DR ANITA MOHAN, MUMBAI V. DY. CIT CC-1(1), MUMBAI

ITA 4806/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1153 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALDLD
• Keywords: TDS
• Section: 271(1)(c); 143(3)

Judgement Text

1 ITA NO.4806/MUM/2018 DR. ANITA MOHAN ASSESSMENT YEAR-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4806/MUM/2018 ( / ASSESSMENT YEAR: 2012-13) DR. ANITA MOHAN FLAT NO. C/601, ABHIJEET APTS. SAINATH CO OP. HSG. SOC. LTD. POLICE STATION ROAD SANTACRUZ (EAST), MUMBAI-400 055. / VS. D CIT - CC - 1(1) OLD CGO BUILDING NEXT TO AAYKAR BHAVAN CHURCHGATE, MUMBAI-400 007. ./ ./PAN/GIR NO. ADHPM-7787-N ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI S. MICHAEL JERALD- LD. DR / DATE OF HEARING : 17/12/2019 / DATE OF PRONOUNCEMENT : 17/12/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. IN THE AFORESAID APPEAL FOR ASSESSMENT YEAR (AY) 2012-13, THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF PENALTY OF RS.1.20 LACS U/S 271(1)(C) BY LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-47, MUMBAI [IN 2 ITA NO.4806/MUM/2018 DR. ANITA MOHAN ASSESSMENT YEAR-2012-13 SHORT REFERRED TO AS CIT(A)] VIDE APPEAL NO. CIT( A)-47/191/2015-16 ORDER DATED 22/05/2018. 2. AT THE TIME OF HEARING, NONE APPEARED FOR ASSESS EE AND NO VALID ADJOURNMENT APPLICATION WAS PLACED ON RECORD. LEFT WITH NO OPTION, THE APPEAL WAS PROCEEDED WITH EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD AND AFTER CONSIDERING THE SUBMIS SIONS OF LD. DR, WHO JUSTIFIED IMPOSITION OF PENALTY IN THE GIVEN CIRCUM STANCES. 3. FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED AS CONSULTING DOCTOR WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S. 143(3) O N 17/03/2015 WHEREIN THE EXPENDITURE OF RS.3.52 LACS CLAIMED BY THE ASSE SSEE WAS DISALLOWED IN VIEW OF THE FACT THAT THE ASSESSEE WAS NOT RUNNING ANY INDEPENDENT CLINIC BUT WORKING ON RETAINERSHIP BASIS AS A MEDICAL CONS ULTANT WITH M/S FORTIS HOSPITALS LIMITED. THE ASSESSEE REFLECTED PROFESSIO NAL RECEIPTS OF RS.17.36 LACS AND CLAIMED EXPENDITURE OF RS.6.54 LACS. THE D ISALLOWANCE OF RS.3.52 LACS WAS ON ACCOUNT OF EXPENDITURE STATED T O BE INCURRED UNDER THE HEADS SALARIES, TRAVELLING EXPENSES, BUSINESS PROMO TION AND VARIOUS OTHER PETTY EXPENDITURE, THE DETAILS OF WHICH HAVE ALREAD Y BEEN EXTRACTED IN THE QUANTUM ASSESSMENT ORDER AS WELL AS PENALTY ORDER. IT IS EVIDENT FROM QUANTUM ASSESSMENT ORDER THAT THE DISALLOWANCE WAS MADE FOR WANT OF SUFFICIENT DOCUMENTARY EVIDENCES. THE RECORD WOULD SHOW THAT THE ASSESSEE ACCEPTED THE SAID DISALLOWANCE AND PAID DU E TAXES AS PER INCOME ASSESSED IN SCRUTINY ASSESSMENT. 3 ITA NO.4806/MUM/2018 DR. ANITA MOHAN ASSESSMENT YEAR-2012-13 4. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) AND THE ASSESSEE WAS SADDLED WITH IMPUGNED PENALTY OF R S.1.20 LACS VIDE PENALTY ORDER DATED 24/06/2015. DURING THE COURSE O F PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE EXPENDITURE WHICH W AS DISALLOWED HAD DIRECT RELATION WITH PROFESSIONAL RECEIPTS. NEVERTH ELESS, THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE CORRECT PAR TICULARS OF INCOME AND THEREFORE, THE ASSESSEE OPPOSED THE LEVY OF PENALTY BY RELYING UPON THE DECISION OF HONBLE SUPREME COURT RENDERED IN CIT V/S RELIANCE PETROPRODUCTS PRIVATE LTD. (322 ITR 158). HOWEVER, NOT CONVINCED WITH ASSESSEES ARGUMENTS, LD. AO IMPOSED IMPUGNED PENAL TY OF RS.1.20 LACS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 5. THE LEARNED FIRST APPELLATE AUTHORITY, HOLDING T HAT THE ASSESSEE COULD NOT DISCHARGE THE ONUS BY OFFERING SUSTAINABLE EXPL ANATION REGARDING ADDITIONS MADE BY LD. AO AND DID NOT ACT IN A BONA FIDE MANNER, CONFIRMED THE PENALTY BY RELYING UPON THE DECISION OF HONBLE DELHI HIGH COURT RENDERED IN CIT V/S ZOOM COMMUNICATIONS PRIVATE LTD. (327 ITR 5 10) WHEREIN IT WAS HELD THAT IF ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW BUT IS WHOLLY WITHOUT ANY BASIS AN D THE EXPLANATION OFFERED BY ASSESSEE WAS NOT FOUND TO BE BONA-FIDE, EXPLANATION-1 TO SEC. 271 (1) (C) WOULD COME INTO PLAY AND THE ASSESSEE WOULD BE LIABLE FOR PENALTY. AGGRIEVED BY AFORESAID ADJUDICATION, THE ASSESSEE I S UNDER FURTHER APPEAL BEFORE US. 6. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX, WE FIND THAT THE ASSESSEE WAS A CONSULTING DOCTOR WITH M/S FORTIS HOSPITALS L IMITED AND EARNED 4 ITA NO.4806/MUM/2018 DR. ANITA MOHAN ASSESSMENT YEAR-2012-13 PROFESSIONAL RECEIPTS OF RS.17.36 LACS AND CLAIMED EXPENDITURE OF RS.6.54 LACS WHICH WOULD WORK OUT TO BE APPROX. 38% OF PROF ESSIONAL RECEIPTS. THE LD. AO HAS MADE PARTIAL DISALLOWANCE TO THE EXTENT OF RS.3.52 LACS ONLY BUT ACCEPTED THE BALANCE EXPENDITURE AS CLAIMED BY THE ASSESSEE. THE AFORESAID ACTION ON THE PART OF LD. AO WOULD ESTABL ISH THAT THE ASSESSEE WAS CERTAINLY REQUIRED TO INCUR EXPENSES DURING THE COURSE OF HER PROFESSION. AS PER ASSESSEES SUBMISSIONS, THE ASSE SSEE WAS REQUIRED TO INCUR CERTAIN COSTS LIKE TRAVELLING EXPENSES AND EM PLOY AN ASSISTANT IN THE HOSPITAL FOR MAINTAINING DIARIES BESIDES FOOD COSTS FOR THE STAFF IN CASE OF LATE SITTINGS. KEEPING IN VIEW ASSESSEES PROFESSIO N, WE ARE CONVINCED WITH THESE ARGUMENTS. THEREFORE, THE MERE FACT THAT THE ASSESSEE ACCEPTED DISALLOWANCE OF CERTAIN EXPENDITURE WOULD NOT JUSTI FY THE LEVY OF PENALTY MERELY ON THE GROUND THAT THE ASSESSEE WAS NOT RUNN ING AN INDEPENDENT CLINIC BUT WORKING AS CONSULTING DOCTOR TO A HOSPIT AL. IT IS PERTINENT TO NOTE THAT RECEIPTS WERE IN THE NATURE OF PROFESSIONAL IN COME WHICH IS EVIDENT FROM THE FACT THAT RECEIPTS WERE SUBJECTED TO TDS U /S 194J. FURTHER, THESE RECEIPTS WERE ALSO ACCEPTED TO BE ASSESSABLE UNDER THE HEAD PROFIT & GAINS OF BUSINESS / PROFESSION. THE ASSESSEE WAS CERTAINLY REQUIRED TO INCUR EXPENDITURE DURING THE COURSE OF HER PROFESSION AND THEREFORE, MERE ACCEPTANCE OF CERTAIN DISALLOWANCE, IN OUR CONSIDER ED OPINION, WOULD NOT MAKE ASSESSEE LIABLE FOR IMPUGNED PENALTY, KEEPING IN VIEW HER BACKGROUND. IT IS TRITE LAW THAT THE IMPOSITION OF PENALTY IS NOT AUTOMATIC AND EVERY ADDITION WOULD NOT NECESSARILY RESULT INTO IM POSITION OF PENALTY. THEREFORE, THE FACTS AND CIRCUMSTANCES DO NOT CONVI NCE US TO CONFIRM THE 5 ITA NO.4806/MUM/2018 DR. ANITA MOHAN ASSESSMENT YEAR-2012-13 PENALTY AGAINST THE ASSESSEE. BY DELETING THE SAME, WE ALLOW ASSESSEES APPEAL. 7. THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DECEMBER, 2019. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 17/12/2019 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#() , ) , / DR, ITAT, MUMBAI 6. '+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.