Case Law Details

Case Name : Mrs. Richa Dubey Vs Income-tax Officer (ITAT Mumbai)
Appeal Number : IT APPEAL NO. 4887 (MUM.) OF 2014
Date of Judgement/Order : 20/04/2016
Related Assessment Year :
Courts : All ITAT (1730) ITAT Mumbai (489)

We have observed that the assessee is a salaried employee and received salary from M/s. AC Nielson Research Services Pvt. Ltd of Rs. 26,376/- and M/s. Hindustan Unilever Limited of Rs.21,22,182/- totaling Rs. 21,48,558/- during the year. There was an error/mistake in punching salary, while filing return of income , received by thee assessee from Hindustan Lever Limited as ‘Rs.2,09,614/-‘ by mistake instead of correct salary of ‘Rs.20,96,914/-‘ and also not taking into effect any other income of (-) Rs.1,51,726/- reported by the assessee and hence the error in filing the return of income with revenue. The details are placed in paper book filed with the Tribunal. The assessee had submitted that she engaged the services of online tax return filing portal “Taxspanner” whom the assessee gave all the details of her income and the said online tax return filing portal “Taxspanner” committed above mistake’s due to their negligence while filing return of income of the assessee with the Revenue. We have observed that it is stated by the assessee that she has provided her Form No. 16 received from her employer to the website of online tax return filing portal “Taxspanner” and received the confirmation from the said ‘Taxspanner’ on 25/06/2011 stating that ITR-V is filed and assessee will get ITR-V (acknowledgement) copy from them in 24 hrs. It is stated that the assessee received the ITR-V from the said ‘Taxspanner’ and sent it to the CPC Bangalore , Income Tax Department. The assessee submitted that at that time she was having pregnancy of 5 months and due to immense work pressure in the office she could not devote time to see the content of ITR filed by the said ‘Taxspanner’ as she did not understand the form also, hence she just signed the ITR-V and sent it to the Bangalore CPC of Income Tax Department. The assessee submitted that keeping in view of her earlier experience with the said ‘Taxspanner’ as well as their experience in filing the return of income, she did not think about verifying the return of income filed by them. The assessee has also filed copies of acknowledgment of filing return of income for the period commencing from assessment year 2009-10 to 2015-16. From the perusal of the said acknowledgement’s of return of income, we find the details of returned income , tax paid and refund claimed as under :

S.No.Assessment YearDate of filing return of incomeReturned IncomeTaxes PaidRefund claimed
1.2009-1003.08.2009540634661170
2.2010-1126.06.20107631921338570
3.2011-1224.06.2011134882424501424500
4.2012-1326.07.201224745706111720
5.2013-1414.08.201328627227119080
6.2014-1530.06.2014287570071499110
7.2015-1627.07.2015454226012498400

The perusal of the above chart shows that the assessee had claimed refund of taxes only in the assessment year 2011-12 under appeal and in the last seven years spanning from assessment year 2009-10 to 2015-16 except assessment year 2011-12, no attempt has been made by the assessee to claim refund of taxes from the Revenue. The assessee derives income mainly from salary and her salary income is subjected to deduction of tax at source and she could under normal circumstances gain by filing in-accurate particulars/concealment of income by way of claiming refund of taxes from revenue. The above chart clearly shows that the conduct of the assessee is bona-fide and it is due to the error and mistake in the assessment year 2011- 12 as contended by the assessee , return of income was wrongly filed .As soon as the assessee came to know about the error/mistake , she immediately took steps to deposit back the refund of taxes so received with the Government Treasury on 14-08-2013 and intimated the AO also vide letter dated 19-08- 2013. We find that the conduct of the assessee is bona-fide and there is no mala-fide intention on the part of the assessee although error/mistake took place in filing return of income for assessment year 2011-12 under appeal. If the assessee would have been ‘habitual tax evader’ as contended by the Revenue , then her conduct would have shown that she is regularly seeking refund of taxes by filing erroneous return of income by concealing her income or furnishing inaccurate particulars of income which the above chart clearly shows otherwise , whereas the return of income till assessment year 2012-13 were all filed as set out above before the issuance of notice u/s 143(2) of the Act by the Revenue for the assessment year 2011-12 on 31.08.2012. Further, the assessee salary income was subjected to deduction of tax at source by her employers and the employer also intimate the Revenue about the gross salary paid and tax so deducted at source on such salary by filing quarterly return of TDS in form 24Q and thus, the revenue is fully aware of the salary income of the tax-payer in its data-base. The employers issue form no 16 to employees whereby all the salary details are furnished along with details of tax deducted at source and hence it is not possible under normal circumstances for a salaried employee to evade taxes by filing in-accurate salary particulars or concealing salary income in the return of income as the mismatch in the information furnished by the tax-payer vide return of income vis-à-vis information with Revenue in its database will be captured by the Revenue. We have seen that the authorities below have used the strong words like ‘habitual tax evader’ against the assessee which in our humble and respectful submissions are not correct observations of the authorities below and we direct that all such words used by the authorities below stand expunged from the orders of the authorities below. The citizens and the tax- payers of this country are participant in the nation building and also contributor to the exchequer and to use such harsh words against them are not warranted except in exceptional proven cases. In our considered view , the conduct of the assessee was not mala-fide and contemptuous and the assessee had come forward by offering a bona-fide explanation about the error committed by the online tax return filing portal ‘Taxspanner’ and hence in our considered view, the assessee is not liable for penalty u/s 271(1)(c) of the Act as the case is covered by the exceptions as contained in the explanation 1(B) to Section 271(1)(c) of the Act .

Even with respect to the discount as commission income received by the assessee, the assessee has purchased a flat from broker M/s Buniyad Retail Pvt. Ltd. and received discount as commission income of Rs. 85,270/- from M/s Buniyad Retail Pvt. Ltd. and the assessee submitted that the said discount as commission income received from broker M/s. Buniyad Retail Pvt. Ltd is capital receipt and the same was reduced by the assessee from the cost of the flat purchased through broker M/s. Buniyad Retail Pvt. Ltd in “Kensington Park” at Jaypee Greens Sector-133. The view adopted by the assessee is a plausible bona-fide view although the same did not found favour with the Revenue and the assessee chose not to file appeal against the said additions but that does not mean that every claim which is not sustained by the revenue will make the tax-payer liable to penalty u/s. 271(1)(c) of the Act. The claim of the assessee was plausible and bona-fide and we hold that no penalty can be imposed u/s 271(1)(c) of the Act on this count.

With respect to the amount of Rs. 16,803/-, it was stated that inadvertently the assessee failed to declare the interest received on savings bank account amounting to Rs. 16,803/- and the omission was neither intentional nor willful. The amount involved is also trivial.

In our considered view, there is no deliberate attempt on the part of the assessee and it is not a fit case to impose penalty u/s 271(1)(c) of the Act on the assessee as the conduct of the assessee if seen in context of preceding and succeeding years as set-out above does not warrant imposition of the penalty u/s 271(1)(c) of the Act keeping in view peculiar facts and circumstances of the case as set out above as we find that no attempt has been made by the assessee in the preceding and succeeding years as set out above to file incorrect income and make an attempt to claim refund from the revenue , except in the assessment year under appeal which errors have also been duly explained by the assessee by furnishing a bona-fide explanation and every error cannot make assessee liable to penalty u/s 271(1)(c) of the Act. Considering all the facts and circumstances of the case, we delete the penalty levied by the A.O. u/s 271(1)(c) of the Act as confirmed/sustained by the CIT(A). We order accordingly.

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Category : Income Tax (20866)
Type : Judiciary (8910)
Tags : ITAT Judgments (3704) section 271(1)(c) (265)

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