Sh Girraj Singhal, Gwalior V. A.C.I.T., Circle-1, Gwalior

ITA 125/AGR/2011

• Counselvise Citation: 12520314 RSA 2011
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 05-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Assessee Lawyers: K C AGARWAL
• Keywords: Question of law; Initiation of penalty proceedings; Assessment record; Revised return; Bonafide mistake; Reassessment proceedings; Ignorance of law
• Section: 139(5); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 125/AGRA/2011 ASSTT. YEAR : 2004-05 GIRRAJ SINGHAL S/O SH. RAM BHAROSE SINGHAL, VS. A.C . I.T., CIRCLE-1, CHITNIS KI GOTH, LASHKAR, GWALIOR. GWALIOR. (PAN : ADDPS 3409 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C. AGARWAL, ADVOCATE RESPONDENT BY : SHRI SOHAIL AKHTAR, JR. D.R. DATE OF HEARING : 01.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 04.05.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GWALIOR DATED 22.03.2011 FOR THE ASSESSMENT YEAR 20 04-05 ON THE FOLLOWING GROUNDS : 1. BECAUSE IN THIS CASE THE ASSESSEE DURING THE C OURSE OF HEARING VOLUNTARILY DISCLOSED ALL THE FACTS BEFORE THE ASSESSING OFFICER ORALLY WITH REGARD TO THE RECEIPT OF SALE CONSIDERA TION AT RS.49,11,000/- IN PLACE OF 15,11,000/- DECLARED IN THE SALE DEED. THE ASSESSING OFFICER NEVER ISSUED ANY NOTICE TO THE AS SESSEE. IN REPLY TO THE QUESTION RAISED BY THE ASSESSING OFFICER IN THE STATEMENT RECORDED ALSO THE ASSESSEE EXPLAINED THE REASONS FOR NOT DEC LARING FULL CONSIDERATION IN THE ORIGINAL RETURN AND ALSO INFOR MED THE ASSESSING OFFICER THAT HE IS FILING REVISED RETURN SHOWING AC TUAL SALE CONSIDERATION RECEIVED FROM THE SALE DEED OF PROPER TY. THUS, DISCLOSURE OF ACTUAL SALE CONSIDERATION WAS VOLUNTA RY AND THE ITA NO. 125/AGRA/2011 2 STATEMENT WAS RECORDED IN CONFIRMATION OF THE ORAL SUBMISSION MADE BEFORE THE ASSESSING OFFICER. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) W AS NOT JUSTIFIED IN HOLDING THAT THE DISCLOSURE OF ACTUAL SALE CONSIDERATION WAS MADE AFTER DETECTION BY THE DEPARTMENT AND IT W AS NOT VOLUNTARY. FURTHER HE IS ERRED IN HOLDING THAT THE ASSESSEE WA S NOT ENTITLED TO FILE THE REVISED RETURN. 2. BECAUSE THE FINDING OF THE CIT(APPEALS) AND ASS ESSING OFFICER THAT FILING OF REVISED RETURN WAS NOT VOLUN TARY OR WAS NOT IN PURSUANCE OF VOLUNTARY DISCLOSURE OF EXCESS SALE CO NSIDERATION MADE BY THE ASSESSEE PRIOR TO ANY NOTICE HAVING BEEN ISS UED TO THE ASSESSEE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND IS NO T BASED ON PROPER APPRECIATION OF MATERIAL ON RECORD. 3. BECAUSE THE FINDING RECORDED IN PARA 5.1 OF THE LEARNED CIT(APPEALS)S ORDER WITH REGARD TO INITIATION OF P ENALTY PROCEEDINGS OF LEVY OF PENALTY U/S. 271(1)(C) ARE PRE-MATURED S INCE THE APPEAL WAS NOT AGAINST THE PENALTY ORDER BUT AGAINST ORDER U/S . 143(3), HENCE, RECORDING OF FINDINGS WITH REGARD TO LEVY OF PENALT Y ARE UNJUSTIFIED AND UNCALLED FOR AND LIABLE TO DELETION. 2. THE ASSESSEE ALSO FILED APPLICATION SEEKING PERM ISSION FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL, NAMELY, BECAUSE THE ASSESSMENT OF LONG TERM CAPITAL GAIN IN A.Y. 2004-05 IS ILLEGAL AND BAD IN LAW. 3. THE FACTS, AS NOTED IN THE IMPUGNED ORDER, ARE T HAT THE ASSESSEE FILED RETURN OF INCOME ON 21.10.2004 DECLARING INCOME OF RS.14,4 0,371/-. THE SAME CONSISTS OF SALARY AND SHARE OF PROFITS FROM THE FIRM, M/S. RAM BHAROSE & SONS. INTEREST INCOME HAS ALSO BEEN DECLARED AT RS.25,963/-. AS PE R COMPUTATION OF INCOME ITA NO. 125/AGRA/2011 3 ENCLOSED WITH THE RETURN, LONG TERM CAPITAL GAINS O F RS.13,86,555/- HAS ALSO BEEN SHOWN WHEREBY A PLOT AT CITY CENTRE, GWALIOR HAS BE EN SOLD AT SALE PRICE OF RS.22,10,000/-. AFTER DEDUCTING THE COST OF THE SAI D PLOT AT RS.8,23,445/-, RESULTANT LONG TERM CAPITAL GAINS OF RS.13,86,555/- HAVE BEEN SHOWN ON WHICH DUE TAXES HAVE ALSO BEEN PAID. 3.1 SUBSEQUENTLY, THE RETURN HAS BEEN REVISED ON 23 .06.2006 (AS PER ASSESSEE 22.06.06). IN THE REVISED RETURN, INCOME FROM SALAR Y AND SHARE OF PROFITS FROM THE FIRM ALONG WITH INTEREST HAS BEEN SHOWN AT THE SAME AMOUNT AS IN THE ORIGINAL RETURN OF INCOME. HOWEVER, LONG TERM CAPITAL GAIN H AS NOW BEEN CALCULATED AT RS.40,87,555/- BY TAKING THE SALE PRICE OF THE SAME PLOT AT RS.49,11,000/- IN PLACE OF RS.22,10,000/- TAKEN EARLIER. THE AO NOTED THAT THE ASSESSEE FILED THE REVISED RETURN ONLY AFTER DETECTION OF THE DEPARTMENT THAT THE SALE PRICE WAS SUPPRESSED BY RS.27,01,000/-. THE REVISED RETURN WAS, IN FACT, FI LED IN JUNE, 2006 WHEREAS AS PER SECTION 139(5) IT WAS TO BE FILED BY 31.03.2006. TH E AO, THEREFORE, NOTED THAT THE REVISED RETURN WAS FILED TIME BARRED AND THE SAME C ANNOT BE TREATED AS VALID REVISED RETURN. ACCORDINGLY, ADDITION OF RS.27,01,000/- WAS MADE ON ACCOUNT OF CONCEALED CAPITAL GAINS. THE SAID ASSESSMENT ORDER WAS CHALLE NGED BEFORE THE LD. CIT(A) AND THE SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN PA RA 4.1 OF THE APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT THE ASSES SEE VOLUNTARILY SURRENDERED THE ITA NO. 125/AGRA/2011 4 CAPITAL GAIN ON FINDING MISTAKE THEREIN AND, ACCORD INGLY, FILED THE REVISED RETURN ON 22.06.2006 WHICH HAS NOT BEEN ACCEPTED BY THE AO AN D TREATED THE SAME AS CONCEALED INCOME. IT WAS STATED THAT REVISED RETURN WAS FILED VOLUNTARILY WHICH SHOULD HAVE BEEN ACCEPTED BY THE AO. THE LD. CIT(A) , HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDING IN THE APPELLATE ORDER IN PARA 4.2 TO 6 ARE REPRODUCED AS UNDER: 4.2 APPELLANT'S SUBMISSIONS ALONGWITH ASSESSMENT O RDER HAVE BEEN CONSIDERED CAREFULLY. ASSESSMENT RECORDS HAVE ALSO BEEN PERUSED. AS PER RECORDS AND ASSESSMENT ORDER IT IS SEEN THAT ON RECEIPT OF COMMISSION ISSUED BY ACIT, CENTRAL CIRCL E, KARNAL TO DCLT, 3(1), GWALIOR IN RESPECT OF SALE/PURCHASE OF PROPERTY AT CITY CENTRE, GWALIOR BY SMT. ANJU GUPTA AND SHRI AJAY PR AKASH GUPTA - THE BUYERS- AND SHRI GIRIRAJ SINGHAL-THE APPELLANT- THE SELLER, COPY OF AGREEMENT DATED 31/01/2003 HAS BEEN FORWARDED TO TH E AO VIDE LETTER DATED 23/06/2006. AS PER THE SALE AGREEMENT THE PRO PERTY HAS BEEN SOLD FOR RS.49,11,000/- BY THE APPELLANT WHEREAS RE GISTRATION HAS BEEN DONE FOR RS. 15,11,000/- ONLY. STATEMENT OF THE APP ELLANT HAS ALSO BEEN RECORDED BY DCIT ON 22/06/2006 WHEREBY THE APP ELLANT HAS CATEGORICALLY ADMITTED OF THE SALE PRICE OF THE PRO PERTY AT RS.49,11,000/- WHICH DUE TO CERTAIN DISPUTES WAS RE GISTERED FOR RS.15,11,000/- VIDE SALE DEED DATED 31/03/2003. ON BEING CONFRONTED THE APPELLANT PLEADED IGNORANCE OF LAW AND FACT THA T THE SALE PRICE HAS BEEN SHOWN AND RESULTING CAPITAL GAIN WORKED OUT ON THE BASIS OF REGISTERED VALUE AS PER THE ORIGINAL RETURN. ACCORD INGLY, THE APPELLANT HAS REVISED HIS RETURN BY REVISING HIS COMPUTATION OF CAPITAL GAIN ON THE BASIS OF ACTUAL SALE PRICE OF THE PROPERTY SOLD . 4.3 THERE IS NO DISPUTE REGARDING THE SALE PRICE OF THE PROPERTY AT RS.49,11,000/- IN PLACE OF RS.22,10,000/- TAKEN BY THE APPELLANT IN THE ORIGINAL RETURN. THIS IS EVIDENT FROM THE AGREEMENT DATED 31/01/2003, BANK STATEMENTS OF THE BUYERS AND THE APPELLANT AND THE ADMISSION OF THE APPELLANT HIMSELF MADE BEFORE THE DCIT WHICH HA S RESULTED IN FILING OF REVISED RETURN WORKING OUT THE ACTUAL CAP ITAL GAIN EARNED BY THE APPELLANT DURING THE YEAR ON THE SALE OF THE SA ID PROPERTY. IT IS ITA NO. 125/AGRA/2011 5 ALSO SEEN FROM RECORDS THAT THE SAID REVISED RETURN HAS BEEN FILED ON 23/06/2006 I.E. BEYOND THE PERIOD PRESCRIBED U/S 13 9(5) OF THE IT ACT. FURTHER, A REVISED RETURN IS PERMISSIBLE WHERE AN A SSESSEE DISCOVERS ANY OMISSION OR WRONG STATEMENT THEREIN. ORIGINAL R ETURN CAN BE SET RIGHT BY WAY OF REVISED RETURN ONLY FOR INADVERTENT SUBMISSIONS OR MISTAKES IN EARLIER RETURN. WHERE THE OMISSION OR W RONG STATEMENT IS DISCOVERED BY THE DEPARTMENT/AO AS A RESULT OF ENQU IRY AND THEREAFTER A REVISED RETURN IS FURNISHED MAKING AMENDS, THAT W ILL NOT AMOUNT TO A REVISED RETURN AS CONTEMPLATED BY SECTION 139. IN T HE INSTANT CASE AT THE TIME OF FILING OF ORIGINAL RETURN THE APPELLANT WAS CLEARLY AWARE OF HAVING EARNED A CERTAIN AMOUNT OF CAPITAL GAINS ON THE BASIS OF ACTUAL SALE PRICE OF THE PROPERTY BUT HAS, NEVERTHELESS, O MITTED TO DISCLOSE THE SAME AT ITS TRUE AND CORRECT VALUE IN THE ORIGINAL RETURN. IN THESE CIRCUMSTANCES, THE SECOND RETURN FILED BY THE APPEL LANT U/S 139(5) CAN NOT BE TREATED AS A REVISED RETURN UNDER THAT SUB-S ECTION AS THERE HAS BEEN NO DISCOVERY BY THE APPELLANT OF ANY OMISSION OR WRONG STATEMENT HAVING BEEN MADE BY HIM BY INADVERTENCE I N THE ORIGINAL RETURN. THE FACT THAT THE APPELLANT HAS ADMITTED OF HAVING RECEIVED SALE PRICE OF RS.49,11,000/- AND HAS CHOSEN TO FILE A REVISED RETURN AFTER A GAP OF TWO YEARS AND THAT TOO AFTER THE REL EVANT INFORMATION HAS BEEN PASSED ON TO THE CONCERNED AO BY THE DCIT IN ITSELF SHOWS THE INTENTION OF THE APPELLANT WHO DELIBERATELY GAV E INACCURATE PARTICULARS IN THE ORIGINAL RETURN. THE APPELLANT'S CONTENTION THAT REVISED RETURN HAS BEEN FILED VOLUNTARILY BEFORE TH E AO HAS COMPLETED THE ASSESSMENT IS FOUND DEVOID OF MERITS. FURTHER, THE CASE LAWS RELIED ON BY THE APPELLANT ARE ALSO NOT FOUND APPLICABLE T O THE FACTS OF HIS CASE. ON THE BASIS OF FACTS ABOVE, AO HAS RIGHTLY MADE TH E ADDITION OF SUPPRESSED CAPITAL GAIN TO THE ORIGINAL RETURN INCO ME OF THE APPELLANT. ACCORDINGLY, ADDITION OF RS.27,01,000/- IS, HEREBY, CONFIRMED. 5. THE NEXT GROUND OF APPEAL RELATES TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) BY THE AO AS PER THE ASSE SSMENT ORDER. AGAIN THE APPELLANT HAS RELIED ON THE SAME FACTS TH AT THE REVISED RETURN HAS BEEN FILED VOLUNTARILY BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS. HENCE NO PENALTY U/S 271(1)(C) IS LEVI ABLE AND THEREFORE WRONGLY INITIATED. ITA NO. 125/AGRA/2011 6 5.1 ON THE BASIS OF FACTS MENTIONED IN THE PRECEDIN G PARAS, DELIBERATE OMISSION IN THE ORIGINAL RETURN CAN NOT BE SAID TO BE DUE TO BONAFIDE INADVERTENCE OR BONAFIDE MISTAKE ON THE PART OF THE APPELLANT BY ANY STANDARD OF EVALUATION OF THE EVIDENCE OR MATERIAL ON RECORD. THE MERE SUBMISSION OF THE SO CALLED REVISED RETURN CAN NOT AVOID PENALTY PROCEEDINGS IN HIS CASE. THE SAID VIEW HAS ALSO BEE N TAKEN BY HON'BLE SUPREME COURT IN CASE OF AGARWAL (FC) VS. CIT (1976 ) 102 ITR 408 (GUA.) AFFIRMED (1990) 186 ITR 571. IN ANY CASE THE PENALTY HAS NOT BEEN LEVIED BY THE AO AND THE APPEAL FILED IS AGAIN ST THE ASSESSMENT ORDER PASSED U/S 143(3). THIS GROUND OF THE APPELLA NT IS, HEREBY, DISMISSED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON ALL THE GROUNDS OF APPEAL, THE ASSESSEE CHALLENGED THE FINDINGS OF THE LD. CIT (A) WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT AN D NO GROUND ON MERIT HAS BEEN RAISED CHALLENGING THE ADDITION OF RS.27,01,000/- M ADE BY THE AO. HE HAS SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INC OME VOLUNTARILY WITHOUT ISSUE OF ANY NOTICE BY THE AO. THEREFORE, THE REVISED RETURN WAS VOLUNTARY UPON WHICH TAXES HAVE BEEN PAID AND FURTHER THE ISSUE OF PENAL TY IS PRE-MATURE IN THE QUANTUM PROCEEDINGS AS EXPLAINED IN GROUND NO. 3 ABOVE. 5. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE REVISED RETURN WAS NOT VALID UNDER THE EYES OF LAW AND ASSESSEE MADE SURRENDER OF CAPITAL GAIN ONLY AFTER THE STATEMENT WAS RECORDED ON 22.06.2006 ADMITTING THEREIN THE CONCEALED INCOME. HE HAS SUBMITTED THAT SINCE ITA NO. 125/AGRA/2011 7 THE REVISED RETURN WAS NOT VALID AS PER LAW, THEREF ORE, THERE IS NO NEED TO DECIDE ANY ISSUE WHETHER THE REVISED RETURN WAS VOLUNTARY OR O THERWISE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. BEFORE PROCEEDING TO DECIDE THE ADDITIONAL GROUND OF APPEA L, IT WOULD BE APPROPRIATE TO DECIDE THE GROUNDS OF APPEAL RAISED IN THE APPEAL B Y THE ASSESSEE. THE FACTS NOTED ABOVE HAVE NOT BEEN DISPUTED BY BOTH THE PARTIES EX CEPT THAT THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVISED RETURN WAS FILE D ON 22.06.2006 WHEREAS THE LD. CIT(A) NOTED IT TO BE 23.06.2006. IT APPEARS TO BE INSIGNIFICANT BECAUSE THERE IS NO DISPUTE THAT THE REVISED RETURN WAS FILED IN JUNE, 2006 AND THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF THE ACKNOWLEDGEMENT OF FILIN G OF REVISED RETURN AT PAGE 5 OF THE PAPER BOOK, WHICH BEARS THE DATE OF FILING THE REVISED RETURN AS 22.06.2006. THE ORIGINAL RETURN OF INCOME IS FILED ON 21.10.2004 FO R THE ASSESSMENT YEAR 2004-05 UNDER APPEAL. SECTION 139(5) OF THE IT ACT PROVIDES THAT IF ANY PERSON, HAVING FURNISHED A RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139, OR IN PURSUANCE OF A NOTICE ISSUED U/S. 142(1), DISCOVERS ANY OMISS ION OR ANY WRONG STATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN AT ANY TIM E BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE C OMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. THE DATE OF ASSESSMENT ORDER IS 13.09.2006. THEREFORE, THE REVISED RETURN SHOULD HAVE BEEN FILED BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE ITA NO. 125/AGRA/2011 8 RELEVANT ASSESSMENT YEAR, I.E., 31.03.2006, WHICH I S EARLIER DATE. THE REVISED RETURN IS, HOWEVER, FILED ON 22.06.2006. THEREFORE, THE SA ME IS CLEARLY TIME BARRED AND CANNOT BE TREATED AS VALID REVISED RETURN UNDER THE EYES OF LAW. THE REVISED RETURN, WHICH WAS NOT VALID UNDER THE LAW, SHOULD NOT BE FU RTHER CONSIDERED WHETHER IT WAS VOLUNTARY OR OTHERWISE. NO COGNIZANCE OF THE SAME C OULD BE TAKEN UNDER LAW. FURTHER, THE STATEMENT OF ASSESSEE WAS RECORDED ON 22.06.2006 ON COMMISSION ISSUED BY ACIT, KARNAL IN WHICH, IN RESPONSE TO QUE STION NO.8, THE ASSESSEE ADMITTED CONCEALED INCOME ON ACCOUNT OF SALE CONSID ERATION OF THE PROPERTY AT RS.49,11,000/- AND AGREED TO FILE THE REVISED RETUR N DISCLOSING THE UNDISCLOSED INCOME. IT IS, THEREFORE, CLEAR THAT THE ASSESSEE F ILED INVALID RETURN ONLY AFTER THE FACT OF CONCEALMENT HAD BEEN DETECTED BY THE REVENUE DEP ARTMENT IN THE ORIGINAL RETURN FILED BY THE ASSESSEE. FURTHER, ACCORDING TO GROUND NO. 3 OF APPEAL OF THE ASSESSEE, FINDING ON THE INITIATION OF PENALTY PROC EEDINGS IN THE QUANTUM PROCEEDINGS IS PRE-MATURE BECAUSE THE APPEAL WAS NO T AGAINST THE PENALTY ORDER. IT IS WELL SETTLED LAW THAT THE QUANTUM AND PENALTY PR OCEEDINGS ARE DIFFERENT PROCEEDINGS AND SHALL HAVE TO BE CONSIDERED SEPARAT ELY. THE FINDING GIVEN IN THE ASSESSMENT ORDER HAVE PROBATIVE VALUE FOR CONSIDERA TION OF THE PENALTY MATTER, BUT THE FINDING GIVEN IN THE QUANTUM PROCEEDINGS ALONE ARE NOT SUFFICIENT TO LEVY PENALTY. THEREFORE, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE CHALLENGING INITIATION OF PENALTY AND THE OBSERVATION OF THE LD . CIT(A) IN THE IMPUGNED ORDER ITA NO. 125/AGRA/2011 9 WOULD NOT BE VALID GROUND OF APPEAL UNDER THE EYES OF LAW. FURTHER, THE ASSESSEE COMMITTED A MISTAKE IN RAISING THE ISSUE OF INITIAT ION OF PENALTY PROCEEDINGS BEFORE THE LD. CIT(A). THEREFORE, THE LD. CIT(A) IN IGNORA NCE OF LAW GAVE CERTAIN OBSERVATIONS AND DISMISSED THAT GROUND OF APPEAL OF THE ASSESSEE. OTHERWISE, THERE WAS NO NEED TO DECIDE THE ISSUE OF INITIATION OF PE NALTY IN THE QUANTUM PROCEEDINGS BEFORE THE LD. CIT(A). SINCE THE ASSESSEE HIMSELF A DMITTED THAT INITIATION OF PENALTY PROCEEDINGS ARE PRE-MATURE IN THE QUANTUM PROCEEDIN GS, THEREFORE, ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE INVALID AND INFRUCTUO US AND CANNOT BE DECIDED IN THE QUANTUM PROCEEDINGS/APPEALS. ALL THE MAIN GROUNDS O F ASSESSEE IN APPEAL ARE, THEREFORE, LIABLE TO BE REJECTED. WE ACCORDINGLY, R EJECT ALL THE THREE GROUNDS OF APPEAL OF THE ASSESSEE. THE ASSESSEE IS, HOWEVER, A T LIBERTY TO RAISE SUCH CONTENTIONS IN THE PENALTY MATTER IF SO ARISE ON PA SSING THE PENALTY ORDERS BY THE AUTHORITIES BELOW ON COMPLETION OF THE QUANTUM ASSE SSMENT. WITH THESE OBSERVATIONS, ALL THE THREE GROUNDS OF APPEAL OF TH E ASSESSEE ARE LIABLE TO BE REJECTED BEING CONNECTED WITH PENALTY MATTER ONLY, WHICH IS SEPARATE AND INDEPENDENT PROCEEDING. 7. NOW, WE TAKE UP THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. THE ASSESSEE THROUGH THE ADDITIONAL GROUND SUBMITTED TH AT THE ASSESSMENT OF LONG TERM CAPITAL GAINS IN ASSESSMENT YEAR 2004-05 IS ILLEGAL AND BAD IN LAW. IT IS STATED THAT ITA NO. 125/AGRA/2011 10 THE LONG TERM CAPITAL GAIN HAS BEEN ASSESSED ON THE BASIS OF SALE DEED OF THE PLOT EXECUTED ON 31.03.2003 AND REGISTERED ON 16.04.2003 BEFORE THE SUB-REGISTRAR, GWALIOR AND RELIANCE WAS PLACED BY THE DEPARTMENT O N AGREEMENT TO SALE DATED 31.03.2003. IT IS FURTHER STATED THAT AS HELD BY H ONBLE SUPREME COURT IN THE CASE OF GURUBUX SINGH VS. KARTAR SING & OTHERS, 231 ITR 303 (SC) AND AS PER SECTION 47 OF THE REGISTRATION ACT, THE DOCUMENTS ON SUBSEQ UENT REGISTRATION WILL TAKE EFFECT FROM THE TIME WHEN IT WAS EXECUTED AND NOT F ROM THE TIME OF REGISTRATION. THE ASSESSEE, THEREFORE, SUBMITTED THAT THE CAPITAL GAINS COULD BE TAXED IN THE PRECEDING ASSESSMENT YEAR 2003-04 AND AS SUCH PRAYE R IS MADE TO ADMIT ADDITIONAL GROUND OF APPEAL. THE ASSESSEE RELIED UPON THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF GURUBUX SING VS. KARTAR SINGH & OTHE RS, 173 CTR 477 IN WHICH IT WAS HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 47 OF THE REGISTRATION ACT, 1908, IT IS WELL SETTLED THAT A DOCUMENT ON SUBSEQU ENT REGISTRATION WILL TAKE EFFECT FROM THE TIME WHEN IT WAS EXECUTED AND NOT FROM THE TIME OF ITS REGISTRATION. THE ASSESSEE ALSO RELIED UPON THE FOLLOWING DECISIONS F OR ADMISSION OF THE ADDITIONAL GROUND OF APPEAL, WHICH ACCORDING TO THE LD. COUNSE L FOR THE ASSESSEE IS PURELY LEGAL IN NATURE AND NO INVESTIGATION OF FACTS ARE REQUIRE D : (I). NATIONAL THERMAL POWER CORPN. LTD. S. CIT, 22 9 ITR 383(SC) (II). ABDUL QAYUUM VS. CIT, 184 ITR 404 (ALLD.) (III). CIT VS. BHARAT GENERAL RE-INSURANCE CO. LTD ., 81 ITR 303(DEL.) ITA NO. 125/AGRA/2011 11 THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT THE ADDITIONAL GROUND MAY BE ADMITTED FOR HEARING. 8. ON THE OTHER HAND, THE LD. DR OPPOSED THE ADMISS ION OF ADDITIONAL GROUND AND SUBMITTED THAT NO SUCH PLEA WAS RAISED BEFORE T HE AUTHORITIES BELOW OR IN THE MAIN GROUNDS OF APPEAL BEFORE THE TRIBUNAL. HE HAS SUBMITTED THAT ALL THE GROUNDS IN THE APPEAL OF THE ASSESSEE WERE RAISED, ADMITTED LY, WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS, WHICH ARE INVALID AND MISCONCE IVED. THEREFORE, IT SHOULD BE TREATED AS NO GROUND RAISED BY THE ASSESSEE. THEREF ORE, THE ADDITIONAL GROUND SHOULD NOT BE ADMITTED. THE LD. DR FURTHER SUBMITTE D THAT THE ISSUE NOW RAISED REQUIRES INTERPRETATION OF THE PROVISIONS OF LAW AN D RECONSIDERATION OF THE DOCUMENTS IN QUESTION. THEREFORE, IT IS NOT A PUREL Y QUESTION OF LAW AND THAT THE ASSESSEE ADMITTED BEFORE THE AUTHORITIES BELOW THAT CAPITAL GAINS AROSE IN ASSESSMENT YEAR 2004-05. THEREFORE, THE ASSESSEE CA NNOT CHANGE HIS STAND NOW. THE LD. DR SUBMITTED THAT THE ASSESSEE, IN THE ORIG INAL RETURN OF INCOME AS WELL AS INVALID REVISED RETURN, HAS SHOWN THE LONG TERM CAP ITAL GAINS VOLUNTARILY ON THE BASIS OF THE MATERIAL ON RECORD. THEREFORE, THE ASS ESSEE COULD NOT BE ALLOWED TO CHANGE HIS STAND FOR SHOWING LONG TERM CAPITAL GAIN IN ASSESSMENT YEAR 2003-04 INSTEAD OF 2004-05. THE LD. DR SUBMITTED THAT PLEA OF THE ASSESSEE WOULD CAUSE SERIOUS PREJUDICE TO THE REVENUE DEPARTMENT. THEREF ORE, THE ADDITIONAL GROUND ITA NO. 125/AGRA/2011 12 SHOULD BE DISMISSED. THE LD. DR RELIED UPON THE DEC ISION OF JURISDICTIONAL M.P. HIGH COURT N THE CASE OF DHARAMDAS AGARWAL VS. CIT, 171 ITR 104, IN WHICH IT WAS HELD HELD, THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT THE O RDER IMPOSING PENALTY WAS PASSED IN BREACH OF ANY STATUT ORY PROVISION PRESCRIBING LIMITATION FOR PASSING AN ORDER OF PENA LTY. FURTHER, THE QUESTION WHETHER IT WAS EXPEDIENT OR NOT TO IMPOSE PENALTY, IN VIEW OF THE INORDINATE DELAY WAS NEVER RAISED BEFORE THE IN COME-TAX OFFICER OR THE APPELLATE ASSISTANT COMMISSIONER OR EVEN BEF ORE THE TRIBUNAL IN THE MEMORANDUM OF APPEAL BUT WAS SOUGHT TO BE RA ISED FOR THE FIRST TIME DURING THE COURSE OF ARGUMENTS BEFORE THE TRIB UNAL. EVEN BEFORE THE APPELLATE ASSISTANT COMMISSIONER, THE ASSESSEE ONLY PLEADED THAT THE QUANTUM OF PENALTY MIGHT BE REDUCED AS THE PENA LTY IMPOSED WAS EXCESSIVE AND THE ASSESSEE EVEN CONCEDED THAT THE L EVY OF PENALTY WAS VALID. THEREFORE, IT WAS NOT A CASE WHERE A PURE QU ESTION OF LAW WAS SOUGHT TO BE RAISED BY THE ASSESSEE BEFORE THE TRIB UNAL. IT WAS ALSO NOT A CASE WHERE EVEN THOUGH THE QUESTION OF FACT W AS SOUGHT TO BE RAISED, ALL THE RELEVANT MATERIAL TO DECIDE THAT QU ESTION WAS ALREADY ON RECORD. ON THE OTHER HAND, IT WAS A CASE WHERE R ELEVANT FACTS, IN ORDER TO FIND OUT WHETHER IT WAS EXPEDIENT TO IMPOS E PENALTY IN SPITE OF INORDINATE DELAY, WERE YET TO BE BROUGHT ON RECORD. FOR THAT PURPOSE, THE PARTIES WERE TO BE GIVEN AN OPPORTUNITY FOR ADD UCING EVIDENCE. IT WAS IN THIS BACKGROUND THAT THE ORDER OF THE TRIBUN AL REFUSING TO PERMIT THE QUESTION, AT BEST A MIXED QUESTION OF FA CT AND LAW, TO BE RAISED FOR THE FIRST TIME DURING THE COURSE OF ARGU MENTS HAD TO BE CONSIDERED AND CONSIDERING THE SAID ORDER IN THAT B ACKGROUND, THE DISCRETION EXERCISED BY THE TRIBUNAL IN NOT PERMITT ING THE SAID QUESTION TO BE RAISED WAS NOT, IN ANY MANNER, ARBIT RARY. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE FILED ORIGINAL RET URN OF INCOME DECLARING CAPITAL GAINS ON SALE OF PLOT PARTLY. THEREAFTER, THE ASSES SEE WAS CONFRONTED WITH THE FACT BY ACIT, GWALIOR TO WHOM THE COMMISSION WAS ISSUED BY ACIT, KARNAL WITH ITA NO. 125/AGRA/2011 13 REGARD TO THE PROPERTY SOLD TO SMT. ANJU GUPTA FOR HIGHER CONSIDERATION AT RS.49,11,000/-. THE STATEMENT OF ASSESSEE WAS RECOR DED ON 22.06.2006 IN WHICH THE ASSESSEE ADMITTED CONCEALED INCOME ON ACCOUNT O F PARTLY SHOWING LONG TERM CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME AND AGREED TO SURRENDER THE ADDITIONAL INCOME ON ACCOUNT OF LONG TERM CAPITAL GAIN. THOUGH THE ASSESSEE FILED REVISED RETURN ON 22.06.2006 DECLARING ENTIRE CAPITAL GAINS ON THE SALE OF PROPERTY IN QUESTION AND PAID TAXES ALSO, BUT IT WAS INVALID RE VISED RETURN OF INCOME AS PER SECTION 139(5) OF THE IT ACT. THE AO COMPUTED THE I NCOME OF THE ASSESSEE AS PER ORIGINAL RETURN OF INCOME FILED ON 21.10.2004 AND M ADE ADDITION OF RS.27,01,000/- ON ACCOUNT OF CAPITAL GAINS CONCEALED BY THE ASSESS EE. THESE FACTS WOULD CLEARLY PROVE THAT THE ASSESSEE FILED REVISED RETURN ONLY A FTER THE FACT OF CONCEALMENT WAS DETECTED BY THE REVENUE DEPARTMENT THROUGH THE ENQU IRY CONDUCTED IN THE CASE OF SMT. ANJU GUPTA, WHO WAS ASSESSED AT KARNAL. THE AS SESSEE ON CONFRONTING WITH THE FACT OF HIGHER SALE CONSIDERATION RECEIVED, ADM ITTED THE CONCEALED INCOME. SINCE THE REVISED RETURN WAS INVALID, THEREFORE, TH ERE IS NO QUESTION OF IT BEING FILED VOLUNTARILY BECAUSE IT WAS FILED ONLY AFTER THE FAC T OF CONCEALMENT WAS DETECTED BY THE REVENUE DEPARTMENT AS NOTED ABOVE. THE ASSESSEE FILED COMPUTATION OF INCOME FILED WITH THE REVISED RETURN AT PAGE 4 OF THE PAPE R BOOK, IN WHICH THE ASSESSEE MENTIONED THE DATE OF SALE TO BE 23.04.2003 AND SAL E PRICE WAS SHOWN AT RS.49,11,000/- AND TAXES HAVE BEEN PAID. COPY OF ST ATEMENT OF ASSESSEE RECORDED ITA NO. 125/AGRA/2011 14 ON 22.06.2006 IS ALSO FILED AT PAGE 6 OF THE PAPER BOOK, IN WHICH IN ANSWER TO QUESTION NO. 6 WITH REGARD TO CAPITAL GAINS SHOWN I N THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE ADMITTED SALE OF PLOT IN QUESTION ON 23.04.2003 AND RECEIPT OF CAPITAL GAIN THEREON, WHI CH WAS DISCLOSED IN THE RETURN OF INCOME. THEREFORE, THE DETAILS SUBMITTED IN THE REV ISED COMPUTATION OF INCOME AND THE STATEMENT NOTED ABOVE, THE ASSESSEE CLEARLY ADM ITTED THE RECEIPT OF SALE CONSIDERATION OF CAPITAL GAIN ON 23.04.2003 AS WELL AS THE DATE OF SALE ON 23.04.2003, WHICH WOULD FALL IN ASSESSMENT YEAR UND ER APPEAL, I.E., 2004-05. IN RESPONSE TO THE LAST QUESTION NO. 9 TO SAY ANYTHING APART FROM WHAT IS RECORDED IN THE STATEMENT, THE ASSESSEE DID NOT OFFER ANY EXPLA NATION . THE ASSESSEE ALSO FILED COPY OF THE SALE DEED IN THE PAPER BOOK AND ON THE BACK OF THE SALE DEED AT SOME PAGES, THE DATES 16.04.2003 AND 23.04.2003 HAVE BEE N MENTIONED AND THEREAFTER SEVERAL BLANK STAMP PAPERS HAVE BEEN ATTACHED AND A T THE BACK OF THE SAME, DATE 23.04.2003 HAS BEEN MENTIONED IN THE SEAL OF ASSIS TANT TREASURY OFFICER, GWALIOR (MP) IT, THEREFORE, APPEARS THAT EVEN SOME OF THE STAMP PAPERS ATTACHED TO THE SALE DEED WERE PURCHASED OR DELIVERED ONLY ON 23.04.2003 . WHY THE TREASURY ISSUED THESE ADDITIONAL STAMP PAPERS ON 23.04.2003 IS NOT EXPLAINED AT ALL. THE DIFFERENT DATES MENTIONED AT THE BACK OF STAMP PAPERS FOR THE PURPOSE OF EXECUTING THE SALE DEEDS WILL NOT PROVE THAT THE SALE DEED IN QUESTION WAS EXECUTED ON 31.03.2003. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE BEFORE U S TO PROVE THAT THE SALE DEED IN ITA NO. 125/AGRA/2011 15 QUESTION WAS, IN FACT, EXECUTED ON 31.03.2003, RATH ER, THE DATES MENTIONED AT THE BACK OF THE STAMP PAPERS OF SALE DEED WILL DISPROVE THE CLAIM OF THE ASSESSEE. UNLESS IT IS CLEAR THAT THE SALE DEED WAS EXECUTED ON 31.03.2003, NO COGNIZANCE OF THIS DATE COULD BE TAKEN IN FAVOUR OF THE ASSESSEE. IT IS A QUESTION OF FACT WHICH SHALL HAVE TO BE DECIDED ONLY AFTER CONSIDERATION O F THE RELEVANT DOCUMENTARY EVIDENCE AND SEEKING CLARIFICATION FROM THE OFFICE OF THE ASSISTANT TREASURY OFFICER, GWALIOR AND THE OFFICE OF THE SUB-REGISTRA R WHO REGISTERED THE SALE DEED. THE QUESTION RAISED NOW COULD HAVE BEEN DECIDED ON MERITS ON EXAMINATION OF SEVERAL DOCUMENTS. THEREFORE, SUCH EXERCISE IS NOT PERMISSIBLE AT THE SECOND APPELLATE STAGE. IT WOULD CAUSE SERIOUS PREJUDICE T O THE REVENUE DEPARTMENT BECAUSE THE ASSESSEE, ADMITTEDLY, PAID SELF ASSESSM ENT TAX ON THE ENTIRE CAPITAL GAINS IN THE ASSESSMENT YEAR UNDER APPEAL. THE ASSE SSEE HAS ALSO NOT EXPLAINED AS TO WHAT WAS THE MATERIAL BEFORE HIM WHICH PROMPTED HIM TO DECLARE ENTIRE CAPITAL GAINS IN THE ASSESSMENT YEAR UNDER APPEAL, I.E., 20 04-05. THE QUESTION RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND OF APPEAL IS, THU S, NOT PURELY A QUESTION OF LAW, WHICH SHOULD BE ADMITTED FOR HEARING ON MERITS. WE MAY NOTE HERE THAT IF THE ASSESSEE MAY BE PERMITTED TO RAISE THIS GROUND FOR TAXABILITY OF CAPITAL GAIN IN PRECEDING ASSESSMENT YEAR 2003-04, EVEN SUCH A CAPI TAL GAIN MAY NOT BE TAXED IN THE PRECEDING ASSESSMENT YEAR BECAUSE THE LIMITATIO N HAD ALREADY EXPIRED FOR INITIATING THE REASSESSMENT PROCEEDINGS U/S. 147 OF THE IT ACT. IN THAT EVENT, SERIOUS ITA NO. 125/AGRA/2011 16 PREJUDICE WOULD BE CAUSED TO THE INTEREST OF REVENU E, PARTICULARLY WHEN THE ASSESSEE HIMSELF DECLARED THE LONG TERM CAPITAL GAI NS IN THE ORIGINAL RETURN OF INCOME AND REVISED RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER APPEAL, I.E., 2004-05. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ARAVALI ENGINEERS (P) LTD. VS. CIT, 237 CTR (P&H) 312, CONSIDERING TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. (SUPRA) AND OTHER DECISIONS OF JURISDICTIONAL M.P. HIGH COURT HELD NO DOUBT THAT AN APPELLATE AUTHORITY CAN ALLOW A Q UESTION TO BE RAISED FOR THE FIRST TIME EVEN IF SUCH A QUESTIO N WAS NOT RAISED AT A LOWER FORUM BUT THE DISCRETION TO DO SO HAS TO BE E XERCISED IN THE INTEREST OF JUSTICE IN THE FACTS AND CIRCUMSTANCES AND NOT MECHANICALLY. NORMALLY A QUESTION OF FACT MAY NOT B E ALLOWED TO BE RAISED FOR THE FIRST TIME AS IT MAY PREJUDICE THE O THER SIDE. IF SUCH QUESTION IS RAISED AT THE EARLIEST OPPORTUNITY, THE OTHER SIDE CAN LEAD EVIDENCE WHICH IT MAY NOT BE ABLE TO DO IF SUCH A Q UESTION IS RAISED FOR THE FIRST TIME BEFORE THE APPELLATE AUTHORITY. OF C OURSE, THERE CAN BE NO TOTAL BAR ON SUCH QUESTION BEING ALLOWED, IF INT EREST OF JUSTICE SO REQUIRES. QUESTION OF VALIDITY OF NOTICE MAY NOT BE ALLOWED TO BE RAISED FOR THE FIRST TIME IN APPEAL. SUBSEQUENT LEG ISLATIVE AMENDMENT ADDING S. 292BB SUPPORTS THIS PRINCIPLE. THE QUESTI ON HAS, THUS, TO BE ANSWERED AGAINST THE ASSESSEE CIT VS. PREMIUM CAP ITAL MARKET & INVESTMENT LTD. (2005) 198 CTR (MP) 680 : (2005) 2 75 ITR 260 (MP) RELIED ON. THEREFORE, IN OUR VIEW, THE ADDITIONAL GROUND SO RA ISED BY THE ASSESSEE SHOULD NOT BE ADMITTED FOR HEARING ON MERITS. FURTHER, WE HAVE NOTED ABOVE WHILE DECIDING THE MAIN THREE GROUNDS OF APPEAL OF THE ASSESSEE THAT T HESE WERE NOT VALID GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR INITIATION OF PEN ALTY PROCEEDINGS IN THE QUANTUM PROCEEDINGS. THEREFORE, THE APPEAL OF THE ASSESSEE WOULD NOT BE MAINTAINABLE. IN ITA NO. 125/AGRA/2011 17 THAT EVENT WHEN THE APPEAL OF THE ASSESSEE ITSELF W AS NOT MAINTAINABLE ON THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, WE ARE NO T INCLINED TO ADMIT THE ADDITIONAL GROUND OF APPEAL, PARTICULARLY ON THE PO INTS WHICH WERE NEVER RAISED BEFORE THE AUTHORITIES BELOW AND WHICH REQUIRES REC ONSIDERATION AND RE- APPRECIATION OF THE MATERIAL AND EVIDENCES AND FURT HER INVESTIGATION INTO THE MATTER. IN VIEW OF THE ABOVE OBSERVATION, THE DECISION CITE D BY THE LD. COUNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE . WE ARE NOT INCLINED TO ADMIT THE ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE. T HE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL GROUND IS, ACCORDINGLY, DIS MISSED. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE FAILS AND IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY