Smt. R. Visalakshi, CHENNAI V. ITO, CHENNAI

CO 4/CHNY/2014

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9809 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: R VENKATARAMANITP
• Keywords: Opportunity of being heard; Revised return; Ignorance of law
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.2109/MDS./2013 & C.O.NO.04/MDS./2014 ( / ASSESSMENT YEAR :2010-2011) THE INCOME TAX OFFICER, BUSINESS WARD V(4), CHENNAI. VS. SMT.R.VISALAKSHI, NO.5/143,5 TH CROSS STREET, WORKERS ESTATE, NEELANKARAI, CHENNAI. PAN AAYPV 5102 G ( &' / APPELLANT ) ( #(&' / RESPONDENT/ CROSS OBJECTOR ) ASSESSEE BY : SHRI R.VENKATARAMAN ITP REVENUE BY : SHRI N.MADHAVAN, JCIT D.R. / DATE OF HEARING : 17.07.2014 /DATE OF PRONOUNCEMENT : 08.08.2014 ) / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL AND CROSS OBJECTIONS ARE FILED BY TH E REVENUE AND THE ASSESSEE RESPECTIVELY, AGAINST THE ORDER OF THE ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 2 COMMISSIONER OF INCOME TAX (APPEALS)-V, CHENNAI DAT ED 28.08.2013, IN ITA NO.73/12-13(A)-V FOR THE ASSESSM ENT YEAR 2010-11 WHEREIN THE LD. CIT (A) HAD DELETED THE PEN ALTY IMPOSED BY THE LD. ASSESSING OFFICER UNDER SECTION 271(1)(C) O F THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER, THE CRUXES OF THE ISSUE IS THAT REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A) FOR HAVING DELETED PENALTY OF ` 15,62,485/-. 3. THE ASSESSEE HAS RAISED SEVEN ELABORATE GROUNDS IN HER CROSS OBJECTIONS SUPPORTING THE ORDER OF THE LD. C IT(A) WHO HAD DIRECTED THE ASSESSING OFFICER TO DELETE THE PENAL TY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSES SEE IS AN INDIVIDUAL & SENIOR CITIZEN, FILED HER RETURN OF IN COME ON 21.04.2011 ADMITTING HER INCOME AS ` 2,15,450/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY & INCOME FROM OTHER SOURCES . INITIALLY THE ASSESSMENT ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 3 WAS COMPLETED U/S.143 (1) OF THE ACT ON 13.10.2011. SUBSEQUENTLY IT WAS NOTICED THAT THE ASSESSEE HAD ALSO JOINTLY D ERIVED INCOME ALONG WITH HER SON UNDER THE HEAD LONG TERM CAPITAL GAIN S ARISING OUT OF SALE OF IMMOVABLE PROPERTY FOR A CONSIDERATION OF ` 1,96,71,000/- RELEVANT TO THE ASSESSMENT YEAR. THEREFORE THE CA SE WAS TAKEN UP FOR SCRUTINY WHEREIN IT WAS OBSERVED THAT THE ASSE SSEE ALONG WITH HER SON HAD JOINTLY SOLD A PROPERTY AT MADURAI DURING T HE RELEVANT ASSESSMENT YEAR FOR THE SALE CONSIDERATION OF ` 1,96,71,000/- AGAINST WHICH THE ASSESSEE HAD NOT OFFERED HER SHARE OF CAP ITAL GAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. A.R. FILED REVISED STATEMENT OF INCOME OFFERING THE CAPITAL GAINS FOR THE ASSESSEES SHARE OF SALE PROCEEDS OF ` 98,35,500/-. IT WAS EXPLAINED BEFORE THE LD. ASSESSING OFFICER THAT THE ASSESSEE BEING OLD A ND IGNORANT WAS NOT GUIDED BY HER TAX COUNSEL WHO PREPARED HER RETU RN OF INCOME DUE TO WHICH THIS INADVERTENT ERROR HAD OCCURRED. THE LD. ASSESSING OFFICER FURTHER NOTICED THAT IN THE REVISED RETURN OF INCOME THE CAPITAL GAIN WAS COMPUTED WITHOUT CLAIMING THE BENEFIT OF I NDEXATION. HOWEVER, CERTAIN EXPENDITURE TOWARDS IMPROVEMENT WA S CLAIMED. THE LD. ASSESSING OFFICER AFTER VERIFYING THE RETUR N OF INCOME, ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 4 DISALLOWED THE EXPENDITURE AMOUNTING TO ` 3,70,955/- AND AFTER ALLOWING INDEXATION REWORKED THE CAPITAL GAIN AT ` 76,02,137/-. THUS THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ALONG WITH THE INTEREST INCOME OF ` 6,292/- WHICH WAS OMITTED IN THE RETURN OF INCOME. THE LD. ASSESSING OFFICER THEREAFTER INITIATED PENA LTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR CONCEALING INCOME UND ER THE HEAD CAPITAL GAINS. 5.1 AT THE TIME OF PENALTY PROCEEDINGS THE LD. A.R . HAD TENDERED THE FOLLOWING EXPLANATIONS FOR THE INADVERTENT MIST AKE COMMITTED BY THE ASSESSEE:- 5. MY CLIENT MRS. R.VISALAKSHI, JOINT OWNER OF THE MADURAI HOUSE, SOLD THE PROPERTY ALONG WITH HER SON DURING DECEMBER 200 9 AND GAVE HER SHARE OF SALE PROCEEDS TO HER SON FOR HIS FAMILY CO MMITMENTS AND EXPENDITURES. SHE BEING OLD AND INNOCENT DID NOT KN OW THAT SHE HAD TO PAY TAX FOR LONG TERM CAPITAL GAIN DUE TO SALE O F HER SHARE OF SALE PROCEEDS DURING THAT YEAR. ALSO, SHE WAS NOT GUIDE D PROPERLY BY HER PREVIOUS TAX COUNSELS AND HENCE SHE HAD FILED HER T AX RETURNS SHOWING ALL OTHER INCOME EXCEPT CAPITAL GAIN DUE TO HER IGNORANCE AND IMPROPER GUIDANCE AND NOT DUE TO WILLFUL OR INT ENTIONAL MOTIVE. ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 5 6. MEANTIME, BASED ON OUR ADVICE, SHE HAD REALIZED HER IGNORANCE AND DECIDED TO PAY THE BALANCE OF TAX AS PER THE REVISE D COMPUTATION OF TOTAL INCOME. DURING THAT TIME, HER HUSBAND HAD BEE N SICK AND HOSPITALIZED. SHE COULD NOT THINK ANYTHING EXCEPT TO TAKE CARE OF HER AGED HUSBAND AND DURING MARCH 2012, HER HUSBAND PAS SED AWAY. AS SHE WAS MENTALLY UPSET AND NEEDED CHANGE OF PLAC E, SHE HAD MOVED TO HER DAUGHTERS PLACE AT MUMBAI FOR A WHILE . SHE RETURNED BACK DURING MAY END AND PAID THE BALANCE TAX OF RS. 12,67,000/- AS PER REVISED COMPUTATION WITH THE HELP OF HER SON. IN HER REVISED STATEMENT, SHE HAS SHOWN ALL HER INCOME DURING THAT YEAR AND PAID THE TAX ALONG WITH INTEREST UP TO DATE. 7. THERE WAS AN ERROR IN COMPUTATION OF TOTAL INCO ME IN HER REVISED STATEMENT WHILE COMPUTING CAPITAL GAIN. HER SON HAD CHOSEN SCHEMA-ITR 2 OF A.Y.2010-11 FROM I.T. PORTAL FOR CO MPUTING CAPITAL GAIN AS WELL AS TOTAL INCOME OF HIS MOTHER FOR A.Y. 2010-11. IN THE PROCESS, HE HAD WRONGLY SELECTED THE OPTION UNDER P ROVISO OF SEC.112(1) IN CAPITAL GAIN COMPUTATION DUE TO LACK OF KNOWLEDGE IN THE SAID ACT, I.E. COMPUTATION OF COST OF ACQUISITI ON & COST OF IMPROVEMENT WITHOUT INDEXATION AND HENCE ARRIVED TH E BALANCE TAX PAYABLE INCLUDING INTEREST U/S. 234A, B & C OF RS.1 2,67,000/- AND SHE HAD PAID THE SAID TAX ON 30.05.2012. I WOULD L IKE TO STRESS A ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 6 POINT THAT THIS WAS PURELY A TECHNICAL MISTAKE WHIL E COMPUTING HER TOTAL INCOME THROUGH SCHEMA AND NOT INTENTIONAL O R WILLFUL. 8. MEANWHILE, WE HAVE INTIMATED HER THAT THE REVIS ED COMPUTATION WAS WRONG AND REWORKED THE ENTIRE STATEMENT OF INCOME B Y CHOOSING INDEXATION OPTION FOR CAPITAL GAIN CALCULATION. BA SED ON OR REVISED COMPUTATION OF HER TOTAL INCOME, SHE HAD FURTHER PA ID A BALANCE TAX OF RS.9,69,000/- ON 27.07.2012. AS SHE HAD ALREADY GIVEN ALL THE SALE PROCEEDS OF HOUSE SOLD AT MADURAI AND DUE TO EXCESS EXPENDITURE SPENT ON HER HUSBANDS HOSPITALIZATION AND SUBSEQUE NTLY FOR HIS LAST RITES AFTER HIS DEMISE, SHE HAD PAID TAX ON BOTH TH E OCCASIONS WITH THE HELP OF HER SON AND BY SELLING HER JEWELS. 9. TO SUM UP, DUE TO HER IGNORANCE OF LAW AND IMPR OPER GUIDANCE OF HER PREVIOUS TAX COUNSELS, THE ASSESSEE HAD INADVERTENT LY FILED HER TAX RETURNS WITHOUT SHOWING CAPITAL GAIN FOR A.Y.2010-1 1 AND SUBSEQUENTLY REALIZED HER IGNORANCE DUE TO OUR PROP ER GUIDANCE AND MANAGED TO PAY THE TAX, DESPITE SHE HAD GIVEN ALL T HE PROCEEDS TO HER SON FOR HIS FAMILY COMMITMENTS. HER INTENTION WAS NOT TO AVOID OR EVADE TAX AND ALSO AFTER PROPER ADVICE, SHE INTENDE D TO PAY TAX AND SOMEHOW MANAGED TO PAY TAX. ALSO, THE CO-OPERATION EXTENDED BY THE ASSESSEE /US, AS HER AUTHORIZED REPRESENTATIVE, DURING ALL THE HEARINGS CANNOT BE IGNORED AND THAT WAS THE EVIDE NCE FOR THE GENUINENESS OF THE ASSESSEE WITH RESPECT TO THIS CA SE. HENCE, I ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 7 REQUEST YOU TO KINDLY CONSIDER ALL THE ABOVE POINTS INCLUDING THE GENUINENESS OF THE ASSESSEE AND ALSO THE MERITS OF THE CASE AND DO THE NEEDFUL BY DROPPING THE PROCEEDINGS AGAINST THE ASSESSEE U/S. 271(1)(C) FOR A.Y.2010-11 AND ISSUE NIL ORDER AT TH E EARLIEST. 5.2. THE LD. ASSESSING OFFICER REJECTED THE EXPLAN ATION OFFERED BY THE LD. A.R. FOR THE FOLLOWING REASONS:- (I) THE ASSESSEE WAS REGULARLY FILING HER RETURN O F INCOME AND HER SON WAS ALSO ASSESSED TO TAX AT MUMBAI WHERE HE RESIDES. (II) SIMPLY BECAUSE THE ASSESSEE HAD OFFERED THE C ONCEALED INCOME AFTER DETECTION BY THE REVENUE BY FILING REV ISED RETURN OF INCOME, THE ASSESSEE CANNOT ESCAPE THE PROVISION S OF SECTION 271(1)(C) OF THE ACT. (III) THOUGH THE INFORMATION REGARDING THE CAPITAL GAIN WAS REVEALED BY THE ASSESSEE, IT WAS THE REVENUE WHO HA D DETECTED THE SAME. (IV) THE DECISIONS OF THE HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. KRISHNA AND CO. IN 120 ITR 1 44(MAD.), THE DECISION OF THE HONBLE KERALA HIGH COURT IN TH E CASE OF ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 8 P. C. JOSEPH & BROTHERS VS. CIT IN 240 ITR 818 (KE R.) AND THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. SOVA BAJORIA IN 232 ITR 202(CAL.) HAD CLEAR LY LAID DOWN THAT, FAILURE TO DISCLOSE THE CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME BY THE ASSESSEE, THOUGH IT WAS DIS CLOSED IN THE REVISED STATEMENT, WOULD ATTRACT THE PENAL PROV ISIONS OF SEC. 271(1)(C) OF THE ACT. 6.1. BEFORE THE LD. CIT (A) THE LD. A.R. REITERATE D THE SUBMISSIONS BEFORE THE LD. ASSESSING OFFICER AND FURTHER MADE T HE FOLLOWING SUBMISSIONS:- (I) THE NON-DISCLOSURE OF CAPITAL GAIN BY THE ASSE SSEE IN HER ORIGINAL RETURN OF INCOME WAS NEITHER INTENTIONAL N OR WILLFUL AND IT HAD OCCURRED DUE TO LACK OF PROPER GUIDANCE FROM TH E ASSESSEES TAX CONSULTANT AND HER IGNORANCE. (II) THE ASSESSEE HAD GIVEN HER SHARE OF SALE PROC EEDS TO HER SON TO SETTLE HIS FAMILY COMMITMENTS. SHE WAS FURTHER PRE-OCCUPIED AS SHE WAS ATTENDING TO HER HUSBAND WHO WAS SUFFERI NG FROM PROLONGED ILLNESS. SHORTLY AFTER THE SALE TRANSACT ION OF HER HOUSE ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 9 HER HUSBAND HAD PASSED AWAY DUE TO WHICH SHE WAS UN DER MENTAL AGONY AND WAS DISORIENTED. (III) WHEN THE LD. ASSESSING OFFICER HAD INFORMED HER OF HER TAX LIABILITY, SHE HAD IMMEDIATELY PAID THE TAXES BY SE LLING HER JEWELLERY. (IV) VARIOUS DECISIONS OF HIGHER JUDICIARY WERE ALS O CITED. (V) CHRONOLOGICALLY THE EVENTS THAT ARE TAKEN PLACE WERE ALSO EXPLAINED AS FOLLOWS:_ 5.1. ON VERIFYING THE GROUNDS OF APPEAL AND DETAIL ED WRITTEN SUBMISSION AS WELL AS THE PENALTY ORDER IT IS SEEN THAT THE AS SESSEE MRS.R.VISALAKSHI WAS A JOINT OWNER (50:50) OF MADUR AI PROPERTY WITH HER SON MR.R.SRIDHAR. SHE HAS BEEN REGULARLY FILING HE R INCOME TAX RETURNS SHOWING RENTAL INCOME, OTHER SOURCES @ ITP,BW-V,CHE NNAI. THEY SOLD THE MADURAI PROPERTY ON 01.12.2009 FOR A SALE CONSI DERATION OF RS.1,96,71,000/- AND THE ASSESSEES SHARE (50%) ON SALE PROCEEDS WAS RS.98,35,500/- THEY DEPOSITED THE ENTIRE SALE PROCEEDS IN IOB, KALAKSHETRA COLONY, IN A JOINT ACCOUNT OPENED FOR T HIS PURPOSE ONLY. ASSESSEE, BEING A MOTHR GAVE ALL HER SHARE OF SALE PROCEEDS TO HER SON FOR HIS FAMILY COMMITMENTS & EXPENDITURES. MEANTIM E ASSESSEES SON MR.R.SRIDHAR, PURCHASED A NEW HOUSE AT NEELANKARAI FOR AROUND RS.80 LAKHS ON 22.01.2010 WITH THE HELP OF HIS SHARE OF S ALE PROCEEDS ON ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 10 22.01.2010. THE SON BOUGHT A PLOT AT NEELANKARAI F OR AROUND RS.70 LAKHS ON 11.12.2009, PAID SOME OF HIS DEBTS, PURCHA SED SOME HOUSEHOLD ARTICLES AND KEPT THE BALANCE FOR HIS FUT URE FAMILY EXPENDITURE. ASSESSEE WAS UNDER THE IMPRESSION THAT THERE WOULD NOT BE ANY TAXABLE INCOME IN CONNECTION WITH SALE OF HO USE PROPERTY SINCE SHE HAD GIVEN ALL HER SALE PROCEEDS RECEIVED THROUG H THE SALE TO HER SON. DUE TO HER IGNORANCE AND ALSO WRONG FUIDANCE OF HER PREVIOUS TAX COUNSEL, SHE HAD FILED HER TAX RETURNS FOR A.Y. 201 0-11 (F.Y.2009-10) ON 24.01.2010 ADMITTING A TOTAL INCOME OF RS.2,15,450/ - WITHOUT SHOWING THE CAPITAL GAINS ARISING DUE TO SALE OF HOUSE PROP ERTY AT MADURAI. MEANTIME, ASSESSEE AND HER SON APPROACHED US FOR PR OFESSIONAL GUIDANCE FOR THE SUBSEQUENT YEAR TAX FILING. 5.2. AFTER THOROUGH VERIFICATION OF PREVIOUS YEAR RECORDS, ON PROPER ADVISED THE ASSESSEE REGARDING CAPITAL GAINS DUE TO SALE OF HOUSE PAID THE TAX AND FILED REVISED STATEMENT OF INCOME EVEN THOUGH A REVISED RETURN COULD NOT BE FILED IN TIME. THE APPELLANT R EALIZED HER IGNORANCE AND PAID THE TAX AS PER REVISED STATEMENT OF INCOME FOR ASSESSMENT YEAR 2010-11. THE REVISED RETURN COULD NOT BE FILE D AT THAT TIME SINCE THE ORIGINAL RETURN WAS FILED BELATEDLY. ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 11 5.3. DURING THAT TIME, HER HUSBAND HAD BEEN SICK A ND HOSPITALIZED. SHE COULD NOT THINK ANYTHING ELSE EXCEPT TO TAKE CA RE OF HER AGED HUSBAND WHO HAD BEEN IN PROLONGED ILLNESS. DURING M ARCH 2012 HER HUSBAND PASSED AWAY. AS SHE WAS MENTALLY UPSET AND NEEDED CHANGE OF PLACE, SHE HAD MOVED TO HER DAUGHTERS PLACE IN MUMBAI FOR A WHILE. ASSESSEE CAME BACK FROM MUMBAI IN RESPONSE TO THE N OTICES ISSUED UNDER SECTION 142(1) BY THE AO AND FULFILL THE TAX COMMITMENTS AROSE ON ACCOUNT OF CAPITAL GAINS AND PAID THE TAX AS PER RE VISED STATEMENT OF INCOME TO THE TUNE OF RS.12,67,000/- ON 30.05.2012. THE APPELLANT HAS SUBMITTED DURING THE SAME TIME REVISED STATEMENT, C OMPUTATION OF CAPITAL GAINS, TAX CHALLAN COPY ETC., TO THE AO. T HE AO HAD ADDED SOME OF THE COST OF IMPROVEMENT WHICH THE ASSESSEE COULD NOT PRODUCE THE DOCUMENTS /PARTICULARS IN TIME. SUBSEQUENTLY, T HE APPELLANT REVISED HER COMPUTATION AND REWORKED THE ENTIRE STATEMENT O F INCOME HAVING INCLUDED THE AOS ADDITIONS ACCEPTING THE COST OF I MPROVEMENT. 5.4. BASED ON THE ABOVE REWORKING, ASSESSEE HAD PA ID A FURTHER TAX OF RS.9,69,000/- ON 27.07.2012. AS THE SELF-ASSESS MENT TAX WAS PAID IN TWO DIFFERENT DATES, IT WAS DIFFICULT TO COMPUTE IN TEREST MANUALLY AND AT THE SAME TIME, THE INTEREST SHOWN IN SCHEMA ITR 2 FOR A.Y. 10-11 WAS VERY EXCESSIVE. BASED ON THE APPELLANTS REQUE ST, AO HAD RE- CALCULATED THE INTEREST COMPONENT AND RAISED A FURT HER DEMAND OF TAX OF ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 12 RS.2,12,388/- THROUGH HER 143(3) ORDER ALONG WITH P ENALTY NOTICE UNDER SECTION 271(1)(C). THE ASSESSEE HAD PAID THE SAID T AX ON 10.09.2012 AND SUBMITTED THE SAME BEFORE AO ALONG WITH REPLY T O PENALTY NOTICE MENTIONING ALL THE STATEMENT OF FACTS BUT AO DID NO T GIVE OPPORTUNITY OF BEING HEARD AND ISSUED 271 (1)(C) ORDER LEVYING A P ENALTY OF RS.15,62,485/- ON 23.01.2013. THE APPELLANT FURTHER SUBMITTED IN ALL THE THREE O CCASIONS, ASSESSEE HAD FOUND DIFFICULTIES IN PAYING TAXES SINCE SHE HAD GI VEN ALL HER SALE PROCEEDS TO HER SON FOR HIS FAMILY COMMITMENTS, SPE NT HUGE AMOUNT ON HER HUSBAND HOSPITALIZATION AND ALSO FOR OBSEQUIES OF HER HUSBAND AFTER HIS DEMISE TILL HIS FIRST DEATH ANNIVERSARY. HOWEV ER, SHE HAD MANAGED TO PAY SUCH TAXES WITH THE HELP OF HIS SON AND SELL ING SOME OF HER JEWELS. 6.2. AFTER EXAMINING THE SUBMISSIONS OF THE LD. A.R. AND THE FACTS OF THE CASE THE LD. CIT (A), DELETED THE PENALTY LE VIED BY THE LD. ASSESSING OFFICER. 7. BEFORE US THE LD. A.R. SUBMITTED THAT THE ASSESS EE HAD GIVEN AWAY THEIR ENTIRE SALE PROCEEDS OF THE PROPERTY TO HER SON WHO WAS ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 13 RESIDING AT MUMBAI. SINCE HER SON WAS ALSO AN ASSES SEE FILING HIS RETURN OF INCOME IN MUMBAI, SHE WAS UNDER THE BONA FIDE BELIEF THAT ALL HER LEGAL LIABILITIES WITH RESPECT TO THE SALE OF PROPERTY WOULD HAVE BEEN TAKEN CARE OFF BY HER SON. FURTHER, THE FAMIL Y WAS PASSING THROUGH A BAD PHASE SUCH AS SICKNESS OF HER HUSBAND AND HIS DEMISE WHICH HAD LEFT HER DISORIENTED AND MENTALLY IMBALANCED. THE LD. A.R. FURTHER ARGUED THAT THE ASSESSEE HAD DISCL OSED HER ENTIRE STATE OF AFFAIRS BEFORE THE REVENUE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS WITHOUT HIDING ANY FACTS AND THUS SHE H ERSELF REVEALED THE SALE TRANSACTIONS OF HER JOINT MADURAI PROPERTY WITH HER SON. THEREFORE IT WAS NOT THE REVENUE WHO DETECTED THE I NADVERTENT MISTAKE COMMITTED BY THE ASSESSEE. THE LD. A.R. AR GUED BY STATING THAT IN SUCH CIRCUMSTANCES IMPOSITION OF PENALTY WI LL BE TOO HARSH ON THE ASSESSEE, MORE SO CONSIDERING THE AGE OF THE AS SESSEE. 8. LD. D.R VEHEMENTLY ARGUED IN SUPPORT OF THE ORD ER OF THE LD. ASSESSING OFFICER AND PLEADED FOR CONFIRMING THE OR DER OF THE REVENUE. ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 14 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. ON THE FACTS AND CIR CUMSTANCES OF THE CASE, IT IS EVIDENT FROM THE OBSERVATIONS OF THE LD . ASSESSING OFFICER THAT THE ASSESSEE HERSELF HAD DISCLOSED ALL PARTICU LARS OF INCOME WITH RESPECT TO CAPITAL GAINS BEFORE THE REVENUE VOLUNTA RILY. ON REALIZING THAT IN THE COMPUTATION STATEMENT THE CAPITAL GAINS WAS LEFT OUT, THE ASSESSEE HAD FILED HER REVISED RETURN OF INCOME AND PROMPTLY PAID THE TAX. THEREFORE IT CANNOT BE INFERRED THAT THE R EVENUE HAD DETECTED THE OMISSION MADE BY THE ASSESSEE IN HER R ETURN OF INCOME. THE EXPLANATION OFFERED BY THE ASSESSEE ALSO APPEAR S TO BE GENUINE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE BECAUSE THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE CAPIT AL GAINS ARISED OUT OF SALE OF JOINT PROPERTY WOULD HAVE BEEN DEALT WIT H BY HER SON BECAUSE SHE HAD HANDED OVER THE ENTIRE SALE PROCEED S TO HER SON. THE ASSESSEE WAS ALSO PASSING THROUGH A DEPRESSED S TATE OF MIND DUE TO THE ILLNESS AND DEMISE OF HER HUSBAND. SHE HERSELF WAS A SENIOR CITIZEN AND WAS IGNORANT AND SOLELY DEPENDED ON HER TAX CONSULTANT FOR COMPUTATION OF HER INCOME. IN SUCH CIRCUMSTANCES, THE CASE LAWS RELIED BY THE LD. CIT (A) WOULD BE AP PLICABLE TO THE ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 15 FACTS OF THE PRESENT CASE BEFORE US. MOREOVER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF K.C.BUILDERS V S. ACIT IN [2004] 265 ITR 562(SC) HAD RELIED IN THE DECISION O F G.L.DIDWANIA VS.ITO [1997] 224 ITR 687(SC) WHEREIN IT WAS HELD A S FOLLOWS WHILE SETTING ASIDE THE CRIMINAL PROCEEDINGS:- MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIP T DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCE FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSI ON WAS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. IN O RDER THAT A PENALTY U/S. 271(1)(C) MAY BE IMPOSED, IT HAS TO BE PROVED THAT THE ASSESSEE HAS CONSCIOUSLY MADE THE CONCEALMENT OR FURNISHED INACC URATE PARTICULARS OF HIS INCOME . CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CAS E BEFORE US AND FOR THE REASONS CITED HEREINABOVE, WE DO NOT FIND I T NECESSITY TO INTERFERE IN THE ORDER OF THE LD. CIT (A). THEREFOR E WE HEREBY UPHOLD THE DECISION OF THE LD. CIT (A) IN DELETING THE P ENALTY LEVIED BY THE LD. ASSESSING OFFICER INVOKING THE PROVISIONS OF SE CTION 271(1)( C) OF THE ACT AND ACCORDINGLY, CONFIRMED THE ORDER OF THE LD. CIT (A). ITA NO. 2109/MDS/13 CO NO.04/MDS./14 SMT.R.VISALAKSHI 16 10. SINCE WE HAVE DECIDED THE APPEAL OF THE REVENU E VOID OF MERITS AND HAVE UPHELD THE ORDER OF THE LD. CIT (A) AND THE C.O OF THE ASSESSEE BEING IN SUPPORT OF THE ORDER OF THE L D. CIT (A), THE C.O. OF THE ASSESSEE STANDS ALLOWED. 11. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 8 TH AUGUST, 2014 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD ) (A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH AUGUST, 2014. K S SUNDARAM. ! ' #$ % $ /COPY TO: 1. &' /APPELLANT 2. '(&' /RESPONDENT 3. ) () /CIT(A) 4. ) /CIT 5. $,- ' . /DR 6. -/ 0 /GF