Poonam Lal, CHENNAI V. ITO, CHENNAI

ITA 148/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0116 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Principle of natural justice; Question of law
• Section: 271(1)(c); 250; 54

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A. NO. 148/CHNY/2019 / ASSESSMENT YEAR: 2009-10 MS. POONAM LAL, NO. 14, 4 TH STREET, ABHIRAMAPURAM, CHENNAI 600 018. [PAN:AAXPP6666N] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(2), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT / DATE OF HEARING : 08.05.2019 /DATE OF PRONOUNCEMENT : 11.06.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 4, CHENNAI, DATED 25.09.2018 RELEVANT TO THE ASSESSMENT YEAR 2009-10 CONFIRMING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ADMITTING TOTAL INCOME OF .1,91,232/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE SOLD PROPERTY FOR A TOTAL CONSIDERATION OF I.T.A. NO. 148/CHNY/19 2 .74,00,000/- AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT FOR A SUM OF .35,54,495/-. THE ASSESSING OFFICER FOUND THAT THE AMOUNT CLAIMED AS DEDUCTION UNDER SECTION 54 OF THE ACT WAS TOWARDS REPAYMENT OF LOAN AMOUNT AVAILED FOR THE PURCHASE OF PROPERTY WHICH WAS SOLD. THE ASSESSING OFFICER ALSO DISALLOWED INDEXED COST OF IMPROVEMENT FOR WANT OF PROOF. ACCORDINGLY, THE LONG TERM CAPITAL GAIN WAS ASSESSED AT .56,05,112/-. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE, WHICH CAME TO BE SUSTAINED BY THE TRIBUNAL VIDE ORDER IN I.T.A. NO. 2289/CHNY/2015 DATED 03.04.2017. ACCORDINGLY, PENALTY PROCEEDINGS WERE INITIATED BY ISSUING NOTICE UNDER SECTION 271(1)(C) OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF .11,21,000/- UNDER SECTION 271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE PENALTY LEVIED ON THE GIVEN FACTS OF THE CASE IS NOT LEGALLY SUSTAINABLE AS THE NOTICE PROPOSING TO LEVY OF PENALTY DOES NOT CLEARLY MENTIONED AS TO WHETHER IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF ASSUMPTION OF JURISDICTION UNDER SECTION 271(1)(C) OF THE ACT. IT WAS FURTHER SUBMISSION THAT THE ASSESSEE HAD NOT CONCEALED ANY INCOME OR FURNISHED ANY PARTICULARS OF INCOME NOR FILED ANY INACCURATE I.T.A. NO. 148/CHNY/19 3 PARTICULARS OF INCOME AND THUS, PRAYED FOR DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 4. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT FOR A SUM OF .35,54,495/- WAS BONAFIDE OR OTHERWISE. AFTER CONSIDERING THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT, WHICH WAS CONFIRMED BY THE LD. CIT(A) AND SUSTAINED BY THE TRIBUNAL. BEFORE THE TRIBUNAL, THE ASSESSEE HAS RAISED A GROUND THAT THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE PENALTY LEVIED ON THE GIVEN FACTS OF THE CASE IS NOT LEGALLY SUSTAINABLE AS THE NOTICE PROPOSING TO LEVY PENALTY DOES NOT CLEARLY MENTION AS TO WHETHER IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF ASSUMPTION OF JURISDICTION UNDER SECTION 271(1)(C) OF THE ACT. ADMITTEDLY, THE ABOVE GROUND WAS NOT RAISED EITHER BEFORE THE ASSESSING OFFICER WHILE PASSING PENALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT OR BEFORE THE LD. CIT(A). IN THE PENALTY ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT BUT FOR THE SCRUTINY ASSESSMENT, THE ASSESSEE WOULD HAVE I.T.A. NO. 148/CHNY/19 4 UNJUSTLY GOT ENRICHED BY THE TAX PAYABLE ON THE LONG TERM CAPITAL GAINS EARNED BY HER AND THUS, THE ASSESSEE HAS ATTEMPTED TO EVADE THE LAWFUL AMOUNT DUE TO THE GOVERNMENT. SINCE THE ASSESSEE MADE AN INCORRECT CLAIM IN LAW WHICH IS NOTHING BUT FURNISHING OF INACCURATE PARTICULARS OF INCOME, LEADING TO CONCEALMENT OF INCOME AND THEREBY, LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. SIMILAR SUBSTANTIAL QUESTION OF LAW RAISED IN THIS APPEAL WAS ALSO SUBJECT MATTER IN APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SUNDARAM FINANCE LTD. V. ACIT (2018) 93 TAXMANN.COM 250 [WHICH WAS DELIVERED ON 23.04.2018], WHEREIN, WHEN THE ASSESSEE HAS, VERY WELL UNDERSTOOD THAT IT HAD NO CASE IN ITS FAVOUR, BY WAY OF FILING A MEMO SEEKING PERMISSION TO RAISE ADDITIONAL SUBSTANTIAL QUESTION OF LAW, THE LD. COUNSEL FOR THE ASSESSEE HAS CHALLENGED THE DEFECT IN THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT. AFTER CONSIDERING THE FACTS OF THE CASE, THE HONBLE JURISDICTIONAL HIGH COURT HAS OBSERVED AND HELD AS UNDER: 15. BEFORE US, THE ASSESSEE SEEKS TO CONTEND THAT THE NOTICES ISSUED UNDER SECTION 274 R/W. SECTION 271OF THE ACT ARE VITIATED SINCE IT DID NOT SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C) OF THE ACT. 16. WE HAVE PERUSED THE NOTICES AND WE FIND THAT THE RELEVANT COLUMNS HAVE BEEN MARKED, MORE PARTICULARLY, WHEN THE CASE AGAINST THE ASSESSEE IS THAT THEY HAVE CONCEALED PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, THE CONTENTION RAISED BY THE ASSESSEE IS LIABLE TO BE REJECTED ON FACTS. THAT APART, THIS ISSUE CAN NEVER BE A QUESTION OF LAW IN THE ASSESSEES CASE, AS IT IS I.T.A. NO. 148/CHNY/19 5 PURELY A QUESTION OF FACT. APART FROM THAT, THE ASSESSEE HAD AT NO EARLIER POINT OF TIME RAISED THE PLEA THAT ON ACCOUNT OF A DEFECT IN THE NOTICE, THEY WERE PUT TO PREJUDICE. ALL VIOLATIONS WILL NOT RESULT IN NULLIFYING THE ORDERS PASSED BY STATUTORY AUTHORITIES. IF THE CASE OF THE ASSESSEE IS THAT THEY HAVE BEEN PUT TO PREJUDICE AND PRINCIPLES OF NATURAL JUSTICE WERE VIOLATED ON ACCOUNT OF NOT BEING ABLE TO SUBMIT AN EFFECTIVE REPLY, IT WOULD BE A DIFFERENT MATTER. THIS WAS NEVER THE PLEA OF THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL OR BEFORE THIS COURT WHEN THE TAX CASE APPEALS WERE FILED AND IT WAS ONLY AFTER 10 YEARS, WHEN THE APPEALS WERE LISTED FOR FINAL HEARING, THIS ISSUE IS SOUGHT TO BE RAISED. THUS ON FACTS, WE COULD SAFELY CONCLUDE THAT EVEN ASSUMING THAT THERE WAS DEFECT IN THE NOTICE, IT HAD CAUSED NO PREJUDICE TO THE ASSESSEE AND THE ASSESSEE CLEARLY UNDERSTOOD WHAT WAS THE PURPORT AND IMPORT OF NOTICE ISSUED UNDER SECTION 274 R/W. SECTION 271OF THE ACT. THEREFORE, PRINCIPLES OF NATURAL JUSTICE CANNOT BE READ IN ABSTRACT AND THE ASSESSEE, BEING A LIMITED COMPANY, HAVING WIDE NETWORK IN VARIOUS FINANCIAL SERVICES, SHOULD DEFINITELY BE PRECLUDED FROM RAISING SUCH A PLEA AT THIS BELATED STAGE. 17. THUS, FOR THE ABOVE REASONS, SUBSTANTIAL QUESTIONS OF LAW NOS.1 AND 2 ARE ANSWERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. THE ADDITIONAL SUBSTANTIAL QUESTION OF LAW, WHICH WAS FRAMED IS REJECTED ON THE GROUND THAT ON FACTS THE SAID QUESTION DOES NOT ARISE FOR CONSIDERATION AS WELL AS FOR THE REASONS SET OUT BY US IN THE PRECEDING PARAGRAPHS. IN THE PRESENT CASE ALSO, THE ASSESSEE HAS CLEARLY UNDERSTOOD WHAT WAS THE PURPORT AND IMPORT OF NOTICE ISSUED UNDER SECTION 274 R.W.S. 271 OF THE ACT. THEREFORE, THE PRINCIPLES OF NATURAL JUSTICE CANNOT BE READ IN ABSTRACT AND THE ASSESSEE, BEING REGULARLY ASSESSED TO INCOME TAX AND HAS BEEN HAVING AND OFFERING INCOME FROM PROPERTY AND OTHER SOURCES, CONSISTING INTEREST INCOME, SHOULD BE PRECLUDED FROM RAISING SUCH A GROUND BEFORE THE TRIBUNAL BY FILING A OLD NOTICE DATED 27.12.2011, IN WHICH, THE DATE, ETC. ARE HAND-WRITTEN, WHEREAS, BEFORE THE LD. CIT(A), BY WAY OF WRITTEN SUBMISSIONS, THE ASSESSEE I.T.A. NO. 148/CHNY/19 6 HAS MAINLY CONTENDED ISSUE AND SERVICE OF NOTICE AND VALIDITY AND ALSO STRONGLY RELIED UPON THE DECISION IN THE CASE OF CIT V. ZOOM COMMUNICATION (P) LTD. [327 ITR 510] THAT MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS, OTHERWISE, THE ASSESSEE ADMITS FILING OF INACCURATE PARTICULARS AND SOUGHT FOR REMEDY AND WHEN THE ATTEMPTS FAILED, THE ASSESSEE TOOK A DIFFERENT GROUND BEFORE THE TRIBUNAL THAT THERE IS DEFECT IN THE NOTICE ISSUED TO THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF SUNDARAM FINANCE LTD. V. ACIT (SUPRA), THE GROUND RAISED BY THE ASSESSEE STANDS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 11 TH JUNE, 2019 IN CHENNAI. SD/- SD/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 11.06.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.