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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI MAHAVIR SINGH & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the order dated 21.08.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.
The only issue raised by the assessee in the various grounds of appeal is against the order of Ld. CIT(A) upholding the order of AO in imposing penalty under section 271(1)(c) of the Act to the tune of Rs.52,683/-.
2 Shri Balraj P. Bansal 3. At the time of hearing, we noticed that there is a delay of 38 days in filing the appeal. After perusing the affidavit filed by the assessee and the document of the Ld. D.R., we observe that the delay of 38 days was attributable to the fact that when the order was received it was festive season of Diwali and the assessee remained out of station for a long period and therefore the appeal could not be filed in time. The assessee also stated in the affidavit that the delay was not due to negligence but due to bonafide reasons and therefore should be condoned. After considering the facts on records and the nature of issue involved in the case, we are inclined to condone the delay. Accordingly, we condone the delay in filing the appeal and proceed to dispose the appeal as mentioned below.
The facts in brief are that the assessment under section 143(3) was framed vide order dated 07.01.2014 determining the total income at Rs.44,89,140/- as against the return of income of Rs.43,18,647/- the only addition made in the assessment order is consequent to the change of heads of income from house property to income from other sources. During the course of assessment proceedings, the AO observed that assessee has shown income from house property of Rs.18,13,634/- received from various parties whereas after perusing the lease/rental agreements the AO came to the conclusion that these agreements were entered into for providing various amenities and services and therefore the same has to be assessed under the income from other sources and not from house property.
3 Shri Balraj P. Bansal 5. After considering the reply of the assessee and various contentions raised by the assessee, the AO recalculated the income as under: Income from house property - Rs.14,14,127/- (After allowing the deduction under section 24(1) of the Act.)
Income from other sources. - Rs.5,70,000/-
The Ld. CIT(A) upheld the order of AO by observing that issue involved in the assessee’s case is neither debatable nor can there be two views possible as claimed by the assessee and explanation offered by the assessee in this regard has not been substantiated and same was not found to be correct and bonafide and therefore the Explanation 1 to section 271(1)(c) is clearly attracted.
We have heard the Ld. D.R. and perused the material on record and observed that the only issue which has resulted into addition in the assessment order was due to the fact that according to the AO the assessee has received some income by way of providing maintenance and other facilities in the lease/rent agreement which should have been assessed as income from other sources whereas the same was shown by the assessee as income from house property. In our considered view no penalty is leviable under section 271(1)(c) of the Act in case there is a mere change of heads of income. The case of the assessee is supported by the decision of the Hon’ble Bombay High Court in the case of Bennet Coleman & Co. Ltd of 2010 dated 06.04.2010, Hon’ble Delhi High Court in the case of Bhartesh Jain ITA No.763/2006 dated 13.07.2007
4 Shri Balraj P. Bansal wherein these Hon’ble Courts have held that no penalty is leviable u/s 271(1)(c) of the Act when there is a change of heads of income. We, therefore, respectfully following the ratio laid down in the decisions as stated above, set aside the order of Ld. CIT(A) and direct the AO to delete the penalty.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 28.01.2019.