SHAILESH R. PRAJAPATI, PUNE v. ITO 26(1)(4), MUMBAI

ITA 1708/MUM/2010 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 170819914 RSA 2010
Assessee PAN ABSPP1880E
Bench Mumbai
Appeal Number ITA 1708/MUM/2010
Duration Of Justice 10 month(s) 26 day(s)
Appellant SHAILESH R. PRAJAPATI, PUNE
Respondent ITO 26(1)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 28-01-2011
Assessment Year 2004-2005
Appeal Filed On 04-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI J. SUDHAKAR REDDY A.M. AND SHRI V. DU RGA RAO J.M. ITA NO. 1708/M/2010 ASSESSMENT YEAR: 2003-04 SHAILESH R. PRAJAPATI APPELLANT C/O MR. D.Y. PANDIT ADV. 1187/10 KRUPA SHIVAJINAGAR PUNE 411 055. (PAN ABSPP1880E) VS. INCOME TAX OFFICER 26(1)(4) RESPONDENT MUMBAI 400 002. APPELLANT BY : MR. D.Y. PANDIT RESPONDENT BY : MR. AMARDEEP . ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- 28 MUMBAI PASSED ON 20/11/2009 FOR THE AS SESSMENT YEAR 2003-04. 2. THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS PERTAINING TO LEVY OF PENALTY OF RS. 23 799/- U/S 271(1)(C) OF TH E ACT. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE HAD RECEIVED LEASE RENT OF RS. 32 800/- DURING THE PREVIOUS YEAR RELEVANT TO AY UNDER CONSIDERATION WHICH WAS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE TREATING THE SAME INCOME FROM HOUSE PROPE RTY. THE AO NOTICED THAT THE ASSESSEE HAD ALSO RECEIVED ARREARS OF LEASE RENT OF RS. 65 100/- AND MAINTENANCE EXPENSES OF RS. 10 800/- W HICH WAS NOT TA NO. 1708/M/10 M/S SHAILESH R. PRAJAPATI 2 SHOWN IN THE ORIGINAL RETURN FILED FOR THE YEAR. TH E AO WAS OF THE VIEW THAT THE ASSESSEE HAS NOT SHOWN THIS RECEIPT OF TH E AMOUNT IN ORIGINAL RETURN OF INCOME AND THE SAME IS BROUGHT T O THE TAXATION AFTER THE DETECTION BY THE DEPARTMENT U/S 148 OF TH E ACT AND AFTER CONFRONTING THE FACTS ABOUT RECEIPT OF SUCH INCOME TO THE ASSESSEE. THEREFORE THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD CONCEALED T HE PARTICULARS OF HIS INCOME. ACCORDINGLY HE LEVIED PENALTY OF RS. 2 3 799/- U/S 271(1)(C) OF THE ACT. THE CIT(A) CONFIRMED THE PENA LTY LEVIED BY THE AO. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE H AS CONTENDED THAT THE AO WHILE TREATING THE RENT OF RS. 97 900/- PAID BY THE EMPLOYER OF THE ASSESSEE TO ASSESSEE AS INCOME FRO M HOUSE PROPERTY FAILED TO TAKE INTO ACCOUNT THAT THE EMPLOYER HAS A LREADY CALCULATED THE AMOUNT OF RS. 18 365/-AS VALUE OF PERQUISITE OF PROVIDING RENT FREE ACCOMMODATION AS PERQUISITE U/S 17(2) OF THE ACT AN D ADDED IT AS A PART OF SALARY BY APPLYING THE PROVISION OF RULE 3( 1) OF IT RULES AND DID NOT REDUCE THE SAID VALUE OF PERQUISITE OF RS. 18 365/- FROM THE COMPUTATION OF INCOME AT THE TIME OF REASSESSMENT WHICH RESULTED IN THE DOUBLE TAXATION OF INCOME. THEREFORE THE LEARN ED COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT THE AO AS WELL AS CIT (A) OUGHT TO HAVE HELD THAT THERE WAS NO WILLFUL CONCEALMENT OF ANY I NCOME BUT THERE WAS CHANGE OF VIEW BY TAXING INCOME UNDER DIFFERENT HEAD I.E. TAXING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM SALARY AND NO PENALTY SHOULD HAVE BEE N LEVIED. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAD NO WILLFUL INTENTION TO CONCEAL THE INCOME OR ANY D ELIBERATE INTENTION TO DEFRAUD THE REVENUE AS HE WAS UNDER THE BONAFIDE BELIEF THAT WHATEVER INCOME RECEIVED FROM THE EMPLOYER WAS INCL UDED IN THE SALARY BY EMPLOYER COMPANY AND SUBJECTED TO TDS. TH E LEARNED AR HAS CANVASSED THAT SIMILAR ISSUE AROSE BEFORE THE I TAT MUMBAI BENCES INCLUDING THE DECISION IN THE CASE OF RAVIND RA LAXMAN SATHE TA NO. 1708/M/10 M/S SHAILESH R. PRAJAPATI 3 IN ITA NO. 2828/M/08 FOR AY 2001-02 VIDE ITS ORDER DATED 22 ND DECEMBER 2009 WHEREIN UNDER SIMILAR FACTS AND CIRC UMSTANCES OF THE CASE THE ITAT CANCELLED THE PENALTY LEVIED U/S 271( 1)(C) OF THE ACT. IN VIEW OF THE ABOVE HE PLEADED THAT THE PENALTY MAY BE CANCELLED. 5. ON THE OTHER HAND THE LEARNED DR HAS RELIED UPO N THE ORDERS OF THE REVENUE AUTHORITIES. THE LEARNED DR HAS SUBMITT ED THAT THE ASSESSEE HAS RECEIVED ARREARS OF LEASE RENT AND MAI NTENANCE OF EXPENSES FROM THE EMPLOYER WHICH WERE NOT SHOWN IN THE ORIGINAL RETURN OF INCOME AND THE SAME WERE BROUGHT TO TAXAT ION AFTER THE DETECTION BY THE DEPARTMENT. THEREFORE HE CONTEND ED THAT THE ASSESSEE HAS WILLFULLY CONCEALED THE PARTICULARS OF HIS INCOME TO EVADE TAX AND THE REVENUE AUTHORITIES HAVE RIGHTLY INITIA TED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PEN ALTY ACCORDINGLY. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE SUBMISSION OF THE ASSESSEE IS THAT THERE IS NO WILLFUL CONCEALMENT OF INCOME BUT ONLY CHANGE OF VI EW BY TAXING INCOME UNDER DIFFERENT HEAD NAMELY TAXING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FRO M SALARY. HIS EXPLANATION BEFORE THE REVENUE AUTHORITIES IS THAT HE WAS UNDER BONAFIDE BELIEF THAT WHATEVER INCOME RECEIVED FROM THE EMPLOYER WAS INCLUDED IN THE SALARY BY EMPLOYER AND SUBJECTED TO TAX. THEREFORE WE ARE OF THE VIEW THAT THE ASSESSEE HAS NO INTENTION TO CONCEAL THE INCOME OR ANY DELIBERATE INTENTION TO DEFRAUD THE R EVENUE. THE REVENUE AUTHORITIES HAVE NOT BROUGHT ANY MATERIAL O N RECORD TO ESTABLISH THAT THE ASSESSEE HAS WILLFULLY AND DELIB ERATELY CONCEALED HIS INCOME TO EVADE TAX. MOREOVER THE SIMILAR AROS E BEFORE THE ITAT IN THE CASE OF RAVINDRA LAXMAN SATHE(SUPRA) WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES AS RAISED IN THIS APPEAL T HE ITAT CANCELLED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. IN VI EW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE HEREBY SET ASIDE THE ORDER OF THE CIT(A) TA NO. 1708/M/10 M/S SHAILESH R. PRAJAPATI 4 AND CANCEL THE PENALTY OF RS. 23 799/- LEVIED BY TH E AO U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 28 TH JANUARY 2011. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE D BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV