G. Ashok Reddy, Hyderabad, Hyderabad V. ITO, Ward-4(1), Hyderabad, Hyderabad

ITA 564/HYD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6073 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Assessee Lawyers: S RAMA RAO
• Keywords: TDS
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC, HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO. 564/HYD/2017 ASSESSMENT YEAR: 2009-10 G.ASHOK REDDY, HYDERABAD [PAN: AEOPG8648C] VS THE INCOME TAX OFFICER, WARD-4(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI KIRAN KATTA, DR DATE OF HEARING : 17-09-2020 DATE OF PRONOUNCEMENT : 29-09-2020 O R D E R THIS IS ASSESSEES APPEAL FOR THE AY.2009-10, DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)1, HYDERABAD, DATED 29-12-2016, AGAINST CONFIRMATION OF PENALTY LEVIED BY THE ASSESSING OFFIC ER (AO) U/S.271(1)(C) OF THE INCOME TAX ACT [ACT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN IND IVIDUAL ENGAGED IN THE BUSINESS OF DISTRIBUTION OF AMWAY PRODU CTS, FILED HIS RETURN OF INCOME FOR THE AY.2009-10 ON 31- 08-2009, DECLARING INCOME OF RS.2,34,464/-. DURING THE ASSES SMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE AO MADE VARIOUS ADDITIONS, AGAINST WHICH THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE. ITA NO. 564/HYD/2017 :- 2 -: 2.1. AGAINST THE SAID ORDER OF CIT(A), THE ASSESSEE PR EFERRED FURTHER APPEAL BEFORE THE ITAT AND ITAT DELETED THE MAJ OR ADDITION OF RS.10 LAKHS AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.27,482/-, RS.1,54,172/- AND RS.1,52,596/ -. IN THE MEANTIME, THE AO HAS INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IN RESPECT OF INTEREST ON FDRS NO T DECLARED IN THE RETURN OF RS.10,862/-, GROSS RECEIPTS DECLARED LESS BY RS.1,75,052/- AND UN-EXPLAINED CASH CREDITS U/S.68 O F THE ACT OF RS.10 LAKHS TOTALLING TO RS.11,85,914/-. THE ASSESS EE SUBMITTED HIS EXPLANATION AND REQUESTED FOR DROPPING OF THE PENALTY PROCEEDINGS. HOWEVER, THE AO LEVIED THE PEN ALTY. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE CIT(A), WHO CONFIRMED THE ORDER OF AO AND THEREFORE, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE ITAT, RAISIN G THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BO TH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.4,68,519/-. 3. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THEE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE ASSESSING OFFICER DID NOT SPECIFY THE REASONS FOR I NITIATION OF PROCEEDINGS U/S.271(1)(C) OF THE I.T.ACT. 5. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 4. THE CASE IS TAKEN UP FOR HEARING ON 17-09-2020 THR OUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. ITA NO. 564/HYD/2017 :- 3 -: 5. AS REGARDS THE FIRST ADDITION WHICH HAS BEEN CONF IRMED BY THE TRIBUNAL I.E., INTEREST ON FDR OF RS.10,862/- N OT DECLARED IN THE RETURN OF INCOME OF THE ASSESSEE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT A SUM OF RS.10,000/- IS EXEMPT FROM TAX AND ONLY THE AMOUNT OF RS.862/- IS TO BE BROUGHT TO TAX AND THE ASSESSEE HAS NO T CONTESTED THE ISSUE DUE TO THE SMALLNESS OF THE AMOUNT. I T IS SUBMITTED THAT THERE IS NO FURNISHING OF INACCURATE PART ICULARS OR FAILURE OR CONCEALMENT OF INCOME BY THE ASSESSEE. 5.1. AS REGARDS THE VARIANCE IN GROSS RECEIPTS DECLAR ED BY THE ASSESSEE AS PER FORM-26AS, IT IS SUBMITTED THAT THE AMW AY PRODUCTS HAD CREDITED THE ASSESSEES ACCOUNT IN THE RE LEVANT P.Y. BUT MADE THE PAYMENT IN THE MONTHS OF JUNE AND JULY AFTER MAKING TDS AND THEREFORE THE ASSESSEE HAS OFFER ED THE INCOME IN THE SUBSEQUENT ASSESSMENT YEAR AND THERE I S NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS OF INCOME. 5.2. AS REGARDS THE ADDITION OF RS.10 LAKHS, IT IS SU BMITTED THAT THE TRIBUNAL HAS DELETED THIS ADDITION, THEREFORE NO PENALTY IS TO BE LEVIED ON THIS SUM. 6. LD.DR, HOWEVER, SUBMITTED THAT THE ASSESSEE HAS NOT DECLARED THE INCOME IN ITS RETURN OF INCOME AND IT IS ONLY DURING THE ASSESSMENT PROCEEDINGS THAT THE SAID INCOMES HAVE COME TO LIGHT AND THEREFORE, THERE IS CONCEALMENT OF INC OME AND FURNISHING OF INACCURATE PARTICULARS BY THE ASSESS EE AND THE PENALTY TO THE EXTENT OF THE SAID ADDITIONS CONFIRMED BY THE ITAT SHOULD BE CONFIRMED. ITA NO. 564/HYD/2017 :- 4 -: 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, I FIND THAT THE TRIBUNAL HAS DELETED THE ADDITIO NS OF RS.10 LAKHS AND THEREFORE, THE PENALTY ON THE SAID SU M IS NOT LEVIABLE. AS REGARDS THE OTHER TWO ADDITIONS ALSO, I A M CONVINCED THAT THERE IS NO FURNISHING OF INACCURATE PA RTICULARS OR CONCEALMENT OF INCOME. THE INTEREST ON FDR IS EXEM PT UPTO A SUM OF RS.10,000/- AND ONLY THE BALANCE OF RS.862/ - HAS NOT BEEN DECLARED IN THE RETURN WHICH ALONE CAN BE CON SIDERED FOR LEVY OF PENALTY. BUT DUE TO THE SMALLNESS OF THE A MOUNT, I DO NOT CONSIDER IT FIT TO CONFIRM THE PENALTY ON THIS AMO UNT. AS REGARDS THE DIFFERENCE IN GROSS RECEIPTS, I FIND TH AT THE ASSESSEE HAS PAID THE TAXES IN THE SUBSEQUENT YEAR AND THE VARIANCE IN THE COMMISSION DECLARED BY THE ASSESSEE A ND FORM-26AS IS ON ACCOUNT OF ENTRIES MADE BY THE PAYER A ND NOT THE ASSESSEE. THEREFORE, I AM CONVINCED THAT THE PENAL TY IS NOT SUSTAINABLE ON THIS ISSUE AS WELL. ACCORDINGLY, IT IS DELETED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2020 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 29-09-2020 TNMM ITA NO. 564/HYD/2017 :- 5 -: COPY TO : 1. SHRI G.ASHOK REDDY, 1-2-412/20 & 20/1, FLAT NO.3 02, RELIANCE JAYA TOWERS, DOMALGUDA, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-4(1), HYDERABAD. 3. CIT(APPEALS)-1, HYDERABAD. 4. PR.CIT-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.