KRISHNA KUMAR GUPTA, Jaipur V. ACIT, Jaipur

ITA 819/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5607 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Assessee Lawyers: TANUJ AGARWAL
• Keywords: Reasonable cause; Wrong claim; Revised return; Ignorance of law
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 819/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI KRISHNA KUMAR GUPTA E-78, ATISH MARKET TRIPOLIA BAZAR, JAIPUR CUKE VS. THE ACIT CIRCLE- 5 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACIPG 2043 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI TANUJ AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/02/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 06/02/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 20-06-2016 FOR THE ASSESSMEN T YEAR 2008-09 RAISING THEREIN SOLITARY GROUND AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN SU STAINING PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961 AMOUNTI NG TO RS. 27,759/-. ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 2 2.1 APROPOS SOLITARY GROUND OF THE ASSESSEE, THE FA CTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. PENALT Y OF RS. 27,759/- WAS LEVIED BY THE ASSESSING OFFICER AS THE DEDUCTIO N ON INTEREST ON HOUSING LOAN HAD BEEN CLAIMED AT RS. 2,39,832/- AS AGAINST RS. 1,50,000/- ALLOWABLE BY LAW. IT WAS SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE MISTAKE WAS DETECTED BY THE AUTHORIZED REPRESENTATIVE AND HE ADVISED THE APPELL ANT TO RECTIFY THE MISTAKE AND PAY THE TAXES BY FILING A REVISED R ETURN. THUS, A REVISED COMPUTATION WAS SUBMITTED DURING THE ASSESS MENT PROCEEDINGS. THE AUTHORIZED REPRESENTATIVES SUBMI SSION IS THAT SINCE REVISED COMPUTATION HAS BEEN SUBMITTED AND TH E INCOME HAS BEEN VOLUNTARILY RETURNED BY THE ASSESSEE NO PENALT Y IN LEVIABLE. THE ASSESSING OFFICER NOTED IN THE PENALTY ORDER TH AT IN SPITE OF ADEQUATE OPPORTUNITY NO SUBMISSION WERE MADE BEF ORE HIM IN THE PENALTY PROCEEDINGS AND THE PENALTY OF RS. 27,7 59/- WAS LEVIED. IN THE PRESENT PROCEEDINGS, IT IS CLAIMED THAT THE INCOME WAS VOLUNTARILY OFFERED AND HENCE NO PENALTY IS LEVIABL E. IT IS SEEN FROM THE RECORD THAT IN THE NOTICE ISSUED ON 21.01.2010 AND 16.07.2010, BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDINGS, QUERIES HAD BEEN MADE REGARDING DEDUCTIONS MADE UND ER CHAPTER VIA AND PROOFS OF THE SAME HAD BEEN CALLED FOR. TH E ASSESSEE HAS FILED THE REVISED COMPUTATION ON 21.10.2010, THUS T HE ASSESSEES CLAIM THAT THE REVISED COMPUTATION IS FILED SUO MOT O IS NOT CORRECT. THE SAME HAS BEEN FILED ONLY AFTER A SPECIFIC QUERY WAS RAISED BY THE ASSESSING OFFICER ON THE ISSUE. THE SECOND PLEA TAKEN BY THE ASSESSEE IS OF IGNORAN CE OF LAW. SINCE, ASSESSEE IS ASSISTED BY TRAINED PROFESSIONAL S, THIS PLEA CANNOT BE ACCEPTED AND ANYWAY IGNORANCE OF LAW CANNOT BE A N EXCUSE. IMPORTANTLY, THE ISSUE IS THAT BUT FOR THE CASE BEI NG TAKEN UP FOR SCRUTINY AND THE SPECIFIC QUERY AND INVESTIGATION B Y ASSESSING OFFICER, THIS AMOUNT WOULD HAVE ESCAPED ASSESSMENT. THE APEX COURT IN THE CASE OF MAK DATE HAS CLEARLY HELD THAT PLEA OF THE ASSESSEE LIE VOLUNTARY DISCLOSURE, BUY PEACE, AVOI D LITIGATION TO ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 3 EXPLANATION ITS CONDUCT ARE NOT RECOGNIZED BY THE S TATUE UNDER THE EXPLANATION 1 TO SECTION 271(1)(C). IT IS TRITE LAW S THAT VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE M ISCHIEF OF PENAL PROCEEDINGS UNDER SECTION 271(1)(C). THE LAW DOES N OT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HI S CONCEALED INCOME, HE HAS TO BE ABSOLVED FROM PENALTY. FURTHER , IT WAS OBSERVED THAT IT IS THE STATUTORY DUTY OF THE ASSES SEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN TH E SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. IN THE LIGHT OF THE ABOVE OBSERVATIONS OF THE HONBLE COURT, IT IS CLEAR THAT THE ASSESSEE, HAS NEITHER MADE A VOLUNTARY DISCLOSURE NOR RECORDED IT S TRANSACTIONS PROPERLY IN ITS BOOKS OF ACCOUNT AND ALSO NOT DECLA RED THE SAME IN THE RETURN FILED BY IT. IT IS ALSO IMPORTANT TO NOTE THAT BUT FOR THE DETEC TION OF THIS TRANSACTION IN THE ASSESSMENT PROCEEDINGS, IN CONSE QUENCE TO THE SPECIFIC NOTICE, ISSUED BY THE ASSESSING OFFICER, T HE UNDISCLOSED INCOME WOULD NOT HAVE GOT UNEARTHED AT ALL. RELIAN CE IS PLACE ON THE FOLLOWING OBSERVATIONS IN THE CASE OF 60 TAXMAN N.COM 352 (MADRAS) IN THE CASE OF LANXESS INDIA (P) LTD. HERE IS A CASE WHERE THE APPELLANT-ASSESSEE HAD C LAIMED THE DEDUCTION FOR THE ROYALTY PAYMENT FOR THE SECOND TI ME, WHEN IT WAS IN FACT CLAIMED IN THE PRECEDING ASSESSMENT YEAR AND ALLOWED, AND THE SAID ERROR OF COMPUTATION WAS UNEARTHED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3) BY THE ORIGINAL A UTHORITY FOR WHICH A NOTICE WAS ISSUED U/S 143(2) AND THE ORDER OF THE O RIGINAL AUTHORITY DATED MARC 28,2005, AS EXTRACTED IN THE EARLIER POR TION OF THIS ORDER, CLEARLY SHOWS THAT WHEN THE TDS CERTIFICATES IN RES PECT OF THE ROYALTY PAID TO M/S. BAYER AG GERMANY WAS ASKED TO BE FURNI SHED, AFTER VERIFYING THE DETAILS, IT WAS NOTICED THAT SOME OF THE TDS CERTIFICATES PERTAINED TO THE EARLIER YEAR AND PART OF THE ROYAL TY PAYMENT ATTRIBUTED TO THESE CERTIFICATES HAD ALREADY BEEN CLAIMED AND ALLOWED AS DEDUCTION TO THE ASSESSEE IN THE EARLIER YEARS. THEREAFTER, W HEN THE ASSESSEE WAS FURTHER QUESTIONED, WITH A CRYPTIC REPLY BY WAY OF THE LETTER DATED MARC 14,2005, NO COGENT AND RELIABLE EVIDENCE WERE SHOWN BY THE ASSESSEE, AS SUCH A HUGE AMOUNT COULD NOT HAVE BEEN CLAIMEDAS DEDUCTION BY INADVERTENCE FOR THE SECOND TIME. T SAID PLEA HAS A LSO BEEN REPELLED BY THE SUPREME COURT IN MAK DATA (P) LTD.S CASE (SUPR A),AS THE ASSESSEE SHOULD FIRST SHOW BY COGENT AND RELIABLE EVIDENCE T HAT THERE WAS NEITHER CONCEALMENT OF PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME. WE FIND THAT THE PLEA TAKEN BY THE ASSESSEE IN THE LETTER DATED MARC 24, 2005, IS ONLY CURSORY AND DOE S NOT GIVE ANY ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 4 ACCEPTABLE EXPLANATION FOR THE WRONG COMPUTATION, A S THE ERROR WAS DETECTED BY THE ORIGINAL AUTHORITY DURING THE PROCE EDINGS U/S 143(3) AND SHE HAS ALSO RECORDED A CATEGORICAL FINDING THA T THE ASSESSEE SUPPRESSED THE INCOME BY MAKING A WRONG CLAIM OF RO YALTY PAYMENT, WHICH ACTUALLY PERTAINED TO EARLIER ASSESSMENT YEAR S, WHICH WAS CLAIMED AND ALLOWED AND THEREFORE, THOUGHT IT FIT T O LEVY PENALTY U/S 271(1) OF THE ACT. IN VIEW OF THE DISCUSSION AS ABOVE, SINCE THE DISCL OSURE MADE BY THE ASSESSEE CANNOT BE SAID TO BE VOLUNTARY AND ALSO NO REASONABLE CAUSE COULD BE DEMONSTRATED BY THE ASSES SEE THE PENALTY LEVIED U/S 271(1)(C) IS CONFIRMED. 2.2 DURING THE COURSE OF HEARING, THE LD. AR OF TH E ASSESSEE PRAYED FOR DELETION OF PENALTY OF RS. 27,759/- U/S 271(1) OF THE ACT CONFIRMED BY THE LD. CIT(A) FOR WHICH THE LD. AR O F THE ASSESSEE FILED THE WRITTEN SUBMISSION AND THE SAME HAS ALSO BEEN T AKEN INTO CONSIDERATION. 2.3 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE ASSESSMEN T ORDER DATED 29-12- 2010 THAT THE AO MADE DISALLOWANCE OF RS. 89,832/- OUT OF INTEREST ON HOUSING LOAN BY OBSERVING AS UNDER:- 3(A) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED HOUSING LO AN INTEREST OF RS. 2,39,832/- IN THE HEAD OF INCOME FROM HOUSE PROPERTY. AR OF THE ASSESSEE HAS BEEN ASKED TO PR ODUCE THE DETAILS OF THE LOAN AND PROPERTY DETAILS. PERUSAL O F THE REPLY OF THE ASSESSEE, IT IS FOUND THAT THE ASSESSEE HAS WRONGLY CLAIMED INTEREST ON HOUSING LOAN U/S 24(B) OF RS. 2 ,39,832/- ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 5 ON SELF OCCUPIED PROPERTY. AS PER THE SECTION 24(B) OF THE INCOME TAX ACT ASSESSEE IS ONLY ENTITLE INTEREST ON HOUSING LOAN OF RS. 1,50,000/- ON SELF OCCUPIED PROPERTY. T HE ASSESSEE HAS ACCEPTED THE MISTAKE VIDE LETTER DATED 21-10- 2010 AND FILED REVISED RETURN OF INCOME AND PAID TH E TAX ON DIFFERENCE AMOUNT. BUT REVISED RETURN IS NOT TREATE D AS REGULAR RETURN BECAUSE THIS RETURN IS NOT FILED ON DUE TIME. CREDITS OF THE TAXES ARE ALLOWED TO THE ASSESSEE. T HEREFORE, RS. 89,832/- IS ADDED TO THE TOTAL INCOME OF THE AS SESSEE. SINCE THE ASSESSEE HAS CONCEALED ITS INCOME AND HAS FILED INACCURATE PARTICULARS OF INCOME, THEREFORE, PENALTY PROCEEDINGS U/S 271(1) ARE BEING INITIATED SEPARAT ELY. 2.4.1 IN PENALTY PROCEEDINGS, ACIT VIDE HIS ORDER D ATED 28-06-2011 IMPOSED THE PENALTY OF RS. 27,759/- BY OBSERVING AS UNDER:- DESPITE THE OPPORTUNITY PROVIDED VIDE THIS OFFICE SHOW CAUSE NOTICE DATED 14-06-2011 AND FIXED ON 20- 06-2011 FOR HEARING NEITHER THE ASSESSEE NOR HIS A/ R PRESENT NOR HE FILED ANY WRITTEN REPLY WHICH SHOWS THAT THE ASSESSEE HAS NOTHING TO SAY IN THIS REGARD AS HE HIMSELF HAD ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE MIS TAKE COMMITTED BY HIM. THEREFORE, I AM OF THE VIEW THAT THE ASSESSEE HAS COMMITTED A DEFAULT WITHIN THE MEANING OF SECTION 271(1) OF THE ACT AND FURNISHED INACCURATE PARTICULARS OF INCOME OF RS. 89,832/- BY CLAIMING E XCESS INTEREST IN HOUSING LOAN WITH A MOTIVE TO PAY LESS TAX THEREFORE, I AM LEFT WITH NO ALTERNATIVE OTHER THAN TO IMPOSE A PENALTY OF RS. 27,759/-. WORKING OF PENALTY IS AS UNDER:- TAX ON CONCEALED INCOME OR TAX SOUGHT TO BE EVADED RS. 27,759/- MINIMUM PENALTY IMPOSABLE @ 100% RS. 27,759 /- MAXIMUM PENALTY IMPOSABLE@ 300% RS. 83,277/- PENALTY IMPOSED U/S 271(1) RS. 27,759/- ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 6 2.4.2 IN FIRST APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY OF RS. 27,759/- U/S 271(1)(C) OF THE ACT. DURING THE C OURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD BONAFIDELY CLAIMED THE ENTIRE INTEREST OF RS. 2,39,832/- AS DEDUCTION U/S 24 OF THE I.T. ACT UNDER THE HEAD INCOME FROM HOUSE PROPERTY (ASSESSEE'S PAP ER BOOK PAGE 1 TO 4). THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT T HE DEDUCTION IS AVAILABLE TO THE EXTENT OF RS. 1.50 LACS ONLY. THE LD. AR OF THE ASSESSEE SUBMITTED THE ASSESSEE APPOINTED HIM AS AUTHORIZED REPRESENTATIVE IN HIS CASE WHO ADVISED THE ASSESSEE TO RECTIFY THIS MISTA KE AND PAY THE DUE TAXES BY FILING THE REVISED RETURN. THE ASSESSEE FI LED THE REVISED RETURN BY PAYING THE BALANCE TAX AND BROUGHT TO THE NOTICE OF THE AO DURING ASSESSMENT PROCEEDINGS BY LETTER DATED 21-10-2010. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO HAS NOT POINTED OUT THIS MISTAKE BUT IT WAS DETECTED BY HIM. IT IS ALSO NOTED THAT THE AO IN TH E ASSESSMENT ORDER MENTIONED THAT ON PERUSAL OF THE REPLY OF THE ASSESSEE, IT IS FOUN D THAT THE ASSESSEE HAS WRONGLY CLAIMED INTEREST ON HOUSING LO AN U/S 24(B) OF RS. 2,39,832/- ON SELF OCCUPIED PROPERTY . IT THUS APPEARS THAT THE AO HAS NOT DETECTED THE MISTAKE BUT IT IS NOTICED BY THE AO ON LY AFTER PERUSING THE REPLY OF THE LD. AR OF THE ASSESSEE. IT IS FURTHER NOTICED THAT THE ASSESSEE HAD FILED THE REVISED RETURN OF INCOME BY PAYING TH E BALANCE DUE TAX ON ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 7 THE AMOUNT EXCESSIVE CLAIMED AGAINST THE RESTRICTIO N OF DEDUCTION TO THE EXTENT OF RS. 1.50 LACS UNDER HEAD INCOME FROM HOUS E PROPERTY. IT IS ALSO NOTICED THAT THIS IS THE FIRST YEAR OF THE ASSESSEE CLAIMING SUCH DEDUCTION U/S 24(B) OF THE ACT. IT IS ALSO NOTICED THAT DURIN G THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAWS TO THIS EFFECT. 1. CEMENT MARKETING CO. OF INDIA LTD. VS. ASSTT. CS T (1980) 124 ITR 15 (SC) 2. MOTILAL PADAMPATI SUGAR MILLS CO. LTD. VS. STATE OF U.P> (1979), 118 ITR 326 (SC) 3. HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972)8 3 ITR 26 (SC) 4. CIT VS. R.K. GOLECHA 173 ITR 423 (RAJ.) 5. DILIP N SHROFF VS. JCIT (2007) 291 ITR 519 (SC) 6. CIT VS. RELIANCE PETROPRODUCTS PVTLTD (2010) 322 ITR 158 (SC) 7. PRICE WATERHOUSE COOPERS (P) LTD. VS. CIT (2012) 348 ITR 306 (SC) 8. CIT VS. HIRALAL DOSHI (ITA NO. 2331/2013 DATED 9 -02-2016 (BOM) HENCE, TAKING INTO CONSIDERATION ALL THE FACTS, CIR CUMSTANCES OF THE CASE AND THE CASE LAWS RELIED UPON BY THE LD. AR OF THE ASSESSEE (SUPRA), I FEEL THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY OF ITA NO. 819/JP/2016 SHRI KRISHNA KUMAR GUPTA VS. ACIT, CIRCLE- 5, JAIPU R . 8 RS. 27,759/- U/S 271(1)(C) OF THE ACT WHICH IS DIRE CTED TO BE DELETED. THUS THE SOLITARY GROUND OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 /02 /2017. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 /02/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI KRISHNA KUMAR GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 5, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 819/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR