Zarin Z. Kothawala, V. Asstt. CIT Cir.7, Pune,

ITA 715/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3345 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 23-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GULATI
• Assessee Lawyers: DILEEP S RAHURKAR
• Keywords: Initiation of penalty proceedings; Revised return; Bonafide mistake
• Section: 142(1); 139(5); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI I.C. SUDHIR, JM AND SHRI D. KARUNAKAR A RAO, AM I.T.A. NO. 715/PN/2008: A.Y. 2004-05 ZARIN Z. KOTHAWALA NORTH MAIN ROAD, KOREGAON PARK, PUNE PAN ABAPK 7972 Q APPELLANT VS. ASSTT. CIT CIR. 7, PUNE RESPONDENT APPELLANT BY : SHRI DILEEP S. RAHURKAR RESPONDENT BY: SHRI G.S. GULATI ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRM ING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF ORDERS OF THE LOWER AUTHO RITIES. DURING THE ASSESSMENT PROCEEDINGS, THE A.O FOUND TH AT THE ASSESSEE HAS SHOWN LESS INCOME FROM LONG TERM CAPIT AL GAIN AND SHORT TERM CAPITAL GAIN BY AN AMOUNT OF RS. 5,6 9,898/- AND RS. 21,043/- RESPECTIVELY. THE A.O ACCORDINGLY MADE AN ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE AND ORDERED FOR INITIATION OF PENALTY PROCEEDINGS U/S 2 71(1)(C) OF THE ACT. THE A.O DID NOT AGREE WITH THE SUBMISSION S OF THE ITA NO.715/PN/2008 ZARIN Z KOTHAWALA A.Y. 2004-05 , 2 ASSESSEE THAT HE HAD FILED REVISED RETURN VOLUNTARI LY BEFORE COMMENCEMENT OF HEARING AND HAD POINTED OUT THE MIS TAKE ON HER OWN WHICH OCCURRED ON ACCOUNT OF A BONAFIDE MIS TAKE IN CALCULATION OF CAPITAL GAIN. THE A.O OBSERVED THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS INVALID AS THE SAM E WAS FILED ON 23-8-2006 I.E. BEYOND THE TIME LIMIT PRESCRIBED IN SECTION 139(5) OF THE ACT. THE A.O NOTED FURTHER THAT HAD THE DEPARTMENT NOT ISSUED NOTICES U/S 132(2) AND 142(1) , THE ASSESSEE WOULD HAVE NEVER DECLARED THE INCOME OF RS . 5,69,848/- AND RS. 21,043/-. THE A.O ACCORDINGLY H ELD THE ASSESSEE LIABLE FOR IMPOSITION OF PENALTY U/S 271(1 )(C) FOR CONCEALING PARTICULARS OF HER INCOME AND LEVIED PEN ALTY OF RS. 69,636/-. THE LEARNED CIT(A) HAS UPHELD THE PENALT Y. 3. BEFORE US THE LEARNED AR HAS REITERATED THE SUBM ISSIONS MADE BEFORE THE A.O AND THE LEARNED CIT(A). HE SUB MITTED THAT SINCE THE REVISED RETURN WAS OUT OF TIME, THE A.O DID NOT ACCEPT IT BUT HE HAS ACCEPTED THE REVISED COMPUTATI ON. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAD S UPPRESSED ANY NECESSARY INFORMATION REGARDING THE CAPITAL GAI N AND MISTAKE, IF ANY, FOUND BY THE A.O, WAS BONAFIDE ON THE PART OF THE ASSESSEE WHICH WAS ACCEPTED BY HER AND PAID TAX ES ACCORDINGLY ON IT. IN SUPPORT, THE AR REFERRED PAG ES NO. 5 AND 6 OF THE PAPER BOOK I.E. COPIES OF NOTICES U/S 142( 1) ALONG WITH QUESTIONNAIRE. ITA NO.715/PN/2008 ZARIN Z KOTHAWALA A.Y. 2004-05 , 3 4. THE LEARNED DR ON THE OTHER HAND, PLACED RELIANC E ON THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT THE RE WAS NO BONAFIDE MISTAKE BUT CONCEALMENT OF INCOME WAS THER E ON THE PART OF THE ASSESSEE. 5. HAVING GONE THROUGH THE ORDERS OF LOWER AUTHORIT IES, WE FIND SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE AS THERE IS NO REASON TO DOUBT THE EXPLANATION OF THE ASSESSEE THAT MISTAKE WAS BONAFIDE AS THE ASSESSEE HAD DISCLOSED ALL THE NECESSARY INFORMATION REGARDING INCOME FROM LONG TE RM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN ON THE BASIS OF TH OSE INFORMATIONS ONLY THE A.O CAME TO THE CONCLUSION TH AT LESS INCOME HAS BEEN SHOWN THEREON. THE ASSESSEE WHEN C AME TO KNOW ABOUT THE MISTAKE ACCEPTED IT AND FILED REVISE D RETURN. THE A.O DID NOT ACCEPT THE SAID REVISED RETURN AS I T WAS BEYOND THE PRESCRIBED TIME LIMIT U/S 139(5) OF THE ACT BUT HE HAS ACCEPTED THE REVISED COMPUTATION. TAKING INTO ACCOUNT THE TOTALITY OF THESE MATERIAL FACTS AND CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE MISTAKE ON THE PART OF THE ASS ESSEE WAS BONAFIDE ONE AND THERE WAS NO ANY REASON TO COME TO THE CONCLUSION BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS SHOWING LESS INCOME ON ACCOUNT OF LONG TERM CAPITAL GAIN AND SHO RT TERM ITA NO.715/PN/2008 ZARIN Z KOTHAWALA A.Y. 2004-05 , 4 CAPITAL GAIN. WE THUS WHILE SETTING ASIDE THE PENA LTY ORDER AND THE FIRST APPELLATE ORDER SUSTAINING THE SAME, DIRECT THE A.O TO DELETE THE PENALTY. THE GROUND IS ACCORDINGL Y ALLOWED. 6. CONSEQUENTLY, THE APPEAL IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (D. KARUNAKARA RAO) (I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 31 ST AUGUST 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- (A) III PUNE (4) CIT IV PUNE (5) THE D.R. ITAT B BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE