DCIT, Dehradun V. Ms. Reena Verma Mittal, Dehradun

ITA 5727/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3454 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 12-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Salary income; Revised return
• Section: 143(3); 142(1); 90

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NOS.:- 5726, 5727/DEL /2015 ASSESSMENT YEARS: 2011-12, 2012-13 DCIT CIRCLE-2, 13A-SUBHASH ROAD, DEHRADUN 248001 VS. REENA VERMA MITTAL 170-A, RAJPUR ROAD, DEHRADUN PAN AKCPM1369E (APPELLANT) (RESPONDENT) O R D E R PER AMIT SHUKLA, J.M. THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST SEPARATE IMPUGNED ORDER OF EVEN DATE, 14.8.2015, PAS SED BY LD. CIT(APPEAL), DEHRADUN IN RELATION TO THE PENALTY PROC EEDINGS U/S 271(1)(C) FOR THE ASSESSMENT YEARS 2011-12, 2012-13. IN BOTH THE APPEALS ASSESSEE IS AGGRIEVED BY LEVY OF PENALTY OF RS. 16,50,000/- AND RS. 11,00,000/- FOR THE ASSESSMENT YEARS 2011-12 AND 2012-13 RESPECTIVELY. SINCE THE ISSUES INVOLVED IN BOTH THE AP PEALS ARE COMMON DEPARTMENT BY: SHRI ATIQ AHMOD, SR.DR ASSESSEE BY : SHRI ANUBHAV JAIN, ADVOCATE DATE OF HEARING 02/11/2017 DATE OF PRONOUNCEMENT 10/11/2017 ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 2 ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE, THEY WE RE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. WE WILL FIRST TAKE UP THE APPEAL FOR THE ASSESSM ENT YEAR 2011- 12. THE BRIEF FACTS QUA THE ISSUE OF LEVY OF PENALTY ARE THAT ASSESSEE IS AN INDIAN BORN AND WAS HAVING CITIZENSHIP OF USA UP TILL ASSESSMENT YEAR 2010-11. FROM THE ASSESSMENT YEAR 2011-12, ASSES SEE HAD SHIFTED TO DELHI. SHE FILED HER RETURN OF INCOME FOR TH E ASSESSMENT YEAR 2011-12 ON 30 TH JULY, 2011 IN INDIA IN THE STATUS OF RESIDENT BUT NOT ORDINARY RESIDENT, DECLARING INCOME FROM SALARY AND OTHER SOURCES (BANK INTEREST). FOR THE YEAR UNDER CONSIDERATION, THE A SSESSEE RECEIVED SALARY INCOME FROM TWO DIFFERENT EMPLOYERS NAMELY:- I. CREDIT SIGHTS INTERNATIONAL MANAGEMENT: USD 4,12,4 66 II. CREDIT SIGHTS ASIA RESEARCH PVT. LTD.: RS. 5 8,42,800 3. THE SALARY INCOME WAS SUBJECTED TO TDS BOTH IN IN DIA AS WELL AS IN USA AS PER THE PREVAILING LAW OF THE RESPECTIVE CO UNTRIES. THE SAID RETURN WAS PREPARED BY PROFESSIONAL CHARTERED ACCOUN TANTS IN DELHI WHEREIN RELIEF OF SALARY INCOME ON TAXES PAID IN US A WAS CLAIMED AT RS. 63,28,940/- U/S 90 OF THE ACT AND ACCORDINGLY, T OTAL INCOME WAS DECLARED AT RS. 2,69,63,960/-. LATER ON THE ASSESSEE W AS SERVED WITH NOTICE U/S 143(2), DATED 7.8.2012 BY THE AO FOR SCRU TINISING THE RETURN OF INCOME. IN ORDER TO REPRESENT HER CASE BEFOR E THE A.O. SHE ENGAGED ANOTHER PROFESSIONAL FIRM OF CHARTERED ACCOUN TS AT DEHRADUN AS SHE WAS RESIDING IN DEHRADUN. THE NEW CONSULTANTS AFTER VERIFYING THE INFORMATION AND DOCUMENTS FURNISHED BY THE ASSESSEE , REALISED THAT THERE WERE CERTAIN CALCULATION ERRORS WHICH HAD O CCURRED WHILE COMPUTING TOTAL INCOME AND ADVISED THE ASSESSEE TO FILE REVISED RETURN OF INCOME. ACCORDINGLY, THE REVISED RETURN WAS FILED ON 30.12.2012, WHEREBY THE CLAIM OF RELIEF U/S 90 WAS REDUCED TO RS. 55,05,227/-; AND AGAIN THE SECOND REVISED RETURN WAS FILED ON 22. 3.2013 BY FURTHER ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 3 REDUCING THE RELIEF U/S 90 TO RS. 47,27,799/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 31.12.2013, WH EREBY THE SECOND REVISED RETURN WAS ACCEPTED BY THE AO AND ON LY ADDITION OF RS. 1,23,100/- WAS MADE ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. 4. THE A.O. HOWEVER INITIATED THE PENALTY PROC EEDINGS U/S 271(1)(C) ON THE EXCESS RELIEF CLAIMED IN THE ORIGIN AL RETURN OF INCOME, ON THE GROUND THAT ASSESSEE HAS NOT REVISED THE RETURN VOLUNTARILY OR HAS NOT CORRECTED HER MISTAKE BY HERSELF BUT ONLY WHE N NOTICE U/S 143(2) WAS ISSUED BY THE DEPARTMENT THAT THE ASSESSEE CAME TO KNOW THAT EXCESS RELIEF U/S 90 HAS BEEN CLAIMED WHICH HAS BEEN DEDUCTED BY THE DEPARTMENT. THE ASSESSEES CASE WAS SELECTED FO R SCRUTINY UNDER CASS ONLY FOR EXAMINING THE GENUINENESS OF THE RELIEF U/S 90 CLAIMED BY THE ASSESSEE. THUS, A.O. WAS OF THE VIEW THAT SUCH A REVISED RETURN HAS BEEN FILED ONLY IT WAS DISCOVERED BY THE DEPARTMENT. 5. BEFORE THE A.O AS WELL AS BEFORE THE LD. CIT (APP EALS) THE ASSESSEES SUBMISSION WAS THAT IN THE NOTICE U/S 143( 2), NO QUERY OR QUESTIONNAIRE WHATSOEVER WAS RAISED AND ONLY TIME THE A.O. ASKED TO JUSTIFY THE REVISED RETURN WAS VIDE NOTICE DATED 18.12 .2013 ISSUED U/S 142(1) WHICH WAS MUCH AFTER THE ASSESSEE HAD FILED HE R SECOND REVISED RETURN OF INCOME. IT WAS SUBMITTED THAT THE MISTAKE WAS ON ACCOUNT OF FOREIGN EXCHANGE RATE TAKEN FOR CONVERSION OF US DOL LAR INTO INDIAN RUPEES AND ALSO BY MISTAKE THE EARLIER CHARTERED ACCO UNTANT HAD INCLUDED THE CREDIT FOR SOCIAL SECURITY TAX AND MEDICA RE TAX PAID IN USA WHILE CLAIMING RELIEF U/S 90. THE A.O. HAS DULY ACCEPTED THE SAID REVISED RETURN IN THE ORDER PASSED U/S 143(3) AND THE REFORE, IT WAS NOT A CASE THAT ASSESSEE HAD FILED REVISED RETURN ONLY AFT ER SHE WAS CONFRONTED OR CORNERED BY THE A.O. THE ASSESSEES DETA ILED SUBMISSION IN THIS REGARD HAS BEEN INCORPORATED BY THE CIT (A) AT PAGES 5 TO 7 OF ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 4 THE APPELLATE ORDER. THE LD. CIT (A) AFTER CONSIDERI NG THE ASSESSEES EXPLANATION AND MATERIAL ON RECORD, DELETED THE SAID PENALTY AFTER OBSERVING AND HOLDING AS UNDER:- THE FINDINGS OF LD.AO AND THE AVERMENTS OF THE LD. AR HAVE BEEN CONSIDERED. IT IS SEEN THAT THE TAX CONSULTANT AT D ELHI (HIS CERTIFICATE HAS BEEN FILED NOW AS IT WAS ALSO FILED BEFORE THE LD.AO WOULD HAVE PREPARED THE STATEMENT OF INCOME AND FIL ED THE RETURN ELECTRONICALLY SINCE THE APPELLANT IS NOW ADMITTEDL Y BASED IN DELHI. THEREAFTER, IT CAN BE UNDERSTOOD THAT ON REC EIVING NOTICE FOR SCRUTINY OF THE CASE, ANOTHER CONSULTANT WAS ENGAGE D AT DEHRADUN WHO APPARENTLY POINTED OUT THE ERROR AND E NSURED REVISED COMPUTATIONS OF INCOME BEING FILED. WHILE T HE LD.AO HAS MENTIONED THAT AS PER CASS THE CASE WAS SELECTED FO R SCRUTINY FOR DETERMINING THE CLAIM U/S 90 OF THE ACT, IT IS NOT IN EVIDENCE THAT DUE TO CONSTANT PRESSURE FROM THE LD. AO AT THE ASS ESSMENT STAGE ONLY THAT THE APPELLANT REVISED HER INCOME. THE FAC TS AND CIRCUMSTANCES SPELT OUT IN THIS CASE WOULD EASILY P ERSUADE ONE TO BELIEVE THAT A GENUINE MISTAKE OCCURRED IN COMPUTIN G INCOME WHICH WAS DISCOVERED UNFORTUNA1ELY, ONLY AFTER RECE IPT OF NOTICE FOR SCRUTINY BUT NONETHELESS EFFORTS ARE SEEN TO HA VE BEEN MADE TO SET RIGHT THE ERROR. ON THIS ISSUE, THE CASE OF PRI CE WATERHOUSE COOPERS (P) LTD (SUPRA) IS ALMOST IDENTICAL ON FACT S AND WOULD COME TO THIS APPELLANT'S RESCUE TO THE EXTENT THAT RELIEF IS DUE ON AMOUNTS ATTRIBUTABLE TO THE ERROR IN CALCULATING RE LIEF U/S 90 OF THE ACT AND ON ACCOUNT OF FOREIGN EXCHANGE CONVERSION. HOWEVER, THE RELIEF NEEDS TO BE HAVE REDUCED BY RS. 1,23,100 (UN DISCLOSED CREDITS IN BANK) FOR WORKING OUT THE LEVIABLE PENAL TY. THE LD.AO IS DIRECTED ACCORDINGLY. 5.3 HOWEVER, IT MAY BE REITERATED THAT REGARDING TH E AMOUNT OF RS. 1,23,100 THE PENALTY IS UPHELD SINCE THIS IS A CASE OF CONCEALMENT OF INCOME WHICH WAS DISCOVERED BY THE L D. A.O. AT THE ASSESSMENT STAGE. HERE IT IS PERTINENT TO MENTI ON THAT THIS AMOUNT WAS APPARENTLY NOT OFFERED SUO MOTO AND THUS A DISTINCTION NEEDS TO BE MADE BETWEEN A POSSIBLE OVE RSIGHT AND GENUINE CONCEALMENT AS IN THIS CASE. ACCORDINGLY TH E PENALTY IS UPHELD ON RS. 1,23,100/-. THE LD. A.O. IS DIRECTED ACCORDINGLY. ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 5 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS MATER IAL ON RECORD, WE FIND THAT THE A.O. HAS LEVIED THE PENALTY ON THE GROUND THAT THE ASSESSEE HAD CLAIMED EXCESS RELIEF U/S 90 IN THE ORI GINAL RETURN OF INCOME AND THE SAID RELIEF HAS BEEN REDUCED IN THE RE VISED RETURN OF INCOME ONLY WHEN THE ASSESSEE WAS CONFRONTED BY THE A .O. THAT SHE HAS DEDUCTED EXCESS CLAIM OF RELIEF U/S 90. AS DISCU SSED IN THE FOREGOING PARAGRAPHS, THE ORIGINAL RETURN OF INCOME W AS FILED ON 30.7.2011 AND THE SAID RETURN WAS SELECTED FOR SCRUT INY BY ISSUANCE OF NOTICE ON 7.8.2012 U/S 143(2). NOWHERE IT HAS BEEN S TATED OR BROUGHT ON RECORD EITHER IN ASSESSMENT ORDER OR IN THE PENALT Y ORDER THAT THE AO AFTER THE ISSUANCE OF SAID NOTICE U/S 143(2) AND BE FORE FILING OF REVISED RETURNS OR ANY TIME BETWEEN THIS PERIOD, THE A SSESSEE WAS CONFRONTED WITH ANY QUERY ON ACCOUNT OF EXCESS RELIEF; OR ASSESSEE WAS CORNERED ON THIS ISSUE DURING THE ASSESSMENT PROCEEDI NGS FORCING THE ASSESSEE TO REVISED HER RETURN. THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 30.10.2012 AND AGAIN ON 22.3.2013 AP PEARS TO BE PURELY VOLUNTARY AND BY OWN VOLITION, BECAUSE NOTHING HAS BEEN ASKED FROM THE ASSESSEE REGARDING THE RELIEF COMPUTED U/S 90 . IT WAS NEW CONSULTANTS ENGAGED BY HER WHO POINTED THAT THE MISTAKE I N CALCULATION OF RELIEF. THE ASSESSEE HAD EXPLAINED TH AT THE MISTAKE WAS DUE TO; FIRSTLY , INCORRECT RATE OF EXCHANGE FOR CONVERSION OF USD TO INR WHILE CALCULATING THE SALARY; AND SECONDLY, RELIEF WAS INCORRECTLY SOUGHT FOR SOCIAL SECURITY TAX AND MEDICARE TAXES PAID IN USA BY EARLIER CA, WHICH LATER ON WAS REALISED THAT SUCH TAXES PAID IN USA CANNOT BE SOUGHT AS RELIEF U/S 90. THE ASSESSEE AT THE TIME OF ORIGINAL RETURN HAD FILED ALL THESE DETAILS AND CLAIMED THE RELI EF AS PER THE PROFESSIONAL ADVICE GIVEN BY A CHARTERED ACCOUNTANT. LATER ON, AFTER THE RECEIPT OF SCRUTINY NOTICES U/S 143(2) AND WITHOUT THEIR BEING ANY QUERY OR DETECTION BY THE AO, ANOTHER CONSULTANT ENGAGED FOR ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 6 CONDUCTING THE MATTERS BEFORE THE AO ADVISED THE ASSESS EE TO FILE THE REVISED RETURN TO CORRECT MISTAKES. SUCH A FILING OF RE VISED RETURN IS ABSOLUTELY VOLUNTARILY AND WITHOUT ANY DETECTION BY TH E AO. AT LEAST NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO THAT PRIO R TO FILING OF THE REVISED RETURN OF INCOME, THE ASSESSEE WAS CONFRON TED WITH THE QUERY FOR CLAIMING EXCESS RELIEF. THUS, WE DO NOT F IND ANY INFIRMITY IN THE ORDER OF CIT (A) AND ACCORDINGLY, WE HOLD THAT L D. CIT (A) HAS RIGHTLY DELETED THE SAID PENALTY. 7. SIMILARLY IN THE ASSESSMENT YEAR 2012-13 ALSO, TH E PENALTY HAS BEEN LEVIED ON SIMILAR GROUND OF EXCESS RELIEF U/S 90. HEREIN IN THIS CASE THE ORIGINAL RETURN WAS FILED ON 11.12.2012 FOR THE ASSESSMENT YEAR 2012-13 AND THE NOTICE U/S 143(2) WAS ISSUED ON 12.08.2013 AND AFTER THE RECEIPT OF SUCH NOTICE ASSESSEE HAD FILED TH E REVISED RETURN ON 19.12.2013, WHEREBY THE ORIGINAL RETURN OF INCOME DE CLARED AT RS. 1,86,50,987/- WAS REVISED TO RS. 2,21,34,392/- AFTER REDUCING RELIEF U/S 90. HEREIN THIS YEAR ALSO THE RETURN WAS REVISED B Y TAKING THE CORRECT RATE OF EXCHANGE FOR CONVERSION OF USD AND TH E INR WHILE CALCULATING THE SALARY RELIEF U/S 90 AND BY EXCLUDIN G THE CREDIT OF SOCIAL SECURITY TAX AND MEDICARE TAX PAID IN USA WHIC H WAS CLAIMED AS A RELIEF U/S 90. HERE AGAIN PRIOR TO FILING OF R EVISED RETURN OF INCOME ON 19.12.2013, NO QUERY WAS RAISED TO THE ASSESSEE B Y THE AO QUA THE RELIEF SOUGHT U/S 90 AND THERE IS NO MATERIAL ON REC ORD TO INDICATE THAT THE AO HAD DETECTED OR HAS CONFRONTED THE ASSESSEE ON THIS ISSUE OF RELIEF U/S 90 PRIOR TO FILING OF REVISED RETURN OF IN COME. IN THIS YEAR TOO, THE LD. CIT (A) HAS FOLLOWED HIS FINDING GIVEN IN HI S ORDER FOR THE AY 2011-12 AS INCORPORATED ABOVE. THUS, WE HOLD THAT NO P ENALTY U/S ITA NOS. 5726,5727/DEL/2015 DCIT VS. REENA VERMA MITTAL 7 271(1)(C) IS LEVIABLE IN ASSESSMENT YEAR 2012-13 ALS O. ORDER OF THE LD. CIT (A) IS THUS, AFFIRMED. 8. IN THE RESULT BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER, 2017. SD/- SD/- (PRASHANT MAHARISHI) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10/11/2017 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI