Shri Ramprasad P. Patel, Ahmedabad V. The Income Tax Officer, Ward-2(2)(4), Ahmedabad

ITA 2645/AHD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9076 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 16-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset; Business income; Revised return
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO.2645/AHD/2015 (ASSESSMENT YEAR:2011-12) RAMPRASAD P. PATEL 20, SOMNATHNAGAR SOCIETY, SANGHVI SCHOOL CHAR RASTA, NARANPURA, AHMEDABAD - 3800013 APPELLANT VS. THE I.T.O., WARD 2(2)(4), AHMEDABAD RESPONDEN T PAN: ACOPP9149D /BY ASSESSEE : MR. M. K. PATEL, A.R. /BY REVENUE : MR. SAMIR VAKIL, SR. D.R. /DATE OF HEARING : 23.02.2017 /DATE OF PRONOUNCEMENT : 08.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST THE CIT(A)-10, AHMEDABADS ORDER DATED 15.07.2015, PASS ED IN APPEAL NO. CIT(A)-10/ITO.WD.7(4)/528/14-15, AFFIRMING ASSESSIN G OFFICERS ACTION ITA NO. 2645/AHD/2015 (RAMPRASAD P. PATEL VS. ITO) A.Y. 2011-12 - 2 - IMPOSING PENALTY OF RS.9,05,055/-, IN PROCEEDINGS U NDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE STRAIGHTWAY COME TO THE RELEVANT FACTS. THE ASSESSEE-INDIVIDUAL DERIVES BUSINESS INCOME FROM VARIOUS FIRMS, RENTAL INCOME AND INCOME FROM SHORT TERM CAPITAL GAINS. IT FILED ITS RETURN ON 2 4.10.2011 STATING LOSS OF RS.6,597/-. THE ASSESSING OFFICER RECEIVED AIR IN FORMATION ABOUT THE ASSESSEE WHO HAVE SOLD AN IMMOVABLE PROPERTY ON 06. 04.2010 ALONG WITH TWO OTHER VENDORS FOR RS.2,52,31,200/-. THIS PROPE RTY WAS ADMITTEDLY SITUATED IN SURVEY NO. 173 ADMEASURING 16173 SQ. MT RS., VILLAGE SARGASAN, TALUKA & DIST. GANDHINAGAR. HE HAD CO-PURCHASED T HE VERY PROPERTY ON 09.07.2008 FOR RS.72,02,000/-. HIS SHARE IN SAID P URCHASE MONEY WAS OF RS.24,00,666/-. THE ASSESSEE HAD ADMITTEDLY NOT OF FERED THE ABOVE CAPITAL GAINS FOR ASSESSMENT IN HIS RETURN. HE APPEARS T O HAVE SUBMITTED A REVISED RETURN ON BEING SPECIFICALLY POINTED ABOUT THE SAID CAPITAL GAINS. THIS REVISED COMPUTATION TREATED THE SAID CAPITAL GAINS AS LONG TERM INSTEAD OF SHORT TERM DESPITE THE FACT THAT ASSESSEE HAD HELD THE CAPITAL ASSET IN QUESTION FOR A TIME PERIOD OF LESS THAN THREE YEARS. THIS MADE THE ASS ESSING OFFICER TO GAIN ISSUE A SHOW CAUSE NOTICE. THE ASSESSEE DID NOT FILE ANY REPLY. THE ASSESSING AUTHORITY THEREAFTER FRAMED A REGULAR ASSESSMENT AS SESSING ASSESSEES SHORT TERM CAPITAL GAINS TO THE TUNE OF RS.60,09,734/- IN ASSESSMENT ORDER DATED 29.11.2013. HE FURTHER INITIATED THE IMPUGNED PENA LTY PROCEEDINGS ALLEGING BOTH FURNISHING OF INACCURATE PARTICULARS AS WELL A S CONCEALMENT OF INCOME. LEARNED COUNSEL REPRESENTING ASSESSEE STATES THAT H E DID NOT PREFER ANY APPEAL AGAINST THE SAID QUANTUM ORDER. 3. WE NOW ADVERT TO THE IMPUGNED PENALTY PROCEEDING S. THE ASSESSEE DOES NOT APPEAR TO HAVE FILED ANY REPLY. THE ASSES SING OFFICER QUOTED ALL THE ABOVE QUANTUM DEVELOPMENTS TO IMPOSE THE PENALTY IN QUESTION ON ITA NO. 2645/AHD/2015 (RAMPRASAD P. PATEL VS. ITO) A.Y. 2011-12 - 3 - 27.05.2014. THIS FOLLOWED HIS ORDER DATED 18.08.20 15 SUBJECTING THE SAME TO SECTION 154 RECTIFICATION. THE CIT(A)S ORDER ALSO UPHOLDS ASSESSING OFFICERS ACTION BY OBSERVING AS UNDER: 4.1 AFTER GOING THROUGH THE FACTS MENTIONED IN THE ASSESSMENT ORDER AND THE SUBMISSION MADE BY THE APPELLANT, THERE IS NO DISPU TE THAT THE ASSESSEE EARNED INCOME OF RS.60,09,734/- AS SHORT TERM CAPITAL GAIN FOR THE YEAR UNDER CONSIDERATION, WHICH HAS NOT BEEN SHOWN IN THE REGU LAR RETURN OF INCOME FILED. THIS INFORMATION WAS RECEIVED BY THE ASSESSING OFFI CER FROM THE AIR DATA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN IT WAS PO INTED OUT TO THE ASSESSEE, THE ASSESSEE HAS NOT SUBMITTED ANY REPLY TO THE ASSESSI NG OFFICER. IN THE WRITTEN SUBMISSION SUBMITTED, IT HAS BEEN PRAYED ON BEHALF OF THE APPELLANT THAT IT IS 3 MISTAKE BECAUSE OF OVERSIGHT, THEREFORE, PENALTY SH OULD NOT BE LEVIED. 4.2 THE CONTENTION ON BEHALF OF THE APPELLANT ADVAN CED IS NOT ACCEPTABLE FOR THE REASON THAT THE ASSESSEE HAD TIME TO FILE THE R EVISED RETURN, WHICH THE ASSESSEE FAILED TO DO. THE ASSESSEE DID NOT PAY THE TAX ON T HIS INCOME BEFORE COMPLETION O-F THE ASSESSMENT PROCEEDINGS. EVEN DURING THE ASSESSM ENT PROCEEDINGS, THE ASSESSEE DID NOT ADMIT THIS INCOME AS SHORT TERM CAPITAL GAI N BY FILING REVISED COMPUTATION OF INCOME BEFORE THE ASSESSING OFFICER. ALL THESE F ACTS DEARLY ESTABLISH THAT FROM THE DAY ONE, THE ASSESSEE HAD NO INTENTION TO SHOW THIS INCOME AND PAY TAX TO THE EX-CHEQUER. THESE FACTS PROVE THAT THE ASSESSEE WIT H MALAFIDE INTENTION, CONCEALED THE PARTICULARS OF INCOME AND SIMULTANEOUSLY FURNIS HED INACCURATE PARTICULARS OF INCOME. THUS, THIS IS A FIT CASE FOR LEVY OF PENALT Y. REGARDING THE VARIOUS CASE LAWS CITED BY THE AR OF THE APPELLANT TO SUBSTANTIATE HI S ARGUMENTS, THESE CASE LAWS ARE NOT APPLICABLE TO THIS CASE, AS THE FACTS OF THIS C ASE ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THOSE CASES. THEREFORE, THE PENALTY LE VIED U/S. 271(1)(C) EQUAL TO THE 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSIN G OFFICER IS UPHELD. 4. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES S TRONGLY REITERATING THEIR RESPECTIVE STANDS. SHRI PATEL QUOTES HONBLE APEX COURTS DECISION IN CASE OF PRICE WATERHOUSE COOPERS REPORTED AS 348 I TR 306 (SC) THAT THE ASSESSEES ABOVE COMPUTATION IN HIS ORIGINAL RETUR N NOT DECLARING THE CAPITAL GAINS IN QUESTION AMOUNTED TO A SILLY MISTAKE NOT L IABLE TO BE PENALIZED. HE FURTHER SUBMITS THAT THE ASSESSEE IS A FARMER NOT K NOWING ABOUT NUANCES OF THE TAX LAW SO AS TO DECLARE THE ABOVE CAPITAL GAIN S. WE PUT UP A SPECIFIC QUERY AS TO HOW THE ASSESSEES IMMOVABLE PROPERTY B ECAME A CAPITAL ASSET U/S.2(14) OF THE ACT. SHRI PATEL VERY FAIRLY SUBMI TS THAT THE ASSESSEE HAD HIMSELF CONVERTED HIS JOINTLY OWNED AGRICULTURAL LA ND IN QUESTION TO A NON AGRICULTURAL ONE AFTER OBTAINING COMPETENT AUTHORIT IES SANCTION. WE OBSERVE ITA NO. 2645/AHD/2015 (RAMPRASAD P. PATEL VS. ITO) A.Y. 2011-12 - 4 - IN THIS PECULIAR FACTUAL BACKDROP THAT THE ASSESSEE CANNOT BE DEEMED TO BE EITHER AN INNOCENT FARMER OR SOMEONE COMMITTING A S ILLY MISTAKE IN QUESTION. WE ARE OF THE OPINION THAT FIRST OF ALL, THE ASSESS EE DID NOT INCLUDE THE ABOVE CAPITAL GAINS IN HIS ORIGINAL RETURN. THE SAME WAS THEREFORE AN INSTANCE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME IN O RDER TO CONCEAL IT FROM BEING ASSESSED. HE ADOPTED THE VERY COURSE OF ACTI ON EVEN AFTER BEING POINTED OUT BY THE ASSESSING OFFICER IN FILING A RE VISED COMPUTATION DECLARING LONG TERM CAPITAL GAINS ASSESSABLE AT A LESSER TAX RATE THAN THE SHORT TERM ONES. WE ACCORDINGLY CONCLUDE THAT HIS ACT AND CONDUCT CO MES VERY WELL WITHIN THE FOUR CORNERS OF SECTION 271(1)(C) OF THE ACT. WE F IND NO REASON TO INTERFERE WITH THE CIT(A)S ORDER UNDER CHALLENGE. 5. THIS ASSESSEES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 8 TH DAY OF MARCH, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICI AL MEMBER AHMEDABAD: DATED 08/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0