Shri Ram Babu Agrawal C/o- R-13, Yudhishthar Marg, C-Scheme, Jaipur, Jaipur V. DCIT, Circle-5, Jaipur, Circle-5, Jaipur

ITA 700/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8423 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 14-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MISS. CHANCHAL MEENA
• Keywords: Principle of natural justice; Revised return
• Section: 271(1)(c); 11; 143(3); 143(1); 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 700/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2015-16 SHRI RAM BABU AGARWAL R-13, YUDHISHTHAR MARG, C-SCHEME, JAIPUR. CUKE VS. THE DCIT, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AASPA 6246 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ R ESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : MISS. CHANCHAL MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 06/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/07/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 23.04.2019 OF LD. CIT(A)-II, JAIPUR FOR THE ASSESSM ENT ORDER 2015-16. DUE TO PREVAILING COVID-19 PANDEMIC CONDITION THE H EARING OF THE APPEAL IS CONCLUDED THROUGH VIDEO CONFERENCE. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESS ING OFFICER OF NOT EXCLUDING INTEREST INCOME OF RS. 23,57,248/- FR OM TOTAL ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 2 INCOME OF A.Y. 2015-16 AS SAME HAS BEEN ASSESSED IN A.Y. 2014- 15 BY AO. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) ERRED IN LAW CONFIRMING THE ACTION OF THE AS SESSING OFFICER ACTION OF TAXING THE SAME INCOME TWICE BY WAY OF IN TEREST INCOME OF RS. 23,57,248/- HAS ALREADY INCLUDED IN THE A.Y. 2014-15 BY AO WHICH IS AGAINST THE NATURAL JUSTICE OF LAW. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) ERRED IN HOLDING THAT ASSESSEE HAS SUFFICIEN T TIME TO REVISE HIS RETURN WHICH WAS NOT DONE. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) ERRED IN HOLDING THAT IT IS NOT CLEAR IF THI S AMOUNT WAS INCLUDED IN TOTAL INCOME SHOWN BY ASSESSEE. 2. THE ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSE SSEE IS REGARDING THE INTEREST INCOME OF RS. 23,57,248/- FROM PARTNER SHIP FIRMS WAS INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE FOR TH E YEAR UNDER CONSIDERATION AS WELL AS FOR THE ASSESSMENT YEAR 20 14-15 AND CONSEQUENTLY THE ASSESSEE IS SEEKING EXCLUSION OF T HE SAID INTEREST INCOME FROM THE TOTAL INCOME OF THE YEAR UNDER CONS IDERATION. THE ASSESSEE IS AN INDIVIDUAL AND PARTNER IN VARIOUS PARTNERSHIP FIRMS. THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.03.2016 D ECLARING TOTAL INCOME OF RS. 42,95,090/- INCLUDING INTEREST INCOME OF RS. RS. 23,57,248/-. INITIALLY THE ASSESSMENT WAS PROCESSED U/S 143(1) AND SUBSEQUENTLY IT WAS SELECTED FOR SCRUTINY. DURING T HE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THAT THE IN TEREST INCOME OF RS. ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 3 23,57,248/- PERTAINS TO THE ASSESSMENT YEAR 2014-1 5 AND THE AO HAS ADDED THE SAME TO THE INCOME OF THE ASSESSEE FOR TH E ASSESSMENT YEAR 2014-15, THEREFORE, THE SAID INCOME MAY BE EXCLUDED FROM THE INCOME OF THE ASSESSEE. THE AO DID NOT ACCEPT THIS SUBMISS ION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT REVISED HIS RETURN OF INCOME AND THEREFORE, THE INCOME CANNOT BE ASSESSED AT THE LOWER THAN THE INCOME DECLARED IN THE RETURN OF INCOME. THE ASSESS EE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND SUBMITTE D THAT THE AO IS BOUND TO MAKE THE ASSESSMENT OF TOTAL INCOME OR LOS S OF THE ASSESSEE AND DETERMINED THE SUM PAYABLE BY HIM OR REFUND ANY AMOUNT DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT. THEREFORE, THE AO IS DUTY BOUND TO ASSESS THE CORRECT INCOME OF THE ASSESSEE AS PER LAW. IF AN INCOME IS MISTAKENLY OFFERED TO TAX BY THE ASSESSEE THE SAME CANNOT BE CHARGED TO TAX WHEN IT IS NOT LIABLE FOR TAX FOR THE YEAR U NDER CONSIDERATION. THE ASSESSEE RELIED UPON VARIOUS DECISIONS IN SUPPORT O F THE CONTENTION THAT ONLY THE CORRECT INCOME OF THE ASSESSEE HAS TO BE A SSESSED TO TAX AND NO INCOME SHALL BE TAXED TWICE. THE LD. CIT(A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE ON THE GROUND THAT SINCE THE ASSESSEE HAS NOT REVISED HIS RETURN OF INCOME, THEREFORE, THE SA ID INCOME CANNOT BE EXCLUDED. ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 4 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT IT IS A CASE OF TAXATION OF SAME INCOME TWICE ONCE IN THE A SSESSMENT YEAR 2014-15 AND THEN AGAIN IN ASSESSMENT YEAR 2015-16. THE LD. AR HAS POINTED OUT THAT THE AO AS WELL AS LD. CIT(A) HAS R EJECTED THE SUBMISSIONS OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT REVISED HIS RETURN OF INCOME. HE HAS SUBMITTED THAT SINCE THE ASSESSEE FILED HIS RETURN OF INCOME BELATEDLY ON 30.03.2016, THEREFORE, THE SAME COULD NOT BE REVISED. THE LD. AR HAS REFERRED TO TH E ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2014-15 AND SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 23,57,248/- ON ACCOUNT OF INTEREST INCOME FROM THE PARTNERSHIP FIRMS AND ALSO LEVIED T HE PENALTY U/S 271(1)(C) AGAINST THE SAID ADDITION. THE ASSESSEE H AS NOT CHALLENGED THE ASSESSMENT ORDER AND ADDITION MADE BY THE AO FO R THE ASSESSMENT YEAR 2014-15 HOWEVER, AFTER THE ADDITION MADE FOR A SSESSMENT YEAR 2014-15 THE ASSESSEE SOUGHT TO EXCLUDE THE SAME IN COME WHICH WAS OFFERED TO TAX FOR THE ASSESSMENT YEAR 2015-16. THE REFORE, THE ASSESSING OFFICER HAS TAXED THE SAME INCOME TWICE O NE FOR THE ASSESSMENT YEAR 2014-15 AND THEN FOR THE ASSESSMENT YEAR 2015-16. SINCE, THE ASSESSEE HAS NOT OFFERED THIS INCOME FOR THE ASSESSMENT YEAR 2014-15 BUT IT WAS OFFERED FOR THE ASSESSMENT YEAR 2015-16 ON THE ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 5 BASIS OF RECEIPT OF THE INTEREST, THEREFORE, ONCE T HE SAID INCOME AS ADDED FOR THE ASSESSMENT YEAR 2014-15 THEN CONSEQUE NTLY THE SAME CANNOT BE TAXED FOR THE ASSESSMENT YEAR 2015-16. HE HAS REFERRED TO THE CBDT CIRCULAR NO. 14 DATED 11.04.1955 AND SUBMI TTED THAT THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF THE ASSESSEE AS TO HIS RIGHTS. IT IS THE DUTY OF THE AO TO ASSIST A TA X PAYER IN EVERY REASONABLE WAY. IN SUPPORT OF HIS CONTENTION, HE HA S RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. R. DALMIA 135 ITR 346. HE HAS ALSO RELIED UPON THE DECISION O F KOLKATA BENCH DATED 14.05.2018 IN CASE OF ACIT VS. SMT. SHARMILA KUMAR IN ITA NO. 679/KOL/2016 AS WELL AS DECISION OF PUNE BENCH DATE D 29.01.2015 IN CASE OF ACIT VS. BAJAJ FINANCE LTD. IN ITA NO. 288 TO 291/PN/2014. 4. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT TH E ASSESSEE HAS NOT RECTIFIED HIS RETURN OF INCOME FOR FILING REVIS ED RETURN OF INCOME. FURTHER, THE REMEDY IF ANY IS AVAILABLE ONLY U/S 11 9(2(B) OF THE ACT AND THE CBDT HAS ALREADY BEEN ISSUED CONSEQUENTIAL CIRC ULAR IN THIS RESPECT, THEREFORE, THE ASSESSEE CANNOT CHALLENGE THE ASSESS MENT ORDER WHEREBY THE AO AS ACCEPTED THE RETURN OF INCOME AND NO ADDI TION IS MADE. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW . ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 6 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS W ELL AS RELEVANT MATERIAL ON RECORD. IN THE CASE IN HAND THE INTERES T INCOME OF RS. 23,57,248/- PERTAINS TO THE ASSESSMENT YEAR 2014-15 HOWEVER, THE ASSESSEE HAS NOT OFFERED THE SAID INCOME IN THE RET URN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 BUT IT WAS OFFERED TO TAX F OR THE ASSESSMENT YEAR 2015-16. WHILE COMPLETING ASSESSMENT FOR THE A SSESSMENT YEAR 2014-15, THE AO POINTED OUT THIS ANOMALY REGARDING THE INTEREST INCOME WHICH WAS ACCEPTED BY THE ASSESSEE AND CONSEQUENTLY THE AO MADE AN ADDITION OF RS. 23,57,248/- TO THE TOTAL INCOME OF THE ASSESSEE WHILE PASSING THE SCRUTINY ASSESSMENT U/S 143(3) OF THE A CT DATED 02.12.2016. CONSEQUENTLY, THE ASSESSEE HAS SOUGHT T HE EXCLUSION OF THE SAID INCOME FROM THE TOTAL INCOME OF THE ASSESSEE F OR THE ASSESSMENT YEAR 2015-16 WHICH WAS DENIED BY THE AO IN PARA 4 O F THE ASSESSMENT ORDER AS UNDER:- 4 IN RESPONSE THE NOTICE THE AR OF THE ASSESSEE SH . RAJIV GUPTA, CA APPEARED AND FILED WRITTEN SUBMISSION. AFTER CON SIDERING THE REPLY OF THE ASSESSEE AND INFORMATION AVAILABLE ON RECORD, RETURNED INCOME OF THE ASSESSEE IS ACCEPTED. THE A/ R OF THE ASSESSEE HAD MADE REQUEST TO EXCLUDE INTEREST INCOM E OF RS. 23,57,248/-FROM TOTAL INCOME OF A.Y. 2015-16 AS SAM E HAS BEEN ASSESSED IN A.Y. 2014-15. THE REQUEST OF THE ASSESS EE CANNOT BE ACCEPTED AS THE ASSESSEE HAS NOT REVISED HIS INCOME FOR A.Y. 2015-16 AND INCOME CANNOT BE ASSESSED AT LOWER THEN INCOME DECLARED IN RETURN OF INCOME. ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 7 THE ONLY REASON FOR DENIAL OF EXCLUSION OF THE INCO ME FROM THE TOTAL INCOME OF THE ASSESSEE IS NON FILING OF THE REVISED RETURN OF INCOME. IT IS PERTINENT TO NOTE THAT SINCE THE RETURN OF INCOME W AS FILED BY THE ASESSEE BELATEDLY, THEREFORE, THE ASSESSEE COULD NO T FILE A REVISED RETURN OF INCOME. UNDISPUTEDLY THE SAID INCOME OF RS. 23,5 7,248/-ON ACCOUNT OF INTEREST FROM THE PARTNERSHIP FIRMS HAS BEEN TAX ED FOR THE ASSESSMENT YEAR 2014-15 AND IT WAS AGAIN TAXED FOR THE YEAR UNDER CONSIDERATION. IT IS A CASE OF TAXING THE SAME INCO ME TWICE. IT IS DUTY OF THE AO TO ASSESS THE CORRECT INCOME OF THE ASSESSEE PERMISSIBLE IN LAW. THE AO CANNOT TAKE THE ADVANTAGE OF ANY MISTAKE ON THE PART OF THE ASSESSEE TO OFFER AN EXCESS INCOME WHICH IS OTHERWI SE NOT TAXABLE UNDER LAW. IN THE CASE IN HAND, WHAT IS THE MISTAKE ON THE PART OF THE ASSESSEE IS TO DECLARE AND OFFER TO TAX THE INTERES T INCOME FOR THE ASSESSMENT YEAR 2015-16 INSTEAD OF 2014-15. ONCE, T HE INTEREST INCOME WAS ASSESSED FOR THE ASSESSMENT YEAR 2014-15 AND TH E ASSESSEE HAS NOT CHALLENGED THE SAID ORDER OF THE ASSESSING OFFI CER THEN THE CONSEQUENT EFFECT OF THE ASSESSMENT FOR THE ASSESS MENT YEAR 2014-15 WOULD BE TO EXCLUDE THE SAME INCOME FOR THE ASSESSM ENT YEAR 2015-16. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFIC ER FOR THE ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 8 ASSESSMENT YEAR 2014-15 WOULD LED TO DOUBLE TAXATIO N OF THE SAME INCOME. THE AO HAS TO REMOVE THE SAID ANOMALY IN TH E ASSESSMENT BY EXCLUDING THE SAID INCOME FOR THE ASSESSMENT YEARS 2015-16 AS THE INCOME PERTAINS TO THE ASSESSMENT YEAR 2014-15 AND WAS ALSO ACCORDINGLY, TAXED AS PER LAW. ONCE, THE AO HAS TRE ATED THE INCOME IN QUESTION AS CHARGEABLE TO TAX FOR THE ASSESSMENT YE AR 2014-15 THE SAME CANNOT BE CHARGED TO TAX FOR THE ASSESSMENT YE AR 2015-16. EVEN IF THE ASSESSING OFFICER IS HAVING LIMITATION FOR N OT ASSESSING INCOME BELOW THE INCOME DECLARED IN RETURN OF INCOME THE S AID BAR IS NOT APPLICABLE TO THE APPELLATE AUTHORITY. THE CIT(A) H AS REJECTED THE CONTENTION OF THE ASSESSEE AS HELD IN PARA 2.3.2 AS UNDER :- 2.3.2. ON PERUSAL OF OVERALL FACTS, IT IS SEEN THA T FOR A.Y. 2014-15 IN ASSESSMENT MADE ON 02.12.2016, ADDITION OF INTER EST FROM PARTNERSHIP FIRM OF RS. 23,57,248/-WAS MADE. APPELL ANT FILED RETURN OF INCOME FOR A.Y. 2015-16 ON 30.03.2016. TH US, HE HAD SUFFICIENT TIME TO REVISE HIS RETURN WHICH WAS NOT DONE. ALSO IT IS NOT CLEAR IF THIS AMOUNT WAS INCLUDED IN TOTAL INCO ME SHOWN BY ASSESSEE, THEREFORE, THIS CLAIM CANNOT BE ALLOWED T O ASSESSEE. ACCORDINGLY, THOSE GROUNDS ARE DISMISSED. THUS, THE LD. CIT(A) HAS ALSO MISUNDERSTOOD THE FAC T ABOUT THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED M UCH PRIOR TO THE ASSESSMENT FRAMED BY THE AO FOR THE ASSESSMENT YEAR 2014-15. THEREFORE, AT THE TIME OF FILING OF THE RETURN OF I NCOME IT WAS NOT CERTAIN ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 9 OR KNOWN TO THE ASSESSEE THAT THE AO WOULD MAKE AN ADDITION OF THE SAID INCOME FOR THE ASSESSMENT YEAR 2014-15. EVEN O THERWISE THE ASSESSEE IS LIABLE TO PAY TAX ONLY ON THE INCOME WH ICH IS CHARGEABLE TO TAX AS PER LAW, IF ANY EXCESS AMOUNT OF INCOME OFFE RED TO TAX THE AO IS DUTY BOUND TO CORRECT THE SAME AND ONLY INCOME WHIC H ASSESSABLE TO TAX AS PER LAW HAS TO BE ASSESSED TO TAX. HENCE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE CANNOT BE PE NALIZED ONLY FOR THE REASON THAT HE HAS NOT FILED REVISED RETURN OF INCO ME FOR CORRECTING THE APPARENT MISTAKE OF DOUBLE TAXATION OF THE INCOME. IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES OF THE CASE THE INCOME WHICH IS ALREADY CHARGED TO TAX FOR THE ASSESSMENT YEAR 2014-15 ON A CCOUNT OF INTEREST FROM PARTNERSHIP FIRMS OF RS. 23,57,248/- IS DELETE D FROM THE TOTAL INCOME OF THE ASSESSEE. THE AO IS DIRECTED TO ASSES SEE THE TOTAL INCOME OF THE ASSESSEE BY EXCLUDING THE SAID INCOME. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/07/2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/07/2020. * SANTOSH. ITA NO. 700/JP/2019 SHRI RAM BABU AGARWAL VS. DCIT 10 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAM BABU AGARWAL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 700/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR