Chaitali Saha, Kolkata V. CIT, (APPeals)-XIV, KOLKATA, Kolkata

ITA 775/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1933 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 22-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2014
• Court: TRIBUNAL
• Keywords: Business income; Salary income; Principle of natural justice; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH, KOLKATA (BENCH - C ) BEFORE SHRI N. V. VASUDEVAN JUDICIAL MEMBER AND SHRI M . BALAGANESH, ACCOUNTANT MEMBER , I.T.A. NO. 775 /KOL/2014 ASSESSMENT YEARS: 20 08 - 09 ORDER PER M. BALAGANESH , AM THIS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - XIV, KOLKATA, DT. 26 .0 3 .2014, LEVYING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT , IN THE FACTS AND CIRCUMSTANCES OF THE CASE. CHAITALI SAHA 94/34, VIVEKANANDA ABASAN, PLOT - 21 NAYAPATTI ROAD, DUM - DUM - 700055 [PAN : ABGPS2661G ] - VS - CIT - (A ) - XIV , KOLKATA (APPELLANT) (RESPONDENT) FOR THE APP ELLANT NONE FOR THE RESPONDENT RAJAT KUMAR KUREEL, JCIT, SR. DR DATE OF HEARING 22 .03.2017 DATE OF PRONOUNCEMENT 05.04.2017 2 I.T.A. NO. 775/KOL/2014 ASSESSMENT YEARS: 2008 - 09 CHAITALI SAHA 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY FROM AIR INDIA AND INTEREST INCOME ON DEPOSITS. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARING ONLY SALARY INCOME. THE LD. AO OBTAINED INFORMATION IN AIR, WHEREIN HE OBSERVED THAT THE ASSESSEE HAD RECEIVED INTEREST INCOME TO THE TUN E OF RS.4,76,423/ - WHICH HAD NOT BEEN OFFERED BY THE ASSESSEE IN THE RETURN. THE ASSESSEE EXPLAINED THAT SHE WAS SUFFERING FROM BREAST CANCER AND WAS MOVING FOR TREATMENT AT HINDUJA HOSPITAL AT MUMBAI & CMRI AT KOLKATA AND SHE COULD NOT OBTAIN THE BANK STA TEMENT IN TIME, IN ORDER TO OFFER THE INTEREST INCOME IN THE RETURN. ACCORDINGLY, SHE COULD NOT OFFER THE INTEREST INCOME ON ACCRUAL BASIS. IT WAS ALSO PLEADED BY THE ASSESSEE THAT SHE WAS CONTEMPLATING TO OFFER THE INCOME ON RECEIPT BASIS INSTEAD OF ON AC CRUAL BASIS. THE LD. AO COMPLETED THE ASSESSMENT AFTER ADDING THE INTEREST INCOME ON ACCRUAL BASIS AND PROCEEDED TO LEVY PENALTY U/S 271(1)(C) OF THE ACT THEREON. THE LEVY OF PENALTY WAS CONFIRMED BY THE LD. CIT(A) IN FIRST APPEAL. 4. AGGRIEVED THE ASSES SEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS OF APPEAL: 1). THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS.1,98,991/ - IMPOSED U/S 271(1)(C) OF THE I.T. ACT WHICH IS BAD IN LAW, VOID AND AGAINST THE PRINCI PLE OF NATURAL JUSTICE. 2). THAT THE APPELLANT CRAVES LEAVE TO URGE THE ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 3 I.T.A. NO. 775/KOL/2014 ASSESSMENT YEARS: 2008 - 09 CHAITALI SAHA 5. THE ASSESSEE PLACED WRITTEN SUBMISSIONS BEFORE US EXPLAINING THE ENTIRE FACTS OF THE CASE AND ADDUCING EVIDENCE FOR HER ILLNESS AND MEDICAL TREATMENT UNDERGONE BY HER DURING THE RELEVANT TIME. SINCE THE ASSESSEE DID NOT HAVE ANY BUSINESS INCOME, SHE WAS CONTEMPLATING TO OFFER THE INTEREST INCOME ON RECEIPT BASIS INSTEAD OF, ON ACCRUAL BASIS. THE INABILITY OF THE ASSESSEE DU E TO PROLONGED ILLNESS HAD CONTRIBUTED FOR NOT OFFERING THE SAID INTEREST INCOME ON ACCRUAL BASIS IN THE ORIGINAL RETURN OF INCOME AND THE SAME ITSELF WOULD CONSTITUTE REASONABLE CAUSE IN TERMS OF SECTION 273 B OF THE ACT, AND ACCORDINGLY PLEADED FOR CANCEL LATION OF THE PENALTY LEVIED BY THE LD. AO . IN RESPONSE TO THIS THE LD. DR, VEHEMENTLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND LOT OF FORCE IN THE ARGUMEN TS OF THE LD. AR, THAT DUE TO THE INABILITY OF THE ASSESSEE IN OBTAINING THE BANK STATEMENTS FOR OFFERING INTEREST INCOME ON BANK DEPOSITS IN THE ORIGINAL RETURN OF INCOME AS SHE WAS SUFFERING FROM BREAST CANCER AND WAS UNDERGOING TREATMENT THEREON. THIS, IN OUR CONSIDERED OPINION, WOULD DEFINITELY CONSTITUTE REASONABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT AND WE HOLD THAT THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WAS PREVENTED FROM REASONABLE CAUSE AND HENCE THE ASSESSEE SHOULD NOT BE IN VITED THAT THE LEVY OF PENALTY THEREON. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 4 I.T.A. NO. 775/KOL/2014 ASSESSMENT YEARS: 2008 - 09 CHAITALI SAHA 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 05.04.2017 SD/ - SD/ - [ N. V. VASUDEVAN ] [M. BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.04.2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE CHAITALI SAHA 94/34, VIVEKANANDA ABASAN, PLOT - 21 NAYAPATTI ROAD, DUM - DUM - 700055 2. RESPONDENT CIT - (A) - XIV, KOLKATA . 3. CIT(A) - KOLKATA. 4. CIT , KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES