REGENT ASSETS CONSULTANCY SERVICES P. LTD, MUMBAI V. ITO 7(2)(1), MUMBAI

ITA 6106/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62710 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2002-2003
• Appeal Filed On: 02-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN

Judgement Text

ITA NOS 6105 TO 6108 REGENT ASSETS CONSULTANCY SERV ICES PVT LTD MUMBAI D BENCH PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NOS 6105 TO 6108/MUM/2011 (ASSESSMENT YEARS: 1999-2000, 2002-03, 2003-04 & 2 004-05) REGENT ASSETS CONSULTANCY SERVICES (P) LTD., 20, VICTORIA HOUSE, SHERLY RAJAN ROAD, BANDRA (W), MUMBAI 400050 PAN NO.AAACR 7826 C (APPELLANT) VS. INCOME TAX OFFICER 7(2)(1) AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400020 (RESPONDENT) ASSESSEE BY: SHRI M. SUBRAMANIAN DEPARTMENT BY: SHRI RITESH MISRA, DR DATE OF HEARING: 25/07/2012 DATE OF PRONOUNCEMENT: 31/07/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THESE FOUR APPEALS ARE AGAINST THE ORDERS OF THE C IT (A)-13 MUMBAI, DATED 13/04/2011 FOR VARIOUS ASSESSMENT YEA RS ON THE ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C). A T THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT ON THE SAME FACTS, T HE ITAT MUMBAI BENCH K, IN ITA NO. 246/MUM/08 DATED 28.07 .2009 HAS ALREADY CONFIRMED THE DELETION OF PENALTY AND SINCE THE FACTS ARE SIMILAR, THE PENALTIES ARE TO BE CANCELLED. 2. BRIEFLY STATED, ASSESSEE DISCLOSED RENTAL INCOME UN DER THE HEAD INCOME FROM PROFITS AND GAINS OF BUSINESS AND PROFESSION. AT THE ASSESSMENT STAGE, AO TREATED THE INCOME UNDER T HE HEAD INCOME FROM HOUSE PROPERTY AND REWORKED THE TOTAL INCOME. AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) AND LEVIED PENALTY ON THE GROUND THAT ASSESSEE MADE WRONG CLAI M IN THE RETURN OF INCOME. THE PENALTY LEVIED FOR ASSESSMENT YEAR 2000-01 ITA NOS 6105 TO 6108 REGENT ASSETS CONSULTANCY SERV ICES PVT LTD MUMBAI D BENCH PAGE 2 OF 3 ON SIMILAR FACTS WAS DELETED BY THE CIT (A) ON THE REASON THAT FURNISHING OF INCOME UNDER ONE HEAD IS TREATED AS I NCOME UNDER OTHER HEAD, DOES NOT ATTRACT PENALTY PROVISIONS UND ER THE ACT. THIS ORDER WAS UPHELD BY THE ITAT BY HOLDING AS UNDER: 4. THE PENAL PROVISIONS ARE TO BE INTERPRETED STRI CTLY, HAVING REGARD TO THE FACT SITUATION OF THE CASE. TH E SCOPE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE A CT DOES NOT EMBRACE WITHIN ITS FOLD THE AUTOMATIC NATURE OF SUCH PENALTY. IN THIS CASE, ASSESSEE AS PER ITS PERCEPTI ON DISCLOSED THE RENTAL INCOME, IN HIS RETURN OF INCOM E UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVE R, AO ASSESSED THE SAME INCOME UNDER THE HEAD INCOME FROM PROFITS AND GAINS OF BUSINESS AND PROFESSION. IT IS PERTINENT TO ADD HERE THAT MERE CHANGE OF HEAD OF INCOME UNDER WHICH THE IMPUGNED INCOME IS TO BE CHARGED CANNOT BE MADE THE FOUNDATION OF LEVY OF PENALTY, WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE RENTAL INCOME CAN BE CHARGED UNDER THE HEA D INCOME FROM HOUSE PROPERTY OR UNDER THE HEAD INC OME FROM PROFITS AND GAINS OF BUSINESS AND PROFESSION DEPENDING UPON THE FACTS OF EACH CASE. THERE IS NO INFALLIBLE AND UNIVERSAL NATURE OF SUCH INCOME, AS FAR AS HEAD OF INCOME IS CONCERNED. THEREFORE, THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT J USTIFIED AND, HENCE, THE FINDINGS OF THE LEARNED CIT (A) ARE UPHELD. 3. SINCE SIMILAR FACTS ARE APPLICABLE IN THE YEARS UND ER CONSIDERATION AND THE INCOME WHICH WAS RECEIVED FRO M THE PROPERTY SITUATED IN NAVI MUMBAI WAS TREATED AS INCOME FROM HOUSE PROPERTY, FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE YEAR 2000-01, WE HOLD THAT AS THE FACTS OF THE CASE, PEN ALTY UNDER SECTION 271(1)(C) WAS NOT WARRANTED. 4. EVEN THOUGH ASSESSEE SUBMITTED THAT THE PENALTY WAS CANCELLED UNDER SIMILAR LINES TO THE CIT (A) AND EN CLOSED THE ORDER OF THE ITAT, WE ARE SURPRISED TO NOTE THAT THE LEAR NED CIT (A) HAS NOT EVEN CONSIDERED OR DISCUSSED THE ABOVE AND CONF IRMED THE PENALTY DIFFERING FROM HIS PREDECESSORS ORDER ON S AME FACTS. ITA NOS 6105 TO 6108 REGENT ASSETS CONSULTANCY SERV ICES PVT LTD MUMBAI D BENCH PAGE 3 OF 3 5. WE, THEREFORE, ALLOW ASSESSEE APPEALS AND CANCEL TH E PENALTY IN ALL THE FOUR ASSESSMENT YEARS. 6. IN THE RESULT APPEALS FILED BY ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2012. SD/- SD/- (AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31 ST JULY, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI