Shri Rajnikant Gamanlal Gilitwala, Surat V. The Income Tax Officer, Ward-2(4), Surat

ITA 2320/AHD/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2395 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS LATA PHILIPS
• Assessee Lawyers: P B PARMAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 2320/AHD/2015 / ASSESSMENT YEAR: 2011-12 RAJNIKANT GAMANLAL GILITWALA, 2/3248, ANAVIL SHERI, SAGRAMPURA, SURAT PAN : AFMPG 3133 R VS. THE ITO, WARD-2(4), SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.B. PARMAR, AR REVENUE BY : MRS. LATA PHILIPS, SR DR. !'# / DATE OF HEARING : 19/11/2015 / DATE OF PRONOUNCEMENT: 09/02/2016 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT, DAT ED 08.05.2015 PASSED FOR ASSESSMENT YEAR 2011-12. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,14,839/- WH ICH WAS IMPOSED U/S. 271(1)(C) OF THE INCOME-TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 06.10.2011 DECLARING TOTAL INCOME AT RS.1 ,77,824/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND A NOTICE U/S 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE ON 12.09.2012. THE ASSESSING OFFICER GOT INFORMATION FROM THE ANNUAL I NFORMATION RETURN (AIR) WING THAT THE ASSESSEE HAS SOLD IMMOVABLE PRO PERTY HAVING VALUE OF ITA NO. 2320/AHD/2015 RAJNIKANT GAMANLAL GILITWALA VS. ITO FOR AY: 2011-12 2 RS.30 LAKHS. THE ASSESSEE DID NOT DISCLOSE THIS TR ANSACTION IN THE RETURN AND DID NOT PAY TAXES ON THE GAIN ACCRUED TO HIM ON SUC H SALE OF PROPERTY. WHEN THE ASSESSING OFFICER HAS CONFRONTED THE ASSES SEE, THEN VIDE LETTER DATED 14.03.2014 THE ASSESSEE HAS ADMITTED THE LONG TERM CAPITAL GAIN OF RS.5,74,195/-. THE ASSESSEE HAS INTEREST INCOME AL SO. THE LD. ASSESSING OFFICER HAS MADE ADDITION OF RS.5,74,195/- AS LONG TERM CAPITAL GAIN AND RS.6,483/- AS INTEREST INCOME. HE DETERMINED THE T AXABLE INCOME OF THE ASSESSEE AT RS.7,58,502/-. THE LD. ASSESSING OFFI CER HAS INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT. T HE STAND OF THE ASSESSEE WAS THAT BY MISTAKE HE FAILED TO OFFER THE LONG TER M CAPITAL GAIN FOR TAXATION ON SALE OF ANCESTRAL PROPERTY AND ALSO INT EREST INCOME EARNED ON THE DEPOSITS IN SAVINGS BANK ACCOUNT. THE LD. ASSESSIN G OFFICER HAS IMPOSED THE PENALTY OF RS.1,14,839/- ON THE GROUND THAT THE ASS ESSEE COULD NOT GIVE ANY EXPLANATION AS TO WHY HE FAILED TO INCLUDE THESE IT EMS IN THE COMPUTATION OF INCOME. THE ASSESSING OFFICER ACCORDINGLY IMPOSED THE PENALTY. 4. APPEAL TO CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENT ION TOWARDS PAGE NO.2 OF THE PAPER-BOOK, WHEREIN HE HAS PLACED ON RECORD COPY OF COMPUTATION OF TOTAL INCOME. THIS WAS THE COMPUTATION FILED ALONG WITH THE ORIGINAL RETURN WHERE INCOME WAS COMPUTED AT RS.1,77,820/-. THE AS SESSEE HAS ANNEXED COPY OF THE ACCOUNTS (P& L A/C, BALANCE-SHEET, LEDG ER A/C. ETC.). HE SUBMITTED THAT IF THE ASSESSEE HAD ANY MALAFIDE INT ENTION, THEN THESE ACCOUNTS OUGHT TO HAVE NOT BEEN ANNEXED BY THE ASSE SSEE WITH THE COMPUTATION OF INCOME. THUS, ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THERE WAS NO DELIBERATE ATTEMPT AT THE END OF THE A SSESSEE TO CONCEAL THE PARTICULARS OF INCOME. ON THE OTHER HAND, LD. DEPA RTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. ITA NO. 2320/AHD/2015 RAJNIKANT GAMANLAL GILITWALA VS. ITO FOR AY: 2011-12 3 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. 7. SECTION 271(1)(C) OF THE ACT HAS A DIRECT BEARI NG ON THE CONTROVERSY AND, THEREFORE, IT IS SALUTARY UPON US TO TAKE NOTE OF THE RELEVANT PROVISIONS OF SECTION 271(1)(C) ALONG WITH EXPLANATION 1 WHICH READ AS UNDER: '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1). IF THE ASSESSING OFFICER OR THE C OMMISSIONER (APPEALS) OR THE CIT IN THE COURSE OF ANY PROCEEDIN GS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B)******** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I) AND (INCOME-TAX OFFICER,)******** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLA USE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF T AX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1.- WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER(APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AN D MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCL OSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUT ING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHA LL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB- SECTION, BE DEE MED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED'. ITA NO. 2320/AHD/2015 RAJNIKANT GAMANLAL GILITWALA VS. ITO FOR AY: 2011-12 4 8. A BARE PERUSAL OF THIS SECTION WOULD REVEAL THAT FOR VISITING ANY ASSESSEE WITH THE PENALTY, THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) DURING THE COURSE OF ANY PROCEEDINGS B EFORE THEM SHOULD BE SATISFIED, THAT THE ASSESSEE HAS; (I) CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS FAR AS THE QUA NTIFICATION OF THE PENALTY IS CONCERNED, THE PENALTY IMPOSED UNDER THIS SECTIO N CAN RANGE IN BETWEEN 100% TO 300% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE, AS A RESULT OF SUCH CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. THE OTHER MOST IMPORTANT FEATURES OF THIS SECTION IS DEEMING PROVISIONS REGARDING CONCEALMENT OF INCOME. THE SECTION NOT ONLY COVERED THE SITUATION IN WHICH THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS, IN CERTAIN SITUATION, EVEN WITHOUT THERE BEING ANYTHIN G TO INDICATE SO, STATUTORY DEEMING FICTION FOR CONCEALMENT OF INCOME COMES INT O PLAY. THIS DEEMING FICTION, BY WAY OF EXPLANATION I TO SECTION 271(1)( C) POSTULATES TWO SITUATIONS; (A) FIRST WHETHER IN RESPECT OF ANY FAC TS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME UNDER THE PROVISION S OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLA NATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFI CER OR LEARNED CIT(APPEALS); AND, (B) WHERE IN RESPECT OF ANY FACT , MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE AS SESSEE FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMP UTATION OF THE TOTAL INCOME. UNDER FIRST SITUATION, THE DEEMING FICTION WOULD COME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPEC T TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME OR BY ACTION OF THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GIVING A CATEGORICAL FINDIN G TO THE EFFECT THAT EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICTION WOULD COME TO PLAY BY THE FAILURE O F THE ASSESSEE TO ITA NO. 2320/AHD/2015 RAJNIKANT GAMANLAL GILITWALA VS. ITO FOR AY: 2011-12 5 SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSEE IS NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAVE BEEN DISCLOSED BY THE ASSESSEE. THESE TWO SITUATIONS PRO VIDED IN EXPLANATION 1 APPENDED TO SECTION 271(1)(C) MAKES IT CLEAR THAT T HAT WHEN THIS DEEMING FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN THE RELATED ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF TH E ASSESSEE, FOR THE PURPOSE OF SECTION 271(1)(C) WOULD BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS HAVE BEE N FURNISHED. 9. IN THE LIGHT OF ABOVE, IF WE EXAMINE THE FACTS O F THE PRESENT CASE, THEN IT WOULD REVEAL THAT THERE IS NO EXPLANATION AT THE END OF THE ASSESSEE AS TO HOW HE FAILED TO INCLUDE LONG TERM CAPITAL GAIN IN HIS COMPUTATION OF INCOME. IT IS ALSO PERTINENT TO MENTION THAT THE A SSESSING OFFICER GOT INFORMATION FROM THE ANNUAL INFORMATION RETURN WING AND ONLY THEREAFTER CONFRONTED THE ASSESSEE. THE ASSESSING OFFICER DID NOT GET AN IDEA OR CLUE FROM THE COMPUTATION OF INCOME OR ANNEXURE APPENDED BY THE ASSESSEE WITH REGARD TO THE SALE OF PROPERTY. THE LD. FIRST APPE LLATE AUTHORITY HAS EXAMINED THE ISSUE ELABORATELY WITH ALL POSSIBLE AN GLE AND THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT( A). THE APPEAL IS DEVOID OF ANY MERIT; HENCE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/02/2016 BIJU T., PS ITA NO. 2320/AHD/2015 RAJNIKANT GAMANLAL GILITWALA VS. ITO FOR AY: 2011-12 6 !&''()(*' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # ( ) / THE CIT(A) 5. &'( ! , ! , / DR, ITAT, AHMEDABAD 6. (- ./ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD