PISUPATI JAGANNATHAN VENKATESH, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX - CIRCLE 1, MUMBAI

ITA 449/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4247 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim; Bonafide mistake; TDS; Set aside
• Section: 271(1)(c); 54F; 142(1); 143(2); 139(4); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 449 /MUM/20 1 8 ( / ASSESSMENT YEAR: 2009 - 10 ) SHRI PISUPATI JAGANNATHAN VENKATESH N . A. KULAKRNI, ADVOCATE WADAL BUILDING, 1 ST FLOOR, MANPADA ROAD, NEAR, NEAR DNSB BANK, DOMBIVALI EAST - 421201 . / VS. ACIT CIRCLE - 1 6 TH FLOOR, AHAR I.T. PARK, ROAD NO. 16 - Z, WAGLE INDL, THANE - 400604. ./ ./ PAN/G IR NO. : AHOPP1050E ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 27 .0 2 .201 9 / DATE OF PRONOUNCEMENT : 13. 03 .2019 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 30 . 11.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2009 - 10 WHERE IN THE PENALTY LEVIED BY THE AO HAS BEEN ORDERED TO BE CONFIRMED . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS & THE CIRCUMSTANCES, WHETHER THE CIT(A) HAS RIGHT IN HO LDING THE VIEW THAT AFTER ALLOWING THE BENEFIT OF U/S 54F UP TO ASSESSEE BY : SHRI N.A. KULKA RNI (AR) REVENUE BY: SHRI ABI RAMA KARTIKIYEN (DR) ITA. NO.449 /M/201 8 A.Y. 20 0 9 - 10 2 THE PERIOD DENOTED U/S 139(4) REMAINING AMOUNT OF CAPITAL GAIN IF SO BE LIABLE TO LEVY OF PENALTY U/S 271(1)(C) AS PLACING THE INACCURATE PARTICULAR BEFORE THE AO. 2 ALSO HOLDING THAT THE A CCRUED INTEREST ON FIXED DEPOSIT WHICH IS REFLECTING ON THE SITE UPON 26AS SHALL BE FORMED THE PLACEMENT OF INACCURATE PARTICULARS AND CONCEALED INCOME AS PER THE SECTION 271(1) (C) OF THE ACT. ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 29 - 07 .200 9 DECLARING TOTAL INCOME TO THE TUNE OF RS.58,63,540/ - FOR THE A.Y. 2009 - 10 . THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY, HENCE, NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESS EE SOLD HIS FLAT AND INVESTED THE CAPITAL GAIN IN NEW RESIDENTIAL PROPERTY. THE ASSESSEE RECEIVED THE CAPITAL GAIN IN SUM OF RS. 65,98,740/ - AND INVESTMENT HAS BEEN SHOWN IN SUM OF RS.67,27,087/ - . FACTUA L L Y, THE ASSESSEE HAS INVESTED IN SUM OF RS.44,36,738/ - TILL 31 ST JULY 2009. THE CAPITAL GAIN IN SUM OF RS.21,59,002/ - WAS NOT INVESTED, THEREFORE, THE SAME WAS BROUGHT TO TAX. THE ASSESSEE DID NOT SHOW THE INTEREST ACCRUED FROM HIS BANK WITH HDFC BANK ON F.D. AT RS.4,34,222/ - AND INTEREST FROM THE SBI AND IC ICI BANK TOTALING IN SUM OF RS.20,842/ - , THEREFORE, THE SAME WAS ALSO BROUGHT TO TAX. SINCE THE CLAIM OF THE ASSESSEE WAS WRONG, HENCE, THE PENALTY PROCEEDING WAS INITIATED. THE ASSESSING OFFICER LEVIED THE PENALTY IN SUM OF RS.6,43,907/ - FEELING AGGRIEVED , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO PARTLY ALLOWED THE CLAM OF THE ASSESSEE , BUT THE ASSESSEE WAS NOT SATISFIED, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ITA. NO.449 /M/201 8 A.Y. 20 0 9 - 10 3 ISSUE NOS. 1 & 2 4 . ISSUE NOS. 1 & 2 ARE INTER - CONNECTED, THE REFORE, ARE BEING TAKEN UP TOG ETHER FOR ADJUDICATION. HOWEVER BOTH THE ISSUES ARE IN CONNECTION WITH THE CONFIRMATION OF THE PENALTY BY CIT(A) . THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PENALTY WAS LEVIED BY AO ON ACCOUNT OF WRONG CLAIM OF THE ASSESSEE IN CONNECTION WITH THE LONG TERM CAPITAL GAIN AND IN APPEAL BEFORE THE HONBLE ITAT THE ISSUE HAS BEEN SET ASIDE AND REMANDED BEFORE THE AO FOR AFRESH ADJUDICATION BY VIRTUE OF ORDER DATED 13.09.2017 IN THE ASSESSEES OWN CASE IN ITA. NO.3715 /M/2013, THEREFORE, THE PENALTY IS NOT LIABLE TO BE SUSTAINABLE . IT IS ALSO ARGUED THAT SO FAR AS THE NON - OFFERING OF THE INTEREST IN SUM OF RS.4,55,064/ - ON FDRS IS CONCERNED, THE TDS HAS BEEN DEDUCTED IN SUM OF RS.44,725/ - BY DEDUCTOR AND THE ASSESSEE WA S OF THE VIEW THAT THE LIABILITY OF TAX WOULD ASSESSED AT THE END OF MATURITY , THEREFORE, NO PENALTY IS LEVIABLE . HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. ON A PPRAISAL OF THE PENALTY ORDER DATED 19.03.2014 ON RECORD, WE NOTICED THAT THE AO HAS LEVIED THE PENALTY ON ACCOUNT OF WRONG CLAIM U/S 54 OF THE ACT AND ON ACCOUNT OF NON - OFFERING THE INTEREST INCOME UPON FD IN SUM OF RS. 4,55,064/ - . SO FAR AS THE CAPITAL GA IN IS CONCERNED , THE HONBLE ITAT IN THE ASSESSEES OWN CASE SET ASIDE THE ISSUE AND RESTORED THE ISSUE BEFORE THE AO BY VIRTUE OF ORDER DATED 13.09.2017 IN ITA. NO. ITA. NO.449 /M/201 8 A.Y. 20 0 9 - 10 4 3715/M/2013 . N O DEMAND IS IN EXISTENCE SO IN THE SAID CIRCUMSTANCES, THE PENALTY HAS NO LE G TO STAND, HENCE, IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW. SO FAR AS THE ISSUE OF NON - OFFERING THE INTEREST INCOME IN SUM OF RS.4,55,064/ - ON FD IS CONCERNED, W E ARE OF THE VIEW THAT IT IS A BONAFIDE MISTAKE WHICH HAS NOT BEEN OFFERED IN THE R ETURN OF INCOME PROPERLY. HOW EVER, THE TDS HAS BEEN DEDUCTED. THERE IS NO LOSS OF REVENUE SO N O PENALTY IS LEVIABLE. TAKING INTO ACCOUNT, FACT AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE CIT(A) IS WRONG AGAINST LAW AND FACTS AND IS NOT LI ABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND DELETE THE PENALTY. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13. 03 .2019 . SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 13. 03 .2019 . V IJAY ITA. NO.449 /M/201 8 A.Y. 20 0 9 - 10 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDEN T. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI