JYOTHIRMOY YAMSANI, HYDERABAD,HYDERABAD vs. DCIT, CIRCLE-1, WARANGAL, WARANGAL

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ITA 1519/HYD/2016Status: DisposedITAT Hyderabad04 October 2019AY 1999-20004 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty under section 271(1)(c) cannot be invoked for income already declared in the revised return and accepted by the department. Therefore, the penalty levied on such income is deleted.

What were the facts?

The assessee filed a revised return of income offering additional income after receiving a notice under section 148. The Assessing Officer (AO) made an addition, but this issue was later remitted back to the AO by the ITAT. The penalty under section 271(1)(c) was levied on income already declared in the revised return.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on income declared in a revised return and accepted by the department, especially when the original addition was remitted back. Validity of notice under Section 274 rws 271(1)(c) when inappropriate portions were not struck off.

Which sections of the Income-tax Act were involved?

Section 148,Section 144,Section 147,Section 69,Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri S. Rama Rao
For Respondent: Shri Dinesh Paduchuri

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A”, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 1519/Hyd/2016 Assessment Year: 1999-2000

Jyothirmoy Yamsani, Vs. Dy. Commissioner of Income- Hyderabad. tax, Circle – 1, Hyderabad. PAN – AAOPY7315A (Appellant) (Respondent)

Assessee by : Shri S. Rama Rao Revenue by : Shri Dinesh Paduchuri

Date of hearing : 09-07-2019 Date of pronouncement : 04-10-2019

O R D E R PER S. RIFAUR RAHMAN, A.M.:

Brief facts of the case are, the appeal is recalled vide order dated 24/08/2017 in M.A. No. 40/Hyd/2018. In the M.A., the assessee has, inter-alia stated as under: “The Hon'ble ITAT set aside only that part of the assessment to verify whether the addition of Rs.4,99,150j- can be made or not. The said amount .as not added. The Assessing Officer merely has to give relief by allowing Rs.4,99,150/- from the total income determined of Rs.18,06,502/-. In the circumstances, the penalty u/s 271(1)( c) of the I.T. Act arose out of the order dated 29.03.2006 and not out of the order dated 19.03.2014. This issue was not considered by the Hon'ble ITAT while deciding the appeal.”

The Tribunal was therefore pleased to recall the order of the Tribunal for a limited purpose of rehearing the ground of appeal No. (a) and the appeal is thus posted for hearing before us.

2 ITA No. 1519/H/16 Jyothirmoy Yamsani, Hyd. 2. Before us, ld. AR of the assessee submitted that the Hon’ble ITAT in its earlier order has not adjudicated the additional grounds, which are as under: “a) The learned Commissioner of Income Tax (Appeals) ought to have held that the notice u/s 274 rws 271(1)(c) is not valid and consequently the order passed u/s 271(1)(c) of the I.T.Act is also not valid. b) The learned Commissioner of Income Tax (Appeals) ought to have considered the fact that the Assessing Officer did not strike off the inappropriate portion in the notice issued uj s 274 and held that the notice is not valid.” 2.1 In this regard, he submitted that the assessee has filed her return of income on 30/06/1999 admitting total income of Rs. 7,57,352/-. Subsequently, she received a notice u/s 148 on 23/02/2005. In response to the above notice, assessee filed a revised return of income on 25/02/2005 declaring total income of Rs. 13,07,352/-. In the revised return of income, assessee has offered Rs. 5,50,000/- as additional income. Subsequently, the assessment was completed on 29/03/2006 u/s 144 rws 147 of the Act and AO made addition of Rs. 4,99,150/- u/s 69 of the Act, as additional income.

2.2 With regard to addition made u/s 69, he submitted that the ITAT has remitted this issue back to the AO to verify and make the assessment de-novo. Since the ITAT has remitted this issue back to the file of AO, there is no addition as far as this assessment is concerned. He submitted that, however, AO has invoked section 271(1)(c) against the income, which was already declared in the revised return of income. He contended that AO cannot invoke section 271(1)(c) for the reason that in the proceedings even though peak credit worked by the assessee was accepted, the deposits in the bank account are disclosed fully in the revised return of income filed. He, therefore, submitted that there is no justification in invoking section 271(1)(c) in assessee’s case.

3 ITA No. 1519/H/16 Jyothirmoy Yamsani, Hyd. 3. Ld. DR, on the other hand, submitted that the assessee has admitted additional income in the revised return of income only on the detection of the above transaction by the department, otherwise, assessee would not have disclosed the same in revised return of income, therefore, AO is justified in invoking section 271(1)(c) of the Act.

4.

Considered the rival submissions and perused the material on record. We notice that assessee has declared additional income in the revised return of income at the time of filing return of income in response to the notice u/s 148. The revised return of income was accepted by the AO and processed the same to complete the assessment proceedings. Assessment proceedings were completed by making an addition of Rs. 4,99,150/- However, the same was subjected to appeal before the appellate authorities and the coordinate bench in its order, remitted this issue back to the file of AO for reverification. As far as invoking provisions of section 271(1)(c) are concerned, an amount of Rs. 5,50,000/- which was already declared by the assessee in its revised return of income and the same was accepted by the department, therefore, section 271(1)(c) cannot be invoked and penalty levied on such amount is hereby deleted. Accordingly, the additional grounds raised by the assessee are allowed.

5.

In the result, appeal of the assessee is allowed.

Pronounced in the open court on 4th October, 2019

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 4th October, 2019. kv

4 ITA No. 1519/H/16 Jyothirmoy Yamsani, Hyd. Copy to:- 1) Jyothirmoy Yamsani, C/o Sri S. Rama Rao, Advocate, Flat No. 102, Shriya’s Elegance, 3-6-643, Street No. 9, Himayatnagar, Hyderabad – 500 029. 2) DCIT, Circle – 1, Aayakar Bhavan Station Road, Warangal, 3) CIT(A) - 3, Hyderabad 4 Pr. CIT - 3, Hyderabad 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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