Parvatabai Dada Kharate, Nashik V. Assistant Commissioner of Income-tax, Circle - 1, Nashik

ITA 1603/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5247 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1603/PUN/2017 / ASSESSMENT YEAR : 2011-12 PARVATABAI D. KHARATE, POOJA ROW HOUSE NO.B-2, VIDYA NAGAR, MAKHMALABAD, NASHIK 422 003. PAN : DDZPK2026K. . / APPELLANT V/S THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK. . / RESPONDENT ASSESSEE BY : NONE (WRITTEN SUBMISSIONS FILED) REVENUE BY : SHRI SUDHENDU DAS / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 1, NASHIK DT.29.05.2017 FOR T HE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL WHO FILED HER RETURN OF INCOME FOR A.Y. 2011-12 ON 19.12.2013 DECLARING TOTAL INCOME OF RS.2,56,378 /-. AO HAS NOTED THAT ASSESSEE WAS REQUIRED TO FILE THE RETURN OF IN COME ON OR BEFORE 31.03.2013 BUT THE RETURN OF INCOME THAT WAS FILED BY THE ASSESSEE ON / DATE OF HEARING : 01.08.2019 / DATE OF PRONOUNCEMENT: 19.08.2019 2 19.12.2013 WAS BEYOND THE DUE DATE OF FILING THE RETURN O F INCOME. SINCE THE ASSESSEE HAD FAILED TO FILE THE RETURN OF INCOME U/S 1 39(1) OF THE ACT, AO VIDE ORDER DT.15.04.2016 LEVIED PENALTY OF RS.5,000/- U/S 271F OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED TH E MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.29.05.2017 (IN APPEAL NO.NSK/CWT(A) - 1/85/2016-17) CONFIRMED THE ORDER OF AO AND THEREBY DIS MISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND : ON THE BASIS OF FACTS AND THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE COMMISSIONER OF INCOME TAX, (APPEAL) 1, NASHIK, IS NOT JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY OF RS.5,000/- U/S 27 1F OF THE ACT. 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF TH E ASSESSEE THOUGH NOTICE WAS SERVED ON THE ASSESSEE. ASSESSEE H AS HOWEVER FILED WRITTEN SUBMISSIONS ON 29.07.2019. WE THEREFORE PROCEED T O DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE BASED ON THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD AND AFTER HEARING THE LD. D.R. 4. BEFORE US, LD. D.R. SUBMITTED THAT DURING THE FINANCIAL Y EAR ENDING 31 ST MARCH, 2011 RELEVANT TO A.Y. 2011-12 ASSESSEE JOINTLY WITH HIS OTHER FAMILY MEMBERS HAD SOLD AGRICULTURAL LAND FOR A TOTAL CONSID ERATION OF RS.3,52,36,500/- AND IN WHICH ASSESSEES SHARE WAS RS.5,0 0,000/-. ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR A.Y. 2011 -12 WITHIN THE TIME STIPULATED UNDER SEC.139(1) OF THE ACT WHICH WAS 31.03 .2013 BUT HOWEVER ASSESSEE HAD FILED THE RETURN OF INCOME ON 19.1 2.2013. HE SUBMITTED THAT THE CONTENTION OF THE ASSESSEE OF BEING AN ILLITERATE AGRICULTURIST, BEING NOT AWARE ABOUT THE INTRINSIC PROVISION S OF THE I.T. ACT IS NOT ACCEPTABLE IN VIEW OF THE FACT THAT THE SALE HAD T AKEN PLACE UNDER 3 THE GUIDANCE OF QUALIFIED PRACTITIONERS AND LAWYERS. HE THER EFORE SUBMITTED THAT ASSESSEE HAD NOT DEMONSTRATED ANY REASONABLE CA USE FOR NOT FILING THE RETURN OF INCOME WITHIN THE TIME ALLOWED U/S 139(1) OF THE A CT AND THEREFORE, THE AO WAS FULLY JUSTIFIED IN LEVYING THE PENALTY. HE THUS SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL A VAILABLE ON RECORD, INCLUDING THE WRITTEN SUBMISSIONS FILED BY THE ASSESS EE. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO LEVY OF PENALTY U/S 271F OF THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT DURING THE YE AR UNDER CONSIDERATION, ASSESSEE JOINTLY WITH FIVE PERSONS OF HER FA MILY HAD SOLD AGRICULTURAL LAND FOR A TOTAL CONSIDERATION OF RS.3,52,36,500/ - AND IN WHICH ASSESSEES SHARE WAS RS.5,00,000/-. IT IS ASSESSEE S SUBMISSION THAT ASSESSEE IS AN ILLITERATE AGRICULTURIST AND WAS NOT AWARE O F THE INTRINSIC PROVISIONS OF THE INCOME TAX ACT AND SHE WAS UNDER THE BONAFIDE BELIEF THAT THE PROFITS EARNED ON SALE OF AGRICULTURAL LAND IS EXEM PT AND IS NOT CHARGEABLE TO TAX. SUBSEQUENTLY, WHEN SHE CAME TO KNO W ABOUT HIS LIABILITY TO PAY THE TAX ON SALE OF LAND, HE FILED THE RETURN OF INCOME FOR A.Y. 2011-12 ON 19.12.2013 DECLARING TOTAL INCOME OF RS.2,56,378/ -. IT WAS ALSO THE ASSESSEES SUBMISSION BEFORE THE LD.CIT(A) THAT HER TOTAL INCOME NEVER EXCEEDED THE MAXIMUM AMOUNT CHARGEABLE TO TAX IN ANY OTHER YEAR AND IN THE YEAR UNDER CONSIDERATION ONLY DUE TO THE SA LE OF AGRICULTURAL LAND, ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME. IT IS THEREFORE ASSESSEES SUBMISSION THAT THE DEFAULT OF THE ASSESSEE O F NOT FILING THE RETURN OF INCOME WITHIN THE STATUTORY LIMIT WAS ON ACCOU NT OF IGNORANCE AND BEING A TECHNICAL BREACH, THEREFORE THE PENALTY LEVIED U/S 271F OF THE ACT BE DELETED. THE AFORESAID CONTENTIONS OF THE ASSESSE E HAVE NOT BEEN FOUND TO BE FALSE OR UNTRUE. 4 6. SEC.271F OF THE ACT DEALS WITH PENALTY FOR FAILURE TO FURN ISH THE RETURN OF INCOME. IT STATES THAT IF A PERSON WHO IS REQU IRED TO FURNISH THE RETURN OF INCOME AS REQUIRED U/S 139(1) OF THE ACT OR BY THE PROVISIONS TO THAT SECTION, FAILS TO FURNISH SUCH RETURN BEFORE THE END O F THE RELEVANT ASSESSMENT YEAR, THE AO MAY DIRECT THAT SUCH PERSON S HALL PAY, BY WAY OF PENALTY, A SUM OF RS.5,000/-. SEC.273B OF THE ACT DEALS WITH PENALTY NOT T O BE IMPOSED IN CERTAIN CASES. IT STATES THAT NOTWITHSTAN DING ANYTHING CONTAINED IN THE PROVISIONS OF CLAUSE (B) OF SUB-SECTION (1) OF SEC.271 AND VARIOUS SECTIONS INCLUDING SEC.271F, NO PENALTY SHALL BE IMPO SABLE ON THE ASSESSEE FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THAT FAILURE. ON CONJOIN T READING OF SEC.271F AND 273B OF THE ACT, IT CAN BE SEEN THAT IT IS N OT MANDATORY U/S 271F OF THE ACT THAT A PENALTY MUST BE IMPOSED IN EVERY CASE IF THE CONDITIONS LAID DOWN IN THE SAID SECTION ARE ESTABLISHED. THEREFORE NO PENALTY U/S 271F OF THE ACT SHALL BE IMPOSED ON ASSESSE E IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR SAID FAILURE. THE EXPRESS ION REASONABLE CAUSE USED IN SEC.273B OF THE ACT IS NOT DEFINED UNDER THE ACT. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TRIUMPH INTERN ATIONAL FINANCE (I) LTD. (2012) 345 ITR 270 HAS OBSERVED THAT THE EXPRES SION REASONABLE CAUSE WOULD HAVE WIDER CONNOTATION THAT THE EXPRESSION SUFFICIENT CAUSE AND THEREFORE THE EXPRESSION REASONABLE CAUSE IN SEC.2 73B OF THE ACT FOR NON-IMPOSITION OF PENALTY WOULD HAVE TO BE CONSTRUED LIBERA LLY DEPENDING UPON THE FACTS OF EACH CASE. 7. IN THE PRESENT CASE, IT IS ASSESSEES SUBMISSION THAT SHE IS AN ILLITERATE AGRICULTURIST, SHE WAS NOT SUBJECT TO INCOME TAX IN ANY EARLIER YEARS, SHE WAS UNDER A BONAFIDE BELIEF THAT PROFITS EARNED ON SALE OF AGRICULTURAL LAND IS NOT SUBJECT TO INCOME TAX AND WHEN S HE CAME TO KNOW THAT SHE WAS LIABLE TO INCOME TAX ON PROFITS EARNED ON SA LE OF AGRICULTURAL 5 LAND, SHE FILED THE RETURN OF INCOME. THE AFORESAID CONTENTIO NS OF THE ASSESSEE HAVE NOT BEEN FOUND TO BE FALSE / UNTRUE. IN SUCH CIRCUMSTANCES, WITHOUT THERE BEING ANY MATERIAL TO THE CONTRARY, IT CAN BE SAID THAT ASSESSEE WAS UNDER A BONAFIDE BELIEF OF SHE BEING NOT TAX ABLE. AT THIS MOMENT IT WOULD ALSO BE RELEVANT TO REFER TO THE OBSER VATION MADE BY THE TRIBUNAL IN THE CASE OF WTO VS. S.P. JAYAKUMAR REPORTED IN (1983) 3 ITD 221 (ITAT) MAD. 6. THAT THE TAX LAWS OF THIS COUNTRY ARE COMPLEX AN D COMPLICATED AND OFTEN REQUIRE FOR COMPLIANCE, THEREWITH THE ASSISTANCE OF TAX PRACTITIONERS SPECIALISING IN THIS FIELD, IS A WELL KNOWN FACT. I T IS EQUALLY WELL KNOWN FACT THAT THE LEGISLATION IN THIS FIELD UNDERGOES SO FRE QUENT CHANGES AND AMENDMENTS THAT IT IS NOT POSSIBLE FOR EVEN A PERSO N SPECIALISING IN THIS FIELD, INCLUDING THE TAX ADMINISTRATOR, TO CLAIM THAT HE K NOWS WHAT EXACTLY THE LAW IS ON A PARTICULAR GIVEN DAY OR PERIOD WITHOUT MAKI NG REFERENCES TO THE HISTORY OF THE ENACTMENTS. IN SUCH CIRCUMSTANCES, I T WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO HOLD THAT THE ASSESSEE KNEW OR OUGHT TO HAVE KNOWN THE CORRECT LAW AND COMPLY THEREWITH, EVEN THOUGH, IN F ACT, HE WAS NOT AWARE OF THE PROVISIONS. WHEN THE FACTS IN THE PRESENT CASE ARE SEEN IN THE LIGHT OF THE ABOVE OBSERVATIONS, WE ARE OF THE VIEW THAT IN THE PRESENT C ASE, THE BELIEF OF ASSESSEE CAN BE CONSIDERED TO BE A REASONABLE CAUSE FO R FAILURE AS CONTEMPLATED IN SEC.273B OF THE ACT IN FILING THE RETURN OF INCOME. IN SUCH CIRCUMSTANCES, WE THEREFORE DIRECT THE DELETION OF PENALTY. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19 TH DAY OF AUGUST, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 19 TH AUGUST, 2019. YAMINI 6 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, NASHIK. PR. CIT 1, NASHIK. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.