GURUDEEPSINGH CHADHA, MUMBAI V. ITO 16(3)(3), MUMBAI

CO 118/MUM/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1534 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2015
• Court: TRIBUNAL
• Assessee Lawyers: B D NAIK
• Keywords: Principle of natural justice; Revised return
• Section: 143(3); 154

Judgement Text

SHRI GURDEEPSINGH CHADHA ITA NO. 1802 /MUM/20 1 4 C O NO. 1 18 /MUM/201 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. : 1802 /MUM/20 1 4 ( ASSESSMENT YEAR: 200 9 - 1 0 ) INCOME TAX O FFICER 16(3)(3), MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI - 400 007 VS SHRI GURDEEPSINGH CHADHA , 21 CANNEDY BRIDGE, OPERA HOUSE, MUMBAI - 400 004 .: PAN: ACKPC 0071 D (APPELLANT) (RESPONDENT) APPE LLANT BY : SHRI B D NAIK RESPONDENT BY : SHRI K K LALKAKA CO NO. 118/MUM/2015 ARISING OUT OF ITA NO. : 1802/MUM/2014 , AY, 2009 - 10 SHRI GURDEEPSINGH CHADHA , 21 CANNEDY BRIDGE, OPERA HOUSE, MUMBAI - 400 004 .: PAN: ACKPC 0 071 D VS INCOME TAX OFFICER 16(3)(3), MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI - 400 007 (APPELLANT - CROSS OBJECTOR ) (RESPONDENT) APPELLANT CROSS OBJECTOR BY : SHRI K K LALKAKA RESPONDENT BY : SHRI B D NAIK /DATE OF HEARING : 0 3 - 09 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 11 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE AFORESAID APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE HA VE BEEN FILED AGAINST IMPUGNED ORDER DATED 23.12.2013 PASSED BY CIT(A) - 27, MUMBAI IN RELATION TO THE PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2009 - 10. THE REVENUE IS MAINLY AGGRIEVED BY DELETION OF PENALTY OF RS.7,43,000/ - WHICH HAS BEEN LEVIED ON ACCOUNT OF DISCLOSURE OF LONG TERM CAPITAL IN THE REVISED RETURN. SHRI GURDEEPSINGH CHADHA ITA NO. 1802 /MUM/20 1 4 C O NO. 1 18 /MUM/201 5 2 2. THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM PARTNERSHIP FIRMS AND ALSO INCOME FROM OTHER SOURCES. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT RS. 1,54,315/ - ON 31.03.2010. THE SAID RETURN OF INCOME WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) , DATED 19.08.2010 , SERVED UPON THE ASSESSEE ON 24.08.2010 . H OWEVER ASSESSEE DID NOT RESPOND TO THIS NOTICE . THEREAFTER, A FRE SH NOTICE U/S 14 2 ( 1) WAS ISSUED ON 18.02.2011. ON 31 ST MARCH, 2011, THE ASSESSEE HAD FILED REVISED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.37,62,631/ - , WHICH INCLUDED THE AMOUNT OF LTCG OF RS.36,08,136/ - AND PAID THE TAXES THEREON . THE AO HOWEVER COM PLETED THE ASSESSMENT U/S 143( 3 ) ON THE BASIS OF ORIGINAL RETURN OF INCOME ONLY , THAT IS , ON INCOME AT RS. 1,54,3 15 . IN THE OFFICE NOTE HE NOTED THAT ASSESSEE HAS FILED HIS REVISED RETURN ONLY AFTER SERVICE OF NOTICE U/S 143(2). S UBSEQUENT TO THE PASSING O F THE ASSESSMENT ORDER, A NOTICE U/S 154 WAS ISSUED BY THE AO AND ASSESSMENT WAS REVISED AND THE INCOME WAS FINALLY ASSESSED AND DETERMINED ON A TOTAL INCOME OF RS.37,62,631/ - THAT IS , ON THE BASIS OF REVISED RETURN. 3. IN THE COURSE OF THE PENALTY PROCE EDINGS U/S 271(1)(C), THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE SUBMITTED THAT , HE HAD PURCHASED A SHOP OUT OF THE AMOUNT OF THE LONG - TERM - CAPITAL - GAIN EARNED IN THE NAME OF MINOR SON AND WAS UNDER A BONA FIDE BELIEF THAT THE CAPITAL GAIN WOULD BE EXEMPT IF THE SAME HAS BEEN INVESTED IN A PROPERTY. THE MOMENT WHEN THE ASSESSEE CAME TO KNOW THAT EXEMPTION IS NOT ALLOWED ON PURCHASE OF A COMMERCIAL PROPERTY/SHOP , HE IMMEDIATELY REVISED THE RETURN TO OFFER THE LONG - TERM - CAPITAL - GAIN AND THE TAXES DUE O N SUCH CAPITAL GAIN WAS ALSO PAID. HOWEVER, THE LD. AO REJECTED THE ASSESSEES EXPLANATION AND HELD THAT THE ASSESSEE CAME FORWARD FOR FILING REVISED RETURN WHEN ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND AFTER ISSUANCE OF NOTICE U/S 143(2). AFTER REFER RING TO THE VARIOUS DECISIONS IN THE IMPUGNED PENALTY ORDER, AO LEVIED THE PENALTY ON THE AMOUNT OF SHRI GURDEEPSINGH CHADHA ITA NO. 1802 /MUM/20 1 4 C O NO. 1 18 /MUM/201 5 3 CAPITAL GAIN OF RS. 36,08,136 / - SHOWN IN THE REVISED RETURN WHICH WORKED OUT TO RS. 7,43,313/ - , I.E. @ 100% OF THE TAX SOUGHT TO BE EVADED. 4. BEFORE THE C IT(A), THE DETAIL ED SUBMISSIONS WERE MADE ALONG WITH THE CITATION OF VARIOUS CASE LAWS THAT ON THESE FACTS, NO PENALTY CAN BE LEVIED, BECAUSE THE AO DID NOT HAD ANY MATERIAL THAT ASSESSEE HAS CONCEALED ANY FACTS. THE LD. CIT(A) AFTER REFERRING TO SUCH DETA ILED SUBMISSIONS OF THE ASSESSEE FROM PAGES 3 TO 18 OF THE APPELLATE ORDER, DELETED THE PENALTY ON THE GROUND THAT ASSESSEE HAS VOLUNTARILY FILED THE REVISED RETURN DISCLOSING THE LONG TERM CAPITAL GAIN AS TAXABLE WITHOUT THERE BEING ANY INFORMATION OR MAT ERIAL BEFORE THE AO ON SUCH CAPITAL GAIN. FURTHER, IT WAS THE ASSESSEE WHO BROUGHT TO THE KNOWLEDGE OF THE AO THAT ASSESSMENT WAS WRONGLY FRAMED AT AN INCOME OF RS.1,54,320/ - TO WHICH AO CARRIED OUT NECESSARY RECTIFICATION. THE LD. CIT(A) AFTER DETAILED DI SCUSSION AND REASONING GIVEN FROM PAGES 19 TO 25, DELETED THE PENALTY. 5. WE HAVE HEARD THE PARTIES AT LENGTH AND ALSO CAREFULLY CONSIDERED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. THE PENALTY HAS BEEN LEVIED BY THE AO ON THE AMOUNT OF LONG TERM CAPITAL GAIN OF RS. 3 6,08,316/ - WHICH WAS OFFERED IN THE SO CALLED REVISED RETURN OF INCOME. AS NOTED BY THE AO AS WELL AS CIT(A), THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 3 1 .03.2010 AT RS. 1,54,315/ - , WHICH WAS NOT U/S 139(1) . THE SAID RETURN WAS SE LECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) , DATED 19.08.2010 , WHICH WAS NOT RESPONDED TO AND AGAIN NOTICE U/S 14 2 (1) WAS ISSUED ON 18.0 2 .20 1 1. THEREAFTER, ON 31 ST MARCH, 20 1 1 A REVISED RETURN WAS FILED SHOWING INCOME OF RS. 37,62,631/ - . THE SAI D REVISED RETURN WAS DEFINITELY NOT A RETURN FILED U/S 139(5), BECAUSE THE ORIGINAL RETURN WAS NOT FILED U/S 139(1). THE AO COMPLETED ORIGINAL ASSESSMENT U/S 143(3) ON THE BASIS OF ORIGINAL RETURN OF INCOME. IT IS ONLY WHEN ASSESSEE INFORMED THE AO ABOUT SHRI GURDEEPSINGH CHADHA ITA NO. 1802 /MUM/20 1 4 C O NO. 1 18 /MUM/201 5 4 T HE FACTUM OF SO CALLED REVISED RETURN, THE AO REVISED THE ASSESSMENT OF INCOME AT RS. 37,62,631/ - UNDER ORDER PASSED U/S 154 . THUS, THE INCOME WAS RECTIFIED AND THE FINAL ASSESSED INCOME STOOD AT RS. 37,62,631/ - I.E. ON THE BASIS OF SO CALLED REVISED RETUR N. THE SOLE REASON FOR LEVY OF PENALTY BY THE AO IS THAT THE ASSESSEE HAS FILED HIS REVISED RETURN ONLY AFTER THE ISSUANCE OF NOTICE U/S 143(2), HOWEVER N EITHER IN THE ASSESSMENT ORDER NOR IN THE PENALTY ORDER THE AO HAS REFERRED TO ANY INFORMATION OR MATE RIAL IN POSSESSION QUA THE LTCG PRIOR TO THE ASSESSEES FILING OF ALLEGED REVISED RETURN OR ANY SPECIFIC MATERIAL WAS CONFRONTED TO THE ASSESSEE BY WAY OF QUERY OR NOTICE. NOTHING IS BORNE OUT FROM THE RECORD THAT THE ASSESSEE CAME FORWARD TO REVISE THE RE TURN ONLY WHEN ANY ADVERSE MATERIAL OR EVIDENCES WERE CONFRONTED TO THE ASSESSEE. IT APPEARS THAT, THE ASSESSEE HAS DISCLOSED THE LTCG AND PAID TAXES THEREON SUO - MOTO OR VOLUNTARILY WITHOUT THERE BEING ANY ADVERSE MATERIAL OR QUERY OR ENQUIRY BY THE AO. IF THE FACTUM OF FILING OF REVISED RETURN VOLUNTARY BY THE ASSESSEE REFLECTING THE SAID LONG TERM CAPITAL GAINS IS NOT REBUTTED, THEN IT CANNOT BE HELD THAT THE ASSESSEE IS GUILTY OF CONCEALING THE INCOME . 6. THE ASSESSEES EXPLANATION THAT, HE WAS UNDER T HE BONA FIDE BELIEF THAT THE AMOUNT OF THE LONG TERM CAPITAL GAIN WHICH HAS BEEN INVESTED IN THE SHOP WA S EXEMPT AND LATER ON , WHEN HE CAME TO KNOW ABOUT THE LEGAL POSITION THAT THE EXEMPTION FR O M CAPITAL GAIN CAN ONLY BE GRANTED IF AMOUNT OF CAPITAL GAIN HAS BEEN INVESTED IN RESIDENTIAL PROPERTY AND NOT FOR THE PURCHASE OF SHOP , MAY NOT BE VERY RELEVANT, BECAUSE, ASSESSEE HAS OFFER ED THE LONG - TERM - CAPITAL GAIN WITHOUT THERE BEING ANY ADVERSE MATERIAL OR INFORMATION BEFORE THE AO , THAT IS, SUO - MOTTO OR VOLU NTARY AND SAME NOW HAS BEEN ACCEPTED IN THE FINALLY ASSESSED INCOME. FINALLY THERE REMAINS NO VARIATION BETWEEN THE INCOME OFFERED BY THE ASSESSEE AND FINALLY ASSESSED INCOME. H ENCE THE ACTION OF THE ASSESSEE FOR DECLARING LTCG BELATED WHICH STANDS ACCEPTE D BY THE AO IN THE ORDER PASSED U/S 154 CANNOT BE ADVERSELY VIEWED FOR THE PURPOSE OF LEVYING OF SHRI GURDEEPSINGH CHADHA ITA NO. 1802 /MUM/20 1 4 C O NO. 1 18 /MUM/201 5 5 PENALTY FOR CONCEALMENT OF INCOME U/S 271(1)(C). ON THESE FACTS, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDING RECORDED BY CIT(A). THUS, ORDER OF THE C IT(A) DELETING THE PENALTY IS UPHELD. 7. IN THE CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY ON THE GROUND OF VIOLATION OF PRINCIP LES OF NATURAL JUSTICE. 8. SINCE WE HAVE ALREADY AFFIRMED THE DELETION OF PENALTY, THEREFORE, GROUND RA ISED IN THE CROSS OBJECTION HAS BECOME INFRUCTUOUS. ACCORDINGLY, C.O. OF THE ASSESSEE STANDS DISMISSED. 9. IN THE RESULT, REVENUES APPEALS AS WELL AS ASSESSEES CO ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER , 2015. SD/ - SD/ - ( RAJESH KUMAR ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH NOVEMBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 27 , MUMBAI. 4 ) THE CIT 16 , MUMBAI. 5 ) , , / THE D.R. G BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS