Sh. Tara Chand Arora, Patiala V. ITO, Patiala

ITA 826/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81059 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: K P BAJAJ
• Keywords: Opportunity of being heard; Wrong claim; Bonafide mistake
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 826 & 827/CHD/2014 ASSESSMENT YEAR: 2008-09 SHRI TARA CHAND ARORA, V THE ITO, HOUSE NO. 787, WARD 6, STREET NO. 7, TRIPRI, PATIALA. PATIALA. PAN: ACAPA6892Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.P.BAJAJ RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 27.11.2014 DATE OF PRONOUNCEMENT : 09.12.2014 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS), PATIA LA DATED 30.07.2014 FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSMENT IN THIS CASE WAS MADE UNDER SECTION 143(3) OF THE ACT AT AN INCOME OF RS. 9,96,680/- AS AGAINST RETURNED INCOME OF RS. 3,50,540/- ON 18.10.2010 BY MAKING THE FOLLOWING AD DITIONS : I) WRONG CLAIM ON AMOUNT OF EX-GRATIA = RS. 5 LACS CLAIMED EXEMPTION UNDER SECTION 10(10C) OF INCOME TAX ACT II) EXCESS CLAIM OF ASSESSEE ON ACCOUNT = RS. 79,200/ - OF GRATUITY RECEIVED III) EXCESS CLAIM ON ACCOUNT OF LEAVE = RS. 10,501/- ENCASHMENT 2 IV) ADDITION ON ACCOUNT OF INTEREST = RS. 6,180/- OF IDBI BONDS NOT DISCLOSED IN THE RETURN V) ADDITION ON ACCOUNT OF UN- =RS. 50,363/- EXPLAINED BANK ENTRY DATED 29.05.2007 TOTAL : =RS.6,46,244/- 3. THE ASSESSEE CHALLENGED THE ADDITIONS ON MERIT B EFORE LD. CIT(APPEALS). THE APPEAL OF THE ASSESSEE WAS TIME BARRED. THE LD. CIT(APPEALS) FOUND THAT ASSESSEE TOOK RETIREMEN T FROM THE SERVICE OF STATE BANK OF PATIALA UNDER EXIT OPTION SCHEME FLOATED BY THE BANK AS PER THEIR CIRCULAR. THE NOT ICE OF DEMAND HAS BEEN SERVED UPON ASSESSEE ON 02.11.2010. HOWEV ER, THE ASSESSEE HAS FILED THE APPEAL ON 26.04.2012 I.E. AL MOST 17 MONTHS AFTER THE RECEIPT OF THE ASSESSMENT ORDER. THE ASSESSEE EXPLAINED BEFORE LD. CIT(APPEALS) THAT EARLIER COUN SEL HAD ADVISED THAT HIS CLAIM IS NOT ON STRONGER FOOTING, THEREFORE, NO APPEAL BE FILED. HOWEVER, THE ASSESSEE FILED THE A PPEAL LATER ON AFTER GETTING THE ADVICE THAT THE CLAIM OF ASSESSEE WAS ALLOWABLE, THEREFORE APPEAL WAS FILED BELATEDLY. IT WAS CLAIM ED THAT ASSESSEE IS A RETIRED PERSON FROM THE SERVICE AND W AS NOT AWARE OF LEGAL ISSUES BEING HE WAS NOT EXPERT IN LEGAL TE RMINOLOGY. IT WAS, THEREFORE, SUBMITTED THAT DELAY MAY BE CONDONE D. THE LD. CIT(APPEALS), HOWEVER, REFUSED TO CONDONE THE DELAY AND DISMISSED APPEAL OF THE ASSESSEE. THE ASSESSEE IS IN APPEAL ON QUANTUM APPEAL IN ITA NO. 826/CHD/2014. 4. THE ASSESSING OFFICER VIDE SEPARATE ORDER IMPOSE D PENALTY UNDER SECTION 271(1)(C) OF THE ACT AGAINST THE ASSE SSEE ON ADDITION OF RS. 6,46,244/-. THE LD. CIT(APPEALS), HOWEVER 3 DELETED THE PENALTY ON THE ADDITION OF RS. 5 LACS O N ACCOUNT OF EX-GRATIA PAYMENT AND FOR THE REMAINING FOUR ADDITI ONS, LD. CIT(APPEALS) CONFIRMED THE PENALTY. THE APPEAL OF THE ASSESSEE WAS, THEREFORE, PARTLY ALLOWED. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE PLACED ON RECORD COPY OF T HE ORDER OF ITAT, CHANDIGARH BENCH IN THE CASE OF SHRI VIJAY KU MAR SHARMA VS ITO AND JEEVA SINGH VS ITO IN ITA 291/2012 AND I TA 292/2012 DATED 07.05.2012 IN WHICH THE ASSESSEE WAS FOUND TO BE QUALIFIED FOR DEDUCTION UNDER SECTION 10(10C) OF THE INCOME TAX ACT AND CLAIM OF THE ASSESSEE HAS BEEN ALLOWED. CONSIDERING THE EXPLANATION OF THE ASSESSEE IN THE LIGHT OF THE ABOVE DECISION, IT IS CLEAR THAT EARLIER THE VIEWS WERE TAKEN AGAINST THE ASSESSEES THAT THE CLAIM OF ASSESSEE FO R DEDUCTION IS NOT ALLOWABLE BUT LATER ON, IT WAS SETTLED THAT CLA IM OF ASSESSEE IS JUSTIFIED. THE ASSESSEE IS RETIRED BANK EMPLOYE E AND WAS NOT AWARE OF THE LEGAL ISSUES AND WAS FULLY DEPENDENT U PON THE LEGAL ADVISE GIVEN TO HIM BY HIS COUNSEL. THE COUNSEL OF THE ASSESSEE HAD ADVISED HIM NOT TO FILE THE APPEAL WHICH WAS LA TER FOUND TO BE WRONG BECAUSE THE CLAIM OF ASSESSEE WAS ALLOWABL E IN LAW AND AS SUCH, ON FRESH OPINION TAKEN, THE ASSESSEE FILED THE APPEAL BEFORE LD. CIT(APPEALS). IT IS, THEREFORE, A CASE OF BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE IN NOT FILING T HE APPEAL BEFORE LD. CIT(APPEALS) ON TIME AND WAS PREVENTED B Y WRONG ADVICE AND AS SUCH, ASSESSEE IS ABLE TO EXPLAIN THA T HE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FILING THE APP EAL BEFORE THE LD. CIT(APPEALS). THE LD. CIT(APPEALS), THEREFORE, INSTEAD OF 4 DISMISSING THE APPEAL OF THE ASSESSEE, TREATING TO BE TIME BARRED, SHOULD HAVE CONDONED THE DELAY IN FILING TH E APPEAL BEFORE HIM. WE, THEREFORE, CONDONE THE DELAY IN FI LING APPEAL BEFORE LD. CIT(APPEALS). RESULTANTLY, THE ORDER OF THE LD. CIT(APPEALS) IS SET ASIDE AND THE APPEAL OF THE ASS ESSEE IS RESTORED TO HIS FILE WITH DIRECTION TO DECIDE THE A PPEAL OF THE ASSESSEE ON MERITS BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, ITA NO. 826/CHD/2014 IS ALLOWED F OR STATISTICAL PURPOSES. 7. SINCE WE HAVE RESTORED THE QUANTUM APPEAL TO THE FILE OF LD. CIT(APPEALS), THEREFORE, THE PENALTY MATTER SHOULD ALSO BE RESTORED TO THE FILE OF LD. CIT(APPEALS) FOR DECISI ON IN ACCORDANCE WITH LAW BECAUSE THE PENALTY APPEAL COULD BE DECIDE D ONLY AFTER THE DECISION IN THE QUANTUM APPEAL. HOWEVER, WE MA Y CLARIFY THAT LD. CIT(APPEALS) HAS ALREADY CANCELLED THE PEN ALTY WITH REGARD TO EX-GRATIA EXEMPTION CLAIMED UNDER SECTION 10(10C) OF THE ACT IN A SUM OF RS. 5 LACS AND IT IS NOT REPORT ED WHETHER DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL OR NOT. THEREFORE, SUCH FINDING OF THE LD. CIT(APPEALS) SHALL REMAIN S AME AND WOULD NOT BE SUBJECT MATTER IN THE REMAND PROCEEDIN GS BEFORE HIM BECAUSE ASSESSEE COULD NOT BE PUT TO ADVERSE PO SITION IN THAT EVENT. 8. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORD ER OF THE LD. CIT(APPEALS) TO THE EXTENT OF MAINTAINING PENALTY O N REMAINING FOUR ADDITIONS AND RESTORE THE APPEAL OF THE ASSESS EE TO HIS FILE WITH DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSES SEE ON PENALTY 5 UNDER SECTION 271(1)(C) OF THE ACT AFTER TAKING DEC ISION ON THE QUANTUM APPEAL BY GIVING REASONABLE SUFFICIENT OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 827/CHD/2014 IS ALSO ALLOWED FOR STATISTICAL PURPOS ES. 10. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9 TH DECEMBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH