Dr Jami Sridhar, Berhampur v. DCIT, Berhampur

ITA 49/CTK/2010 | 2006-2007
Pronouncement Date: 25-02-2011

Appeal Details

RSA Number 4922114 RSA 2010
Assessee PAN ABHPS1138N
Bench Cuttack
Appeal Number ITA 49/CTK/2010
Duration Of Justice 1 year(s) 7 day(s)
Appellant Dr Jami Sridhar, Berhampur
Respondent DCIT, Berhampur
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Bench Allotted DB
Date Of Final Hearing 22-02-2011
Next Hearing Date 22-02-2011
Assessment Year 2006-2007
Appeal Filed On 18-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK ( ) BEFORE . . HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER. /AND . . . S HRI K.S.S.PRASAD RAO JUDICIAL MEMBER / I.T.A.NO. 49/CTK/2010 / ASSESSMENT YEAR 23006 - 07 DR. JAMI SRIDHAR S/O. SRI JAMI SRINIVASARAO GADIVARI STREET BERHAMPUR. PAN: ABHPS 1138 N - - - VERSUS - DCIT BERHAMPUR CIRCLE BE RHAMPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.B.CHETTY AR / FOR THE RESPONDENT: / SHRI S.K.DASH DR / ORDER . . SHRI K.K.GUPTA ACCOUN TANT MEMBER. THIS APPEAL BY THE ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME - TAX ACT 1961. 2. THE BRIEF F ACTS RELATING TO THE DISPUTE ARE THAT THE ASSESSEE IS A DOCTOR. DURING THE IMPUGNED ASSESSMENT YEAR HE WAS WORKING AS A CONSULTANT WITH CALCUTTA MEDICAL RESEARCH INSTITUTE AT CALCUTTA WHO WAS COMPENSATED BY WAY OF SALARY WHICH WAS NOT FIXED. ON HAV ING OBTA INED FORM NO. 16A INDICATING SALARY AT 1 45 959 WITH TAX DEDUCTION AT 1 10 000 HE FILED THE RETURN OF INCOME WHICH WAS PROCESSED U/S.143(3). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE PRODUCED ANOTHER CERTIFICATE FROM THE EMPLOYER IN FORM 16A WHICH RECTIFIED THE COMPUTER ERROR OF GROSS SALARY AT 4 57 759 INSTEAD OF 1 45 959 AND THE TDS REMAINI ED THE SAME I.E. 1 10 000.THE ASSESSING OFFICER PROCEEDED TO CONSIDER THIS ACT OF THE ASSESSEE RETURNING LOWER SALARY INCOME AS FURNISHING INACCUR ATE PARTICULARS OF INCOME AND I.T.A.NO. 49/CTK/2010 2 CONCEALMENT THEREOF TO INVOKE THE PROVISIONS OF SECTION 271(1)(C). DURING THE COURSE OF HEARING OF THE PENALTY PROCEEDINGS IT WAS EXPLAINED BY THE ASSESSEE THAT AS THE ASSESSEE HIMSELF WAS NOT PERSONALLY PRESENT WHEN ONLY TH E EARLIER FORM NO.16A WAS THE BASIS FOR FILING THE RETURN THE EMPLOYER DID NOT TAKE NOTE OF THE COMPUTER ERROR COMMITTED BUT WAS RECTIFIED BY FURNISHING A NEW FORM 16A WHICH INDICATED THE SAME TAX RESULTING IN REFUND EVEN ON THE NEW AMOUNT OF GROSS SALAR Y CONSIDERED BY THE ASSESSING OFFICER WAS THEREFORE NOT A LOSS TO THE REVENUE BUT MERELY A TECHNICAL ERROR HAVING NO INCLINATION FOR THE ASSESSEE TO EITHER FURNISH INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE ASSESSEES FATHER AND THE CHARTERED AC COUNTANT ALONE WERE SUBJECTED TO SUCH SCRUTINY THEREFORE WAS NEGATED BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE HAD INTENTIONALLY COMMITTED THE MISTAKE. PENALTY OF 43 200 WAS IMPOSED WHICH WAS APPEALED AGAINST BEFORE THE FIRST APPELLATE AUTHORITY. THE LEARNED CIT(A) ON THE BASIS OF FACTS BROUGHT ON RECORD CONSIDERED THAT THE INTENTION OF FUR NISHING INACCURATE PARTICULARS I S PROVED WHEN THE TAX OF 1 10 000 HAS BEEN DEDUCTED ON AN INCOME OF 4 57 759 SALARY HAS BEEN PAID BY THE EMPLOYER. WHEN EMPLOYER HAS PAID A HIGHER AMOUNT THE ONUS L IED ON THE ASSESSEE NOT TO CONCEAL THE SAME THEREFORE WAS JUSTIFIABLY CONSIDERED FOR LEVY OF PENALTY U/S.271(1)(C). 3. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE AUTHORITIES BELOW HAVE STRETCHED THE ERROR COMMITTED BY THE COMPUTER IN ISSUING FORM 16A BY HOLDING THE SAME TO THE EXTENT OF THE ASSESSEE HAVING FURNISHED INACCURATE PARTICULARS OR CONCEALED INCOME. HE POINTED OUT THAT IT HAS BEEN REPEATEDLY SUBMITTED BEFORE THE AUTHORITIES BELOW THAT THE ASSESSEE BEING A DOCTOR WAS NOT AVAILABLE WHEN HIS FATHER BEING A SENIOR CITIZEN HA D FURNISHED THE PAPERS TO THE CA FOR ENABLING HIM TO FILE THE RETURN WHICH PAPERS ALONE WERE SENT TO THE ASSESSEE FOR SIGNATURE WHO IN THE IMPUGNED PERIOD WAS IN I.T.A.NO. 49/CTK/2010 3 CANADA. THE TAX HAD BEEN PAID AT SOURCE BY THE EMPLOYER THEREFORE MAKES THE UNDISPUTED FACT THAT TAX HAS BEEN DEDUCTED ON AN INCOME NOT CONCEALED HAS TO BE JUSTIFIED IN ACCORDANCE WITH THE PROVISIONS OF LAW WAS THEREFORE ONLY A COMPUTER ERROR FOUND BY THE ASSESSING OFFICER WITHOUT ESTABLISHING THAT IT WAS THE ASSESSEE WHO FURNISHED THE INACCURATE PARTICULARS. INACCURATE PARTICULARS IF ANY WERE TO BE RECTIFIED BY THE EMPLOYER WHICH IT DID BY FURNISHING ANOTHER FORM 16A INDICATING THE REQUISITE INCOME ON WHICH IT HAS DEDUCTED THE SAME TAX AS WAS ALSO NOTED BY IT IN THE PREVIOUS ERRONEOUS FORM 16A.THERE WAS NO LOSS OF REVENUE ON THE BASIS OF SUCH CLERICAL ERROR CANNOT BE HELD AGAINST THE ASSESSEE AS INTENTIONAL FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE DIFFERENCE IN THE TWO INCOMES ON SALARY HAVE BEEN ESTABLISHED BY HIM TO HAVE BEEN INVESTED IN ASSETS WHICH HAVE NOT BEEN BROUGHT TO TAX. HE POINTED OUT THAT A CLERICAL ERROR WHICH HAS BEEN RECTIFIED CANNOT BE BLOWN OUT OF PROPORTION TO ESTABLISH MAT T ER RIPE FOR INVOKING THE PROVISIONS OF SECTION 271(1)(C). FOR THIS PROPOSITION HE HAS RELIED ON THE JUDGMENTS SUCH AS CIT V. KHODAY ESWARSA AND SONS (83 ITR 369 (SC) CIT V. MOTILAL & CO. (210 ITR 288)(KOL) CIT V. SARAN KHANDSARI SUGAR WORKS ( 246 ITR 216)(ALL) AND CIT V. K.R. CHINNI KRISHNA CHETTY (246 ITR 121 (MAD) WHICH CLEARLY HELD THAT FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT HAS TO BE ESTABLISHED N THE HANDS OF THE ASSESSEE TO THE EXTENT SUCH ENHANCEMENT OF INCOME DOES NOT AUTOMATICALLY CONCLUDE THAT IT WAS A DELIBERATE ACT ON THE PART OF THE ASSESSEE .HE SUBMITTED THAT THERE WAS NO TAX SO UGHT TO BE EVADED RIPE FOR LEVY OF PENALTY AS NOTED IN SUB - CLAUSE (III) OF SECTION 271(1)(D). THE AMOUNT SOUGHT TO BE DEMANDED AS PENALTY HAS NO LEGS TO STAND ON INSOFAR AS THE ASSESSEE HAS RETURNED THE AMOUNT WHICH THE EMPLOYER HAD DEDUCTED REMAINING THE SAME FOR TWO SET OF INCOMES. THIS I.T.A.NO. 49/CTK/2010 4 CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE TO THE EXTENT THAT THE EMPLOYER UNDERTOOK THE LIABILITY OF EXPLAN ING OF FURNISHING INACCURATE PARTICULARS IN FORM 16A WHICH HAS NOT BEEN DELIBERATED UPON EITHER BY THE ASSESSIN G OFFICER OR BY THE LEARNED CIT(A) FOR LEVY OF PENALTY . 4. THE LEARNED DR SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW INDICAT ED THAT THE ASSESSEE IS IN HABIT OF CONCEALING PARTICULARS OF INCOME WHICH ARE BROUGHT TO THE NOTICE BY THE ASSESSING OFFICER D URING THE COURSE OF ASSESSMENT PROCEEDINGS ONLY WHEN IN THE SIMILAR FASHION FOR THE ASSESSMENT YEAR 2004 - 05 THE ASSESSEE HAD CLAIMED EXPENSES FROM CLINICAL RECEIPTS WERE BROUGHT TO TAX WAS OBSERVED BY THE AUTHORITIES BELOW AGAINST THE ASSESSEE. HE POINTED OUT THAT THE CASE LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE HAVE BEEN TAKEN NOTE OF BY THE LEARNED CIT(A) THEREFORE WAS DELIBERATED UPON TO HOLD THAT THE EXPLANATION UNDER THE SAID SECTION REQUIRED THE ASSESSEE TO SUBSTANTIATE AS A BONAFIDE MISTAK E ON THE PART OF THE EMPLOYER AND NOT THE ASSESSEE. HE SUPPORTED THE CONFIRMATION OF PENALTY SO LEVIED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ON OUR CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES WE FIND THAT THE LEARNED COUNSEL FOR THE ASSESSEE HAS CATEGORICALLY CHALLENGED THAT THE ASSESSING OFFICER HAD NO MATERIAL TO ESTABLISH LEVYING OF PENALTY ON THE AMOUNT OF TAX SOUGHT TO BE EVADED ON AN INCOME WHICH WAS ONLY A CLERICAL MISTAKE ON THE PART OF TH E EMPLOYER BY INDICATING LESS AMOUNT. THE ONLY MISTAKE THAT THE ASSESSEE COMMITTED WAS THAT HE RELIED ON THE SAME AND WAS NOT VERIFIED FROM THE BANK PASS BOOK WHICH HAD TO RECTIFY THE AMOUNT OF SALARY AS PER FORM NO.16A SUBMITTED LATTER. THE AR FOR THE ASS ESSEE FURTHER HAVE REPEATEDLY CLAIMED THAT THE ASSESSEE BEING A HEART SPECIALIST AND A BUSY DOCTOR WAS NOT AVAILABLE TO I.T.A.NO. 49/CTK/2010 5 VERIFY THE SAID ERRONEOUS NOTING OF SALARY OTHER THAN WHAT WAS ACTUALLY RECEIVED WAS THEREFORE RECTIFIED IMMEDIATELY ON THE OBSERVATION OF THE LEARNED ASSESSING OFFICER THAT A SUM OF 1 10 000 HAD BEEN DEDUCTED AS TAX ON THE SUM OF 1 45 959 THEREFORE WAS AN ERROR. WHEN THE AUTHORITIES THEMSELVES ARE AWARE OF THE FACT THAT THE TAX DOES NOT QUANTIFY THE INCOME IN PROPORTION TO WHAT HAS BEEN DEDUCTED AND PAID TO THE GOVERNMENT EXCHEQUER WAS TO BE APPROPRIATELY BROUGHT TO TAX RESULTING IN REFUND THEREFORE WAS ACCEPTED AS A BONAFIDE MISTAKE AT THE TIME OF ASSESSMENT. THEREFORE THE LEVY OF PENALTY HAS BEEN ESTABLISHED ON AN ERROR COMMITTED BY T HE EMPLOYER FURNISH ING FORM NO.16A TO THE ASSESSEE WHO HAS NOT WITHHELD ANY TAX ON ACCOUNT OF PURPORTED CONCEALED INCOME. THE ASSESSING OFFICERS VIEW THAT THE EMPLOYER HAD GIVEN A WRONG CERTIFICATE AS THE TAX DEDUCTED DID NOT COMMENSURATE WITH THE AMOUNT INSCRIBED THEREIN THE COUNSEL OF THE ASSESSEE AND ASSESSEES FATHER ALSO RECTIFIED THE MISTAKE BY FURNISHING ANOTHER FORM 16A THEREFORE CLINCHES THE ISSUE THAT THERE WAS NEITHER ANY FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE ASSESS EE HAD NOT BEEN GRANTED REFUND EITHER ON AN EARLIER OCCASION BUT WAS ULTIMATELY GRANTED REFUND AFTER THE ENHANCEMENT INCOME WAS ASSESSED. THE LEARNED CIT(A) ON THE OTHER HAND SOUGHT TO RELY ON THE EXPLANATION APPENDED TO SECTION 271(1)(C) WHICH HAS UNDERGONE SEVERAL JUDICIAL INTERPRETATIONS AND AMENDMENTS TO THE EXTENT THAT THE ASSESSEE HAS TO BE BR ANDED AS INTENTIONALLY FURNISHING INACCURATE PARTICULARS OF INCOME WHEN THE TAX DEDUCTED AT A HIGHER R ATE HAS BEEN ACCEPTED BY HIM BY CLAIMING REFUND AFTER THE SAID SUM HAS ALSO BEEN INCORPORATED .THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE INVOKING OF THE PROVISIONS OF SECTION 271(1)(C) WAS PREMATURE ONCE THE ASSESSING OFFICER CHOSE TO ACCEPT THE FO RM 16A RECTIFIED AND FURNISHED BY THE EMPLOYER WH ICH THE ASSESSEE HAD ON THE EARLIER OCCASION I.T.A.NO. 49/CTK/2010 6 ONLY SOUGHT FOR REFUND OF 1 10 000 WAS WHETHER THIS REFUND WAS NOT ON THE BASIS OF ANY OTHER INCOME BUT THE SAID INCOME. THE ERROR HAS BEEN ESTABLISHED TO HAVE BEEN COMMITTED BY THE EMPLOYER THEREFORE CANNOT BE PASSED ON TO THE ASSESSEE FOR LEVY OF PENALTY U/S.271(1)(C).IN VIEW THEREOF WE CANCEL THE PENALTY SO LEVIED U/S.271(1)(C) OF THE ACT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25 TH FEBRUARY 2011 SD/ - SD/ - ( . . . ) ( K.S.S.PRASAD RAO) JUDICIAL MEMBER ( . . ) (K.K.GUPTA) ACCOUNTANT MEMBER. ( ) DATE: 25 TH FEBRUARY 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : DR. JAMI SRIDHAR S/O. SRI JAMI SRINIVASARAO GADIVARI S TREET BERHAMPUR. 2 / THE RESPONDENT: DCIT BERHAMPUR CIRCLE BERHAMPUR. 3 . / THE CIT 4 . ( )/ THE CIT(A) 5 . / DR CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY / BY ORDER [ ] SENIOR PRIVATE SECRETARY ( ) ( H.K.PADHEE ) SENIOR.PRIVATE SECRETARY.