Karanveer Singh Bahia, New Delhi V. DCIT, New Delhi

ITA 1957/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3775 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: SEKHON
• Keywords: Wrong claim; Revised return
• Section: 54F; 10B; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI DELHI BENCH D : NEW DELHI DELHI BENCH D : NEW DELHI DELHI BENCH D : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI B.K.HALDAR, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI B.K.HALDAR, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI B.K.HALDAR, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI B.K.HALDAR, AM ITA NO.1957/DEL/2010 ITA NO.1957/DEL/2010 ITA NO.1957/DEL/2010 ITA NO.1957/DEL/2010 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006 ASSESSMENT YEAR : 2006- -- -07 0707 07 SHRI KARANVEER SINGH BAHIA, SHRI KARANVEER SINGH BAHIA, SHRI KARANVEER SINGH BAHIA, SHRI KARANVEER SINGH BAHIA, B BB B- -- -1/11, VASANT VIHAR, 1/11, VASANT VIHAR, 1/11, VASANT VIHAR, 1/11, VASANT VIHAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 057. 110 057. 110 057. 110 057. PAN : AAEPB0630 PAN : AAEPB0630 PAN : AAEPB0630 PAN : AAEPB0630R. R.R. R. VS. VS. VS. VS. DY.COMMISSIONER OF INCOME TAX, DY.COMMISSIONER OF INCOME TAX, DY.COMMISSIONER OF INCOME TAX, DY.COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -13(1), 13(1), 13(1), 13(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.S.SEKHON, CA. RESPONDENT BY : SHRI A.K.MONGA, DR. ORDER ORDER ORDER ORDER PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : THIS IS ASSESSEES APPEAL. SOLE GROUND RAISED IS A S UNDER:- THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)- XVII, DELHI, HAS ERRED IN CONFIRMING THE PENALTY OF RS.3,26,475/- WHICH WAS IMPOSED UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT, 1961. 2. BRIEF FACTS ARE THAT THE ASSESSEE SOLD A COMMERC IAL PROPERTY. QUA THE SALE PROCEEDS, THE ASSESSEE DECLARED LONG T ERM CAPITAL GAINS CLAIMING A DEDUCTION U/S 54. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED THE JUSTIFICATI ON FOR CLAIM OF DEDUCTION U/S 54. ASSESSEE THEN FILED A REVISED CO MPUTATION CLAIMING DEDUCTION U/S 54F INSTEAD OF SECTION 54. THE REVIS ED COMPUTATION RESULTED IN OFFERING AMOUNT OF `14,54,881/- AS EXCE SS CLAIM OF DEDUCTION U/S 54. AO HELD THAT THE ASSESSEES REVI SED COMPUTATION DATED 24.11.2008 FILED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS CANNOT BE ACCEPTED AS A VALID DECLARATION IN VIEW O F HONBLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE (INDIA) LTD. V S. CIT 284 ITR 323 ITA NO.1957/DEL/2010 2 AND FURTHER RELIED ON THE CASE OF K.P.MADHUSUDNAN V S. CIT 251 ITR 99 (SC) FOR THE PROPOSITION THAT THE REVISED RETURN FI LED BY THE ASSESSEE AMOUNTS TO OMISSION OF THE DEFAULT. THE ADDITION W AS CONFIRMED. PENALTY PROCEEDINGS WERE INITIATED. THE AO HELD TH AT THE ASSESSEE FAILED TO DISCLOSE MATERIAL FACTS FOR COMPUTATION O F TOTAL INCOME AND THE EXPLANATION OFFERED BY THE ASSESSEE COULD NOT B E SUBSTANTIATED AND PENALTY U/S 271(1)(C) WAS IMPOSED. 3. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL WHERE THE PENALTY WAS CONFIRMED RELYING ON DHARMENDRA TEXTILE PROCESSOR V S. CIT 306 ITR 277 AND ATUL MOHAN BINDAL 225 CTR 248 (SC) FOR TH E PROPOSITION THAT PENALTY U/S 271(1)(C) IS A STRICT CIVIL LIABILITY, THEREFORE, THE ORDER OF AO WAS UPHELD. 4. AGGRIEVED, ASSESSEE IS BEFORE US. 5. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE IMPOSITION OF PENALTY BY THE AO BY RECOURSE TO ACTION U/S 271(1) WAS NOT JUSTIFIED INASMUCH AS:- (I) THE ASSESSEE HAS FILED ALL THE PRIMARY FACTS I. E. THE COPY OF SALE DEED AND OTHER RELEVANT PARTICULARS WHICH HAVE NOT BEEN DISPUTED BY THE AO. (II) QUA THE ORIGINAL RETURN, IT MAY BE A CASE OF M ISTAKEN CLAIM BUT NOT A CLAIM OF FURNISHING INACCURATE PARTICULAR S. (III) THE ASSESSEES REVISED COMPUTATION OF INCOME CANNOT BE BRUSHED ASIDE INASMUCH AS AO ULTIMATELY ALLOWED THE DEDUCTION U/S 54F, THEREFORE, THE CASE AMOUNTS TO ALLOWABILITY OF DEDUCTION NOT U/S 54 BUT U/S 54F. THIS WAS AGAIN BY ASSESSEES BONA-FIDE BELIEF. ITA NO.1957/DEL/2010 3 (IV) THE EXPLANATION FILED BY THE ASSESSEE HAS BEEN SUBSTANTIATED BY ASSESSEE BY WAY OF WRITTEN SUBMISS IONS AND LOWER AUTHORITIES ON SUMMARY ASSUMPTION WITHOUT LOOKING INTO THE FACTS HELD IT TO BE NOT CORROBORAT ED. (V) IT IS PLEADED THAT EVEN THE CASE LAWS RELIED ON BY THE LEARNED CIT(A) IN THE CASE OF DHARMENDRA TEXTILE PR OCESSOR (SUPRA) AND ATUL MOHAN BINDAL (SUPRA) ALSO LAY DOWN THAT THE CIVIL LIABILITY IS A STRICT LIABILITY AND MEREL Y BECAUSE THE SECTION FOR ALLOWING ASSESSEES CLAIM HAS BEEN ALTE RED BY THE AO WILL NOT AMOUNT TO BREACH OF STRICT LIABILIT Y. RELIANCE IS PLACED ON HONBLE SUPREME COURT JUDGMENT DATED 10.9.2009 IN THE CASE OF SANJIV FABRICS IN CIVIL AP PEAL NOS.2344-2347 OF 2004 LAYING DOWN THAT WHEN THE STA TUTE USES THE WORDS FALSE REPRESENTATION, THE FINDING OF MENS- REA IS A CONDITION PRECEDENT FOR LEVYING PENALTY U/ S 10B OF THE UP SALES TAX ACT WHICH IS IN PARI-MATERIA WITH SECTION 271(1)(C) EXPLANATION (1). 6. THE LEARNED DR SUPPORTED THE ORDERS OF LOWER AUT HORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE RELEVANT MATERIAL ON RECORD. IN OUR VIEW, THE CASE IN QUESTION REPRESENTS MAKING OF A WRONG CLAIM AND NOT FURNISHI NG OF INACCURATE PARTICULARS. (I) THE ASSESSEE SOLD A COMMERCIAL PROPERTY AND CLA IMED DEDUCTION U/S 54 WHICH WAS ELIGIBLE FOR SALE OF RESIDENTIAL PROPERTY. THE ASSESSEE ENCLOSED ALL NECESSARY FACTS ALONGWITH THE RETURN OF INCOME AND IT IS ON THAT BASIS THAT AO COULD ASCERTAIN THE NATURE OF PROPERTY. THEREFORE, WE FIND MERIT IN THE ARGUMENT OF ITA NO.1957/DEL/2010 4 THE LEARNED COUNSEL THAT ALL THE MATERIAL FACTS WER E FURNISHED BEFORE THE AO. (II) A PENALTY U/S 271(1)(C) EXPLANATION (1) IS ATT RIBUTABLE TO DEFAULT OF FURNISHING INACCURATE PARTICULARS IN THE RETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN OUR VIEW, THE ASSESSEE MADE A WRON G CLAIM U/S 54 INSTEAD OF SECTION 54F. THE SAME HAS BEEN ATTRIBUTED TO A BONA-FIDE BELIEF CARRIED ON BY THE ASSESSEE. CONSEQUENTLY, THE CASE BEFORE US ASSUMES THE NATURE NOT OF FURNISHING INACCURATE PARTICULARS BUT MAKING A WRONG CLAIM. IT IS NOT A CASE OF FALSE CL AIM AS ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54F AND NOT U/S 54 AS HELD BY LOWER AUTHORITIES. (III) COMING TO THE CASE LAWS, HONBLE SUPREME COUR T IN THE CASE OF DHARMENDRA TEXTILE PROCESSOR (SUPRA) AND AT UL MOHAN BINDAL (SUPRA) HAS LAID DOWN THE PRINCIPLE OF STRICT CIVIL LIABILITY. EVEN HONBLE SUPREME COURT HAS NOT LAID DOWN THAT EVERY ADDITION WILL AUTOMATICALLY LE AD TO LEVY OF PENALTY AND THE ASPECT OF STRICT LIABILITY WILL DEPEND ON THE FACTS OF EACH CASE. THE CASE LAW CIT ED BY THE LEARNED COUNSEL IN THE CASE OF SANJEEV FABRICS (SUPRA) CANNOT BE RELIED AS IT DEALS WITH THE ASPEC T OF FALSE REPRESENTATION FOR WHICH HONBLE SUPREME COUR T HELD THE INGREDIENTS OF MENS-REA TO BE A PRE-CONDIT ION. IN CONTRADISTINCTION, EXPLANATION TO SECTION 271(1) (C) REFERS TO INACCURATE PARTICULARS. IF WE APPLY THIS CASE, THEN THE MATTER HAS TO BE SET ASIDE AS HELD BY HON BLE SUPREME COURT IN THIS CASE. 8. CONSEQUENTLY, WE ARE INCLINED TO DECIDE THE ISSU E IN THE PECULIAR FACTS OF THIS CASE AND NOT BEING A CASE OF FURNISHI NG INACCURATE ITA NO.1957/DEL/2010 5 PARTICULARS. WE SEE NO JUSTIFICATION IN IMPOSITION OF PENALTY WHICH IS DELETED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2011. SD/- SD/- (B.K.HALDAR) (B.K.HALDAR) (B.K.HALDAR) (B.K.HALDAR) (R.P.TOLANI) (R.P.TOLANI) (R.P.TOLANI) (R.P.TOLANI) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 17.06.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR