SIDHARATH S KAPUR, MUMBAI V. DCIT 26(2), MUMBAI

ITA 792/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2485 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 10-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNEESH K ARVINDDR
• Keywords: Salary income; Bonafide belief
• Section: 10

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.792 /MUM/2015 ( / ASSESSMENT YEAR : 2010-11) SIDHARATH S. KAPOOR, 10 TH FLOOR, 37 LOVEDALE APRTS., OPP FARIYAS HOTEL, COLABA, MUMBAI. / V. DY. ACIT 35(3), C-12, 4 TH FLOOR, PRATYAKSHA KAR BHAVAN, BKC, BANDRA (EAST), MUMBAI 400 051. ./ PAN : AAJPK7956Q ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY NONE REVENUE BY : SHRI RAJNEESH K. ARVIND,DR / DATE OF HEARING : 10-08-2016 / DATE OF PRONOUNCEMENT : 25-10-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 792/MUM/2015, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 14 TH NOVEMBER, 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 28, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2010- 11, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ORDER OF PENALTY DATED 31 ST JULY, 2013 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 271(1)(C) OF THE INCOME TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 792/MUM/2015 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. THE LEARNED CIT (A) IS ERRED IN UPHOLDING THE P ENALTY OF RS. 401135/- WITHOUT CONSIDERING THE BONAFIDE AND PROPER HEARING AND WITHOUT CONSIDERING ALL THE GROUNDS. 2. THE LEARNED CIT (A) HAS NOT APPRECIATED THE FACT TA X EVASION IS ONLY RS. 132198/- AND NOT RS. 401135/-. 3. AT THE TIME OF HEARING BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, WE PROCEED TO DISPOSE OF THE A PPEAL AFTER HEARING THE LEARNED D.R. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 14 3(3) OF THE ACT, IT WAS OBSERVED BY THE A.O. THAT THE ASSESSEE HAD RECEIVED INTEREST AMOUNTING TO RS.22,82,196/- IN HIS BANK ACCOUNT , WHILE THE ASSE SSEE HAS OFFERED RS. 17,46,736/- AS INTEREST INCOME IN HIS RETURN OF IN COME FILED WITH THE REVENUE. THUS, THERE WAS AN ADDITION OF RS.6,89,98 2/- TO THE RETURNED INCOME BY THE AO IN QUANTUM ASSESSMENT. SIMILARLY, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAD OFFERED SALARY INCOME OF R S.47,98,998/- RECEIVED FROM ONE EMPLOYER I.E. M/S. DELHI INTERNATIONAL AIR PORT PVT. LTD., WHEREAS HE HAD ALSO RECEIVED SALARY INCOME OF RS.6,08,723/- FR OM M/S. ICOMM TELE LTD. ALSO DURING THE FINANCIAL YEAR , WHICH WAS NOT DECL ARED TO THE REVENUE AND HENCE THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE DUE TO THE FAILURE OF THE ASSESSEE TO REPORT THE SAME IN HIS R ETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 FILED WITH THE REVENUE. SHO W CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE AO ASKING AS TO WHY P ENALTY U/S 271 (1)(C) OF THE ACT SHOULD NOT BE LEVIED. THE ASSESSEE SUBMITTE D THAT THE ASSESSEES CASE ITA 792/MUM/2015 3 WAS SELECTED FOR SCRUTINY AND SALARY INCOME FROM PR EVIOUS EMPLOYER OF RS. 6,08,190/- ON WHICH TDS OF RS. 1,77,479/- HAD BEEN DEDUCTED WAS NOT INCLUDED IN THE RETURN OF INCOME FILED WITH THE REV ENUE AND THE ASSESSEE HAS OFFERED THE SAME FOR TAXATION DURING QUANTUM ASSESS MENT . SIMILARLY, INTEREST INCOME FROM SBI AMOUNTING TO RS. 6,89,952/ - ON WHICH TDS OF RS. 76,409/- WAS DEDUCTED WAS INADVERTENTLY NOT SHOWN A S INCOME IN THE RETURN OF INCOME FILED WITH THE REVENUE AND THE SAME HAD B EEN OFFERED TO TAX DURING THE QUANTUM ASSESSMENT . THE ASSESSEE SUBMITTED TH AT HE JOINED M/S ICOMM TELE LIMITED IN THE MONTH OF FEBRUARY, 2009 A ND RESIGNED IN MAY, 2009. THE TOTAL SALARY RECEIVED WAS RS. 6 LACS AND TDS WAS REQUIRED TO BE DEDUCTED TO THE TUNE OF RS. 79,407/- , AGAINST WHIC H TDS OF RS.1,77,479/- WAS ALREADY DEDUCTED BY THE EMPLOYER AND HENCE THE ASSESSEE INADVERTENTLY IGNORED TO INCLUDE THE SAID SALARY INCOME. SIMILARL Y, INTEREST OF RS. 6,86,952/- WAS CREDITED IN THE ASSESSEE ACCOUNT AND THE REQUIR ED TDS OF RS. 76,409/- HAD BEEN DEDUCTED AND IT WAS SUBMITTED THAT THE ASS ESSEE HAD NOT CLAIMED THE TDS AMOUNT WITH RESPECT TO BOTH THE ADDITIONS I N THE RETURN OF INCOME FILED WITH THE REVENUE. THE A.O. REJECTED THE CONTENTION OF THE ASSESSEE AN D OBSERVED THAT THE ASSESSEE HAD EARNED SALARY INCOME OF RS.6,08,190/- AND THE BANK INTEREST INCOME OF RS. 6,86,952/- AND THE ASSESSEE HIMSELF HAD NOT VOLUNTARILY OFFERED SALARY AND INTEREST INCOME AS PER RETURN OF INCOME FILED AND ALSO FAILED TO CORRECT THE INACCURATE CLAIMS MADE IN HIS RETURN OF INCOME FILED WITH THE REVENUE. NO SATISFACTORY EXPLANATIONS HAS BEEN OFFE RED BY THE ASSESSEE FOR NOT SHOWING THIS INCOME IN THE ORIGINAL RETURN OF I NCOME FILED WITH THE REVENUE BUT ONLY STATED THAT THE SAID INCOME REMAIN ED TO BE TAXED AS FORM NO. 16 WAS NOT RECEIVED OR DUE TO OMISSION/OVERSIGH T. WHEN THE ASSESSEE WAS CONFRONTED, THE ASSESSEE SUBMITTED THE DETAILS FROM WHICH THE DETAILS OF UNDISCLOSED INCOME HAVE BEEN ADDED. FURTHER , THE A O OBSERVED THAT THE CONTENTION OF ASSESSEE THAT THE ASSESSEE HAS OFFERE D THE SAID INCOME DURING ITA 792/MUM/2015 4 THE COURSE OF ASSESSMENT PROCEEDINGS WAS ALSO NOT C ORRECT AS THE SAME HAS BEEN DONE BY THE ASSESSEE AFTER THE CASE WAS SELECT ED FOR SCRUTINY. THE A.O. OBSERVED THAT THE ASSESSEE HAS ACCEPTED THE ORDER U /S.143 (3) OF THE ACT AND PAID THE TAX DETERMINED IN THE ASSESSMENT ORDER AND HE HAS ALSO NOT FILED ANY APPEAL BEFORE THE LEARNED CIT(A) AGAINST THE ASSESS MENT ORDER IN QUANTUM WHICH PROVED THAT THE ASSESSEE HAS ADMITTED THAT TH E PARTICULARS OF INCOME IN THE RETURN WERE FURNISHED INACCURATELY IN THE RETUR N OF INCOME FILED WITH THE REVENUE. THE A.O. HELD THAT IT IS MANDATORY ON PART OF THE ASSESSEE TO FURNISH THE PARTICULARS OF INCOME IN THE RETURN OF INCOME C ORRECTLY AS PER PROVISIONS OF THE ACT WHICH THE ASSESSEE FAILED TO DO SO. IT WAS OBSERVED BY THE AO THAT THE CASE OF CIT V. RELIANCE PETROPRODUCTS PRIVATE LIMIT ED (2010) 322 ITR 158 (SC) RELIED UPON BY THE ASSESSEE IS NOT APPLICABLE IN TH E CASE OF THE ASSESSEE AS THE ASSESSEE DID CONCEAL THE INCOME AND FILED INACC URATE PARTICULARS OF INCOME.IT WAS OBSERVED BY THE AO THAT MEN-REA IS NO T TO BE PROVE AS PENALTY PROCEEDINGS ARE CIVIL PROCEEDINGS AND WILLFUL CONCE ALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY THE A.O. ACCORDINGLY LEVIED PENALTY OF RS. 4,01,135/- U/S 271(1)(C) OF THE ACT WHICH IS 10 0% OF THE TAX SOUGHT TO BE EVADED VIDE PENALTY ORDER DATED 31-07-2013 PASSED B Y THE AO U/S 271(1)(C) OF THE ACT. 5.AGGRIEVED BY THE PENALTY ORDER DATED 31-07-2013 P ASSED BY THE A.O. U/S 271(1)(C) OF THE ACT, THE ASSESSEE FILED FIRST APPE AL BEFORE THE LD. CIT(A). 6. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH AT HE HAD EARNED SALARY FROM ICOMM TELE LIMITED FOR THE MONTH OF APRIL AND MAY, 2009 OF RS. 6,08,190/- OUT OF WHICH TDS DEDUCTED WAS RS. 1,77,4 79/- @ 29.18%. IT WAS SUBMITTED THAT THE ASSESSEE IS WORKING WITH DELHI I NTERNATIONAL AIRPORT PRIVATE LIMITED(DIAL) AND THE SALARY INCOME FROM DI AL WAS DULY DECLARED TO THE REVENUE IN THE RETURN OF INCOME FILED. SIMILAR LY IT WAS SUBMITTED THAT INTEREST INCOME FROM SBI WAS RS. 6,86,952/- ON WHI CH TDS DEDUCTED WAS ITA 792/MUM/2015 5 RS. 76,409/- @ 11.12%. THE ASSESSEE SUBMITTED THAT INADVERTENTLY THE INTEREST INCOME FROM SBI OF RS. 6,86,952/- AND THE TAX OF RS. 76409/- DEDUCTED AT SOURCE ON THIS INCOME WAS NOT CLAIMED I N THE RETURN OF INCOME FILED WITH THE REVENUE . HOWEVER, ON REALIZING THE SAME THE ASSESSEE SUO- MOTU HAS FILED REVISED COMPUTATION OF INCOME BEFORE THE A.O. VIDE LETTER DATED 30-10-2012 AND OFFERED BOTH THE INCOME AND CLAIMED TDS ALREADY SO DEDUCTED. THE ASSESSEE ACCORDINGLY PRAYED THAT PEN ALTY LEVIED IS BOTH ILLEGAL AND BAD IN LAW. THE LD. CIT(A) REJECTED THE CONTENTION OF THE ASSE SSEE AND OBSERVED THAT THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT TAX HAD BEEN CORRECTLY DEDUCTED AT SOURCE BY THE OTHER EMPLOYER ICOMM TELE LIMITED FOR APRIL/MAY 2009 AND HENCE THERE WAS NO N EED TO SHOW IN THE RETURN OF INCOME FILED WITH THE REVENUE CANNOT BE A CCEPTED AS IT GOES AGAINST THE CONDUCT OF THE ASSESSEE. THE LD. CIT(A) HELD T HAT THE ASSESSEES CLAIM THAT THIS WAS AN INADVERTENT MISTAKE/OMMISION CANNOT BE ACCEPTED WITHOUT ANY VALID EXPLANATION. NO VALID REASONS WERE OFFERED B Y THE ASSESSEE FOR NOT SHOWING THESE INCOME IN THE RETURN OF INCOME FILED WITH THE REVENUE . IT WAS OBSERVED THAT THE REVISED COMPUTATION WAS SUBMITTED ONLY AFTER THE CASE WAS PICKED UP FOR SCRUTINY AND SPECIFIC REASONS WERE PU T TO THE ASSESSEE, HENCE, IT COULD NOT BE SAID THAT THE ASSESSEE HAS VOLUNTARILY OFFERED THE SAID INCOME TO TAX BEFORE IT WAS POINTED OUT BY THE A.O. TO THE AS SESSEE. IT WAS OBSERVED THAT FILING OF REVISED COMPUTATION OF INCOME DURING ASSE SSMENT PROCEEDINGS DOES NOT ABSOLVE THE ASSESSEE FROM THE CHARGE OF FILING OF INACCURATE PARTICULARS IN THE RETURN OF INCOME FILED WITH THE REVENUE. THE L D. CIT(A) ACCORDINGLY HELD THAT SINCE THE BONAFIDES OF THE EXPLANATION FURNISH ED BY THE ASSESSEE HAS NOT BEEN ESTABLISHED AND ALSO ALL THE FACTS MATERIAL TO THE COMPUTATION OF INCOME HAVE NOT BEEN FURNISHED IN THE RETURN OF INCOME FIL ED WITH THE REVENUE , THE PENALTY LEVIED BY THE A.O. WAS UPHELD/SUSTAINED BY LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 14-11-2014 . THE LEARNED C IT(A) ALSO REJECTED THE ITA 792/MUM/2015 6 CONTENTIONS OF THE ASSESSEE THAT THE PENALTY BE RES TRICTED KEEPING IN VIEW THE TAX SO ALREADY DEDUCTED AT SOURCE ON SALARIES AND I NTEREST , BUT THE LEARNED CIT(A) REJECTED CONTENTIONS OF THE ASSESSEE AS THE PENALTY IS TO BE LEVIED U/S 271(1)(C) OF THE ACT ON THE TAX SOUGHT TO BE EVADED IN EXPLANATION 4 TO SECTION 271(1)(C) OF THE ACT AND VIDE CLAUSE (C) OF THE EXP LANATION 4 CLEARLY BRINGS OUT THAT TAX SOUGHT TO BE EVADED MEANS THE DIFFERENCE B ETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME O N RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTI CULARS HAVE BEEN FURNISHED. 7. AGGRIEVED BY THE APPELLATE ORDERS DATED 14-11-20 14 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 8. NONE APPEARED FOR THE ASSESSEE . THE LD. D.R. SU BMITTED THAT PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED BY THE AO AND S USTAINED BY LEARNED CIT(A) AS THE INCOME EARNED FROM SALARY FROM ICOMM TELE LI MITED FOR APRIL/MAY 2009 OF RS. 6,08,190/- WAS NOT DECLARED IN THE RETU RN OF INCOME FILED WITH THE REVENUE. THE TDS WAS DEDUCTED OF RS. 1,77,479/- @ 29.18% ON SALARY INCOME FROM ICOMM TELE LIMITED. SIMILARLY, THE ASSE SSEE HAS NOT DISCLOSED THE INTEREST INCOME FROM SBI OF RS. 6,86,952/- IN T HE RETURN OF INCOME FILED WITH THE REVENUE. IT WAS SUBMITTED THAT TAX OF RS. 76,409/- WAS DEDUCTED ON THIS INTEREST INCOME FROM SBI WAS NOT CLAIMED IN TH E RETURN OF INCOME FILED WITH THE REVENUE . THE TAX WAS DEDUCTED AT SOURCE ON THESE INCOMES HOWEVER THE SAME WAS NOT INCLUDED IN THE RETURN OF INCOME FILED WITH THE REVENUE. THE PENALTY U/S 271(1)(C) OF THE ACT WAS RIGHTLY LEVIED BY THE A.O. THE LD. D.R. ALSO RELIED ON THE ORDER OF THE LD. CI T(A). 9. WE HAVE HEARD THE LD. D.R. AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS. WE HAVE OBSERVED TH AT THE ASSESSEE WAS ITA 792/MUM/2015 7 WORKING FOR A SHORT PERIOD I.E. FROM FEBRUARY TO MA Y, 2009 WITH ICOMM TELE LTD. WHEREBY THE ASSESSEE HAS EARNED SALARY INCOME OF RS. 6,08,190/- FOR APRIL/MAY 2009 ON WHICH TAX WAS DEDUCTED AT SOURCE. AFTER MAY, 2009, THE ASSESSEE WAS WORKING WITH DELHI INTERNATIONAL AIRPO RT (P) LTD.(DIAL) AND THE ASSESSEE HAS DULY DECLARED THE SALARY INCOME FROM D IAL IN THE RETURN OF INCOME FILED WITH THE REVENUE. WHILE COMPUTING THE INCOME FROM SALARY, INADVERTENTLY THE ASSESSEE HAD NOT INCLUDED THE SAL ARY RECEIVED FOR TWO MONTHS FROM ICOMM TELE LTD. OF RS.6,08,190/- FOR AP RIL/MAY 2009 AND ALSO THE TDS OF RS.1,77,479/- WAS ALSO NOT CLAIMED WHICH WAS DEDUCTED ON SALARY INCOME FROM ICOMM TELE LIMITED. THE ASSESSEE HAS AL SO EARNED INTEREST INCOME FROM SBI WHICH TO THE TUNE OF RS. 6,86,952/- WHICH WAS NOT DECLARED IN THE RETURN OF INCOME FILED WITH THE REVENUE AND TAX DEDUCTED AT SOURCE OF RS. 76,409/- DEDUCTED AT SOURCE ON THE INTEREST INC OME FROM SBI WAS ALSO NOT CLAIMED IN THE RETURN OF INCOME FILED WITH THE REVE NUE . ON BEING CONFRONTED, THE ASSESSEE DULY INCLUDED THE SAID INCOME IN REVIS ED COMPUTATION OF INCOME FILED WITH THE AO. THE DUE TAXES ALONG WITH APPLICA BLE INTEREST WERE PAID TO THE REVENUE AND ASSESSMENT ORDER IN QUANTUM WAS ACC EPTED BY THE ASSESSEE AND NO APPEAL WAS FILED BY THE ASSESSEE BEFORE LEAR NED CIT(A) AGAINST QUANTUM ASSESSMENT ORDER. ON BEING ASKED BY THE AUT HORITIES BELOW, THE ASSESSEE HAS SUBMITTED THAT IT IS INADVERTENT MISTA KE/OMMISION AND THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT TAX HAVIN G DEDUCTED AT SOURCE , AND HENCE THERE WAS NO NEED TO SHOW THE SAME IN THE RET URN OF INCOME FILED WITH THE REVENUE. IN OUR CONSIDERED VIEW BASED ON PECUL IAR FACTS OF THE CASE, THE ASSESSEE HAS COMMITTED THE MISTAKE INADVERTENTLY FO R WHICH EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE BEFORE THE AUTHORITIES B ELOW WHICH IS A BONAFIDE EXPLANATION . THE ASSESSEE FILED REVISED COMPUTATIO N OF INCOME BEFORE THE AO INCLUDING THE ABOVE INCOME DURING THE ASSESSMENT PR OCEEDINGS AND CLAIMED THE TAX DEDUCTED AT SOURCE ON THESE TWO INCOME AND PAID THE DIFFERENTIAL DUE TAXES TO THE REVENUE ALONG WITH APPLICABLE INTEREST . THE ASSESSEE HAS COME FORWARD WITH BONAFIDE EXPLANATION AND THEREFORE THE PENALTY U/S 271(1)(C) OF ITA 792/MUM/2015 8 THE ACT LEVIED BY THE A.O. ON THE ASSESSEE IS NOT J USTIFIED AND IS HEREBY ORDERED TO BE DELETED AS THE CASE IS COVERED BY EXP LANATION 1 TO SECTION 271(1)(C) OF THE ACT. WE ORDER ACCORDINGLY. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO. 792/MUM/2015 FOR THE ASSESSMENT YEAR 2010-11 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2016. # $% &' 25-10-2016 ( ) SD/- SD/- (C.N. PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 25-10-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI