COMPLAINT FILED ON: 25.06.2009

DISPOSED ON: 01.03.2011

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)

1^ST MARCH 2011

       PRESENT:- SRI. B.S.REDDY                 PRESIDENT                        

                         SMT. M. YASHODHAMMA    MEMBER    

                         SRI.A.MUNIYAPPA               MEMBER

O R D E R S

SRI. B.S.REDDY, PRESIDENT

             The complainant filed this complaint u/s. 12 of the C.P. Act of 1986 seeking direction against Opposite Party (herein after called as OP) to pay an amount of Rs.10,00,000/- as compensation with interest on an allegations of deficiency in service on the part of OP.

2.      The case of the complainant to be stated in brief is that:-

The complainant is the industrialist / Business man and the respondent is the Private Limited Company dealing with Mutual Funds investments etc. The complainant availed the service of OP by investing Rs.3,06,750/- in mutual funds for the investment made during the year 2005. OP wrongly sent the investment details as Rs.1,00,00,000/- inspite of furnishing the correct investment details of the complainant Rs.3,06,750/-. Due to which Income Tax department has levied the Income Tax of Rs.46,00,000/- to the complainant. Because of the mistake and the erroneous entry and furnishing of erroneous details to the Income Tax Department, the complainant had to prefer an appeal before Income Tax Appellate authority by spending lakhs of rupees, after receipt of the notice from the Income Tax Department demanding Income Tax of Rs.46,64,000/- for the investment; made as per AIR details furnished by OP. Complainant approached OP and complained about their misdeeds. OP instead of redressing the problem of the complainant had simply went on dodging the matter by giving one or the other reasons. Having no other alternative the complainant had to approach Income Tax Appellate Tribunal through Appeal against the demand made because of the erroneous AIR details furnished by OP by spending huge money. Inspite of specific instructions and correct details furnished by the complainant; OP has callously with ulterior motive filed the wrong amount of Rs.1,00,00,000/- as investment by the complainant to Income Tax Department. After receipt of notice from Income Tax Department complainant approached OP seeking remedy, OP never bothered to attend to his grievance. Complainant got issued legal notice on 01.04.2009 calling upon to pay compensation of Rs.10,00,000/- for the deficient service and loss caused to the complainant within 15 days from the date of service of notice. OP instead of complying the demand had sent untenable reply. Because of the wrong doings of OP; the complainant was made to suffer mentally, socially and monetarily. He has lost his valuable time in approaching Advocates and Appellate authority and court.  He has lost lakhs of rupees towards the expenditure and penalty. Hence he is claiming global compensation of Rs.10,00,000/- with this complaint.

3.      On appearance OP filed version contending that the complaint is vexatious and baseless, hence same is to be dismissed in limline with costs. As per the provision of Income Tax Act and Rules OP is obliged to furnish an annual Information Return (AIR) in respect of mutual fund financial transactions for any financial year and information relating to which is relevant and required for the purpose of the Act to the prescribed Income Tax authority. OP furnished the AIR for financial year for 2005-2006 on 23.08.2006. That subsequent to which it came to the knowledge of OP that inadvertently unintentionally and due to typographical error an incorrect AIR was filed on 23.08.2006 and immediately a revised supplementary return was filed on 14.12.2006 giving the correct financial details of all transactions beyond the prescribed limit against the details submitted for these transactions vide the earlier AIR filed on 23.08.2006. It was only 29.12.2008 when OP was approached by complainant with the copy of communication dated 18.11.2008 received by him from the office of the Income Tax officer. In response to which OP addressed a letter on the same day conveying that there had been an error in the information relating to transactions in the AIR filed with the Tax Authority dated 23.08.2006. In the said communication correct details of his investment in Principal Mutual Fund, along with the erroneous details as furnished to the Tax authority were also set forth. The copy of the provisional receipt of the supplementary AIR filed on 14.12.2006 and his account statement for the period 2005-06 were furnished to the complainant. OP received the notice dated 01.04.2009 from the complainant and in response to the same vide letter dated 28.04.2009 OP reiterated the submissions made in its letter dated 29.12.2008 and also forwarded the said letter along with its enclosures i.e., revised / supplimentary AIR. There is no deficiency of service by OP. 

OP has given Para wise replies in the version and further it is submitted that the complainant has not furnished any details and / or supporting documents concerning his alleged claim that he has lost lakhs of rupees towards expenditure and penalty and that hence Rs.10,00,000/- is being claimed as global damages. The complainant has failed to justify an apparent delay in approaching the OP for necessary clarification and / or failure on his part in submitting the letter of the OP to his Tax authorities. Had the said letter been furnished to his Income Tax Authorities, they would have gathered the true and complete details of OP’s investment in principal mutual fund and as such their allegations concerning incorrect transaction amount furnished by the OP in the AIR filed with the Tax authority for the financial year 2005-06 would have been set aside and dismissed. The complainant has failed to furnish any evidence regarding filing of an Appeal before the Income Tax Appellate Authority and the same pending at adjudication. The complainant is not entitled to any relief by way of compensation and hence it is prayed to dismiss the complaint.

4.      In order to substantiate the complaint averments, the complainant got filed affidavit evidence of his Power of Attorney Holder Smt. Lalitha who is also working as accountant and produced documents. The officer and authorized representative of OP Sujata Punjabi filed affidavit evidence in support of defence version and produced documents. 

5.      Arguments on both sides heard. Points for consideration are:

Point No.1: Whether the complainant has proved

                  the deficiency in service on the part of

                   the OP?

     Point No.2: If so, whether the complainant is entitled

                 for the relief’s now claimed?

     Point No.3: To what Order?

6.      We record our findings on the above points:

Point No.1:- Negative.

Point No.2:- Negative.

Point No.3:- As per final Order.

R E A S O N S

7.      At the outset it is not at dispute that the complainant availed the service from the OP by investing Rs.3,06,750/- in mutual funds during the year – 2005. OP while furnishing annual investments returns to the income tax department with regard to the investment made by complainant during the year – 2005, wrongly sent the investment details as invested an amount of Rs.1,00,00,000/- instead of showing the correct figure of Rs.3,06,750/- which was invested. The complainant claims that due to the said mistake on the part of the OP in furnishing erroneous details regarding the investment to the income tax department, the department has levied the income tax of Rs.46,64,000/-. The complainant had to prefer an appeal challenging the said order of assessment levying the income tax of Rs.46,64,000/-. Appeal has been preferred before the Income Tax Appellate Tribunal against demand made by the income tax department. Thus the complainant claims that the act of OP in furnishing annual information return report by showing the investment at Rs.1,00,00,000/- as against the correct investment of Rs.3,06,750/-, OP made the complainant to suffer the order of levying the tax and challenging the same before the appellate tribunal, as such there is deficiency in service on the part of OP.

8.      The defence of the OP is the annual information return (AIR) in respect of the complainant was furnished for the financial year 2005-06 on 23.08.2006. Subsequent to which it came to the knowledge of the OP that inadvertently, unintentionally and due to typographical error an incorrect AIR was filed on 23.08.2006 and immediately a revised supplementary return was filed on 14.12.2006 giving the correct financial details of all the transactions beyond the prescribed limit as against the details submitted for these transactions vide the earlier AIR filed on 23.08.2006. On 29.12.2008 when OP was approached by the complainant with copy of communication dated 18.11.2008 received from the office of income tax officer; OP addressed a letter on the same day conveying that there had been error in the information related to complainant’s transactions in AIR filed with Tax Authorities dated 23.08.2006. The copy of the provisional receipt of supplementary AIR filed on 14.12.2006 and the statement for the period 2005-06 is furnished to the complainant. Failure on the part of the complainant in submitting the copy of letter addressed to the income tax authorities lead to pass assessment order. Had the said letter had been furnished to the tax authorities, they would have gathered the true and complete details of complainant’s investment with principal mutual fund and as such their allegations regarding incorrect transactions amount furnished by the OP in the AIR filed with the tax authorities for the financial year 2005-06 would have been set aside. Thus it is contended that there is no deficiency in service on the part of the OP.

9.      It may be noted that OP admits the fact that on 23.08.2006 furnished the AIR for the financial year 2005-06 to the income tax authority with respect to the investment made by the complainant showing the total amount of investment at Rs.1,00,00,000/- instead of an amount of Rs.3,06,750/-. Subsequently OP came to know that inadvertently, incorrect AIR was filed on 23.08.2006, immediately a revised supplementary return was filed on 14.12.2006 giving the correct financial details for all transactions beyond the prescribed limit against the details submitted for these transactions vide the earlier AIR filed on 23.08.2006. On 29.12.2008 when the complainant approached the OP with the copy of the communication dated 18.11.2008 received by him from the office of the income tax officer, OP addressed a letter on the same day conveying that there had been error in the information relating to the complainant transactions in the AIR filed on 23.08.2006. In the said communication correct details of complainant’s investments along with the erroneous details as furnished earlier were also set forth. Copy of provisional receipt of supplementary AIR filed on 14.12.2006 and accounts statement for the period 2005-06 were also furnished to the complainant. The complainant has not appeared before the income tax authorities and submitted regarding the revised supplementary AIR submitted by OP on 14.12.2006 with correct details of account statement.

10.    The assessment order produced by the complainant marked as document No.2 reveals that the said order has been passed on 24.11.2008. During the course of scrutiny assessment the particulars related to AIR information was cross verified from the bank statements produced by the assessee. The same was brought to the notice of the assessee’s representative and was asked to clarify and submit the sources for the above investments. Despite ample opportunities afforded; the assessee has not furnished any information on the above (except for a letter stating that no such investment was made by the assessee). After going through the assessment order; it becomes clear that representative of this complainant has not brought to the notice of the assessing authority with regard to revised AIR submitted by OP on 14.12.2006 with correct transactions details. On account of the same the order was passed levying income tax and other charges at Rs.46,64,896/-. OP has produced the copy of the provisional receipt for having submitted supplementary revised AIR marked as exhibit R-1. The copy of the communication dated 29.12.2008 marked as exhibit R-2 reveals that OP has informed the complainant that the correct investment details were already furnished to the income tax department. For the legal notice reply has been sent by OP, it is stated that by inadvertently the information relating to the complainant with regard to the investment was incorrectly furnished in the AIR return. However no sooner this was noted, the same was immediately rectified by submitting the supplementary AIR report to the income tax department on 14.12.2006. It appears that on account of complainant not participating in the proceedings before the income tax authorities at the time of passing the assessment order and submitting that the correct AIR report is already submitted on 14.12.2006; the department was made to a pass such order. Because of the lapses on the part of the complainant and inactiveness to represent before the income tax authorities lead to pass such an order. Soon after OP came to know that earlier AIR report submitted on 23.08.2006 was not correct a revised AIR report was submitted on 14.12.2006 giving the correct financial details of all transactions. Under these circumstances we are of the view that there is no any deficiency in service on the part of the OP. The complaint is devoid of merits; the same is liable to be dismissed. Accordingly we proceed to pass the following:

                                      O R D E R

This complaint filed by the complainant dismissed. Considering the nature of dispute no order as to costs.  

Send the copy of this order to both the parties free of cost.

(Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 1^st day of March – 2011.)

PRESIDENT

MEMBER                                                      MEMBER 

Snm: