MANISH DHIRAJLAL POPAT, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 35(2), MUMBAI

ITA 6871/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8460 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income; Difference of opinion; Set aside
• Section: 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI AMARJIT SINGH ( J M) I.T.A. NO. 6871 /MUM/ 2017 (ASSESSMENT YEAR 20 11 - 12 ) MANISH DHIRAJLAL POPAT 116A/8, GITANJALI SION WEST MUMBAI - 400 022. PAN : AAIPP9936C V S . A CIT 35(2) BANDRA KURLA COMPLEX BANDRA MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI MEHUL SHAH DEPARTMENT BY SHRI DURGA DUTT DATE OF HEARING 28 . 1 . 201 9 DATE OF PRONOUNCEMENT 28 . 3 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : THIS APPEA L BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A) DATED 10.8.2017 AND PERTAINS TO A.Y. 20 11 - 12 . 2. GROUNDS OF APPEAL READ AS UNDER : BEING AGGRIEVED BY THE ORDERS OF THE ASSESSING OFFICER 35 (1), MUMBAI, AND LEARNED COMMISSIONER OF INCOME - TAX (APPEAL) - 46, MUMBAI, THIS APPEAL PETITION IS FILED ON THE FOLLOWING AMONGST OTHER GROUNDS OF APPEAL, WHICH IT IS PRAYED MAY BE CONSIDERED WITHOUT PREJUDICE TO ONE ANOTHER. 1. ON THE FACTS, AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED COMMIS SIONER OF INCOME - TAX (APPEAL) ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY UNDER SECTION 271 (1) (C) OF THE INCOME - TAX ACT 1961 ON THE COMPONENTS OF ADDITION WITH RESPECT TO INCOME FROM HOUSE PROPERTY AND CLUBBING OF INCOME OF SPO USE WITHOUT APPRECIATING THAT THESE ISSUES WERE SET ASIDE BY HON'BLE ITAT TO THE FILE ASSESSING OFFICER FOR FRESH CONSIDERATION IN VIEW OF WHICH ASSESSMENT ORDER OF THE ASSESSING OFFICER TO THAT EXTENT WAS ABATED AND PENALTY ON THESE COMPONENTS STOOD CANCE LLED. 2. ON THE FACTS, AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED COMMISSIONER OF INCOME - TAX (APPEAL) ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY UNDER SECTION 271 (1) (C) OF THE MANISH DHIRAJLAL POPAT 2 INCOME - TAX ACT 1961 AMOUNTING TO RS. 345,286 WITHOUT APPRECIATING THAT THE ADDITION WITH RESPECT TO INCOME FROM HOUSE PROPERTY AND CLUBBING OF INCOME WAS MADE AND PARTIALLY SUSTAINED/SUSTAINED MERELY ON A DIFFERENCE OF OPINION AND WITHOUT BRINGING ANY COGNATE MATERIAL ON RECORD; AND INTEREST ON SAVINGS ACCOUNT THAT WAS NOT OFFERED WHILE FILING RETURN OF INCOME WAS VOLUNTARILY OFFERED BY YOUR APPELLANT DURING THE COURSE OF ASSESSMENT. 3. YOUR APPELLANT CRAVES LEAVE TO ADD TO, AMEND, ALTER, MODIFY, AND/OR DELETE ANY OF THE ABOVE GROUNDS OF A PPEAL AT OR BEFORE FINAL DISPOSAL OF APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAD FILED RETURN OF INCOME ON 29 - 07 - 2011 DECLARING TOTAL INCOME OF RS.3,73,34,020/ - . THE ASSESSEE HAS DECLARED INCOME FROM SALARY OF RS.3,47 ,44,381/ - AND INCOME FROM OTHER SOURCES OF RS.33,70,641/ - . THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 16 - 01 - 2014, AFTER MAKING THE FOLLOWING ADDITIONS/ DISALLOWANCES : - (I) INCOME FROM HOUSE PROPERTY : RS.1,13,268/ - (II) INTEREST INCOME FROM SB A/C NOT OFFERED TO TAX IN THE RETURN : RS.4,56,916/ - (III) CLUBBING OF INCOME EARNED BY SPOUSE : RS.5,67,237/ - U/S. 68 PENALTY PROCEEDINGS U/S. 271 (1 )(C) WERE INITIATED SEPARATELY. AG AINST THE ASSESSMENT ORDER U/S. 143( 3), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) ON THE ISSUE OF HOUSE PROPERTY INCOME AND CLUBBING OF INCOME. THE CIT(A), VIDE ORDER NO.CIT(A) - 28/ACIT 26(1)/451/2013 - 14 DATED 13 - 11 - 2014, RESTRICTED THE ADDITION IN RESPECT OF HOUSE PROPERTY INCOME TO RS.93,277/ - AS AGAINST THE ADDITION OF RS.1,13,268/ - MADE BY THE AO. FURTHER, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF CLUBBING OF INCOME OF RS.5,67,237/ - . 4 . IN RESPONSE TO THE LETTER DATED 18 - 02 - 2016 ISSUED BY THE AO AS TO WHY PENALTY SHOULD NOT BE LEVIED IN RESPECT OF THE ABOVE ADDITIONS, THE AUTHORISED REPRESENTATIVE FILED LETTER ON 25 - 02 - 2016 STATING THAT EVERYTHING WAS AVAILABLE ON RECORD AND THE ASSESSEE NEITHER FILED INACCURATE PARTICULARS NOR CONCEALED ANY INFORMATION AND REQUESTED THE AO TO DROP THE PENALTY PROCEEDINGS. MANISH DHIRAJLAL POPAT 3 FURTHER, IT WAS STATED THAT THE APPELLANT HAS PREFERRED AN APPEAL BEFORE THE ITAT AGAINST THE ORDER OF CIT(A) AND THE SAME IS STILL PENDING. 5 . HOWEVER, THE AO DID NOT FIN D THE CONTENTIONS OF THE ASSESSEE TO BE ACCEPTABLE. WITH REGARD TO THE ADDITIONS MADE IN RESPECT OF HOUSE PROPERTY INCOME AND CLUBBING OF INCOME EARNED BY THE SPOUSE, THE AO OBSERVED THAT THE CIT(A) CONFIRMED THE ADDITIONS MADE ON THESE TWO ISSUES EXCEPT F OR GIVING RELIEF OF RS.19,991/ - WITH REGARD TO INCOME FROM HOUSE PROPERTY. WITH REGARD TO THE ADDITION MADE IN RESPECT OF INTEREST RECEIPTS IN THE SAVINGS BANK A/C WHICH WAS NOT ADMITTED IN THE RETURN OF INCOME, THE SUBMISSION OF THE ASSESSEE WAS NOT ACCEP TED BY THE AO ON THE GROUND THAT THE ASSESSEE HAD OFFERED THE INCOME ONLY AFTER A QUERY WAS RAISED IN THIS REGARD DURING THE ASSESSMENT PROCEEDINGS BY THE AO. THE AO OBSERVED THAT HAD THE QUERY NOT BEEN RAISED DURING THE COURSE OF SCRUTINY ASSESSMENT PROCE EDINGS, THE INTEREST INCOME TO THE EXTENT OF ADDITION MADE WOULD HAVE ESCAPED ASSESSMENT. 6 . ACCORDINGLY, THE ASSESSING OFFICER LEVIED A PENALTY OF RS.3,45,286 / - BEING 100% , OF T HE TAX SOUGHT TO BE EVADED IN RESPECT OF ALL THE THREE ADDITIONS MADE IN T HE ASS ESSMENT ORDER, SUBJECT TO THE MARGINAL RELIEF ALLOWED BY THE CIT(A) WITH REGARD TO ONE OF THE ADDITIONS. 7 . UPON ASSESSEES APPEAL LEARNED CIT(A) NOTED THE ASSESSEES CONTENTION THAT SINCE ON TWO ISSUES ITAT HAS R EMANDED THE MATTER, PENALTY CANNOT BE SUSTAINED ON TH OSE ISSUE S . HOWEVER, LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION. HE PROCEEDED TO CONFIRM THE PENALTY ON ALL ISSUES. 7. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEA L BEFORE US. 9 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS . LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT AS REGARDS T HE ISSUE OF INCOME FROM HOUSE PROPERTY AND CLUBBING OF INCOME IS CONCERNED, THE MATTER HAS BEEN REMANDED TO THE ASSESSING OFFICER BY THE ITAT IN QUANTUM APPEAL. HENCE, LEARNED COUNSEL OF THE ASSE SSEE SUBMITTED THAT PENALTY LEVIED SHOULD ALSO BE MANISH DHIRAJLAL POPAT 4 DELETED. AS REGARDS THIRD ITEM OF ADDITION ON ACCOUNT OF INTEREST IN SAVINGS BANK, HE PLEADED THAT IT WAS VOLUNTARY OFFER AND THERE IS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. 10 . PER CONTR A, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF LEARNED CIT(A). 11 . UPON CAREFUL CONSIDERATION, WE FIND CONSIDERABLE COGENCY IN THE SUBMISSION OF LEARNED COUNSEL OF THE ASSESSEE THAT FOR THE ISSUES REMITTED BY THE ITAT TO THE ASSESSING O FFICER IN QUANTUM APPEAL, LEVY OF PENALTY IS NOT SUSTAINABLE. ACCORDINGLY, AS REGARD THE ISSUE OF LEVY OF PENALTY IN THIS REGARD, WE REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL CONSIDER THE SAME AFRESH AFTER PASSING TH E ORDER IN QUANTUM ISSUE UPON ITAT REMAND . 12. AS REGARDS, LEVY OF PENALTY ON INTEREST ON SAVINGS BANK IS CONCERNED, WE FIND THAT THE ASSESSEES CASE THAT THE SAME WAS VOLUNTARILY OFFERED H AS CONSIDERABLE COGENCY. THE ASSESSEES CONDUCT CANNOT BE SAID T O BE CONTUMACIOUS TO WARRANT LEVY OF PENALTY. HON'BLE APEX COURT IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA VS. (83 ITR 26) HAD HELD THAT AUTHORITY MAY NOT LEVY PENALTY IF CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. HENCE W ITH REGARD TO PENALTY LEVIED ON ADDITION INTEREST ON SAVINGS BANK ACCOUNT, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETED THE SAME. 1 3 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AS ABOVE. ORDER HAS BE EN PRONOUNCED IN THE COU RT ON 28 . 3 . 201 9 . SD/ - SD/ - (AMARJIT SINGH ) (SH A MIM YAHYA ) J U DICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 28 / 3 / 20 1 9 MANISH DHIRAJLAL POPAT 5 COPY OF THE ORDER FORWARDED TO : 1. THE A PPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECRETARY ) PS ITAT, MUMBAI