Smt. Rekha Goel, Ghaziabad V. ITO, Ghaziabad

ITA 1/DEL/2012

• Counselvise Citation: 120114 RSA 2012
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 02-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SSMT MAMTA KOCHAR
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Wrong claim
• Section: 54F; 54

Judgement Text

Z IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 01/DEL/2012 ASSESSMENT YEAR : 2005-06 SMT. REKHA GOEL, ITO, 4, BEIND N-BLOCK, WARD-2 (2), PATEL MARG, N. DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.ACUPG ACUPG ACUPG ACUPG- -- -1856 1856 1856 1856- -- -E EE E APPELLANT BY : SHRI ANIL SHARMA, ADVOCATE. RESPONDENT BY : SSMT. MAMTA KOCHAR, SR. DR. ORDER PER KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A), GHAZIABAD DATED 31.10.2011 FOR ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEALS ARE AS UNDER:- 1. THAT THE LD CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S IN DECIDING THE APPEAL EX PARTE IN VIOLATION OF THE PRINCIPLES O F NATURAL JUSTICE AND WITHOUT GRANTING TO THE ASSESSEE A FAIR, PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD, FAILING TO AP PRECIATE THAT THERE WAS REASONABLE AND SUFFICIENT CAUSE FOR ALLEGED N ON COMPLIANCE ON THE DATES FIXED FOR HEARING. 2. WITHOUT PREJUDICE TO THE ABOVE, THE IMPUGNED ORDER UPHOLDING THE LEVY OF PENALTY IMPOSED U/S 271(1)( C) OF THE IT ACT ITA NO01/DEL/2012 2 AMOUNTING TO `.74,010/-IS VOID AB INITIO AND UNSUSTAI NABLE AS THE LD CIT(A) HAS MIS-APPRECIATED THE FACTS OF THE CASE. T HE LD CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE NEVER CONCEALED ANY PARTICULARS OF INCOME NOT FURNISHED INA CCURATE PARTICULARS OF SUCH INCOME, SO AS TO ATTRACT THE PENAL PROVISIONS OF SECTION 271(1)( C) OF THE ACT. 3. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE THAT MER E CLAIM UNDER A WRONG SECTION WOULD NOT BE A SUFFICIENT GROUND TO H ELD THE ASSESSEE WITH THE CHARGE OF CONCEALMENT OF INCOME FOR T HE PURPOSE OF LEVYING PENALTY U/S 271(1)( C) OF THE ACT. THE FINDING THAT THE ASSESSEE FAILED TO CONTROVERT THE FINDINGS RECO RDED BY THE ASSESSING OFFICER IN THE PENALTY ORDER, IS WHOLLY IN CORRECT IN AS MUCH AS THE APPEAL HAS BEEN DISPOSED OFF EX PARTE WIT HOUT GRANTING TO THE ASSESSEE A FAIR AND PROPER OPPORTUNITY. IT IS THEREFORE PRAYED THAT THE ORDER OF LD CIT(A) B E QUASHED AND THE PENALTY AS IMPOSED BY THE ASSESSING OFFICER AND UPHE LD BY THE CIT(A) BE CANCELLED. IN ANY CASE, THE APPEAL MAY KINDLY BE RESTORED TO THE CIT(A) FOR DISPOSAL AFRESH AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. 2. BRIEF FACTS OF THE CASE IS THAT SMT. REKHA GOEL SOLD A PLOT OF LAND AT GHAZIABAD FOR `.18,50,000/- AND EARNED A LONG TE RM CAPITAL GAIN OF `.13,24,242/- AFTER GIVING EFFECT TO THE INDEXED CO ST. OUT OF LONG TERM CAPITAL GAIN THUS EARNED, SHE INVESTED `.13,02,100/- I N THE PURCHASE OF A HOUSE AT NOIDA. HOWEVER, DURING ASSESSMENT PROCEEDINGS IT CAME TO THE NOTICE THAT CAPITAL GAIN HAS ARISEN FROM TRANSFER OF A LONG TERM CAPITAL ASSET WHICH IS NOT A RESIDENTIAL HOUSE AND AS SUC H EXEMPTION BY MAKING INVESTMENT IN PURCHASE OF A HOUSE CAN ONLY B E CLAIMED UNDER SECTION 54F OF THE INCOME TAX ACT, 1961. ITA NO01/DEL/2012 3 3. AS PER PROVISIONS OF SECTION 54F, THE ASSESSEE WAS REQUIR ED TO UTILIZE THE NET CONSIDERATION FOR PURCHASE OR CONSTRUC TION OF A RESIDENTIAL HOUSE WITHIN THE PERIOD SPECIFIED IN THE SE CTION. 4. THE ASSESSEE HAD INSTEAD INVESTED ONLY CAPITAL GAIN FO R THE PURCHASE OF A HOUSE. DURING THE ASSESSMENT PROCEEDINGS, W HEN IT WAS BROUGHT TO HER NOTICE. SHE RELISE HER MISTAKE AND OFF ERED THE DIFFERENCE FOR TAX. THE ASSESSING OFFICER INITIATED THE PENALTY PR OCEEDINGS AND ISSUED NOTICE U/S 271(1)( C) READ WITH SECTION 274, INV ITING HER EXPLANATION AS TO WHY PENALTY BE NOT IMPOSED. SHE CO NTENDED THAT NOTHING WAS CONCEALED AND ALL PARTICULARS OF SALE & PU RCHASE OF PLOT AND HOUSE WERE SUBMITTED ALONG WITH THE RETURN OF INC OME. THE ASSESSEE THROUGH HER COUNSEL FURTHER PLEADED THAT IF SHE HAD KNOWN THAT THE ENTIRE SALE CONSIDERATION WAS TO BE DEPOSITED, SHE WOULD HAVE INVESTED THE DIFFERENCE IN CAPITAL GAIN BONDS INSTEAD OF GIVING LOANS TO FAMILY MEMBERS. ON THESE BASIS, SHE CLAIMED THAT SHE NEV ER HAD THE INTENTION TO INFRINGE THE LAW SO HER IGNORANCE OF LA W SHOULD NOT BE CONSIDERED AS DELIBERATE DISOBEYANCE OF LAW. 5. SHE ALSO CITED THE CASE OF MOTILAL PADAMPUR SUGAR MILLS CO. LTD. V. STATE OF U.P. (1979) 118 ITR 326 (SC) IN WHICH H ON'BLE SUPREME COURT HAS OBSERVED AS UNDER;- MOREOVER, IT IS TO BE REMEMBERED THAT THERE IS NO PR ESUMPTION THAT EVERY PERSON KNOWS THE LAW, IT IS OFTEN SAID THAT EVERY PERSON IS PRESUMED TO KNOW THE LAW, BUT IT IS NOT A C ORRECT STATEMENT, THERE IS NO SUCH MAXIM KNOW TO THE LAW. BESIDES SHE ALSO CITED THE CASE OF KAUSHAL DEWAN VS ITO ( 1983) 3 ITD 432 WHEREIN ITAT DELHI BENCH HAS ALSO OBSERVED THAT IN COME TAX ACT IS ITA NO01/DEL/2012 4 HIGHLY COMPLICATED AND THERE WOULD HARDLY BE A PERSO N IN THE COUNTRY WHO WOULD BE KNOWING ALL THE PROVISIONS OF THE ACT. T HE ASSESSEE CITED FEW MORE CASES WHICH WERE IN HER FAVOUR BUT THE ASSESSIN G OFFICER DID NOT FIND MERIT IN HER SUBMISSIONS AND IMPOSED THE PENAL TY OF `.74,010/- U/S 271(1)( C) OF THE ACT. LD ASSESSING OFFICER IN SUPPOR T OF HIS CONCLUSION REFERRED VARIOUS JUDICIAL PRONOUNCEMENTS SUC H AS CIT V. MUSADILAL RAM BHAROSE (1987) 165 ITR 14 OF SUPREME CO URT AND CASE OF KP MADHSUDHAN CIT 25 ITR 99 (SC. BOTH THESE CASES WE RE IN FAVOUR OF THE REVENUE. 6. AGGRIEVED BY THIS, ASSESSEE FILED APPEAL BEFORE LD CI T(A). LD CIT(A) UPHELD THE DECISION OF ASSESSING OFFICER AND DISM ISSED THE APPEAL OF ASSESSEE EX PARTE AFTER GIVING FEW NOTICES AND CONSEQUENTLY ASSESSEE HAS APPROACHED THE TRIBUNAL. 7. THE LD AR STRESSED UPON THAT CLAIM WAS MADE WRONGLY U/S 54 INSTEAD OF SECTION 54F AND NO FACTS WERE CONCEALED. NO INACCURATE PARTICULARS WERE FURNISHED AND RATHER DOCUMENTS OF PUR CHASE AND SALE WERE FILED ALONG WITH RETURN OF INCOME AND AS PER LA W, THE ASSESSING OFFICER HAS TO GIVE RIGHTFUL CLAIMS OF ASSESSEE AND REJEC T WRONGFUL CLAIMS. IF DURING THIS EXERCISE SOME CLAIM IS REJECTED T HEN THAT CANNOT BE SAID TO BE CONCEALMENT OF INCOME. HE PUT RELIANCE ON ITAT MUMBAI BENCH C ORDER IN THE CASE OF ITO, WQARD-9(2)(4) V . PARIKH INVESTMENT &DEVELOPMENTS (P) LTD. 43 SOT 537 (2010)WHEREIN IT W AS HELD THAT MERE WRONGFUL FILING OF CLAIM CANNOT BE SAID TO BE C ONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF IN COME. 8. HOWEVER, LD DR RELIED UPON THE ORDER OF ASSESSING OF FICER AND CIT(A). ITA NO01/DEL/2012 5 9. WE HAVE HEARD THE SUBMISSIONS OF RIVAL PARTIES AND H AVE GONE THROUGH THE FACTS OF THE CASE. WE ARE OF THE OPINION THAT THE ASSESSEE HAS NOT CONCEALED PARTICULARS OF INCOME NOR HAS FURNIS HED INACCURATE PARTICULARS OF HER INCOME. MERELY FILING OF A WRONG CLAIM CANNOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THIS VIEW IS ALSO SUPPORTED BY HON'BLE AP EX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. WHEREIN APEX COU RT HAS HELD AS UNDER:- IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROV ISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. IN CIT V. ATUL MOHAN BINDAL (2009) 9 SC C 589, WHERE THIS COURT WAS CONSIDERING THE SAME PROVISIONS, THE COUR T OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED TH AT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR F URNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THE ABOVE, THE PENALTY IS DELETED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23RD DAY OF MARCH, 2012. SD/- SD/- (RAJPAL YADAV) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 23.3.2012. HMS ITA NO01/DEL/2012 6 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO01/DEL/2012 7 POINT TO BE DISCUSSED WITH THE MINISTRY FOR FUTURE REF ERENCE FOR WRITING A LETTER TO THE MINISTRY. 1.