Wiliam Wadhwa, New Delhi V. ACIT, New Delhi

ITA 6060/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3955 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 09-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief; Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-6060/DEL/2015 ( ASSESSMENT YEAR: 2008-09) WILLIAM WADHWA D-48, PANCHSHEEL ENCLAVE NEW DELHI AAAPW4710B VS ACIT CIRCLE 23(1) NEW DELHI ASSESSEE BY MS. RANO JAIN, ADV. REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS CHALLENGING THE ORDE R DATED 25- 7-2013 IN APPEAL NO. 215/2013-14 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-10, NEW DELHI (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLO WING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE OR DER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A )] CONFIRMING THE PENALTY OF RS. 1,31,450/- LEVIED UNDER SECTION 271(1)(C) BY THE AO, IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE PE NALTY U/S DATE OF HEARING 19.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 6060/DEL/2015 271(1)(C ) AMOUNTING TO RS. 1,31,450/- LEVIED BY TH E AO ON ACCOUNT OF REMITTANCE FROM US. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE PE NALTY REJECTING THE CONTENTION OF THE ASSESSEE THAT THE NON-INCLUSI ON OF SAID AMOUNT IN THE INCOME WAS ON ACCOUNT OF BONAFIDE BELIEF OF THE ASSESSEE AS SHE WAS A NON-RESIDENT IN EARLIER YEAR, AS SUCH THE SAID AMOUNT WAS NOT TAXABLE IN THOSE YEARS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE PENALTY DESPITE THE FACT TH AT THERE IS NEITHER CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULAR S OF INCOME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING PENALT Y U/S 271(1)(C ) AMOUNTING TO RS. 1,31,450/- DESPITE THE FACT THAT T HE OMISSION TO INCLUDE THE AMOUNT OF REMITTANCE WAS A BONAFIDE MIS TAKE ON THE PART OF THE ASSESSEE WITHOUT THERE BEING ANY DELIBE RATE INTENTION TO FURNISH INACCURATE PARTICULARS. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING PENALTY U/S 271(1)(C ) AS NO FI NDING HAS BEEN GIVEN ON MERIT REGARDING CONCEALMENT IN THE ORDER P ASSED BY THE AO. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN IGNORING THE FACT THAT PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND AS SUCH MERE ADDITION MADE IN ASSES SMENT DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS. 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY OF THE GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE WAS I N PROFESSION OF TEACHING STATISTICS AND ECONOMICS, AND WAS ALSO ASS OCIATED WITH A RENOWNED NGO PRATHAM IN INDIA, SHE WENT TO USA EV ERY YEAR TO TEACH IN UNIVERSITY OF CALIFORNIA AND WAS A NON-RES IDENT TILL THE YEAR 2002-03, AFTER WHICH SHE SHIFTED TO INDIA. TIL L SUCH TIME SHE WAS REGULARLY FILING HER RETURN OF INCOME IN USA AN D WAS DULY ASSESSED TO TAX. HOWEVER, AFTER COMING TO INDIA SHE WAS NOT 3 ITA NO. 6060/DEL/2015 AWARE OF HER INCOME WHICH NOW BECAME TAXABLE IN IND IA. FOR THE AY 2008-09 SHE FILED HER RETURN OF INCOME ON 15.10. 2008 DECLARING A TOTAL INCOME OF RS. 29,28,019/-. IT WAS PROCESSE D U/S 143(3)(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT CALLED AS TH E ACT), THEREAFTER ON RECEIVING THE INFORMATION THAT THE AS SESSEE RECEIVED FOREIGN REMITTANCE IN US DOLLARS FROM USA AND THE S AID AMOUNT WAS NOT DECLARED IN THE RETURN OF INCOME, AO REOPEN ED THE ASSESSMENT AND COMPLETED BY ORDER DATED 18.12.2012 DISALLOWING 50% OF OTHER EXPENSES TO A TUNE OF RS. 5,52,310/-. SIMULTANEOUSLY AO INITIATED PROCEEDINGS U/S 271(1)( C ) OF THE ACT AND CONCLUDED THEM BY ORDER DATED 26.06.2013 WITH T HE LEVY OF PENALTY OF RS. 1,31,454/-. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE LD. CIT (A) BY WAY OF IMPUGNED ORD ER HOLDING THAT SINCE THE ASSESSEE FAILED TO DISCHARGE HER DUT Y OF DISCLOSING THE TRUE AND FULL PARTICULARS OF INCOME, PENALTY IS SUSTAINABLE. HENCE, THIS APPEAL IS PREFERRED BY THE ASSESSEE. 3. THERE IS NO DISPUTE THAT THE ASSESSEE WAS A NON- RESIDENT TILL 2002-03. SIMILAR SITUATION HAD ARISEN FOR THE ASSE SSEE EARLIER FOR THE AY 2006-07 TO 2008-09 ALSO, AND PENALTY WAS IMP OSED ON THE 4 ITA NO. 6060/DEL/2015 ASSESSEE FOR THE VERY SAME REASON. WHEN THE MATTER TRAVELLED UP TO THIS TRIBUNAL, BY WAY OF ORDER DATED 30.09.2015 IN ITA NOS. 5899 TO 5901/DEL/2014 A COORDINATE BENCH OF THIS TR IBUNAL HAD TAKEN A VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY THOUGH IT IS A FIT CASE FOR MAKING ADDITION. THE OBSERVATIONS O F THE COORDINATE BENCH OF THIS TRIBUNAL VIDE PARAGRAPH NO. 13 ARE RE LEVANT FOR THE DISPOSAL OF THIS MATTER AND THOSE ARE AS FOLLOWS: 13. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSES SEE WAS A NON- RESIDENT TILL THE AY 2002-03, THEREAFTER SHE SHIFTE D TO INDIA. THE ASSESSEE WAS EARNING HONORARIOUM FROM THE UNIVERSIT Y OF CALIFORNIA, IRVINE AS THERE WAS A TREATY BETWEEN THE USA AND TH E INDIA, THE AMOUNT SO RECEIVED BY THE ASSESSEE WAS NOT TAXABLE IN USA. THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT THE INCOM E EARNED IN USA WAS EXEMPT UNDER DTAA BETWEEN USA AND INDIA AND THI S FACT WAS DISCLOSED IN FORM NO. 1040NR FOR THE YEAR 2005 COMP RISING THE INCOME TAX RETURN FILED BY US NON-RESIDENT ALIEN. FROM THE AFORESAID FACTS IT APPEARS THAT THERE WAS NO MALAFI DE INTENTION OF THE ASESSEE TO EITHER CONCEAL ANY INCOME OR TO FURNISH INACCURATE PARTICULARS OF INCOME BECAUSE THE AMOUNT RECEIVED A S HONORARIUM WAS DISCLOSED BY THE ASSESSEE AND DUE TAXES WAS PAI D WHEN IT WAS POINTED OUT THAT THE SAID AMOUNT I.E. FOREIGN REMIT TANCE IN USD RECEIVED FROM USA WAS TAXABLE. IN THE PRESENT CASE , THE AO ALSO MADE THE ADDITION BY DISALLOWING 50% OF THE EXPENSE S CLAIMED BY THE ASSESSEE ON ACCOUNT OF HER VISIT TO UNIVERSITY OF CALIFORNIA. THE SAID DISALLOWANCE WAS PURELY ON ADHOC BASIS, SO IT CANNOT BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF HER INCOME OR CONCEALED THE INCOME. IN MY OPINION THE PRESENT CA SE CAN BE A GOOD CASE OR MAKING THE ADDITION BUT NOT FOR LEVYING THE PENALTY U/S 271(1)(C ) OF THE ACT. I, THEREFORE, CONSIDERING T HE PECULIAR FACTS OF THIS CASE DEEM IT APPROPRIATE TO DELETE THE PENALTY LEVI ED BY THE AO AND SUSTAINED BY THE LD. CIT (A). 5 ITA NO. 6060/DEL/2015 4. SINCE THE FACTS ARE SIMILAR, THERE IS NO REASON FOR US TO DEVIATE FROM THE CONCLUSION THAT REACHED BY A COORD INATE BENCH IN THE CASE OF ASSESSEE UNDER SAME SET OF FACTS AND CI RCUMSTANCES. WE, THEREFORE, WHILE RESPECTFULLY FOLLOWING THE SAM E, FIND THAT THE PENALTY CANNOT BE SUSTAINED. WE, THEREFORE, DIRECT THE AO TO DELETE THE SAME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 6060/DEL/2015