SHRIMATI SANGEETA SEHGAL, JALANDHAR V. INCOME TAX OFFICER,WARD 3 (1), JALANDHAR

ITA 433/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7055 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 31-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAVANI SHANKAR
• Assessee Lawyers: S K VATTA
• Keywords: Initiation of penalty proceedings; Wrong claim; Revised return; Bonafide mistake
• Section: 271(1)(c); 142(1)

Judgement Text

PAGE | 1 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.433/ASR./2018 (ASSESSMENT YEARS: 2014-15) SANGEETA SEHGAL, 682-683, MODEL TOWN, JALANDHAR. VS. THE INCOME TAX OFFICER WARD-3(1) JALANDHAR. PAN AUWPS7580D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.K.VATTA, A.R RESPONDENT BY: SHRI BHAVANI SHANKAR, D.R. DATE OF HEARING: 10.01.2019 DATE OF PRONOUNCEMENT: 15.01.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-2, JALANDHAR, DATED 09.05.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT I.T. ACT), DATED 19.05.2017 FOR A.Y. 2014-15. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED WORTHY CIT (APPEALS) WAS ABSOLUTELY WRONG AND UNJUSTIFIED SINCE ERRED BOTH ON FACTS & IN LAW IN UPHOLDING THE IMPOSITION OF PENALTY U/S 271(1)(C) SINCE FAILED TO CONSIDER AND APPRECIATE THE EVIDENCE AND FACT THAT THE SAID INADVERTENT CLAIM WAS VOLUNTARILY AND SUO MOTO POINTED IN WRITING BY THE ASSESSEE'S COUNSEL WHICH WAS NEITHER DETECTED NOR POINTED OUR DURING THE COURSE OF ASSESSMENT AS EVIDENCED BY DOCUMENTS. 2. THAT THE LD. ASSESSING OFFICER WHILE IMPOSING THE SAID PENALTY AND WORTHY CIT(APPEALS), WHILE UPHOLDING, BOTH HAVE ERRED AND WAS WRONG AND UNJUSTIFIED AS THEY HAVE FAILED TO CONSIDER AND APPRECIATE THAT WERE MAKING OF A CLAIM OF EXPENDITURE, WHICH IN FACT HAS BEEN ACTUALLY INCURRED, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT TENTAMOUNT TO EITHER CONCEALMENT OF PARTICULARS OR PAGE | 2 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER FURNISHING INACCURATE PARTICULARS ESPECIALLY IN VIEW THAT THE SAID HONEST BONAFIDE MISTAKE WAS VOLUNTARILY POINTED OUT IN WRITTEN SUBMISSION ON RECORD IGNORING THE LEGAL CITATION OF BOTH THE HON'ABLE SUPREME COURT OF INDIA IN THE CASE OF RELIANCE PETRO PRODUCTS (P) LIMITED 230 CTR 320, OTHER COURTS AS RELIED UPON. 3. THAT THE WORTHY CIT(APPEALS) WAS WRONG AND ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE SUBMISSIONS AND PRAY THAT AN ASSESSING OFFICER CAN RECTIFY A MISTAKE U/S 154(2) OF THE ACT WHICH IS BOUGHT TO HIS NOTICE AS THE SAID INADVERTENT CLAIM OF INTEREST WAS NOT A FRESH CLAIM BUT REDUCTION OF THE AMOUNTS COMPUTED AS PER ORIGINAL RETURN IN VIEW OF THE RATIO OF THE DECISION OF THE HONABLE SUPREME COURT IN THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS CIT (1971) 82 ITR 363 (SC) AND 240 ITR 660 (MADRAS) AS SUBMITTED VIDE PARA 5 OF THE SUBMISSION BEFORE CIT(APPEALS) AND ALSO APPEARING IN PARA 5 OF PAGE 3 OF 10 OF THE APPELLATE ORDER WHICH VIEW WAS SUMMARILY IGNORED WHILE UPHOLDING PENALTY. 4. THAT THE WORTHY CIT(A) WAS WRONG, UNJUSTIFIED BOTH ON FACTS IN LAW WHILE UPHOLDING THE PENALTY AS FAILED TO CONSIDER THAT THE NOTICE ISSUED U/S 274 READ WITH SEC. 271(1)(C) OF THE ACT IN PRINTED FORM WITHOUT SPECIFYING GROUNDS OF INITIATION OF PENALTY PROCEEDINGS IS VALID LEGAL AND TENABLE IN LAW. 5. THAT THE WORTHY CIT(APPEALS) AS PER PARA 4.3 OF THE APPELLATE ORDER, WHILE UPHOLDING THE IMPOSITION OF PENALTY HAVE ALSO SUMMARILY IGNORED AS DULY SUBMITTED THE CBDT GUIDELINES VIDE CIRCULAR NO. 14XL35 OF 11 TH APRIL, 1975 AND ALSO AS DULY HELD BY HONBLE BOMBAY HIGH COURT IN CASE OF VIJAY GUPTA VS. CIT (2016) 137 ITR 114 WHICH SPECIFICALLY PROVIDES, THAT 'OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGES OR IGNORANCE OF AN ASSESSEE THEIR RIGHTS THE LD. A.O. WAS BOUND TO FOLLOW THE SAID INSTRUCTIONS WHICH ARE BINDING IN NATURE. 6. THAT BOTH THE LD. A.O. AND WORTHY CIT(APPEALS) WHILE IMPOSING THE PENALTY AND UPHOLDING THE PENALTY HAVE COMPLETELY DISREGARDED THE RATIOS OF THE JUDGMENTS AS RELIED UPON BY THE ASSESSEE. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR A.Y. 2014-15 ON 31.03.2015, DECLARING TOTAL INCOME AT RS.10,39,140/-. THE ASSESSEE HAD IN HER RETURN OF INCOME CLAIMED DEDUCTION OF INTEREST EXPENDITURE OF RS. 61,04,706/- IN RESPECT OF BORROWED CAPITAL WHICH WAS STATED TO HAVE BEEN UTILISED TOWARDS PROPERTY. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE I.T ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O ISSUED A NOTICE UNDER SEC. 142(1) OF THE I.T ACT, DATED 09.06.2006 AND CALLED UPON THE ASSESSEE TO FURNISH NECESSARY DETAILS VIZ. (I). COMPLETE DETAILS OF THE RENTAL INCOME AND THE NAMES AND ADDRESSES OF THE PERSONS WHO WERE PAYING RENT; (II). DETAILS OF OTHER INCOMES SHOWN IN THE RETURN OF INCOME; AND (III). BIFURCATED DETAILS OF THE HOUSEHOLD EXPENSES. IN REPLY, THE ASSESSEE APART PAGE | 3 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER FROM FURNISHING DETAILS IN RESPECT OF THE AFORESAID QUERIES SO RAISED BY THE A.O, FURTHER STATED VIZ. (I). THAT SHE ALONGWITH MRS. ANITA SEHGAL, BOTH HAVING EQUAL SHARE EACH, HAD ACQUIRED A PROPERTY BY RAISING INTEREST BEARING BORROWED FUNDS; (II). THAT THE INTEREST EXPENDITURE ON THE BORROWED FUNDS AGGREGATED TO RS. 95,71,337/- AND HER SHARE WORKED OUT AT RS. 47,85,668/-; AND (III). THOUGH HER ENTITLEMENT TOWARDS CLAIM OF DEDUCTION IN RESPECT OF THE INTEREST ON BORROWED CAPITAL AS AGAINST THE RENTAL INCOME WORKED OUT AT RS. 47,85,668/-, HOWEVER THE SAME INADVERTENTLY ON ACCOUNT OF A BONAFIDE MISTAKE WAS WRONGLY CLAIMED BY HER AT RS.61,84,706/- IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. APART THEREFROM, THE ASSESSEE IN HER AFORESAID REPLY ALSO EXPLAINED THE REASON LEADING TO THE AFORESAID BONAFIDE MISTAKE ON HER PART. IT WAS STATED BY THE ASSESSEE THAT THE SAID MISTAKE HAD ARISEN FOR THE REASON THAT THE INTEREST EXPENDITURE OF RS. 13,10,038/- PERTAINING TO HER ANOTHER LOAN ACCOUNT WITH ICICI BANK I.E ACCOUNT NUMBER CBL UD00001844368 WHICH WAS UTILIZED FOR MAKING OF INVESTMENTS IN OTHER CONCERNS, WAS INADVERTENTLY INCLUDED BY HER ACCOUNTANT WHILE RAISING THE AFORESAID CLAIM OF INTEREST EXPENDITURE IN RESPECT OF LOAN RAISED AGAINST PROPERTY. IT WAS SUBMITTED BY THE ASSESSEE THAT THE AFORESAID MISTAKE HAD EMERGED ON THE PART OF HER ACCOUNTANT, WHO WHILE PREPARING THE RETURN OF INCOME HAD JUMBLED THE AFORESAID INTEREST EXPENSES. IN THE BACKDROP OF THE AFORESAID FACTS, IT WAS SUBMITTED BY THE ASSESSEE THAT HER CLAIM OF INTEREST EXPENDITURE ON THE LOAN RAISED AGAINST PROPERTY BE RESTRICTED TO AN AMOUNT OF RS.47,85,668/-, AS AGAINST THE CLAIM OF RS.61,04,706/- THAT WAS INADVERTENTLY RAISED IN HER RETURN OF INCOME. IN SUM AND SUBSTANCE, IT WAS SUBMITTED BY THE ASSESSEE THAT THE EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE AMOUNTING TO RS.13,19,038/- THAT HAD EMERGED ON ACCOUNT OF AN INADVERTENT BONAFIDE MISTAKE ON THE PART OF HER ACCOUNTANT, BE ADDED BACK TO HER RETURNED INCOME. 4. THE A.O AFTER DELIBERATING ON THE AFORESAID CONTENTION ADVANCED BY THE ASSESSEE MADE A DISALLOWANCE OF THE EXCESS CLAIM OF THE INTEREST EXPENDITURE OF RS.13,19,038/- THAT WAS RAISED BY THE ASSESSEE IN HER RETURN OF INCOME. IT WAS OBSERVED BY THE AO THAT THE AFORESAID DISALLOWANCE OF RS.13,19,038/- PAGE | 4 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER WAS BEING MADE ON THE BASIS OF THE ADMISSION BY THE ASSESSEE AS REGARDS THE MISTAKE ON HER PART. ON THE BASIS OF THE AFORESAID DELIBERATIONS THE A.O ASSESSED HER INCOME AT RS.23,58,178/-. THE A.O WHILE CULMINATING THE ASSESSMENT ALSO INITIATED PENALTY PROCEEDINGS UNDER SEC.271(1)(C) IN RESPECT OF THE AFORESAID DISALLOWANCE OF RS.13,19,038/- ON THE GROUND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. 5. THE A.O AFTER CULMINATING THE ASSESSMENT PROCEEDINGS CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) IN RESPECT OF THE AFORESAID DISALLOWANCE OF INTEREST EXPENDITURE OF RS.13,19,038/- MAY NOT BE IMPOSED IN HER HANDS. THE REPLY FILED BY THE ASSESSEE THAT NO PENALTY UNDER SEC.271(1)(C) WAS CALLED FOR IN HER HANDS, HOWEVER DID NOT FIND FAVOUR WITH THE A.O WHO IMPOSED PENALTY OF RS.4,07,580/- UNDER SEC.271(1)(C) OF THE I.T. ACT. 6. AGGRIEVED, THE ASSESSEE ASSAILED THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) IN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) NOT BEING PERSUADE TO SUBSCRIBE TO THE CONTENTIONS ADVANCED BY THE ASSESSEE THAT NO PENALTY UNDER SEC. 271(1)(C) WAS CALLED FOR IN HER HANDS, UPHELD THE ORDER OF THE A.O AND DISMISSED THE APPEAL. 7. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE DREW OUR ATTENTION TO THE NOTICE ISSUED BY THE A.O UNDER SEC.142(1) OF THE I.T. ACT, DATED 09.06.2016. IT WAS SUBMITTED BY THE LD. A.R THAT THE A.O IN HIS AFORESAID NOTICE UNDER SEC. 142(1), DATED 09.06.2016, HAD ONLY CALLED UPON THE ASSESSEE TO FURNISH DETAILS OF RENTAL INCOME WITH COMPLETE ADDRESS OF THE RENTAL BUILDING AND NAMES AND ADDRESSES OF THE TENANTS, ALONGWITH THE BIFURCATED DETAILS OF THE HOUSEHOLD EXPENSES. IT WAS SUBMITTED BY THE LD. A.R THAT THE ASSESSEE IN HER REPLY, DATED 27.06.2016 HAD VOLUNTARILY ADMITTED THE INADVERTENT MISTAKE ON HER PART AS REGARDS RAISING OF AN EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE OF RS. 13,19,038/- IN RESPECT OF BORROWED FUNDS RAISED TOWARDS PROPERTY. IN SUM AND SUBSTANCE, IT WAS THE CONTENTION OF THE LD. A.R THAT THE PAGE | 5 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER MISTAKE IN RAISING OF THE EXCESS CLAIM OF DEDUCTION TOWARDS INTEREST EXPENDITURE WAS ADMITTED BY THE ASSESSEE ON A SUO MOTTO BASIS PRIOR TO BEING CONFRONTED BY THE A.O. THE LD. A.R IN ORDER TO FORTIFY HIS AFORESAID CONTENTION DREW OUR ATTENTION TO THE REPLY DATED 27.06.2016 THAT WAS FILED BY THE ASSESSEE WITH THE A.O (PAGE 11 ) OF ASSESSES PAPER BOOK (FOR SHORT APB). ON A QUERY BY THE BENCH AS TO WHY A REVISED RETURN OF INCOME WAS NOT FILED BY THE ASSESSEE, IT WAS SUBMITTED BY THE LD. A.R THAT AS THE ORIGINAL RETURN OF INCOME WAS FILED ON 31.03.2015 I.E. BEYOND THE STIPULATED TIME PERIOD ENVISAGED UNDER SEC.139(1) OF THE I.T. ACT, THUS THE ASSESSEE STOOD DIVESTED OF HER RIGHT TO REVISE HER RETURN OF INCOME, AND THEREIN RECTIFY/UNDO THE MISTAKE IN RAISING OF THE EXCESS CLAIM OF DEDUCTION TOWARDS INTEREST EXPENDITURE IN THE ORIGINAL RETURN OF INCOME FILED BY HER. THE LD. A.R IN SUPPORT OF HER CONTENTION THAT IN A CASE WHERE AN ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS WITHDRAWS AN EXCESS CLAIM OF DEDUCTION THAT WAS INADVERTENTLY RAISED WHILE FILING THE RETURN OF INCOME, THEN NO PENALTY UNDER SEC.271(1)(C) IS TO BE IMPOSED, RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. MAN INDUSTRIES LTD.(2018) 164 DTR (BOM) 165. APART THEREFROM, IT WAS SUBMITTED BY THE LD. A.R THAT THE A.O IN THE BACKDROP OF THE ADMISSION ON THE PART OF THE ASSESSEE IN RESPECT OF THE AFORESAID EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE OF RS. 13,19,038/-, HAD PURSUANT THERETO DISALLOWED THE SAID SUM AND FRAMED ASSESSMENT IN HER HANDS. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE ASSESSEE HAD ADMITTED THE AFORESAID MISTAKE OF HAVING CLAIMED EXCESS DEDUCTION OF INTEREST EXPENDITURE ONLY IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THEREFORE, THE A.O HAD RIGHTLY IMPOSED PENALTY UNDER SEC.271(1)(C) IN RESPECT OF SUCH WRONG CLAIM OF DEDUCTION SO RAISED BY HER. 9. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAD IN HER RETURN OF INCOME THAT WAS FILED PAGE | 6 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER UNDER SUB-SECTION (4) OF SEC.139 ON 31.03.2015 RAISED A CLAIM OF DEDUCTION OF INTEREST ON BORROWED FUNDS AT RS.61,04,706/-. HOWEVER, IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FILED A REVISED STATEMENT OF COMPUTATION OF INCOME, WHEREIN SHE HAD SCALED DOWN HER CLAIM OF DEDUCTION OF INTEREST EXPENDITURE ON BORROWED CAPITAL FROM RS.61,04,706/- TO RS.47,85,668/-. WE FIND FROM A PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES THAT AS PER THE ASSESSEE THE MISTAKE IN RAISING EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE ON THE BORROWED FUNDS TOWARDS PROPERTY, HAD EMERGED FOR THE REASON THAT THE INTEREST EXPENDITURE OF RS. 13,19,038/- PERTAINING TO ANOTHER LOAN ACCOUNT OF THE ASSESSEE WITH ICICI BANK I.E ACCOUNT NUMBER CBL UD00001844368, FUNDS OF WHICH WERE UTILIZED FOR MAKING OF INVESTMENTS IN OTHER CONCERNS, WAS HOWEVER INADVERTENTLY INCLUDED BY HER ACCOUNTANT WHILE RAISING THE AFORESAID CLAIM OF INTEREST EXPENDITURE IN RESPECT OF LOAN TOWARDS PROPERTY. IN SUM AND SUBSTANCE, IT WAS THE CLAIM OF THE ASSESSEE THAT THOUGH ADMITTEDLY THE SHARE OF INTEREST EXPENDITURE ON THE LOANS WHICH WERE JOINTLY RAISED BY THE ASSESSES ALONG WITH MRS. ANITA SEHGAL WORKED OUT AT RS.47,85,668/-, HOWEVER, THE SAME WAS WRONGLY CLAIMED IN HER ORIGINAL RETURN OF INCOME AT RS.61,04,706/-. AS OBSERVED BY US HEREINABOVE, THE ASSESSEE EXPLAINING THE REASONS LEADING TO THE AFORESAID MISTAKE HAD SUBMITTED THAT THE INTEREST EXPENDITURE PERTAINING TO ANOTHER LOAN ACCOUNT I.E. ICICI CBL UD00001844368, WHICH WAS UTILIZED FOR MAKING INVESTMENTS IN OTHER CONCERNS WAS WRONGLY INCLUDED IN THE INTEREST EXPENDITURE ON LOAN TOWARDS PROPERTY BY THE ACCOUNTANT WHILE COMPILING THE RETURN OF INCOME OF THE ASSESSEE. IT IS SUBMITTED BY THE ASSESSEE THAT ON ACCOUNT OF THE AFORESAID MISTAKE, THE CLAIM OF DEDUCTION OF INTEREST EXPENDITURE WAS WRONGLY RAISED AT RS.61,04,706/-, AS AGAINST HER ACTUAL ENTITLEMENT OF RS.47,85,668/-. 10. WE HAVE DELIBERATED AT LENGTH ON THE FACTS OF THE CASE IN THE BACKDROP OF THE CONTENTIONS ADVANCED BY THE LD. A.R, AND ARE OF THE CONSIDERED VIEW THAT IN THE TOTALITY OF THE FACTS OF THE CASE NO PENALTY UNDER SEC.271(1)(C) COULD HAVE VALIDLY BEEN IMPOSED IN THE HANDS OF THE ASSESSEE. ADMITTEDLY, THE ASSESSEE HAD RAISED A CLAIM OF DEDUCTION OF INTEREST EXPENDITURE ON LOAN PAGE | 7 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER FOR PROPERTY AMOUNTING TO RS.61,04,706/- IN HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. INSOFAR, THE ACTUAL ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE IS CONCERNED, THE SAME AS OBSERVED BY US HEREINABOVE, STANDS WORKED OUT AT RS.47,85,668/-. WE FIND THAT IT IS NOT THE CASE OF THE REVENUE, NOR IS IT A FACT THAT THE EXCESS CLAIM OF INTEREST EXPENDITURE OF RS.13,19,038/- HAD NOT BEEN INCURRED IN RESPECT OF ANOTHER LOAN ACCOUNT OF THE ASSESSEE, OR THAT THE RAISING OF THE CLAIM TOWARDS EXCESS AMOUNT OF INTEREST EXPENDITURE OF RS. 13,19,038/- WAS MERELY A BOGUS CLAIM OF DEDUCTION RAISED BY THE ASSESSEE. RATHER, THE FACT AS IT SO REMAINS IS THAT THE INTEREST EXPENDITURE OF RS.13,19,038/- (INCLUDED IN THE CLAIM OF DEDUCTION OF INTEREST EXPENDITURE OF RS.61,04,706/-) PERTAINED TO ANOTHER LOAN ACCOUNT OF THE ASSESSEE WITH ICIC BANK I.E. LOAN A/C NO. ICICI LBL UD00001844368 WHICH WAS UTILISED FOR MAKING OF INVESTMENTS IN OTHER CONCERNS, AND HAD WRONGLY BEEN CLAIMED AS A DEDUCTION AS BEING IN THE NATURE OF INTEREST ON LOAN RAISED AGAINST PROPERTY. IN OUR CONSIDERED VIEW, THE AFORESAID CLAIM OF DEDUCTION OF RS.13,19,038/- RAISED BY THE ASSESSEE WOULD THOUGH NOT BE ALLOWABLE WHILE COMPUTING HER INCOME, HOWEVER, THE SAME IN OUR CONSIDERED VIEW, IN THE TOTALITY OF THE FACTS OF THE CASE WOULD NOT JUSTIFY IMPOSITION OF PENALTY UNDER SEC. 271(1)(C) IN THE HANDS OF THE ASSESSEE. AT THIS STAGE, WE MAY HEREIN OBSERVE THAT THE ASSESSEE PRIOR TO HAVING BEEN CONFRONTED WITH THE AFORESAID INFIRMITY IN HER CLAIM, HAD VOLUNTARILY ON HER OWN, VIDE A LETTER DATED 27.06.2016 THAT WAS FILED WITH THE A.O, THEREIN ADMITTED THE AFORESAID MISTAKE AND HAD REQUESTED THAT THE EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE AMOUNTING TO RS.13,19,038/- BE ADDED TO HER RETURNED INCOME. IN THIS REGARD, IT WOULD BE RELEVANT AND PERTINENT TO POINT OUT THAT AS THE ASSESSEE HAD FAILED TO FILE HER ORIGINAL RETURN OF INCOME WITHIN THE DUE DATE AS ENVISAGED IN SUB-SECTION (1) OF SEC.139 OF THE I.T. ACT, HENCE SHE REMAINED DIVESTED OF HER RIGHT TO UNDO/RECTIFY HER AFORESAID MISTAKE BY FILING A REVISED RETURN OF INCOME. BE THAT AS IT MAY, WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE AFORESAID FACTS, AS THE ASSESSEE HAD IN THE COURSE OF THE ASSESSMENT PROCEEDINGS BY FILING A REVISED STATEMENT OF COMPUTATION OF INCOME CAME PAGE | 8 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER FORTH WITH A VOLUNTARY ADMISSION OF HER MISTAKE OF HAVING RAISED AN EXCESS CLAIM OF DEDUCTION OF INTEREST EXPENDITURE OF RS. 13,19,038/- ON LOAN AGAINST PROPERTY, THE SAME THEREIN DULY SUBSTANTIATES HER BONAFIDES OF HAVING INADVERTENTLY RAISED AN EXCESS CLAIM OF DEDUCTION IN HER RETURN OF INCOME. APART THEREFROM, WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS HAD VOLUNTARILY ADMITTED THE MISTAKE THAT HAD CREPT IN HER RETURN OF INCOME, THEN MERELY FOR THE REASON THAT SHE COULD NOT UNDO/RECTIFY THE MISTAKE IN HER ORIGINAL RETURN OF INCOME BY FILING A REVISED RETURN OF INCOME WOULD NOT JUSTIFY LEVY OF PENALTY UNDER SEC. 271(1)(C) IN HER HANDS. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. SOMANY EVERGREEN KNITS LTD. (2013) 352 ITR 592 (BOM) , WHEREIN IT WAS OBSERVED AS UNDER : 10. WE ARE ALSO OF THE VIEW THAT THE NON-FURNISHING OF THE REVISED RETURN DOES NOT MEAN THAT THE BONAFIDE MISTAKE IN MAKING A WRONG CLAIM SHOULD BE VISITED WITH IMPOSITION OF PENALTY. MOREOVER, THE TIME FOR FILING A REVISED RETURN HAD ALREADY BEEN EXPIRED. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE STAND OF THE CIT(A) THAT THE ASSESSEE FIELD TO FILE A REVISED RETURN AND, THEREFORE, THE PLEA OF BONAFIDE MISTAKE CANNOT BE ACCEPTED IS AN ERRONEOUS CONCLUSION. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT NO PENALTY SHOULD HAVE BEEN IMPOSED ON THE ASSESSEE. WE, THEREFORE, DIRECT THAT THE PENALTY IMPOSED ON THE ASSESSEE BE CANCELLED. 11. FURTHER, AS OBSERVED BY US HEREINABOVE, IT IS NEITHER THE CASE OF THE REVENUE, NOR A FACT THAT THE EXCESS CLAIM OF DEDUCTION OF RS.13,19,038/- THAT WAS RAISED BY THE ASSESSEE WAS FOUND TO BE A BOGUS CLAIM THAT WAS RAISED IN THE THIN AIR. RATHER, AS OBSERVED BY US HEREINABOVE, THE AFORESAID CLAIM OF INTEREST EXPENDITURE RAISED BY THE ASSESSEE WAS IN CONTEXT OF THE LOANS WHICH WERE RAISED BY HER FOR MAKING OF INVESTMENTS IN OTHER CONCERNS. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS ARE OF A STRONG CONVICTION, THAT THOUGH THE DISALLOWANCE OF RS.13,19,038/- MADE BY THE A.O AT THE BEHEST OF THE ASSESSEE WOULD THOUGH SUFFICE FOR SADDLING HER WITH ADDITIONAL TAX LIABILITY, HOWEVER, IN THE TOTALITY OF THE FACTS OF THE CASE NO PENALTY UNDER SEC.271(1)(C) ON THE SAID COUNT COULD HAVE VALIDLY BEEN IMPOSED ON HER. PAGE | 9 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER 12. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS BEING OF THE CONSIDERED VIEW THAT THE CIT(A) HAD WRONGLY UPHELD THE PENALTY IMPOSED BY THE A.O UNDER SEC.271(1)(C) OF THE I.T. ACT, THEREFORE, SET ASIDE HIS ORDER AND DELETE THE PENALTY OF RS.4,07,580/- IMPOSED BY THE A.O UNDER SEC.271(1)(C) OF THE I.T ACT. 13. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.01.2019 SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER PLACE: JALANDHAR; DATE: 15 .01.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , / DR, ITAT, CAMP BENCH, JALANDHAR. 6. [ / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) /ITAT, CAMP BENCH, JALANDHAR. PAGE | 10 ITA NO. 433/ASR/2018 A.Y. 2014-15 SANGEETA SEHGAL VS. THE INCOME TAX OFFICER SR.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS 15.1.19 SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON 15.1.19 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK 15.1.19 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER