Ushaben R. Patel, Vadodara V. The Dy.Commissioner of Income Tax(Intl. Taxn.), Vadodara

ITA 2092/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5870 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 133(6); 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2092 & 2093/AHD/2016 (ASSESSMENT YEAR: 2011-12) USHABEN R PATEL, 4-A GOVARDHAN PARK, VIJAY NAGAR, HARNI ROAD, VADODARA-390022 PAN NO. BIGPP4846Q AND BIPINBHAI M PATEL, 4-A GOVARDHAN PARK, VIJAY NAGAR, HARNI ROAD, VADODARA-390022 PAN NO. BHQPP5773H V/S DCIT (INTERNATIONAL TAXATION), VADODARA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAKAR SHARMA, C. A. RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. ( )/ ORDER DATE OF HEARING : 19 -03-201 8 DATE OF PRONOUNCEMENT : 23-03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NOS. 209 2 & 2093/AHD/2016 . A.Y. 2011-1 2 2 1. ITA NOS. 2092 & 2093/AHD/2016 ARE TWO SEPARATE APPE ALS BY TWO DIFFERENT ASSESSEES PREFERRED AGAINST A COMMON ORDER OF THE L D. CIT(A)-13, AHMEDABAD DATED 31.05.2016 PERTAINING TO A.Y. 2011-12. 2. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THESE APPE ALS AND SINCE THE FIRST APPELLATE AUTHORITY HAS DECIDED THE IMPUGNED APPEAL S BY A COMMON ORDER, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISP OSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. BRIEFLY STATED THE COMMON FACTS OF THE IMPUGNED APP EALS ARE THAT THE ASSESSEE IS AN US CITIZEN WHO SOLD A PROPERTY JOINTLY HELD A T VADODARA FOR A TOTAL SALES CONSIDERATION OF RS. 3.47 CRORES. OUT OF WHICH RS. 1.15 CRORES WAS CREDITED IN THE BANK ACCOUNT. 4. SINCE THE TOTAL SALE CONSIDERATION WAS RS. 3.47 CRO RES AND SINCE THE ASSESSEE SHARE WAS 1/3 RD , THE ASSESSEE ACCORDINGLY RECEIVED THE TOTAL CONSI DERATION OF RS. 1.15 CRORES. 5. SINCE THE ASSESSEE HAD NOT FILED ANY INCOME TAX RET URN, NOTICE U/S. 148 WAS ISSUED PURSUANT TO WHICH THE ASSESSEE FILED ITR FOR A.Y. 2011-12. 6. THE INCOME WAS ASSESSED AT RS. 60.61 LACS AND PENAL TY PROCEEDINGS WERE SEPARATELY INITIATED U/S. 271(1)(C) OF THE ACT. 7. DURING THE COURSE OF THE PENAL PROCEEDINGS, THE ASS ESSEE WAS SHOW CAUSED TO EXPLAIN WHY PENALTY U/S. 271(1)(C) OF THE ACT SHOUL D NOT BE IMPOSED FOR CONCEALMENT OF INCOME. ON RECEIVING NO PLAUSIBLE RE PLY, THE A.O. CONCLUDED ITA NOS. 209 2 & 2093/AHD/2016 . A.Y. 2011-1 2 3 BY HOLDING THAT THERE WAS A COMPLETE FAILURE ON THE PART OF THE ASSESSEE TO DISCHARGE THE ONUS CAST ON HER AND PROCEEDED BY LEV YING PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 12.48 LACS. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 9. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THE ASSESSEES ARE NON-RESIDENT INDIANS AND ARE US CITIZENS. THE I MPUGNED PROPERTY SITUATED AT VADODARA WAS SOLD THROUGH A POWER OF ATTORNEY HO LDER WHO DID NOT INFORM THE ASSESSEE ABOUT THE INCOME TAX LIABILITY IN INDI A. IT IS THE SAY OF THE LD. COUNSEL AS SOON AS THE ASSESSEE CAME TO KNOW ABOUT THE INCOME TAX LIABILITY, TAXES WERE PAID IMMEDIATELY AND MUCH BEFORE THE ISS UE OF NOTICE U/S. 148 OF THE ACT. IT IS THE SAY OF THE LD. COUNSEL THAT THIS BEING THE FIRST RETURN OF INCOME AND THE ASSESSED INCOME AND THE RETURNED INCOME ARE THE SAME. THEREFORE, NO PENALTY SHOULD BE LEVIED. 10. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. IT IS THE SAY OF THE LD. D.R. THAT THE ASSESSEE DID NOT EVEN FILE THE RETURN EVEN AFTER RECEIVING THE NOTICES U/S. 133(6) OF THE ACT AND SUMMONS ISSU ED U/S. 131 OF THE ACT. THE LD. D.R. VEHEMENTLY STATED THAT THE RETURNS WER E FILED ONLY AFTER THE ISSUE OF NOTICE U/S. 148 OF THE ACT AND THEREFORE IT IS C LEAR CASE OF CONCEALMENT OF INCOME. 11. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THROUGH A POWER OF ATTORNEY HOLDER, THE ASSESSEE SOLD THE IMPUGNED PROPERTY AT VADODARA. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS A NON-RESIDENT INDIVIDUAL AND IS AN US CITIZEN. THE ASSESSEE ITA NOS. 209 2 & 2093/AHD/2016 . A.Y. 2011-1 2 4 WAS NOT AWARE OF HER TAX LIABILITY IN INDIA ON THE SALE OF IMPUGNED PROPERTY. IT IS ALSO TRUE THAT ONCE THE LIABILITY WAS POINTED OU T TO HER, THE TAXES WERE DULY PAID IMMEDIATELY. SINCE THE TIME FOR FILING THE RET URN OF INCOME HAS EXPIRED, SHE APPROACHES THE OFFICER THROUGH AN APPLICATION FOR I SSUANCE OF NOTICE U/S. 148 OF THE ACT TO REGULARIZE THE ASSESSMENT. IN THE SAI D LETTER, THE ASSESSEE ALSO DREW THE ATTENTION OF THE A.O. THAT TAXES HAVE BEEN ALRE ADY PAID. PURSUANCE TO THE LETTER FILED BY THE ASSESSEE, THE A.O. ISSUED NOTIC E U/S. 148 OF THE ACT AND THE RETURN OF INCOME WAS FILED AND THE RETURNED INCOME WAS ASSESSED AS SUCH. 12. THUS, THERE IS NO DIFFERENCE BETWEEN THE ASSESSED I NCOME AND THE RETURNED INCOME. 13. IT IS A SETTLED PROPOSITION OF LAW THAT EVERYTHING DEPENDS UPON THE INCOME TAX RETURN FILED BY THE ASSESSEE. EXPLANATION (4) TO SE CTION 271(1)(C) OF THE ACT PROVIDES THAT FOR THE COMPUTATION OF THE PENALTY TH E AMOUNT OF TAX SOUGHT TO BE EVADED SHALL BE DETERMINED IN ACCORDANCE WITH TH E AMOUNT OF TAX ON THE TOTAL INCOME ASSESSED MINUS THE AMOUNT OF TAX THAT WOULD HAVE BEEN CHARGEABLE HAD THE TOTAL INCOME ASSESSED AS PER THE GENERAL PROVISIONS BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THUS, IF THE FACTS OF THE CASE IN HAND A RE CONSIDERED IN THE LIGHT OF THE EXPLANATION (4) TO SECTION 271(1)(C) OF THE ACT , AS MENTIONED ELSEWHERE, ASSESSED INCOME IS THE SAME AS THE RETURNED INCOME, THE PENALTY WOULD BE RS. NIL. 14. THAT ASIDE, THE CONTENTION OF THE ASSESSEE THAT BEI NG AN US CITIZEN SHE WAS NOT AWARE OF THE DOMESTIC LAWS CANNOT BE BRUSHED ASIDE LIGHTLY. IT IS ALSO NOT THE CASE WHERE THE ASSESSEE HAS OBJECTED TO THE ASSESSE D INCOME, THE TAXES WERE ITA NOS. 209 2 & 2093/AHD/2016 . A.Y. 2011-1 2 5 PAID MUCH BEFORE THE FILING OF THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. 15. CONSIDERING THE FACTS IN TOTALITY, WE DO NOT FIND T HIS TO BE A FIT CASE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. WE ACCORDINGL Y SET ASIDE THE FINDING OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALT Y SO LEVIED U/S. 271(1)(C) OF THE ACT. BOTH THE APPEALS ARE ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 23- 03- 20 18 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 23 /03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD