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Income Tax Appellate Tribunal, “F” Bench, Mumbai
Before: Shri B.R. Baskaran (AM) & Shri Ravish Sood(JM)
O R D E R Per B.R. Baskaran (AM) :-
Both the appeals filed by the assessee are directed against the orders passed by the learned CIT(A)-4, Mumbai and they relate to A.Y. 2007-08. The appeal numbered as relates to quantum assessment proceedings and other appeal relates to penalty proceedings.
Both the appeals are barred by limitation by 562 days. The assessee has filed petitions requesting the Bench to condone the delay. In the said petitions identical reasons were given for the delay, i.e., it is stated that the work relating to income tax matters are assigned to an employee named Mr. Prakash Gogate. The appeal orders were kept at the table of Mr. Prakash Gogate by the peon for taking necessary action. At that point of time, he was not available at his table. Subsequently, both the orders got mixed up with other documents and hence he could not take action in respect of orders received from the learned CIT(A) within the stipulated period. Subsequently, when the demand
2 M/s. Maharashtra Airport Development Company Ltd. was pressed by the Assessing Officer, it was ascertained that the appellate orders have already been passed by the learned CIT(A) and it was already served to the assessee. Accordingly, a thorough search was made in the office and orders were traced and appeals were filed immediately thereafter. The assessee has also furnished affidavit obtained from Mr. Prakash Gogate accepting his mistake. The Ld A.R submitted that Shri Prakash Gogate is present before the bench on the date of hearing in order to reiterate his submissions.
3. The Learned Counsel appearing for the assessee submitted that the issue contested in the appeal is a recurring issue and hence no malafides can be imputed on the assessee in not filing the appeal in time. He submitted that the delay in filing the appeal has occurred due to misplacement of orders of the learned CIT(A) and accordingly prayed that the delay in filing the appeal may be condoned. Learned AR placed reliance on the decision rendered by Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji (167 ITR 471), wherein Hon'ble Supreme Court has observed that when substantial justice and technical considerations were pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Learned AR also placed reliance on the decision rendered by this Bench in the case of Hathway C-Net P. Ltd. (ITA No. 4112/Mum/2016 dated 13.1.2018), wherein delay of 658 days was condoned. He submitted that in the case of Hathway C-Net P Ltd (supra) also, there was misplacement of appellate order and the Coordinate Bench found the same to be bonafide mistake committed by the employee of the assessee. Accordingly, the Tribunal, by placing reliance on the decision rendered by Hon'ble Supreme Court in the case of Ram Nath Sao Vs. Gobrardhan Sao and others [(2002) 1 AIR 1021] and also case of N. Balakrishnan Vs. M. Krishnamurthy (1998) 7 (SC) case, condoned the delay. Accordingly, the Ld A.R prayed that the delay occurred in these two appeals be condoned.
3 M/s. Maharashtra Airport Development Company Ltd.
On the contrary, the learned DR strongly opposed the prayer put forth by learned AR. He submitted that the petition filed by the assessee as well as affidavit filed by its employee is not supported by any other evidence. He submitted that the assessee has not shown that it has taken any disciplinary action against the employee who has alleged to have committed mistake.
We have heard the rival contentions on this preliminary issue and perused the record. Before us concerned employee also appeared and learned AR has also submitted that no malafide intention can be imputed in this matter since the issues agitated in this appeal are recurring issues being agitated every year, meaning thereby identical additions are being made by AO in other years and the assessee has been contesting them. Hence it could not a case of taking belated decision in preferring appeal before the Tribunal.With regard to the departmental disciplinary action, if any taken on the concerned employee, the Ld A.R submitted that the employee is a junior level employee and it is quiet common to get the papers mixed up if one is dealing with multiple matters. He submitted that he might have been warned. He submitted that the bench may take a liberal view in this matter. On consideration of facts relating to this issue and rival submissions, we are of the view that there is sufficient cause for the assessee in filing the appeals belatedly. Accordingly, we condone the delay in filing the present appeals and admit them for hearing.
We shall take up the appeal filed by the assessee against quantum assessment proceedings. The Learned AR submitted that the appeal is emanating from the appeal effect order passed by the Assessing Officer in order to give effect to the order passed by the Tribunal. He submitted that the Assessing Officer has passed the order without giving opportunity to the assessee. The Learned AR submitted that the assessee has raised a specific ground, viz., ground No. 4 in this regard.
4 M/s. Maharashtra Airport Development Company Ltd.
We have heard learned DR and perused the record. Since the Assessing Officer has passed the impugned order without giving opportunity to the assessee, in the interest of natural justice, we are of the view that all the issues contested by the assessee should be restored to the file of the Assessing Officer for examining them afresh. Accordingly, we set aside the order passed by the learned CIT(A) and restore all the issues to the file of the Assessing Officer.
We shall now take up the appeal filed by the assessee against the penalty levied u/s. 271(1)(c) of the Act.
At the outset, learned DR submitted that the penalty appeal may be kept in abeyance, since the quantum appeal has been restored back to the file of the Assessing Officer.
On the contrary, the learned AR submitted that the assessee’s appeal is squarely covered by various decisions and accordingly submitted that this appeal could be disposed of independently.
Elaborating further, the learned AR submitted that the Assessing Officer has levied penalty on the amount of ` 13.56 lakhs. The assessee had claimed this amount as its business income. The Assessing Officer took the view that the assessee has not commenced its business and accordingly assessed the same as income under the head “income from other sources”. He submitted that there is mere change in head of income while assessing income and hence there cannot be a case of either concealing particulars of income or furnishing of inaccurate particulars of income. Accordingly he submitted that mere change of head of income would not give rise to penalty u/s. 271(1)(c) of the Act. In this regard, he took support of the decision rendered by Hon'ble Bombay High Court in the case of CIT Vs. Bennett Coleman & Co. Ltd. (2013) 33 taxmann.com 227.
5 M/s. Maharashtra Airport Development Company Ltd.
The Learned DR, on the contrary, submitted that the facts available in Bennett Coleman & Co. Ltd. (supra) are different and hence assessee could not take support of the said decision.
We have heard the rival contentions on this issue and perused the record. In the case of Bennett Coleman & Co. Ltd. (supra), issue in dispute was with regard to assessment of premium received on redemption of debentures. The assessee claimed the same as capital gains while the AO assessed the same as income under the head “income from other sources”. Thereafter penalty u/s 271(1)(c) was levied on the above said amount. The Hon'ble Bombay High Court upheld the view taken by the Tribunal that change in head of income would not give rise to penalty u/s. 271(1)(c) of the Act. For the sake of convenience, we extract below operative portion of the order passed by Hon'ble Bombay High Court :-
So far as question (ii) is concerned, the respondent-assessee had claimed premium on redemption of debentures as income from capital gains. Whereas the assessing officer held that the redemption of debentures is revenue receipt assessable to tax under the head income from other sources. The CIT(A) confirmed the order of the assessing officer. The respondent-assessee did not file any further appeal on the quantum proceedings. Thereafter, the assessing officer levied penalty under Section 271(1)(c) of the Act on the respondent-assessee. The CIT(A) also confirmed the levy of penalty upon the respondent-assessee. On further appeal, the Tribunal held that there is no dispute with regard to the fact that the respondent-assessee had disclosed that the amount received as premium on redemption of debentures in its computation of income. Further, the Tribunal records that it is not the case of the department that the respondent-assessee had concealed any particulars of income or furnished inaccurate particulars of income by stating incorrect facts. The assessing officer considered the said premium received on redemption of debentures to be taxable under the head income from other sources while the respondent-assessee considered the same to be taxable under the head capital gains. In view of the fact that there is only a change of head of income and in the absence of any facts that the claim of the assessee was not bonafide, the Tribunal deleted the penalty imposed under Section 271(1)(c) of the Act. The revenue has not been able to point out that the finding of the Tribunal is 6 M/s. Maharashtra Airport Development Company Ltd.
perverse. In these circumstances, we see no reason to entertain the proposed question (ii).
In our view assessee’s case is squarely covered by the decision rendered by Hon'ble Bombay High Court in the case of Bennett Coleman & Co. Ltd. (supra). In this view of the matter we are of the opinion that the Assessing Officer was not justified in levying penalty u/s. 271(1)(c) of the Act on account of mere change of head of income.
Assessee also raised many other legal issues namely :
(a) Where High Court has admitted substantial question of law in respect of an item on which penalty was levied, the penalty is liable to be deleted.
(b) Notice issued by the Assessing Officer u/s. 274 read with section 271(1)(c) of the Act does not specify the limb under which penalty proceedings were initiated and hence there is non-application of mind on the part of AO.
(c) Issue contested by the assessee is debatable in nature as the Assessing Officer has accepted the view of the assessee in succeeding year.
Both the parties submitted their contentions at length on the above said issues. However, we do not find it necessary to adjudicate the above said legal grounds, as we have already held that the penalty u/s. 271(1)(c) of the Act is not leviable on account of mere change of head of income. Hence adjudication of the above said grounds would be academic in nature.
In view of foregoing discussions, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the penalty levied by him u/s. 271(1)(c) of the Act for the year under consideration on the amount of Rs.13.56 lakhs, referred above.
7 M/s. Maharashtra Airport Development Company Ltd.
In the result, appeal filed by the assessee in is allowed.
Order has been pronounced in the Court on 31.8.2018.