SHRI BHAGWAT PRASAD GUPTA, Alwar v. ITO, Alwar

ITA 844/JPR/2012 | 2008-2009
Pronouncement Date: 11-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 84423114 RSA 2012
Assessee PAN ACIPG2339Q
Bench Jaipur
Appeal Number ITA 844/JPR/2012
Duration Of Justice 8 month(s) 9 day(s)
Appellant SHRI BHAGWAT PRASAD GUPTA, Alwar
Respondent ITO, Alwar
Appeal Type Income Tax Appeal
Pronouncement Date 11-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 11-07-2013
Date Of Final Hearing 10-07-2013
Next Hearing Date 10-07-2013
Assessment Year 2008-2009
Appeal Filed On 01-11-2012
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN ACCOUNTANT MEMBER ITA NO. 844/JP/2012 ASSESSMENT YEAR: 2008-09 PAN NO. ACIPG2339Q SHRI BHAGWAT PRASAD GUPTA VS. THE INCOME TAX OFFI CER P/O M/S JYOTI TRATING CO. WARD 1(2) ALWAR. NAYA GUNJ PURANI ANAJ MANDI. KHERLI ALWAR. (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : MS. ANITA RITESH DATE OF HEARING : 10.07.2013 DATE OF PRONOUNCEMENT : 11.07.2013 ORDER PER B.R. JAIN A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 12 TH SEPTEMBER 2012 OF LD. CIT (APPEALS) ALWAR RAISES THE SOLITARY GROUND AS UNDE R :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. ITO WAS WRONG AND UNJUSTIFIED IN IMPOSING A PENALTY OF RS. 29 705/- U/S 271(1)(C) OF THE I.T. ACT 1961 AND LD. CIT (APPEALS) ALWAR WAS ALSO WRONG AND UNJUSTIFIED IN CONFIRMING THE SAME. 2. BRIEFLY THE FACTS ARE THAT THE ASSESSEE RETURNED INCOME OF RS. 1 77 190/- ON DATED 18/8/2008. THE CASE OF THE ASSESSEE WAS SELECTED FO R SCRUTINY AND A NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 27/8/2009. THE ASSESSEE REVIS ED RETURN OF INCOME ON 31/8/2009 FOR THE REASON THAT INTEREST ACCRUED AMOUNTING TO RS. 1 1 704/- ON NATIONAL SAVING CERTIFICATES WAS NOT INCLUDED IN THE ORIGINAL RETURN DUE TO INAD VERTENT MISTAKE. THEREAFTER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE AGAI N REVISED THE RETURN VOLUNTARILY ON 2 02/12/2010 BY INCLUDING INCOME FROM SHORT TERM CAPI TAL GAINS FOR RS. 1 88 539/- AND F & O PROFIT ON SHARES AMOUNTING TO RS. 38 224/- AS THU S INCOME WAS NEITHER SHOWN IN THE ORIGINAL RETURN OF INCOME NOR INCLUDED IN THE RETUR N REVISED BY HIM ON 31/8/2009. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AT A TOT AL INCOME OF RS. 4 33 660/- ON THE BASIS OF ORIGINAL RETURN OF INCOME AND BEING SATISF IED THAT THE ASSESSEE HAS CONCEALED INCOME BY FURNISHING INACCURATE PARTICULARS OF INCO ME INITIATED PROCEEDINGS U/S 271 (1)(C) OF THE ACT. IN RESPONSE TO SHOW CAUSE NOTICE THE ASSESSEE FURNISHED EXPLANATION ON EACH OF THE ADDITIONS MADE BY THE ASSESSING OFFICER AS UNDER:- (A) THE INCOME FROM INTEREST ON NSC COULD NOT BE I NCLUDED IN THE ORIGINAL RETURN OF INCOME AS THERE WAS A MISTAKE IN THE SOFT WARE OF THE ASSESSEES COUNSEL WHO PREPARED RETURN OF INCOME OF THE ASSESSEE. THIS RET URN WAS VOLUNTARILY REVISED ON 31/8/2009 BY INCLUDING THE AFORESAID ACCRUED INTERE ST. THERE WAS NO DELIBERATE CONCEALMENT NOR THE SAME WAS DETECTED BY THE DEPART MENT BEFORE SUCH VOLUNTARY REVISION MADE BY THE ASSESSEE. (B) AS REGARDS THE INCOME FROM SHORT TERM CAPITAL GAINS ON SHARE AND F&O PROFIT IN DEALINGS IN SHARES THE SAME WERE NOT INC LUDED IN THE ORIGINAL RETURN OF INCOME AS THE ASSESSEE WAS NEITHER AWARE OF THE FACT THAT SUC H INCOMES ARE LIABLE TO TAX NOR HE HAD ANY ADVICE AS SUCH WHEN HE FILED THE ORIGINAL RETUR N OF INCOME THROUGH HIS COUNSEL. IT IS ONLY AFTER THE RECEIPT OF NOTICE FOR ASSESSING THE INCOME IN SCRUTINY ASSESSMENT THE ASSESSEES COUNSEL ADVISED HIM THAT THE INCOME FROM BOTH THE AFORESAID SOURCES IS ALSO LIABLE TO TAX. AFTER SUCH ADVISE THE ASSESSEE HIMS ELF PROCEEDED TO REVISE THE RETURN VOLUNTARILY. IT IS NOT A CASE OF DETECTION BY THE A SSESSING OFFICER. THE ASSESSEE HAD NO INTENTION TO CONCEAL THE INCOME AND ALL THE PARTICU LARS OF RECEIPT WERE AVAILABLE ON RECORD. 3 THE REVISION HAS BEEN MADE IN GOOD FAITH. PENALTY U /S 271(1)(C) THEREFORE WAS NOT LEVIABLE. THE AFORESAID PLEAS WERE ALSO SUPPORTED B Y PLETHORA OF JUDGMENTS. 3. THE ASSESSING OFFICER BEING NOT SATISFIED WITH T HE EXPLANATION PROCEEDED TO IMPOSE A PENALTY OF RS. 66 189/- WHICH WAS 100% OF TAX SOUGHT TO BE EVADED. THIS WAS LATER RECTIFIED TO A PENALTY OF RS. 29 705/- VIDE R ECTIFICATION MADE U/S 154 OF THE ACT ON 27/1/2012. 4. THE LD. CIT(A) UPHOLDING THE PENALTY BY FINDING THAT THE RETURN FILED ON 2/12/2010 HAS RIGHTLY BEEN TREATED AS INVALID RETUR N AND SUCH A REVISION WAS NOT MADE WITHIN THE AMBIT OF SPECIFIC PROVISION OF SECTION 139(5) OF THE ACT. RELIANCE WAS PLACED ON THE JUDGMENT BY THE HON'BLE SUPREME COURT IN THE CASE OF KUMAR JAGDISH CHANDRA SINGHA VS. CIT (1996) 220 ITR 67. THAT BESIDES THE ASSESSEE HAD NOT PLACED ANY EVIDENCE ON RECORD IN SUPPORT OF THE CLAIM THAT THE INTEREST INCOME WAS NOT OFFERED BECAUSE OF THE MISTAKE OF THE COUNSEL NOR FILED ANY BONAFIDE OR PLAUSIBLE EXPLANATION FOR NON-DISCLOSURE OF INCOME FROM SHARES AS F&O PROFIT AND SHORT TERM CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME. RELIANCE WAS PLACED ON T HE JUDGMENT BY HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF PREM PAL GANDHI VS. CIT REPORTED IN 335 ITR 23 (P&H) AND BY THE HON'BLE APEX COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSOR AND OTHERS REPORTED IN 306 ITR 27 7 (SC) TO SUPPORT HIS DECISION. 5. IN APPEAL BEFORE THE TRIBUNAL NONE ATTENDS ON B EHALF OF THE ASSESSEE. WRITTEN SUBMISSIONS DATED 17/6/2013 HAVE BEEN FILED REITERA TING THE SAME CLAIMS AND EXPLANATION AS WERE TAKEN BEFORE THE AUTHORITIES BELOW. THE ASS ESSEE HAS ALSO SUPPORTED HIS CASE BY NUMBER OF CASE LAWS IN THE WRITTEN SUBMISSIONS AND HAS CONTENDED THAT THERE IS NO JUSTIFICATION IN SUSTENANCE OF PENALTY BY THE LD. C IT(A). 4 6. ON THE OTHER HAND THE LD. D.R. SUPPORTED THE FI NDINGS AND CONCLUSIONS REACHED BY THE AUTHORITIES BELOW. IT WAS CONTENDED THAT THE RETURN OF INCOME ORIGINALLY FILED WAS A BELATED RETURN. THIS RETURN WOULD NOT HAVE BEEN REV ISED. THE SUBSEQUENT RETURN FILED BY THE ASSESSEE ARE NEITHER VOLUNTARY NOR THE ASSESSEE FURNISHED ANY MATERIAL TO SUPPORT THE EXPLANATION TENDERED BEFORE THE AUTHORITIES BELOW O R EVEN BEFORE THE APPELLATE TRIBUNAL. IT THEREFORE HAS BEEN URGED TO DISMISS THE APPEAL BEING DEVOID OF ANY MERIT. 7. I HAVE HEARD THE LD. D.R. WITH REFERENCE TO WRIT TEN SUBMISSIONS LAID ON RECORD BY THE ASSESSEE. THE APPELLANT HAS VOLUNTARILY REVISED THE RETURN OF INCOME ON 31/8/2009 BY INCLUDING ACCRUED INTEREST ON NSC FOR RS. 11 704/- WHICH IT HAD OMITTED TO INCLUDE IN THE ORIGINAL RETURN OF INCOME. THIS BEING A BONAFIDE MI STAKE AND EXPLANATION BEING SATISFACTORY PENALTY U/S 271(1)(C)OF THE ACT ON TH E SAID INCOME OF RS. 11 704/-IS NOT EXIGIBLE. I THEREFORE DIRECT DELETION OF PENALTY ON THIS AMOUNT. 8. AS REGARDS PENALTY ON THE INCOME FROM SHARES AS F&O PROFIT AND SHORT TERM CAPITAL GAINS THE APPELLANT HAD TENDERED EXPLANATI ON THAT IT HAD GIVEN ALL INFORMATION TO HIS CONSULTANT AT THE TIME WHEN ORIGINAL RETURN OF INCOME WAS PREPARED BY HIM. THE ASSESSEE WAS NOT AWARE OF LAW AS TO WHETHER SUCH IN COME IS TAXABLE OR NOT. IT IS ONLY AFTER THE RECEIPT OF NOTICE IN SCRUTINY PROCEEDINGS THE APPELLANT WAS ADVISED THAT THE INCOME FROM SHARES WAS ALSO TAXABLE. AFTER RECEIPT OF ADVI SE THE ASSESSEE PROCEEDED TO FILE REVISED RETURN. CONSIDERATION OF THE ENTIRE MATERIA L ON RECORD REVEALS THAT THE ASSESSEE HAD PUT FORTH EXPLANATION WITHOUT LAYING ANY DOCUMENTAR Y EVIDENCE IN SUPPORT THEREOF. THE CORRECTNESS OF THE EXPLANATION OF THE ASSESSEE WAS NOT TESTED BY THE AUTHORITIES BELOW NOR THE ASSESSEE WAS REQUIRED TO SUPPORT HIS EXPLANATIO N WHEN THE RELEVANT ADVISE SO CLAIMED TO HAVE BEEN GIVEN TO THE ASSESSEE. THE INCOME TAX IS ON THE REAL INCOME EARNED BY A 5 PERSON. TAX ON DEEMED INCOME IS ALSO LIABLE WHERE S PECIFIC PROVISIONS HAVE BEEN ENACTED IN THE INCOME TAX ACT. THE INCOME FROM SHORT TERM C APITAL GAINS IS A DEEMED INCOME. IT WAS THEREFORE NECESSARY TO HAVE EXAMINED HIS EXPL ANATION AFTER AFFORDING EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND REQU IRED HIM TO SUBSTANTIATE THE EXPLANATION. THE AUTHORITIES BELOW HOWEVER HAVE J UMPED TO THE CONCLUSION BY MAKING HALFHEARTED ENQUIRY ONLY. I THEREFORE SET ASIDE TH E PENALTY AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER SO THAT THE APPELLANT IS PROV IDED EFFECTIVE OPPORTUNITY OF BEING HEARD AND SUBSTANTIATE ITS EXPLANATION WITH COGENT MATERIAL IF SO ADVISED. 9. IN THE RESULT APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 11.07.2013. SD/- (B.R. JAIN) ACCOUNTANT MEMBER JAIPUR DATED : 11.07.2013 * RANJAN COPY FORWARDED TO :- 1. SHRI BHAGWAT PRASAD GUPTA ALWAR. 2. THE ITO WARD 1(2) ALWAR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (ITA NO. 844/JP/2012) BY ORDER AR ITAT JAIPUR.