Arun Kumar Gupta, V. ITO, Ward-1(1),

ITA 775/DEL/2005

• Counselvise Citation: [2005] 113 COUNSELVISE.COM (IT) 4219 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2005
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-04-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 16-02-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: V K GOEL
• Keywords: Question of law; Wrong claim
• Section: 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B NEW DELHI BEFORE SHRI G.E. VEERABHDRAPPA, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMEBR I.T.A NO. 775/DEL/05 ASSTT. YEAR 2002-03 SHRI ARUN KR. GUPTA, S/O SHRI J.L. GUPTA C/O SHRI B.L. SHARMA, GALI NO. 1, PANCHSHEEL COLONY, GARH ROAD, MEERUT. VS. I.T.O WARD-1 (1), MEERUT (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V.K. GOEL, ADVOCATE RESPONDENT BY: SHRI MANISH GUPTA, DR ORDER PER RAJPAL YADAV, JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT(A) DATED 1 ST DECEMBER, 2004 PASSED FOR ASSTT. YEAR 2002-03. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT( A) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY AMOUNTING TO RS. 396 57/- U/S 271 (1)(C) OF THE INCOME TAX ACT. ITA NO. 775/DEL/2005 ASSTT. YEAR 2002-03 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME ON 1 ST MAY, 2002 DECLARING AN INCOME OF RS. 1,09,492/-. H E HAS CLAIMED A REFUND OF RS. 5,622/-. THE ASSESSEE AT TH E RELEVANT TIME WAS SERVING IN ALLAHABAD BANK, MIRJAPUR AS CHIEF MANAGE R. HE HAS CONSTRUCTED HIS HOUSE AFTER TAKING LOAN FROM ALLAHA BAD BANK AND A LOAN OF RS. 2,25,000/- FROM HIS WIFE SMT. ARCHANA GUPTA. SMT. ARCHANA GUPTA WAS ASSESSED TO TAX IN WARD 5, MEERUT FROM THE LAST THREE YEARS I.E ASSTT. YEAR 1999-2000 TO 2001-02. THE TAX CONSU LTANT OF THE ASSESSEE SHRI PANKAJ GARG HAS ADVISED HIM TO CLAIM REBATE ON ACCOUNT OF HOUSING LOAN INTEREST PAYABLE TO THE BANK AS WEL L AS TO SMT. ARCHANA GUPTA WHO WAS ASSESSED TO TAX. HE ALSO APPRISED THE ASSESSEE THAT SINCE SMT. GUPTA HAS A SEPARATE SOURCE OF INCOME, H ER INCOME WOULD NOT BE CLUBBED WITH THE INCOME OF ASSESSEE U/S 64 O F THE INCOME TAX ACT. ACCORDING TO THE ASSESSEE ON THE BASIS OF THIS ADVICE HE HAS SIGNED THE BLANK PROFORMA ON WHICH RETURN WAS TO BE SUBMIT TED AND GAVE IT TO THE TAX CONSULTANT WITH AN INSTRUCTION THAT COMPUTE THE INCOME ACCORDING TO THE LAW AND CLAIM THE DEDUCTION WHICH IS ADMISSI BLE UNDER THE LAW. DURING THE ASSTT. PROCEEDING WHEN IT WAS CONFRONTED TO THE ASSESSEE THAT DEDUCTION OF INTEREST PAID TO THE WIFE IS NOT AVAILABLE TO THE ASSESSEE. HE SURRENDERED THAT AMOUNT OF RS. 54,000/ - WITH A REQUEST TO THE AO THAT BEING A SALARIED EMPLOYEE HE DOES NOT W ANT TO INVOLVE ITA NO. 775/DEL/2005 ASSTT. YEAR 2002-03 3 HIMSELF IN ANY SORT OF LITIGATION AND READY TO PAY THE TAX. THE INCOME OF THE ASSESSEE ACCORDINGLY ASSESSED BY THE AO VIDE OR DER DATED 15.12.2003 PASSED U/S 143 (3) OF THE ACT. THE AO H AD INITIATED PENALTY PROCEEDING AGAINST THE ASSESSEE ON THE GROUND THAT HE HAS FURNISHED INACCURATE PARTICULARS OF THE INCOME BY CLAIMING DE DUCTION OF RS. 54,000/- ON ACCOUNT OF INTEREST PAYMENT RELATING TO THE CONSTRUCTION OF THE HOUSE. THE AO CONCLUDED THAT ASSESSEE HAS KNOWI NGLY CLAIMED EXCESS DEDUCTION AND THEREFORE DESERVES TO BE VISIT ED WITH PENALTY. HE OBSERVED THAT ACT GIVES DISCRETION TO THE AO TO IMP OSE THE PENALTY RANGING FROM 100% TO 300% OF THE TAX SOUGHT TO BE EVADED. IN THE CASE OF ASSESSEE HE IMPOSED THE PENALTY @ 300% AND WORKE D OUT AT RS. 39.657/-. 3. APPEAL TO THE LD. CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS NO MALAFIDE INTENTION AT THE END OF ASSESSEE. HE HAS FILED THE RETURN ACCORDING TO THE ADVICE OF SHRI PANKAJ GARG. SHRI PANKAJ GARG HAS CO MMITTED A FRAUD NOT ONLY WITH THE ASSESSEE BUT SO MANY OTHER ASSESSEES AT MEERUT. HE FURTHER CONTENDED THAT SOMEWHAT SIMILAR DEDUCTION W AS CLAIMED IN A NUMBER OF CASES BY THE SALARIED EMPLOYEE. THE LD. C IT(A) HAS DELETED THE PENALTY IN SOME OF THE CASES AND THE TRIBUNAL H AS UPHELD THE ORDER OF THE LD. CIT(A). HE MADE A REFERENCE TO THE ORDER OF THE ITAT PASSED ITA NO. 775/DEL/2005 ASSTT. YEAR 2002-03 4 IN THE APPEAL OF REVENUE BEARING NO. 2023/D/05 FOR ASSTT. YEAR 2002-03 IN THE CASE OF SHRI OM PAL SINGH. HE FURTHER CONTEN DED THAT THIS ORDER OF THE TRIBUNAL HAS BEEN UPHELD BY THE HONBLE ALLAHAB AD HIGH COURT IN ITA NO. 211 OF 2006. HE FURTHER RELIED UPON THE ORD ER OF ITAT IN THE CASE OF SHRI ARUN KUMAR SEHGAL PASSED IN ITA NO. 3198/D/ 2005. IN THIS CASE UNDER SIMILAR CASES TRIBUNAL HAS DELETED THE PENALT Y. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF LD. CIT(A). 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT THAT APPEAL OF THE ASSESSEE WAS EARLIER DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 27 TH OCTOBER, 2005. HOWEVER IT WAS RECALLED IN A MISCELLANEOUS APPLICAT ION ON THE GROUND THAT TRIBUNAL FAILED TO CONSIDER THE CASES OF 6-7 OTHER ASSESSEE WHO WERE IDENTICALLY SITUATED AND BROUGHT TO THE NOTICE OF THE TRIBUNAL AT THE TIME OF HEARING OF THE APPEAL. THE ORDER OF THE TRI BUNAL DATED 27 TH OCTOBER, 2005 HAS BEEN RECALLED IN MA NO. 279/D/08 VIDE ORDER DATED 25 TH FEBRUARY, 2002 WHEREIN TRIBUNAL WAS SATISFIED THAT IT HAS COMMITTED AN APPARENT MISTAKE WHILE DISPOSING OF THE APPEAL O F ASSESSEE, BECAUSE IT FAILED TO TAKE NOTICE OF THE ORDERS OF THE ITAT WHICH WERE PASSED ON IDENTICAL FACTS. THE HONBLE ALLAHABAD HIGH COURT W HILE DISMISSING THE APPEAL OF REVENUE IN THE CASE OF SHRI OM PAL SINGH HAS MADE FOLLOWING OBSERVATION :- ITA NO. 775/DEL/2005 ASSTT. YEAR 2002-03 5 FALSE CLAIM OF DEDUCTION WAS MADE BY THE COUNSEL W ITHOUT ANY KNOWLEDGE OF THE ASSESSEE WHO IMMEDIATELY REVIS ED THE RETURN ON COMING TO KNOW ABOUT THIS FACT. THE PENAL TY HAS BEEN DELETED BY THE TRIBUNAL ON THE GROUND THAT THE ASSESSEE HAS NOT CONCEALED OR HAS FURNISHED INACCUR ATE PARTICULARS OF ITS INCOME. IN VIEW OF THE FINDING RECORDED BY THE TRIBUNAL WHI CH IS BASED ON THE APPRECIATION OF EVIDENCE AND MATERIAL ON REC ORD, THE ORDER OF THE TRIBUNAL DOES NOT GIVE RISE TO ANY QUE STION OF LAW WHAT TO SAY ABOUT ANY SUBSTANTIAL QUESTION OF LAW. THE APPEAL FAILS AND IS DISMISSED DATED 21.7.2009 211/06/YK 6. THE ASSESSEE HAS CLAIMED THE DEDUCTION OF INTERE ST EXPENSES ON THE ADVICE OF TAX CONSULTANT. THE MOMENT HE WAS CON FRONTED THAT INTEREST PAID TO THE WIFE FOR RAISING LOAN TO CONST RUCT THE HOUSE IS NOT ADMISSIBLE . HE DID NOT DISPUTE AND AGREED TO PAY T HE TAX. HE HAS SPECIFICALLY ALLEGED THAT HE DOES NOT WANT TO INDUL GE IN ANY LITIGATION WITH THE DEPARTMENT, BEING A SALARIED EMPLOYEE. THE ASSE SSEE HAS DISCLOSED THE FACTS IN THE RETURN. HE HAS MADE A CLAIM WHICH MAY NOT BE ALLOWABLE IN THE LAW BUT THAT WOULD NOT INDICATE THAT SUCH A STEP AT THE END OF ASSESSEE WAS A DELIBERATE ATTEMPT TO AVOID THE TAX LIABILITY OR TO FURNISH THE INACCURATE PARTICULARS. TAKING INTO CONSIDERATI ON THE FACTS, CIRCUMSTANCES AND OTHER ORDERS OF THE TRIBUNAL PLAC ED ON RECORD AS WELL AS THE ORDER OF THE HONBLE ALLAHABAD HIGH COURT WH EREIN HONBLE COURT ITA NO. 775/DEL/2005 ASSTT. YEAR 2002-03 6 HAS CONFIRMED THE ORDER OF THE ITAT IN ITA NO. 2023 /D/2005 WE ALLOW THE APPEAL OF ASSESSEE AND DELETE THE PENALTY. ORDER PRONOUNCED IN THE OPEN COURT ON 9.4.2010. [G.E. VEERABHDRAPPA] [RAJPAL YADAV] VICE PRESIDENT JUDICIAL MEMBER VEENA DATED: COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT