GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HOWEVER, THE ASSESSEE IS AT LIBERTY TO PUT FORTH ANY MATERIAL TO SUBSTANTIATE HIS CLAIM BEFORE THE A.O. ACCORDINGLY THE ASSES SING OFFICER FOUND THAT THE ASSESSEE HAD RECEIVED RENTAL INCOME OF 10,98,856 OUT OF WHICH LESSORS SHARE ALLOWED FOR 8,79,085. THE BALANCE AMOUNT OF 2,19,771 WAS TREATED AS INCOME FROM OTHER SOURCES OF THE ASSESSEE PREVIOUSLY. BUT AS PER DIRECTION OF THE TRIBUNAL THE SAID AMOUNT OF 23,19,771 IS TREATED AS INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM OTHER SOURCES AS WAS DONE EARLIER. ACCORDINGLY INCOME FROM HOUSE PROPERTY WAS ARRIVED AT 2,19,771. THE ASSESSEE HAS GIVEN RE P LY TO SHOW C AUSE NOTICE ISSUED BY THE ASSESSING OFFICER FOR LEVYING PENALTY U/S.271(1)(C) OF THE I.T.ACT. ON PERUSAL OF THE ASSESSMENT RECORD AND RELEVANT DOCUMENTS 3 AND AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAS RECEIVED A SUM OF 10,98,856 DURING THE P ERIOD UNDER CONSIDERATION AND IT WAS CLAIMED BY THE ASSESSEE AS EXEMPT AS P ER THE COM P UTATION OF TOTAL INCOME. OUT OF THAT AMOUNT, THE ASSESSING OFFICER ALLOWED LESSORS SHARE FOR 8,79,085 AND THE BALANCE AMOUNT OF 2,19,771 WAS TREATED AS INCOME FROM OTHER SOURCES PREVIOUSLY. HOWEVER, AS PER THE DIRECTION OF THE TRIBUNAL, THE BALANCE AMOUNT OF 2,19,771 WAS TREATED AS INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM OTHER SOURCES AS DETERMINED EARLIER. TREATING THIS AS CO NCEALMENT OF INCOME, THE ASSESSING OFFICER HAS LEVIED PENALTY U/S.271(1)(C) AGAINST THE ASSESSEE. AGGRIEVED BY THAT PENALTY ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND IS UNSUCCESSFUL. HENCE, THE PRESENT APPEAL IS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED CONTENDING INTER ALIA THAT THERE IS NO CONCEALMENT OF INCOME COMMITTED BY THE ASSESSEE. THE HEAD UNDER WHICH THE INCOME IS CLAIMED ONLY CHANGED BUT THERE IS NO CHANGE IN THE AMOUNT OF INCOME RESULTING IN CONCEALMENT OF INCOME. THEREFORE, THE PENALTY LEVIED AGAINST THE ASSESSEE AND CONFIRMED BY THE CIT(A) IS NOT JUSTIFIED AND NOT SUSTAINABLE UNDER LAW. ACCORDINGLY, HE PRAYED FOR ALLOWING THE APPEAL OF THE ASSE SSEE BY CANCELLING THE PENALTY IMPOSED AGAINST THE ASSESSEE. 6. CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY ARGUED SUPPORTING THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES AND ASSAILING THE CONTENTIONS PLEADED BY THE ASSESSEE. ACCORDINGLY, HE SOUGHT FOR UPHOLDING THE ORDERS OF THE DEPARTMENTAL AUTHORITIES BY DISMISSING THE APPEAL OF THE ASSESSEE. 7. ON CAREFUL ANALYSIS OF THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES, IT IS FOUND THAT T HE ASSESSEE HAS OFFERED THE INCOME UNDER ONE 4 HEAD BUT THE DEPARTMENT HAS TAKEN IT AND ASSESSED THE SAME UNDER ANOTHER HEAD. THIS CLEARLY INDICATES THAT THERE IS NO CONCEALMENT OF INCOME MADE BY THE ASSESSEE BUT ONLY CHANGED THE HEAD OF INCOME. THEREFORE, W E ARE OF THE CONSIDERED VIEW THAT PENAL PROVISION BEING A HARSH ONE, IT CANNOT BE INVOKED IN SUCH CIRCUMSTANCES WHERE THE HEAD OF INCOME ONLY WAS CHANGED BUT THERE IS NO INCREASE OF INCOME TAXABLE IN THE HANDS OF THE ASSESSEE, AS IN THE PRESENT CASE. THERE FORE, WE ARE OF THE CONSIDERED VIEW THAT THE LEVY OF PENALTY U/S.271(1)(C) OF THE I.T.ACT AGAINST THE ASSESSEE IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND IS LIABLE TO BE CANCELLED. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDERS OF THE DEPARTMENTAL AUTHORITIE S AND CANCEL THE IMPUGNED PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT BY ALLOWING THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 9 TH NOVEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: JOGESH KUMAR PURUSOTTAM THACKER,S/O. LAE PURUSOTTAM NANU THACKER, GUJARATI COLONY, JHARSUGUDA, 2. T HE RESPONDENT: INCOME - TAX OFFICER, WARD 1, JHARSUGUDA. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.