ITO, Ward-24(4),, v. S.Venkatnarain,,

ITA 2583/DEL/2005 | 2001-2002
Pronouncement Date: 11-01-2010 | Result: Dismissed

Appeal Details

RSA Number 258320114 RSA 2005
Bench Delhi
Appeal Number ITA 2583/DEL/2005
Duration Of Justice 4 year(s) 7 month(s) 15 day(s)
Appellant ITO, Ward-24(4),,
Respondent S.Venkatnarain,,
Appeal Type Income Tax Appeal
Pronouncement Date 11-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 11-01-2010
Date Of Final Hearing 11-01-2010
Next Hearing Date 11-01-2010
Assessment Year 2001-2002
Appeal Filed On 27-05-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.P. BANSAL AND SHRI A.K GARODIA I.T.A. NO.2583/DEL./2005 (ASSESSMENT YEAR: 2001-02) ITO WARD 24(4) VS. MR. S. VENKATNARAYAN NEW DELHI. C-2/2073 VASANT KUNJ NEW DELHI. (PAN/GIR NO.AABPV7524R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.K. RAMAN CA REVENUE BY : SHRI G.S. SAHOTA SR.DR ORDER PER A.K. GARODIA AM : THE IS A REVENUES APPEAL DIRECTED AGAINST THE O RDER OF THE CIT(A)-X NEW DELHI DATED 11.3.2005 FOR AY 2001-02. THE ONLY GRO UND RAISED BY THE REVENUE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD .CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 AMOUNTING TO RS 3 63 029/- WHEN THE ASSESSEE DID NOT FULFILL THE CONDITIONS FOR CLAIMING RELIEF U/S 80RR. 2. BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDU AL A WRITER/JOURNALIST BY PROFESSION AND THE ASSESSEE HAS BEEN REGULARLY FILING HIS INCO ME-TAX RETURN AS NOTED BY THE CIT(A) ON PAGE 2 OF HIS ORDER. DURING THIS YEAR A RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME OF RS.55 188/- AFTER CLAIMIN G DEDUCTION OF RS.12 43 306/- U/S 80RRA OF THE I.T. ACT 1961. THE AO NOTICED THAT H E DID NOT FULFILL THE CONDITIONS OF SECTION 80RRA OF THE ACT AND AS SUCH THE CLAIM OF D EDUCTION U/S 80RRA WAS DENIED. THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1 )(C) FOR HAVING MADE AN INCORRECT CLAIM OF DEDUCTION. DURING THE COURSE OF PENALTY P ROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT THE ASSESSEE HAS WRONGL Y MENTIONED THE SECTION AS 80RRA WHEREAS THE CORRECT SECTION SHOULD BE 80RR. IT WAS ALSO SUBMITTED THAT IT HAS HAPPENED BECAUSE OF A TYPOGRAPHICAL MISTAKE AND AS ALL THE C ONDITIONS U/S 80RR WERE FULFILLED AND ITA NO.2583/DEL./2005 (AY : 2001-02) 2 THERE WAS NO CONCEALMENT IN THIS CASE. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEES EXPLANATION WAS NOT SA TISFACTORY AND THAT IT WAS A DELIBERATE CLAIM OF WRONG DEDUCTION BY FURNISHING INCORRECT PA RTICULARS OF INCOME. HE IMPOSED A PENALTY OF RS.363029/- U/S 271(1)(C) OF THE ACT. B EING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS CAN CELLED THE PENALTY BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE MATTER AND THE EXP LANATION OFFERED BY THE APPELLANT. THERE IS NO DOUBT IN MY MIND THAT THE A PPELLANT IS ENTITLED TO DEDUCTION U/S 80RR BEING AN EMINENT JOURNALIST AND A WRITER. THE EXPLANATION THAT DUE TO A MISTAKE ON THE PART OF HIS TAX CONSULTANT THE SECTI ON UNDER WHICH HE WAS ELIGIBLE TO CLAIM THE DEDUCTION WAS MENTIONED AS SEC.80RRA I NSTEAD OF SEC.80RR IS PLAUSIBLE AND NOT FOUND TO BE FALSE EITHER BY THE A O OR BY ME. THERE APPEARS TO BE NO MALA FIDE MOTIVE TO MAKE THE WRONG CLAIM OF D EDUCTION U/S 80RRA WHEN THE SAME CORRECT DEDUCTION WAS AVAILABLE TO HIM U/S 80RR. THE AMOUNT DEDUCTIBLE WAS ALSO EXACTLY THE SAME. NO EXTRA BENE FIT WOULD ACCRUE TO THE APPELLANT IF HE GETS THE DEDUCTION U/S 80RRA INSTEA D OF SEC.80RR. THE EXPLANATION THAT IT IS A BONA FIDE MISTAKE IS THERE FORE ACCEPTABLE UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THERE ARE NUM EROUS JUDICIAL DECISIONS INCLUDING THOSE OF THE HONBLE SUPREME COURT WHICH HAVE HELD THAT A BONA FIDE MISTAKE CANNOT ATTRACT THE PROVISIONS OF SEC.271(1) (C). AS THE EXPLANATION OFFERED BY THE APPELLANT HAS NOT BEEN FOUND TO BE FALSE I HOLD THAT A LEVY OF PENALTY U/S 271(1)(C) IN THIS CASE IS UNJUSTIFIED. THEREFORE I T IS CANCELLED. 3. NOW THE REVENUE IS IN APPEAL BEFORE US. LD.DR OF THE REVENUE SUPPORTED THE PENALTY ORDER WHEREAS THE LD.AR OF THE ASSESSEE SUP PORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD AND HAVE GONG THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT IT IS NOTED BY THE AO IN THE ASSESSMENT ORDER IN THE STATEMENT OF THE ASSESSEE RECORDED ON OATH BY THE AO IT WAS SUBMITTED BY THE ASSESSEE THAT THE A SSESSEE HAS RENDERED SERVICES TO VARIOUS FOREIGN PARTIES INCLUDING ITN(UK) ARAB NEW S (SAUDI ARABIA) THE ISLAND (SRI LANKA) RADIO LAKHA (SOUTH AFRICA) & NBC (USA). WH EN THE AO POINTED OUT TO THE ASSESSEE THAT ONE OF THE CONDITIONS REQUIRED U/S 80 RRA IS NOT FULFILLED I.E. REGARDING PRIOR APPROVAL FROM THE PRESCRIBED AUTHORITIES THE ASSES SEE SUBMITTED THAT HE IS READY TO PAY THE TAX AND REQUESTED NOT TO IMPOSE ANY PENALTY. O N THE BASIS OF THIS STATEMENT OF THE ASSESSEE THE AO MADE ADDITION IN THE ASSESSMENT OR DER AND INITIATED PENALTY PROCEEDINGS ALSO. ITA NO.2583/DEL./2005 (AY : 2001-02) 3 5. NOW WE EXAMINE THE CLAIM OF THE ASSESSEE DURING PENALTY PROCEEDINGS THAT CLAIM U/S 80RRA WAS MADE BY TYPOGRAPHICAL MISTAKE AND IN FACT THE ASSESSEE WAS ELIGIBLE FOR SAME AMOUNT OF DEDUCTION U/S 80RR. WHEN WE EXAMINE THE PROVISIONS OF SECTION 80RR AND 80RRA WE FIND THAT AS PER THE PROVISION OF SEC TION 80RR DEDUCTION IS ALLOWABLE IN RESPECT OF PROFESSIONAL INCOME FROM FOREIGN SOURCES IN CERTAIN CASES WHEREAS DEDUCTION IS ALLOWABLE U/S 80RRA IN RESPECT OF REMUNERATION RECE IVED FOR SERVICES RENDERED OUTSIDE INDIA. THE BASIC DIFFERENCE IS THAT IN THE FIRST C ASE I.E. WHERE THE ASSESSEE CLAIMED DEDUCTION U/S 80RR THE INCOME IS RECEIVED BY THE A SSESSEE FOR THE PROFESSIONAL SERVICES RENDERED BY THE ASSESSEE BEING AN AUTHOR PLAYER WR ITER ARTIST ETC. WHEREAS DEDUCTION U/S 80RRA IS ALLOWABLE WHEN AN INDIAN CITIZEN IS RENDER ING SERVICES AND RECEIVES REMUNERATION FROM A FOREIGN EMPLOYER OR ANY INDIAN CONCERN FOR SAME SERVICES RENDERED OUTSIDE INDIA. IN THE SECOND CASE THE ADDITIONAL REQUIREMENT IS THERE THAT THE TERMS AND CONDITIONS OF THE SERVICES OUTSIDE INDIA ARE APPROV ED IN THIS BEHALF BY THE CENTRAL GOVERNMENT OR THE PRESCRIBED AUTHORITY. THERE IS N O SUCH REQUIREMENT WITH REGARD TO THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80RR. IN THE PRESENT CASE THIS IS A FINDING OF THE AO THAT THIS REQUIREMENT WAS NOT FULFILLED B Y THE ASSESSEE TO BE ELIGIBLE FOR DEDUCTION U/S 80RRA BUT IF THIS CLAIM IS CONSIDERE D U/S 80RR THERE IS NO REQUIREMENT OF FULFILLING SUCH CONDITION AND HENCE IT CANNOT BE S AID THAT A TOTALLYFALSE CLAIM WAS MADE BY THE ASSESSEE. IT IS ALSO WORTH NOTING THAT AS P ER THE DETAILS OF SERVICES RENDERED BY THE ASSESSEE AS NOTED BY THE AO IN THE ASSESSMENT ORDER IT APPEARS THAT THESE SERVICES WERE NOT RENDERED BY THE ASSESSEE AS AN EMPLOYEE OF THOS E FOREIGN PARTIES AND IT APPEARS THAT THESE SERVICES WERE RENDERED AS PROFESSIONAL SERVIC ES. ON PAGE 1 OF THE ASSESSMENT ORDER ALSO IT IS NOTED BY THE AO THAT THE ASSESSEE IS A SYNDICATE JOURNALIST PROVIDES HIS SERVICES TO MANY FOREIGN MEDIA CHANNELS IN ADDITION TO THE INDIAN COUNTERPARTS. THIS OBSERVATION OF THE AO IN THE ASSESSMENT ORDER ALSO SHOWS THAT T HE ASSESSEE WAS NOT RENDERING HIS SERVICES TO FOREIGN PARTIES AS AN EMPLOYEE OF THOSE FOREIGN PARTIES AND HENCE THIS EXPLANATION OF THE ASSESSEE APPEARS BONA FIDE THAT THE ASSESSEE WANTED TO CLAIM DEDUCTION U/S 80RR AND BY TYPOGRAPHICAL MISTAKE DEDUCTION WA S CLAIMED U/S 80RRA. CONSIDERING ALL THESE FACTS WE ARE OF THE CONSIDERED OPINION T HAT THE PENALTY WAS RIGHTLY DELETED BY THE CIT(A). WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) AND WE THEREFORE CONFIRM THE SAME. ITA NO.2583/DEL./2005 (AY : 2001-02) 4 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER PRONOUNCED IN OPEN COURT ON THE DATE OF HE ARING I.E. ON 11.01.2010 ITSELF. SD/- SD/- (I.P.BANSAL) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SKB DATED JANUARY 11 2010. COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-X NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR/ITAT