LATE SHRI DASARI NARAYANA RAO REP BY L/H SHRI DASARI ARUN KUMAR,HYDERABAD vs. ITO (OSD) NON CORPORATE CIRCLE 20, CHENNAI

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ITA 2377/CHNY/2018Status: DisposedITAT Chennai16 November 2018AY 2005-066 pages
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What did the Tribunal hold?

The Tribunal held that a mere claim in the return of income, after furnishing all particulars, cannot be construed as concealment or furnishing inaccurate particulars of income. It also held that the CIT(Appeals) should have considered the additional evidence filed by the assessee.

What were the facts?

The assessee claimed deductions under Section 80G and remission of liability under Section 41(1). The Assessing Officer levied penalty under Section 271(1)(c) for AY 2005-06. For AY 2011-12, the CIT(Appeals) did not consider additional evidence filed by the assessee.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable for mere claims in the return, and whether the CIT(Appeals) erred in not considering additional evidence.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 80G,Section 41(1)

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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

For Respondent: Shri R. Clement Ramesh Kumar, Addl.CIT
Hearing: 14.11.2018Pronounced: 16.11.2018

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

is filed against the order of the CIT(Appeals) confirming the penalty levied under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act') for the assessment year 2005-06, whereas, is filed against the order of the CIT(Appeals) for regular assessment for assessment year 2011-12. Therefore, we heard both the appeals of the assessee together and disposing of the same by this common order.

Let’s firs take .

2.

Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the assessee claimed deduction under Section 80G of the Act and also remission of liability under Section 41(1) of the Act in respect of Shri V. Venkatarao. In fact, according to the Ld. representative, the assessee claimed deduction under Section 80G of the Act to the extent of ₹1,00,000/-. The assessee could not produce receipt in respect of the payment made to the extent of ₹10,000/-, therefore, the Assessing Officer restricted the disallowance to ₹50,000/-. In respect of remission of liability, according to the Ld. representative, the Assessing Officer found that it could not be ruled out the possibility of being a trading liability, therefore, it is the income of the assessee under Section 41(1) of the Act. According to the Ld. representative, the assessee has furnished entire details and claimed remission under Section 41(1) of the Act as deduction. According to the Ld. representative, mere claim after furnishing entire details cannot be construed as furnishing inaccurate particulars of income or concealing any part of income of the assessee, therefore, the CIT(Appeals) is not justified in confirming the penalty levied by the Assessing Officer.

3.

We heard Shri R. Clement Ramesh Kumar, the Ld. Departmental Representative also. The assessee claimed deduction to the extent of ₹1,00,000/- under Section 80G of the Act and also deduction in respect of remission of liability with regard to one Shri V. Venkatarao. This Tribunal is of the considered opinion that making mere claim by furnishing all particulars to the Assessing Officer cannot be construed to be concealment of income or furnishing inaccurate particulars of income. As held by Apex Court in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158, a mere claim in the return of income cannot be construed to be concealment of income or furnishing inaccurate particulars of income. In view of this judgment of Apex Court, this Tribunal is unable to uphold the orders of the authorities below. Accordingly, orders of both the authorities below are set aside and the penalty levied by the Assessing Officer is deleted.

4.

Now coming to the assessee’s appeal in I.T.A.

No.2378/Chny/2018.

5.

Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the first ground of appeal is with regard to interest claimed by the assessee to the extent of ₹8,10,000/-. The Ld. representative, during the course of hearing, submitted that he is not pressing this ground. The Ld. representative also made an endorsement to this effect in the grounds of appeal filed before this Tribunal. In view of the above, the ground with regard to claim towards interest is dismissed as not pressed.

Now coming to addition of ₹3,58,00,000/-, ₹2,90,00,000/- 6. and ₹68,00,000/-, the assessee has filed additional evidence before the CIT(Appeals). The assessee has filed a copy of acknowledgement as proof of filing additional evidence before the CIT(Appeals). Inspite of that, the CIT(Appeals) has not considered the additional evidence. This Tribunal is of the considered opinion that when the assessee has filed additional evidence, it is for the CIT(Appeals) to examine the same and decide the case in one way or other or to forward the additional evidence to the Assessing Officer and call for his remand report. Unfortunately, the CIT(Appeals) has not exercised his option in respect of the additional evidence filed by the assessee. In those circumstances, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer in the interest of justice. Accordingly, orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter in the light of the additional material filed by the assessee and other material that may be filed before the Assessing Officer and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

7.

In the result, the assessee’s appeal in is allowed and the appeal in I.T.A. No.2378/Chny/2018 is partly allowed for statistical purposes.

Order pronounced in the court on 16thNovember, 2018 at Chennai.

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