Deb Kumar Gupta, Kolkata v. ITO, Ward - 27(3), Kolkata, Kolkata

ITA 1034/KOL/2010 | 2005-2006
Pronouncement Date: 10-03-2011

Appeal Details

RSA Number 103423514 RSA 2010
Assessee PAN ADRPG6403F
Bench Kolkata
Appeal Number ITA 1034/KOL/2010
Duration Of Justice 9 month(s) 21 day(s)
Appellant Deb Kumar Gupta, Kolkata
Respondent ITO, Ward - 27(3), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 10-03-2011
Appeal Filed By Assessee
Bench Allotted C
Tribunal Order Date 10-03-2011
Assessment Year 2005-2006
Appeal Filed On 20-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE /AND . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SRI C. D. RAO AM] # # # # / I.T.A NO. 1034/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2005-06 DEB KUMAR GUPTA. VS INCOME TAX OFFICER WD-27(3) KOLKATA. (PA NO ADRPG 6403 F) ( )* /APPELLANT ) (+ )*/ RESPONDENT ) FOR THE APPELLANT: SRI D. K. MITRA FOR THE RESPONDENT: SRI P. KOLHE !- / ORDER PER MAHAVIR SINGH JM ( ) THIS APPEAL FILED BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A)-XIV KOLKATA IN APPEAL NO. 147/CIT(A)-XIV/08-09 VIDE ORDER DATED 25.01.2010. THE ASSESSMENT WAS FRAMED BY ITO WARD-27(3) KOLKATA U/S 143(3) O F THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2005-06 VIDE HIS ORDER DATED 31.12.2007. THE PENALTY IN DISPUTE WAS LEVIED BY IT O WARD-27(3) KOLKATA U/S 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 26.6.2008 . 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) CONFIRMING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT . FOR THIS ASSESSEE HAS RAISED THE FOLLOWING THREE GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES THE APPELLAN T CANNOT BE SAID TO HAVE CONCEALED HIS PARTICULARS OF INCOME DELIBERATELY A ND THE OMISSION WAS JUST ACCIDENTAL AND HENCE THE PENALTY PROCEEDINGS CANNO T SUSTAIN IN LAW. 2. THAT THE CIT(A) ERRED IN LAW IN CONFIRMING THE ORDER OF THE A.O. WITHOUT GOING INTO THE FACTUAL CIRCUMSTANCES. 3. THAT THE PURPORTED FINDINGS OF THE CIT(A) DENYI NG RELIEF TO THE APPELLANT ARE NOT ONLY MECHANICAL BUT ALSO ARBITRARY AND UNR EASONABLE. 2 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSING OFFICER HAS LEVIE D THE PENALTY IN VIEW OF THE FACT THAT THE SHORT TERM CAPITAL GAIN ASSESSED BY ASSESSING O FFICER AT RS.69 971/- IN RESPECT OF REDEMPTION OF UNITS OF VARIOUS MUTUAL FUNDS EFFECTE D DURING THE RELEVANT PREVIOUS YEAR RELEVANT TO THIS ASSESSMENT YEAR WAS NOT CHALLENGED BY THE ASSESSEE. THE ASSESSING OFFICER LEVIED THE PENALTY ON MERITS AS WELL AS ON THE ISSUE THAT THE MISTAKE OF CHARTERED ACCOUNTANT CANNOT BE A REASONABLE CAUSE FOR FURNISH ING OF INACCURATE PARTICULARS OF INCOME. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFOR E CIT(A). 4. WE FIND THAT CIT(A) HAS CONFIRMED THE PENALTY L EVIED BY ASSESSING OFFICER ONLY ON ONE PREMISE THAT THERE IS NO GROUND FOR DELETION OF PENALTY THAT ANY INCOME REMAINED TO BE INCLUDED IN THE RETURN OF INCOME BECAUSE OF T HE MISTAKE OF AUTHORISED REPRESENTATIVE OF THE ASSESSEE. ACCORDING TO HIM RETURN IS PREPARED IN CONSULTATION WITH AUTHORISED REPRESENTATIVE AND IN CASE SUCH ARG UMENT IS ACCEPTED THE PENALTY IN NO CASE WILL REMAIN. FOR THIS CIT(A) CONFIRMED THE P ENALTY BY GIVING FOLLOWING FINDING IN PARA 4 OF HIS APPELLATE ORDER: 4. I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE A/ R. I FEEL THAT THE ASSESSEE CANNOT BE ABSOLVED FROM PENALTY U/S.271(1)(C) ON T HE GROUND THAT ANY INCOME REMAINED TO BE INCLUDED IN THE RETURN OF INCOME BE CAUSE OF THE MISTAKE OF HIS A/R. GENERALLY THE WHOLE OF THE RETURN IS PREPARE D IN CONSULTATION WITH THE A/R ONLY AND IF THIS ARGUMENT IS ACCEPTED THEN THE ASS ESSEE WILL NOT TAKE RESPONSIBILITY FOR ANYTHING SHOWN IN THE RETURN. THE A/R HAS REFERRED TO SOME COURT CASES AND HAS CLAIMED THAT FOR LEVYING PENAL TY U/S. 271(1)(C) THE A.O. HAS TO PROVE MENS REA ON THE PART OF THE ASSESSEE. IT CAN BE SEEN THAT ALL THESE COURT CASES HAVE BEEN OVERRULED BY HON. SUPREME COURT I N THE CASE OF DHARMENDRA TEXTILES REPORTED AT 306 ITR 277 WHEREIN HON. APEX COURT HAS SAID THAT PENALTY U/S. 271(1)(C) IS A CIVIL LIABILITY FOR WHICH THE DEPARTMENT IS NOT REQUIRED TO PROVE THE MENS REA OR INTENTION OF THE ASSESEE TO CONCEAL INCOME. IN VIEW OF THE ABOVE DISCUSSION I HOLD THAT THE AS SESSEE CONCEALED HIS INCOME FOR ASSESSMENT YEAR 2005-06 AND THE A.O. HAS RIGH TLY LEVIED THE PENALTY OF RS.7 850/- U/S. 271(1)(C). AGGRIEVED ASSESSEE CAME IN APPEAL BEFORE US. 3 5. WE FIND THAT BEFORE CIT(A) AS WELL AS BEFORE ASS ESSING OFFICER THE ASSESSEE HAS CONTENDED ON MERITS ALSO AND THE RELEVANT PARAS 3 A ND 4 OF ASSESSEES CONTENTION READS AS UNDER: IN COURSE OF ASSESSMENT PROCEEDINGS THE SAID SHOR T TERM CAPITAL GAINS WERE DULY CALCULATED BY THE UNDERSIGNED AND FURNISHED B EFORE YOUR LD.AUTHORITY WITH A CONFESSION THAT THE SHORT TERM CAPITAL GAI NS SHOULD HAVE BEEN DISCLOSED IN THE RETURN OF INCOME BECAUSE OF THE A MENDMENT CAME INTO EFFECT WITH EFFECT FROM 01.04.2005 I.E. THE ASSESSMENT YE AR 2005-2006. THE AMENDMENT CAME UNDER FINANCE (NO.2) ACT 2004 BY THE INSERTI ON OF A NEW SECTION 111A. AS A CHARTERED ACCOUNTANT THE UNDERSIGNED SHOULD N OT HAVE COMMITTED SUCH A LAPSE WHICH HAD DULY BEEN ADMITTED BEFORE YOUR LD. AUTHORITY - OTHERWISE THE WHOLE OF INCOME FROM MUTUAL FUNDS HAD DULY BEEN I NCLUDED IN THE RETURN OF INCOME AND IN THE ACCOUNTS FILED ALONG WITH THE RE TURN OF INCOME - CLAIMING TO BE EXEMPT U/S 10(35). THE MISTAKE WAS ALSO INDEE D CAUSED BY THE DEFINITION OF THE WORD TRANSFER [ AS DEFINED IN SECTION 2(47) ] WHICH DID NOT USE THE CONCEPT (AS USED IN CASE MUTUAL FUNDS) REDEMPTION . YOUR LD. AUTHORITY WOULD AGREE AND APPRECIATE THAT REDEMPTION IN NO CASE CAN HAVE THE MEANING AS CONTEMPLATED IN SECTION - 2(47). ANY WA Y THESE ARE BEING SUBMITTED TO SHOW AND JUSTIFY THAT THE ASSESSEE HA D (NEITHER HIS UNDERSIGNED A.R.) NO MALAFIDE INTENSION IN NOT DISCLOSING THE SAID SHORT- TERM CAPITAL GAIN. THE ASSESSEE HAS SUBSTANTIAL INCOME AND AS PER REC ORDS HE HAD NEVER GONE ON RECORD TO DESIGN IN ANY MANNER TO EVADE TAX. TH E WHOLE OF LAPSE WAS ON THE PART OF HIS UNDERSIGNED A.R. AND NOT THE ASSESSEE. THE ASSESSEE HAD FORTHWITH PAID TAXES DEMANDED IN TERMS OF ORDER U/S. 143(3) AND HAD NOT AGITATED THE MATTER IN APPEAL. IN FACT THE UNDERSIGNED HAD TO TENDER AN APOLOGY TO THE ASSESSEE FOR THE LAPSE. 4. IT IS NOW CLAIMED THAT THERE HAD BEEN NO WILLFU L NEGLECT OR DESIGN IN NOT DISCLOSING THE INSTANT SHORT TERM CAPITAL GAIN. T HE CA OF THE ASSESEE (THE UNDERSIGNED A.R) HAD COMMITTED THE LAPSE IN HIS PR OFESSIONAL CAPACITY WHICH WAS JUST AN OMISSION AND THERE HAD BEEN NO WILLFUL CONCEALMENT CONSIDERING THE RECORDED MERIT OF THE ASSESSEE. 6. IN VIEW OF THE ABOVE WE ARE OF THE VIEW THAT LE T CIT(A) GIVE FINDINGS ON MERITS WHETHER THIS IS A CASE OF LEVY OF PENALTY OR NOT. THE MAIN CONTENTION OF THE ASSESSEE IS THAT HE HAS DECLARED COMPLETE PARTICULARS IN RESPEC T TO TRANSACTION FOR REDEMPTION OF UNITS OF VARIOUS MUTUAL FUNDS EFFECTED DURING THE Y EAR BUT HAS NOT CONCEALED ANY PARTICULARS OF INCOME. THIS ASPECT HAS NOT BEEN EX AMINED BY THE CIT(A) AND THE SAME REQUIRES TO BE VERIFIED. ACCORDINGLY THIS ISSUE OF ASSESSEES APPEAL IS SET ASIDE TO THE FILE OF CIT(A) TO DECIDE AFRESH ON MERITS. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN OPEN COURT ON 10 TH DAY OF MARCH 2011. SD/- SD/- . . !' (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 10 TH DAY OF MARCH 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SRI DEB KUMAR GUPTA FL-3E 7D/1 ANIL MOITRA ROAD KOLKATA-700 019. 2 + )* / RESPONDENT ITO WD-27(3) KOLKATA 3 . -$ / THE CIT(A) KOLKATA 4. -$ ( )/ CIT KOLKATA. 5 . => +$ / DR KOLKATA BENCHES KOLKATA 4 +/ TRUE COPY !-$?/ BY ORDER 1 /ASSTT. REGISTRAR .