Appeal details
Counselvise Citation
[2012] 119 COUNSELVISE.COM (IT) 8050 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-11-2012
Appeal Filed By
Assessee
Bench Allotted
A
Assessment Year
2006-2007
Appeal Filed On
14-06-2012
Judgement Text
, , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ () )) ) , , , , . .. .!' !'!' !'. .. . , , , , #$ ] ]] ] [BEFORE SMT.DIVA SINGH, JM & SRI C. D. RAO, AM ] & / I.T.A NO. 926/KOL/2012 '( )*/ ASSESSMENT YEAR : 2006-07 VIRENDRA KUMAR GOEL -VS.- I.T.O., WA RD-50(4), KOLKATA [PAN : ADAPG 2112 J] KOLKATA [ ,- /APPELLANT ] [ ./,-/ RESPONDENT ] ,- / FOR THE APPELLANT : SHRI NITIN JAGWAYAN, F. C.A. ./,- / FOR THE RESPONDENT : SHRI K.N.JANA,JCIT SR .DR 0'1 2 '$ /DATE OF HEARING : 01.11.2012. 3) 2 '$ /DATE OF PRONOUNCEMENT : 02.11.2012. #4 /ORDER . .. .!' !'!' !'. .. . , , , , #$ PER C. D. RAO, A. M. THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORD ER OF LD. CIT-(A)-XXXII, KOLKATA DATED 25.04.2012 PERTAINING TO ASSESSMENT Y EAR 2006-07. 2. IN THIS APPEAL THE ONLY GROUND RAISED BY ASSESS EE IS RELATING TO CONFIRMATION OF PENALTY OF RS.18,826/- U/S 271(1)(C ) OF THE IT ACT BY THE LD. CIT(A). 3. THE BRIEF FACTS OF THIS ISSUE AS APPEARING IN T HE PENALTY ORDER ARE AS UNDER :- IN THE F.Y 2005-06, THE ASSESSEE HAS SHOWN INCOME FROM HOUSE PROPERTY AT RS.12,847/-. DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE FURN ISHED DOCUMENTS RELATED TO INTEREST ON HOUSING LOAN AND IT WAS SEEN THAT THE ASSESSEE T OOK LOAN OF RS 9,60,000 FROM ICICI BANK FOR A RESIDENTIAL PROPERTY BUILT BY BENGAL SHR ISTI INFRASTRUCTURE DEVELOPMENT LIMITED AT 9E KANAK ANGAN,CITY CENTRE ,DURGAPUR-713 21. HOWEVER, THE RENT RECEIPT WAS REGARDING A DIFFERENT PROPERTY SITUATED AT NACHAN R OAD, OPP DENA BANK, BHIRINGHI, DURGAPUR. THEREFORE, IT BECAME CLEAR THAT ASSESSEE HAS DEDUCTED INTEREST PAID ON A PROPERTY FOR WHICH NO ANNUAL VALUE HAS BEEN OFFERED FOR TAXATION AND FROM INCOME OUT OF A PROPERTY ON WHICH NO INTEREST WAS PAID. IT IS ALS O ON RECORD THAT THE SAID PROPERTY WAS ITA NO.926/KOL/2012 2 VACANT DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEE HAD NOT OCCUPIED THE PROPERTY DURING THE YEAR UNDER CONSIDERATION. HENCE INTEREST OF R.S.74,903/- WAS ADDED BACK TO HIS INCOME AND PENALTY FOR CONCEALMENT U/S 271(1)(C) WAS INITIATED. 3.1. THE ASSESSEE HAS FILED WRITTEN SUBMISSION WHIC H IS AS UNDER IN THE WRITTEN SUBMISSION IT HAS BEEN STATED THAT ACCORDING TO THE UNDERSTANDING OF THE ACT, THE ASSESSEE GENUINELY BELIEVED THAT HE WAS EN TITLED TO SUCH A DEDUCTION AND HENCE CLAIMED IT IN THE RETURN OF INCOME FILED FOR THAT Y EAR THE INTENTION OF THE ASSESSEE CLEARLY SUGGESTED THAT THERE HAS NEITHER BEEN ANY CONCEALME NT OF INCOME ON HIS PART NOR ANY DELIBERATE FURNISHING OF INCORRECT PARTICULARS OF I NCOME. THE ASSESSEE HAS ALSO PLEADED THAT IT HAS BEEN HELD IN VARIOUS DECISIONS OF COURT S THAT AN INADVERTENT MISTAKE COMMITTED BY THE ASSESSEE CANNOT BE EQUATED WITH AN ACT OR CO NCEALMENT. THE ASSESSEE HAS CITED CERTAIN CASE LAWS TO DRIVE THE POINT THAT THE MENSE REA HAS TO BE PROVED BEFORE IMPOSING PENALTY. 3.2. HOWEVER, THE LD. AO HAS LEVIED PENALTY BY STAT ING THAT I WOULD NOT VENTURE ANY OPINION ON THIS AS VERY RE CENTLY SUPREME COURT IN CASE OF UNION OF INDIA VS DHARMENDRA TEXTILE, HELD AS UNDER 24. IT IS OF SIGNIFICANCE TO NOTE THAT THE CONCEPT UAL AND CONTEXTUAL DIFFERENCE BETWEEN SECTION 271 (1) (C) AND SECTION 276C OF THE IT ACT WAS LOST SIGHT OF IN DILIP SHROFFS CASE (SUPRA). 25. THE EXPLANATIONS APPENDED TO SECTION 272(1) (C) OF THE IT ACT ENTIRELY INDICATES THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR CON CEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN. THE JUDGMENT IN DI LP N. SHROFFS CASE (SUPRA) HAS NOT CONSIDERED THE EFFECT AND RELEVANCE OF SECTION 276C OF THE I. T. ACT. OBJECT BEHIND ENACTMENT OF SECTION 271 (1)(C) READ WITH EXPLANATI ONS INDICATE THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF RE VENUE. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TTER OF PROSECUTION UNDER SECTION 276C OF THE I.T.ACT. HENCE, I BELIEVE THAT THE ASSESSEE CONCEALED HIS IN COME TO THE EXTEND OF RS. 74903/-. FROM INCOME FROM HOUSE PROPERTY BY REDUCING INTERES T PAID FROM RENTAL INCOME EVEN THOUGH NO LOAN WAS TAKEN FOR THAT PROPERTY. 3.3. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE SAM E BY OBSERVING AS UNDER :- THE SUBMISSION OF THE APPELLANT AND THE PENALTY OR DER OF THE A.O. DULY CONSIDERED DURING THE COURSE OF APPELLATE PROCEEDINGS. THE FIN DINGS OF THE A.O. IS THAT THE ASSESSEE CONCEALED HIS INCOME TO THE EXTENT OF RS.74,903/- F ROM INCOME FROM HOUSE PROPERTY BY REDUCING INTEREST PAID FROM RENTED INCOME EVEN THOU GH NO LOAN WAS TAKEN FOR THAT PROPERTY. THIS ACTION OF THE APPELLANT DOES NOT SHO WS THAT THE APPELLANT MADE INADVERTENT MISTAKE BUT THE APPELLANT CLAIMED THIS DEDUCTION KN OWINGLY. SO THE CASE LAW RELIED BY THE ITA NO.926/KOL/2012 3 APPELLANT DOES NOT APPLY IN THIS CASE. HENCE, CONSI DERING THE FACTS AND CIRCUMSTANCES OF THE CASE I CONFIRM THE ACTION OF THE A.O., THEREFOR E, THE PENALTY OF RS.18,626/- U/S. 271(L)(C) OF THE I.T. ACT IS CONFIRMED. 3.4. AGGRIEVED BY THIS NOW ASSESSEE IS IN APPEAL BE FORE US. 4. AT THE TIME OF HEARING, THE LD. COUNSEL APPEARIN G ON BEHALF OF ASSESSEE HAS NOT DISPUTED THE FACTS NARRATED BY AO IN THE PENALTY OR DER. BUT HOWEVER, HE CONTENDED THAT SECTION 24 HAS NOT SPECIFIED THAT THE INTEREST ON H OUSE PROPERTY INCURRED BY ASSESSEE CANNOT BE SET OFF EVEN THOUGH THERE IS NO INCOME OF HOUSE PROPERTY WHICH HAS BEEN OFFERED BY ASSESSEE. THE AO HIMSELF HAS ACCEPTED TH AT THE PROPERTY ON WHICH THE ASSESSEE HAS INCURRED INTEREST IS VACANT DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THE ASSESSEE IS UNDER THE BONA FIDE BELIEF THAT SIN CE THE LOAN HAS BEEN TAKEN FOR THE PURPOSE OF HOUSING BY ASSESSEE INTEREST INCURRED FO R HOUSING LOAN CAN BE SET OFF AGAINST THE RENTAL INCOME OFFERED BY ASSESSEE. HE FURTHER S UBMITTED THAT HE HAS NOT GONE ON APPEAL AGAINST THE DISALLOWANCE OF THE INTEREST IN ORDER TO AVOID THE LITIGATION AND THE QUANTUM OF THE INTEREST IS ALSO NOT SUBSTANTIAL. TH IS ACT OF NON APPEAL BY ASSESSEE CANNOT BE TAKEN INTO CONSIDERATION THAT HE HAS ACCE PTED THE VIEW EXPRESSED BY THE REVENUE. HE FURTHER RELIED ON THE DECISION OF HONB LE APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PRIVATE LTD 322 ITR 158 (SC) WHICH IS THE SUBSEQUENT CASE OF UNION OF INDIA VS DHARMENDRA TEXTILE ON WHICH THE A O HAS PLACED RELIANCE. UNDER THESE CIRCUMSTANCES, HE ARGUED THAT THE ASSESSEE HA S NEITHER CONCEALED HIS INCOME NOR FILED INACCURATE PARTICULARS AS SPECIFIED U/S 271(1 )(C) OF THE IT ACT. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AU THORITIES AND DIRECT THE AO TO DELETE THE PENALTY LEVIED. 5. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE RELIED ON THE ORDERS OF REVENUE AUTHORITIES. ITA NO.926/KOL/2012 4 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF PROVISION OF SECTION 24 OF THE IT ACT AS WELL AS THE FACTS OF TH E CASE, THERE IS NO DISPUTE THAT ASSESSEE HAS INCURRED INTEREST ON HOUSING LOAN AND THE SAID HOUSE WAS KEPT VACANT DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER DIS PUTE. KEEPING IN VIEW OF THIS FACT WE ARE OF THE VIEW THAT THE ASSESSEE UNDER BONA FI DE BELIEF HAS CLAIMED THE INTEREST ON HOUSING LOAN WHICH IS KEPT VACANT AGAINST THE RENTA L INCOME OF ANOTHER PROPERTY. UNDER BONA FIDE BELIEF THAT PROVISION OF SECTION 24 OF TH E IT ACT IS NOT CLEAR WHETHER ASSESSEE CAN CLAIM THE SAID INTEREST AGAINST THE RENTAL INCO ME AS IN THE PREVIOUS CASE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE RA TIO LAID BY THE HONBLE APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD (SUPRA) IS APPLICABLE TO THE FACTS OF THE PRESENT CASE WHICH IS A SUBSEQUENT DECISION BY THE HONBLE APEX COURT IN THE CASE OF UNION OF INDIA VS DHARMENDRA TEXTILES ON WHICH R ELIANCE HAS BEEN PLACED BY LD. CIT(A). THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PRIVATE LTD. (SUPRA) HAS HE LD AS UNDER : . WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCU RATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. TH ERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CO RRECT, NOR ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO Q UESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AM OUNT TO FURNISHING INACCURATE PARTICULARS. 6.1. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT APPLICABLE AND THE IMPUGNED ORDER CANNOT BE UPHELD ON FACTS, AS SUCH WE FIND NO JUSTIFICATION ON THE PART OF THE ITA NO.926/KOL/2012 5 REVENUE TO LEVY PENALTY. ACCORDINGLY, PENALTY ORDER DESERVES TO BE QUASHED. WE ORDER ACCORDINGLY. 7. IN THE RESULT THE APPEAL OF ASSESSEE IS ALLOWED. #4 $0# 5 0' 6 7 '$ ORDER PRONOUNCED IN THE COURT ON 02.11.2012. SD/- SD/- [ , ] [ .!'., , , , #$ ] [ DIVA SINGH ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ('$) DATED : 02.11.2012. [RG '89 : /.PS] #4 2 .; <#;)/ COPY OF THE ORDER FORWARDED TO: 1. VIRENDRA KUMAR GOEL, C/O M.C.JAGWAYAN & CO., 46, KA LI KRISHNA TAGORE STREET, 2 ND FLOOR, KOLKATA-700007. 2 I.T.O., WARD-50(4), KOLKATA. 3. THE CIT, 4. THE CIT(A)- XXXII, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA [/; ./ TRUE COPY] #4'0/ BY ORDER, 9 /ASSTT REGISTRAR ITA NO.926/KOL/2012 6
