State Bank of Indore Retd. Employes.Medical Benefit Scheme, v. The ITO 5 (3),

ITA 54/IND/2009 | 2003-2004
Pronouncement Date: 25-01-2011 | Result: Dismissed

Appeal Details

RSA Number 5422714 RSA 2009
Assessee PAN AAUFS0914N
Bench Indore
Appeal Number ITA 54/IND/2009
Duration Of Justice 1 year(s) 11 month(s) 11 day(s)
Appellant State Bank of Indore Retd. Employes.Medical Benefit Scheme,
Respondent The ITO 5 (3),
Appeal Type Income Tax Appeal
Pronouncement Date 25-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-01-2011
Date Of Final Hearing 25-01-2011
Next Hearing Date 25-01-2011
Assessment Year 2003-2004
Appeal Filed On 13-02-2009
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 NOS. 319 54 AND 55/IND/2009 AYS 2002-03 TO 2004-05 STATE BANK OF INDORE RETIRED EMPLOYEES MEDICAL BENEFIT SCHEME INDORE PAN AAUFS0914N :: APPELLANT VS INCOME TAX OFFICER 5(3) INDORE :: RESPONDENT APPELLANT BY SHRI SUMIT NEMA RESPONDENT BY SHRI ARUN DEWAN DATE OF HEARING 12.04.2012 DATE OF PRONOUNCEMENT 19.04.2012 O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDERS D ATED 6.3.2009 5.12.2008 RESPECTIVELY PASSED BY THE LE ARNED FIRST APPELLATE AUTHORITY INDORE WHEREIN THE PENALTY OF RS.6 61 824/- 2 RS.10 94 311/- AND RS. 18 55 106/- RESPECTIVELY W AS IMPOSED BY THE LEARNED AO AND SUSTAINED IN THE IMPUGNED ORD ERS. 2. DURING HEARING OF THESE APPEALS WE HAVE HEARD S HRI SUMIT NEMA LEARNED COUNSEL FOR THE ASSESSEE AND SHRI AR UN DEWAN LEARNED SENIOR DR. THE CRUX OR ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE INTEREST INCOME WAS DULY DECLA RED BY THE ASSESSEE IN ITS RETURN BY SPECIFICALLY PUTTING A NO TE MENTIONING THAT THE IMPUGNED FUND WAS CREATED BY THE RETIRED E MPLOYEES BY THEIR OWN CONTRIBUTION AND THE INCOME FROM MUTUAL A SSOCIATION IS EXEMPT FROM TAXATION THEREFORE AFTER CLAIMING THE EXEMPTION THE TOTAL INCOME WAS DECLARED AT NIL. THE LEARNED COUNSEL ALSO INVITED OUR ATTENTION TO PAGE 2 OF THE ASSESSMENT O RDER MENTIONING THE IDENTICAL FACT. IT WAS SUBMITTED THA T NEITHER THERE IS CONCEALMENT OF INCOME NOR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. ON THE OTHER HAND THE LEARNED SR. DR DEFENDED THE IMPOSITION OF PENALTY ON THE GROUND THAT THE IN TEREST INCOME SO RECEIVED FROM SUCH SCHEME WAS TAXABLE IN THE HAN DS OF THE ASSESSEE BECAUSE THE FUND WAS NOT APPROVED BY THE L EARNED CIT IN ACCORDANCE WITH RULE 16C OF THE IT RULES. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE 3 ASSESSEE DECLARED NIL INCOME AFTER CLAIMING EXEMPTI ON OF RS.22 49 490/- (AY 2002-03) RS.10 94 311/- (AY 200 3-04) AND RS.18 55 106/- (AY 2004-05) AFTER CLAIMING THE SAME AS EXEMPT. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF TH E ACT. LATER ON IT WAS SEEN BY THE ASSESSING OFFICER THAT THE IM PUGNED AMOUNTS WERE RECEIVED AS INTEREST FROM TERM DEPOSIT S AND SAVING BANK ACCOUNTS. THIS INTEREST INCOME WAS CLAIMED EX EMPT UNDER SECTION 10(23AAA) OF THE ACT. THE IMPUGNED ADDITION WAS MADE BY THE LEARNED AO ON THE GROUND THAT SINCE THE ASSE SSEE WAS NOT APPROVED BY THE LEARNED CIT IN ACCORDANCE WITH RULE 16C OF THE IT RULES 1962 THE ASSESSEE IS NOT ENTITLED TO BEN EFIT OF EXEMPTION UNDER SECTION 10(23AAA) OF THE IT ACT 19 61. THE CASE WAS REOPENED UNDER SECTION 147 AND THE ASSESSMENT W AS COMPLETED U/S 147 READ WITH SECTION 143(3) BY CONSI DERING THE INTEREST RECEIPTS AS INCOME OF THE ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS. PENALTY PROCEEDINGS UNDER SECTION 271(1) OF THE ACT WERE INITIATED ON THE IMPUGNED ADDITIONS. 3.1 NOW THE QUESTION ARISES WHETHER THE PENALTY IS IMPOSABLE UNDER SECTION 271(1) ESPECIALLY WHEN THE ASSESSEE CLAIMED THE SAME AS EXEMPT BY PUTTING A NOTE WHILE FILING THE R ETURN. BEFORE ADVERTING THIS QUESTION IT IS PERTINENT TO MENTION HERE THAT THE 4 ASSESSEE FILED APPLICATION FOR CLAIMING EXEMPTION O N 22.3.2006 BEFORE THE LEARNED CIT WHICH WAS REJECTED ON 4.1.20 10. IT IS SEEN THAT THE ASSESSMENT ORDERS WERE FRAMED ON 15.2.2008 FOR ALL THE ASSESSMENT YEARS MEANING THEREBY THE APPLICATION FO R CLAIMING EXEMPTION WAS STILL PENDING WITH THE LEARNED CIT T HEREFORE THE ASSESSEE WAS UNDER A REASONABLE BELIEF THAT EITHER THE EXEMPTION HAS BEEN GRANTED OR IF NOT IT WILL BE GRANTED IN DU E COURSE. IN VIEW OF THESE FACTS THE ASSESSEE GETS SHELTER FROM THE DECISION FROM HONBLE APEX COURT IN THE CASE OF CIT V. RELIANCE P ETRO PRODUCTS PVT. LTD. (2010) 189 TAXMAN 322/322 ITR 158 (SC) WH EREIN IT WAS HELD THAT MERE MAKING OF CLAIM WHICH IS NOT SU STAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. UNCO NTROVERTEDLY THE ASSESSEE WHILE FILING THE RETURN PUT A SPECIFIC NOTE THAT THE CLAIMED INCOME IS EXEMPT. IT IS WORTH MENTIONING T HAT BEFORE FINALISATION OF THE ASSESSMENT ON 15.12.2006 THE A PPLICATION FOR EXEMPTION WAS PENDING BEFORE THE LEARNED CIT. IF T HE LANGUAGE USED IN SECTION 271(1) OF THE ACT IS ANALYSED IT IS CLEAR THAT FOR IMPOSING PENALTY EITHER THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INC OME. UNDER THE FACTS NARRATED ABOVE WE ARE OF THE VIEW WHEN THE A SSESSEE PUT A 5 SPECIFIC NOTE IN THE RETURN THERE IS NEITHER CONCE ALMENT NOR FURNISHING OF INACCURATE PARTICULARS THEREFORE IN THE LIGHT OF THE DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS (SU PRA) IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY. THE ASSESSEE IS ALSO FORTIFIED BY THE RATIO LAID DOWN IN THE CASE OF SHRI RAM TRADERS AND ANOTHER VS. DIVISIONAL DEPUTY COMMISSIONER OF COMMERCIAL TA X (2012) 20 STJ 376 (MP) WHEREIN NOTICE WAS ISSUED FOR LEVY OF PENALTY UNDER SECTION 69 OF MPCT ACT WHICH IS ANALOGOUS TO SECTIO N 271(1) OF THE IT ACT. IN VIEW OF THESE FACTS WE ARE OF THE VIEW THAT NO PENALTY IS LEVIABLE THEREFORE THESE APPEALS OF TH E ASSESSEE ARE ALLOWED AND THE AO IS DIRECTED TO DELETE THE PENALT Y. FINALLY ALL THE APPEALS OF THE ASSESSEE ARE ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19.4 .2012. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 19.4.2012 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE DN/-