Hira Lal Gupta, Lucknow V. Astt. Commissioner of Income Tax, Lucknow

ITA 708/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4783 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-01-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 26-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 708/LKW/2015 ASSESSMENT YEAR: 2011 - 12 HIRA LAL GUPTA 2/79, VIRAM KHAND GOMTI NAGAR LU CKNOW V. ASSTT. CIT RANGE 5 LUCKNOW T AN /PAN : AESPG4926P (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. S. C. AGARWAL, ADVOCATE RESPONDENT BY: SHRI. AMIT NIGAM, D.R. DATE OF HEARING: 12 01 201 6 DATE OF PRONOUNCEMENT: 03 02 201 6 O R D E R PER SUNI L KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2 . DURING THE COURSE OF HEARING, THE LD. C OUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE WAS MANAGING DIRECTOR OF UP SAMAJ KALYAN NIGAM LIMITED. HE FILED HIS RETURN OF INCOME ON 28.7.2011 DECLARING TOTAL INCOME AT RS.11,43,740/ - UNDER THE HEAD SALARIES ON THE BA SIS OF FORM 16A ISSUED BY UP SAMAJ KALYAN NIGAM LIMITED. BESIDES, THE ASSESSEE HAS ALSO RECEIVED ARREARS FROM IRLA OF R S.2,63,495/ - , ON WHICH TDS WAS ALSO DEDUCTED AT R S.81,370/ - BUT INADVERTENTLY THE ASSESSEE HAS NEITHER INCLUDED THIS AMOUNT TO THE : - 2 - : TOTAL INCOME NOR CLAIMED BENEFIT OF TDS ON SUCH PAYMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FROM THE BANK DETAILS, THE ASSESSING OFFICER HAS NOTED RECEIPT OF TOTAL INCOME AND MADE ADDIT I ON OF THE SAME. BESIDES, HE HAS ALSO LEVIED PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT. THE PENALTY WAS ALSO LEVIED ON INTEREST INCOME OF R S.10,782/ - WHICH WAS ALSO NOT OFFERED TO TAX INADVERTENTLY. 3 . THE ASSESSEE PREFERRED AN A P PEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT UNDER A BONA FIDE MISTAKE HE COULD NOT O FFER THIS AMOUNT TO TAX, AS IT WAS RECEIVED AS AN ARREAR FROM DIFFERENT DEPARTMENTS AND NOT FROM THE REGULAR EMPLOYER WITH WHOM ASSESSEE WAS WORKING. BUT THE LD. CIT(A) WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE AND HE CONFIRMED THE PENALTY. 4 . NOW THE ASSESSEE IS BEFORE US AND THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSING OFFICER HAS MADE ADDITION OF THE TOTAL ARREARS RECEIVED OF RS.2,63,495/ - , BUT HAS NOT ALLOWED DEDUCTION OF TDS DEDUCTED BY THE IRLA. IF THE DEDUCTION IS CONSIDERED, THERE WOULD BE NO OUTSTANDING DUES; THEREFORE, THERE WAS NO LOSS TO THE REVENUE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT WHATEVER MISTAKE WAS OCCURRED IN COMPUTATION OF TOTAL INCOME, IT WAS INADVE RTENT AND UNDER BONA FIDE BELIEF. THEREFORE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. 5 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORIT IES IN THE LIGHT OF THE RIVAL SUBMISSIONS , WE FIND THAT THOUGH THE ASSESSING OFFICER HAS MADE ADDITION OF RS.2,63,495/ - AS ARREARS RECEIVED FROM IRLA, BUT HAS NOT ALLOWED DEDUCTION OF TDS DEDUCTED BY THE PAYER. THE : - 3 - : APPROACH OF THE ASSESSING OFFICER IS NOT CORRECT. IF HE HAS TAKEN A PARTICULAR RECEIPT TO THE TOTAL INCOME OF THE ASSESSEE, THE BENEFIT OF DEDUCTION OF THE AMOUNT DEDUCTED BY THE PAYER SHOULD BE ALLOWED. WE HAVE ALSO TAKEN INTO ACCOUNT THE CONTENTIONS OF THE ASSESSEE THAT IF TDS DEDUCTED IS TA KEN INTO ACCOUNT, THERE WOULD NOT BE ANY TAX LIABILITY EVEN AFTER TAKING THIS AMOUNT TO BE THE PART OF THE TOTAL INCOME OF THE ASSESSEE. IN SUCH AN EVENTUALITY, THERE WOULD BE NO LOSS TO THE REVENUE. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT I N THE PRESENT CASE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION ED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD 1 . APPELLANT FEBRU ARY, 2016 JJ: 1201 COPY FORWARDED TO: 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR