Shri Harshadbhai Ratilal Patel, Ahmedabad V. The Income Tax Officer, Ward-3(3), Petlad

ITA 1906/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85520 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-12-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: K H SHAH
• Keywords: Salary income; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI , ACCOUNTANT MEMBER ITA NO . 1906 /AHD/20 1 4 A. Y. 20 10 - 11 SHRI HARSHADBHAI RATILAL PATEL, C/O, KETAN H. SHAH, ADVOCATE, 903 SAPPHI RE COMPLEX, C.G. ROAD, NAVRANGPURA, AHMEDABAD. PAN: ADUPP 5698L VS ITO, WARD - 3 ( 3 ), PETLAD . (APPELLANT) (RESPONDENT) REVENUE BY : SHRI DINESH SINGH , SR. D.R. , ASSESSEE(S) BY : SHRI K.H. SHAH, A.R. / DATE OF HEARING : 2 3 / 1 2 /201 4 / DATE OF PRONOUNCEMENT: 9 / 01 /201 5 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF T HE L EARNED CIT(A) - I , BARODA , DAT ED 05.05.2014 AND THE ONLY GROUND IS IN RESPECT OF LEVY OF PENALTY U/S.271(1)(C) OF RS.4,62,400/ - . 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) DATED 27.12.2012 AND THE PENALTY ORD ER PASSED U/S.271(1)(C) DATED 29.04.2013 WERE THAT THE APPELLANT IS A SALARIED EMPLOYEE WORKING AS A TEACHER IN B.A. PATEL HIGH SCHOOL, CHANGA. IT WAS NOTICED BY THE AO THAT AN ORIGINAL RETURN WAS FILED ON 21.05.2010 DECLARING AN INCOME OF RS.2,44,446/ - . T HEREAFTER, THE ASSESSEE HAS ALSO ITA NO. 1906 /AHD/201 4 SHRI HARSHADBHAI RATILAL PATEL VS. ITO, WARD - 3 ( 3 ), PETLAD . FOR A.Y. 2010 - 11 - 2 - FILED AN E - RETURN OF INCOME DECLARING RS.22,39,901/ - . AS PER THE SAID RETURN THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY AND DISCLOSED LONG TERM CAPITAL GAIN IN THE SAID E - RETURN. THE ADMITTED FACTUAL POSITION WAS THAT THE ASS ESSEE HAD FILED TWO RETURNS, FIRST WAS MANUALLY FILED DISCLOSING SALARY INCOME AND THE OTHER WAS E - RETURN DISCLOSING LONG TERM CAPITAL GAIN. THE AO HAS ALSO NOTED THAT THE RETURN WHICH WAS MANUALLY FILED ON 21.05.2010 WAS PROCESSED U/S.143(1) OF IT ACT. SI NCE, AS PER THE ORIGINAL RETURN THE CAPITAL GAIN TAX WAS NOT OFFERED; THEREFORE, THE PENALTY U/S.271(1)(C) WAS INITIATED. WHILE LEVYING THE IMPUGNED PENALTY AGAIN IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS NOT FURNISHED THE PARTICULARS IN RESPECT OF L ONG TERM CAPITAL GAIN WHEN THE RETURN OF INCOME WAS FILED AT THE FIRST INSTANCE THEREFORE, CONCEAL ED THE PARTICULARS OF INCOME. THE AO HAS LEVIED THE IMPUGNED PENALTY ON THE CAPITAL GAIN OF RS.22,39,901/ - + INTEREST RECEIVED FROM BANK OF RS.3,047/ - . 3. LEAR NED CIT(A) HAS CONFIRMED THE PENALTY. WITH THIS FACTUAL BACKGROUND, LEARNED AR, MR. K.H. SHAH HAS PLEADED THAT THE E - RETURN WAS FILED VOLUNTARILY AND IT WAS WRONG ON THE PART OF THE REVENUE DEPARTMENT TO ALLEGE THAT THE SAME WAS FILED AFTER THE NOTICE WAS ISSUED U/S.143(2) OF IT ACT. BY REFERRING THE SAID NOTICE ISSUED U/S.143(2) WHICH WAS DATED 30 TH OF AUGUST, 2011. LEARNED AR HAS DRAWN OUR ATTENTION THAT THE SAID NOTICE WAS SERVED UPON THE ASSESSEE ON 5.9.2011. HOWEVER, THE E - RETURN WAS FILED ON 31 ST OF A UGUST, 2011. LEARNED AR HAS THEREFORE ARGUED THAT THE E - RETURN WAS FILED SUO MOTU PRIOR TO ANY INTIMATION RECEIVED FROM THE REVENUE DEPARTMENT. HE HAS ALSO PLEADED THAT THIS IS THE CASE OF AN INDIVIDUAL WHO I S NOT VERY WELL CONVER SANT WITH THE INCOME TAX PROCEDURE, WHICH IS ALSO EVIDENT THAT THE SALARY INCOME WHICH WAS ITA NO. 1906 /AHD/201 4 SHRI HARSHADBHAI RATILAL PATEL VS. ITO, WARD - 3 ( 3 ), PETLAD . FOR A.Y. 2010 - 11 - 3 - DISCLOSED AS PER THE ORIGINAL RETURN WAS NOT INCLUDED IN THE E - RETURN, IN WHICH ONLY THE CAPITAL GAIN WAS DISCLOSED. THIS BEHAVIOR OF THE ASSESSEE ITSELF PROVES HIS INNOCENCE. HE HAS ALSO IN FORMED THAT AS PER THE E - RETURN THE LONG TERM CAPITAL GAIN TAX WAS PAID ALONG WITH INTEREST TOTALING RS.5,68,974/ - ; HENCE, THERE WAS NO INTENTION OF THE ASSESSEE TO AVOID THE INCIDENCE OF TAX. LEARNED AR HAS ALSO PLEADED THAT THE NOTICE ISSUED U/S.143(2) D ATED 30 TH OF AUGUST, 2011 HAS NOT MENTIONED ANY SPECIFIC INQUIRY WHICH PROVES THAT THERE WAS NO INFORMATION AVAILABLE TO THE REVENUE DEPARTMENT IN RESPECT OF LONG TERM CAPITAL GAIN. LEARNED AR HAS PLACED RELIANCE ON THE DECISION OF K.C. BUILDERS, 265 ITR 5 62 (SC) . 4. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., DINESH SINGH HAS SUPPORTED THE LEVY OF PENALTY AND PLEADED THAT THE ASSESSEE HAS NOT DEPOSITED ANY ADVANCE TAX ON THE LONG TERM CAPITAL GAIN, THEREFORE, HIS INTENTION WAS NOT TO DISCLOSE THE LONG TERM CAPITAL GAIN VOLUNTARILY. ACCORDING TO LEARNED SR.D.R., E - RETURN WAS FILED WHEN THE REVENUE DEPARTMENT HAD DETECTED THE CONCEALMENT OF LONG TERM CAPITAL GAIN. ACCORDING TO HIS ARGUMENTS, FILING OF E - RETURN WAS NOT A VOLUNTARY ACT OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE SIDES. WE HAVE PERUSED THE IMPUGNED ORDERS IN THE LIGHT OF THE COMPILATION FILED. WE FIND FORCE IN THE ARGUMENT OF LEARNED AR BECAUSE OF THE REASON THAT THE NOTICE U/S.143(2) WAS ALTHOUGH DATED 30 TH OF AUGUST, 201 1 BUT THE ADMITTED FACTUAL POSITION, AS ACKNOWLEDGED BY THE AO HIMSELF, WAS SERVED UPON THE ASSESSEE ON 05.09.2011. MEANWHILE THE ASSESSEE HAD ALREADY FILED THE E - RETURN ON 31 ST AUGUST, 2011 DISCLOSING THE LONG TERM CAPITAL GAIN OF RS.22,39,901/ - . ITA NO. 1906 /AHD/201 4 SHRI HARSHADBHAI RATILAL PATEL VS. ITO, WARD - 3 ( 3 ), PETLAD . FOR A.Y. 2010 - 11 - 4 - IN SUCH CIRCUMSTANCES, IT IS FAIR AND REASONABLE TO HOLD THAT THE FILING OF E - RETURN WAS A VOLUNTARY ACT PRIOR TO ANY DETECTION FROM THE SIDE OF THE REVENUE. 5.1 THIS FACT CAN ALSO NOT BE IGNORED THAT THE ASSESSEE IS A SCHOOL TEACHER AND HENCE ACTED UPON UNDER B ONA FIDE BELIEF AND GOOD FAITH. THIS IS NOT THE CASE OF THE REVENUE THAT THE CAPITAL GAIN WAS NOT FULLY AND TRULY DISCLOSED BY THE ASSESSEE. RATHER, WHATEVER INCOME WAS DISCLOSED AS PER THE E - RETURN WAS DULY ACCEPTED BY THE AO. WE HEREBY FOLLOW THE LEGAL PROPOSITION LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF K.C. BUILDER (SUPRA) WHEREIN THE REVISED RETURN WAS ACCEPTED BY THE DEPARTMENT AND THE ASSESSMENT WAS F INALISED ON THE BASIS OF THE REVISED RETURN, THEREFORE, IN THE ABSENCE OF ANY DISHONEST OR FRAUDULENT INTENTION ; THE PENAL PROVISIONS WERE DISMISSED. RESULTANTLY, WE HEREBY HOLD THAT NO CONCEALMENT PENALTY IS REQUIRED TO BE IMPOSED IN RESPECT OF LONG TERM CAPITAL GAIN. WE ORDER ACCORDINGLY. 5.2 AS FAR AS THE LEVY OF PENALTY ON THE INTEREST AM OUNT OF RS.3,047/ - IS CONCERNED NO SATISFACTORY EXPLANATION HAS BEEN OFFERED BY LEARNED AR TO DEMONSTRATE THAT THE INTEREST RECEIVED FROM BANKS WAS EITHER VOLUNTARILY DISCLOSED IN THE ORIGINAL RETURN OR IN THE E - RETURN. RATHER FACTS OF THE CASE HAVE REVEAL ED THAT THE AO HAS FOUND THAT THE INTEREST RECEIVED FROM THE BANKS WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURNS OF INCOME. IN SUCH CIRCUMSTANCES, WE HEREBY HOLD THAT THE PENALTY U/ S. 271(1)(C) WAS CORRECTLY LEVIED ON THE IMPUGNED INTEREST AMOUNT. RESUL TANTLY, GROUND RAISED BY THE REVENUE IS PARTLY ALLOWED. ITA NO. 1906 /AHD/201 4 SHRI HARSHADBHAI RATILAL PATEL VS. ITO, WARD - 3 ( 3 ), PETLAD . FOR A.Y. 2010 - 11 - 5 - 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/ - SD/ - ( N.S. SAINI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 09 / 01 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD