Smt. Rameet Kaur, Chandigarh V. ITO, Chandigarh

ITA 1016/CHANDI/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8415 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 1016/CHD/2014 ASSESSMENT YEAR: 2009-10 SMT. RAMEET KAUR, VS. THE ITO, WARD 4(2), 3068, SECTOR 28-D, CHANDIGARH CHANDIGARH PAN NO. ABHPK7151Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TEJ MOHAN SINGH RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 05.02.2016 DATE OF PRONOUNCEMENT : 29.02.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) CHANDIGARH IN CONFIRMING THE PENALTY OF RS. 1,25,11 0/- IMPOSED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR T HE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL AND SUBMITTED HER RETURN ON INCOME ON 31.7.2009 DEC LARING TOTAL INCOME AT RS. 7,47,060/-. THE RETURN WAS PROCESSED U/S 143(1) ON 12.7.2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND INCOME WAS A SSESSED U/S 143(3) OF THE ACT ON 19.12.2011 AT RS. 10,76,930/- AS AGAINST THE RETURNED INCOME OF RS. 7,47,060/- BY MAKING THE FOLLOWING ADDITIONS:- 2 I) ADDITION ON ACCOUNT OF NON-DISCLOSURE OF INTEREST F ROM BANK RS. 13,867/- II) ADDITION ON ACCOUNT OF NON DISCLOSURE OF SHORT TERM CAPITAL GAIN RS. 3,16,000/- THE ASSESSING OFFICER INITIATED THE PENALTY PROCEED INGS U/S 271(1)(C) OF THE ACT FOR RECONCILING THE PARTICULARS OF INCOME. THE ASSE SSING OFFICER ISSUED A SHOW CAUSE NOTICE ON 6.6.2011 TO THE ASSESSEE. IN RESPON SE TO THE SAID NOTICE, THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS:- 'IN THIS REGARD IT IS STATED THAT PENALTY PROCEEDIN GS HAVE BEEN INITIATED FOR NOT REFLECTING INTEREST ON SAVIN G BANK ACCOUNT OF RS. 13,867/- AND SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY OF RS. 3,16,000/-. INTEREST FROM BANK WA S OMITTED DUE TO OVERSIGHT. THE ASSESSEE AGREED TO ADDITIO N OF BANK INTEREST WHICH IS NOT REFLECTED IN THE RETURN. DURING THE YEAR THE ASSESSEE SOLD PART SHARE IN THE HOUSE NO. 3379, SECTOR 19-D, CHANDIGARH. THE APPELLANT WAS NO T AWARE OF THE FINANCIAL IMPLICATION OF SALE AS THE BALANCE SHARE IN PROPERTY WAS SOLD TWO YEARS LATER. THE APPELLANT LO ST HER HUSBAND SOME YEARS BACK AND WAS MENTALLY AND PHYSIC ALLY NOT MAINTAINING GOOD HEALTH. HER FINANCIAL AFFAIRS WERE BEING LOOKED AFTER BY HER UNCLE IN DELHI WHO BY MISTAKE F ORGOT TO, MENTION THE STCG ON SALE OF PROPERTY AT THE TIME OF FILING OF RETURN. THERE HAS BEEN NO INTENTIONAL & WILLFUL DEFAULT IN FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE REASONS WE RE BEYOND OF THE CONTROL OF THE APPELLANT AS HER FINANCIAL AF FAIRS WERE LOOKED AFTER BY HER UNCLE. THE APPELLANT HAS DEPOSI TED THE TAX ALONG WITH INTEREST TO PROVE HER BONAFIDE. REFERENCE IS INVITED TO THE FOLLOWING CASE LAWS:- CIT VS. HARDAYAL SINGH (HUF) [2009] 178 TAXMAN 3 (PUNJ. & HAR.) ADDITIONAL CIT VS PREM CHAND GARG 123 TTJ 433 (DELHI) 3 IT WILL NOT BE OUT OF PLACE TO MENTION THAT THE APP ELLANT HAS THEIR MINOR CHILDREN AND IS SUFFERING FROM A PARALY TIC ATTACK SINCE THE LAST ONE YEAR AND IS BED RIDDEN. IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCES AND ALSO KEEPING IN MIND THE PHYSICALLY AND MENTAL STATE OF THE APPELLANT, IT IS PRAYED THAT THE PENALTY PROCEEDING S MAY KINDLY BE DROPPED. 3. THE ASSESSING OFFICER VIDE HIS LETTER DATED 21.1 1.2011 POINTED OUT TO THE ASSESSEE, THE BANKS WHEREIN SHE WAS HAVING BANK AC COUNTS AND ALSO THE INTEREST PAID TO HER BY THOSE BANKS WHICH WAS NOT SHOWN IN H ER RETURN OF INCOME. THE DETAILS OF INTEREST RECEIVED BY THE ASSESSEE FROM T HE BANKS ARE AS UNDER:- S.NO. NAME OF BANK ACCOUNT NO. AMT OF INTEREST ACCRUED 1 CITI BANK 5-100564-183 RS. 1261/- 2 PUNJAB & SINDH BANK, CHD SB-21169 RS. 10211/- 3 PUNJAB & SINDH BANK, CHD ALPM NO.1(CAPITAL GAIN ACCOUNT) RS. 492/- 4 HDFC BANK LTD, IND. AREA, PH-1, CHD 01071000131938 RS. 1666/- 5 HDFC BANK LTD. INDL. AREA, PH-I, CHD 09640100116 RS. 267/- 5 ICICI BANK LTD. CHD RS. 13,867/- THE ASSESSING OFFICER OBSERVED IN THE PENALTY ORDER THAT ASSESSEE VIDE HER LETTER / REPLY DATED 3.12.2011 ADMITTED THE ABOVE INCOME A S UNDISCLOSED INTEREST INCOME AND STATED THAT THE SAME BE ADDED TO THE INC OME RETURNED BY HER. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEES SUBMISSIONS FOR ADDITION OF 4 UNDISCLOSED INTEREST INCOME WAS NOT VOLUNTARY AND I N VIEW OF THE BANK STATEMENT, SHE HAD NO ALTERNATIVE BUT TO ACCEPT THE ADDITION OF UNDISCLOSED INTEREST INCOME TO THE RETURNED INCOME. THUS, THE A DDITION OF RS. 13,867/- WAS MADE TO THE RETURNED INCOME OF THE ASSESSEE AND CO NSEQUENTLY PROCEEDINGS U/S 271(1)(C) WERE INITIATED. THE ASSESSING OFFICER FUR THER NOTED THAT THE ASSESSEE WAS SPECIFICALLY ASKED VIDE QUESTIONNAIRE DATED 30. 5.2011 TO FILE DETAILS OF IMMOVABLE AND MOVABLE PROPERTIES SOLD / PURCHASED B Y HER OR BY THE DEPENDENT MEMBERS OF HER FAMILY DURING THE PERIOD 1.4.2008 TO 31.3.2009 RELATING TO ASSESSMENT YEAR 2009-10. ACCORDING TO ASSESSING OF FICER, THE ASSESSEE FURNISHED EVASIVE REPLY AND STATED ONLY ABOUT PURC HASE OF PROPERTY. NO REPLY WAS FILED WITH REGARD TO SALE OF IMMOVABLE PROPERTY . THE ASSESSING OFFICER VIDE HIS LETTER DATED 21.11.2011 POINTED OUT TO THE ASSE SSEE ABOUT HER ACCOUNTS IN VARIOUS BANKS FROM WHERE INTEREST WAS BEING RECEIVE D BY HER AND ASKED THE ASSESSEE TO EXPLAIN THE REASONS FOR NON-DISCLOSURE OF THIS BANK INTEREST AND ALSO DEBIT AND CREDIT ENTRIES IN THE BANK ACCOUNTS. THE ASSESSING OFFICER HAS SPECIFICALLY POINTED OUT THAT IN THE BANK ACCOUNT O F ASSESSEE WITH PUNJAB & SIND BANK (ACCOUNT NO. ALPM NO.1) WHEREIN CREDIT ENTRY D ATED 24.2.2009 FOR RS. 18 LAKHS WAS SHOWN WHICH WAS ON ACCOUNT OF SALE PRO CEEDS OF 20% SHARE OF SECTOR 19 HOUSE PROPERTY, CHANDIGARH. THE ASSESSEE DID NOT DECLARE THE CAPITAL GAIN FROM THE SALE OF SAID PROPERTY IN HER RETURN O F INCOME. HOWEVER, THE ASSESSEE VIDE LETTER DATED 3.12.2011 DISCLOSED THAT SHE HAS EARNED SHORT TERM CAPITAL GAIN OF RS. 3,16,000/- ON ACCOUNT OF SALE O F PART OF HOUSE PROPERTY OF SECTOR 19, CHANDIGARH OF RS. 90 LAKHS AND THAT RS . 18 LAKHS WAS HER 20% SHARE FROM IT. ACCORDING TO ASSESSING OFFICER, THE DECL ARATION MADE BY THE ASSESSEE ON ACCOUNT OF SHORT TERM CAPITAL GAIN FOR RS. 3,16, 000/- FROM THE SALE OF HOUSE PROPERTY FOR RS. 18 LAKHS I.E. 20% SHARE OF TOTAL CONSIDERATION OF RS. 90 LAKHS WAS NOT VOLUNTARY BUT WAS THE RESULT OF THE EXPLANA TION SOUGHT OF INTEREST INCOME AND DEBIT-CREDIT ENTRIES IN THE BANK ACCOUNT S AND PARTICULARS OF ACCOUNT NO.1 ALPM NO.1 PUNJAB & SIND BANK. IN THIS REGA RD, THE ASSESSEE SUBMITTED 5 THAT SHE WAS NOT AWARE OF THE IMPLICATION OF THE RU LE AS THE BALANCE SHARE IN THE PROPERTY WAS SOLD TWO YEARS AFTER AND THAT THE FINA NCIAL AFFAIRS WAS LOOKED AFTER HER UNCLE IN DELHI WHO BY MISTAKE FORGOT TO MENTION SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY AT THE TIME OF FILING OF RETURN. T HE ASSESSING OFFICER CONCLUDED THAT THE PLEA OF THE ASSESSEE THAT SHE WAS IGNORANT OF LAW IS NO EXCUSE. IT WAS DUTY OF THE ASSESSEE TO SEE BEFORE FINING THE RETUR N WHETHER INCOME EARNED / ACCRUED HAD DULY BEEN RETURNED IN THE RETURN OF INC OME. CONSEQUENTLY, THE ASSESSING OFFICER LEVIED THE PENALTY OF RS. 1,25,11 0/- ON ACCOUNT OF CONCEALING THE PARTICULARS OF INCOME U/S 271(1)(C) OF THE ACT . 4. ON APPEAL , THE CIT(A) CONFIRMED THE PENALTY OBS ERVING, AS UNDER:_ 5. I HAVE CONSIDERED THE SUBMISSION OF T HE LD. COUNSEL. THE CONTENTION OF THE LD. COUNSEL THAT T HE APPELLANT HAD ADMITTED HER FAULT OF NON DISCLOSURE OF SHORT T ERM CAPITAL GAIN ON RECEIPT OF QUESTIONNAIRE DATED 30.05.2011 IS NOT CORRECT, SINCE SHE HAD FILED THE REPLY TO THIS QUESTIONNAIRE ONLY ON 03.11.2011 AND IN THIS REPLY, SHE HAD MENTIONED AS UNDER: 'REPLY NO. 11:- : 'NOT APPLICABLE AS NO IMMOVABLE / MOVABLE PROPERTIES ARE PURCHASED BY THE ASSESSEE OR HER DEPENDENT FAMILY MEMBERS. 5.1 THEREFORE, SHE HAD AVOIDED THE QUERY BY ONLY SAYING THAT NO PURCHASE OF PROPERTY WAS MADE AND DETAILS OF SALE WERE NOT PROVIDED. IT WAS ONLY AFTER THE ASSESSIN G OFFICER PROBED FURTHER AND SENT A DETAILED LETTER DATED 21. 11.2011, ASKING THE APPELLANT TO EXPLAIN THE DEBIT AND CREDI T ENTRIES; THE APPELLANT ADMITTED TO THE UNDISCLOSED INTEREST INCO ME AND SHORT TERM CAPITAL GAIN NOT DECLARED IN THE RETURN OF INCOME. THUS, THE PLEA OF THE APPELLANT THAT SHE HAD ADMITT ED TO THE FAULT OF NOT DECLARING THESE INCOMES BEFORE DETECTI ON BY THE DEPARTMENT IS NOT CORRECT AND IS, THEREFORE, REJECT ED. IF THE APPELLANT'S CASE WAS NOT SELECTED FOR SCRUTINY, THE IMPUGNED AMOUNTS COULD HAVE ESCAPED THE ASSESSMENT. THE JUDG EMENT OF 6 HON'BLE DELHI HIGH COURT IN THE CASE OF M/S ZOOM COMMUNICATION (P) LTD. (327 ITR 510) IS SQUARELY AP PLICATION TO THE FACTS OF THE CASE, IN WHICH IT WAS HELD: 'IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH IS INCORRECT IN LAW WOULD NOT AMOUNT TO GIVING INACCUR ATE PARTICULARS OF THE INCOME OF THE ASSESSEE, BUT IT C ANNOT BE DISPUTED THAT THE CLAIM MADE BY THE ASSESSEE NEE DS TO BE BONAFIDE. IF THE CLAIM BESIDES BEING INCORRECT IN LAW IS MALA FIDE, EXPLANATION 1 TO SECTION 271 (1) WOUL D COME INTO PLAY AND WORK TO THE DISADVANTAGE OF THE ASSESSEE. 20. THE COURT CANNOT OVERLOOK THE FACT THAT ONLY A SMALL PERCENTAGE OF THE INCOME-TAX RETURNS ARE PICKED UP FOR SCRUTINY. IF THE ASSESSEE MAKES A CLAIM WHICH IS N OT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BAS IS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE, IT WOULD BE DI FFICULT TO SAY THAT HE WOULD STILL NOT BE LIABLE TO PENALT Y UNDER SECTION 271(L)(C) OF THE ACT. IF WE TAKE THE VIEW T HAT A CLAIM WHICH IS WHOLLY UNTENABLE IN LAW AND HAS ABSOLUTELY NO FOUNDATION ON WHICH IT COULD BE MADE, THE ASSESSEE WOULD NOT BE LIABLE TO IMPOSITION OF 'PENA LTY, EVEN IF HE WAS NOT ACTING BONA FIDE WHILE MAKING A CLAIM OF THIS- NATURE, THAT WOULD GIVE A LICENSE TO UNSCRUPULOUS ASSESSEES TO MAKE WHOLLY UNTENABLE AND UNSUSTAINABLE CLAIMS WITHOUT THERE BEING ANY BASIS FOR MAKING THEM, IN THE HOPE THAT THEIR RETURN WOULD NO T BE PICKED UP FOR SCRUTINY AND THEY WOULD BE ASSESSED O N THE BASIS OF SELF-ASSESSMENT UNDER SECTION 143(1) OF TH E ACT AND EVEN IF THEIR CASE IS SELECTED FOR SCRUTINY, TH EY CAN GET AWAY MERELY BY PAYING THE TAX, WHICH IN ANY CAS E, WAS PAYABLE BY THEM. THE CONSEQUENCE WOULD BE THAT THE PERSONS WHO MAKE CLAIMS OF THIS NATURE, ACTUATED BY A MALA FIDE INTENTION TO EVADE TAX OTHERWISE PAYABLE BY THEM WOULD GET AWAY WITHOUT PAYING THE TAX LEGALLY PAYABLE BY THEM, IF THEIR CASES ARE NOT PICKED UP F OR SCRUTINY. THIS WOULD TAKE AWAY THE DETERRENT EFFEC T, WHICH THESE PENALTY PROVISIONS IN THE ACT HAVE.' 5.2 FROM THE FACTS OF THE CASE AS DISCUSSED HER EINABOVE,- IT IS EVIDENT THAT THE APPELLANT HAD TAKEN A CALCULATE D RISK, BUT WAS CAUGHT ON THE WRONG FOOT. THE EXPLANATION FURN ISHED BY THE APPELLANT NOW THAT SHE HAD ADMITTED TO THE FAUL T OF NOT DECLARING THESE INCOMES BEFORE DETECTION BY THE DEP ARTMENT IS NOT CORRECT AND SO IT IS HELD THAT THE ASSESSING OF FICER WAS RIGHT IN LEVYING PENALTY FOR CONCEALMENT U/S 271(1 )(C ) OF THE 7 ACT. THE PENALTY FOR CONCEALMENT LEVIED IS ACCORDIN GLY CONFIRMED. GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE DISMISSED. 5. I HAVE HEARD SHRI TEJ MOHAN SINGH, LD. COUNSEL F OR THE ASSESSEE AND SHRI MANJIT SINGH, LD. DR AT LENGTH AND HAVE ALSO PERUSE D THE MATERIALS AVAILABLE ON RECORD. SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE FURTHER SUBMITTED THAT ASSESSEE HAD SUBMITTED DETAILED REPLY DATED 9.6.201 2 BEFORE THE ASSESSING OFFICER AND PRAYED THAT SAME MAY BE CONSIDERED AND IMPUGNED PENALTY BE CANCELLED. I HAVE PERUSED THE REPLY OF THE ASSESS EE DATED 9.6.2012 WHICH IS ALREADY REPRODUCED IN THIS ORDER. IT IS EVIDENT FRO M THE RECORD THAT THE ASSESSEE TOOK THE PLEA BEFORE THE AUTHORITIES BELOW THAT THE RE WAS NO WILLFUL DEFAULT AND THEREFORE, ASSESSEE HAD AGREED FOR THE ADDITION OF BANK INTEREST AND SO THE PENALTY SHOULD NOT BE LEVIED. IN MY OPINION, THERE IS NO MERIT IN THE ABOVE CONTENTION OF THE ASSESSEE. IN THIS CASE, THE ASSE SSEE DECLARED THE BANK INTEREST AFTER DETECTION OF CONCEALMENT BY THE DEPARTMENT. IN MY OPINION, IF THE ASSESSEES CASE WAS NOT SELECTED FOR SCRUTINY, THE IMPUGNED ADDITION COULD HAVE ESCAPED THE ASSESSMENT. AS REGARDS THE SHORT TERM C APITAL GAIN, THE ASSESSEE VIDE HER REPLY DATED 13.12.2011 HAD ADMITTED THAT SHORT TERM CAPITAL GAIN HAD ACCRUED TO HER ON ACCOUNT OF SALE OF HER SHARE IN PROPERTY. IN THIS REGARD, THE ASSESSEE CONTENDED THAT IT WAS ADMISSION OF MISTAKE BY THE A SSESSEE BEFORE THE DETECTION OF THE SAME BY THE ASSESSING OFFICER. THIS CONTENT ION OF THE ASSESSEE IS ALSO DEVOID OF ANY MERITS. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, I AM OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS CORRECTLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFIC ER. I MAY ADD HERE THAT LD. CIT(A) HAS ALSO RIGHTLY RELIED ON THE DECISION OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION P. LTD. ( 2010) 327 ITR 510 (DEL.) WHEREIN IT HAS BEEN HELD THAT IF THE EXPLANATION IS NEITHER SUBSTANTIATED NOR 8 SHOWN TO BE BONAFIDE, EXPANATION-1 OF SECTION 271C WOULD COME INTO PLAY AND THE ASSESSEE WILL BE LIABLE FOR THE PRESCRIBED PEN ALTY. IN THE INSTANT CASE, THE EXPLANATION GIVEN BY THE ASSESSEE IS NEITHER BONAFI DE NOR SUBSTANTIATED BY ANY COGENT EVIDENCE, AND HENCE PENALTY IS LEVIABLE. I MAY ADD HERE THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS WITHOUT AN Y BASIS AND NOT TENABLE. ACCORDINGLY, I UPHOLD THE ORDER OF CIT(A) AND DISMI SS THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.02.2016 SD- (H.L.KARWA) VICE PRESIDENT DATED : 29 TH FEBRUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR