Sri Namballa Dharma Rao, Bhubaneswar V. ITO, Ward-2(3), Bhubaneswar, Bhubaneswar

ITA 402/CTK/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3809 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S C BHADNA
• Keywords: Salary income; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ( CUTTACK BENCH, CUTTACK ) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH , JUDICIAL MEMBER I TA N O . 4 02 / CTK/2014 (ASSESSMENT YEAR : 20 09 - 1 0 ) SRI NAMBALLA DHARMA RAO, VS. ITO, WARD 2 (3), BRPL, 5 TH FLOO R, BHUBANESWAR. IPICOL ANNEX BUILDING, JANPATH, SAHID NAGAR, BHUBANESWAR. ( PAN : ABCPR9307A ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.C. BHADNA , AR REVENUE BY : SHRI D.K. PRADHAN , DR D ATE OF HEARING : 2 7 . 0 4 .2017 DATE OF PRONOUNCEMEN T : 29 . 0 5 .2017 O R D E R PER KULDIP SINGH , JUDICIAL MEMBER : THE APPELLANT, SRI NAMBALLA DHARMA RAO (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 27.08.2014 PASSED BY THE COM MISSIONER OF INCOME - TAX (APPEALS) - II, BHUBANESWAR QUA THE ASSESSMENT YEAR 2009 - 10 REDUCING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT) ON THE GROUNDS INTER ALIA THAT : - ITA NO . 4 02 / CTK ./2014 2 1. THE APPELLATE ORDER AS WELL AS THE ORDER U/ S.271 (1) (C) IS AGAINST LAW, WEIGHT OF EVIDENCES AND PROBABILITIES OF THE CASE. 2. THE LEARNED ASSESSING OFFICER HAS ARBITRARILY IMPOSED PENALTY WITHOUT CONSIDERING THE APPELLANT'S EXPLANATION THAT THE APPELLANT DID NOT INTEND TO CONCEAL THE INCOME BECO MES APPARENT FROM THE FACT THAT, THE ORIGINAL RETURN WAS FILED BY THE ASSESSEE BY OFFERING TOTAL INCOME OF RS.41,01,946/ - AND THE SAME INCOME WAS AGAIN REVISED TO RS.42,99,950/ - . 3. THE LEARNED ASSESSING OFFICER IGNORED THE APPELLANT'S CLARIFICATION THAT THE ADDITIONS EFFECTED FOR FURNISHING INACCURATE/INCORRECT PARTICULARS AND NOT OFFERING CERTAIN DEPOSIT ETC. HAS NOT BEEN DONE BY HIM RATHER HAS BEEN DONE BY HIS COUNSEL. FURTHER THE APPELLANT ACCEPTED THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER A ND DEPOSITED THE DEMAND TAX TO BUY AT PEACE. 4. THE HONOURABLE CIT(APPEAL) ALSO CONFIRMED THE LEVY OF PENALTY U/S 271 (1)(C) AND REDUCED THE PENALTY AMOUNT TO RS.2,00,000/ - AS AGAINST THE EARLIER VALUE OF RS.3,07,453/ - . 5. FOR THESE AND OTHER GROUNDS THAT MAY EMERGE AT THE TIME OF HEARING, IT IS PRAYED THAT THE SAID PENALTY BE DELETED AND THE ORDER BE QUASHED TO MEET THE END OF JUSTICE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMENT ORDER DATED 30.12.2011 DETERMINING THE TOTAL INCOME AT RS. 50,06,490/ - AS AGAINST DISCLOSED INCOME OF RS.41,01,946/ - , THE PENALTY PROCEEDINGS WERE INITIATED ON THE GROUNDS INTER ALIA THAT THE ASSESSEE CLAIMED EXPENDITURE ON HRA OF RS.6,72,000; THAT THE ITA NO . 4 02 / CTK ./2014 3 ASS ESSEE HAS FAILED TO CLARIFY DEPOSIT OF RS.30,000/ - IN THE BANK; AND THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE INTEREST ON THE SAVING ACCOUNT TO THE TUNE OF RS.4,542/ - . AFTER ISSUANCE OF NOTICE U/S 143(2) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT) , THE ASSESSEE FILED REVISED RETURN DECLARING INCOME OF RS.42,99,950/ - AS AGAINST TOTAL INCOME OF RS.41,01,946/ - DECLARED IN THE ORIGINAL RETURN. REJECTING THE CLAIM RAISED BY THE ASSESSEE THAT HE HAS VOLUNTARILY DISCLOSED INCOME TO THE TUNE OF RS.1,98,00 0/ - ON GROUND OF OMISSION, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE WAS REQUIRED TO PAY EXCESS TAX TO THE TUNE OF RS .62,356/ - ON SUCH UNDISCLOSED INCOME AND THE ASSESSEE HAS ALSO FAILED TO DISCLOSE SOURCE OF CASH DEPOSIT OF RS.30,000/ - IN HIS BANK AC COUNT AND ALSO FAILED TO DISCLOSE INTEREST OF R S .4,252/ - AND ATTRIBUTED THIS LAPSE TO HIS TAX CONSULTANT. CONSEQUENTLY, AO IMPOSED A PENALTY OF RS.3,07,453/ - BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE. ASSESSEE HAS NOT CHALLENGED THE QUANT UM PROCEEDINGS. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING AN APPEAL BEFORE THE LD. CIT (A) WHO HAS REDUCED THE PENALTY TO RS.2,00,000/ - AS AGAINST EARLIER PENALTY OF RS.3,07,453/ - IMPOSED BY THE AO . FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY FILING THE PRESENT APPEAL. ITA NO . 4 02 / CTK ./2014 4 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTAN CES OF THE CASE. 5. UNDISPUTEDLY , THE ASSESSEE BEING A SALARIED PERSON FILED HIS RETURN OF INCOME AT RS.41,01,946/ - ON 28.07.2009 WHICH WAS PROCESSED U/S 143( 1 ) OF THE ACT AND THEREAFTER THE CASE WAS SUBJECTED TO SCRUTINY AND ON ISSUANCE OF NOTICE U/S 143 (2) OF THE ACT, THE ASSESSEE FILED A REVISED RETURN TO THE TUNE OF RS.42,99,950/ - AND THEN ASSESSMENT U/S 143(3) WAS COMPLETED BY DETERMINING THE TOTAL INCOME AT RS.50,06,490/ - . 6. ASSESSEE AFTER ACCEPTING THE LAPSE ON HIS PART ATTRIBUTED THE ENTIRE OMISSI ON T O SHRI G.P. RATHA, HIS TAX CONSULTANT, WHICH EXPLANATION HAS NOT BEEN ACCEPTED BY THE AO ON THE GROUND THAT DISCLOSING UNDISCLOSED SALARY INCOME OF SEPARATE EMPLOYER IS NOT AT ALL A VOLUNTARY ACTION AND THE ASSESSEE CANNOT ABSOLVE HIMSELF OF THE COMMIS SION OF WRONG DOING TO AVOID THE PAYMENT OF TAX. IT IS ALSO NOT DISPUTED THAT ASSESSEE HAS PAID DUE TAX AND INTEREST THEREON BY FILING REVISED RETURN. 7. KEEPING IN VIEW THE FACT THAT WHEN THE ASSESSEE BEING A CHEMICAL ENGINEER/SALARIED PERSON HAS TAKEN E XPERT ADVICE FROM HIS TAX CONSULTANT, SHRI G.P. RATHA, BY FILING RETURN OF INCOME, HIS ITA NO . 4 02 / CTK ./2014 5 EXPLANATION CANNOT BE SUMMARILY REJECTED BECAUSE IMMEDIATELY ON KNOWING THE FACT THAT SOME PORTION OF HIS INCOME COULD NOT BE BROUGHT TO TAX, HE HAS FILED THE REVISED RE TURN OF INCOME MAKING PAYMENT OF TAX AND INTEREST THEREON WHICH HAS TO BE TREATED AS A VOLUNTARY ACT TO BUY THE PEACE OF MIND. 8. NOT ONLY THIS, WHEN WE EXAMINE THE IMPUGNED ORDER PASSED BY LD. CIT (A), THE SAME IS OTHERWISE NOT SUSTAINABLE IN THE EYES O F LAW BECAUSE THE LD. CIT (A) HAS REDUCED THE PENALTY FROM RS.3,07,453/ - IMPOSED @ 100% TO RS.2,00,000/ - WHICH IS LESS THAN 100% AND BEYOND THE PURVIEW OF LD. CIT (A) U/S 271(1)(C) OF THE ACT. THE PENALTY CAN ONLY BE IMPOSED WITHIN THE RANGE OF 100% TO 30 0% AND NOT BELOW 100% BUT T HIS DECISION HAS NEVER BEEN CHALLENGED BY THE REVENUE. SO, IN THE TOTALITY OF THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE HEREBY SET ASIDE. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF MAY , 201 7 . SD/ - SD/ - ( N.S. SAINI ) ( KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF MAY , 201 7 / TS ITA NO . 4 02 / CTK ./2014 6 COPY OF THE ORDER FORWARDED TO: 1.APPELLANT - SRI NAMBALLA DHARMA RAO, BRPL, 5 TH FLOOR, IPICOL ANNEX BUILDING, JANPATH, SAHID NAGAR, BHUBANESWAR. 2.RESPONDENT - ITO, WARD 2 (3), BHUBANESWAR. 3.CIT 4.CIT (A) - II , BHUBANESW AR . 5.DR (ITAT), CUTTACK . 6. GUARD FILE //TRUE COPY// BY ORDER SR. PRIVATE SECRETARY , ITAT , CUTTACK