Shri Anil Tyagi, Ghaziabad V. ITO, Ghaziabad

ITA 2065/DEL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4019 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Capital asset; Principle of natural justice; Question of law; Difference of opinion
• Section: 143(3)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2065/DEL/2016 (ASSESSMENT YEAR: 2011 - 12 ) SHRI ANIL TYAGI, 97/SA, VILLAGE DUNDAHERA, NH - 24, GHAZIABAD (UP), PAN: ACQPT1968G VS. ITO, WARD - 1(1), GHAZIABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANOOP SHARMA, ADV SHRI SANJAY PRASHAR, ADV REVENUE BY: SMT ASHIMA NEB, SR. DR DATE OF HEARING 08/08 / 2018 DATE OF PRONOUNCEMENT 0 2 / 11 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A), GHAZIABAD DATED 11.02.2016 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. CIT(A) ERRED IN LAW, ON FACTS AND SURROUNDING BACKGROUND CIRCUMSTANCES IN SUSTAINING THE EXORBITANT IMPUGNED PENALTY OF RS. 1193221 LEVIED BY LD. A.O. U/S 271(1)(C) OF I.T. ACT ON ILLOGICAL, IRRELEVANT AND EVASIVE GROUNDS HAVING NO SANCTITY IN LAW. 2. THAT IN DOING SO, THE LD. CIT(A) IN A ZEAL TO SUSTAIN PENALTY IGNORED HIS OWN FINDINGS IN THE CASE OF ANOTHER APPELLANT M/S KALYANI ENGINEERING WORKS INVOLVING SAME FACTS AND C IRCUMSTANCES, RELYING ON THE SAME SET OF CASE LAWS, SAME VOLUNTARY SURRENDER OFFER HAD DELETED THE PENALTY VIDE APPELLATE ORDER IN APPEAL NO. 236/2014 - 15/GZB. DATED 11 - 12 - 2015. 3. THAT THE LD. CIT(A) FURTHER ERRED IN LAW, ON FACTS AND SURROUNDING BACKGROUN D CIRCUMSTANCES, IN FAILING TO APPRECIATE THE CONTENTS OF THE SURRENDER OFFER LETTER DATED 27 - 08 - 2014, SPECIFYING JUST TO AVOID FUTURE LITIGATION, WHICH NOT ONLY BEEN ACCEPTED WITHOUT IFS AND BUT BY THE LD. A.O. BUT IT HAS ALSO BEEN ACTED UPON WHILE CA LCULATING THE CAPITAL GAIN. THUS, THERE WAS NO IOTA OF CONCEALMENT AND VOLUNTARY SURRENDER CANNOT BE BRUSHED ASIDE, AS PER WELL SETTLED LAW. SHRI ANIL TYAGI VS ITO ITA NO. 2065/DEL/2016 (ASSESSMENT YEAR: 2011 - 12) PAGE | 2 4. THAT THE LD. CIT(A) FURTHER ERRED IN LAW, ON FACTS AND SURROUNDING CIRCUMSTANCES IN IGNORING THE FAILURE ON THE PART OF THE LD. A.O. TO RECORD HIS SATISFACTION CLARIFYING THE SPECIFIC CHARGE AGAINST THE APPELLANT AS LAID DOWN IN LAW. 5. THAT ON THE FACTS AND SURROUNDING CIRCUMSTANCES COUPLED WITH VARIOUS VERDICTS OF HIGHER JUDICIAL AUTHORITY RELIED UPON BY THE APPEL LANT IN HIS WRITTEN SUBMISSION, THE IMPUGNED PENALTY PROCEEDINGS ARE UNSUSTAINABLE IN LAW AB - INITIO AND CONSEQUENTLY THE IMPUGNED PENALTY IS LIABLE FOR DELETION IN THE INTEREST OF NATURAL LAW AND EQUITY. 3. THE ONLY ISSUE IS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT OF RS. 1193221/ - . 4. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME ON 09.08.2011 AT TOTAL INCOME OF RS. 169287/ - . THE ASSESSMENT U/S 143(3) WAS PASSED ON 13.02.2014 AT RS. 5961640/ - . THE ONLY ADDITI ON IS OF RS. 5792350/ - UNDER LONG - TERM CAPITAL GAIN ON TRANSFER OF CAPITAL ASSETS. THEREFORE, THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED. THE ASSESSEE SUBMITTED IN PENALTY PROCEEDINGS THAT THE ASSESSEE IS A FARMER AND ANCESTRAL AGRICU LTURAL LAND USED BY HIM FOR AGRICULTURAL PURPOSES WAS SOLD. ACCORDING TO THE ASSESSEE, NO CAPITAL GAIN IS CHARGEABLE ON SALE OF AGRICULTURAL LAND. THE LD AO HELD THAT THE ALLEGED LAND WAS RESIDENTIAL PROPERTY AND THEREFORE CHARGED CAPITAL GAIN THEREON. THE ASSESSEE ACCEPTED THE ABOVE AMOUNT IN THE ASSESSMENT PROCEEDINGS ITSELF AND SURRENDERED THE ABOVE SUM WITH A REQUEST TO NOT TO LEVY THE PENALTY. ON THIS GROUND, THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS HAVING A BONA FIDE BELIEF ABOUT NON TAXABILITY OF PROFIT ON SALE OF AGRICULTURAL LAND AND THEREFORE, PENALTY SHOULD NOT BE LEVIED. THE LD AO REJECTED THE EXPLANATION OF THE ASSESSEE AND LEV IED THE PENALTY OF RS. 1193221/ - . THE PENALTY ORDER WAS PASSED ON 28.08.2014. SAME WAS CHALLENGED BEFORE THE LD CIT ( A) UNSUCCESSFULLY. THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD AR FIRSTLY ARGUED THAT PENALTY IS NOT SUSTAINABLE AS THERE IS NO SPECIFIC CHARGE IN THE PENALTY NOTICE ISSUED BY THE LD AO. HE REFERRED TO THE PENALTY NOTICE DATED 13.02.2014 PLACED AT PAGE NO. 12 OF THE PAPER SHRI ANIL TYAGI VS ITO ITA NO. 2065/DEL/2016 (ASSESSMENT YEAR: 2011 - 12) PAGE | 3 BOOK. HE SUBMITTED THAT OUT OF TWIN CHARGES N ONE OF THE CHARGE HAS BEEN CANCELLED BY THE LD AO. HE FURTHER SUBMITTED THAT IN THE ASSESSMENT ORDER DATED 13.02.2017 THE LD AO HAS NOT STATED ABOUT ANY CHARGE EITHER OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. HE FURTHER STATED THAT IN THE PEN ALTY ORDER THE PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF THE INCOME. THE LD CIT ( A) HAS ALSO LEVIED THE PENALTY FOR CONCEALMENT OF INCOME. HE THEREFORE, STATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HON'BLE KARNAT AKA HIGH COURT IN CIT VS. MANJUNATHA COTTON AND GINNING 359 ITR 565 AS WELL AS CIT VS. SSA S EMERALD MEADOWS 73 TAXMANN.COM 248. 6. THE LD DR VEHEMENTLY SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE SUNDARAM FI NANCE LTD VS. ACIT 403 ITR 407 (MAD) WHERE THE DECISIONS CITED BY THE ASSESSEE ARE CONSIDERED. EVEN ON THE MERITS, THE LD AR SUBMITTED THAT THERE IS NO CONCEALMENT OF PARTICULARS BUT DIFFERENCE OF OPINION ONLY. HE FURTHER STATED THAT MERELY NON - FILING OF APPEAL AND ACCEPTANCE OF THE ADDITION DOES NOT RESULT INTO PENALTY. ON MERITS , LD DR SUBMITTED THAT THE ASSESSEE HAS SOLD CAPITAL ASSET AND NOT SHOWN THE CAPITAL GAIN THEREFORE, THERE IS CLEAR CUT CASE OF CONCEALMENT OF INCOME. 7. WE HAVE CAREFULLY CONSI DERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE SHOW CAUSE NOTICE DATED 13.02.2014 AND FIND THAT THE LD AO HAS NOT STRUCK OFF ONE OF THE TWIN CHARGES. FURTHER, IN THE ASSESSMENT ORDER ALSO THE LD AO HAS NOT SPECIFIED ONE OF THE EITHER CHARGES . THEREFORE , IT IS APPARENT THAT ASSESSEE WAS NOT ISSUED SHOW CAUSE NOTICE ON ANY SPECIFI C CHARGE EITHER OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF 73 TAXMANN.COM 248. THE DE CISION RELIED UPON BY THE LD DR IN CASE OF SUNDRAM FINANCE LTD (SUPRA) IS CLEARLY DISTINGUISHABLE. IN THAT PARTICULAR CASE THE HON'BLE MADRAS HIGH COURT HAS HELD THAT THE ASSESSEE HAS UNDERSTOOD T HE PURPORT AND IMPORT OF THE NOTIC E . THE HONOURABLE COURT HELD AS UNDER : - SHRI ANIL TYAGI VS ITO ITA NO. 2065/DEL/2016 (ASSESSMENT YEAR: 2011 - 12) PAGE | 4 16. WE HAVE PERUSED THE NOTICES AND WE FIND THAT THE RELEVANT COLUMNS HAVE BEEN MARKED, MORE PARTICULARLY, WHEN THE CASE AGAINST THE ASSESSEE IS THAT THEY HAVE CONCEALED PARTICULARS OF INCOME AND FURNISHED INACCUR ATE PARTICULARS OF INCOME. THEREFORE, THE CONTENTION RAISED BY THE ASSESSEE IS LIABLE TO BE REJECTED ON FACTS. THAT APART, THIS ISSUE CAN NEVER BE A QUESTION OF LAW IN THE ASSESSEE'S CASE, AS IT IS PURELY A QUESTION OF FACT. APART FROM THAT, THE ASSESSEE H AD AT NO EARLIER POINT OF TIME RAISED THE PLEA THAT ON ACCOUNT OF A DEFECT IN THE NOTICE, THEY WERE PUT TO PREJUDICE. ALL VIOLATIONS WILL NOT RESULT IN NULLIFYING THE ORDERS PASSED BY STATUTORY AUTHORITIES. IF THE CASE OF THE ASSESSEE IS THAT THEY HAVE BEE N PUT TO PREJUDICE AND PRINCIPLES OF NATURAL JUSTICE WERE VIOLATED ON ACCOUNT OF NOT BEING ABLE TO SUBMIT AN EFFECTIVE REPLY, IT WOULD BE A DIFFERENT MATTER. THIS WAS NEVER THE PLEA OF THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE FIRST AP PELLATE AUTHORITY OR BEFORE THE TRIBUNAL OR BEFORE THIS COURT WHEN THE TAX CASE APPEALS WERE FILED AND IT WAS ONLY AFTER 10 YEARS, WHEN THE APPEALS WERE LISTED FOR FINAL HEARING, THIS ISSUE IS SOUGHT TO BE RAISED. THUS ON FACTS, WE COULD SAFELY CONCLUDE TH AT EVEN ASSUMING THAT THERE WAS DEFECT IN THE NOTICE, IT HAD CAUSED NO PREJUDICE TO THE ASSESSEE AND THE ASSESSEE CLEARLY UNDERSTOOD WHAT WAS THE PURPORT AND IMPORT OF NOTICE ISSUED UNDER SECTION 274 R/W, SECTION 271 OF THE ACT. THEREFORE, PRINCIPLES OF NA TURAL JUSTICE CANNOT BE READ IN ABSTRACT AND THE ASSESSEE, BEING A LIMITED COMPANY, HAVING WIDE NETWORK IN VARIOUS FINANCIAL SERVICES, SHOULD DEFINITELY BE PRECLUDED FROM RAISING SUCH A PLEA AT THIS BELATED STAGE. 8. IN THE PRESENT CASE THE ASSESSEE WAS NOT EVEN INFORMED THAT IT WAS A CASE OF CONCEALMENT OF INCOME. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN CASE OF SSA EMERALD MEADOWS ( SUPRA) AGAINST WHICH SLP HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT, WE RE VERSE THE FINDING OF THE LD AO AND LD CIT(A) AND DIRECT THE LD AO TO DELETE THE PENALTY LEVIED U/S 271(1) ( C) OF THE ACT OF RS. 1193221/ - . 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 2 / 11 / 2018 . - SD/ - - SD/ - ( BHAVNESH SAINI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 2 / 11 / 2018 A K KEOT COPY FORWARDED TO SHRI ANIL TYAGI VS ITO ITA NO. 2065/DEL/2016 (ASSESSMENT YEAR: 2011 - 12) PAGE | 5 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI