ANAND SHAKTIKUMAR SANCHETI,NAGPUR vs. INCOME TAX OFFICER, WARD 1(3), NAGPUR

The assessee has raised following grounds of appeal:–

Facts in Brief:– The assessee filed his return of income electronically on disclosing total income at ` 91,89,490. The case was selected for limited scrutiny under CASS for the reason that the assessee claimed deduction against income from other sources and dividend income. Notice under section 142(1) of the Income Tax Act, 1961 ("the Act") was issued and served upon the assessee. The assessee filed all the details in response to the notice under section 142(1) of the Act i.e., copy of income tax return, computation sheet, bank account statement, dividend certificate confirmation, etc. The Assessing Officer, after perusal of all the details, noted that the assessee has received dividend income of ` 59,69,142, and has claimed it as exempt while filing the original return of income on 28/10/2017. As per the provisions of section 115BBDA of the Act, income in aggregate exceeding ` 10 lakh, by way of dividend declared and distributed or paid by a domestic companyor companies shall be taxable @ 10%. The assessee revised his return of income after receipt of the notice under section 143(2) of the Act (which was served on 22/09/2018 and income was shown at ` 14160400, after including dividend income of ` 49,69,142 [` 59,69,142 (–) ` 10,00,000]. Accordingly, the Assessing Officer completed the assessment and has also initiated penalty proceedings under section 270A of the Act.

The Assessing Officer, during the penalty proceedings, by stating that it is a bona fide claim of the assessee that its income is exempt. It is also a case Page | 2

The learned CIT(A) also confirmed the Assessing Officer order.

We have heard the rival arguments, gone through the facts of the case and averments of the assessee made before the Assessing Officer during penalty proceedings as well as the submissions made by the assessee before the learned CIT(A). We find that it is a bona fide claim of the assessee that the entire amount of dividend income received by him is exempt. The assessee once received notice under section 143(2) of the Act, the assessee immediately filed revised return of income and withdrew his claim. Accordingly the assessment order was passed. Before the assessment order is passed the assessee had filed his revised return of income. When the Assessing Officer has passed the assessment order, the revised return of income was already available with the Assessing Officer. Not only that, the assessee had made such claim in the preceding years also. Under these facts and circumstances of the case, we are of the opinion that the claim of the assessee is a bona fide claim and the learned CIT(A) without considering the facts properly has confirmed the order passed by the Assessing Officer and hence, the order passed by the learned CIT(A) is liable to be reversed. Page | 3

In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on 14/05/2024