GVK JAIPUR EXPRESSWAY P LTD., Jaipur V. ACIT, Jaipur

ITA 140/JPR/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5638 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R PAREEK JCIT DHK
• Keywords: Earning of tax free income; Revised return
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 140/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. M/S. GVK JAIPUR EXPRESSWAY P. LTD., 286 KM, TOLL PLAZA, AJMER ROAD, N.A-8, VILLAGE THIKARIA, JAIPUR. CUKE VS. THE ASSTT. COMMISSIONER OF INCOME TAX, RANGE-7, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCG 5541 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI G.R. PAREEK (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19.01.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/01/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS)- III, JAIPUR DATED 15.11.2012 PERTAINING TO ASSESSME NT YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT (A) HAS GROSSLY ERRED IN UPHOLDING THE LEVY OF PENALTY OF RS. 24,87,400/- IN THE CASE OF THE ASSESSEE. 1.1. THAT THE LD. CIT (A) FURTHER ERRED IN IGNORING THE FACT THAT THE ASSESSEE COMPANY, ITSELF HAS WORKED OUT THE AMOUNTI NG CAPITAL GAINS INCLUDED IN DIVIDEND INCOME AND DEPOSITED THE TAXES THEREON BEING MISTAKE INADVERTENTLY TAKEN PLACE, TH US THE PENALTY SO UPHOLD DESERVES TO BE DELETED. 1.2. THAT THE LD. CIT (A) HAS FURTHER ERRED IN NOT ACCEP TING THE EXPLANATION OF THE ASSESSEE WHO ACTED IN BONA FIDE MANNER AND BY SUFFICIENT REASON EXPLAIN THE CIRCUMSTANCES LEAD ING TO MISTAKE, THUS THE RESULTANT CONFIRMATION OF PENALTY U/ 271(1)(C) AT RS. 24,87,400/- DESERVES TO BE DELETED. 2 ITA NO. 140/JP/2013 M/S. GVK JAIPUR EXPRESSWAY P LTD. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) WAS FRAMED VIDE ORDER DATED 30 TH DECEMBER, 2009. WHILE FRAMING THE ASSESSMENT, THE AO ALSO INITIATED PENALTY PROCEEDINGS FOR CONCEALING THE PARTICULARS OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED VIDE LET TER DATED 23TH OCTOBER, 2009 REVISED COMPUTATION THEREBY THE ASSESSEE SUBMITTED THAT WHILE FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE ASSESS EE COMPANY HAD CLAIMED AN AMOUNT OF RS. 1,72,62,082.58 AS DIVIDEND INCOME AND THE SAME HAS BEEN CLAIMED EXEMPT. IT WAS SUBMITTED THAT INADVERTENTLY THE SAM E HAS BEEN CLAIMED AS EXEMPT WHICH WAS OFFERED FOR TAXATION. THE AO THUS COMPUTE D THE INCOME OF THE ASSESSEE AS PER THE REVISED COMPUTATION FILED BY THE ASSESSE E. THE AO ALSO INITIATED PENALTY PROCEEDINGS IN RESPECT OF THE INCOME DECLARED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. AGGRIEVED BY THIS, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE LD. CIT (A), WHO HOWEVER CONFIRMED THE PENALTY. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION. HE SUBMITTED THAT THE ASSESSEE COMPANY HAD DECLARED A SUM OF RS. 1,72,62,082.58 AS DIVIDEND INCOME AND CLAIMED T HE SAME AS EXEMPT INCOME. LATER ON, WHILE PREPARING A RECONCILIATION STATEMEN T OF INVESTMENT IN MUTUAL FUND IT CAME TO THE NOTICE OF THE ASSESSEE THAT OUT OF VARI OUS INVESTMENT IN MUTUAL FUND SOME WERE REDEEMED AND REINVESTED AND THE DIFFERENC E BETWEEN THE SALE PROCEEDS OF THE UNITS OF THE MUTUAL FUNDS AND THE AMOUNT INV ESTED WAS WRONGLY CONSIDERED AS DIVIDEND INCOME IN PLACE OF SHORT TERM CAPITAL GAIN . REALIZING THIS MISTAKE, THE 3 ITA NO. 140/JP/2013 M/S. GVK JAIPUR EXPRESSWAY P LTD. ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S FILED REVISED DETAILS OF INVESTMENT AND TRANSACTIONS MADE IN THE MUTUAL FUND DURING THE YEAR AND CORRECT WORKING OF INCOME FROM SHORT TERM CAPITAL GAIN AND DIVIDENDS WHICH INADVERTENTLY WAS CLAIMED AS EXEMPT INCOME IN THE RETURN FILED AN D ACCORDINGLY THE SAME WAS SUO- MOTO OFFERED FOR TAXATION BY THE ASSESSEE THROUGH R EVISED COMPUTATION AND DUE TAX WAS DEPOSITED ON ACCOUNT OF SHORT TERM CAPITAL GAIN . HE SUBMITTED THAT IT IS NOTEWORTHY THAT THE AO HAD NOT MADE ANY ENQUIRY OR INVESTIGATION. HE SUBMITTED THAT THE ASSESSEE COMPANY ACTED IN A BONA FIDE MANN ER AND SUBMITTED SUFFICIENT EXPLANATION BEFORE THE AO REGARDING THE CIRCUMSTANC ES LEADING TO THE BONA FIDE MISTAKE. HE SUBMITTED THAT THE ASSESSEE HAD NOT CO NCEALED PARTICULARS OF INCOME. THERE IS NO INFORMATION SUGGESTING ANY DELIBERATE O R WILLFUL CONCEALMENT OF INCOME/PARTICULARS IN THE RETURN OF INCOME FILED. THE LD. COUNSEL SUBMITTED THAT THE HONBLE APEX COURT IN THE CASE OF SIR SHADI LAL SUG AR & GENERAL MILLS LTD. VS. CIT, 162 ITR 705 (SC) HELD THAT FROM THE ASSESSEE AGRE EING TO ADDITION TO HIS INCOME IT DOES NOT FOLLOW THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME. THE ASSESSEE HAS ONLY ACCEPTED CERTAIN AMOUNT TO BE TAX ED AND HE HAS NOT ACCEPTED THAT IT HAS DELIBERATELY FURNISHED INACCURATE PARTI CULARS OR CONCEALED ANY INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF I.T. ACT . THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ESCORTS FINANCE LTD. 328 ITR 44 (DEL.) HELD THAT IN THE EVENT OF AN INADVERTENT ERROR THE ASSESSEE MAKING CORRECTION AND FILING REVISED RETURN AND OFFERING FOR TAXATION DURING THE ASSESSMENT PROCEED INGS, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE. 3.1. ON THE CONTRARY, THE LD. D/R SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT IT IS ONLY DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE ASSESSEE 4 ITA NO. 140/JP/2013 M/S. GVK JAIPUR EXPRESSWAY P LTD. HAS COME WITH A REVISED COMPUTATION AND OFFERED THE INCOME WHICH WAS NOT OFFERED FOR TAXATION IN THE RETURN OF INCOME. UNDER THESE F ACTS, HE SUBMITTED THAT IT CANNOT BE CONCLUDED THAT THE CONDUCT OF THE ASSESSEE WAS B ONA FIDE. 3.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IT IS NOT DISPUTED THAT THE ASSESSEE ITSEL F HAS OFFERED FOR TAXATION THE INCOME WHICH WAS CLAIMED TO BE EXEMPT IN THE RETURN OF INC OME. IT IS SUBMITTED THAT IT WAS BECAUSE OF THE ERROR WHICH RESULTED IN CLAIMING THE EXEMPT INCOME. RELIANCE IS PLACED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT, 348 ITR 306 ( SC) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT THE ASSESSEE SHOULD HAV E BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE, IN A CASE SUC H AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING IN ACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. THE HONBLE APEX COURT WAS OF T HE OPINION THAT ON THE PECULIAR FACTS, THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIFIED. IN THE PRESENT CASE ALSO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE REALIZED THAT OUT OF VARIOUS INVESTMENTS IN MUTUAL FUND SOME WERE REDEEM ED AND REINVESTED AND THE DIFFERENCE BETWEEN THE SALE PROCEEDS OF THE UNITS O F THE MUTUAL FUNDS AND THE AMOUNT INVESTED WAS WRONGLY CONSIDERED AS DIVIDEND INCOME INSTEAD OF SHORT TERM CAPITAL GAIN. THE LD. CIT (A) HAS REJECTED THE APP EAL OF THE ASSESSEE BY RELYING ON THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN TH E CASE OF CIT VS. KERALA TRANSPORT CO., 134 TAXMAN 320 (KER.). ON THE CONTR ARY, LD. COUNSEL HAS RELIED UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ESCORTS FINANCE LTD. (SUPRA). IT WAS POINTED OUT BY THE LD. COUNSE L FOR THE ASSESSEE THAT IN OTHER YEARS ALSO SUCH MISTAKE OCCURRED AND THE DEPARTMENT HAS ACCEPTED THE EXPLANATION 5 ITA NO. 140/JP/2013 M/S. GVK JAIPUR EXPRESSWAY P LTD. GIVEN BY THE ASSESSEE AND HAS NOT IMPOSED THE PENAL TY. THIS FACT IS NOT CONTROVERTED BY THE REVENUE. THEREFORE, UNDER THE PECULIARITY OF THE FACTS IN THE PRESENT CASE, RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COUR T (SUPRA) AND THE JUDGMENT OF THE HONBLE DELHI HIGH COURT (SUPRA), WE ARE OF THE VIEW THAT THE LD. CIT (A) OUGHT NOT TO HAVE SUSTAINED THE PENALTY. THEREFORE, WE SE T ASIDE THE ORDER OF LD. CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY. THE GROUND OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/01/2017. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. GVK JAIPUR EXPRESSWAY PVT. LTD., JAIPUR. 2. THE RESPONDENT- THE ACIT RANGE-7, JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 140/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 140/JP/2013 M/S. GVK JAIPUR EXPRESSWAY P LTD.