ITO, New Delhi V. Sh. Laxman Giri, Delhi

ITA 1542/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77810 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: R B ARORA
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 54; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. GEORGE GEORGE K., JM AND SH. B. C. MEENA , AM ITA NO. 1542/DEL/2013 : ASS TT. YEAR : 2009-10 INCOME TAX OFFIER, WARD 44(3), NEW DELHI VS SHRI LAXMAN GIRI, 96-E, POCKET-I, MAYUR VIHAR, PHASE-I, DELHI-91 (APPELLANT) (RESPONDENT) PAN NO. ABZPG8738P ASSESSEE BY : SH. R. B. ARORA, ADV. REVENUE BY : SH. S. N. BHATIA, DR DATE OF HEARING : 24.7.2014 DATE OF PRONOUNCEMENT : 25.7.2014 ORDER PER GEORGE GEORGE K., JM: THIS APPEAL AT THE INSTANCE OF THE REVENUE IS DIREC TED AGAINST CIT(A) ORDER DATED 18.12.2012. THE ORDER OF THE CIT (A) EMANATES FROM THE ORDER PASSED U/S 271(1)(C) OF THE ACT, IMPOSING A PENALTY OF RS. 4,94,425/-. THE RELEVANT ASSESSMENT YEAR IS 2009-10 . 2. FACTS IN BRIEF ARE AS FOLLOWS:- THE ASSESSEE, AN INDIVIDUAL, IS A SALARIED EMPLOYEE WORKING WITH MMTC. THE RETURN OF INCOME FOR THE CONCERNED ASSESS MENT YEAR WAS FILED ON 28.7.2009 DECLARING TAXABLE INCOME UNDER T HE HEAD SALARIES AMOUNTING TO RS. 2,67,680/-. THE ASSESSMENT WAS SEL ECTED FOR SCRUTINY THROUGH CASS ON THE BASIS OF A.I.R INFORMATION. SCR UTINY ASSESSMENT ITA NO. 1542/DEL/2013 LAXMAN GIRI 2 U/S 143(3) OF THE ACT WAS COMPLETED ON 26.12.2011 M AKING AN ADDITION OF RS. 21,76,717/- (BANK INTEREST OF RS. 275 + LONG TERM CAPITAL GAINS OF RS. 21,76,442/-). PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT WAS INITIATED AND PENALTY OF RS. 4,94,425/- WAS IMPOSED VIDE ORDER DATED 25.6.2012. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE RELE VANT FINDINGS OF THE CIT(A) READS AS FOLLOWS: I HAVE GONE THROUGH THE PENALTY ORDER, THE WRITTEN SUBMISSIONS AND PAPER BOOK FILED DURING THE COURSE OF APPELLATE PROCEEDIN GS. APPELLANT HAS CITED VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF HIS C LAIM THAT PENALTY FOR CONCEALMENT OF INCOME IS NOT LEVIABLE FOR VOLUNTARY DISCLOSURE OF INCOME EVEN DURING ASSESSMENT PROCEEDINGS. AS PER DELHI HI GH COURTS RECENT DECISION IN 30/10/2011, IN THE CASE OF CIT VS HARNA RI, NO PENALTY CAN BE IMPOSED, IF APPELLANT SURRENDERS HIS INCOME VOLUNTA RITY EVEN AFTER RECEIPT OF QUESTIONARE, IN THE ABSENCE OF DETECTION OR INFO RMATION IN THE POSITION OF REVENUE. THIS IS CONFIRMED BY A.O IN HIS PENALTY ORDER PAGE NO. 1/PARA- 2. THEREFORE, THE PENALTY OF SUCH A BIG AMOUNT TO A SALARIED EMPLOYEE WILL BE HARSH. 4. THE REVENUE BEING AGGRIEVED IS AN APPEAL BEFORE US. THE LD. DR SUPPORTED THE ORDER OF THE INCOME TAX OFFICER, WARD 44(3), NEW DELHI, IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. THE LD. AUTHORIZED REPRESENTATIVE ON THE OTHER HAND, REITERATED THE SU BMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND RELIED ON THE FINDINGS OF THE CIT(A). ITA NO. 1542/DEL/2013 LAXMAN GIRI 3 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. DURING THE PREVIOUS YEAR RELEVANT TO THE CONCERNED ASSESSMENT YEAR THE ASSESSEE HAD SOLD A RESIDENTIAL HOUSE, IN GHAZIABAD. THE SAID HOUSE WAS PURCHASED IN THE YEAR 1996. AGAI NST THE SALE OF THE SAID RESIDENTIAL HOUSE, THE ASSESSEE HAD PURCHASED ANOTHER RESIDENTIAL HOUSE FOR RS. 12,72,000/-. WITH THE DOCUMENTED PRIC E RECEIVED BY THE ASSESSEE ON THE SALE OF SUBJECT PROPERTY, THE CALCU LATION OF CAPITAL GAINS WAS NIL AND ON THIS BELIEF TRANSACTION WAS NOT DI SCLOSED IN ASSESSEES RETURN OF INCOME. THEREAFTER IN VIEW OF PROCEEDINGS U/S 50C OF THE ACT, THE ASSESSEE BECAME LIABLE FOR CAPITAL GAIN AND HE OFFERED THE SAME FOR TAXATION. THE REVISED COMPUTATION OF CAPITAL GAIN W AS ACCEPTED BY THE REVENUE AND EXEMPTION U/S 54 WAS DULY GRANTED TO TH E ASSESSEE. THE CAPITAL GAINS LIABILITY AROSE ON ACCOUNT OF APPLICA TION OF SEC. 50C OF THE ACT. THE STAMP DUTY VALUE OF THE SUBJECT PROPERTY W AS TAKEN AS THE CONSIDERATION DEEMED TO HAVE BEEN RECEIVED BY THE A SSESSEE. IN VIEW OF THE DEEMING PROVISION U/S 50C, THE ASSESSEE HAS MAD E LIABLE FOR CAPITAL GAINS TAX. THERE HAS BEEN NO CONCEALMENT OR DELIBER ATE ACT ON THE PART OF THE ASSESSEE IN FURNISHING INACCURATE PARTICULAR S OF INCOME, WARRANTING IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT. 5.1 IN THIS CONTEXT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS HARNARAIN IN ITA NO. 2072/2010 DATED 31.10.2 011 AND HELD THAT NO PENALTY CAN BE IMPOSED, IF THE ASSESSEE SURRENDE RS HIS INCOME VOLUNTARILY EVEN AFTER RECEIPTS OF QUESTIONNAIRE, I N ABSENCE OF DETECTION ITA NO. 1542/DEL/2013 LAXMAN GIRI 4 OR INFORMATION OF CONCEALMENT BY THE REVENUE. THE R ELEVANT FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS HARNARAIN (SUPRA) READS AS FOLLOWS:- 9. IN K. C. BUILDERS VS ACIT, (2004) 265 ITR 562, THE HONBLE SUPREME COURT OBSERVED THAT WORD CONCEALMENT REQUIRES THE RE TO BE A DELIBERATE ACT ON THE PART OF THE ASSESSEE, AND THE CONCEALMEN T INHERENTLY CARRIES WITH IT THE ELEMENT OF MENS REA. IT WAS FURTHER OBS ERVED THAT A MERE OMISSION FROM RETURN OF ANY ITEM OF RECEIPT DOES NE ITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCE FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSI ON WAS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID IMPOSITION OF TAX THEREUPON. IT WAS ALSO HELD BY THE SUPREME COURT THAT BEFORE A PENALTY UNDER SECTION 2 71(1)(C) IS IMPOSED IT HAS TO BE ESTABLISHED THAT THE ASSESSEE HAD CONSCIO USLY MADE THE CONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF INCOME. 10. IT IS ALSO OBSERVED THAT THE CIT(A) HAD RELIED ON THE DECISION OF THE MADHYA PRADESH HIGH COURT AND THE JHARKHAND HIGH CO URT IN THE CASE OF CIT VS S. V. ELECTRICALS P. LTD. (155 TAXMAN 158) A ND CIT VS ASHIM KUMAR AGARWAL (153 TAXMAN 226) RESPECTIVELY WHERE I T WAS HELD THAT WHERE THE ASSESSEE SURRENDERS HIS FULL INCOME, THOU GH AT A LATER STATE, THERE WAS NO QUESTION OF ANY CONCEALMENT ON HIS PAR T AND CONSEQUENTLY NO PENALTY UNDER SECTION 271(1)(C) WAS LEVIABLE, AND T HAT A OMISSION FORM RETURN OF INCOME DID NOT AMOUNT TO CONCEALMENT. 11. IN VIEW OF THE DISCUSSION ABOVE AND THE CITED D ECISIONS, SURRENDER OF THE AMOUNT BY THE ASSESSEE AFTER RECEIPT OF THE QUE STIONNAIRE COULD NOT LED TO AN INFERENCE THAT IT WAS NOT VOLUNTARY, IN THE A BSENCE OF ANY MATERIAL ON RECORD TO SUGGEST THAT IT WAS BOGUS OR UNTRUE. IT I S FURTHER EVIDENT THAT THERE WAS NEITHER ANY DETECTION NOR ANY INFORMATION IN THE POSSESSION OF THE REVENUE WHICH MIGHT LEAD TO A CONCLUSION THAT T HERE WAS A DETECTION BY THE REVENUE OF CONCEALMENT. ACCORDINGLY, THE QUE STION OF LAW FRAMED IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE A SSESSEE. THE APPEAL IS DISMISSED. NO COSTS. ITA NO. 1542/DEL/2013 LAXMAN GIRI 5 5.2 IN VIEW OF THE AFORESAID REASONING AND THE JUDG MENT OF THE HONBLE JURISDICTIONAL HIGH COURT CITED (SUPRA), WE UPHOLD THE ORDER OF THE CIT(A) HAS CORRECT AND IN ACCORDANCE WITH LAW AND N O INTERFERENCE IS CALLED FOR LAW. IT IS ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/7/2014 SD/- SD/- (B. C. MEENA) (G EORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 25/7/2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 24.7.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 25.7.2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.