Maltiben Manilal Shah, Ahmedabad v. The Income tax Officer,Ward-15(3),, Ahmedabad

ITA 3312/AHD/2009 | 2006-2007
Pronouncement Date: 29-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 331220514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 3312/AHD/2009
Duration Of Justice 1 month(s) 15 day(s)
Appellant Maltiben Manilal Shah, Ahmedabad
Respondent The Income tax Officer,Ward-15(3),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 29-01-2010
Date Of Final Hearing 28-01-2010
Next Hearing Date 28-01-2010
Assessment Year 2006-2007
Appeal Filed On 14-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'SMC' (BEFORE SHRI N S SAINI ACCOUNTANT MEMBER) ITA NO.3312/AHD/2009 (ASSESSMENT YEAR:- 2006-07) SMT. MALTIBEN MANILAL SHAH 19 SUHASNAGAR SOCIETY NEAR DINESH HALL ASHRAM ROAD AHMEDABAD V/S THE INCOME-TAX OFFICER WARD 15(3) AHMEDABAD [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI RAJESH C SHAH AR RESPONDENT BY:- SHRI MAHESH KUMAR SR. DR O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) DATED 13-10-2009 FOR ASSESSMENT YEAR 2005-06 WHEREBY THE CIT(A) HAS CONFIRMED THE PENALTY OF RS.38 000/- IMPOSED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 [THE ACT]. 2 THE FACTS OF THE CASE ARE THAT THE AO HAS PASSED ORDER U/S 143(3) ON 15-12-2008 MAKING AN ADDITION OF INTE REST OF KISHAN VIKAS PATRA AND INTEREST ON SARDAR SAROVAR NIGAM BO ARD. THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS.3 60 340/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS CREDITED RS.1 20 348/- ON 27-09-05 AND RS.1 00 000/- WAS CREDITED ON 29-10-05 IN SB ACCOUNT NO.48330 MAI NTAINED WITH BANK OF BARODA NAVRANGPURA BRANCH AHMEDABAD. THE ASSESSEE SUBMITTED HER SUBMISSION DATED 23-10-2008 AND STATE D THAT THE ABOVE AMOUNTS WERE CREDITED ON ACCOUNT OF MATURITY OF KIS HAN VIKAS PATRA. HOWEVER ACCRUED INTEREST WAS NOT SHOWN BY HER DUE TO BONA FIDE BELIEF THAT INTEREST WAS TAX FREE AND OFFERED THE S AME FOR TAXATION. SHE HAS INVESTED RS.50 000/- ON 21-10-1999 AND RS.5 0 000/- ON 18- 2 02-2000 IN KISHAN VIKAS PATRA. THEREFORE TOTAL ACCR UED INTEREST OF RS.1 20 348/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER THE ASSESSEE HAD SHOWN INTEREST FROM SARDAR SAROVAR NIGAM OFRS.7983/-. HOWEVER THE INTEREST OF RS.3369/- WAS NOT SHOWN BY HER. THEREFORE THE AO MADE THE ADDITION. ON THE BAS IS OF THESE FACTS THE LEARNED ASSESSING OFFICER INITIATED PENALTY PRO CEEDINGS U/S 271(1)(C) OF THE ACT AND ISSUED A SHOW CAUSE NOTICE U/S 271(1)(C) READ WITH SECTION 274 AS TO WHY ORDER IMPOSING A PE NALTY U/S 271(1)(C) SHOULD NOT BE MADE FOR CONCEALMENT OF INC OME. THE ASSESSEE SUBMITTED THAT SHE HAS NOT FURNISHED INACC URATE PARTICULARS OF INCOME AND HAVE NOT CONCEALED THE INCOME. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE AO LEVIED PENALTY U/S 271(1)(C) BY OBSERVING AS UNDER: ON PERUSAL OF THE REPLY FILED DURING THE ASSESSMEN T PROCEEDINGS IT IS APPARENT THAT THE ASSESSEE ALSO CONFIRMS THAT THE I NCOME LIABLE FOR TAXATION WAS NOT OFFERED IN THE RETURN OF INCOME FILED. IN V IEW OF THE SAME THERE IS CONCEALMENT OF INCOME BY THE ASSESSEE FOR THE FOLLO WING AMOUNTS. INTEREST ON KVP RS.1 20 348/- INTEREST ON SARDAR SAROVAR NIGAM RS. 3 369/- ---------------- RS.1 23 717/- IN VIEW OF THE ABOVE I AM SATISFIED THAT THE ASSES SEE HAS CONCEALED INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME. AS SUCH THE ASSESSEE IS LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT. T HE MINIMUM PENALTY LEVIABLE COMES TO RS.37 856/-AT THE RATE OF 100% AN D RS.1 13 568/- AT THE RATE OF 300%. LOOKING TO THE FACT AND CIRCUMSTANCES OF THE CASE I IMPOSE A PENALTY OF RS.38 000/- U/S 271(1)(C) OF THE I.T. AC T 1961. 3 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) UPHELD THE LEVY OF PENALTY BY OBSERVING AS UNDER: 5 AFTER A CAREFUL AND COMPARATIVE STUDY OF PENALTY ORDER U/S 271(1)(C) OF THE I.T. ACT & GROUNDS OF APPEAL I AM IN AGREEM ENT WITH THE AO HENCE THE PENALTY ORDER U/S 271(1)(C) PASSED BY THE LD. A O IS APPROVED AS IT IS BECAUSE IGNORANCE OF LAW CANNOT BE AN EXCUSE FOR BR EAKING IT. 3 4 THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED BEFORE US THAT INTEREST ON KVPS OF RS.1 2 0 348/- WAS NOT SHOWN AS INCOME BY THE ASSESSEE UNDER A BONA FIDE B ELIEF THAT THE SAME WAS NOT TAXABLE. FURTHER IT WAS SUBMITTED THA T INTEREST OF RS.3369/- EARNED ON SARDAR SAROVAR NIGAM BOARD WAS A BONA FIDE MISTAKE ON THE PART OF THE ASSESSEE AS THE SAID ENT RY WAS OMITTED TO BE TAKEN INTO ACCOUNT WHILE FILING THE RETURN OF IN COME. HE SUBMITTED THAT IMMEDIATELY ON LEARNED ASSESSING OFFICER POINT ING OUT THE ABOVE MISTAKE TO THE ASSESSEE THE ASSESSEE AGREED TO PAY TAX ON THE SAME. HENCE IT WAS HIS SUBMISSION THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE WAS NOT LIA BLE TO PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF I NCOME. 5 THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDER OF THE LOWER AUTHORITIES. 6 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE PENALTY OF RS.38 000/- WAS LEVIED UND ER SECTION 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF RS.1 20 348/- ON ACCOUNT OF INTEREST ON KISAN VIKAS PATRA AND RS.3 3 69/- INTEREST EARNED ON INVESTMENT WITH SARDAR SAROVAR NIGAM BOAR D. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAS NOT DISCLOSED THE ABOVE TWO INTEREST INCOME IN THE RETU RN OF INCOME FILED BY HER. THE ASSESSEE EXPLAINED BEFORE THE LEARNED ASSESSING OFFICER THAT THE INTEREST INCOME OF RS.1 20 348/- RECEIVED ON KISAN VIKAS PATRA WAS NOT DISCLOSED AS THE ASSESSEE WAS OF THE BELIEF THAT SUCH INTEREST INCOME WAS NOT TAXABLE. IN RESPECT OF INT EREST OF RS.3369/- EARNED FROM SARDAR SAROVAR NIGAM BOARD THE ASSESSE E EXPLAINED THAT INTEREST EARNED ON SAME INVESTMENT OF RS.7983/ - WAS DULY DISCLOSED IN THE RETURN OF INCOME AND THIS AMOUNT O F RS.3369/- WAS LEFT TO BE CONSIDERED BECAUSE OF A MISTAKE. THE LE ARNED ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE ABOVE EXPLANAT ION AS THE 4 ASSESSEE DID NOT FURNISH THE INFORMATION CALLED UPO N BY THE LEARNED ASSESSING OFFICER AND ONLY AFTER THE LEARNED ASSESS ING OFFICER RECEIVED THE RELEVANT INFORMATION FROM POST OFFICE AND BANK AND PASSED ON THAT INFORMATION TO THE ASSESSEE THE ASS ESSEE AGREED TO PAY TAX ON THE ABOVE INCOME. THE LEARNED COMMISSIO NER OF INCOME TAX(APPEALS) ON APPEAL CONFIRMED THE ABOVE LEVY OF PENALTY. BEFORE ME THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. I FIND THAT NO MATERIAL WAS BROUGHT BY THE ASSESSEE TO SHOW THAT H OW AND IN WHAT CIRCUMSTANCES SHE BELIEVED THAT THE INTEREST INCOME RECEIVED FROM THE KISAN VIKAS PATRA WAS AN EXEMPT INCOME. THE AS SESSEE COULD NOT BRING ANY MATERIAL BEFORE ME OR BEFORE THE LOWE R AUTHORITIES TO SHOW THAT THE ABOVE BELIEF WAS A BONAFIDE BELIEF OF THE ASSESSEE AND THE ASSESSEE IN FACT DISCLOSED THE ABOVE INCOME AS AN EXEMPT INCOME IN THE RETURN OR ACCOMPANYING DOCUMENTS FILED THERE WITH. IN MY CONSIDERED VIEW GROSS NEGLIGENCE CANNOT BE GET AWA Y WITH BY PLEADING IGNORANCE OF LAW. THEREFORE IN MY CONSID ERED VIEW THE LOWER AUTHORITIES WERE JUSTIFIED IN IMPOSING PENALT Y UNDER SECTION 271(1)(C) IN RESPECT OF INTEREST INCOME OF RS.1 20 348/- EARNED FROM KISAN VIKAS PATRA BY THE ASSESSEE AND NOT DISCLOSED IN THE RETURN OF INCOME FILED BY HER. IN RESPECT OF INTEREST EARNED FROM INVESTMENT WITH SARDAR SAROVAR NIGAM BOARD I FIND THAT THE AS SESSEE HAD EARNED A TOTAL INTEREST OF RS.11352/- DURING THE YEAR UNDE R CONSIDERATION OUT OF WHICH THE ASSESSEE HAS DULY DISCLOSED RS.7983/- AND PAID TAX THEREON. IN RESPECT OF REMAINING AMOUNT OF RS.3369 /- THE ASSESSEE EXPLAINED THAT DUE TO MISTAKE THAT REMAINED TO BE C ONSIDERED BY HER AT THE TIME OF THE FILING OF THE RETURN OF INCOME. ON THE ABOVE FACTS AND KEEPING IN VIEW THE SMALLNESS OF THE AMOUNT INV OLVED AND IN VIEW OF THE FACT THAT THE LARGER AMOUNT OF INTEREST EARNED FROM THIS INVESTMENT WAS DISCLOSED BY THE ASSESSEE IN MY CON SIDERED VIEW PROVES THAT THE NON DISCLOSURE OF RS.3369/- ON THE PART OF THE ASSESSEE WAS DUE TO A BONA-FIDE MISTAKE ON HER PART AND NOT BECAUSE OF ANY DISHONEST OR CONTUMACIOUS ACT. I THEREFORE DELETE THE LEVY OF 5 PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN RESPE CT OF ABOVE INTEREST INCOME OF RS.3369/-. I THEREFORE SET AS IDE THE ORDER UNDER APPEAL AND DIRECT THE LEARNED ASSESSING OFFICER TO RECOMPUTE THE PENALTY IN LIGHT OF THE DECISION GIVEN ABOVE. 7 IN THE RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 29-01- 2010 SD/- (N S SAINI) ACCOUNTANT MEMBER DATE : 29-01-2010 COPY OF THE ORDER FORWARDED TO : 1. SMT. MALTIBEN MANILAL SHAH 19 SUHASNAGAR SOCIET Y NEAR DINESH HALL ASHRAM ROAD AHMEDABAD 2. THE ITO WARD-15(3) AHMEDABAD 3. CIT CONCERNED 4. CIT(A) XXI AHMEDABAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABA