Mr. Harpreet Singh, Chandigarh v. ITO, Chandigarh

ITA 210/CHANDI/2015 | 2010-2011
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 21021514 RSA 2015
Assessee PAN ADHPS7155A
Bench Chandigarh
Appeal Number ITA 210/CHANDI/2015
Duration Of Justice 4 month(s) 28 day(s)
Appellant Mr. Harpreet Singh, Chandigarh
Respondent ITO, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 31-07-2015
Date Of Final Hearing 17-07-2015
Next Hearing Date 17-07-2015
Assessment Year 2010-2011
Appeal Filed On 03-03-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT ITA NO. 210/CHD/2015 (ASSESSMENT YEAR: 2010-11) MR.HARPREET SINGH VS. THE INCOME TAX OFFICER H.NO.1578 SECTOR 18-D WARD 2(3) CHANDIGARH. CHANDIGARH. PAN NO. ADHPS7155A (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI K.C.JAIN & SHAMAN JAIN RESPONDENT BY : SHRI JITENDER KUMAR DR DATE OF HEARING : 23.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER H.L.KARWA VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I CHANDIGARH DATED 11.12.2014 IN CONFIRM ING THE PENALTY OF RS.62 139/- LEVIED UNDER SECTION 271(1)( C) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) FOR ASSES SMENT YEAR 2010-11. 2 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME THROUGH E-FILIN G DECLARING TAXABLE INCOME OF RS.3 43 100/- UNDER THE HEADS IN COME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AS SESSMENT THROUGH CASS. THE ASSESSING OFFICER FRAMED THE AS SESSMENT UNDER SECTION 143(3) OF THE ACT ON 30.1.2013 WHERE IN THE AMOUNT OF RS.2 90 572/- ON ACCOUNT OF UN-DISCLOSED HOUSE PROPERTY INCOME WAS ADDED TO THE TOTAL INCOME OF TH E ASSESSEE. THUS NET INCOME OF RS.2 03 400/- WAS AD DED TO THE INCOME OF THE ASSESSEE AFTER ALLOWING DEDUCTION UN DER SECTION 24(A) OF THE ACT. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. IN RESPO NSE TO THE SAID NOTICE ISSUED BY THE ASSESSING OFFICER THE AS SESSEE SUBMITTED WRITTEN REPLY DATED 25.7.2013 WHICH READ S AS UNDER : IN RESPECT OF ADDITION OF RS. 2 90 572/- WE WANT TO REITERATE THAT IT WAS A VOLUNTARY SURRENDER BY O UR CLIENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THIS WAS NOT A DELIBERATE MISTAKE BY OUR ASSESSEE T O CONCEAL INCOME INSTEAD IT WAS PURELY OF A MISTAKE ON THE PART OF ASSESSEE'S ACCOUNTANT WHICH COULD NOT B E CHECKED BY THE ASSESSEE AND HE WAS UNAWARE OF SUCH MISTAKE. WHEN OUR CLIENT CAME TO KNEW ABOUT THE MISTAKE HE FILED A REVISED RETURN WHICH COULD NOT BE ACCEPTED BECAUSE ORIGINAL RETURN WAS FILED LATE. IT CAN ALSO BE SEEN FROM THE PREVIOUS YEAR RETURNS OF OUR ASSESSEE THAT HE WAS OFFERING THE WHOLE RENT RECEIV ED FOR TAXATION. THE MISTAKE IN RETURN OF INCOME WAS BONAFIDE AND NO MALAFIDE INTENTION CAN BE DRAWN IN THE 3 ABOVE MENTIONED CASE. VARIOUS HON'BLE TRIBUNALS AND HON'BLE COURT'S HAD ALREADY UPHELD THE FACT THAT NO PENALTY FOR CONCEALMENT IS WARRANTED IN CASE OF BONAFIDE MISTAKES. THEREFORE PENALTY UNDER SECTION 271 (L)( C) IS ABSOLUTELY NOT WARRANTED IN THIS CASE. 3. THE ASSESSING OFFICER HAS STATED THAT IN RESPEC T OF SCO 230-31 SECTOR 34 CHANDIGARH NO RENTAL INCOME WAS DECLARED. THE ASSESSING OFFICER VIDE HIS ORDER DA TED 23.11.2012 ASKED THE ASSESSEE TO FURNISH FLOOR-WISE RENTAL INCOME IN RESPECT OF TWO SHOWROOMS. HOWEVER THE A SSESSEE ALSO ADMITTED THAT INADVERTENTLY THE RENT RECEIVED AMOUNTING TO RS.2 90 572/- WAS NOT INCLUDED IN THE RENTAL INC OME AS DEDUCTION OF TAX AT SOURCE WAS NOT DEDUCTED THEREON BY THE TENANTS AS SUCH RENT RECEIVED WAS OMITTED TO BE TA KEN INTO ACCOUNT. THE ASSESSING OFFICER HAS STATED THAT TH E ASSESSEE SURRENDERED THE INCOME OF RS.2 90 572/- WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING O FFICER TOOK A VIEW THAT THE ASSESSEE HAS DELIBERATELY CONCEALED HIS PARTICULARS OF INCOME FROM HOUSE PROPERTY AND FURNI SHED INACCURATE PARTICULARS OF HIS INCOME. CONSEQUENTL Y THE ASSESSING OFFICER IMPOSED A PENALTY OF RS.62 139/- UNDER SECTION 271(1)(C) OF THE ACT. 4. ON APPEAL THE LEARNED CIT (APPEALS) CONFIRMED THE PENALTY AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD S/SHRI K.C.JAIN AND SHAMAN JAIN LEARNED COUNSELS FOR THE ASSESSEE AND SHRI JITENDE R KUMAR 4 LEARNED D.R. AT LENGTH AND HAVE ALSO PERUSED THE MA TERIALS AVAILABLE ON RECORD. THE ORIGINAL RETURN WAS FIL ED ON 31.3.2011 WHEREIN THE ASSESSEE HAD DECLARED RENTAL INCOME OF ONLY FIRST FLOOR OF SHOWROOM NO.839-40 SECTOR 22-A CHANDIGARH. HOWEVER THE ASSESSEE HAD NOT DECLARE D RENTAL INCOME OF THE REMAINING FLOOR. THE EXPLANATION OF THE ASSESSEE WAS THAT HE HAD SUO-MOTO REVISED THE RETUR N ON 26.4.2011 WHEREIN HE HAD INCLUDED THE RENTAL INCOM E OF RS.2 90 572/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ASSESSEE HIMSELF VOLUNTARILY DEC LARED ADDITIONAL INCOME IN THE REVISED RETURN DATED 26.4 .2011. NO DETECTION OF CONCEALED INCOME WAS MADE BY THE REVEN UE AUTHORITIES AND THEREFORE PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT IS NOT LEVIABLE. THE LEARNED D.R FOR THE R EVENUE ON THE OTHER HAND SUBMITTED THAT IN THE INSTANT CASE THE ORIGINAL RETURN WAS FILED ON 31.3.2011 AND THE SAM E WAS NOT FILED IN TIME AND SO ANY SUBSEQUENT RETURN FILED B Y THE ASSESSEE HAS TO BE IGNORED WHICH IS WHAT PRECISELY THE ASSESSING OFFICER HAS DONE. HE FURTHER SUBMITTED T HAT THE ORIGINAL RETURN WAS NOT FILED UNDER SECTION 139(1) OF THE ACT AND THEREFORE THE RETURN FILED SUBSEQUENTLY ON 2 6.4.2011 CANNOT BE TREATED AS REVISED RETURN . THEREFORE T HE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IT IS RELEVANT TO OBSERVE H ERE THAT THE ASSESSING OFFICER HAS OMITTED TO MAKE THE MENTION O F REVISED RETURN FILED BY THE ASSESSEE ON 26.4.2011. HOWEV ER IT IS TRUE THAT THE RETURN SUBMITTED ON 26.4.2011 CANNOT BE 5 CONSIDERED AS REVISED RETURN FILED UNDER SECTION 1 39(5) OF THE ACT. AT THE SAME TIME IT IS NOT THE CASE WHERE T HE RENTAL INCOME NOT SHOWN IN THE ORIGINAL RETURN WAS DETECTE D BY THE REVENUE AUTHORITIES. ADMITTEDLY THE ASSESSEE OFF ERED THE RENTAL INCOME ON 26.4.2011 AND PAID THE TAXES THERE ON BEFORE ANY DETECTION OF CONCEALMENT BY THE REVENUE AUTHORI TIES. NO NOTICE OR QUERY WAS RAISED REGARDING THE RENTAL INC OME OFFERED BY THE ASSESSEE FOR TAXATION ON 26.4.2011. THEREF ORE IT CANNOT BE SAID THAT THE ASSESSEE EITHER CONCEALED T HE INCOME OR FURNISHED THE INACCURATE PARTICULARS OF INCOME. IN THIS CASE THE RENTAL INCOME INADVERTENTLY OMITTED IN TH E ORIGINAL RETURN WAS VOLUNTARILY OFFERED FOR TAXATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS THE ASSESSEE REALIZED ITS MISTAKE AND POINTED OUT THE SAME TO THE ASSESSING OFFICER. IN THE CASE OF CIT VS. SOMANY EVERGREE KNITS LTD.(2013) 352 ITR 592 (BOM) THE HON'BLE BOMBAY HIGH COURT WHILE DISMISSING THE APPE AL OF THE ASSESSEE HELD AS UNDER : (III) THE GRIEVANCE OF THE REVENUE IS THAT PENALT Y IS JUSTIFIED IN VIEW OF THE FACT THAT THE RESPONDENT- ASSESSEE HAD NOT FILED A REVISED RETURN OF INCOME. HOWEVER THE TRIBUNAL NOTED THAT THE TIME TO FILE R EVISED RETURN HAD EXPIRED. IN ANY EVENT EVEN THE REVENUE DOES NOT DISPUTE THAT IT WAS A BONAFIIDE MISTAKE ON THE PART OF THE RESPONDENT-ASSESSEE. IN THE ABOVE VIEW IMPOSITION OF PENALTY UPON THE RESPONDENT-ASSESSEE IS NOT WARRANTED. 6 6. IN THE ABOVE CASE THE ASSESSEE SOLD ITS GARMEN T ASSETS AND CLAIMED LOSS OF RS.21.68 LACS THEREON AS REVENUE EXPENDITURE IN ITS RETURN. IN THE COURSE OF ASSESS MENT PROCEEDINGS THE ASSESSEE REALIZED ITS MISTAKE AND WITHDREW THE LOSS. THE ASSESSING OFFICER ACCEPTED THE WITH DRAWAL AND COMPLETED THE ASSESSMENT BUT IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE TRIBUNAL DELETED THE PE NALTY STATING THAT THE CLAIM FOR DEDUCTION MADE BY THE ASSESSEE O N ACCOUNT OF A BONAFIDE MISTAKE AND IN SUCH CIRCUMSTANCES TH E LEVY OF PENALTY WAS JUSTIFIED. IN THE SAID CASE THE MIST AKE WAS RECTIFIED DURING THE ASSESSMENT PROCEEDINGS SINCE T HE TIME TO FILE THE REVISED RETURN WAS EXPIRED. HOWEVER DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE REAL IZED ITS MISTAKE AND POINTED OUT THE SAME TO THE ASSESSING O FFICER. IN THE INSTANT CASE ALSO DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE ASSESSEE REALIZED ITS MISTAKE AND POINTED OUT THE SAME TO THE ASSESSING OFFICER. THERE WAS NO D ETECTION OF CONCEALED INCOME BY THE REVENUE AUTHORITIES. THE A SSESSEE VOLUNTARILY OFFERED THE RENTAL INCOME OF RS.2 90 57 2/- FOR TAXATION AND THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 30.1.2013 PASSED UNDE R SECTION 143(3) OF THE ACT. CONSIDERING THE ENTIRE FACTS A ND CIRCUMSTANCES OF THE PRESENT CASE AND ALSO KEEPING IN VIEW THE DECISION OF THE HON'BLE BOMBAY HIGH COURT REFER RED TO ABOVE I AM OF THE OPINION THAT IN THE FACTS AND CI RCUMSTANCES OF THE PRESENT CASE NO PENALTY UNDER SECTION 271(1 )(C) OF THE ACT CAN BE VALIDLY LEVIED. THEREFORE I CANCEL TH E PENALTY OF 7 RS.62 139/- LEVIED BY THE ASSESSING OFFICER AND CON FIRMED BY THE LEARNED CIT (APPEALS). 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 31 ST JULY 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR ITAT CHANDIGARH 8