Shelat Family Trust, Pune V. Addl. CIT,

ITA 1482/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49734 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 29-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Keywords: Revised return; Reassessment proceedings
• Section: 80HHC; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 1482 & 1483/PN/09 (ASST. YEAR: 2004-05 & 2005 -06) SHELAT FAMILY TRUST, .. APPELLANT 50 NATIONAL HSG. SOCIETY, BANER ROAD, AUNDH, PUNE PAN AAETS2039M VS. ADDL. COMMISSIONER OF INCOME-TAX .. RESPONDE NT RANGE-6, PUNE APPELLANT BY : SHRI C H NANIWADEKAR RESPONDENT BY : SHRI ABHAY DAMLE ORDER PER D. KARUNAKARA RAO, A.M: SINCE A COMMON ISSUE IS INVOLVED IN BOTH THE ABOVE CITED APPEALS OF THE ASSESSEE, THEY ARE HEARD TOGETHER AND ARE BEING DIS POSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. THE COMMON GROUND OF APPEALS READS AS FOLLOWS: THE LD CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDI NG PENALTY U/S 271(1)(C) IMPOSED BY THE AO FOR FURNISHING INACCURATE PARTICULARS OF INC OME. HE OUGHT TO HAVE APPRECIATED THE FACTS AND CIRCUMSTANCES OF THE CASE AS ALSO THE ARG UMENTS ADVANCED BY THE ASSESSEE IN PROPER PERSPECTIVE. 3. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE FILED RETURN OF INCOME ALONG WITH THE RELEVANT ANNEXURES, WHICH CONTAINED DETAILS ABOUT EARNING OF THE CAPITAL GAIN S, INTEREST AND OTHERS. MAKING USE OF THE SAID ANNEXURES, THE AO RE-OPENED THE ASS ESSMENT AFTER RECORDING REASONS FOR TAXING THE CORRECT SHORT-TERM CAPITAL G AINS. IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED RETURN OF IN COME REVISING THE INCOME UPWARDS. IN THE REASSESSMENT PROCEEDINGS, THE AO A CCEPTED THE INCOME RETURNED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 148 WITHOUT ITA N0S 1482, 1483/PN/09 SHELAT FAMILY TRUST, PU NE 2 MAKING ANY ADDITIONS. HOWEVER, THE AO LEVIED PENALT IES U/S 271(1)(C) ON THE INCOME REVISED BY THE ASSESSEE DURING RE-ASSESSMENT PROCEEDINGS. THE CIT(A) CONFIRMED THE PENALTY FOR THE REASONS MENTIONED IN PARA 6 OF HIS ORDER. AGGRIEVED WITH THE SAME, THE ASSESSEE FILED PRESENT APPEALS. 4. DURING PROCEEDINGS BEFORE US, THE LEARNED COUNSE L MENTIONED THAT THE SOURCE MATERIAL FOR THE AO FOR ISSUE OF NOTICE U/S 148 IS THE DOCUMENTS IN THE FORM OF THE ANNEXURES TO THE ORIGINAL RETURN OF INC OME. THEREFORE, THE ASSESSEE CANNOT BE FOUND FAULTY IN MATTERS OF DISCLOSURE OF INFORMATION. FURTHER, AS PER THE COUNSEL, THE ASSESSEE CAME FORWARD TO DISCLOSE THE CORRECT AND PROPER CAPITAL GAINS AND OTHERS IN RESPONSE TO THE NOTICE U/S 148 VOLUNTARILY, ALTHOUGH AFTER THE ISSUE OF NOTICE U/S 148 OF THE ACT. AS PER HIM, THI S EVENT DEMONSTRATES VOLUNTARINESS IN COMING FORWARD CLEANLY WITH FULL D ISCLOSURE OF INCOME. FURTHER ALSO THE REVISED INCOME RETURNED BY THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 148 AND THE RE-ASSESSED INCOME IS ONE AND THE SAME. BY THIS, THE COUNSEL MENTIONED THAT THE REVISED INCOME FILED BY THE ASSE SSEE IN RESPONSE TO NOTICE U/S 148 IS FREE FROM ANY INACCURACY OF PARTICULARS OF INCOME. IN THESE CIRCUMSTANCES, PENALTY CANNOT BE SUSTAINED. THE COU NSEL ALSO RELIED ON THE FOLLOWING DECISIONS OF THE TRIBUNAL: I)ITO V MAHAVI R CYCLE3 INDUSTRIES 36 DTR 398 (CHD.) (TRIB) AND II) SUNILCHANDRA VOHRA V ACI T 127 TTJ 100 (MUM). 5. ON THE OTHER HAND, LEARNED DR FOR THE REVENUE WA S OF THE OPINION THAT BUT FOR THE ISSUE OF NOTICE U/S 148 THE ASSESSEE WO ULD NOT HAVE COME FORWARD WITH THE ADDITIONAL INCOME BY WAY OF REVISED RETURN . THEREFORE, THIS CANNOT BE VOLUNTARY ACT OF THE ASSESSEE. HE RELIED ON PARA 6 OF THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE PARTIES AND PERUSED THE RELEVA NT ORDERS PLACED BEFORE US. WE HAVE ALSO PERUSED RELEVANT PART OF PARA 6 OF CIT(A)S ORDER RELIED UPON BY THE DR. THE CIT(A) CONFIRMED THE PENALTY ON SEEING MALA FIDE INTENTIONS OF THE ITA N0S 1482, 1483/PN/09 SHELAT FAMILY TRUST, PU NE 3 ASSESSEE. IN THIS REGARD, WE HAVE PERUSED THE ORDER S RELIED UPON BY THE COUNSEL AND CONCLUSION OF THESE DECISIONS READ AS UNDER: I) ITO V MAHAVIR CYCLE INDUSTRIES (SUPRA): PENALTY UNDER SECTION 271(1)(C) WAS NOT LEVIABLE FOR CLAIMING EXCESSIVE DEDUCTION U/S 8 0HHC BY TREATING LOCAL SALES OF SCRAP AS PART OF PROFITS OF BUSINESS AND EXCLUDING THE SA ME FROM ITS TOTAL TURNOVER AS WELL AS FROM THE EXPORT TURNOVER IN VIEW OF THE FACT THAT T HERE WERE DIVERGENT OPINIONS ON THE ISSUE OF DEDUCTION UNDER SEC. 80HHC RESPECT OF SAL E OF SCRAP AND THE ISSUE WAS DEBATABLE AND THE CLAIM FOR DEDUCTION WAS MADE ON T HE ADVICE OF A CHARTERED ACCOUNTANT. II) SUNILCHANDRA VOHRA V ACIT (SUPRA): BONA FIDE IGNORANCE OF THE LAW REGARDING APPLICABILITY OF SECTION 2(22)(E) IS A VALID GROUND FOR NOT IMPOSING PENALTY FOR CONCEALMENT. 7. FROM THE FACTS OF THE CASE, IT IS EVIDENT THAT T HERE IS NO DEFAULT OF DISCLOSURE OF RELEVANT TRANSACTIONS /INVESTMENTS IN THE CAPITAL GAINS YIELDING ASSETS. YES, IT IS TRUE THAT THE ASSESSEE DID NOT C OMPUTE THE GAINS ACCURATELY WHILE FILING THE ORIGINAL RETURN OF INCOME. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE ACCURATELY REFLECTED THE CORRECT CAPITAL G AINS INCOME AS IT IS EVIDENT FROM THE FACT THAT THE AO ACCEPTED THE REVISED INCO ME FURNISHED IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THUS, THERE IS INACCURACY OF INCOME SO FAR AS THE RETURN OF INCOME FILED U/S 148 IS CONCERNED. FOR THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, THE BASIS FOR LEVY OF THE PENALTY SHOULD BE THE DISCLOSURES MADE BY THE ASSESSEE IN THE RETURN FILED U/S 148 OF THE ACT. SO LONG AS THIS RETURN IS ACCURATE AND DEVOID OF ANY L APSES SO FAR AS THE INCOME IS CONCVERNED, IN OUR OPINION, THERE IS NO CASE OF CON CEALMENT OF INCOME AND THE PROVISIONS OF SECTION 271(1)(C) HAS NO ROLE AGAINST THE ASSESSEE. WE OPINE SO BASED ON THE APEX COURTS JUDGMENT IN THE CASE OF CIT V. RELIANCE PETRO-PRODUCTS PVT. LTD., 322 ITR 158 (SC) AND RELEVANT HELD PORTI ON OF THE SAID JUDGMENT IS AS FOLLOWS: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) O F THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDL Y, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING O F THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INA CCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORD ER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N , THE PENALTY PROVISION CANNOT BE INVOKED. .. THERE CAN BE NO DISPUTE THAT EVE RYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE , BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME . WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS ITA N0S 1482, 1483/PN/09 SHELAT FAMILY TRUST, PU NE 4 SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS . 8. THUS, THE RETURN OF INCOME OR VALID REVISED U/S 148 OF THE ACT, WHICH IS THE BASIS OR THE STARTING POINT FOR ARRIVING AT THE ACCURACY OR INACCURACY OF THE PARTICULARS/CLAIMS BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME.. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RET URN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. IN THE LIGHT OF THE SAID SETTLED POSITION, WE HAVE EXAMINED THE FACTS OF THE INSTANT CASE, WHERE THE ASSESSEE FURNISHED THE VALID REVISED RETURN, WHICH WAS ACCEP TED BY THE AO WITHOUT POINTING OUT A SINGLE INACCURACY AND WITHOUT MAKING ANY FURTHER AD DITIONS IN THE ASSESSMENT. IN SUCH CIRCUMSTANCES, WE FIND THAT IT IS NOT A FIT CASE FO R LEVY PENALTY. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF APRIL, 2011. SD/- SD/- (I.C. SUDHIR) (D. KARUNAKA RA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 20 TH APRIL, 2011 B COPY TO:- 1) ASSESSEE 2) ADDL.CIT R-6, PUNE 3) CIT(A)-III, PUNE 4) CIT-III, PUNE 5) THE DR, A BENCH, ITAT., PUNE. BY ORDER TRUE COPY ASST. REGISTRAR, I.T.A.T., PUNE