SUREKHA A JAIN, MUMBAI V. ITO 20(2)-3, MUMBAI

ITA 2394/MUM/2011

• Counselvise Citation: 239419914 RSA 2011
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 25-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIPDR
• Assessee Lawyers: S ATISH CHANDAK
• Section: 143(3); 54F; 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2394/MUM/2011 ASSESSMENT YEAR:2004-05 SUREKHA A. JAIN, FLAT NO.301, 3 RD FLOOR, GULSHAN BLDG. NO.1, JUHU ROAD, ANDHERI(W) MUMBAI-400058 / VS. INCOME TAX OFFICER-20(3)-3, INCOME TAX OFFICE, PIRAMAL CHAMBERS, PAREL, MUMBAI ( /ASSESSEE) ( / REVENUE) P.A. NO. ADLPJ8723E / ASSESSEE BY): SHRI SATISH CHANDAK / REVENUE BY SHRI NEIL PHILIP-DR / DATE OF HEARING : 10/02/2015 /DATE OF ORDER 02/03/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 25/01/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, CONFIRMING THE PENALTY OF RS.1,99,074/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). SUREKHA A. JAIN , 2 2. DURING HEARING, THE CRUX OF ARGUMENT ADVANCED BY SHRI SATISH CHANDAK, LD. COUNSEL FOR THE ASSESSEE, IS TH AT NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT, THUS, THE PEN ALTY WAS WRONGLY IMPOSED/CONFIRMED. IT WAS ALSO PLEADED THA T WHEN NOTICE U/S 148 OF THE ACT WAS ISSUED, THE ASSESSING OFFICER WAS HAVING THE INFORMATION AS NECESSARY DETAILS WERE MA DE AVAILABLE BY THE ASSESSEE TO THE ASSESSING OFFICER. IT WAS A LSO CONTENDED THAT RELIEF U/S 54F OF THE ACT WAS ALLOWED BY THE A SSESSING OFFICER. ALTERNATIVELY, IT WAS CLAIMED THAT THE PE NALTY WAS IMPOSED AT 200% WHICH IS HIGHLY EXCESSIVE. RELIANC E WAS PLACED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF BH AVANA THANAWALA V/S ITO (ITA NO.1171/MUM/2009) ORDER DATE D 30 TH APRIL, 2010 AND SHRI JOSEPH J. MUDALIAR V/S ACIT (I TA NO.1603/MUM/2013) ORDER DATED 30/05/2014. 2.1. ON THE OTHER HAND, SHRI NEIL PHILIP, LD. DR, D EFENDED THE IMPOSITION AS WELL AS CONFIRMATION OF PENALTY BY CO NTENDING THAT THERE IS A CONCEALMENT/FURNISHING OF INACCURATE PAR TICULARS BY THE ASSESSEE. THE IMPUGNED ORDER WAS DEFENDED. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE, ON 28/03/2005, DECLARED INCOME OF RS.92,2 00/-, CONSISTING OF LONG TERM AND SHORT TERM CAPITAL GAIN S ON SALE OF SHARES AND INTEREST RECEIVED FROM LOANS ETC. THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT, AFTER REC ORDING THE REASONS, ON 05/06/2007 AND THEREAFTER, THE ASSESSME NT WAS COMPLETED ASSESSING THE INCOME AT RS.5,95,890/- ON 01/10/2008 WHICH INCLUDES LONG TERM CAPITAL GAINS, ON THE SALE SUREKHA A. JAIN , 3 OF SHARES, AMOUNTING TO RS.4,97,685/-, WHICH WERE N OT SHOWN BY THE ASSESSEE IN THE ORIGINAL RETURN. IT WAS OBSERV ED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE DELIBERATELY DI D NOT FURNISH TRUE AND CORRECT PARTICULAR OF INCOME, CONSEQUENTLY , NOTICE U/S 234 R.W.S 271(1)(C) OF THE ACT WAS ISSUED TO THE AS SESSEE AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT MAY NOT BE IMP OSED. AT THAT STAGE, THE STAND OF THE ASSESSEE WAS THAT RETURN WA S FILED ON THE BASIS OF PARTICULARS AVAILABLE WITH THE ASSESSEE AN D DUE TO SUBSEQUENT EVENTS I.E. NON-COMPLETION OF CONSTRUCTI ON AND POSSESSION OF FLATS, NOT GIVEN BY THE DEVELOPERS, W ITHIN STIPULATED PERIODS RESULTED INTO NON-FILING OF CLAIM OF CAPITA L GAIN IN THE RESIDENTIAL UNIT. IT WAS ALSO SUBMITTED, AFTER HAV ING REALIZED THE MISTAKE, THE DUE TAX ALONGWITH INTEREST WAS PAID. THE CRUX OF THE ARGUMENT IS THAT THE ASSESSEE SUO MOTO PAID THE TAX ON 03/03/2008 AND FILED THE REVISED WORKING OF THE RET URN OF INCOME ON 26/08/2008. WE ARE NOT SATISFIED WITH TH IS EXPLANATION OF THE ASSESSEE, BECAUSE THE ORIGINAL R ETURN WAS FILED BY THE ASSESSEE ON 28/03/2005 AND REOPENING WAS MAD E ON 05/06/2007 COMPLETING THE ASSESSMENT ON 01/10/2008. IF NO NOTICE WOULD HAVE ISSUED TO THE ASSESSEE U/S 274 R. W.S. 271(1)(C) OF THE ACT, THERE WAS ALL POSSIBILITY THAT THE ASSE SSEE WOULD HAVE GONE SCOT FREE. THE ASSESSEE REVISED THE RETURN ON 26/08/2008 I.E. ALMOST AFTER MORE THAN THREE YEARS THAT TO WHE N THE DETECTION WAS MADE BY THE DEPARTMENT, THEREFORE, THE ASSESSE E FURNISHED INACCURATE PARTICULARS OF INCOME AND CONSEQUENT CON CEALMENT OF INCOME, LEADING TO IMPOSITION OF PENALTY U/S 271(1) (C) OF THE ACT. SO FAR AS, RELIANCE ON THE DECISION IN CIT VS RELIA NCE PETRO PRODUCTS PVT. LTD. (322 ITR 158)(SC) IS CONCERNED, WE ARE OF THE VIEW THAT FACTS ARE ALTOGETHER DIFFERENT AS THE CLA IM WAS NOT MADE SUREKHA A. JAIN , 4 BY THE ASSESSEE WHILE FILING THE ORIGINAL RETURN. EVEN ITS NOT A CASE OF BONA-FIDE MISTAKE. THE HONBLE GUJARAT HIGH COURT A. M. SHAH & COMP. (2000) 108 TAXMAN 137 (GUJ.) EVEN WENT TO THE EXTENT THAT ANY CONCEALMENT OR ANY ACCURACY IN PART ICULARS OF INCOME IN THE RETURN OCCURRING AT ANY STAGE UP TO T HE INCLUSIVE OF THE ULTIMATE STAGE OF WORKING OUT OF THE TOTAL INCO ME WOULD ATTRACT PENALTY PROVISION OF SECTION 271(1)(C) OF T HE ACT. IN CIT VS ANWAR ALI (76 ITR 696)(SC), THE HONBLE APEX COURT CONCLUDED THAT ENTIRETY OF CIRCUMSTANCES MUST REASONABLY POIN T TO THE CONCLUSION THAT DISPUTED AMOUNT REPRESENTED INCOME AND THE ASSESSEE CONSCIOUSLY CONCEALED THE PARTICULARS OF H IS INCOME OR DELIBERATELY FURNISHED INACCURATE PARTICULARS. THE FACTS IN THE CASE OF BHAVANA THANAWALA AND SHRI JOSEPH J. MUDALI A (SUPRA), RELIED UPON BY THE ASSESSEE ARE ALSO ON DIFFERENT F ACTS, THEREFORE, MAY NOT HELP THE ASSESSEE. THUS, WE FIND NO INFIRMI TY IN IMPOSITION AS WELL AS CONFIRMATION OF PENALTY. HOWEVER, UNDER THE FACTS AVAILABLE ON RECORD, SINCE THE PENALTY HAS BEEN IMPOSED AT THE RATE OF 200%, IN OU R VIEW, IS HIGHLY EXCESSIVE, THEREFORE, THE LD. ASSESSING OFFI CER IS DIRECTED TO IMPOSE/CALCULATE PENALTY AT THE RATE OF 100% AGAINS T 200% IMPOSED BY HIM. THUS, THE APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 02/03/2015 . SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; # DATED : 02/03/201 5 SUREKHA A. JAIN , 5 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. %& '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. + + , ( %& ) / THE CIT, MUMBAI. 4. + + , / CIT(A)- , MUMBAI 5. ./0 )1 , + %& %12 , / DR, ITAT, MUMBAI 6. 03 4 / GUARD FILE. / BY ORDER, *.& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI