Smt. Romi Lahiri, Kolkata V. DCIT, CIR-51, KOLKATA, Kolkata

ITA 173/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4770 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 30-01-2014
• Court: TRIBUNAL
• Assessee Lawyers: GOUTAM BANERJEE
• Section: 54F; 263; 144

Judgement Text

1 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI K. NARASIMHA CHARY, JM] I.T.A NO. 173/KOL/2014 ASSESSMENT YEAR: 2006-07 SMT. ROMI LAHIRI, (PAN: ABBPL5369B) VS. DEPUTY COM MISSIONER OF INCOME-TAX, CIRCLE-51, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 26.07.2016 DATE OF PRONOUNCEMENT: 03.08.2016 FOR THE APPELLANT: SHRI GOUTAM BANERJEE, AR FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CIT ORDER PER SHRI K. NARASIMHA CHARY, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXII, KOLKATA VIDE APPEAL NO. 58/XXXII/11-12/CIR-51/KOL DATED 13.08.20 13. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-51, KOLKATA U/S. 263/144 OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2006-07 VIDE HIS O RDER DATED 30.12.2010. PENALTY U/S. 271(1)(C) OF THE ACT WAS IMPOSED BY DCIT, CIRC LE-51, KOLKATA VIDE HIS ORDER DATED 24.06.2011. 2. AT THE OUTSET, WE FIND THAT THERE IS A DELAY OF 73 DAYS IN FILING THE APPEAL BEFORE US BY THE ASSESSEE WHICH IS SUPPORTED WITH C ONDONATION PETITION. IN VIEW OF THE CONCESSION GIVEN BY THE LD DR FOR CONDONATION O F DELAY, WE HEREBY CONDONE THE DELAY AND ADMIT THE APPEAL OF THE ASSESSEE FOR ADJU DICATION. 3. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE PURCHASED A PLOT OF LAND ON 5.2.2004 FOR RS. 3,72,140/- AND SOLD IT AWAY ON 7.1 2.2005 FOR RS.9,93,700/-, BUT CLAIMED BOTH LONG TERM CAPITAL GAINS AS WELL AS BEN EFIT UNDER SECTION 54F OF THE ACT. IN SPITE OF ORDERS PASSED UNDER SECTION 263 OF THE ACT, THE ASSESSEE FAILED TO COMPLY WITH THE DIRECTION, AS SUCH ANOTHER ORDER UNDER SEC TION 144 R/W SEC 263 WAS PASSED ON 2 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 30.12.2010 TREATING THE CAPITAL GAINS AS SHORT TERM CAPITAL GAINS AND WITHDRAWING THE BENEFITS UNDER SECTION 54F OF THE ACT. BESIDES THI S, PENALTY PROCEEDINGS WERE ALSO INITIATED AND LEVIED IN THE SUM OF RS.63,368/- VIDE ORDER DATED 24.06.2011. APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS) ENDED UP I N DISMISSAL CONFIRMING THE ORDER PASSED BY THE AO. HENCE, THE ASSESSEE HAS PR EFERRED AN APPEAL ON THE FOLLOWING GROUNDS: 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEVY OF PENALTY U/S. 271(1)(C) OF RS.63,368/- FOR AY 2006-07 IS WRONG, ERRONEOUS, ARB ITRARY, EXCESSIVE AND DESERVES TO BE DELETED/CANCELLED. 4. ASSESSEE DID NOT CHALLENGE THE ORDER DATED 21-04 -2010 PASSED UNDER SECTION 263 OF THE ACT. SHE HAS ALSO NOT CHALLENGED THE OR DER DATED 30.12.2010 PASSED UNDER SECTION 144 R/W 263 OF THE ACT. ONLY CHALLENGE IS TO THE PENALTY ORDER IMPOSING PENALTY OF RS 63,368/-. ARGUMENT OF LEARNED COUNSE L FOR THE ASSESSEE IS TWO-FOLD. FIRSTLY, UNDER MISTAKEN IMPRESSION OF ELIGIBILITY T O CLAIM BENEFIT UNDER SECTION 54F OF THE ACT, ASSESSEE HAS TREATED THE PROCEEDS OF SALE AS LONG TERM CAPITAL GAIN INSTEAD OF SHORT TERM CAPITAL GAIN AND WHEN THE SUM OF RS.6,21 ,260/- WAS ADDED, THE ASSESSEE ACCEPTED THE SAME AND PAID THE TAX DUE THEREON. AC CORDING TO HIM, THIS IS AT BEST AN ERRONEOUS CLAIM. HE FURTHER SUBMITTED THAT THE LEA RNED AO IN HIS ORDER STATED THAT INACCURATE PARTICULARS ARE FURNISHED BY THE ASSESSE E, WHEREAS THE LEARNED CIT(A) STATED THAT THE ASSESSEE CONCEALED THE PARTICULARS OF HER TAXABLE INCOME. HOWEVER, AS A MATTER OF FACT, ACCORDING TO LEARNED COUNSEL FOR THE ASSESSEE, THERE IS NEITHER CONCEALMENT NOR FURNISHING THE INACCURATE PARTICULA RS OF INCOME, SINCE ALL THE DOCUMENTS WERE SUBMITTED BEFORE THE AO AND AMOUNT W AS ALSO SHOWN IN THE RETURN. HE FURTHER SUBMITTED THAT IN THE ABSENCE OF ANY CON CEALMENT OR ACTIVE FURNISHING OF INACCURATE PARTICULARS, AN ERRONEOUS BELIEF AS TO T HE ENTITLEMENT FOR THE BENEFIT UNDER SECTION 54F OF THE ACT DOES NOT FORM A BASE TO IMPO SE PENALTY. HE PLACED RELIANCE ON A DECISION REPORTED IN UDAYA N MUKHERJEE VS COMMISSIONER OF INCOME-TAX (2007) 291 ITR 318(CAL), WHEREIN IT WAS HELD AS UNDER: 3 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 7. IF WE GO BY SECTION 271(1)(C), THEN IT APPEARS THAT THE SAID SECTION WILL APPLY IN A CASE WHERE THE ASSESSEE HAS CONCEALED HIS INCOME OR HAS FURNISHED WRONG PARTICULARS. IN THIS CASE, IT APPEARS THAT ALL THE PARTICULARS WERE FURN ISHED AND THERE IS NO FINDING THAT THE PARTICULARS THAT WERE FURNISHED WERE WRONG IN ANY R ESPECT. 8. THERE IS NOTHING TO INDICATE THAT THERE WAS ANY CONCEALMENT. THE ONLY WRONG INFORMATION THAT WAS DETECTED BY THE ASSESSING OFFICER AND AFFI RMED BY THE LEARNED TRIBUNAL DISAGREEING WITH THE DECISION TAKEN BY THE COMMISSIONER OF INCO ME-TAX (APPEALS) WAS THAT THE CALCULATION MADE ON THE BASIS OF THE INDEXATION WAS WRONG AND THAT INDEXATION WAS NOT CORRECT. THUS, THE QUESTION BOILS DOWN TO THE PROPO SITION THAT IT WAS A WRONG CALCULATION ON THE BASIS OF A MISTAKEN INDEXATION. NOW, THE QUESTI ON IS WHETHER THE WRONG CALCULATION ON THE BASIS OF THE MISTAKEN INDEXATION COULD BE TREAT ED TO BE AN INDIRECT CONCEALMENT OR A WRONG FURNISHING OF PARTICULARS. 5. RELIANCE IS ALSO PLACED ON A DECISION REPORTED I N PRICE WATERHOUSE COOPERS PVT. LTD VS. CIT [2012] 348 ITR 306 (SC) FOR THE PR INCIPLE THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DID NOT MEAN THAT THE ASSESSEE WAS GUILTY OF EITHER FURNISH ING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. LASTLY. THE DECI SION REPORTED IN CIT V. HIRALAL DOSHI [2016] 383 ITR 19 (BOM) TO DEMONSTRATE THAT W HEN THERE IS NO CONCEALMENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS, TH E AUTHORITIES REACHING A CONCLUSION PRIMA FACIE THAT THE INCOME COULD BE REGARDED AS LO NG TERM CAPITAL GAIN DELETING PENALTY IS A POSSIBLE VIEW. ARGUING THUS, LEARNED COUNSEL FOR THE ASSESSEE PRAYED TO DELETE THE PENALTY. 6. LEARNED DR, ON THE OTHER HAND, SUBMITTED THAT IT IS OPEN FROM THE DOCUMENTS THAT THE INCOME WAS A SHORT TERM CAPITAL GAIN BUT N OT A LONG TERM CAPITAL GAIN, BUT THE ASSESSEE WITH MALA FIDE INTENTION SHOWN IT AS LONG TERM CAPITAL GAIN AND CLAIMED BENEFIT UNDER SECTION 54F OF THE ACT, AND BUT FOR D ETECTION BY THE AUTHORITIES IN SCRUTINY PROCEEDINGS, IT COULD HAVE GONE UNNOTICED CAUSING PREJUDICE TO THE REVENUE. HE ARGUED THAT SHOWING SHORT TERM CAPITAL GAIN AS L ONG TERM CAPITAL GAIN ITSELF IS AN ACT OF FURNISHING INACCURATE PARTICULARS. HE PRAYE D TO DISMISS THE APPEAL OF ASSESSEE. 7. BASING ON THE ABOVE ARGUMENTS, THE POINT THAT AR ISES FOR OUR CONSIDERATION IS WHETHER THE LEARNED ASSESSING OFFICER JUSTIFIED IN IMPOSING PENALTY ON THE ASSESSEE? 4 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 8. AS COULD BE SEEN FROM THE RECORD IT IS AN ADMITT ED FACT THAT THE ASSESSEE WHILE FILING THE RETURN HAD FURNISHED THE COPIES OF ALL T HE DOCUMENTS. HOWEVER, SHOWING THE SALE PROCEEDS OF THE BUILDING AS LONG TERM CAPI TAL GAIN INSTEAD OF SHORT TERM CAPITAL GAIN AND ALSO CLAIMING BENEFIT U/S. 54F OF THE ACT AND ON A SCRUTINY IT IS FOUND THAT THE ASSESSEE WRONGLY CLAIMED THE BENEFIT U/S. 54F OF THE ACT AND ALSO THAT SHE HAD WRONGLY SHOWN THE SALE PROCEEDS AS LONG TER M CAPITAL GAIN INSTEAD OF SHORT TERM CAPITAL GAIN. BUT FOR THIS THING, THERE IS NE ITHER ANY ACT OF CONCEALMENT OF ANY MATERIAL FACT NOR ANY WILFUL FURNISHING OF INACCURA TE PARTICULARS. HOWEVER, THE LD. DR ARGUES THAT THE VERY ACT OF SHOWING THE LONG TER M CAPITAL GAIN AS A SHORT TERM CAPITAL GAIN IN ORDER TO CLAIM BENEFIT U/S. 54F OF THE ACT ITSELF AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS. HOWEVER, HE DOES NOT EX PLAIN THE DISCREPANCY IN THE ORDER OF THE AO HOLDING THIS ACT AS FURNISHING OF INACCUR ATE PARTICULARS WHEREAS THE LD. CIT(A) FINDING IT TO BE CONCEALMENT OF INCOME. THE SE TWO FINDINGS BY THE AUTHORITIES CANNOT BE RECONCILED AND THERE IS LOT O F FORCE IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS AT LO SS AS TO ON WHAT GROUND SHE HAS TO DEFEND HERSELF. WE ALSO FIND SOME FORCE IN THE ARG UMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT CERTAINLY IN THIS CASE BOTH THE ELEME NTS ARE NOT PRESENT. THE AUTHORITIES BELOW ARE NOT CLEAR AS TO THE ALLEGATION TO BE LEVE LLED AGAINST THE ASSESSEE - WHETHER IT IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS. CERTAINLY THE SITUATION CAUSES PREJUDICE TO THE ASSESSEE TO CONDU CT HER DEFENCE DILIGENTLY. 9. NOW COMING TO THE MERITS OF THE CASE, IT IS A JU DICIALLY ACKNOWLEDGED FACT THAT THE TAX LAWS OF THIS COUNTRY ARE COMPLEX AND COMPLI CATED AND OFTEN REQUIRE FOR COMPLIANCE THERE-WITH THE ASSISTANCE OF TAX PRACTIT IONERS SPECIALISING IN THIS FIELD AND THAT THE LEGISLATION IN THIS FIELD UNDERGOES SO FRE QUENT CHANGES AND AMENDMENTS THAT IT IS NOT POSSIBLE FOR EVEN A PERSON SPECIALISING IN T HIS FIELD, INCLUDING THE TAX ADMINISTRATOR, TO CLAIM THAT HE KNOWS WHAT EXACTLY THE LAW IS ON A PARTICULAR GIVEN DAY OR PERIOD WITHOUT MAKING REFERENCES TO THE HIST ORY OF THE ENACTMENTS. FURTHER, IT IS ALSO JUDICIALLY ACKNOWLEDGED FACT THAT THERE IS NO PRESUMPTION IN LAW THAT EVERY PERSON KNOWS THE LAW AND IT IS ALSO NOT A CORRECT S TATEMENT TO MAKE THAT THERE IS A PRESUMPTION THAT EVERY PERSON KNOWS THE LAW OF THE LAND. IN THIS SITUATION, IT WOULD 5 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 BE UNFAIR TO HOLD THAT THE ASSESSEE KNEW OR OUGHT T O HAVE KNOWN THE CORRECT LAW AND COMPLY THEREWITH. WHEN ONCE THE ASSESSEE HAS NOT CO NCEALED ANY FACT WHILE FILING THE RETURN AND AS A MATTER OF FACT SHE FILED THE COPIES OF THE DOCUMENT ALONG WITH THE RETURN, MERELY BECAUSE THE SALE PROCEEDS ARE SHOWN AS A LONG TERM CAPITAL GAIN INSTEAD OF SHORT TERM CAPITAL GAIN, IT CANNOT READILY BE ST ATED THAT THERE IS EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. IT IS ALSO POSSIBLE THAT SUCH AN ERRONEOUS CLAIM COULD HAVE BEEN MADE UNDER AN ERRON EOUS OR IMPROPER UNDERSTANDING OF LAW. WHEN WE LOOK AT THE THINGS F ROM THE ANGLE OF THE ASSESSEE FURNISHING COPIES AND DOCUMENTS AND, SHOWING THE SA LE PROCEEDS IN THE RETURNS COUPLED WITH THE FACTS THAT SHE DOES NOT CHALLENGE THE ADDITION OF QUANTUM TO THE TUNE OF RS.6,21,260/-, THERE APPEARS SOME FORCE IN THE C ONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PROCEEDINGS DO NOT WARRANT IMPOSI TION OF PENALTY AND IT IS ONLY A VENIAL BREACH OF LAW. BESIDES THIS, THE AUTHORITIE S HOLDING THE BREACH ON THE PART OF THE ASSESSEE AS FURNISHING OF INACCURATE PARTICULAR S BY AO AND CONCEALMENT OF INCOME BY CIT(A) STRENGTHENS OUR CONCLUSION THAT TH IS IS NOT A MATTER WHICH SHALL END UP IN IMPOSITION OF PENALTY AND AS IT IS HELD BY TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF HIRALAL DOSHIIS CASE (SUPRA), DELETING THE PENALTY IS A POSSIBLE VIEW AND THE FACTS AND CIRCUMSTANCES OF THE CASE INSPIRES US TO TAKE SUCH A VIEW IN THE INTEREST OF JUSTICE. WE ACCORDINGLY DO SO. THE POINT IS AN SWERED IN THE NEGATIVE HOLDING THAT THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN I MPOSING PENALTY ON THE ASSESSEE AND THE APPEAL OF THE ASSESSEE IS LIABLE TO BE ALLOWED WHILE QUASHING THE IMPUGNED ORDER. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.08.2016 SD/- SD/- (M. BALAGANESH) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED :3 RD AUGUST, 2016 JD.(SR.P.S.) 6 ITA NO.173/KOL/2014 SMT. ROMI LAHIRI, AY 2006-07 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SMT. ROMI LAHIRI, AJ-9, SALT LAKE CITY, KOLKATA-91 2 RESPONDENT DCIT, CIRCLE-51, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .