RAJESH R. BARAPATRE, V. ITO WD 26(2)(2), MUMBAI

ITA 6624/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56227 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-12-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 30-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARTHASARTHY NAIK
• Keywords: Bonafide belief
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI V. DUR GA RAO, J.M. ITA NO. 6624/MUM/2010 ASSESSMENT YEAR : 2001-02 RAJESH R. BARAPATRE, APPELLANT C/O M/S BPCL, POL DEPOT NEAR RAIRU RLY STATION GWALIOR (M.P.) VS. INCOME-TAX OFFICER-WARD 26(2)(2), RE SPONDENT MUMBAI 400 002. APPELLANT BY : NONE RESPONDENT BY : MR. PARTHASARTHY NAIK DATE OF HEARING : 08/12/2011 DATE OF PRONOUNCEMENT : 16/12 /2011 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-28, MUMBAI, PASSED ON 17/05/2010 FOR THE ASSESSMENT YEAR 2001-02, WHEREIN THE ASESSSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN THE LAW AND FACTS IN NOT ADJUDICATING THE FIRST GROUND OF APPEAL CALLING IN QUESTION THE JURISDICTION OF THE ITO WHO WITHOUT JURISDICTION IMPOSED THE PENALTY WITHOUT AFFORDING OPPORTUNITY TO THE APPELLANT. THE LEARNED CIT(A) FURTHER FAILED TO CONSIDER THE WRITTEN SUBMISSIONS IN RESPECT OF GROUND NO.1. 2. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMI NG THE PENALTY WHICH MAY KINDLY BE DELETED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING BEFORE US. HOWEVER, WE PROCEEDED TO DECIDE THE APPE AL AFTER HEARING THE LEARNED DR AND ON MERITS. ITA NO. 6624/MUM/2010 RAJESH BARAPATRE 2 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN EMPLOYEE OF M/S BPCL. THE AO NOTICED THAT THE ASSESSEE HAS N OT SHOWN RECEIPT OF LEASE RENT AND MAINTENANCE CHARGES OF RS. 2,53,8 39/- AND RS. 7,572/- RESPECTIVELY. SINCE THE ASSESSEE HAD NOT S HOWN THE SAID RECEIPTS IN HIS ORIGINAL RETURN OF INCOME AND THE S AME IS BROUGHT TO THE TAXATION AFTER THE DETECTION BY THE DEPARTMENT U/S 148 OF THE ACT, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND IMPOSED PENALTY ON CONCEALED INCOME AT RS. 61,331/- . ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO. AGGR IEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE ITAT. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE SUBMISSIONS OF THE ASSESSE E BEFORE THE CIT(A) WAS THAT THE AO HAS NOT CONSIDERED THE AMOUN T OF PERQUISITE VALUE ADDED IN FORM 16 AND OFFERED TO TAX WHILE CAL CULATING INCOME FROM HOUSE PROPERTY, WHICH RESULTED INTO DOUBLE TAX ATION OF THE SAME INCOME. THE SUM OF RS. 2,53,839/- IS ALREADY FORMIN G PART OF THE TOTAL INCOME AND THE AO ERRED IN CONSIDERING THIS SUM AS CONCEALED. IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE AO ERRED IN LE VYING PENALTY ON REIMBURSEMENT OF EXPENSES AS THE SAME HAS BEEN RECE IVED BY THE ASESSSEE AS LESSOR ON ACCOUNT OF EXPENSES FOR MAINT ENANCE AND PAYMENT TAXES ETC. AS PER THE TERMS AND CONDITIONS OF LEASE AGREEMENT AND, THEREFORE, THE SAME IS NOT INCOME OF THE ASESS SEE. THE CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AO. WE FIND THAT THE AO NOTIC ED IN HIS ORDER THAT IN ORIGINAL RETURN OF INCOME, THE ASSESSEE HAD NOT DISCLOSED THE LEASE RENT AND MAINTENANCE CHARGES, WHICH RESULTED INTO T HE DIFFERENCE IN INCOME BETWEEN ASSESSED INCOME AND RETURNED INCOME. SINCE THE LEASE RENT WAS TAXED ONLY AFTER ITS DETECTION BY TH E DEPARTMENT, THE AO INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY ON THE INCOME, ON WHICH TAX IS SOUGHT TO BE EVADED, AT RS. 61,331/-. FOR THIS DIFFERENCE, ITA NO. 6624/MUM/2010 RAJESH BARAPATRE 3 THE EXPLANATION OF THE ASSESSEE IS THAT HE WAS UNDE R BONAFIDE BELIEF THAT WHATEVER INCOME EARNED FROM THE EMPLOYER REFLE CTED IN FORM NO. 16. WE ARE OF THE VIEW THAT THE ASESSSEE DOES NOT H AVE ANY WILLFUL INTENTION TO CONCEAL THE INCOME OR ANY DELIBERATE I NTENTION TO DEFRAUD THE REVENUE AS THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT WHATEVER INCOME EARNED FROM THE EMPLOYER WAS REFLEC TED IN FORM NO. 16. THE ASSESSEE IS A REGULAR AND TIMELY IN MEETING ALL HIS TAX OBLIGATIONS. MOREOVER, SIMILAR ISSUE CAME UP BEFORE THE ITAT, MUMBAI BENCHES WHEREIN THE CO-ORDINATE BENCHES CANCELLED T HE PENALTY LEVIED BY THE AO U/S 271(1)(C). UNDER IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE, THE ITAT MUMBAI BENCH F IN THE CASE OF VIKAS AMRUT RAJPUT IN ITA NO. 3755/MUM/2010 VIDE ORDER DATED 14 /09/2011, HELD AS UNDER:- 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE SUBMISSIONS OF THE ASS ESSEE BEFORE THE CIT(A) WAS THAT THE AO HAS NOT CONSIDERED THE A MOUNT OF PERQUISITE VALUE ADDED IN FORM 16 AND OFFERED TO TA X WHILE CALCULATING INCOME FROM HOUSE PROPERTY, WHICH RESUL TED INTO DOUBLE TAXATION OF THE SAME INCOME. THE SUM OF RS. 28,800/- IS ALREADY FORMING PART OF THE TOTAL INCOME AND THE AO ERRED IN CONSIDERING THIS SUM AS CONCEALED. IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE AO ERRED IN LEVYING PENALTY ON REIM BURSEMENT OF EXPENSES AS THE SAME HAS BEEN RECEIVED BY THE ASESS SEE AS LESSOR ON ACCOUNT OF EXPENSES FOR MAINTENANCE AND P AYMENT TAXES ETC. AS PER THE TERMS AND CONDITIONS OF LEASE AGREEMENT AND, THEREFORE, THE SAME IS NOT INCOME OF THE ASESS SEE. THE CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE AS SESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AO. WE FIND THA T THE AO NOTICED IN HIS ORDER THAT IN ORIGINAL RETURN OF INC OME, THE ASSESSEE HAD NOT DISCLOSED THE LEASE RENT AND MAINTENANCE CH ARGES, WHICH RESULTED INTO THE DIFFERENCE IN INCOME BETWEEN ASSE SSED INCOME AND RETURNED INCOME. SINCE THE LEASE RENT WAS TAXED ONLY AFTER ITS DETECTION BY THE DEPARTMENT, THE AO INITIATED P ENALTY PROCEEDINGS AND LEVIED PENALTY ON THE INCOME, ON WH ICH TAX IS SOUGHT TO BE EVADED, AT RS. 12,528/-. FOR THIS DIFF ERENCE, THE EXPLANATION OF THE ASSESSEE IS THAT HE WAS UNDER BO NAFIDE BELIEF THAT WHATEVER INCOME EARNED FROM THE EMPLOYER REFLE CTED IN FORM NO. 16. WE ARE OF THE VIEW THAT THE ASESSSEE HAD NO T WILLFUL INTENTION TO CONCEAL THE INCOME OR ANY DELIBERATE I NTENTION TO DEFRAUD THE REVENUE AS THE ASSESSEE WAS UNDER THE B ONAFIDE BELIEF THAT WHATEVER INCOME EARNED FROM THE EMPLOYE R WAS REFLECTED IN FORM NO. 16. THE ASSESSEE IS A REGULAR AND TIMELY IN MEETING ALL HIS TAX OBLIGATIONS. THE CIT(A) HAS NO T CONSIDERED THE ITA NO. 6624/MUM/2010 RAJESH BARAPATRE 4 SUBMISSIONS OF THE ASSESSEE. THEREFORE, IN OUR CONS IDERED OPINION, THE EXPLANATION OFFERED BY THE ASSESSEE IS BONAFIDE, WHICH OUGHT TO HAVE BEEN ACCEPTED BY THE REVENUE AU THORITIES. HENCE, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U /S 271(1)(C). THEREFORE, WE HEREBY CANCEL PENALTY OF RS. 12,528/- LEVIED BY THE AO AND CONFIRMED BY THE CIT(A). 6. AFTER CONSIDERING THE FACTS OF THE CASE AND RESP ECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH (SUPRA), WE SE T ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY OF RS. 61,331/- L EVIED BY THE AO U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF DECEMBER, 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 16 TH DECEMBER, 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, D BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.