Shri Vijaybhai Somabhai Patel, Ahmedabad V. The Income tax Officer,Ward-2(3), Ahmedabad

ITA 172/AHD/2020

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0218 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-09-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Condonation of delay
• Section: 54; 271(1)(c); 274

Judgement Text

ITA No.172/Ahd/2020 A.Y: 2008-09 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.172/Ahd/2020 Assessment Year: 2008-09 Shri Vijaybhai Somabhai Patel, C/o. S.L. Patel & Co., Near Bank of Baroda, Delhi Chakla, Ahmedabad – 383 001. [PAN – AHQPP 9092 C] Vs. The Income Tax Officer, Ward – 2(3), Ahmedabad. (Appellant) (Respondent) Assessee by Shri D.K. Parikh, AR Revenue by Ms. Saumya Pandey Jain, Sr. DR Da te o f He a r in g 11.09.2023 Da te o f P ro n o u n ce m e n t 03.11.2023 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the assessee against order dated 18.12.2014 passed by the CIT(A)-10, Ahmedabad for the Assessment Year 2008-09. 2. The assessee has raised the following grounds of appeal :- “1. The Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO making addition Amount of Rs.46,64,901/- on sale of land and not granted benefit of u/s.54F of IT Act. 2. The assessment made on the assessee u/s.147 of the Act was bad in law.” 3. There is a delay of 1823 days in filing the present appeal for which the assessee has filed condonation of delay application alongwith the affidavit explaining the delay. The Ld. AR submitted that the appeal against order of CIT(A) dated 18.12.2014 was served on 29.12.2014 and the appeal should have been filed before the Tribunal by 17.02.2015, but the same was filed on 14.02.2020, hence there is a delay of 1823 days. The affidavit regarding reasonable and sufficient cause for the delay is placed at Paper Book page Nos.123 to126 & 127 to 148. The Ld. AR ITA No.172/Ahd/2020 A.Y: 2008-09 Page 2 of 5 submitted that the assessee and his brothers belonged to agriculturist family and the assessee was a NRI and was staying in USA from 2015 to 2020. His financial and Income Tax matters were handled by his brothers namely Shri Amrutbhai S. Patel and later on by Shri Jashubhai S. Patel to whom Power of Attorney (POA) was given by the assessee for handling his Income Tax and Bank matters. The assessee used to visit India only for few days and was under bonafide belief that the assessee’s brothers are following the Income Tax and Bank issues of the assessee. The order of the CIT(A) confirming the penalty was passed on 18.12.2014 and served on POA holder Jashubhai S. Patel at his address on 29.12.2014. However, due to very old age of Jashubhai S. Patel and Amrutbhai S Patel they could not inform about the order passed by the CIT(A) confirming penalty to the assessee and in fact both the brothers of the assessee were subsequently died on 29.03.2018 and 20.01.2020. The period explaining the delay from 29.12.2014 till 29.03.2018 and 20.01.2020 has lapsed as the assessee was under bonafide belief that there was no pending Income Tax mater that of penalty in assessee’s case. The Ld. AR submitted that during the last visit in 10.12.2018 when the Kotak Mahindra Bank issued a letter under Section 226(3) of the Act stating that they will remit funds against Income Tax Department’s attachment of demand, the assessee informed his brother Jashubhai S. Patel but he also could not pursue the matter with Professional Tax Consultant and due to his age and deteriorating health problems because of which he died on 20.01.2020. It was only when assessee visited India last on 14.01.2020 to 13.02.2020 during illness of Jashubhai S. Patel who died on 20.01.2020, the assessee collected all his various papers and documents in which order of CIT(A) dated 18.12.2014 came to the knowledge of the assessee and immediately contacted the Chartered Accountant. As per the advice of the Chartered Accountant the present appeal was filed before the Tribunal on 14.02.2020 resulting into delay of 1823 days. Thus, the Ld. AR submitted that the delay may be condoned and the matter may be heard on merit. The Ld. AR relied upon the decision of Hon’ble Apex Court in the case of Collector Land Acquisition vs. Katji & Others, 167 ITR 471. 4. The Ld. DR submitted that the assessee should have taken proper cognisance when he was aware that assessee’s brothers could not handle the financial matter including tax matter due to their overage. In fact, there were parallel proceedings going on, so the assessee should have taken proper measures to file appeal within ITA No.172/Ahd/2020 A.Y: 2008-09 Page 3 of 5 time. The Ld. DR opposed the delay condonation and prayed that the appeal may be dismissed on this ground itself. 5. We have heard both the parties and perused all the relevant material available on record. In the present case, the circumstances are perused, as the assessee is not staying in India and during the said period he was under the bonafide belief that his brothers will be able to co-ordinate with the Tax Consultant regarding Income Tax matters. In the exceptional circumstances, in the present case, it is appropriate to condone the delay as held in various decisions of Hon’ble Apex Court that when delay is explained in detail and appears to be genuine and bonafide, the same should be condoned. Hence, the delay in the present case was genuinely explained by the assessee and, therefore, we are condoning the delay. This condonation of delay should not be taken as precedent as the delay has been condoned under the circumstances occurred in the present assessee’s case only 6. Now coming to the merits, in this case the return of income declaring total of Rs.2,22,630/- was filed by the assessee. The assessee is partner in M/s S.L. Patel & Co. which is engaged in the business of tea. The assessee has shown income from share of profit from partnership firm and income from Short Term Capital Gain and income from other sources. The case was selected for scrutiny and the assessment was finalised on 24.12.2010. The assessee’s total income was Rs.2,03,45,060/-. The Assessing Officer made addition of Rs.1,11,99,608/- as Long Term Capital Gain in the hands of the assessee on compensation and addition of Rs.89,22,836/- as Long Term Capital Gain by disallowing the claim of exemption under Section 54 of the Act. Subsequently penalty proceedings under Section 271(1(c) of the Act was initiated by issuing notice under Section 274 read with Section 271(1)(c) of the Act on 24.12.2010 as well as on 06.02.2013. The Assessing Officer, after taking cognisance of the assessee’s reply, has imposed penalty of Rs.45,61,650/- for the reason of concealing particulars of income. 7. The Ld. AR submitted that the assessee under bonafide belief has made the claim under Section 54 of the Act in respect of Long Term Capital Gain since the assessee has purchased land for the construction of residence. The Ld. AR submitted that there was no concealment in respect of claim under Section 54 of the Act and, ITA No.172/Ahd/2020 A.Y: 2008-09 Page 4 of 5 therefore, in the light of the decision of Hon’ble Apex Court in the case of CIT vs. Reliance Petroproducts (P) Limited, 322 ITR 158 the penalty should not have been imposed. 8. The Ld. DR submitted that the assessee claimed excessive deduction/ exemption under Section 54 of the Act and, therefore, the Assessing Officer rightly imposed penalty under Section 271(1)(c) of the Act. The Ld. DR relied upon the decisions of the Hon’ble Kerala High Court in the case of CIT vs. India Sea Foods, 105 ITR 708 and CIT vs. Gates Foam & Rubber Company, 91 ITR 467. 9. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has under bonafide belief claimed the exemption under Section 54 of the Act in respect of Long Term Capital Gain as the assessee has made investments during the year. The same was disclosed by the assessee in the details of return of income as well as during the assessment proceedings and thus the element of concealment of particulars of income does not get attracted in assessee’s case. The decision of Hon’ble Apex Court is squarely applicable in assessee’s case. The decisions relied by the Ld. DR will not be applicable ain the present case as the limb under which Section 271(1)(c) of the Act was invoked is missing in the present assessee’s case, in fact, the quantum thereafter has been deleted in assessee’s case and, therefore, the very basis of the penalty does not survive. 10. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 3 rd November, 2023. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 3 rd day of November, 2023 PBN/* ITA No.172/Ahd/2020 A.Y: 2008-09 Page 5 of 5 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE CO Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad