Smt. Bhudevi Kisanrao Gorantyal, Jalna V. Income-tax Officer,

ITA 2027/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5281 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Sale consideration of property below Jantri Value; Document seized; Cost of acquisition; Initiation of penalty proceedings; Reasonable cause; Documents seized
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO.2027/PUN/2016 $ $ / ASSESSMENT YEAR : 2008-09 SMT. BHUDEVI KISANRAO GORANTYAL, C/O. MAYUR CHAP BIDI, NEHRU ROAD, JALNA 431 203 PAN : BIRPG4921Q ....... / APPELLANT / V/S. ITO, WARD-1(3), JALNA / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 16.07.2018 / DATE OF PRONOUNCEMENT : 16.07.2018 / ORDER PER D. KARUNAKARA RAO, AM: THIS IS THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER O F CIT(A)-1, AURANGABAD, DATED 15-07-2016 FOR THE A.Y. 2008-09. 2. GROUNDS RAISED BY THE ASSESSEE ARE EXTRACTED HERE AS UNDER : 1. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LE VIED ASSESSING OFFICER BY PARTLY ALLOWING THE APPEAL. SAME MAY PLEASE BE SET-ASIDE. 2. CIT(A) HAS ERRED IN LEVYING THE PENALTY REJECTIN G THE CLAIM OF ASSESSEE THAT INCORRECT CLAIM DOES NOT ATTRACT PENA LTY. 3. CIT(A) HAS ERRED IN LEVYING THE PENALTY REJECTIN G THE CLAIM OF ASSESSEE THAT SHE BELIEVED ON APPROVED VALUERS CER TIFICATE. 4. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 5. APPELLANT PRAYS TO ADD, ALTER, AMEND, MODIFY AND /OR WITHDRAW THE GROUND/GROUNDS AS THE OCCASION MAY DEMAND. 2 ITA NO.2027/PUN/2016 SMT. BHUDEVI KISANRAO GORANTYAL 3. ASSESSEE ALSO RAISED COUPLE OF ADDITIONAL GROUNDS (LEGAL IN NATURE) AND THE SAME ARE EXTRACTED BELOW : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE & IN LAW, THE PENALTY PROCEEDINGS INITIATED VIDE NOTICE U/S.271(1)(C) DATED 01-03- 2013 IS INVALID AND BAD IN LAW. APPELLANT PRAYS FOR CANCELLATION OF PENALTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE PENALTY ORDER DATED 03-03-2016 PASSED U/S.271(1)(C) IS INVALID AND BAD IN LAW. APPELLANT PRAYS FOR CANCELLATION OF PENALTY. 4. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FACT T HAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEING PURELY LE GAL ONES AND ALL FACTS ARE ALREADY BEFORE THE LOWER AUTHORITIES, THEREFORE, T HE SAME ARE ADMITTED FOR ADJUDICATION IN THE LIGHT OF VARIOUS BINDING JUD GMENTS ON THE SAME. 5. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS AN INDIVIDUAL AND SENIOR CITIZEN. SHE DID NOT FILE HER RETURN OF INCOME ORIGINALLY U/S.139(1) OF THE ACT. DURING THE ASSESSMENT , AO NOTICED THAT ASSESSEE SOLD A PIECE OF LAND SITUATED AT SURVEY NO.355, MAMMA DEVI MANDIR TO RAILWAY STATION ROAD, JALNA FOR A CONSIDERATION OF RS.40 LAKHS. THE SAID LAND WAS SOLD VIDE SALE DEED NO.2187/2007, DATED 27- 06-2007. THE STAMP VALUATION AUTHORITY DETERMINED THE M ARKET VALUE OF THE LAND AT RS.77,60,000/-. THE ACTUAL SALE CONSIDERATION OF THE LAND WAS BELOW THE MARKET VALUE DETERMINED BY THE STAMP VALU ATION AUTHORITY. ASSESSEE OFFERED FILED THE RETURN OF INCOME ON 2 7-02-2012 DISCLOSING CAPITAL GAIN LOSS OF RS.37,70,490/- U/S.50C OF THE A CT. AO OPINED THAT AS PER SECTION 50C OF THE ACT, ASSESSEE IS R EQUIRED TO PAY THE CAPITAL GAIN ON THE SAID LAND TRANSACTION. AT THE END OF ASSESSMENT PROCEEDINGS U/S.143(3) R.W.S. 147 OF THE ACT, AO COMPUTED T HE CAPITAL GAIN AT RS.75,97,725/- AFTER GIVING CREDIT OF INDEXATION AT R S.1,62,275/-. 3 ITA NO.2027/PUN/2016 SMT. BHUDEVI KISANRAO GORANTYAL PENALTY PROCEEDINGS U/S.271(1)(C) WAS INITIATED FOR CONCEALING A ND FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALT Y OF RS.13,51,748/-. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT (A) RESTRICTED THE PENALTY TO THE CAPITAL GAIN AMOUNT OF RS.23,50,345/-. THUS, THE CIT(A) GAVE PART RELIEF TO THE ASSESSEE. 6. AGGRIEVED WITH THE PART RELIEF GIVEN BY THE CIT(A), THE A SSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS/ ADDITIONAL GROUNDS EXTRACTED ABOVE. 7. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE REFERRING TO ADDITIONAL GROUNDS (LEGAL IN NATURE) SUBMITTED THAT THIS IS A CASE WHERE THE AO FAILED TO RECORD VALID SATISFACTION IN THE ASSESSMENT ORDER DURING WHICH THE PENALTY PROCEEDINGS WERE INITIATED. HIGHLIGHTING TH E LEGAL REQUIREMENT OF MAKING A SPECIFIC REFERENCE TO THE SPECIFIC LI MB OF CLAUSE (C) OF SECTION 271(1) OF THE ACT AND RELYING ON VARIOUS BIN DING JUDGMENTS IN THE CASE CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM.) AS WELL AS THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN T HE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 LD. COUNSEL DEMONSTRATED THAT THE PENALTY LEVIED BY THE AO IS UNSUS TAINABLE IN LAW. IN THIS REGARD, HE BROUGHT OUR ATTENTION TO THE ASSESS MENT ORDER AS WELL AS THE PENALTY ORDER HIGHLIGHTING THE ABOVE LEGAL DEFICIENCIES. 8. PER CONTRA, LD. DR FOR THE REVENUE RELIED ON THE ORDER S OF AO/CIT(A). 9. WE HEARD BOTH THE PARTIES ON THIS SPECIFIC LEGAL ISSUE, I.E . RECORDING OF PROPER SATISFACTION BY THE AO. WE PERUSED THE ORDER OF THE AO AND FIND THE SATISFACTION RECORDED BY THE AO FOR INITIATING THE P ENALTY 4 ITA NO.2027/PUN/2016 SMT. BHUDEVI KISANRAO GORANTYAL PROCEEDINGS U/S.271(1)(C) OF THE ACT IS RELEVANT FOR EXTRACTION. THER EFORE, THE SAME IS REPRODUCED AS UNDER : 4.. ACCORDINGLY, THE LONG TERM CAPITAL GAINS AS WORKED OUT ABOVE AT RS.75,97,725/- IS ADDED IN THE HANDS OF THE ASSESSE E AS AGAINST LONG TERM CAPITAL LOSS SHOWN BY THE ASSESSEE AT RS.37,77 ,490/-. SINCE THE ASSESSEE HAS CONCEALED AND FURNISHED INACCURATE PAR TICULARS OF INCOME, THEREFORE, PENAL PROCEEDINGS UNDER SECTION 271(1)( C) OF THE INCOME-TAX ACT, 1961 ARE INITIATED SEPARATELY. 9.1 WE ALSO PERUSED THE PENALTY ORDER DATED 03-03-2016 AND FIND THE SATISFACTION RECORDED BY THE AO FOR LEVYING THE PENALTY U/ S.271(1)(C) OF THE ACT IS RELEVANT FOR EXTRACTION. THE SAID SATISFACTION READS AS UN DER : 12. IN VIEW OF THE ABOVE DISCUSSION AND ON VERIFIC ATION OF THE RECORDS, IT WAS WELL ESTABLISHED THAT, THE ASSESSEE HAS CONCEAL ED THE PARTICULARS OF HER INCOME AND ALSO FURNISHED INACCURATE PARTICULAR S BY NOT DISCLOSING THE LONG TERM CAPITAL GAINS ON SALE OF ASSET AND CLAIMIN G SUBSTANTIAL WRONG COST OF ACQUISITION AS ON 1.4.1981. THEREFORE, I A M SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AN D ALSO FURNISHED INACCURATE PARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C) OF THE IT ACT, 1961 AND THEREBY COMMITTED A DEFAULT UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. HEN CE, I DIRECT HER TO PAY A SUM OF RS.13,51,748/- (RUPEES THIRTEEN LAKHS FIFTY ONE THOUSAND SEVEN HUNDRED FORTY EIGHT ONLY) BY WAY OF PENALTY UNDER S ECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, WHICH IS BEING A SUM NOT LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED AS CALCULATED BELOW.. FACTS AND CIRCUMSTANCES OF THE CASE DISCUSSED ABOVE , I AM SATISFIED THAT THE ASSESSEE WITHOUT ANY SUFFICIENT & REASONABLE CAUSE HAS COMMITTED A DEFAULT AS DEFINED IN EXPLN.1(A) TO SEC TION 271(1)(C) OF IT ACT. THE AMOUNT OF RS.2,00,50,000/- IS DEEMED TO REPRESE NT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. THIS ADDITION HAS BEEN CONFIRMED BY THE ITAT, WHICH IS THE HIGHES T FACT FINDING AUTHORITY. FURTHER, THE ADDITION HAS BEEN MADE ON THE BASIS OF DOCUMENTS SEIZED DURING COURSE OF THE SEARCH U/S.132 OF THE I T ACT, 1961, THE CONTENTS OF WHICH HAVE BEEN ADMITTED BY THE ASSESSE E. BUT ASSESSEE FAILED TO DISCLOSE CORRECTLY THE INCOME EARNED BY H IM, WHICH IS EVIDENT FROM THE NOTINGS IN SEIZED DOCUMENTS. MOREOVER ASS ESSEE HAS TAKEN THE STAND THAT THE ADDITION IS BASED ON PRESUMPTIONS AN D SURMISES, WHICH HAS BEEN FOUND TO BE FALSE. HENCE THIS CASE NEEDS TO BE DISTINGUISHED FROM OTHER CASES OF CONCEALMENT OF INCOME AND CERTA INLY WARRANTS LEVY OF HIGHER THAN MINIMUM QUANTUM OF PENALTY. THEREFORE, THE UNDERSIGNED HEREBY LEVIES 150% OF TAX SOUGHT TO BE EVADED AS PE NALTY U/S.271(1)(C) R.W. EXPLANATION 1 TO IT OF IT ACT, 1961. 11. THUS, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS PROPO SED TO BE LEVIED AT 150% OF THE TAX SOUGHT TO BE EVADED OF RS.1,01, 23,250/- ON THE ASSESSEE. 5 ITA NO.2027/PUN/2016 SMT. BHUDEVI KISANRAO GORANTYAL FROM THE ABOVE, IT IS EVIDENT THAT AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT, AO MENTIONED BOTH LIMBS O F CLAUSE (C) OF SECTION 271(1) OF THE ACT. THIS MANNER OF RECORDING OF SAT ISFACTION SUGGESTS THE EXISTENCE OF AMBIGUITY WITH REFERENCE TO APP LICABILITY OF SPECIFIC LIMB. THEREFORE, WE ARE OF THE OPINION THAT CONSIDERIN G THE ABOVE REFERRED BINDING JUDGMENTS SUCH PENALTY ORDER IS UNSUSTA INABLE IN LAW LEGALLY. AO IS UNDER OBLIGATION TO SPECIFY THE CORRECT LIMB AT THE TIME OF INITIATION AS WELL AS AT THE TIME OF LEVY OF PENALTY. IN VIEW OF THE ABOVE DELIBERATION ON THIS ISSUE, WE ARE OF THE OPINION THAT THE P ENALTY ORDER IS LIABLE TO BE QUASHED ON THIS LEGAL ISSUE. THUS, THE ORDE R OF CIT(A) IS SET-ASIDE AND DIRECT THE AO TO DELETE THE PENALTY. ACCO RDINGLY, THE GROUNDS/ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESS EE ARE ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 16 TH DAY OF JULY, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 16 TH JULY, 2018. SATISH ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, AURANGABAD 4. THE PR. CIT-1, AURANGABAD 5. , , # , / DR, ITAT, B BENCH, PUNE. 6. & / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.