GIRISH TALWALKAR,MUMBAI vs. ASST CIT CIR 2(3), MUMBAI

Rival contentions have been heard and record perused. In this case penalty has been imposed with respect to remuneration from the firm, offered by the assessee in the revised return filed u/s.139(5) of the I.T.Act.

Facts in brief are that assessee is an individual having a proprietary business and is also partner in registered firms. The accounts of the assessee's proprietary business M/ s Talwalkars Health Club are subject to Audit u/ s 44AB. These accounts for Asst. Year 2010-11 are duly audited on 27/09/2010 and Return of Income was filed on 30/09/2010. The due date of filing of Return was 30/09/2010. Else assessee would have been liable for penalty u/s271B. In the Return of Income, Schedule 'IF', assessee has duly disclosed the fact that assessee is a partner in three firms. The details of Firms with their date of filing of returns for AY 2010-11 are given below. Sr. Name of Company PAN No. Date of Remuneration No. filing of return 1 M/s Talwalkars AAAFT4195R 15/10/2010 Yes Health Complex 2 M/s Talwalkars AAAFT0655L 27/09/2010 Yes Fitness Club 3 M/s Talwalkars AAAFT0799H 30/09/2010 Yes Health & Leisure The accounts of the firm M/s Talwalkars Health Complex were not audited up to 29/09/2010 hence Assessee could not show the remuneration of Rs.14,81,658/- in his Return of Income which was filed on 30/09/2010 on due date of Filing of Return. Assessee has thereafter filed Revised Return of Income u/ s 139(5) on 15. 03.2012 including the Remuneration from said firm. The Assessing Officer has held that the Assessee had the malafide intention to conceal income, as the Revised Return was filed on 15.03.2012 and has levied penalty u/ s 271 (1)(c) of Rs.503, 764/-, which was confirmed by CIT(A), against which assessee is in appeal before us.

We have considered rival contentions and do not find any merit in the AO’s action, insofar as the learned Assessing Officer has ignored the facts that Accounts of the said partnership firms were not ready upto 30.09.2010 and accordingly the remuneration could not have been included in the original return of income filed on 30.09.2010. Provision of Sec. 139(5) permits assessee to furnish a Revised Return of Income before expiry of one year from end of relevant assessment year or before completion of assessment. Assessee has accordingly filed the revised return as per law. The said Income could not be shown in the Original Return as accounts of the Firm were not Audited up to the due date of Return.

From the record we found that even in past for Asst. Year 2005-06 & Asst. Year 2006-07 assessee had delayed filing his Return of Income to include the remuneration from these firms but the assessee was subjected to penalty u/s 271B. Hence from Asst. Year 2007-08 onwards assessee has duly filed his Return on due date and Revised Returns were filed including the Income from the above firms. After introduction of E - filing of Returns, filing of any note etc. was done away with. There is no denial of the fact that the assessee is a partner and has been drawing remuneration from M/s Talwalkars Health Complex for last many years. This fact is on Records of Income Tax Department. Assessment for Asst. Year 2006-07 is completed u/s 143(3). We also found that the assessee has been voluntarily disclosing this Income for every year. For Asst. Year 2009-10 & 2011-12 the Revised Return were filed on 13/04/2011 & 25/03/2013 without any notice from Income Tax Officer. Thus it clearly indicates that there is no intention of concealing any Income during the relevant assessment year under consideration.