Shri Zafar Mehdi, Bhopal v. The Income Tax Officer 1(2), Bhopal

ITA 399/IND/2010 | 2006-2007
Pronouncement Date: 26-07-2011 | Result: Allowed

Appeal Details

RSA Number 39922714 RSA 2010
Assessee PAN AFRPM8091B
Bench Indore
Appeal Number ITA 399/IND/2010
Duration Of Justice 1 year(s) 1 month(s) 9 day(s)
Appellant Shri Zafar Mehdi, Bhopal
Respondent The Income Tax Officer 1(2), Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 26-07-2011
Assessment Year 2006-2007
Appeal Filed On 17-06-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.399/IND/2010 A.Y. 2006-07 ZAFAR MEHDI BHOPAL PAN AFRPM 8091 B APPELLANT VS ITO-1(2) BHOPAL RESPONDENT APPELLANT BY : SMT. AMITA VARSHNEY CA RESPONDENT BY : SH. L.L. CHOUBEY SR. DR O R D E R PER JOGINDER SINGH THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A)-I BHOPAL DATED 10.3.2010 WITH REGARD TO CO NFIRMING THE PENALTY OF RS.56 003/- IMPOSED U/S 271(1)(C) OF THE I.T. AC T. 2. DURING HEARING OF THE APPEAL WE HAVE HEARD SMT. AMITA VARSHNEY LD. COUNSEL FOR ASSESSEE AND SHRI L.L. CH OUBEY LD. SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE IS A RETIRED GOVT. EMPLOYEE AND WAS HAVING NO IDEA OF CAPITAL GAIN. IT WAS CLAIMED THAT WHEN THE ASSESSEE CAME TO KNOW ABOUT T HE FACTS AND THE PROVISIONS OF THE ACT HE REVISED HIS RETURN BEFORE COMPLETION OF THE 2 ASSESSMENT PROCEEDINGS AND DUE TAXES WERE PAID. IT WAS FURTHER CLAIMED THAT THE ASSESSEE WAS NEVER CONFRONTED TO T HE MISTAKE IF ANY. HOWEVER THE LD. SR. DR DEFENDED THE IMPOSITION OF PENALTY BY SUBMITTING THAT THE ASSESSEE DELIBERATELY CONCEALED IT PARTICU LARS OF INCOME. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A RETI RED BHEL EMPLOYEE AND AFTER HIS RETIREMENT HE JOINED AS PRINCIPAL OF AN E DUCATIONAL INSTITUTION. AN INCOME OF RS.1 69 687/- WAS DECLARED BY THE ASSE SSEE ON 1.7.2006 IN HIS RETURN FOR ASSESSMENT YEAR 2006-07 WHICH WAS MAINLY SHOWN FROM SALARY AS PRINCIPAL OF ALL SAINT COLLEGE TECHNOLOGY BHOPAL. THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 8.12.2008 U/S 143(3) DETERMINING THE TAXABLE INCOME AT RS.6 54 540/-. AS PER THE REVENUE DURING ASSESSMENT PROCEEDINGS INFORMATION WAS RECE IVED THAT THE ASSESSEE MADE INVESTMENTS IN VARIOUS MUTUAL FUNDS A ND NO SUCH INCOME WAS SHOWED FROM SUCH TRANSACTIONS IN THE RET URN. DURING ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE CLAIMED THAT HE MADE CERTAIN INVESTMENTS WHICH WERE RECEIVED FROM RETIRE MENT FROM BHEL. THIS AMOUNT WAS CLAIMED TO BE GIVEN TO STANDARD CHA RTERED BANK ON HIS BEHALF THE BANK MADE PURCHASE AND SALE OF MUTUAL F UNDS. THE ASSESSEE FURNISHED A CHART CONTAINING THE DETAILS O F TRANSACTIONS 3 SHOWING PURCHASE PRICE DATE OF PURCHASE SALE PRIC E DATE OF SALE PROFIT AND LOSS PURSUANT TO SUCH TRANSACTIONS. AS PER THI S CHART THE ASSESSEE EARNED SHORT TERM CAPITAL GAIN OF RS.5 01 862/- AND ALSO CAPITAL LOSS OF RS.97 181/- RESULTING INTO NET CAPITAL GAIN OF RS.4 04 681/-. THE ASSESSEE DEPOSITED TAX OF RS.40 000/- ON THE ADDL. INCOME. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE AS SESSEE WAS ASSISTED BY C.A. THEREFORE THE ASSESSEE EARNED INCOME FROM OTHER SOURCES TO THE EXTENT OF RS.77 675/-. THE ASSESSING OFFICER C ONSEQUENTLY LEVIED PENALTY OF RS.1 44 707/-. ON APPEAL THE PENALTY WA S WORKED OUT AT RS.56 003/- AS IS EVIDENT FROM THE PAGE 7 OF THE IM PUGNED ORDER. WITHOUT GOING INTO MUCH DELIBERATION THE THRUST OF THE DISCUSSION IS THAT THE ASSESSEE IS A EDUCATED PERSON AND IT IS EXPECTE D FROM TO KNOW THE I.T. ACT. IT IS VERY COMMON AND EASY TO SAY THAT TH ERE IS NO EXCUSE TO IGNORANCE OF LAW BUT FACTUAL ASPECT IS THAT SINCE T HE I.T. ACT IS VERY COMPLEX ONE IT IS NOT EXPECTED FROM EVERY PERSON T O KNOW IT FULLY. WHEN THE MISTAKE WAS BROUGHT TO THE NOTICE OF THE ASSESS EE HE SUO MOTO PAID THE TAXES THEREBY THERE IS NO LOSS TO THE REVENUE. IT IS NOT THE CASE THAT THE ASSESSEE KNOWINGLY TRIED TO HIDE SOMETHING THE REFORE IT IS A FIT CASE WHERE A LENIENT VIEW CAN BE TAKEN. IN SEC. 271(1)(C ) THE WORD USED HAS BEEN MAY AND NOT SHALL MEANING THEREBY THAT THE RE IS DISCRETION WITH THE ASSESSING OFFICER TO IMPOSE OR NOT IMPOSE THE P ENALTY. IT IS NOT THE CASE THAT THE ASSESSEE CONCEALED ANYTHING OR FURNIS HED INACCURATE 4 PARTICULARS. SUO MOTO DECLARATION WILL NOT PER SE T ANTAMOUNT TO FURNISHING INACCURATE PARTICULAR OF INCOME EVEN IF NOT ACCEPT ATION TO THE REVENUE IN ITSELF WOULD NOT ATTRACT PENALTY U/S 271(1)(C). OU R PROPOSITION IS FORTIFIED BY THE RATIO LAID DOWN IN CIT VS. RELIANCE PETRO PR ODUCTS P. LTD. (CIVIL APPEAL NO.2463 OF 2010 DATED 17.3.2010) (SC) AND CI T VS. AJAYAB SINGH & COMPANY (253 ITR 630) (P & H). THE RATIO LA ID DOWN IN HARIGOPAL SINGH VS. CIT (258 ITR 85) (P & H) FURTHE R FORTIFIES THE CASE OF THE ASSESSEE. THE EXPRESSION HAS CONCEALED THE PAR TICULARS OF INCOME AND HAS FURNISHED INACCURATE PARTICULARS OF INCOME HAVE NOT BEEN DEFINED IN EITHER IN SEC. 271(1)(C) OR ELSEWHERE IN THE ACT. ONE THING IS CERTAIN THAT THESE TWO CIRCUMSTANCES ARE NOT IDENTI CAL IN DETAILS ALTHOUGH THEY MAY LEAD TO SAME EFFECT. A SPECIFIC FINDING IS NECESSARY BY THE ASSESSING OFFICER FOR CONCEALMENT. THE FINDINGS IN THE ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE. THE DECISION IN CIT VS. SURESH CHAND MITTAL (251 ITR 9) (SC) FURTHER FORTIFIES THE CASE OF THE ASSESSEE. IN THE PRESENT APPEAL WHEN THE WRONG CLAIM/MISTAKE WAS BR OUGHT TO THE NOTICE OF THE ASSESSEE THAT TOO DURING ASSESSMENT PROCEE DINGS ITSELF (BEFORE PASSING THE ASSESSMENT ORDER) THE ASSESSEE PAID TH E DUE TAXES THEREFORE THERE IS NO LOSS TO THE REVENUE. IT IS N OT THAT IN EACH AND EVERY CASE WHEN THE FACTS ARE VERY MUCH CLEAR NEC ESSARILY THE ASSESSING OFFICER IS TO IMPOSE PENALTY AS WE HAVE S TATED EARLIER THAT THE DISCRETION IS AVAILABLE WITH THE ASSESSING OFFICER TO IMPOSE OR NOT TO 5 IMPOSE. AT THE SAME TIME THE ASSESSING OFFICER IS ALSO EXPECTED TO ACT JUDICIOUSLY BY KEEPING IN VIEW THE HARDSHIP OF THE ASSESSEE ALSO. THEREFORE NO PENALTY IS LEVIABLE U/S 271(1)(C). FINALLY THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 26 TH JULY 2011. (R.C.SHARMA) (JOGINDER SI NGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26.7.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE !VYAS!