Shri Kishorsinh N. Vansia, V. The ACIT., Circle-2, Surat

ITA 1542/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5785 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-06-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV BHATAM
• Keywords: Wrong claim
• Section: 271(1)(c); 80G; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 23/06/2010 DRAFTED ON: 24/ 06/2010 ITA NO.1542/AHD/2007 ASSESSMENT YEAR : 2003-04 SHRI KISHORSINH N.VANSIA HAVERLI MAIN ROAD AT & POST : SACHIN 394 230 DIST.: SURAT VS. THE ASSTT.CIT CIRCLE-2 SURAT PAN/GIR NO. : ABCPV 1655 M (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI TUSHAR P.HEMANI, A.R. RESPONDENT BY: SHRI GAURAV BHATAM, D.R. O R D E R PER SHRI MUKUL SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -II, SURAT DATED 25/101/2007 AND THE SOLITARY ISSUE RAISED IS IN RE SPECT OF LEVY OF PENALTY U/S. 271(1)(C) OF THE I.T.ACT, 1961 OF RS.2,22,997/ -. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG PENALTY ORDER PASSED U/S. 271(1)(C) OF THE I.T.ACT, 1961 DATED 31 /08/2006 AND THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.147 OF THE I.T. ACT, 1961 WERE THAT THE ASSESSEE IS SUBJECT TO TAX IN INDIVIDUAL CAPACITY AND FOR THE YEAR UNDER CONSIDERATION CLAIMED A DEDUCTION U/S.80G OF THE I.T. ACT, 1961. HOWEVER, IT WAS FOUND THAT THE SAID CLAIM U/S.80G O F THE I.T. ACT, 1961 WAS NOT RESTRICTED TO 10% OF THE TOTAL INCOME. DU E TO THE SAID REASON, ITA NO.1542/AHD /2007 SHRI KISHORSINH N. VANSIA ASST.YEAR - 2003-04 - 2 - THE CASE WAS RE-OPENED BY INVOKING THE PROVISIONS O F SECTION 148 OF THE I.T. ACT, 1961. IN COMPLIANCE OF THE RETURN U/S.1 48 OF THE I.T. ACT, 1961, THE ASSESSEE HAS RESTRICTED HIS CLAIM OF DEDUCTION U/S.80G OF THE I.T. ACT, 1961 TO RS.46,803/- AS AGAINST THE ORIGINAL CLAIM OF RS.7,50,000/-. ON ACCOUNT OF THE SAID REASON, PENALTY PROCEEDINGS WER E INITIATED. THE ASSESSING OFFICER WAS OF THE VIEW THAT A WRONG CLAI M OF DEDUCTION WAS MADE WHICH WAS NOTHING BUT HIDING THE INCOME AS WEL L AS FURNISHING INACCURATE PARTICULARS, THEREFORE, ATTRACTED THE PR OVISIONS OF CONCEALMENT OF INCOME. AFTER A DETAILED DISCUSSION AND BY NARR ATING FEW CASE LAWS, THE IMPUGNED PENALTY WAS LEVIED. 3. WHEN THE MATTER WAS REACHED TO THE FIRST APPELLA TE AUTHORITY, THE LEARNED CIT(APPEALS) HAS AFFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT ONCE THE CASE WAS RE-OPENED BY I NVOKING THE PROVISIONS OF SECTION 147/148 OF THE I.T. ACT, 1961 , THEN IT WAS APPARENT THAT A WRONG CLAIM OF DEDUCTION WAS DETECTED BY THE REVENUE AND THE SAME WAS SURRENDERED THROUGH A RETURN INCOMPLIANCE OF THE SAID NOTICE. ONCE THE ASSESSEE HAS NOT DISCLOSED THE CORRECT INC OME IN THE ORIGINAL RETURN, THEREFORE, THE PROVISIONS OF SECTION 271(1) (C) OF THE I.T.ACT, 1961 READ WITH EXPLANATION-1 WERE CORRECTLY ATTRACTED BY THE ASSESSING OFFICER. CONSEQUENTLY, THE ACTION OF THE ASSESSIN G OFFICER WAS UPHELD. 4. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED TH E MATERIAL PLACED BEFORE US. THE ADMITTED FACTUAL POSITION IS THAT THE ASSESSEE HAS CLAIMED A DEDUCTION U/S.80G OF THE I.T. ACT, 1961 IN RESPEC T OF A DONATION AT THE RATE OF 50% OF THE TOTAL DONATED AMOUNT AS PER THE ORIGINAL RETURN. ITA NO.1542/AHD /2007 SHRI KISHORSINH N. VANSIA ASST.YEAR - 2003-04 - 3 - HOWEVER, LATER ON, IT WAS FOUND THAT THE SAID CLAIM OF DEDUCTION U/S.80G OF THE I.T. ACT, 1961 WAS INCORRECT. IN A RETURN, IN COMPLIANCE OF NOTICE ISSUED U/S.148 OF THE I.T. ACT, 1961, THE ASSESSEE HAS RESTRICTED HIS CLAIM TO THE EXTENT OF 10% OF THE GROSS TOTAL INCOME WHIC H WAS ALSO ONE OF THE LIMITS PRESCRIBED BY THE STATUTES IN ADDITION TO TH E LIMITS AND THE CONDITIONS PRESCRIBED U/S.80G OF THE I.T. ACT, 1961 . MEANING THEREBY THE COMPUTATION OF THE CLAIM OF THE DEDUCTION U/S.8 0G OF THE I.T. ACT, 1961 WAS WRONG SINCE THE ASSESSEE HAS MADE THE COM PUTATION KEEPING IN MIND ONLY THE PROVISION OF SECTION 80G OF THE I.T. ACT, 1961 TO THE EXTENT OF CLAIMING THE DEDUCTION AT THE RATE OF 50%, BUT O VERLOOKED THE OTHER PROVISION THAT THE SAME SHOULD NOT BE MORE THAN THE 10% OF THE GROSS TOTAL INCOME. HOWEVER, THIS IS NOT IN DISPUTE THA T ON THOSE VERY FACTS AND EVIDENCES ON THE BASIS OF WHICH EARLIER HIGHER DED UCTION WAS CLAIMED GOT REVISED TO THE CORRECT CLAIM OF DEDUCTION. IT IS NOT THE CASE OF THE REVENUE THAT THE DONATION WAS IN DOUBT AND ALTOGETH ER A FALSE OR UNTRUE CLAIM OF DEDUCTION WAS MADE. THIS IS ALSO NOT THE CASE OF THE REVENUE THAT THE IMPUGNED DONATION WAS NOT GENUINE. THE O NLY OBJECTION OF THE REVENUE IS THAT ON THOSE EVIDENCES AND FACTS, THE C ALCULATION WAS NOT AS PER THE PRESCRIBED NORMS. ON THESE FACTS, IT IS D IFFICULT TO INFLICT A PENALTY FOR CONCEALMENT OF INCOME. RATHER, THE AS SESSEE HAS DEMONSTRATED HIS BONA FIDE REASON FOR HIGHER CLAIM OF DEDUCTION WHICH WAS AMENDED AND RECTIFIED THROUGH A RETURN INCOMPLI ANCE OF A SUBSEQUENT RETURN U/S.148 OF THE I.T. ACT, 1961. ONCE AN EXP LANATION WAS OFFERED AND THE SAID EXPLANATION WAS NOT ESTABLISHED AS A F ALSE OR AN UNTRUE EXPLANATION, THEN NATURALLY THE PROVISIONS OF SECTI ON 271(1)(C) OF THE ITA NO.1542/AHD /2007 SHRI KISHORSINH N. VANSIA ASST.YEAR - 2003-04 - 4 - I.T.ACT, 1961 READ WITH EXPLANATION-1 SHOULD NOT BE INVOKED. WE HEREBY ACCEPT THE PLEADINGS OF THE ASSESSEE AND DIRECT TO DELETE THE PENALTY. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 25/ 06 /2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/ 06 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II, SURAT 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD