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Income Tax Appellate Tribunal, “B” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM & Shri M.Balaganesh, AM]
Shri Sankar Halder -vs.- D.C.I.T., Circle-18, Kolkata Kolkata [PAN : ABLPH9615A) (Respondent) (Appellant) For the Appellant : Shri T.P.Kar, AR For the Respondent : Shri T.K.Neogi, JCIT, Sr.DR Date of Hearing : 13.05.2016. Date of Pronouncement : 20.05.2016. ORDER Per N.V.Vasudevan, JM
These are appeals by the assessee against two orders both dated 06.08.2013 of CIT(A)-XIV, Kolkata, relating to AYrs. 2007-08 and 2008-09.
In both these appeals the assessee has challenged the order of CIT(A) whereby the CIT(A) confirmed the order of AO imposing penalty on the assessee u/s 271(1)(c) of the Income Tax Act, 1961 (Act).
The facts and circumstances under which penalty u/s 271(1)(c) of the Act was imposed on the assessee by AO are as follows :- The Assessee is an individual. For A.Y.2007-08 the assessee filed return of income declaring total income of Rs.8,76,310/-. The assessee is an employee of Oil and Natural Gas Commission. In the course of assessment proceedings the assessee furnished details of bank accounts maintained with ICICI Bank, Bhawanipore Branch and State Bank of India, Gariahat Civic Centre Branch. On perusal of the above said
2 & 2517/Kol/2013 Shri Sankar Halder. A.Yrs.2007-08 & 2008-09 bank account, the AO noticed that the following interest income which was reflected in the bank accounts of the assessee was not offered to tax by the assessee in the return of income. “ICICI FD Amount (Rs.) Prematurely close Matured amount (Rs.) Interest Received don (Rs.) 200000 31/05/2006 204720 4720 200000 31/05/2006 204672 4972 200000 31/05/2006 204745 4745 200000 31/05/2006 204769 4769 Total Interest received 18906 FD Amount (Rs.) A/c. No. Interest Received (Rs.) 200000 627514033393 11914 600000 627514033394 38352 Total Interest received 50266 Savings Bank Interest :
A/c. No. Period Interest Received (Rs.) 6275021503631 02/03/06 – 31/08/06 7326 627501503631 01/09/06 – 31/03/07 13822 Total Interest received 21148 State Bank of India A/c. Total Fixed Deposit Account Interest : Rs.28296/- Total Savings Bank Account Interest : Rs. 7855/- Total Interest received : Rs.36161/- Post Office Time Deposit Interest : Rs.11570/- So the total interest income received during the financial year came to Rs. (18906 + 50266 + 21148+36151+11570) = Rs.1,38,041/-“
The AO wanted to add the above said income to the total income of the assessee to which the assessee agreed. Accordingly the assessment was completed by adding the interest income to the total income declared by the assessee in the return of income.
3 & 2517/Kol/2013 Shri Sankar Halder. A.Yrs.2007-08 & 2008-09 5. For A.Y. 2008-09 the assessee had filed return of income declaring total income of Rs.12,76,192/-. It was noticed by the AO that the following interest income had been offered to tax by the assessee in the return of income :
ICICI Bank FD Amount (Rs.) A/c. No. Interest Received (Rs.) 200000 627514033393 15117 200000 627514033394 48937 Total Interest received 64054 Savings Bank Interest :
A/c. No. Period Interest Received (Rs.) 6275021503631 01/03/07 – 31/08/07 19298 627501503631 01/09/07 – 29/02/07 29702 Total Interest received 49000 State Bank of India A/c. Total Fixed Deposit Interest : Rs.32,236/- Total Savings Bank Account Interest : Rs. 10,783/- Total Interest received : Rs.43,019/- Post Office Time Deposit Interest : Rs.11570/- So the total interest income received during the financial year came to Rs. (64054 + 49000 + 43019 + 11570) = Rs.1,67,643/-“
The aforesaid amount was added to the total income of the Assessee by the AO while concluding the assessment for AY 2008-09.
The AO got the details of the aforesaid interest income from the details of bank accounts filed by the assessee before the AO. The assessee had not objected to the AO adding the aforesaid interest income to the total income declared by the assessee. Accordingly, the assessment was completed for both the assessment years making the addition of interest income to the total income declared by the assessee.
4 & 2517/Kol/2013 Shri Sankar Halder. A.Yrs.2007-08 & 2008-09 8. In respect of the additions made in the assessment proceedings the AO imposed penalty u/s 271(1)(c) of the Act. Before the AO the assessee submitted that he was not guided by any Chartered Accountant while filing the return of income and therefore had inadvertently or by ignorance had not declared the interest income in the return of income. However when the correct legal position was explained by the AO, the assessee agreed to the addition of the interest income to the total income of the assessee. The AO was however of the view that it was the duty of every tax payer to disclose his income in the return of income. He also observed that the assessee was drawing high salary and working in a senior position and therefore it cannot be believed that he was unaware that interest earned ought to have been declared in the return of income filed by the assessee. The AO accordingly imposed penalty on the assessee. The CIT(A) confirmed the order of AO and hence these appeals before the Tribunal.
Aggrieved by the orders of the CIT(A), the Assessee has preferred the present appeals before the Tribunal. We have heard the submissions of the learned counsel for the assessee, who reiterated the submissions as were made before the revenue authorities. He pointed out that in the order of assessments no satisfaction has been recorded by the AO. Regarding initiation of penalty proceedings several judicial pronouncements were relied upon by the ld. Counsel for the assessee. The ld. DR relied on the orders of the revenue authorities.
We have given a careful consideration to the rival submissions. The facts show that the assessee had in the course of assessment proceedings produced the bank accounts with ICICI Bank , Bhawanipore Branch and State Bank of India, Gariahat Civic Centre Branch. From the details produced by the assessee the AO found out that the interest income credited in these bank accounts had not found a place in the return of income. A reading of the assessments shows that the production of the bank account was not after some discovery by the AO that the assessee had derived interest income. 4
5 & 2517/Kol/2013 Shri Sankar Halder. A.Yrs.2007-08 & 2008-09 Secondly when the AO confronted the assessee that the interest income found credited in the assessee’s bank account should be offered to tax the assessee readily admitted and did not raise any objection. The above conduct of the assessee clearly shows that he had no intention whatsoever to conceal particulars of income or furnish inaccurate particulars of income. We are satisfied that failure of the assessee to declare the interest income in his return of income was due to inadvertence and ignorance. In such circumstances, we are of the view that imposition of penalty u/s 271(1)(c) of the Act would not be appropriate. The ITAT Delhi Bench in the case of Addl. CIT vs Premchand Garg (2009) 31 SOT 97 (Delhi) in an identical case took a view that mere omission of surrendering income from the return does not amount to concealment or furnishing inaccurate particulars of income unless and until there is some evidence to show or circumstances found from which it can be gathered that omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid imposition of tax thereon. The aforesaid decision of ITAT Delhi Bench was approved by the Hon’ble Calcutta High Court in the case of CIT vs Ramesh Chand Goel in G.A.No.2347 of 2010 order dated 11.08.2010. We are of the view that in the given facts and circumstances of the case and the legal position as explained the above penalty u/s 271(1)(c) of the Act ought not to have been imposed. We accordingly cancel the orders imposing penalty and allow the appeals of the assessee.
In the result the appeals of the assessee are allowed.
Order pronounced in the Court on 20.05.2016.