Nirmal Singh, New Delhi V. ITO, New Delhi

ITA 5519/DEL/2011

• Counselvise Citation: 551920114 RSA 2011
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 08-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIR S NEGI
• Assessee Lawyers: HARBHAJAN SINGH
• Keywords: Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 5519(DEL)/2011 ASSESSMENT YEAR: 2006-07 SHRI NIRMAL SINGH, INC OME-TAX OFFICER, C-9/9011, VASANT KUNJ, VS. WARD 44( 2), NEW DELHI. NEW DELHI-70. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI HARBHAJAN SINGH , FCA RESPONDENT BY: SHRIR.S. NEGI, SR. DR DATE OF H EARING: 08.02.2012 DATE OF P RONOUNCEMENT: 17.02.2012 ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN UP 11 GROUNDS IN THIS APP EAL. HOWEVER, IN THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL F OR THE ASSESSEE EXPLAINED THAT GROUND NO. 2 IS THE EFFECTIVE GROUND AND OT HER GROUNDS ARE IN AID OF THIS GROUND. THE GROUND IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN UPHOLDING THE PENALTY OF RS. 50,760/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 1.1 THE FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED THE RETURN ON 17.07.2006 DECLARING TOTAL INCOME OF RS. 4,13,82 5/-. PROCEEDINGS WERE ITA NO. 5519(DEL)/2011 2 INITIATED BY ISSUING NOTICE U/S 143(2). A QUEST IONNAIRE WAS ALSO ISSUED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSE SSEE REVISED THE RETURN ON 10.03.2008 DECLARING TOTAL INCOME OF RS. 5,76,697 /-. THE REVISION WAS MADE ON ACCOUNT OF INTEREST, WHICH WAS STATED TO BE INADVERTENTLY NOT INCLUDED IN THE ORIGINAL RETURN. THE ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS. 5,79,697/-. IN THIS RETURN, ADDITI ON OF RS. 3,000/- WAS MADE IN RESPECT OF INTEREST INCOME ACCRUING FROM THE P OST OFFICE. IT IS MENTIONED THAT THE INTEREST ACCRUED FOR 9 MONTHS BUT THE ASSESSEE HAS INCLUDED INTEREST FOR EIGHT MONTHS ONLY. THIS ADDITION H AS BEEN ACCEPTED BY THE ASSESSEE. PENALTY PROCEEDINGS WERE ALSO INITIATED BY RECORDING THE SATISFACTION THAT THE REVISED RETURN WAS FILED A FTER ISSUANCE OF NOTICE U/S 143(2). 1.2 THE PENALTY PROCEEDINGS WERE COMPLETED ON 29. 09.2008 BY LEVYING THE PENALTY OF RS. 50,760/-, BEING THE MINIMUM P ENALTY LEVIABLE UNDER THE PROVISION. IT WAS SUBMITTED BEFORE HIM THAT THE ASSESSEE IS A RETIRED EMPLOYEE OF IFFCO. HE HAS BEEN PAYING INCOME-TA X FROM YEAR TO YEAR. THE ASSESSEE HAD FILED THE RETURN DECLARING TOTA L INCOME OF RS. 5,76,697/-. HE HAS BEEN ASSESSED AT RS. 5,79,697/-. THUS, THERE IS NO CONCEALMENT OF INCOME PRIMARILY BECAUSE THE REVISED RETURN WAS FILED VOLUNTARILY. NOT ITA NO. 5519(DEL)/2011 3 SATISFIED WITH THE EXPLANATION, ANOTHER SHOW CAU SE NOTICE WAS ISSUED ON 29.08.2008. IT WAS SUBMITTED THAT THE REVISED RETURN WAS FILED WITHIN THE PERMISSIBLE TIME AND IT WAS FILED VOLUNTARILY. TH E AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE. IT IS MENTIONED THA T THE RETURN WAS REVISED AFTER ISSUANCE OF QUESTIONNAIRE DATED 27.12.2007, IN WHICH THE ASSESSEE WAS REQUIRED TO FURNISH VARIOUS DETAILS INCLUDING THE DETAILS OF INTEREST RECEIVED FROM BANK ETC. THE REVISION WAS MADE ON 10.03.2008. THUS, THE REVISION IS NOT VOLUNTARY. EVEN AFTER SUCH REVISIO N, INTEREST WAS UNDER- REPORTED BY AN AMOUNT OF RS. 3,000/-. THE INTE REST PERTAINS TO MONTHLY INCOME SCHEME IN WHICH DEPOSITS ARE MADE WITH T HE POST OFFICE. THUS, IT WAS HELD THAT THE ASSESSEE CONCEALED INCOME. 1.3 A NUMBER OF ARGUMENTS WERE TAKEN BEFORE THE LD. CIT(APPEALS), I.E., NO SATISFACTION HAS BEEN RECORDED BY THE AO, THE RETURN HAS BEEN FILED VOLUNTARILY, THERE IS NO CONSCIOUS BREACH OF LAW. PENALTY CANNOT BE LEVIED ON THE BASIS OF ASSESSMENT ORDER WHICH HAS NO F OUNDATION AND IN ANY CASE PENALTY CANNOT BE LEVIED IN RESPECT OF AMOUNT OF RS. 3,000/-, THE ADDITION FOR WHICH WAS MADE BY THE AO TO THE INCOM E SHOWN IN THE REVISED RETURN. IT WAS FURTHER SUBMITTED THAT THE ORD ER OF PROCESSING THE RETURN WAS MADE ON 31.03.2008, I.E., AFTER COMPLETION OF REGULAR ASSESSMENT. THE ITA NO. 5519(DEL)/2011 4 LD. CIT(APPEALS) REJECTED THESE ARGUMENTS AND DISMISSED THE APPEAL. IN PARTICULAR, IT HAS BEEN MENTIONED THAT THE SATISFA CTION IS DISCERNIBLE FROM THE ASSESSMENT ORDER, WHICH IS THE ONLY REQUIREMENT I N VIEW OF THE DECISION IN THE CASE OF MADHUSHREE GUPTA VS. UNION OF INDI A, (2009) 317 ITR 107 (DEL). THE PLEA OF VOLUNTARY REVISION OF RETURN WAS NOT ACCEPTED BY RELYING ON THE DECISION IN THE CASE OF ACIT, FAR IDABAD VS. NEW CHEM LTD., 2010-TIOL-401-ITAT-DEL, IN WHICH IT WAS HEL D THAT THE INCOME WAS REVISED UNDER COMPULSION AS THE ENQUIRIES HAD BEE N MADE BY THE AO. THE PLEA REGARDING LACK OF MENS REA WAS ALSO REJEC TED AS THE FACTS SHOWED THE CONDUCT OF THE ASSESSEE TO THE CONTRARY. T HE ARGUMENT REGARDING LACK OF FOUNDATION WAS ALSO REJECTED BY MENTIONI NG THAT THE LACK OF JURISDICTION TO MAKE ASSESSMENT U/S 143(3) WAS NEVER CHALLENGED BY THE ASSESSEE. THE PLEA REGARDING SUBSEQUENT PASSING OF THE ORDER OF PROCESSING THE RETURN WAS ALSO REJECTED BY MENTIONING THAT TH E REVISED RETURN WAS PROCESSED ON THIS DATE, WHILE THE ASSESSMENT HAS B EEN MADE BY TAKING EVEN THE ORIGINAL RETURN INTO ACCOUNT. RELIANCE HAS BE EN PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS . ZOOM COMMUNICATIONS LTD., 191 TAXMAN 179 (DEL). ITA NO. 5519(DEL)/2011 5 1.4 IT MAY ALSO BE MENTIONED AT THIS STAGE THAT THE DEMAND WAS STAYED BY AN INTERIM ORDER PASSED ON 06.01.2012. THIS I NTERIM ORDER CEASES TO HAVE ANY FORCE ON PASSING THIS ORDER ON THE AP PEAL OF THE ASSESSEE. 2. THE LD. COUNSEL REITERATED VARIOUS PLEAS TAKEN BEFORE THE LD. CIT(APPEALS). IT WAS ALSO SUBMITTED THAT THE A SSESSEE HAS BEEN DISCLOSING INTEREST INCOME IN PAST AND HAS DISCLOSED SUCH INCOME IN FUTURE ALSO. HE RECEIVED RETIREMENT BENEFITS IN THIS YEAR AND THE MONEY WAS DEPOSITED IN A SEPARATE BANK ACCOUNT. THE INTEREST EARNED FROM SUCH DEPOSIT WAS NOT INADVERTENTLY SHOWN IN THE ORIGINAL RETURN OF INC OME. THIS OCCURRED DUE TO LAPSE OF MEMORY. THUS, THE EXPLANATION OF THE ASSESSEE SHOULD BE TAKEN TO BE BONA FIDE WHEN EXAMINED IN THE CONTEXT OF SURROUNDING CIRCUMSTANCES. 2.1 IN REPLY, THE LD. SENIOR DR RELIED ON THE C ONCURRENT FINDINGS OF THE AUTHORITIES BELOW. IN PARTICULAR, IT IS MENTIONE D THAT THE REVISED RETURN WAS FILED AFTER ISSUANCE OF QUESTIONNAIRE IN WHICH DE TAILS OF INVESTMENTS AND EARNINGS THEREON WERE REQUISITIONED. THEREFORE, THE CASE SQUARELY FALLS WITHIN THE RATIO OF ZOOM COMMUNICATIONS LTD. (SU PRA). ITA NO. 5519(DEL)/2011 6 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. BEFORE PROCEEDING WITH THE MERITS OF THE CASE, IT MAY BE MENTIONED THAT THE AO HAS RECORDED HIS SATISFACTIO N WHEN IT WAS MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESS EE FILED REVISED RETURN ONLY AFTER ISSUANCE OF NOTICE U/S 143(2). WE A LSO FIND AS A MATTER OF FACT THAT THE RETURN WAS REVISED AFTER THE QUEST IONNAIRE HAD BEEN RECEIVED BY THE ASSESSEE. IN THE CASE OF UNION OF INDIA V S. DHARMENDRA TEXTILE PROCESSORS LTD., (2008) 306 ITR 277 (S.C), IT HA S BEEN HELD THAT MENS REA IS NOT ESSENTIAL INGREDIENT FOR DECIDING PENALT Y MATTERS UNDER THE ACT. WHAT IS MATERIAL IS TO EXAMINE THE FACTS OF THE CASE IN THE LIGHT OF STATUTORY LANGUAGE AND EXPLANATION APPENDED THER ETO. WE ARE ALSO NOT IMPRESSED BY THE PLEA REGARDING INVALIDITY OF THE ASSESSMENT AS SUCH A PLEA HAS NEVER BEEN TAKEN IN ASSESSMENT PROCE EDINGS. IN FACT, THE ASSESSEE HAS ACCEPTED THE ASSESSMENT ORDER DATED 20.03.2008. THIS LEAVES US WITH THE EXPLANATION OF THE ASSESSEE THAT OMISSION TO RETURN CORRECT INTEREST INCOME WAS DUE TO INADVERTENCE A S THE NEW ACCOUNT OPENED FOR DEPOSITING RETIREMENT BENEFITS COULD NOT BE TAKEN INTO ACCOUNT DUE TO LAPSE OF MEMORY. IN THE CASE OF ZOOM CO MMUNICATIONS LTD.(SUPRA), THE JURISDICTIONAL HIGH COURT HAS H ELD THAT THE PLEA OF INADVERTENCE CANNOT BE ACCEPTED WITHOUT ANY AT TENDANT EVIDENCE. THUS, ITA NO. 5519(DEL)/2011 7 SUCH A PLEA HAS TO BE EXAMINED AND AN APPROPRI ATE CONCLUSION HAS TO BE DRAWN. THE FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A RETIRED PERSON. HE HAS BEEN REGULARLY ASSESSED TO TAX AND CHARGE OF CONCEALMENT OF INCOME HAS NEVER BEEN RAISED AGAINST HIM. THE RETIREMENT BENEFITS WERE DEPOSITED IN A DIFFERENT ACCOUNT ON WHICH INCOME ACCRUED FR OM MONTH TO MONTH. HE FORGOT TO INCLUDE SUCH INCOME AS IN PAST NO SUCH A CCOUNT WAS THERE. LOOKING TO THESE FACTS, WE ARE OF THE VIEW THAT SUCH OMISSIONS MAY TAKE PLACE BY A RETIRED PERSON DUE TO LAPSE OF MEM ORY. IN SUCH CIRCUMSTANCES, THE EXPLANATION IS HELD TO BE BONA FIDE. THEREF ORE, THE LEVY OF PENALTY IS CANCELLED. 4. IN THE RESULT, THE APPEAL IS ALLOWED. SD/- SD/- (RAJPAL YADAV) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER 17/02/2012. SP SATIA COPY OF THE ORDER FORWARDED TO:- MR. NIRMAL SINGH, VASANT KUNJ, NEW DELHI. ITO, WARD 44(2), NEW DELHI. CIT(A) CIT, ITA NO. 5519(DEL)/2011 8 THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.