DIVYA SIRASLEWALA, MUMBAI V. ACIT - 14(2), MUMBAI

ITA 6149/MUM/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3970 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 17-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Salary income; Bonafide mistake

Judgement Text

P A G E | 1 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) IN THE INCOME TAX APPELLATE TRIBUNAL ' D ' BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 6149/MUM/2016 (ASSESSMENT YEAR: 2010 - 11 ) SHRI DIVYA SIRSALEWALA 204, A - Z INDUSTRIAL ESTATE, GANPATRAO KADAM MARG, LOWER PAREL (W), MUMBAI - 400 013 VS. ACIT - 14(2), 3 RD FLOOR, ROOM NO. 302, EARNEST HOUSE, NARIMAN POINT MUMBAI. PAN AABPS4001Q APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI CHAITANYA ANJARIA , D.R DATE OF HEARING: 29.10.2018 DATE OF PRONOUNCEMENT: 3 1 . 10.2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 29, MUMBAI, DATED 10.08.2016, WHICH IN TURN ARISES F ROM THE ORDER PASSED BY THE A.O UNDER SEC.271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT) DATED 13.08.2014. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONBLE CIT(A) ERRED IN UPHOLDING THE PENALTY LEVIED BY THE LD. A.O OF RS.2,22,330/ - U/S. 271(1)(C) OF THE I.T. ACT, 1961 AND THE REASON ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE PR OVISION OF INCOME TAX ACT AND RULES MADE THERE UNDER. 2. YOUR APPELLANT CRAVE, LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OR ALL GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. BRIEFLY STATED, THE A.O WAS IN RECEIPT OF AIR INFORMATION THAT AN AMOUNT OF RS.6,27,000/ - WAS DEDUCTED AS TDS ON A PAYMENT OF RS.20,40,000/ - CREDITED TO THE ASSESSEE. OBSERVING, THAT THE ASSESSEE HAD P A G E | 2 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) FAILED TO FILE HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y. 2010 - 11 A NOTICE UNDER SEC.148 WAS ISSUED T O HIM . IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE VIDE HIS LETTER DATE 08.01.2014 THAT HE HAD ALREADY FILED HIS RETURN OF INCOME ON 22.10.2010, DECLAR ING A NET TAXABLE INCOME OF RS.12,10,914/ - . 3. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSE RVED BY THE A.O THAT THE ASSESSEE HAD DECLARED A SALARY INCOME OF RS.13,20,500/ - ONLY IN HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. FURTHER, IT WAS NOTICED BY HIM THAT THE ASSESSEE HAD CLAIMED THE CREDIT OF THE ENTIRE TDS OF RS.6,27,000/ - . IN T HE BACKDROP OF THE AFORESAID FACTS THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SHORTFALL OF RS.7, 1 9, 5 00/ - [RS.20,40,000/ - ( - ) RS.13,20, 500 / - ]. IN HIS REPLY, I T WAS SUBMITTED BY THE ASSESSEE THAT THOUGH THE SALARY INCOME OF RS.7, 19,500 / - HAD ACCRUED BUT WAS NOT ACTUALLY RECEIVED BY HIM DURING THE YEAR, THEREFORE , INADVERTENTLY THE SAID AMOUNT HAD REMAINED OMITTED TO BE INCLUDED IN HIS TOTAL SALARY INCOME FOR THE YEAR UNDER CONSIDERATION. IN THE BACKDROP OF THE AFORESAID FACTS THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME INCLUDING THE AMOUNT OF RS.7, 19,500 / - . THE A.O ADDED THE AMOUNT OF RS. 7,19,500/ - TO THE TOTAL RETURNED INCOME OF THE ASSESSEE AND ASSESSED HIS NET TAXABLE INCOME AT RS.19,29,410/ - . THE ASSESSEE DID NOT ASSAIL THE AFORESAID ADDITION AN Y FURTHER IN APPEAL BEFORE THE CIT(A). THE A.O WHILE CULMINATING THE ASSESSMENT PROCEEDINGS ALSO INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) AND ISSUED A SHOW CAUSE NOTICE ( SCN ), CALLING UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC.2 71(1)(C) MAY NOT BE IMPOSED ON HIM. 4. IN THE COURSE OF THE PENALTY PROCEEDING S, THE A.O BEING OF THE VIEW THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME AND BY SO DOING HAD TRIED TO EVADE TAX ON THE AMOUNT OF RS.7,19,500/ - , THUS IMPOSED PE NALTY OF RS.2,22,325/ - UNDER SEC.271(1)(C) OF THE ACT. 5. AGGRIEVED, THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE P A G E | 3 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) ASSESSEE WAS NOT PERSUADED TO SUBSCRIBE TO THE SAME AND DISMISS ED THE APPEAL. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT DURING THE COURSE OF HEARING OF THE APPEAL THE ASSESSEE DESPITE HAVING BEEN PUT TO NOTICE AS REGARDS THE DATE OF H EARING OF THE APPEAL H AS HOWEVER FAILED TO PUT UP AN APPEARANCE. WE THUS, IN THE BACKDROP OF THE AFORESAID FACTS ARE CONSTRAIN ED TO DISPOSE OFF THE APPEAL AFTER HEARING THE RESPONDENT REVENUE. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) ON THE OT HER HAND RELIED ON THE ORDER S OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE FACTS INVOLVED IN THIS CASE LIES IN A NARROW COMPASS. THE ASSESSEE WAS IN R ECEIPT OF SALARY INCOME OF RS.20,40,000/ - ON WHICH AN AMOUNT OF RS.6,27,000/ - WAS DEDUCTED BY WAY OF TAX AT SOURCE. ON THE BASIS OF AIR INFORMATION WITH THE A.O, THE CASE OF THE ASSESSEE WAS REOPENED ON THE GROUND THAT NO RETURN OF INCOME WAS FILED BY H IM. HOWEVER, THE ASSESSEE SUBMITTED A LETTER DATED 08.01.2014 STATING THAT HE HAD ALREADY FILED HIS RETURN OF INCOME DECLAR ING AN INCOME OF RS.12,10,914/ - ON 22.10.2010. ON A PERUSAL OF THE RETURN OF INCOME , IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD DECL ARED A SALARY INCOME OF RS.13,20,500/ - IN HIS RETURN OF INCOME. IN THE BACKDROP OF THE AFORESAID FACTS, THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SHORTFALL OF RS.7,19,500/ - [RS.20,40,000/ - ( - ) RS.13,20,500/ - ]. IN HIS REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT DURING THE YEAR HE WAS IN ACTUAL RECEIPT OF SALARY OF RS.13,20,500/ - WHILE FOR THE BALANCE AMOUNT OF RS. 7, 19,500 / - WAS NOT RECEIVED BY HIM DURING THE YEAR. IT WAS SUBMITTED BY THE ASSESSEE THAT AS AN AMOUNT OF RS. 13,20, 5 00/ - ONLY STOOD CREDITED IN HIS BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION, THEREFORE, BY WAY OF AN OVERSIGHT HIS ACCOUNTANT WHO HAD PREPARED HIS ACCOUNTS HAD SHOWN A SALARY OF RS.13,20, 5 00/ - ONLY IN HIS CAPITAL ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IT WAS SU BMITTED BY THE ASSESSEE THAT ON ACCOUNT OF AN INADVERTENT MISTAKE ON THE PART OF HIS ACCOUNTANT THE BALANCE SUM OF P A G E | 4 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) RS.7, 19 , 5 00/ - WHICH THOUGH HAD ACCRUED BUT NOT RECEIVED BY HIM DURING THE YEAR HAD REMAINED OMITTED TO BE SHOWN IN HIS TOTAL INCOME IN THE R ETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS ON LEARNING OF THE AFORESAID MISTAKE HAD FILED A REVISED COMPUTATION OF INCOME WITH THE A.O INCLUDING THE AFORESAID AMOUNT OF RS. 7,19,500/ - . 8. WE F IND THAT THE A.O NOT FINDING FAVOUR WITH THE AFORESAID EXPLANATION OF THE ASSESSEE HAD IMPOSED A PENALTY UNDER SEC.271(1)(C) OF RS.2,22,345/ - , ON THE GROUND THAT THE ASSESSEE HAD CONCEALED HIS INCOME AND BY SO DOING SOUGHT TO EVADE TAX ON THE AMOUNT OF RS. 7,19,500/ - . ON APPEAL, THE ORDER OF THE A.O IMPOSING PENALTY 271(1)(C) WAS UPHELD BY THE CIT(A). 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE OBSERVATIONS OF THE LOWER AUTHOR ITIES. ADMITTEDLY, THE ASSESSEE HAD EARNED SALARY INCOME OF RS.20,40,000/ - DURING THE YEAR ON WHICH TAX AT SOURCE OF RS.6,27,000/ - STOOD DEDUCTED. THE ASSESSEE HAD IN HIS RETURN OF INCOME DECLARED AN INCOME OF RS.13,20,500/ - , WHILE FOR THE CREDIT OF THE ENTIRE AMOUNT OF THE TDS OF RS.6,27,000/ - WAS CLAIMED BY HIM. IT IS THE CONTENTION OF THE ASSESSEE THAT DURING THE YEAR UNDER CONSIDERATION HE HAD FACTUALLY RECEIVED SALARY ONLY TO THE EXTENT OF RS.13,20,500/ - , WHILE FOR THE BALANCE AMOUNT OF RS.7,19,500/ - [RS.20,40,000/ - ( - ) RS. 13,20,500/ - ] WHICH THOUGH HAD ACCRUED TO HIM, WAS HOWEVER NOT RECEIVED DURING THE YEAR UNDER CONSIDERATION. WE FIND NO REASON TO DOUBT THE EXPLANATION OF THE ASSESSEE THAT HIS ACCOUNTANT GOING BY HIS BANK ACCOUNT WHEREIN AN AMOUNT OF RS.13,20,500/ - STOOD DEPOSITED , HAD THEREIN TAKEN THE SAME AS THE SALARY INCOME OF THE ASSESSEE FOR THE YEAR. IN SO FAR, THE CLAIM OF TDS OF RS.6,27,000/ - IS CONCERNED, THE SAME MUST HAVE BEEN ADOPTED BY THE ASSESSEE/ACCO UNTANT ON THE BASIS OF THE 26AS FORM. WE ARE OF THE CONSIDERED VIEW THAT THOUGH AN ASSESSEE IS EXPECTED TO BE MORE CAREFUL AND VIGILANT AT THE TIME OF COMPILING OF HIS RETURN OF INCOME SO THAT THE SAME MAY NOT SUFFER FROM ANY MISTAKE OR OMISSION, BUT AT TH E SAME TIME ARE ALSO NOT OBLIVIOUS OF THE FACT THAT BONAFIDE MISTAKES CANNOT BE RULED OUT. IN THE P A G E | 5 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT IT CAN SAFELY BE CONCLUDED THAT AS THE FAILURE ON THE PART OF THE ASSESSEE TO ACCOUNT FOR THE BALANCE AMOUNT OF RS.7,19,500/ - IN HIS RETURN OF INCOME WAS FOR THE AFORESAID BONAFIDE REASONS AND AN INADVERTENT MISTAKE ON THE PART OF HIS ACCOUNTANT , HENCE NO PENALTY UNDER SEC. 271(1)(C) WAS CALLED FOR IN HIS HANDS ON THE SAID COUNT. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT (2012) 348 ITR 306 (SC). THE HONBLE APEX COURT IN ITS AFORESAID JUDGMENT HAD OBSERVED THAT IMPOSITION OF PENALTY WOULD BE UNWARRANTED IN A CASE WHERE THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONAFIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCOME OR FURNISH INACCURATE PARTICULARS. RATHER, IN THE CASE BEFORE US THE ASSESSEE ON LEARNING OF THE AFORESAID MISTAKE HAD IMMEDIATELY FILED A REVISED COMPUTATION OF INCOME WITH THE A.O IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS ARE UNABLE TO PERSUADE OURSELVES TO UPHOLD THE PENALTY UNDER SEC. 271(1)(C) OF RS. 2,22,330/ - IM POSED BY THE A.O. IN TERMS OF OUR AFORESAID OBSERVATIONS, THE PENALTY OF RS.2,22,330/ - UPHELD BY THE CIT(A) IS DELETED. 10. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRON OUNCED IN THE OPEN COU RT ON 3 1 . 10.2018 S D / - S D / - ( SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 31.10.2018 PS. ROHIT P A G E | 6 ITA NO. 6149/MUM/2016 A.Y. 2010 - 11 SHRI DIVYA SIRSALEWALA VS. ACIT - 14(2) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI