Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘B’BENCH,
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
Shri S.S. Viswanethra Ravi, JM :-
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals), XXIV, Kolkata dated 11-02-2014 for the assessment year 2009-10.
The only effective issue in this appeal is to be decided as to whether the CIT-A justified in confirming the penalty imposed by the AO u/s. 271(1) ( c) of the Act in the facts and circumstances of the case.
The brief facts of the case that the assessee is an individual and a Doctor by profession. However, the assessment
IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 1
u/s. 147/143(3) of the Act was completed on 22-22-2011, wherein the AO made the following additions: Under the Heads The amount of addition Income from House Property Rs.31,020/- Income from other sources Rs.62,097/-
According to AO, the assessee owner of two house properties and did not disclose the notional rental income of Rs.31,020/- on one of such property as required u/s. 23(4)(b) of the Act and the interest income of Rs.62,097/- i.e income from other sources in the original return. Thus, for non disclosure of the same the AO initiated penalty proceedings for concealment of income of Rs.31,020/- and Rs.62,097/- in the original return. Thus, he imposed penalty of Rs.28,773/- for not disclosing the same in the original return and for furnishing inaccurate particulars and concealment of income.
Before the CIT-A the assessee contended that in response to notice issued u/s. 148, the assessee declared income from House Property of Rs.31,020/- and bank interest of Rs.62,097/- voluntarily in the revised return, as it was omitted to mention the same in the original return. In the revised return the assessee disclosed the same and paid taxes thereon and urged to drop the penalty proceedings as the omission showing the said income was not deliberate but due to mistake and misconception on the part of the assessee.
Considering the submissions of assessee, the CIT-A was of the opinion that the income as disclosed by the assessee was not voluntary disclosure and as such he confirmed the order of AO in imposing penalty of Rs.28,773/- for concealment of IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 2
income and not showing the income of Rs.31,020/- towards income from house property and Rs.62,097/- towards bank interest/income from other sources in the original return. Relevant findings of the CIT-A in confirming the same are reproduced herein below:-
2.3 I have carefully considered the observation made by the AO in penalty order as well as submission filed by the AIR of the appellant. I found that appellant concealed the income of Rs. 31.020/- as income from House Property and Rs.62,097/- as interest income. The argument of the appellant is not correct that I voluntarily declared income from House Property of Rs. 31,020/- and Rs. 62,097/- on Bank interest because the appellant shown the above income in response to the notice u/s. 148 of the IT Act 1961. Therefore, the income disclosed by the appellant is not voluntarily disclosure of income. The appellant concealed the income to the tune of Rs. 31,020/- as income from house property and Rs. 62,097/- as interest from bank by not showing the above income in return of income filed originally by the appellant. Therefore, I am agree with the view that the AO rightly imposed the penalty of Rs. 28,773/- u/s. 271 (1 )(c ) of the IT Act. Hence, I confirm the penalty imposed by the AO of Rs. 28,773/- u/s.271 (1)( c) of the IT Act. This ground is not allowed.”
Before us the ld.AR of the assessee submits that the assessee is now aged of 80 years and a Doctor by profession and he is a law abiding citizen. He also submits that in response to notice issued u/s. 148 of the Act the assessee disclosed the said amount of Rs.31,020/- and Rs.62,097/- in his revised return and also paid taxes thereon. Before the CIT-A the assessee contended that it s misconception due to mistake on the part of assessee. The omission of including of said income in the original return was not deliberate and wilful.
On the other hand, the ld.DR has relied on the orders of the lower authorities.
Heard rival submissions and perused the material available on record. It is noticed that the AO imposed the impugned penalty of Rs. 28,773/- for furnishing inaccurate particulars of IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 3
income and as such, the CIT-A confirmed the same. It is also observed that the assessee offered the questioned amount in his revised return filed in response to notice issued u/s. 148 of the Act and paid taxes thereon.
The offence of concealment is a direct attempt to hide an item of income or a portion thereof from the knowledge of the income-tax authorities. In the instant case the AR has claimed that there was no deliberate act on the part of the assessee for the concealment of the income but he being an old aged man omitted to incorporate the above stated income. There was no fault in the earlier years in disclosing the same.
At this juncture we find important to reproduce the provisions as specified in explanation 1 to section 271 (1) of the Act which reads as under
"Explanation 1.-Where in respect of any f acts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate (and fails to prove that such explanation is bona fide and that all the f acts relating to the same and material to the computation of his total income have been disclosed by him) then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed".
The above Explanation makes it clear that the statute visualized the assessment proceedings and penalty proceedings to be wholly distinct and independent of each other. The above stated Explanation 1 comes into operation when, in respect of any facts material to the computation of total income of any person, there is failure to offer an explanation or an explanation is offered which is found to be false by the Assessing Officer or the first appellate authority, or an explanation is offered which is not IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 4
substantiated. In such a case, the amount added or disallowed in computing the total income is deemed to represent the income in respect of which particulars have been concealed. As per the provision of Explanation 1, the onus to establish that the explanation offered was bona fide and all facts relating to the same and material to the computation of his income have been disclosed by him will be on the person charged with concealment. The explanation of the assessee for the purpose of avoidance of penalty must be an acceptable explanation; it should not be a fantastic or fanciful one. As indicated above, the consequence follows as a matter of law. The burden is on the assessee. If he fails to discharge that burden, the presumption that he had concealed the income or furnished inaccurate particulars thereof is available to be drawn. However in the instant case the assessee has explained the reasons for not including the particulars of income as discussed above which appears to be bonafide considering the facts and circumstances of the case.
We are, therefore, of the view that the assessee could not be said to have filed "false" returns when it did not include the amount of interest and notional house property income in the taxable income in the above facts & circumstances. we also find force in the submissions of the Ld.AR that the assessee is old aged and disclosure of amounts in revised and payment of taxes thereon and taking into consideration the submissions, facts and circumstances of the case and we cancel the impugned penalty of Rs.28,773/- imposed by the AO and confirmed by the CIT-A. Therefore, this ground of assessee is allowed.
IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 5
In the result, the appeal of assessee is allowed. ORDER PRONOUNCED IN OPEN COURT ON 28/02/2017
Sd/- Sd/-
Waseem Ahmed S.S. Viswanethra Ravi Accountant Member Judicial Member Dated 28-02-2017
*PP/SPS: Copy of the order forwarded to: 1. The Appellant/Assessee: Dr. Kalyan Chaudhuri P-235 Lake Town, Kolkata-89. 2 The Respondent/Department: Income Tax Officer Ward 19(3), 169 A.J.C Bose Road, Bamboo Villa, 2nd Floor, Kolkata-14. 3 The CIT(A) The CIT 4. DR, Kolkata Bench 5.
Guard file. By Order, Asstt. Registrar
IT A No. 1299/Kol/14 Dr. Kalyan Chaudhuri 6