Central Bank Of India Employees Co - Op Society Ltd, Kolkata V. D.C.I.T Cir - 33,kolkata., Kolkata

ITA 865/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4926 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM
• Assessee Lawyers: G BANERJEE
• Keywords: Bonafide mistake

Judgement Text

ITA NO.865/KOL/2013-CENTRAL BANK OF INDIA EMPLOYEES CO-OP.SOCIETY LTD. A.Y.2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI WAS EEM AHMED, AM ] ITA NO.865/KOL/2013 ASSESSMENT YEAR : 2008-09 CENTRAL BANK OF INDIA EMPLOYEES -VERSUS- D.C.I.T., CIRCLE-33, CO-OPERATIVE SOCIETY LTD.KOLKATA KOLKATA (PAN:AAAAC3869N) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI G.BANERJEE, FCA FOR THE RESPONDENT: SHRI NILOY BARAN SOM, JCIT, SR. DR DATE OF HEARING : 03.02.2016. DATE OF PRONOUNCEMENT : 02.03.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 7.1.2013 OF CIT(A)-XIX, KOLKATA, RELATING TO AY 2008-09. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF THE AO IMPOSING PENAL TY ON THE ASSESSEE U/S.271(1)(C ) OF THE INCOME TAX ACT, 1961 (ACT). 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S.271(1)( C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS: THE ASSESSEE IS A CO-OPERATIVE SOCIETY HAVING INCO ME, AMONGST OTHERS, FROM HOUSE PROPERTIES. IN THE PREVIOUS YEAR RELEVANT TO AY 2008-09, THE ASSESSEE WAS IN RECEIPT OF RENTAL INCOME BY LETTING OUT ITS PROPERT Y TO CENTRAL BANK OF INDIA (CBI), NEW MARKET BRANCH. THE MONTHLY RENT PAYABLE BY CBI WAS RS.1,44,900/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED TH AT A SUM OF RS.25,05,277 WAS DECLARED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE AO WAS OF THE VIEW THAT THE RENT FOR THE MONTH OF MARCH, 2008 OF RS.1,44,90 0/- HAD NOT BEEN INCLUDED IN THE INCOME DECLARED UNDER THE HEAD INCOME FROM HOUSE PR OPERTY. THE ASSESSEE IN REPLY ITA NO.865/KOL/2013-CENTRAL BANK OF INDIA EMPLOYEES CO-OP.SOCIETY LTD. A.Y.2008-09 2 TO THE QUERY OF THE AO IN THIS REGARD ADMITTED THAT A SUM OF RS.1,44,900/- BE ADDED TO THE INCOME DECLARED IN THE RETURN OF INCOME. THE A O ALSO NOTICED THAT THE ASSESSEE HAD CLAIMED A DEDUCTION OF RS.18,891/- WHICH WAS SE RVICE CHARGES PAID FOR COLLECTION OF MONTHLY RENT, AS A DEDUCTION UNDER THE HEAD NCO ME FROM HOUSE PROPERTY. THE AO WAS OF THE VIEW THAT UNDER SEC.24 DEDUCTION ON A CCOUNT OF COLLECTION CHARGES IS NOT AN ALLOWABLE DEDUCTION WHILE COMPUTING INCOME U NDER THE HEAD INCOME FROM HOUSE PROPERTY. ACCORDINGLY THE SAID DEDUCTION WAS DISALLOWED BY THE AO. 4. IN RESPECT OF THE AFORESAID ADDITIONS MADE TO T HE TOTAL INCOME IN THE ASSESSMENT PROCEEDINGS, THE AO INITIATED PENALTY PROCEEDINGS U /S.271(1)( C) OF THE ACT AND BY AN ORDER DATED 30.5.2011 IMPOSED PENALTY ON THE ASSESS EE. 5. BEFORE CIT(A), THE ASSESSEE POINTED OUT THAT TH E MONTHLY RENT FOR MARCH, 2008 OF RS.1,44,900/- WAS IN FACT ALREADY INCLUDED IN THE S UM OF RS.25,05,277 DECLARED AS INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE ASSESSEE POINTED OUT THAT IT WAS A BONAFIDE MISTAKE COMMITTED BY THE ASSESSEE IN ACCEPTING THAT THE RENT FOR MARCH, 2008 WAS NOT DECLARED AND OFFERING THE SAME TO BE BROUGHT TO TAX. THE ASSESSEE POINTED OUT THAT IT WAS A CASE OF DOUBLE T AXATION OF SAME INCOME AND ADDED TO THAT PENALTY U/S.271(1)( C) OF THE ACT IS ALSO B EING IMPOSED FOR AN ITEM OF INCOME WHICH HAS ALREADY BEEN OFFERED TO TAX. WITH REGARD TO DISALLOWANCE OF SERVICE CHARGES FOR COLLECTION OF RENT, THE ASSESSEE POINTED OUT TH AT THE SAID CLAIM WAS GENUINE BUT WAS NOT ALLOWED BECAUSE OF THE PROVISIONS OF SEC.24 OF THE ACT. THAT CANNOT LEAD TO ANY INFERENCE THAT THE ASSESSEE EITHER CONCEALED PARTIC ULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 6. THE CIT(A) WITHOUT DEALING WITH THE ABOVE CONTE NTION OF THE ASSESSEE CONFIRMED THE ORDER OF THE AO BY MERELY OBSERVING THAT THE AS SESSEE DID NOT CHALLENGE THE ORDER OF THE AO IN THE QUANTUM PROCEEDINGS. 7. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT THIS IS NOT A FIT CASE FOR ITA NO.865/KOL/2013-CENTRAL BANK OF INDIA EMPLOYEES CO-OP.SOCIETY LTD. A.Y.2008-09 3 IMPOSING PENALTY U/S.271(1)( C) OF THE ACT. IT IS CLEAR FROM THE RENT STATEMENT OF THE ASSESSEE IN RESPECT OF THE PROPERTY LEASED TO CBI T HAT A TOTAL SUM OF RS.18,80,077 WAS RECEIVED FROM CBI INCLUDING THE RENT OF RS.1,44,900 /- FOR THE MONTH OF MARCH, 2008. THE INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN THE RETURN OF INCOME WAS RS.25,05,277/- WHICH INCLU DES RS.18,80,077/- RECEIVED FROM CBI INCLUSIVE OF RENT OF RS.1,44,900 FOR THE MONTH OF MARCH, 2008. THUS THE VERY ADDITION MADE IN THE ASSESSMENT PROCEEDINGS WAS ERR ONEOUS AND THEREFORE IMPOSITION OF PENALTY ON SUCH ADDITION CANNOT BE SUSTAINED. T HE ADDITION HAS BEEN MADE PURELY ON THE BASIS OF INCORRECT ADMISSION BY THE ASSESSEE . THE SAME IS ACCORDINGLY DIRECTED TO BE CANCELLED. 8. WITH REGARD TO IMPOSITION OF PENALTY ON DISALLO WANCE OF SERVICE CHARGES FOR COLLECTION OF RENT, WE ARE OF THE VIEW THAT THE EXP ENDITURE IN QUESTION WAS IN FACT INCURRED BY THE ASSESSEE AND THIS FACT HAS NOT BEEN DISPUTED BY THE AO. IT IS ONLY BECAUSE OF THE PROVISIONS OF SEC.24 THAT THIS EXPEN DITURE CANNOT BE ALLOWED AS DEDUCTION WHILE COMPUTING INCOME UNDER THE HEAD INC OME FROM HOUSE PROPERTY. THE FACT THAT THE ASSESSEE MADE A CLAIM IN THE RETURN O F INCOME WHICH IS TRUE BUT WHICH IS NOT LEGALLY ADMISSIBLE CANNOT BE THE BASIS TO IMPOS E PENALTY FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. WE THEREFORE HOLD IMPOSITION OF PENALTY IN RESPECT OF THIS ADDITION W AS ALSO NOT CORRECT AND THE ORDER IMPOSING PENALTY ON THIS ADDITION IS ALSO HEREBY CA NCELLED. 9. IN THE RESULT APPEAL BY THE ASSESSEE IS ALLOWED . O RDER PRONOUNCED IN THE COURT ON 02.03.2016. SD/- SD/- [WASEEM AHMED ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.03.2016. [RG PS] ITA NO.865/KOL/2013-CENTRAL BANK OF INDIA EMPLOYEES CO-OP.SOCIETY LTD. A.Y.2008-09 4 COPY OF THE ORDER FORWARDED TO: 1.M/S. CENTRAL BANK OF INDIA EMPLOYEES CO-OP.SOCIET Y LTD., 10, NELLIE SENGUPTA SARANI, KOLKATA-700087. 2.D.C.I.T., CIRCLE-33, KOLKATA 3. CIT(A)-XIX, KOLKATA 4. CIT-XI, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES