MANJU JAIN, Jaipur V. ITO, Jaipur

ITA 125/JPR/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5129 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 09-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Wrong claim; Revised return
• Section: 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 125/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. MANJU JAIN B-22, NEW ANAJ MANDI CHANDPOLE, JAIPUR CUKE VS. THE ITO WARD- 3(3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABPPJ 1170 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.L. PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/07/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26 /07/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A), ALIGARH AT JAIPUR (CAMP OFFICE) DATED 07- 12-2015 FOR THE ASSESSMENT YEAR 2010-11 RAISING THEREIN FOLLOWING G ROUNDS:- (I) THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN PASSING THE ORDER U/S 271(1 )(C) OF THE I.T. ACT,1961 WHICH IS BADE IN LAW AB INITIO. (II) THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN SUSTAINING THE PENALTY OF R S. 3,58,731/- U/S 271(1)(C) OF THE I.T. ACT, 1961 ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 31-03-2011 DECLARING TOTAL INCOME OF RS . 1,96,880/-. THE AO OBSERVED THAT THE ASSESSEE HAD SHOWN INCOME FROM OTHER SOURCES AND THE CAPITAL GAIN WAS SHOWN AS NIL AFTER CLAIMING DEDUCT ION U/S 54 OF THE ACT AMOUNTING TO RS.17,41,413/-. DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO FURNISH T HE COPY OF SALE DEED AMOUNTING TO RS. 68 LACS AND THE PURCHASE DEED AMOU NTING TO RS. 25 LACS AS INDICATED IN THE COMPUTATION OF INCOME FOR CLAIM ING DEDUCTION U/S 54 OF THE ACT. THE ASSESSEE PRODUCED ONLY THE COPY OF SALE DEED AND SUBMITTED THAT PURCHASE DEED COPY WOULD BE SUPPLIED IN DUE COURSE OF TIME. THE AO FURTHER OBSERVED THAT IN THE MEANWHILE THE ASSESSEE FURNISHED HER REVISED RETURN ON 20-03-2012 IN WHICH INCOME WAS SHOWN AT RS. 17,41,413/- UNDER THE HEAD INCOME FROM CAPIT AL GAIN. THE AO REJECTED THE REVISED RETURN OF THE ASSESSEE AS THE SAME WAS NOT FILED WITHIN THE PRESCRIBED TIME LIMIT. THE AO FURTHER OBSERVED THAT THE ASSESSEE SHOULD HAVE SHOWN THE CAPITAL GAIN AT THE TIME OF F ILING OF RETURN WHICH HAS NOT BEEN SHOWN AND IT HAS BEEN SHOWN ONLY AFTER SELECTION OF THE CASE FOR SCRUTINY. THEREFORE, THE AO HELD THAT ASSESSEE IS LIABLE FOR PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS O F INCOME AND CONCEALING PARTICULARS OF INCOME. THE AO OBSERVED T HAT IF THE CASE OF THE ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 3 ASSESSEE WAS NOT SELECTED FOR SCRUTINY THEN THE CAP ITAL GAIN WOULD NOT HAVE BEEN BROUGHT TO TAX. HENCE, THE AO INITIATED P ENALTY PROCEEDINGS U/S 271(1)(C ) OF THE ACT. IN ORDER TO AFFORD AN OPPORT UNITY OF BEING HEARD TO THE ASSESSEE, THE AO ISSUED NOTICE ON 01-042013 TO THE ASSESSEE FOR WHICH REPLY WAS FILED BY THE ASSESSEE ON 15-04-2013. THE AO CONSIDERED THE REPLY OF THE ASSESSEE BUT HE DID NOT FIND SATISFACT ORY AND HENCE THE AO IMPOSED THE PENALTY OF RS. 3,58,731/- U/S 271(1)(C ) OF THE ACT ON THE ASSESSEE. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO CONFIRMED THE PENALTY OF RS. 3,58,731/- IMPOSED U/S 271(1)(C) OF THE ACT BY OBSERVING AS UNDER:- 5.3 IN SUPPORT OF THE GROUND OF APPEAL NO.1, THE APPELLANT HAS STATED THAT TO INITIATE VALID PENALTY PROCEEDINGS U/S 271(1), THE ACT REQUIRES THE AO TO RECORD HIS SATISFACTION AS TO CONCEALMENT /IN THE ASSESSMENT O RDER. IT IS ALLEGED THAT IN THIS CASE, THE AO DID NOT HAVE ANY MATERIAL ON RECORD TO SHOW THAT THERE IS CONCEALMENT OF INCOME. I AM UNABLE TO ACCEPT THE ABOVE MENTIONED CONTENTIO N OF THE APPELLANT AS IN THIS CASE THE AO HAS CLEARLY RECORDED HIS SATISFACTION WITH REGARD TO CONCEALMENT OF INCO ME. THE AOS SATISFACTION IS CLEARLY RECORDED AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE DEPARTMENT THAT THE CAPITAL GAIN WHICH WOULD HAVE BEEN SHOWN BY THE ASSESSEE IN HER RETURN OF INCOME AT THE TIME OF FIL ING OF RETURN OF INCOME HAD NOT BEEN SHOWN BY THE ASSESSEE . THE CAPITAL GAIN IN THIS CASE WAS SHOWN ONLY AFTER SELECTION OF THE CASE UNDER SCRUTINY. THE ASSESSEE IS ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 4 ALSO LIABLE FOR PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALED THE PARTICULARS OF INCOME. THE ASSESSEE'S SUBMISSION I N THIS REGARD WAS AFTER THOUGHT. IF THE CASE WOULD HA VE NOT BEEN SELECTED UNDER COMPUTED ASSISTED SELECTION OF CASES FOR SCRUTINY THEN THE ASSESSEE WAS NOT EVEN A BLE TO FILE HER REVISED COMPUTATION OF INCOME. IN MY VI EW, SHE IS LIABLE FOR PENALTY PROCEEDINGS U/S 271(1) O F I.T. ACT 1961. NOTICE U/S 271(1) OF I.T. ACT IS BE ING ISSUED SEPARATELY. FURTHER, IT IS SEEN THAT THE AO WAS IN POSSESSION O F INFORMATION UNDER AIR WHICH SHOWED THAT THE APPELLA NT HAS SOLD IMMOVABLE PROPERTY. AND WHEN THE AO ENQUIRED A BOUT THE CAPITAL GAIN ON SALE OF THIS PROPERTY, THE APPE LLANT COULD NOT PRODUCE EVIDENCE IN SUPPORT OF THE CLAIM FOR EX EMPTION U/S 54. THUS, THE APPELLANT WAS FORCED TO ACCEPT TH AT THE EXEMPTION HAS WRONGLY BEEN CLAIMED U/S 54. IN VIEW OF THESE FACTS, THERE WAS ENOUGH MATERIAL FOR THE AO TO BE S ATISFIED ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME. VARIOUS CASES CITED BY THE APPELLANT DO NOT HELP TH E APPELLANTS CAUSE BECAUSE IN THIS CASE, THE SURREND ER IS NOT VOLUNTARY. FURTHER, IT IS SEEN THAT THE REVISED RET URN FILED BY HER IS NOT VALID AS IT HAS BEEN FILED BEYOND THE PR ESCRIBED TIME LIMIT. ALSO THE RETURN WAS REVISED ONLY WHEN I N THE FACE OF THE ENQUIRY INITIATED BY THE AO, THE APPELLANT W AS CONCERNED. FURTHER, IN VIEW OF THE DECISION OF HON' BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHA RMENDRA TEXTILE PROCESSORS, 306 ITR 277, THERE IS NO NEED T O ESTABLISH MENS REA BEFORE IMPOSING PENALTY U/S 271(1)(C ). SI NCE THE FACTS OF THE CASE CLEARLY INDICATE CONCEALMENT OF I NCOME, THE AO WAS RIGHT IN IMPOSING PENALTY U/S 271(1). IN VIEW OF THE ABOVE MENTIONED FACTS AND LEGAL POSITION, I FIND NO INFIRMITY IN AOS ORDER OF IMPO SING PENALTY U/S 271(1)(C ). THE AO HAS CHOSEN TO IMPOSE MINIMUM PENALTY @ 100% OF THE TAX SOUGHT TO BE EVAD ED AND HENCE, THE AOS ORDER IS REASONABLE AND FAIR. ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 5 ACCORDINGLY, I CONFIRM THE PENALTY OF RS. 3,58,731/ - IMPOSED U/S 271(1).THUS, THESE GROUNDS OF APPEAL ARE DISMI SSED. 2.3 THE LD. AR OF THE ASSESSEE DURING THE COURSE OF HEARING PRAYED THAT THE ORDER PASSED U/S 271(1) BY THE AO IS ERRONEOUS AND BAD IN LAW AND THE LD. CIT(A) HAS ALSO ERRED IN SUSTAINING THE PEN ALTY OF RS. 3,58,731/- U/S 271(1)(C) OF THE ACT. THE LD. AR THROUGH HIS WR ITTEN SUBMISSION IN NUT SHELL PRAYED THAT THE SAME MAY BE DELETED. THE CASE LAWS RELIED ON BY THE LD. AR AS TO THE ABOVE ISSUES ARE AS UNDER:- (I) H. LAKSHIMNARAYANA VS. ITO (2015) 41 ITR 465 (KAR.) (II) PRICE WATER HOUSE COOPERS VS. CIT 348 ITR 30 6 (SC) (III) ANOOPGAR KRAYA VIKARAYA SAHKARI SAMITI LTD. VS. ACIT, (RAJ.) (IV) POONA MARBLE (P) LTD. VS. DCIT, 157 TTJ (JD. ) 059 (V) CHANDRA PAL BAGGA VS. ITAT AND ANR. 261 ITR 67 RAJ.) (VI) CIT VS. RAJIV GARG & ORS. 313 ITR 256 P&H) (VII) CIT VS. PUSHPENDRA SUARANA, 96 DTR 231 (RAJ .) 2.4 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW AND ALSO RELIED ON FOLLOWING CASE LAWS TO THIS EFFECT:- 1 BADRI PRASAD OM PRAKASH VS. CIT , (1987) 163 ITR 44 0 RAJ) 2. CIT VS. ZOOM COMMUNICATION (P) LTD. (2010) 327 ITR 510 (DEL.) 3. MAK DATA P. LTD. VS. CIT (2013) 358 ITR 593 (S C) 4 K.P. MADHUDHANAN VS. CIT (2001) 251 ITR 99 (SC) 5. M SAJJANRAJ NAHAR VS. CIT (2006) 283 ITR 230 (M AD) 6. NAINU MAL HET CHAND VS. CIT (2007) 294 ITR 185 (ALL. ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 6 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS THE GROUND NO. 1, T HE LD. AR OF THE ASSESSEE HEAVILY RELIED ON THE DECISION OF ITAT BAN GLORE BENCH IN THE CASE OF H LAKSHMINARAYANA VS. ITO, 41 ITR (TRIBUNAL ) 0465 (BANGALORE) AND ALSO THE DECISION OF HON'BLE KARNATAKA HIGH CO URT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 359 ITR 565. THE FACTS OF THE CASE OF THE ASSESSEE ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME ON 31-03-2011 DECLARING TOTAL INCOME OF RS. 1,96,880/- AND ALSO CLAIMED DEDUCTION OF RS. 17,41,413/- U/S 54 OF THE ACT AND AFTER THAT INCOME FROM CAPITAL GAIN WAS SHOWN AT NIL. THE ASSE SSEE PURCHASED A PROPERTY OF RS. 25.00 LACS WHICH WAS SOLD DURING TH E RELEVANT PERIOD FOR RS. 68.00 LACS. THUS THE ASSESSEE HAS SOLD AN IMMO VABLE PROPERTY FOR RS. 68.00 LACS. THE ASSESSEE'S 50% SHARE WAS AT RS. 34.00 LACS AND AFTER DEDUCTION THE CAPITAL GAIN WAS AT RS. 17,41,413/- W HICH HAS BEEN CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THE AO ASKED FOR THE DETAILS REGARDIN G INVESTMENT IN THE HOUSE PROPERTY FOR WHICH THE ASSESSEE CLAIMED DEDUC TION U/S 54 OF THE ACT. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE EV IDENCE IN SUPPORT OF THE CLAIM FOR EXEMPTION U/S 54 OF THE ACT. THE AO T HUS DISALLOWED THE CLAIM AND INITIATED PENALTY PROCEEDINGS U/S 271(1) OF THE ACT. THE ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 7 ASSESSMENT ORDER OF THE AO CLEARLY ESTABLISHES THA T THE AO HAS RECORDED HIS SATISFACTION FOR ISSUING NOTICE U/S 271(1) OF THE ACT. HENCE, THE FACT OF THE CASE CLEARLY SHOWS THAT THE ASSESSEE HAS NOT ONLY CONCEALED THE TAXABLE INCOME BUT ALSO FILED INACCURATE PARTICULAR S OF INCOME WHILE SUBMITTING THE RETURN OF INCOME. THEREFORE, THE FAC TS OF THE CASE ARE AT VARIANCE FROM THE FACTS OF THE CASE OF CIT VS. MANJ UNATHA COTTON & GINNING FACTORY (SUPRA) AND ALSO THE FACTS OF THE C ASE OF H. LAKSHMINARAYANA VS. ITO (SUPRA). THEREFORE, I DO NO T FIND ANY MERIT REGARDING THE VALIDITY OF INITIATION OF PENALTY PRO CEEDINGS AS RAISED IN GROUND NO. 1 OF BY THE ASSESSEE. THEREFORE, THE GRO UND NO. 1 OF THE ASSESSEE DESERVES TO BE DISMISSED. 2.6 AS REGARDS THE GROUND NO. 2 OF THE ASSESSEE WHE REIN THE ASSESSEE EARNED CAPITAL GAIN FROM SALE OF THE PROPERTY AND A LSO WORKED OUT THE SAME IN THE RETURN OF INCOME. THEREAFTER THE ASSESS EE HAS CLAIMED DEDUCTION U/S 54 OF THE ACT PROVIDES EXEMPTION FROM CAPITAL GAIN ON THE PROFIT ON SALE OF THE PROPERTY /HOUSE. THIS EXEMPTI ON IS AVAILABLE TO THE ASSESSEE WITHIN A PERIOD OF ONE YEAR OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER OF THE ASSET TOOK PLACE [PURCHASED] OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THE DATE CONSTRUCTED ONE RESIDENT IAL HOUSE IN INDIA. IN THIS CASE, THE ASSESSEE HAS NEITHER PURCHASED ANY R ESIDENTIAL HOUSE IN INDIA ITA NO. 125/JP/2016 SMT. MANJU JAIN. VS. ITO, WARD- 3 (3), JAIPUR . 8 NOR HAS CONSTRUCTED ANY RESIDENTIAL HOUSE WITHIN TH E PERMITTED TIME. ON THE ENQUIRY FROM THE BENCH TO PRODUCE ANY EVIDENCE IN THIS REGARD, THE LD. AR OF THE ASSESSEE SHOWED HIS INABILITY TO PRODUCE ANY EVIDENCE EVEN TO ESTABLISH PRIMA FACIE INTENTION TO INVEST OR PURCHA SE ANY PROPERTY. THUS THE ASSESSEE HAS MADE PRIMA FACIE BOGUS CLAIM FOR D EDUCTION U/S 54 OF THE ACT. THE CLAIM MADE BY ASSESSEE WAS UNSUSTAINABLE I N LAW. IT WAS AN EX FACIE BOGUS CLAIM. I DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IS UPHELD. THUS GROUND NO. 2 O F THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/07/2 016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 /07/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. MANJU JAIN., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 3 (3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 125/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR