KIRAN BHAGWANT MHATRE, PUNE V. ITO 26(2)(3), MUMBAI

ITA 6812/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59863 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 28-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Assessee Lawyers: Y P PANDIT
• Keywords: Condonation of delay
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI V. DURGA RAO , J.M. ITA NO. 6811 & 6812/MUM/2010 ASSESSMENT YEARS : 2002-03 & 2003-04 KIRAN BHAGWANT MHATRE, APPELLANT C/O MR. D.Y. PANDIT, ADV. 1187/10, KRUPA, SHIVAJINAGAR, PUNE 411 055 (PAN ADZPM2271P) VS. DY. COMMISSIONER OF INCOME-TAX-26(2), R ESPONDENT MUMBAI 400 002. APPELLANT BY : MR. Y.P. PANDIT RESPONDENT BY : MR. P.K.B. MENON DATE OF HEARING : 22/02/2012 DATE OF PRONOUNCEMENT : 29/02 /2012 ORDER PER V. DURGA RAO, J.M.: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE ORDER OF CIT(A)-28, MUMBAI, PASSED ON 29/07/2010 FO R THE ASSESSMENT YEAR 2002-03 & 2003-04. SINCE COMMON ISS UE IS INVOLVED IN BOTH THESE APPEALS, WE HAVE HEARD THESE APPEALS TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. THE GROUND RAISED IN BOTH THE APPEALS IS PERTAIN ING TO PENALTY OF RS. 7,556/- U/S 271(1)(C) OF THE ACT. 3. TO DECIDE THESE APPEALS, WE REFER TO THE FACTS I N AY 2002-03. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN EMPLOYEE OF M/S BPCL. THE AO NOTICED THAT THE ASSESSEE HAS RECE IVED LEASE RENT OF RS. 27,360/- DURING THE PREVIOUS YEAR, WHICH WAS AD DED TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS INCOME FROM HOUSE ITA NOS. 6811 & 6812 /MUM/2010 KIRAN BHAGWANT MHATRE 2 PROPERTY. THE ASSESSEE HAS ALSO RECEIVED MAINTENAN CE EXPENSES OF RS. 12,312/- WHICH WAS NOT SHOWN IN THE ORIGINAL RETURN FILED FOR THE YEAR. SINCE THE ASSESSEE HAD NOT SHOWN THE SAID RE CEIPTS IN HIS ORIGINAL RETURN OF INCOME AND THE SAME IS BROUGHT T O THE TAXATION AFTER THE DETECTION BY THE DEPARTMENT U/S 148 OF TH E ACT, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND IMPOSED PENALTY ON CONCEALED INCOME AT RS. 7,556/-. ON APPE AL, THE CIT(A) REJECTING THE REQUEST FOR CONDONATION OF DELAY FILE D BY THE ASSESSEE, DISMISSED THE APPEAL ON THE GROUND OF DELAY IN FILI NG THE APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) DISMISSED THE APPEAL WITHOUT CON SIDERING THE EXPLANATION GIVEN BY THE ASSESSEE PROPERLY WITH REG ARD TO DELAY. HE FURTHER SUBMITTED THAT THE ASSESSEE WAS UNDER BONA- FIDE BELIEF THAT PENDING TAX ISSUES WERE HANDLED BY THE COMPANY AND THEIR EMPLOYEES UNION AND ALSO INFORM THEM THAT THEY WERE HANDLING THE TAX ISSUES FOR ALL THE EMPLOYEES OF THE COMPANY. IT IS SUBMITTED T HAT SUBSEQUENTLY THE ASSESSEE CAME TO KNOW THAT INDIVIDUAL TAX ISSUE S HAVE TO BE HANDLED BY THE EMPLOYEES THEMSELVES. 5. AFTER HEARING THE LEARNED DR AND PERUSING THE MA TERIAL AS WELL AS THE ORDERS OF THE AUTHORITIES BELOW, IT IS OBSER VED THAT THE ASSESSEE HAS EXPLAINED THE REASON FOR THE DELAY IN FILING TH E APPEAL BEFORE THE CIT(A) AND THE CIT(A) WITHOUT CONSIDERING THE EXPLA NATION OF THE ASSESSEE, DISMISSED THE APPEAL. WE FIND THAT THERE IS A GENUINE REASON FOR THE ASSESSEE IN NOT FILING THE APPEAL IN TIME, THEREFORE, WE CONDONE THE DELAY BY TAKING INTO CONSIDERATION THE FACTS AN D CIRCUMSTANCES OF THE CASE AND ALSO THE ASSESSEE BEING A SMALL EMPLOY EE. GENERALLY, WHEN THE CIT(A) IS NOT DECIDED THE ISSUE ON MERITS , THE APPEAL IS RESTORED TO THE FILE OF THE CIT(A) TO DECIDE THE SA ME ON MERITS. IN THIS CASE WE FIND THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE DECISIONS OF CO-ORDINATE BENCHES OF THE TRIBUNAL AN D TAKING INTO ITA NOS. 6811 & 6812 /MUM/2010 KIRAN BHAGWANT MHATRE 3 CONSIDERATION THE POSITION OF THE ASSESSEE, NO PURP OSE IS GOING TO SERVE, IF THE ISSUE IS RESTORED TO THE FILE OF THE CIT(A), WHICH HAS ALREADY BEEN COVERED AS MENTIONED ABOVE. THEREFORE, WE PROCEED TO DECIDE THE ISSUE ON MERITS. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY VARIOUS DECISIONS OF TRIBUNAL INCLUDING THE DECISION IN THE CASE OF MR. RAVINDRA LAXMAN SATHE VS. ITO IN ITA NO . 2828/MUM/2008 FOR AY 2001-02 ORDER DATED 22/12/2009 , WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- 4. WE HAVE HEARD THE LEARNED DR AND THE ASSESSEE, W HO HIMSELF APPEARED BEFORE US. IN THE CASE UNDER CONSIDERATION SOME ADMITTED FACTS NOTICED ARE THAT THE ASSESSEE IS AN EMPLOYEE OF M/S BHARAT PETROLEUM CORPORATION LTD. (BPCL). BPCL INTRODUCED SCHEME OF SELF LEASING UNDER WHICH THE EMPLOYEES OF BPCL WERE EITH ER EXTENDED LOAN FROM BPCL ITSELF OR COULD TAKE LOAN FROM ANY BANK T O ACQUIRE HOUSE PROPERTY AND THE PROPERTY SO ACQUIRED WAS LEASED OU T TO BPCL ITSELF FOR AMOUNT OF LEASE RENT AND MAINTENANCE CHARGES AS LAI D DOWN AS PER THE LEASE AGREEMENT WITH THE EMPLOYEE. THE PROPERTY IN TURN WAS GIVEN BACK TO THE SAME EMPLOYEE AS RENT FROM ACCOMMODATIO N BY BPCL TREATING IT IS PERQUISITE IN THE HANDS OF THE EMPLO YEE BEING UNFURNISHED RENT FREE ACCOMMODATION. 4.1 THE CASE UNDER CONSIDERATION IS RELATED TO LEVY OF PENALTY UNDER SECTION 271(1)(C). THE SAID SECTION PROVIDES THAT IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMIS SIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISF IED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FUR NISHED INACCURATE PARTICULARS OF SUCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY IN ADDITION TO TAX, IF ANY, PAYAB LE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT E XCEED [THREE TIMES], THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR THE FURNISHING OF INAC CURATE PARTICULARS OF SUCH INCOME. WE NOTICED PENAL PROVISIONS ARE APPLIC ABLE ONLY IN CASE ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE APPLICAB ILITY OF THIS PENAL PROVISIONS HAVE BEEN EXAMINED BY THE ITAT, MUMBAI B ENCH B-1 IN THE CASE OF MIMOSA INVESTMENT CO. PVT. LTD., 28 SOT 470 [ITA NO. 2983/MUM/07 FOR AY 2004-05 ORDER DATED 15.01.09] WH ERE IN IT WAS HELD THAT WHEN THE ASSESSEE HAS FURNISHED ALL THE M ATERIAL FACTS FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME, THE AO IS DUTY BOUND TO CALCULATE CORRECT TOTAL INCOME IN ACCORDANCE WITH L AW WHICH MAY BE DIFFERENT THAN THE TOTAL INCOME CALCULATED BY THE A SSESSEE; MERE FACT THAT THE AO WHILE DISCHARGING HIS DUTY HAS RECALCUL ATED THE TOTAL INCOME IN ACCORDANCE WITH LAW WHICH IS NOT THE SAME AS CALCULATED BY THE ASSESSEE, IT CANNOT BE HELD THAT THE ASSESSEE H AS CONCEALED THE ITA NOS. 6811 & 6812 /MUM/2010 KIRAN BHAGWANT MHATRE 4 PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME OR THERE IS A DEEMED CONCEALMENT IN ACCORDAN CE WITH EXPLANATION1 OF SECTION 271(1)(C). WE MAY ALSO REFER TO THE FOLLOWING CBDT CIRCULAR:- TAX OFFICERS ROLE IN ASSISTING TAX PAYERS OFFIC ERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIES TO ASSIST A TAXPAYER IN E VERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN G UIDING A TAX PAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD , IN THE LONG RUN, BENEFIT THE DEPARTMENT, FOR IT WOULD INSPIRE CONFID ENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPAR TMENT. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSEES ON WHOM IT IS IMPOSED BY LAW, OFFICER S SHOULD_ (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO W HICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO TH EIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED F OR CLAIMING REFUNDS AND RELIEFS CIRCULAR NO. 14XL-35) OF 1955 , DATED 11.4.1955 (EXTRACTED FROM CHOKSI METAL REFINERY V. CIT [1977] 107 ITR 63 (GUJ.) 4.2 ON CONSIDERATION OF ABOVE DISCUSSION AND RATIO LAID DOWN BY THE ITAT IN THE SAID CASE CITED SUPRA, WE ARE OF THE CO NSIDERED VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) . FROM THE ABOVE CIRCULAR, IT IS CLEAR THAT IN THE CASE UNDER CONSID ERATION, THE AO HAS DISCHARGED HIS DUTY OF ASSESSING CORRECT INCOME ON THE BASIS OF PARTICULARS AVAILABLE WITH THE DEPARTMENT WHICH MAY BE BY ISSUING NOTICE U/S 148 OF THE ACT. THE ASSESSEE CLAIMED THE INTEREST ON BORROWED CAPITAL AGAINST SOP INCOME AND OTHERS WHET HER THE SAME IS ALLOWABLE OR NOT OR WHAT SHOULD BE THE CORRECT INCO ME IN ACCORDANCE WITH THE ACT IS A DIFFERENT THING BUT CERTAINLY RE LEVANT SUFFICIENT PARTICULARS WERE ON RECORD, EITHER IN THE FILE OF A SSESSEE, FORM 16 OR IN THE FILE OF BPCL. THE AO MUST HAVE CONSIDERED THE R ELEVANT SCHEME AND ALL MATERIAL IN ASSESSMENT OF BPCL. UNDER THE PECUL IAR CIRCUMSTANCES, SUCH CONSIDERATION OF PARTICULARS IN THE CASE OF BP CL AMOUNTS PARTICULARS AVAILABLE ON RECORD IN CASES OF THE EMP LOYEES OF BPCL. THEREFORE SUCH CASES CANNOT BE SAID TO BE A CASE OF FURNISHING INACCURATE PARTICULARS OR INCOME OR CONCEALING OF A NY PARTICULARS OF INCOME PARTICULARLY WHEN ALL THE RELEVANT PARTICULA RS/MATERIAL AVAILABLE WITH THE DEPARTMENT. FURTHER, IT HAS BEEN NOTICED FROM PENALTY ORDER THAT THE AO NOTED THAT EMPLOYEES IN A LARGE SCALE HAD FILED RETURNS OF INCOME AS PER TDS SALARY CERTIFICA TE IN FORM NO. 16 AND HAD NOT DISCLOSED LEASE RENT & MAINTENANCE CHARGES RECEIVED INCLUDING ASSESSEE. WHEN A LARGE NUMBER OF PERSONS FILED THEI R RETURNS OF INCOME BY SAME MISTAKE THAT MISTAKE CANNOT BE SAID TO BE A CASE WHERE PENALTY PROVISIONS U/S 271(1)(C) IS APPLICABLE, CON TRARY IT SUPPORTS TO ASSESSEES BONAFIDE. ITA NOS. 6811 & 6812 /MUM/2010 KIRAN BHAGWANT MHATRE 5 4.3 IN THE LIGHT OF ABOVE DISCUSSION, WE HEREBY CAN CEL THE PENALTY OF RS. 49,761/- U/S 271(1)(C) OF THE ACT . 7. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICAL TO THAT OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF RAVINDR A LAXMAN SATHE(SUPRA), RESPECTFULLY FOLLOWING THE SAID DECIS ION, WE SET ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY OF RS. 7 ,566/- LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. 8. AS THE ISSUE IN AY 2003-04 IS MATERIALLY IDENTI CAL TO THAT OF AY 2002-03, FOLLOWING THE CONCLUSIONS DRAWN IN AY 2002 -03, WE CANCEL THE PENALTY OF RS. 39,985/- IMPOSED BY THE AO U/S 2 71(1)(C) IN AY 2003-04 ALSO. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF FEBRUARY, 2012. SD/- SD/- (P.M. JAGTAP) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 29 TH FEBRUARY, 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 22/02/12 SR.P.S./P.S ITA NOS. 6811 & 6812 /MUM/2010 KIRAN BHAGWANT MHATRE 6 2. DRAFT PLACED BEFORE AUTHOR 27/02/12 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER