RAMA NARSIMHA KAMESHWAR, MUMBAI V. ITO WD 3(2), THANE

ITA 4411/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2517 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 31-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAY B JAKKE
• Assessee Lawyers: R K MULCHANDANI
• Keywords: Revised return; Bonafide mistake
• Section: 139(5)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, J UDICIAL MEMBER ./ I.T.A. NO. 4411 /MUM/ 2013 ( / ASSESSMENT YEAR : 2007 - 08 ) SHRI RAMA NA RSIMHA KAMESHWAR A/404, SAVOY, RAHEJA GARDENS, LBS MARG, THANE (W) - 400604 / VS. INCOME TAX OFFICER, WARD 3(2), 6 TH FLOOR, ASHAR I T PARK, ROAD NO.16 - 2, WAGLE INDUSTRIAL ESTATE, THANE - 400604 ./ PAN : ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R K MULCHANDANI / RESPONDENT BY : UDAY B JAKKE / DATE OF HEARING : 1 .12. 2015 / DATE OF PRONOUNCEMENT : 1. 12. 2015 O R D E R PER B.R.BASKARAN,AM : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 - 01 - 2013 PA SSED BY LD CIT(A) FOR ASSESSMENT YEAR 2007 - 08 BY CONFIRMING THE PENALTY OF RS.57,171/ - LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS AN INDIVIDUAL AND WAS WORKING IN ABU DHABI. HE FILED HIS ORIGINAL RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 20 - 08 - 2007 DECLARING A TOTAL INCOME OF RS.46,010/ - . THE SAME WAS TAKEN UP FOR SCRUTINY AND ITA NO 4411 / MUM/ 2013 2 ACCORDINGLY A NOTICE DATED 24.09.2008 U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. SUBSEQUENT TO THE RECEIPT OF THE NOTICE CITED ABOVE, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 27 - 08 - 2009 DECLARING A TOTAL INCOME OF RS.3,53,500/ - BY INCLUDING ADDITIONAL BANK INTEREST INCOME OF RS.3,23,674/ - . ADMITTEDLY THE REVISED RETURN OF IN COME WAS FILED BEYOND THE TIME LIMIT PRESCRIBED U/S 139(5) OF THE ACT. THE AO COMPLETED THE ASSESSMENT BY DETERMINING THE TOTAL INCOME AT RS.3,53,500/ - , I.E., AS DECLARED IN THE REVISED RETURN OF INCOME. THE AO INITIATED PENALTY PROCEEDINGS AND LEVIED PE NALTY OF RS.57,171/ - IN RESPECT OF THE ADDITIONAL INTEREST INCOME OF RS.3,23,674/ - DECLARED BY THE ASSESSEE IN THE BELATED REVISED RETURN. THE LD CIT(A) ALSO CONFIRMED THE PENALTY. 3. THE LD A.R SUBMITTED THAT THE ASSESSEE HAD TAKEN A LOAN AGAINST THE BA NK DEPOSITS HELD BY HIM. DURING THE YEAR UNDER CONSIDERATION THE DEPOSITS WERE CLOSED BY DIRECTLY CREDITING THE MATURITY PROCEEDS AGAINST THE LOAN ACCOUNT AND ONLY NET AMOUNT WAS CREDITED TO THE SAVINGS ACCOUNT. HE SUBMITTED THAT THE ASSESSEE HAS PAID AD VANCE TAX BASED ON THE EARLIER YEARS INCOME. HOWEVER, AT THE TIME OF FILING ORIGINAL RETURN OF INCOME, THE INTEREST INCOME FROM DEPOSITS WAS INADVERTENTLY NOT TAKEN INTO ACCOUNT. LATER ON THE MISTAKE WAS NOTICED BY THE ASSESSEE HIMSELF BEFORE THE DETECT ION OF THE SAME BY THE AO AND ACCORDINGLY FILED A REVISED RETURN OF INCOME BY ADMITTING THE CORRECT INTEREST INCOME. HE SUBMITTED THAT THE ASSESSEE HAS EXPLAINED ALL THESE FACTS TO THE AO DURING THE COURSE OF PENALTY PROCEEDINGS. ACCORDINGLY HE SUBMITTED THAT THE ASSESSEES EXPLANATION WAS A BONAFIDE ONE AND ACCORDINGLY PRAYED THAT THE PENALTY SHOULD BE DELETED. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME BY NOT DISCLOSING THE CORRECT INTEREST INCO ME AND HE CAME FORWARD TO FILE REVISED RETURN OF INCOME ONLY AFTER THE ITA NO 4411 / MUM/ 2013 3 RECEIPT OF NOTICE U/S 143(2) OF THE ACT ISSUED BY THE AO. HAD THE NOTICE U/S 143(2) NOT BEEN ISSUED, THE ASSESSEE WOULD NOT HAVE ADMITTED THE ADDITIONAL INCOME. ACCORDINGLY HE CONTEND ED THAT THE ORDER OF LD CIT(A) SHOULD BE UPHELD. 5. WE NOTICE THAT THE ASSESSEE HAS OFFERED AN EXPLANATION AS TO WHY THE INTEREST INCOME HAS ESCAPED THE ATTENTION OF THE ASSESSEE WHILE FILING RETURN OF INCOME. FROM THE SUBMISSIONS MADE BY THE ASSESSEE IN THE PENALTY PROCEEDINGS, WE NOTICE THAT THE ASSESSEE HAD TAKEN A LOAN OF RS.25.00 LAKHS AGAINST THE FIXED DEPOSIT. THE SAID LOAN ACCOUNT WAS CLOSED ON 8.3.2007 AND THE FIXED DEPOSIT ALSO GOT MATURED IN MARCH, 2007. THE DEPOSIT ACCOUNT AS WELL AS LOAN AC COUNT WAS ADJUSTED AGAINST EACH OTHER AND NET PROCEEDS WERE CREDITED TO THE SAVINGS ACCOUNT. ACCORDINGLY IT WAS SUBMITTED THAT THE ASSESSEE HAD INADVERTENTLY OMITTED TO TAKE THE INTEREST INCOME WHILE FILING RETURN OF INCOME. IT WAS ALSO SUBMITTED THAT TH E ASSESSEE HAS FOUND OUT THE MISTAKE AND VOLUNTARILY OFFERED THE SAME THROUGH BELATED REVISED RETURN OF INCOME AND THE SAME WAS ALSO ACCEPTED BY THE ASSESSING OFFICER. 6. WE NOTICE THAT THE ASSESSING OFFICER HAS MAINLY OBSERVED THAT THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE CANNOT BE RECOGNISED, SINCE IT HAS BEEN FILED BEYOND THE PRESCRIBED TIME LIMIT AND ACCORDINGLY CONCLUDED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. WE NOTICE THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE HA VE NOT BEEN APPRECIATED BY THE ASSESSING OFFICER. THE LD CIT(A) HAS ALSO FAILED TO APPRECIATE THE EXPLANATIONS OF THE ASSESSEE AND HE HAS SIMPLY OBSERVED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM THROUGH COGENT MATERIAL. THE LD CIT(A) HAS AL SO CARRIED AWAY BY THE IMPRESSION THAT THE ADMISSION OF ADDITIONAL INCOME WAS NOT VOLUNTARY ONE. ITA NO 4411 / MUM/ 2013 4 7. WE FURTHER NOTICE THAT THOUGH THE REVISED RETURN OF INCOME WAS FILED BEYOND THE TIME LIMIT PRESCRIBED UNDER THE ACT, YET WE NOTICE THAT THE ASSESSEE HAS BR OUGHT THE OMISSION OF INCOME VOLUNTARILY THROUGH THE SAID REVISED RETURN OF INCOME BEFORE ITS DETECTION BY THE ASSESSING OFFICER. FURTHER THE ASSESSEE HAS OFFERED AN EXPLANATION AS TO WHY THE SAME WAS OMITTED TO BE INCLUDED IN THE ORIGINAL RETURN OF INCOM E AND THE SAID EXPLANATION WAS NOT FOUND TO BE FALSE. WE NOTICE THAT THE LD CIT(A) HAD PLACED RELIANCE ON THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF JYOTI LAXMAN KONKAR VS. CIT (292 ITR 0163). HOWEVER, WE NOTICE THAT THE SAID DECISION IS DISTINGUISHABLE ON FACTS, SINCE THE DISHONESTY OF THE ASSESSEE IN THE CASE BEFORE HONBLE HIGH COURT WAS CONFIRMED BY BOTH LD CIT(A) AND THE TRIBUNAL. IN THE INSTANT CASE, THE REASONS THAT LET TO ADOPTION OF NET INTEREST INCOME I NADVERTENTLY WERE EXPLAINED BY THE ASSESSEE AND THE SAME WAS NOT FOUND TO BE FALSE. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE HAS COMMITTED A BONAFIDE MISTAKE IN NOT DISCLOSING THE PROPER INTEREST INCOME AND THE SAME HAS BEEN PROPERLY EXPLAINED BY THE ASSESSEE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE EXPLANATION 1 TO SEC. 271(1)(C) COMES TO THE HELP OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE AO TO DELETE THE IMPUGNED PENALTY LEVIED BY HIM. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 1ST ,DEC, 2015 . SD SD ( / SANDEEP GOSAIN ) ( . . / B.R.BASKARAN ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI ; DATED .. 1ST , DEC,2015 . . ./ SRL , SR. PS ITA NO 4411 / MUM/ 2013 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI