Arjun shamdas Bhagtani, Pune V. Assistant Commissioner of Income-tax,

ITA 2495/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5024 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHWETA MISHRA
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 24 95 /P U N/201 6 / ASSESSMENT YEAR : 20 07 - 08 ARJUN SHAMDAS BHAGTANI, MODERN MINI MARKET, 1942, DR. SALDANA STREET, PUNE 411001 PAN : AAVPB4554F ....... / APPELLANT / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE / RESPONDENT ASSESSEE BY : S HRI C.H. NANIWADEKAR REVENUE BY : MRS. SHWETA MISHRA / DATE OF HEARING : 31 - 07 - 201 8 / DATE OF PRONOUNCEMENT : 05 - 10 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 29 - 07 - 2016 FOR THE ASSESSMENT YEAR 2007 - 08 CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO . 2495/PUN/2016, A.Y. 2007 - 08 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31 - 03 - 2009 DECLARING TOTAL INCOME OF RS.9,17,428/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, STA TUTORY NOTICE U/S. 143(2) O F THE ACT WAS ISSUED TO THE ASSESSEE ON 15 - 09 - 2009. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE DECLARED RS.27,90,000/ - ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF LAND AT PISOLI. THE ASSESSING OFFICER MADE ADDITION OF THE SAID AMOUNT AND ALSO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) FOR CONCEALMENT OF INCOME. THE ASSESSING OFFICER VIDE ORDER DATED 30 - 06 - 2010 PASSED U/S. 271(1)(C) LEVIED PENALTY OF RS.3,87,000/ - ON ACCOUNT OF UNDISCLOSED L ONG TERM CAPITAL GAIN. AGGRIEVED BY THE ORDER LEVYING PENALTY U/S. 271(1)(C), THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER REJECTED THE CONTENTIONS OF THE ASSESS EE AND CONFIRMED LEVY OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE UPHOLDING OF PENALTY. 3. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE INADVERTENTLY FAILED TO DISCLOSE LO NG TERM CAPITAL GAIN ARISING FROM SALE OF LAND AT PISOLI IN THE RETURN OF INCOME. IN SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSEE SUO - MOTU DISCLOSED LONG TERM CAPITAL GAIN. THE ASSESSEE DID NOT CONTEST THE QUANTUM ADDITION. THE APPEAL FILED BY ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY WAS WITHDRAWN. THE ASSESSEE COULD NOT DISCLOSE THE LONG TERM CAPITAL GAIN BY FILING REVISED RETURN AS THE ORIGINAL RETURN WAS FILED AFTER THE DUE DATE. THE 3 ITA NO . 2495/PUN/2016, A.Y. 2007 - 08 LD. AR CONTENDED THAT WHERE THE ASSESSEE HAS VOLUNTARILY DISC LOSED INCOME IN SCRUTINY ASSESSMENT PROCEEDINGS, NO PENALTY SHOULD BE LEVIED ON SUCH ADDITION. TO SUPPORT HIS CONTENTIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. H . BALASUBRAMANIAN REPORTED AS 34 CCH 442. 4. ON THE OTHER HAND MRS. SHWETA MISHRA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE LEVY OF PENALTY. THE LD. DR SUBMITTED , BUT FOR SCRUTINY ASSESSMENT THE LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE WOULD NOT HAVE COME TO THE LIGHT AND WOULD HAVE ESCAPED TAX NET. IT IS A CLEAR CASE OF CONCEALMENT OF INCOME BY THE ASSESSEE. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSEE IN APPEAL HAS ASSAILED LEVY OF PENALTY ON THE ADDITION OF RS.27,90,000/ - AS LONG TERM CAPITAL GAIN . IT IS AN UNDISPUTED FACT THAT THE ASSESSEE FAILED TO DISCLOSE LONG TERM CAPITAL GAIN ON SALE OF PLOT AT PISOLI IN HIS RETURN OF INCOME AND IT WAS ONLY DURING SCRUTINY ASSESSMENT PROCEEDINGS THAT THE ASSESSEE DISCLOSED CAPITAL GAIN ON SALE OF PLOT. IT IS ALSO NOT DISPUTED THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE IMPUG NED ASSESSMENT YEAR ON 31 - 03 - 2009 I.E. BEYOND THE DUE DATE AS PRESCRIBED UNDER THE PROVISIONS OF SECTION 139(1) OF THE ACT. THEREFORE, THE ASSESSEE HAD NO OCCASION TO FILE REVISED RETURN OF INCOME TO RECTIFY HIS MISTAKE. 4 ITA NO . 2495/PUN/2016, A.Y. 2007 - 08 6. PURPORTEDLY, DURING SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSEE VOLUNTARILY OFFERED THE LONG TERM CAPITAL GAIN ON SALE OF PLOT AT PISOLI. A PERUSAL OF THE ASSESSMENT ORDER DOES NOT REVEAL THAT THE LONG TERM CAPITAL GAIN ON SALE OF PLOT WAS DE TECTED BY THE ASSESSING OFFICER IN SCRUT INY PROCEEDINGS. NO SPECIFIC ENQUIRY WAS MADE BY THE ASSESSING OFFICER WITH RESPECT TO SALE TRANSACTIONS OF THE LAND. NO MATERIAL HAS BEEN BROUGHT BEFORE US BY THE REVENUE TO SHOW THAT THE DISCLOSURE OF LONG TERM CAPITAL GAIN BY THE ASSESSEE WAS ON ACCOU NT OF SOME DOCUMENTARY EVIDENCE/INFORMATION PERCEIVED BY THE ASSESSING OFFICER. THUS, THE ONLY WAY OF COMING TO LIGHT SUCH INCOME IS VOLUNTARILY DISCLOSURE BY THE ASSESSEE DURING SCRUTINY ASSESSMENT PROCEEDINGS. 7. THE LD. AR HAS PLACED RELIANCE ON THE DECISION OF CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. H. BALASUBRAMANIAN (SUPRA) , WHEREIN PENALTY U/S. 271(1)(C) WAS LEVIED ON ADDITIONAL INCOME OFFERED BY THE ASSESSEE VOLUNTARILY IN SCRUTINY ASSESSMENT PROCEED INGS. THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) FOR CONCEALMENT OF INCOME. THE TRIBUNAL AFTER PLACING RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. S. SANKARAN REPORTED AS 241 ITR 825 DELETE D LEVY OF PENALTY U/S. 271(1)(C) . THE TRIBUNAL HELD THAT THE ADDITIONAL INCOME DECLARED VOLUNTARILY BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CANNOT LEAD TO CONCLUSION THAT THE ASSESSEE DELIBERATELY CONCEALED THE SAID INCOME IN RETURN O F INCOME AND HENCE , NO PENALTY U/S. 271(1)(C) ON SUCH ADDITION IS WARRANTED. 5 ITA NO . 2495/PUN/2016, A.Y. 2007 - 08 8. TAKING INTO CONSIDERATION IN THE FACTS OF THE PRESENT CASE AND THE DECISION RENDERED IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. H. BALASUBRAMANIAN (SUPRA) , WE ARE OF CONSIDERED VIEW THAT NO PENALTY U/S. 271(1)(C) IS ATTRACTED WHERE THE ASSESSEE HAS VOLUNTARILY DISCLOSED THE INCOME FROM LONG TERM CAPITAL GAIN DURING SCRUTINY ASSESSMENT PROCEEDINGS. THUS, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSE SSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 05 TH DAY OF OCTOBER, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 05 TH OCTOBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5 , PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 4 , PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE