Dy. Commissioner of Income Tax, GONDA V. Shri Suraj Singh, GONDA

ITA 810/LKW/2014

• Counselvise Citation: 81023714 RSA 2014
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Initiation of penalty proceedings; Wrong claim; Corroborative evidences
• Section: 80C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.810/LKW/2014 ASSESSMENT YEAR:2010 - 11 SHRI SURAJ SINGH, G - 6, SURAJ COMPLEX, UTRAULA ROAD, MALVIYA NAGAR, GONDA. PAN:ARZPS2768K VS DY.C.I.T., CIRCLE - GONDA. (RESPONDENT) (APPELLANT) SMT. PINKI MAHAWAR, D. R. APPELLANT BY NONE RESPONDENT BY 02/02/2015 DATE OF HEARING 26 /02/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 15/07/2014 FOR THE ASSESSMENT YEAR 2010 - 11. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE PENALTY IMPOSED U/S 271( 1 )(C) OF THE I.T. ACT, 1961 IGNORING THE FACT THAT THERE IS APPARENTLY CONCEALMENT OF INCOME AS DURING ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NOT SU O MOTTO SURRENDERED THE INTEREST INCOME. HE HAS SURRENDERED THE INTEREST INCOME ONLY WHEN HE WAS CORNERED BY THE AO. IN OTHER WORDS IS HAS HIMSELF ACCEPTED THE INTEREST INCOME AS CONCEALED INCOME. 2. THAT THE LD. CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE PENALTY IMPOSED U/S 271 ( 1 )(C) OF THE I.T. ACT, 1961 BY RELYING ON DECISION OF HON'BLE 2 GUJ A RAT HIGH COURT IN THE CASE OF NEW SOROTHIA ENGINEERING CO. VS. CIT (2006) 282 ITR 642 (GUJ A RAT) WHEREIN IT WAS HELD THAT ASSESSEE HAD CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOME AN D THEREFORE IS LIABLE FOR PENALTY IS WRONG. IT IS AN ESTABLISHED LAW THAT IT IS INCUMBENT UPON THE AO TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAVE BE EN FURNISHED BY THE ASSESSEE. BECAUSE THIS CITATION IS NOT APPLICABLE IN THE INSTANT CASE AS THE A.O. HAS CLEARLY ESTABLISHED THE CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF SUPPRESSION OF INTEREST INCOME FROM BAN K TO THE TURN OF RS.15,13,676/ - AND FALSE CLAIM U/S 80C OF THE I.T. ACT, 1961 TO THE TUNE OF RS.13,882/ - RESPECTIVELY . 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE APPOINTED DATE OF HEARING INSPITE OF NOTICE AND HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED PENALTY ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. OF THE REVENUE, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. WE FIND THAT THE ISSUE REGARDING PENALTY WAS DECIDED BY LEARNED CIT(A) AS PER P ARA S 8 & 9 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 8. I HAVE EXAMINED THE WRITTEN SUBMISSION OF APPELLANT FILED DURING APPELLATE PROCEEDINGS AND FINDING GIVEN BY A.O. IN PENALTY ORDER AND I FIND THAT THE A.O. HAS LEVIED THE PENALTY U/S 271(1)(C) OF I.T. ACT., ON INTEREST INCOME SHOWN IN ORIGINAL TDS CERTIFICA TE ISSUED BY BANK AND THE INTEREST SHOWN IN FORM NO.26AS. THE APPELLANT HAS MENTIONED IN HIS WRITTEN SUBMISSION THAT THE BANK BY MISTAKE PROVIDED A WRONG TDS CERTIFICATE SHOWING THE INCORRECT INTEREST THEREIN AND AFTER REALIZING THE MISTAKE THE SAID BANK R ECTIFIED THEIR TDS RETURN BUT NO FRESH/RECTIFIED TDS CERTIFICATE ISSUED TO APPELLANT. THUS AT THE TIME OF FILING OF I.T. RETURN THE APPELLANT SHOWN THE 3 INTEREST INCOME WHICH WAS REFLECTED IN TDS CERTIFICATE. THUS THE APPELLANT BONAFIDE BELIEF THAT HE HAD S HOWN CORRECT INTEREST INCOME IN HIS RETURN OF INCOME. FURTHER ON GETTING INFORMATION FOR HIS MISTAKE , HE HAD IMMEDIATELY SURRENDERED THE AMOUNT AND AGREED TO PAY TAX DUE OVER THE SAME. DURING ENTIRE ASSESSMENT PROCEEDING THE APPELLANT WAS VERY COOPERATIVE AND SUPPORTIVE. THE LD AO IN HER ASSESSMENT ORDER HAD NOT POINTED ANY INCRIMINATING MATERIAL FOR THIS ADDITION AND NO WHERE MENTIONED THAT THE APPELLANT DELIBERATELY CONCEALED RS.15.12,676/ - FROM HIS INCOME. IT IS SEEN THAT THE APPELLANT HAS PAID THE DU E TAX ON THE INTEREST AMOUNT OF RS.15,13,676/ - . DURING THE ASSESSMENT PROCEEDINGS THE A.O. DID NOT RECORD ANY SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1))(C) OF I.T. ACT ON THE VARIOUS ADDITIONS MADE BY A.O. IT WAS ESSENTIAL TO RECORD TH E SATISFACTION BY THE A.O. BEFORE INITIATION OF PROCEEDINGS OF PENALTY U/S 271(1)(C) BUT THE A.O. DID NOT DO SO. EVEN IN PENALTY ORDER THE A.O. HAS MENTIONED THAT 'ACCORDINGLY PENALTY NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF I.T. ACT, 1961 FOR FURNISH ING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME WAS ISSUED ON 14.03.2013. THE FINDING OF A.O. FOR LEVY OF PENALTY CANNOT BE TAKEN AS VALID BASIS FOR LEVY OF PENALTY U/S 271(1)(C) BECAUSE THE A.O. HIMSELF HAS NOT BEEN POINTED OUT WHICH DEFAUL T COMMITTED BY THE APPELLANT WHETHER FURNISHING THE INACCURATE PARTICULARS OF INCOME OR CONCEALED THE INCOME. RELIANCE IS PLACED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF NEW SOROTHIA ENGINEERING CO. VS. CIT (2006) 282 ITR 642 ( GUJARAT) IT WAS HELD THAT - A.O, THAT ASSESSEE HAD CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREFORE IS LIABLE FOR PENALTY IS WRONG. IT IS AN ESTABLISHED LAW THAT IT IS INCUMBENT UPON THE A.O. TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALME NT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED BY THE ASSESSEE.' 9. RELIANCE IS ALSO PLACED ON THE FOLLOWING JUDICIAL DECISION: - ( I ) 259 ITR 212 (RAJ.) - CIT VS. HARSHVARDHAN CHEMICALS & MINERAL LTD. HELD - 'NO PENALTY OF CONCEALMENT IF THE CLAIM OF THE ASSESSEE IS DEBATABLE AND ARGUABLE.' ( II ) 39 ITR 233 (DEL.) ( III ) 261 ITR 67 (RAJ) - CHANDRA BAGGA VS. ITAT (2003) ( IV ) CIT VS. RELIANCE PETRO PRODUCT PVT. LTD. (2010) 36 DTR 449 (SC) 4 HELD: 'MERELY BECAUSE OF THE ASSESSEE'S CLAIM DEDUCTION OF THE INTEREST OF EXPENSES WHICH HAS NOT BEEN ACCEPTED BY REVENUE PENALTY U/S 271(1)(C) NOT ATTRACTED, MERELY MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT 'FURNISHING INACCURATE P ARTICULARS REGARDING THE INCOME OF ASSESSEE.' ( V ) CIT VS. ASIM KUMAR AGARWAL (2005) 275 ITR 48 (JHARKHAND) HELD - THAT NO PENALTY UNLESS THERE IS A DELIBERATE ATTEMPT ON PART OF ASSESSEE. MERE OMISSION ON PART OF ASSESSEE FLOES NOT AMOUNT TO CONCEALMENT AND IF NO SUPPORTING EVIDENCE ARE AVAILABLE TO PROOF DELIBERATE ATTEMPT, NO PENALTY LIES . CONSIDERING THE WRITTEN SUBMISSION OF APPELLANT, FINDING GIVEN BY THE A.O. IN PENALTY ORDER , VARIOUS JUDICIAL DECISIONS MENTIONED ABOVE AND FACTS & CIRCUMSTANCES OF THE APPELLANT CASE , I HOLD THAT THE A.O. WAS NOT JUSTIFIED IN LEVY OF PENALTY U/S 271( 1) (C) OF L.T. ACT. 5.1 FROM THE ABOVE P ARA S FROM THE ORDER OF CIT(A), WE FIND THAT THE PENALTY WAS DELETED BY CIT(A) ON TWO BASIS. FIRST BASIS IS THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT HE HAS SHOWN CORRECT INCOME IN THE RETURN OF INCOME ON THE BASIS OF TDS CERTIFICATES ISSUED TO HIM. TH E SECOND BASIS IS THAT THE ASSESSING OFFICER HAS NOT RECORDED THE SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) IN A PROPER MANNER. IN THE ASSESSMENT ORDER ALSO, WE FIND THAT IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT AT THE TIME OF FILING RETURN OF INCOME, INTEREST INCOME HAS BEEN DISCLOSED IN PART AND BALANCE AMOUNT OF RS.15,13,676/ - REMAINED UNDISCLOSED DUE TO INCOMPLETE DETAILS PROVIDED BY BANK S.B.I. AND U.P. GRAMIN BANK. THIS GOES TO SHOW THAT THE OMISSION ON THE PART OF THE ASSESSEE IS BONAFIDE OMISSION BECAUSE WHEN THE DEDUCTOR HAS ISSUED A WRONG TDS CERTIFICATE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. FOR THE SECOND ADDITION OF RS.13,882/ - REGARDING EXCESS CLAIM OF DEDUCTION U/S 80C, IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE COULD FURNISH DOCUMENTS OF ONLY RS.86,118/ - WHEREAS DEDUCTION CLAIMED 5 WAS FOR RS. ONE LAC U/S 80C. HENCE, IT IS SEEN THAT ON THIS ACCOUNT ALSO , THE ADDITIO N WAS MADE FOR THE FAILURE OF THE ASSESSEE TO PRODUCE RELEVANT DOCUMENTS WITHOUT A FINDING THAT THE CLAIM ITSELF IS WRONG OR FALSE. HENCE, ON THIS ASPECT, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE S TANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 / 0 2 /2015. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR