DR. (LATE) S ASHOK REPRESENTED BY DR. ANISHA ASHOK LEGAL REPRESENTATIVE, CHENNAI V. ACIT NON CORP CIRCLE 1, CHENNAI

ITA 552/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1066 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 15-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN MS
• Keywords: Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.551 & 552/CHNY/2018 ( )( / ASSESSMENT YEARS : 2005-06 & 2006-07 DR. (LATE) S. ASHOK, REPRESENTED BY DR.ANISHA ASHOK, LEGAL REPRESENTATIVE, 121, G.N. CHETTY ROAD, T. NAGAR, CHENNAI - 600 017. PAN : AABPA 2448 M V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 1, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE -.+, / 0 / RESPONDENT BY : MS. S. VIJAYAPRABHA, JCIT 1 / 2% / DATE OF HEARING : 16.08.2018 3') / 2% / DATE OF PRONOUNCEMENT : 12.09.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, CHENNAI, DATED 15.09.2017, CONFIRMING THE PENALTY L EVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NOS.551 & 552/CHNY/18 2. THERE WAS A DELAY OF 46 DAYS IN FILING BOTH THE APPEALS BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FO R CONDONATION OF DELAY. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESS EE AND THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR N OT FILING THE APPEALS BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT BOTH THE APPEALS. 3. SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSEE IS A MEDICAL PROFESSION AL. THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF THE SALARY PAID TO HIS WIFE DR. RANI ASHOK, WHO IS ALSO A QUALIFIED MEDICAL PRO FESSIONAL. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESS EES WIFE DR. RANI ASHOK HAS NOT ATTENDED ANY PATIENT DUE TO DEPR ESSION. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE PAYMEN T OF SALARY TO DR. RANI ASHOK WAS DISALLOWED. IN FACT, THE ASSESS EE PAID TAXES AND HAS NOT CHALLENGED THE ADDITION MADE BY THE ASS ESSING OFFICER. THE LD.COUNSEL SUBMITTED THAT AN AMOUNT OF 7,93,845/- WAS FOUND DURING THE COURSE OF SEARCH OPERATION. IN FACT, TH IS AMOUNT OF 7,93,845/- BELONGS TO M/S GARUDA OVERSEAS (P) LTD., A COMPANY MANAGED BY DR. RANI ASHOK. ACCORDING TO THE LD. CO UNSEL, THE 3 I.T.A. NOS.551 & 552/CHNY/18 COMPANY M/S GARUDA OVERSEAS (P) LTD. HAS OFFERED TH IS AMOUNT FOR TAXATION, THEREFORE, IT IS NOT A CASE FOR LEVY OF P ENALTY. 4. ON THE CONTRARY, MS. S. VIJAYAPRABHA, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT ON EXAMINATION, DR. RANI ASHOK MADE A CATEGORICAL STATEMENT BEFORE THE AUTHORITY T HAT DUE TO DEPRESSION, SHE HAD NOT ATTENDED THE PATIENTS. ON A QUERY FROM THE BENCH, WHEN DR. RANI ASHOK WAS UNDER DEPRESSION, HO W A STATEMENT WAS RECORDED FROM HER AND HOW THAT STATEM ENT WAS RELIED UPON BY THE ASSESSING OFFICER FOR LEVYING PENALTY? THE LD. D.R. COULD NOT GIVE ANY EXPLANATION. ACCORDING TO THE L D. D.R., SINCE DR. RANI ASHOK COULD NOT ATTEND ANY PATIENT, THE SALARY PAID BY THE ASSESSEE IS A BOGUS CLAIM MADE BY HIM. MOREOVER, A CCORDING TO THE LD. D.R., A SUM OF 7,93,845/- WAS ALSO FOUND DURING THE COURSE OF SEARCH OPERATION. THE ASSESSEE CLAIMED THAT THE MONEY BELONGED TO M/S GARUDA OVERSEAS (P.) LTD., WHICH IS AN AFTERTHOUGHT. THEREFORE, ACCORDING TO THE LD. D.R. , THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE PENALTY LEVI ED BY THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS 4 I.T.A. NOS.551 & 552/CHNY/18 A MEDICAL PROFESSIONAL. HIS WIFE DR. RANI ASHOK IS ALSO ADMITTEDLY A QUALIFIED MEDICAL PROFESSIONAL. THE CLAIM OF THE R EVENUE IS THAT DR. RANI ASHOK DID NOT ATTEND THE PATIENTS FOR SEVERAL YEARS DUE TO DEPRESSION. THE ASSESSEE ADMITTEDLY PAID TAXES DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. THE QUESTION NOW ARISES FOR CONSIDERATION IS WHETHER THE ASSESSEE CONCEALED ANY PART OF INCOME OR FURNISHED ANY INACCURATE PARTICULARS OF I NCOME? THE FACT THAT THE PAYMENT WAS MADE TO DR. RANI ASHOK IS NOT DISPUTED. THE CLAIM OF REVENUE IS THAT DR. RANI ASHOK HAS NOT ATT ENDED ANY PATIENT. SINCE THE PAYMENT WAS NOT DISPUTED BY THE REVENUE AND DR. RANI ASHOK ADMITTEDLY A MEDICAL PROFESSIONAL, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT CANNOT BE SAID TO BE A CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 6. MERE PAYMENT OF TAXES DURING THE ASSESSMENT PROC EEDINGS CANNOT BE A REASON TO LEVY PENALTY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT PENALTY PROCEEDING IS DIFFE RENT FROM ASSESSMENT PROCEEDING. MERELY BECAUSE AN ADDITION WAS MADE IN THE ASSESSMENT PROCEEDINGS THAT WILL NOT AUTOMATICA LLY LEAD TO LEVY OF PENALTY. THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT THE ASSESSING OFFICER IS BOUND TO RE-EXAMINE THE MATERI AL AVAILABLE ON 5 I.T.A. NOS.551 & 552/CHNY/18 RECORD IN THE PENALTY PROCEEDING AND DECIDE THE CAS E ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SO LONG AS THE PAYMENT IS NOT IN DISPU TE AND THE QUALIFICATION OF DR. RANI ASHOK IS NOT IN DISPUTE, THE PAYMENT SAID TO BE MADE TO DR. RANI ASHOK CANNOT BE A REASON TO LEV Y PENALTY. MOREOVER, 7,93,845/- WAS OFFERED IN THE CASE OF M/S GARUDA OVERSEAS (P.) LTD. THEREFORE, THERE WAS NO SUFFICI ENT CAUSE FOR LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CA SE FOR LEVY OF PENALTY. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHO RITIES BELOW ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING O FFICER FOR BOTH THE ASSESSMENT YEARS IS DELETED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 12 TH SEPTEMBER, 2018. 6 I.T.A. NOS.551 & 552/CHNY/18 KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT-1, CHENNAI 5. 7: -2 /DR 6. ( ; /GF.