NEHA V. KHAIRE, MUMBAI v. ITO 26(2)(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI BEFORE SHRI D.K. AGARWAL J.M. AND SHRI RAJENDRA SI NGH A.M. I.T.A. NO.2440/MUM/2010 ASSESSMENT YEAR : 2003-04 SMT. NEHA V. KHAIRE 256/10128 KANNAMWAR NAGAR SNEHA CO.OP HSG. SOCIETY KANNAWAR NAGAR 1 VIKHROLI (E) MUMBAI-400 083 P.A. NO: AAGPK3088A VS. INCOME TAX OFFICER 26(2)(2) ROOM NO.611 6 TH FLOOR K.G. MITTAL-AYURVEDIC HOSPITAL BLDG. CHARNI ROAD MUMBAI-400 002 (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI S.K. SINGH ORDER PER D.K. AGARWAL J.M: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 12.01.2010 PASSED BY THE LEARNED CIT(A) FOR T HE ASSESSMENT YEAR 2003-04 REFUSING TO CONDONE THE DELAY OF 70 DAYS IN FILING THE APPEAL BY THE ASSESSEE AND THEREBY DISMISSED THE APPEAL. 2. AT THE TIME OF HEARING NONE WAS PRESENT FOR AND ON BEHALF OF THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE DESPITE THE FACT THAT THE NOTICE OF DATE OF HEARING WAS DULY SE RVED UPON BY THE ASSESSEE AS PER AD CARD AVAILABLE ON RECORD. IT WAS THEREFOR E DECIDED TO DISPOSE OF THE APPEAL EXPARTE QUA THE ASSESSEE ON MERITS AFTER HEARING THE LD. DR WHO HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER AN D LD. CIT(A). SMT. NEHA V. KHARE ITA NO.2440/MUM/2010 2 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN EMPLOYEE OF BHARAT PETROLEUM CORPORATION LTD. (BPCL) HAS FILED RETURN DECLARING TOTAL INCOME AT RS.2 58 680/-. IT HAS BEEN OBSERVED BY TH E ASSESSING OFFICER THAT IN THE SAID RETURN THE ASSESSEE HAS SHOWN INCOME/L OSS FROM HOUSE PROPERTY OF RS.NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT ON V ERIFICATION OF INFORMATION RECEIVED FROM BPCL IN RESPECT OF ASSESSEE IT WAS F OUND THAT THE ASSESSEE HAS NOT SHOWN RECEIPT OF LEASE RENT LEASE ARREARS AND REIMBURSEMENT OF MAINTENANCE CHARGES. THEREFORE THE ASSESSING OFFIC ER AFTER RECORDING REASONS IN WRITING ISSUED NOTICE U/S.148 OF THE INC OME TAX ACT 1961 OF (THE ACT). IN RESPONSE THE ASSESSEE FILED REVISED RETUR N DECLARING TOTAL INCOME OF RS.3 70 080/-. THE ASSESSING OFFICER AFTER CONSIDER ING THE MATERIAL AVAILABLE ON RECORD COMPLETED THE ASSESSMENT AT THE SAME INCO ME I.E. RS.3 70 080/- VIDE ORDER DATED 05.10.2007 PASSED U/S.143(3) READ WITH SECTION 147 OF THE ACT. WHILE MAKING THE ASSESSMENT THE ASSESSING OFF ICER ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. ACCOR DINGLY THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE PENALTY SHOULD NO T BE IMPOSED U/S.271(1)(C). THE ASSESSING OFFICER AFTER CONSIDER ING THE MATERIAL AVAILABLE ON RECORD IMPOSED PENALTY OF RS.35 091/- ON THE CON CEALED INCOME OF RS.1 11 400/- VIDE ORDER DATED 16.04.2008 PASSED U /S.271(1)(C) OF THE ACT. ON APPEAL THE LD. CIT(A) OBSERVED THAT THE APPEAL FILED BY THE ASSESSEE IS DELAYED BY 70 DAYS AND THE REASONS GIVEN IN THE LE TTER FOR LATE FILING OF APPEAL IS MERELY A SELF SERVING STATEMENT WHICH NOW HERE SHOWS THE REASONABLE CAUSE FOR DELAY IN FILING OF APPEAL AND ACCORDINGLY HE DID NOT ADMIT THE APPEAL AND DISMISSED THE SAME. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS TH E REFUSAL OF CONDONATION OF DELAY AND SUSTENANCE OF PENALTY IMPOSED BY THE A SSESSING OFFICER. SMT. NEHA V. KHARE ITA NO.2440/MUM/2010 3 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE RUNNING INTO 33 PAGES WHEREIN THE ASS ESSEE HAS PLACED ON RECORD THE COPY OF WRITTEN SUBMISSIONS AND COPY OF PETITION FOR CONDONATION OF DELAY FILED BEFORE THE LD. CIT(A) COPY OF LETT ER DATED 17/04/2009 ISSUED BY MINISTER OF STATE FOR FINANCE GOVERNMENT OF IND IA AND COPY OF TRIBUNALS ORDERS CANCELLING THE PENALTY ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE. AS REGARDS CONDONATION OF DELAY IT HAS BEEN HELD BY THE HONBLE ANDHRA PRADESH HIGH COURT IN SURYA GENERAL TRADERS VS. CTO (2003) 133 STC 388 389 (AP) THAT WHEN AN APPELLANT HAS A GOOD CASE ON MERITS DEFEAT OF HIS CLAIM ON TECHNICAL PLEA OF LIMITATION WOULD ULTIMATELY LEAD TO INJUSTICE. STATE SHOULD NOT STAND BY A TECHNICAL PLEA OF LIMIT ATION IF THE CITIZENS CASE WAS OTHERWISE MERITORIOUS. SIMILARLY IT HAS BEEN CONSISTENTLY HELD BY THE HONBLE APEX COURT THAT IN THE MATTER OF CONDONATIO N OF DELAY A LIBERAL AND PRAGMATIC VIEW SHOULD BE TAKEN. THE REASON GIVEN BY THE APPELLANT FOR THE DELAY APPEARS TO BE SUFFICIENT CAUSE AND ACCORDINGL Y THE DELAY IN FILING OF THE APPEAL BEFORE THE LD.CIT(A) IS CONDONED. 6. ON MERITS WE FIND THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE CONSISTENT VIEW OF CO-ORDINATE BENCH OF THE TRIBUNAL WHEREIN IT HAS BEEN HELD THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THERE IS NO CONCERNMENT O N THE PART OF THE ASSESSEE. IN THE CASE OF SUNIL MADHUKAR JOSHI VS. I TO IN ITA NO.2829/MUM/2008 FOR A.Y. 2001-02 ORDER DATED 1.02. 2010 IN WHICH ONE OF US (JM) WAS A PARTY WHEREIN IT HAS BEEN HELD VID E PARA 6 OF THE ORDER AS UNDER :- 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE TRIBUNAL IN THE CASE OF SHRI RAVI NDRA LAXMAN SATHE(SUPRA) ON THE SIMILAR FACTS AND CIRCUMSTANCE S OF THE CASE HAS DELETED THE PENALTY VIDE FINDING RECORDED IN PARA 4.2 OF ITS ORDER DATED 22.12.2009 WHICH IS REPRODUCED A S UNDER : 4.2 ON CONSIDERATION OF ABOVE DISCUSSION AND RATIO LAID DOWN BY THE ITAT IN THE SAID SMT. NEHA V. KHARE ITA NO.2440/MUM/2010 4 CASE CITED SUPRA WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C). FROM THE ABOVE CIRCULAR IT IS CLEAR THAT IN THE CASE UNDER CONSIDERATION THE AO HAS DISCHARGED HIS DUTY OF ASSESSING CORRECT INCOME ON THE BASIS OF PARTICULARS AVAILABLE WITH THE DEPARTMENT WHICH MAY BE BY ISSUING NOTICE U/S 148 OF THE ACT. THE ASSESSEE CLAIMED THE INTEREST ON BORROWED CAPITAL AGAINST SOP INCOME AND OTHERS WHETHER THE SAME IS ALLOWABLE OR NOT OR WHAT SHOULD BE THE CORRECT INCOME IN ACCORDANCE WITH THE ACT IS A DIFFERENT THING BUT CERTAINLY RELEVANT SUFFICIENT PARTICULARS WERE ON RECORD EITHER IN THE FILE OF ASSESSEE FORM 16 OR IN THE FILE OF BPCL. THE AO MUST HAVE CONSIDERED THE RELEVANT SCHEME AND ALL MATERIAL IN ASSESSMENT OF BPCL. UNDER THE PECULIAR CIRCUMSTANCES SUCH CONSIDERATION OF PARTICULARS IN THE CASE OF BPCL AMOUNTS PARTICULARS AVAILABLE ON RECORD IN CASES OF THE EMPLOYEES OF BPCL. THEREFORE SUCH CASES CANNOT BE SAID TO BE A CASE OF FURNISHING INACCURATE PARTICULARS OR INCOME OR CONCEALING OF ANY PARTICULARS OF INCOME PARTICULARLY WHEN ALL THE RELEVANT PARTICULARS/MATERIAL AVAILABLE WITH THE DEPARTMENT. FURTHER IT HAS BEEN NOTICED FROM PENALTY ORDER THAT THE AO NOTED THAT EMPLOYEES IN A LARGE SCALE HAD FILED RETURNS OF INCOME AS PER TDS SALARY CERTIFICATE IN FORM NO. 16 AND HAD NOT DISCLOSED LEASE RENT & MAINTENANCE CHARGES RECEIVED INCLUDING ASSESSEE. WHEN A LARGE NUMBER OF PERSONS FILED THEIR RETURNS OF INCOME BY SAME MISTAKE THAT MISTAKE CANNOT BE SAID TO BE A CASE WHERE PENALTY PROVISIONS U/S 271(1)(C) IS APPLICABLE CONTRARY IT SUPPORTS TO ASSESSEES BONAFIDE. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ORDE R OF THE TRIBUNAL (SUPRA) HOLD THAT UNDER THE PECULIAR FAC TS AND CIRCUMSTANCES THERE IS NO CONCEALMENT ON PART OF T HE ASSESSEE AND ACCORDINGLY THE PENALTY IMPOSED BY THE AO AND S USTAINED BY THE LD. CIT(A) IS DELETED. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. SMT. NEHA V. KHARE ITA NO.2440/MUM/2010 5 7. RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF TH E TRIBUNAL WE CANCEL THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SU STAINED BY THE LD.CIT(A). THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE AL LOWED. 8. IN THE RESULT ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED ON THIS 11 TH DAY OF FEBRUARY 2011. SD/- SD/- ( RAJENDRA SINGH ) (D.K. A GARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DT: 11 TH FEBRUARY 2011. ROSHANI COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR I - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI