Satinder Pal Singh, New Delhi V. ACIT, New Delhi

ITA 4759/DEL/2011

• Counselvise Citation: 475920114 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: ASHWANI TANEJA; DR RAKESH GUPTA
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER ITA NO. 4759 /DEL/201 1 ASSESSMENT YEAR : 2006 - 0 7 SATINDER PAL SINGH, S - 391, GREATER KAILASH - II , NEW DELHI PAN - AATPS0167K (APPELLANT) VS ACIT, CIRCLE - 37(1), NEW DELHI (R ESPONDENT ) APPELLANT BY DR.RAKESH GUPTA, ADV. & SH.ASHWANI TANEJA, ADV. RESPONDENT BY SH.B.R.R.KUMAR, SR. DR O R D E R PER DIVA SINGH, JUDICIAL MEMBER TH IS IS AN APPEAL FILED BY THE ASSESSEE ASSAIL ING THE CORRECTNESS OF THE ORDER DATED 29.08.2011 OF CIT(A) - XXVII , NEW DELHI PERTAINING TO 2006 - 07 ASSESSMENT YEAR WHEREIN THE PENALTY OF RS.1,62,023/ - IMPOSED BY THE AO U/S 271(1)(C) HAS BEEN UPHELD BY THE CIT(A). 2. THE RELEVANT FACTS OF THE CASE ARE THAT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS AS PER THE CLAIM PUT FORTH BY THE ASSESSEE IT WAS ST ATED THAT THE SPECIFIC SAVING BANK A /C NO. - 2777 IN BANK OF PUNJAB BY OVERSIGHT WAS NOT DISCLOSED. ACCORDINGLY THE DECLARED INCOME OF RS.10,62,330/ - WAS REVISED BY THE AMOUNTS FOUND DEPOSITED IN THE SAID BANK ACCOUNT ALONGWITH THE INTEREST (RS.4,79,350/ - +R S.2004/ - ) RESULTING IN INCOME BEING ROUNDED OFF AT RS.15,43,680/ - AS PER THE REVISED COMPUTATION . IN VIEW OF THE FACT THAT THE AMOUNT INDICATED IN THE REVISED COMPUTATION WAS NOT ORIGINALLY R ETURNED BY THE ASSESSEE , T HE AO CONCLUDED THAT IT WAS DISCOVERED ONLY AS A RESULT OF THE QUERIES MADE IN THE ASSESSMENT PROCEEDINGS . A S A RESULT OF THIS THE ASSESSEE WAS S HOW - CAUSED TO SHOW WHY PENALTY U/S 271(1)(C) FOR FILING INACCURATE PARTICULARS THEREBY CONCEALING HIS INCOME SHOULD NOT BE ATTRACTED IN THE FACTS O F THE CASE. THE DATE OF HEARING 2 6 .03.2015 DATE OF PRONOUNCEMENT 16 .0 4 .2015 ITA NO. 4759 /DEL/20 1 1 2 ASSESSEE EXPLAINED THAT THE SPECIFIC BANK ACCOUNT WAS NOT DISCLOSED AS A RESULT OF THE OVERSIGHT BY HIS CHARTERED ACCOUNTANT . O N NOTIC ING THE OVERSIGHT IN THE ASSESSMENT PROCEEDINGS IT WAS VOLUNTARILY ACCEPTED AS A MISTAKE BY THE ASSESSEE CONSEQUENTLY THE COMPUTATION OF INCOME WAS REVISED BY PAYING DUE TAX AND INTEREST THEREON . ACCORDINGLY IT WAS SUBMITTED THAT THIS DID NOT AMOUNT TO CONCEALMENT . THE SAID EXPLANATION WAS NOT ACCEPTED BY THE AO. IN VIEW THEREOF PENALTY OF THE AFORE - SAID AMOUNT WAS IMPOSED ON THE ASSESSEE. THE ACTION WAS CHALLENGED IN APPEAL BY THE ASSESSEE . H OWEVER THE CIT(A) ALSO NOT CONVINCED WITH THE EXPLANATION OFFERED CONFIRMED THE ACTION OF THE AO. 3. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LD. AR REITERATED THE SUBMISSIONS ADVANCED BEFORE THE AO AND THE CIT(A) IN THE PENALTY PROCEEDINGS. VARIOUS CASE - LAWS WERE ALSO RELIED UPON SO AS TO CONTEND THAT THE CHARGE HAS NOT BEEN SPECIFICALLY BEEN MADE OUT AGAINST THE ASSESSEE TO SHOW ON WHAT COUNT THE PENALTY BEING IMPOSED HAS BEEN CONSIDERED AND LEVIED. IT WAS HIS SUBMISSION THAT LAW MANDATES THAT THE SPECIFIC CHARGE RE QUIRED TO BE MET SHOULD BE SPELT OUT. THE ASSESSEE MUS T KNOW IS HE REQUIRED TO EXPLAIN FILING OF INACCURATE PARTICULARS OR IS HE REQUIRED TO EXPLAIN CONCEALMENT OF INCOME . CASE LAWS WERE ALSO RELIED UPON FOR THE PR OPOSITION THAT WHERE IT IS A CASE OF INADVERTENT MISTAKE PENALTY WAS NOT ATTRACTED ESPECIALLY W HERE AS PER JUDICIAL PRECEDENT LAID DOWN BY THE APEX COURT IN PRICE WATERHOUSE COOPERS WHERE THE MISTAKE C OMMITTED BY A CHARTERED ACCOUNTANT IN PUTTING FURTHER A CLAIM PENALTY WAS HELD TO BE NOT ATTRACTED AS THE MISTAKE WAS CONSIDERED TO BE A HUMAN ERROR . I N THE FACTS OF THE PRESENT CASE WHERE THE ASSESSEE IS NOT EVEN A TAX EXPERT AND ADMITTEDLY IS A CRIMINAL LAWYER MISTAKE COMMITTED BY HIS CHARTERED ACCOUNTANT IT WAS SUBMITTED SHOULD NOT BE HELD AGAINST HIM. THE IMPOSITION OF PENALTY IN THE CIRCUMSTANCES IT WAS STATED IS HARSH. ATTENTION ON FACTS WAS ALSO INVITED TO THE TWO REMAND REPORTS OF THE AO WHEREIN IN THE FIRST REMAND REPORT DATED 05.12.2009 IN PA GE NO. 5 - 5(A) THE AO ACCEPTS THAT THE ASSESSEE VOLUNTARILY MADE THE DISCLOSURE ON 14.10.2008 ON NOTICING THE MISTAKE WHICH T H E AO HAD NOT DISCOVERED. HOWEVER IN THE S ECOND REMAND REPORT DATED 16.03.2010 IN PAGE NO. - 6 - 7(A) THE VERY SAME AO CONTRADICTS HIMSELF BY STAT ING HALF TRUTHS. ADDRESSING THE FACTS IT WAS SUBMITTED THAT THE ASSESSMENT ORDER IS DATED 22.12.2008 AND THE AO THEREAFTER HAS SENT NOTICE U/S 133(6) TO VARIOUS BANKS EXCEPT THIS SPECIFIC BANK ACCOUNT AS IT ADMITTEDLY ALREADY ST OOD DISCLOSED BY THE ITA NO. 4759 /DEL/20 1 1 3 ASSES SEE ITSELF AND ONLY ON 22.10.2008 I.E ON THE DATE OF PASSING OF THE ASSESSMENT ORDER NOTICE U/S 133(6) FOR THIS SPECIFIC INFORMATION WHICH ALREADY S TOOD DISCLOSED TO THE AO WAS SENT TO THE BANK OF PUNJAB. T HE SECOND REMAND REPORT IT WAS SUBMITTED WAS SPE CIFICALLY MADE OUT AS THE FIRST REMAND REPORT DID NOT FIND FAVOUR OF THE CIT(A). ATTENTION WAS INVITED TO PAPER BOOK PAGE NO S . - 5, 5A, 7 AND 7A WHEREIN THE VERY SAME AO , SH. A. K. DHIR HAS CONT RADICTED HIMSELF IN THE SECOND REMAND REPORT . A CCORDINGLY IT W AS HIS SUBMISSION THAT IN THE FACE OF THE CONTRADICTIONS IN THE DEPARTMENTAL STAND EVEN IF THE FIRST REMAND REPORT IS NOT BELIEVED THEN ALSO THE PENALTY DESERVE S TO BE QUASHED AS THE DEPARTMENTAL STAND IS CON TRADICTORY . 5 . THE LD. SR. DR, DR. B. R. R. KUMAR STATED THAT THE DISCLOSURE WAS N O T SUO MOTO OR VOLUNTARILY AND IT WAS MADE ONLY WHEN T H E ASSESSEE FOUND THAT IT HAD NO CHOICE BUT TO DISCLOSE THIS BANK ACCOUNT. THE ARGUMENT IT WAS SUBMITTED IS SUPPORTED BY THE FACT THAT THE RETURN AS PER RECORD WA S FILED ON 31.03.2007 AND NOTICE U/S 143(2) WAS ISSUED ON 27.07.2007 FIXING THE DATE OF HEARING ON 17.08.2007. REFER RING TO THE PAPER BOOK PAGE NO. - 5 RELIED UPON BY THE ASSESSEE WHICH CONTAINS FIRST REMAND REPORT OF THE AO , IT WAS POINTED OUT THAT IT WAS O NLY ON 14.10.2008 THAT THE ASSESSEE REVISED ITS COMPUTATION THUS IRRESPECTIVE OF THE FACT THAT THERE IS A CONTRADICTION IN THE TWO REMAND REPORTS EVEN CONSIDERING THE VERY SAME REMAND REPORT RELIED UPON BY THE ASSESSEE IN ITS FAVOUR , IT WAS EVIDENT THAT TH E DISCLOSURE WAS MADE ONLY IN THE ASSESSMENT PROCEEDINGS AND IT WAS NOT SUO MOTO AS IT WAS MADE ONLY WHEN THE AO STARTED LOOKING INTO THE RECORD AS SUCH IT CAN N OT NOT BE STATED TO BE VOLUNTARILY DISCLOSED . ACCORDINGLY IT WAS HIS SUBMISSION THAT T HE CASE LAWS ON FA CTS WHICH ARE DIFFERENT HAVE NO RELEVANCE AS PENALTY U/S 271(1)(C) ON FACTS HAS CORRECTLY BEEN LEVIED AND UPHELD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE RECORD SHOWS THAT THE AO I N THE ASSESSMENT PROCEEDINGS QUA THE REVISED COMPUTATION EXTRACTS THE FOLLOWING EXPLANATION OF THE ASSESSEE. CONSIDERING WHICH THE RETURNED INCOME WAS VARIED AS PER THE DISCLOSURE MADE : - DUE TO OVERSIGHT ONE BANK ACCOUNT WITH BANK OF PUNJAB WAS LEFT TO B E INCLUDED. THE ASSESSEE HAS VOLUNTARILY PAID THE ADDITION TAX ALONGWITH INTEREST AND PRAISE THAT A LENIENT VIEW BE TAKEN AND NO PENALTY PROCEEDINGS BE INITIATED. TAX OF RS.2,20,960/ - HAS BEEN DEPOSITED IN HDFC BANK KALKAJI AND CHALLANS WILL BE RECEIVED AFTER ONE MONTH. (EMPHASIS PROVIDED) ITA NO. 4759 /DEL/20 1 1 4 6.1 . THE SAID EXPLANATION IT IS SEEN HAS ALSO BEEN PUT FORTH IN THE PENALTY PROCEEDINGS AND IT HAS BEEN REPEATED B EFORE THE CIT(A ) AND ALSO BEFORE US. ADDRESSING THE FACTS THE LD. AR HAS CANVASSED THAT THE ASSESSEE IS A CRIMINAL LAWYER AND NOT A TAX EXPERT AND RELIED ON THE JUDICIAL PRECEDENT LAID DOWN BY THE APEX COURT WHERE HUMAN ERROR HAS BEEN CONSIDERED TO BE A VALID GROUND FOR QUASHING PENALTY P ROCEEDINGS IN THE CASE OF A PROFESSIONALLY MANAGED ACCOUNTANCY FIRM OF INTERNATIONAL RE PUTE LIKE PRICE WATER HOUSE COOPER S . THE PLEA THAT DUE TO INADVERTENT OVERSIGHT THE CHARTERED ACCOUNTANT DID NOT DISCLOSE THE SPECIFIC BANK ACCOUNT HAS BEEN SUBMITTED. THE LD . AR WAS REQUIRED TO ADDRESS WHETHER THE TAX PAYER HAS ANY PAST HISTORY OF SIMILAR NON - DISCLOSURE TO WHICH ON ENQUIRING FROM THE ASSESSEE PRESENT IN THE COURT THE LD. AR STATED THAT ON THE SAID ISSUE THERE IS NO PAST HISTORY ADVERSE TO THE ASSESSEE. THE SAID POSITION WAS NOT DISPUTED BY THE LD. SR. DR. ACCORDINGLY CONSIDERING THE ENTIRETY OF THE FACTUAL MATRIX, WE FIND THAT THE CONSISTENT EXPLANATION OF THE ASSESSEE CAN BE ACCEPTED AS BONA FIDE. AS TO OUR MINDS ON FACTS IT IS NOT BEYOND THE REALMS OF REALITY TO CONSIDER THAT THE SPECIFIC BANK ACCOUNT DUE TO INADVERTENT HUMAN ERROR WAS NOT ORIGINALLY DISCLOSED. THE ASSESSEE IT IS SEEN I S A CRIMINAL LAWYER WHO ON TAX MATTERS HAS PROCEEDED AS PER THE ADVICE OF HIS CHARTERED ACCOUNTANT WHO BY MISTAKE DID NOT INC LUDE THE SPECIFIC BANK ACCOUNT DUE TO OVERSIGHT . BEING SATISFIED BY THE EXPLANATION OFFERED, WE SET ASIDE THE IMPUGNED ORDER AND ALLOW THE ASSESSEE S APPEAL BY QUASHING THE PENALTY ORDER. 7. IN THE RESULT THE APPEAL O F THE ASSESSEE IS ALLOWED. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL , 2015. SD/ - SD/ - (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 16 TH APRIL , 2015 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI