Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI C.N. PRASAD & SHRI S. RIFAUR RAHMAN
The appeal filed by the assessee challenging the impugned order dated 11th July 2017, passed by the learned Commissioner of Income Tax (Appeals)–33, Mumbai, for the assessment year 2013–14.
The assessee has raised the following grounds of appeal:–
“1. On the facts and in the circumstances of teh case and in law, the learned CIT(A) erred confirming the addition made by the Assessing
2 Mohd. Rafiz Mohd. Shakoor Shaikh
Officer and assessed the income at ` 2,67,56,790 as against the returned income of ` 2,05,230. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in making addition of ` 2,61,88,228 under section 68 of the Act even though the appellant had produced the documentary evidence of the fact that there was a typographical eror at the time of filing up the Form of return of income and the same ought to have been considered.”
Facts in brief:– During the course of assessment proceedings, on a perusal of the Balance Sheet, the Assessing Officer observed that the assessee has shown proprietor’s capital at ` 2,61,88,228, fixed block assets ` 1,11,23,060 and unquoted investments of ` 79,74,312. The Assessing Officer asked the assessee to give details of the capital introduced during the year, details of fixed assets and investment. The assessee stated that in the return of income filed for the assessment year 2013–14, the assessee has shown income of ` 2,05,230 and self assessment tax paid at ` 600, but no capital account balance of ` 2,61,88,228, was declared in return of income. The assessee submitted that the income shown of ` 2,05,230 is the right income for the A.Y. 2013–14 and the discrepancy of ` 1,90,000 as per the return of income was wrong and by mistake the Authorised Representative of the assessee has filed the return of income declaring income of ` 1,90,000. But when the assessee realized the mistake, immediately after eight days the assessee had filed revised return of income on 9th
3 Mohd. Rafiz Mohd. Shakoor Shaikh October 2013. The Assessing Officer, however, was not convinced with the submissions of the assessee due to the following reasons:–
“i) Assessee had filed original return of income on 01.10.2013, declaring total income of ` 1,90,000 claiming TDS of ` 16,500, and showing Proprietor’s capital at ` 2,61,88,228, fixed block assets ` 1,11,23,060, Investments in Government and other securities – quoted ` 51,88,585 and Government and other Securities unquoted ` 79,74,312. ii) Subsequently assessee had filed revised return of income on 09.10.2013 declaring total income of ` 2,05,230 claiming S.A. tax of ` 600, showing Proprietor’s capital at ` 2,61,88,228, Fixed block assets ` 1,11,23,060, Investments in Government and other securities – quoted ` 51,88,585 and unquoted ` 79,74,312.”
According to the Assessing Officer, the assessee despite filing revised return of income on 1st October 2013, has brought the same facts and figures which were shown in the original return of income for the year under consideration. Therefore, the Assessing Officer held that the assessee’s explanation is nothing but fiction created to mislead the Revenue and hence, the Assessing Officer treated the amount of ` 2,61,88,228, as unexplained income of the assessee under section 68 of the Act and added to the total income of the assessee. The assessee being aggrieved by the aforesaid order of the Assessing Officer, filed appeal before the first appellate authority.
Before the learned CIT(A), the Authorised Representative of the assessee submitted that his Accountant Shri Manoj Dubey and Shri
4 Mohd. Rafiz Mohd. Shakoor Shaikh Nilesh Thapa, while filing the return of income of the assessee for the year under consideration have wrongly shown the proprietor’s capital at ` 2,61,88,227. The learned Authorised Representative further submitted that Shri Suresh Bhatija, the assessee’s authorized Income Tax Practitioner due to his ill–health could not represent the case properly before the Assessing Officer and resultantly the impugned addition was made by the Assessing Officer. To this effect, the Authorised Representative of the assessee has also filed an Affidavit duly sworn by the assessee and Shri Suresh Bhatija, the assessee’s Income Tax Practitioner. The contents of the said Affidavit are reproduced below for ready reference:–
“I solemnly do hereby stated as under. - Explanation of discrepancy found in the case of Sir Mohammed Rafiq Shakoor Shaikh for A.Y 2013–14 Having PAN No. BKMPS4O30H. Continuation of assessment proceedings for A.Y. 2013-14 as follows under.- As the income shown of Rs. 2,05,230/- is the right income for A.Y. 2013-14 as per the return of income filed to discrepancy of Rs.1,90,000/- but after filing the return by my ITP Mr. Suresh M Bhatija staff filed the return was totally wrong and immediately after 8 days they have filed a revised return on 09/10/2013 which I am attaching along with application. As the above said explanation, I have already state that by mistake from my ITP Mr. Suresh M. Bathija staff side they have claimed TDS which is not liable in A.Y. 2013–14 in my case I have given ` 600 to my ITP (Income Tax Practitioner) Mr. Suresh M. Bathija to pay a self assessment tax for A.Y. 2013–14.
5 Mohd. Rafiz Mohd. Shakoor Shaikh
I don’t have any kind of block of ` 1,11,23,060 as I stay in slum area (Chawl) so sir please understand how can I afford to take a block of ` 1,11,23,060. As my income is very nominal and my income lies in form of Hand to Mount, in A.Y. 2011–12, A.Y. 2012–13, A.Y. 2014–15, A.Y. 2015–16, A.Y. 2016–17 capital is same I have not increased any capital and I have not invested any capital anywhere but in A.Y. 2013–14 suddenly my capital lies in crore due to mistake of my I.T.P. (Income Tax Practitioner) Mr. Suresh M. Bathija is suffering from (Prostate Cancer) and he was operated for cancer because of this he cannot attain his office at that time so in the absence of my I.T.P. his staff by mistake filed my return for A.Y. 2013–14, I am also attaching my statement of income & bank statement along with this affidavit. The actual capital is ` 8,89,148/– as on 31/03/2013 but inadvertently the capital shown as ` 2,61,88,228 which is totally wrong and mistake done by my I.T.P. (Income Tax Practitioner) Mr. Suresh M. Bathija staff while filing my return for A.Y. 2013– 14. As I have state above that I have not invested in any government and other security quoted, as I don’t have any kind of fixed asset of ` 1,11,23,060/– and also don’t have any kind of Government and other securities quoted of ` 51,88,588/– or any kind of unquoted of ` 79,74,312/–. I don’t have money to pay any kind of demand issued by your respected side as I have state above that I stay in slum area (Chawl) and my income is very nominal and its lies in form of Hand to Mouth. That concern ITO of Ward–23(2)(3) & Inspector also visited my house and they also inspected my bank account, there is no FD of anu quoted & unquoted type of investment which I have stated above. Being unable to work on a daily basis, I have very nominal income. Bank statement attached for your reference, I do not own any residential / commercial property nor do I have any other kind of assets. So please sir its my humble request to you that kindly understand the reason behind of my wrong capital filing return. Please sir make me free from this scrutiny case I am suffering in very bad condition I have no money to fulfill my basic needs so how can I pay so much tax demanded by your respected side. The above statements true and correct to my knowledge and 6 Mohd. Rafiz Mohd. Shakoor Shaikh belief. I earnestly request your good self to kindly consider my case keeping the above in consideration.”
The learned CIT(A) was not convinced with the submissions of the assessee and considering the totality of facts and circumstances of the issue involved, he was of the view that the assessee has miserably failed in justifying his claim that the figures disclosed in the return of income related to proprietor’s capital, fixed block assets, investments in Government and other securities were mistakes and not a form of capital introduced well matched with the investments for some ulterior motives. Hence, the addition of ` 2,61,88,228, u/s 68 of the Act was confirmed. The assessee being aggrieved by this order of the learned CIT(A), is in further appeal before the Tribunal.
Having considered the submissions of the learned Counsel appearing for the parties and having perused the material on record, we find that the tax practitioner of the assessee, while filing online return of income for the year under consideration, has by mistake shown the proprietor’s authorized capital at ` 2,61,88,227, which resulted in addition under section 68 of the Act by the Assessing Officer. The said addition was confirmed by the learned CIT(A) despite the assessee filed Affidavit on oath that the mistake of introduction of authorized capital of ` 2,61,88,227, is a bona fide mistake occurred on the part of the assessee’s Tax Practitioner Shri Suresh Bhatija. As per
7 Mohd. Rafiz Mohd. Shakoor Shaikh the contents of the Affidavit, the assessee is a very poor person and in the preceding years also the assessee had never shown higher authorized capital. It is brought to our notice that the tax practitioner filed the return of income of the following persons:–
Shri Sanjiv Shankar Vachani; 2. Shri Farook Saidu Shaikh 3. Shri Joseph Raymond Lopes 4. Ms. Leena Joseph Lopes; 5. Shri Jani Navani; and 6. Shri Gopi Advani.
8. The tax practitioner has filed the return of income with similar and same amount as capital and other investment as assets in all the above cases by mistake. The relevant copies of returns of income are placed in the paper book. The learned Authorised Representative brought to our notice, in the case of Ms. Leena Joseph Lopes and Shri Jani Navani, the tax consultant has wrongly filed the capital and investment details similar to the declaration made in the case of the assessee, the Assessing Officer has considered their submissions during the assessment proceedings under section 143(3) of the Act and accepted only the real income by cross verifying the details of previous year data. But it was not done in the case of the assessee. We notice that the mistake made by the tax consultant at the time of filing return of income that he had cut and pasted the same capital
8 Mohd. Rafiz Mohd. Shakoor Shaikh and investment details of some other assessee and this mistake was appreciated and taken note by the respective Assessing Officers in the case of Ms. Leena Joseph Lopes, and Shri Jani Navani. Even in this case also, the Assessing Officer and the learned CIT(A) should have verified the financial records of the assessee of earlier assessment years and after due verification, they could have identified the mistake, but they failed to reconcile the actual capital and investment of the assessee. After considering the above facts on record, we are of the view that tax practitioner had made the above inadvertent mistake while filing the return of income which is not the real capital and investment of the assessee. Therefore, we direct the Assessing Officer to delete the addition made under section 68 of the Act. Accordingly, grounds raised by the assessee are allowed.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 02.08.2021