Smt. Manju Surendra Kumar Mittal, Ahmedabad V. The Income tax Officer,Ward-11(4), Ahmedabad

ITA 2744/AHD/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9962 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ ITA NO. 2744/AHD/2012 / ASSESSMENT YEAR : 2008-09 SMT. MANJU SURENDRAKUMAR MITTAL, 285-NEW CLOTH MARKET, O/S. RAIPUR GATE, AHMEDABAD PAN : ACFPM 3426 R VS THE ITO, WARD 11(4), AHMEDABAD ./ ITA NO. 2745/AHD/2012 / ASSESSMENT YEAR : 2008-09 SMT. PREETI RAJENDRAKUMAR MITTAL, 285-NEW CLOTH MARKET, O/S. RAIPUR GATE, AHMEDABAD PAN : ACFPM 3358 Q VS THE ITO, WARD 11(4), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR P. HEMANI, AR REVENUE BY : SHRI N.P. PATEL, SR. DR / DATE OF HEARING : 30/11/2016 / DATE OF PRONOUNCEMENT: 01/12/2016 / O R D E R THESE ARE APPEALS BY SEPARATE ASSESSEES BUT CO-OWNE R OF THE SAME PROPERTY, AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XIV, AHMEDABAD OF EVEN DATED 10.09.20 12 PERTAINING TO AY 2008-09, IN WHICH PENALTY OF RS.3,47,440/- & RS.3,4 9,140/- HAVE BEEN SUSTAINED IN THE CASE OF SMT. MANJU SURENDRAKUMAR M ITTAL & SMT. PREETI RAJENDRAKUMAR MITTAL RESPECTIVELY. SINCE THE FACTS ARE IDENTICAL, I AM ADJUDICATING THE ISSUE WITH REFERENCE TO THE FACTS AND FIGURES FROM ITA NO.2744/AHD/2012. 2. THE BRIEF FACTS OF THE CASE AND OBSERVATIONS OF THE AO AS EMANATED FROM THE PENALTY ORDER ARE AS UNDER: SMC-ITA NOS 2744 & 2745/AHD/2012 SMT. MANJU SURENDRA KUMAR MITTAL VS. ITO SMT. PREETI RAJENDRAKUMARMITTAL VS. ITO AY : 2008-2009 2 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ISSUED NOTICE U/S.142(1) OF THE I.T. ACT CALLING FOR DETAI LS OF PROPERTY SOLD ON 27/03/2008 ALONG WITH PURCHASE DEED AND SALE DEED. IN THIS CASE THE AIR INFORMATION WAS RECEIVED, WHEREBY IT WAS FOUND THAT THE ASSESSEE HAD SOLD PROPERTY FOR A CONSIDERATION OF RS. 36,10,000/-. ON PERUSAL OF THE DETAILS IT REVEALED THAT THE ASSESSEE WAS JOINT OWNER OF THE S AID PROPERTY WITH SMT. PRITI RAJESHKUMAR MITTAL. THE SAID PROPERTY WAS PUR CHASED ON 16/10/98 FOR A CONSIDERATION OF RS.1,75,000/-. THUS, THE ASSESSE E HAD EARNED CAPITAL GAIN ON THE SALE OF THE SAID PROPERTY. HOWEVER, THE RETU RN OF INCOME DID NOT REVEAL ANY SUCH INCOME ON ACCOUNT OF SALE OF THE SAID LAND . THEREFORE, THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE ON 14/02/2010 REQUES TING HER TO EXPLAIN AS TO WHY CAPITAL GAIN ARISING OUT OF THE ABOVE SALE OF P ROPERTY SHOULD NOT BE CHARGED AND TAXED ACCORDINGLY. IN RESPONSE TO THE S AID NOTICE, MR. C.P. SHAH, C.A. ATTENDED ON BEHALF OF THE ASSESSEE AND FILED R EPLY. IN THE REPLY IT IS ADMITTED THAT THE ASSESSEE WAS UNDER BONAFIED BELIE F THAT THERE WAS NOT TAX PAYABLE ON SELLING OF SUCH LAND. THEREFORE, THE SAM E HAS NOT BEEN CONSIDERED WHILE FILLING THE RETURN OF INCOME FOR A.Y. 2008-09 . IT IS FURTHER SUBMITTED THAT AFTER RECEIPT OF SHOW CAUSE NOTICE SHE HAS CON SULTED C.A. SHRI C. P. SHAH AND AS PER HIS ADVICE, THE ASSESSEE FILED REVISED S TATEMENT OF TOTAL INCOME INCLUDING LONG TERM CAPITAL GAIN OF RS.15,30,285/- IN RESPECT OF HER ONE HALF SHARE IN THE AFORESAID PROPERTY. THE ASSESSEE HAS OFFERED THE TAX ONLY AFTER THE SAME IS DETECTED BY THE DEPARTMENT AND HENCE I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME. 3. THE ASSESSEES SUBMISSIONS, INCLUDING THE ONE TH AT DUE TO OVERSIGHT THE ASSESSEE FAILED TO INCORPORATE THE COMPUTATION IN STATEMENTS OF INCOME, WERE REJECTED BY THE AO AND PENALTY U/S 271(1)(C) W AS IMPOSED. 4. UPON ASSESSEES APPEAL, LD. CIT(A) REFERRED TO S EVERAL CASE LAWS AND CONCLUDED AS UNDER:- 2.1 CONSEQUENTLY, THE FACTS OF THE CASE REQUIR E TO BE ANALYSED IN VIEW OF ABOVE JUDICIAL CITATIONS. THE APPELLANT HAS DURING THE YEAR SOLD LAND, PROFITS OF WHICH WERE LIABLE TO BE TAXED AS LONG TERM CAPIT AL GAINS. THIS LONG-TERM CAPITAL GAINS WAS NOT DISCLOSED IN THE RETURN OF IN COME. IT IS THE CASE OF THE APPELLANT THAT IT WAS UNDER A BONA FIDE BELIEF THAT NO TAX WAS LIABLE TO BE PAID ON SUCH GAINS. THE FACTS OF THE MATTER HOWEVER IS T HAT THE SAME IS NOT TRUE. AT THE TIME OF FILING OF THE RETURN WHEN THIS CLAIM WAS MADE, THE APPELLANT WAS FULLY AWARE OF THE FACT THAT CONTEMPORARY STATU TE DID NOT ALLOW ANY TAX EXEMPTION ON SUCH CAPITAL GAINS TO THE APPELLANT. I T IS ALSO NOT A CASE THAT SMC-ITA NOS 2744 & 2745/AHD/2012 SMT. MANJU SURENDRA KUMAR MITTAL VS. ITO SMT. PREETI RAJENDRAKUMARMITTAL VS. ITO AY : 2008-2009 3 DURING ASSESSMENT PROCEEDINGS, BEFORE THE DETECTION BY THE LEARNED ASSESSING OFFICER, THE APPELLANT GOT TO KNOW OF ITS MISTAKE A ND VOLUNTARILY SUO MOTTO OFFERED THE UNDISCLOSED INCOME. AS PER RECORDS, THE ASSESSING OFFICER HAD DETECTED THIS TRANSACTION OF THE APPELLANT FROM THE AIR DETAILS . THUS, SEEN THE CLAIM OF THE APPELLANT, BY NO STRETCH OF IMAGIN ATION FALLS IN THE CATEGORY OF A DEBATABLE ISSUE ON A LEGAL FICTION BUT IS SQUAREL Y A CASE OF WILFUL NON- DISCLOSURE OF INCOME. THE ARGUMENT OF THE APPELLANT THAT THE DISCLOSURE WAS MADE SUBJECT TO NO PENALTY PROCEEDINGS BEING LEVIED IS ALSO INCORRECT AS THE ASSESSING OFFICER DO NOT HAVE ANY LEGAL MANDATE TO GIVE ANY SUCH ASSURANCE OR EXEMPTIONS TO THE TAXPAYERS. THERE IS NO BONAFIDE W HICH CAN BE ATTACHED TO THE CONDUCT OF THE APPELLANT. BUT FOR THE SCRUTINY PROCEEDINGS U/S. 143(3) THE APPELLANTS CLAIM WOULD HAVE GONE UNNOTICED. RESPECT FULLY FOLLOWING THE JUDICIAL RATIOS DISCUSSED ABOVE AND IN THE LIGHT OF FACTS OF THE CASE EXISTING IN THIS CASE, IT IS ACCORDINGLY HELD THAT THE ACTION O F THE A.O. TO IMPOSE PENALTY U/S. 271(1)(C) AMOUNTING TO RS. 3,47,440/- VIDE ORD ER DATED 28.06.2011 IS CORRECT AND BASED UPON CORRECT INTERPRETATION OF LA W. THE PENALTY ORDER IS THEREFORE SUSTAINED AND THE GROUNDS OF APPEAL RAISE D BY THE APPELLANT DISMISSED. 5. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSELS AND PERUSED THE R ECORDS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUMMARIZED HIS SUBMISS IONS AS UNDER:- (I) AO LEVIED PENALTY OF RS.3,47,440/- U/S 271(L)( C) ON ADDITION MADE IN RESPECT OF LONG TERM CAPITAL GAIN ON SALE OF PROPER TY WHICH CAME TO BE CONFIRMED BY CIT(A) AS WELL. (II) AT THE ASSESSMENT STAGE, AO FOUND THAT ASSESSE E HAD SOLD A PROPERTY, JOINTLY OWNED WITH MS. PREETI MITTAL, FOR SALE CONS IDERATION OF RS.36,10,000/- WHICH WAS NOT OFFERED IN THE RETURN OF INCOME. (II) ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT SUC H LONG TERM CAPITAL GAIN WAS NOT CHARGEABLE TO TAX UNDER THE ACT. (III) WHEN THE ASSESSEE WAS PUT TO NOTICE ABOUT THE SAME, ASSESSEE REALIZED HER MISTAKE THAT LONG TERM CAPITAL GAIN ARISING ON SALE OF SUCH LAND WAS NOT OFFERED IN THE RETURN OF INCOME. (IV) IMMEDIATELY, ASSESSEE FILED A REVISED STATEMEN T OF INCOME WHEREIN LONG TERM CAPITAL GAIN ON SALE OF THE CONCERNED PROPERTY WAS INCLUDED AND PAID DUE TAX ON SUCH INCOME. SMC-ITA NOS 2744 & 2745/AHD/2012 SMT. MANJU SURENDRA KUMAR MITTAL VS. ITO SMT. PREETI RAJENDRAKUMARMITTAL VS. ITO AY : 2008-2009 4 (V) THUS, LONG TERM CAPITAL GAIN WAS NOT INCLUDED I N THE ORIGINAL RETURN OF INCOME ON ACCOUNT OF A BONA FIDE MISTAKE. (VI) IT IS A SETTLED LAW THAT APPELLANT CANNOT BE H ELD GUILTY EITHER FOR CONCEALING ANY INCOME OR FOR FURNISHING ANY INACCUR ATE PARTICULARS OF INCOME IN CASE OF A BONA FIDE AND AN INADVERTENT ER ROR. RELIANCE IS PLACED ON 'PRICE WATERHOUSE COOPERS (P.) LTD VS. CI T 348 ITR 306 (SC). (VII) IN THE LIGHT OF ABOVE, IMPUGNED PENALTY MAY B E DELETED. 6.1 I FIND THAT IT IS UNDISPUTED FACTS OF THE CASE THAT THE ASSESSEE HAS SOLD THE PROPERTY FOR A SALE CONSIDERATION OF RS.36,10,0 00/- AND HAS NOT DISCLOSED THE SAME IN THE RETURN OF INCOME. WHEN THE SAME WA S DETECTED, THE ASSESSEE OFFERED THE SAME FOR TAXATION. WHEN PENALTY WAS LE VIED, THE ASSESSEE CLAIMED THAT SHE WAS UNDER BONA FIDE BELIEF THAT SU CH TRANSACTION WAS NOT EXIGIBLE TO TAXATION. NO REASON WHATSOEVER HAS BEE N ATTRIBUTED AS TO HOW THE ASSESSEE CAME UNDER A BONA FIDE BELIEF THAT THE SAID SALE OF PROPERTY WAS NOT EXIGIBLE TO TAXATION. IT IS ALSO NOT THE CASE THAT THE PROPERTY OR LAND WAS AGRICULTURAL OR THERE WAS ANY DEBATE ABOUT THE TRAN SACTION BEING TAXABLE. IN THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE AUTHORITIES BELOW HAVE RIGHTLY REJECTED ASSESSEES PLEA THAT THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE TRANSACTION WAS NOT EXIGIBLE TO TAXATION. ANOTHER PLANK OF ASSESSEES PLEA IS THAT IT WAS BONA FIDE AND INADVE RTENT ERROR. BY NOT DISCLOSING THE SALE CONSIDERATION OF RS.36,10,000/- , HOW CAN THE SAME BE CLAIMED AS BONA FIDE AND INADVERTENT ERROR IS BEYON D COMPREHENSION. FAILING TO DISCLOSE THE SALE CONSIDERATION OF RS.36 ,10,000/-, BY ANY STRETCH OF IMAGINATION, CANNOT BE CONSIDERED AS AN INADVERTENT ERROR. 6.2 THE RELIANCE PLACED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE CASE LAW OF PRICE WATERHOUSE COOPERS (P.) LTD VS. CIT 348 ITR 306 (SC) IS TOTALLY MISPLACED. IN THE ABOVE CASE, IN THE TAX AUDIT REP ORT IT WAS DISCLOSED THAT AN SMC-ITA NOS 2744 & 2745/AHD/2012 SMT. MANJU SURENDRA KUMAR MITTAL VS. ITO SMT. PREETI RAJENDRAKUMARMITTAL VS. ITO AY : 2008-2009 5 AMOUNT OF RS.23 LACS TOWARDS THE PROVISION OF PAYME NT OF GRATUITY WAS NOT ALLOWABLE U/S 40A(7). HOWEVER, IN THE COMPUTATION OF INCOME, THE SAID AMOUNT WAS NOT DISALLOWED. THE AO ALSO OVERLOOKED T HE ITEM AND OMITTED TO MAKE THE DISALLOWANCE. SUBSEQUENTLY, THE CASE W AS REOPENED AND PENALTY WAS LEVIED U/S 271(1)(C) OF THE ACT. THE A SSESSEE EXPLAINED THAT THE OMISSION TO MAKE THE DISALLOWANCE HAD OCCURRED BECA USE IT HAD SEPARATE ACCOUNTS DEPARTMENT AND THERE WAS SOME CONFUSION AN D THAT THE RETURN WAS MADE BY A NON-CHARTERED ACCOUNTANT AND RETURN WAS S IGNED BY DIRECTOR OF THE ASSESSEE WHO PROCEEDED ON THE BASIS THAT THE RE TURN WAS CORRECTLY DRAWN UP. ON CONFIRMATION OF PENALTY, BY NOTING THAT TH E ASSESSEE WAS A WELL- KNOWN AND REPUTED CHARTERED ACCOUNTANT FIRM AND A T AX CONSULTANT, THE HONBLE APEX COURT DELETED THE PENALTY ON THE GROUN D THAT EVEN THE ASSESSEE COULD HAVE MADE A SILLY MISTAKE. IT WAS NO TED THE FACT THAT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND TH AT IT UNEQUIVOCALLY STATED THAT THE PROVISION FOR PAYMENT WAS NOT ALLOW ABLE U/S 40A(7) INDICATES THAT THE ASSESSEE MADE A COMPUTATION ERRO R IN ITS RETURN OF INCOME. IT WAS ALSO NOTED THAT EVEN THE AO WHO FRAMED THE O RIGINAL ASSESSMENT ORDER MADE A MISTAKE IN OVERLOOKING THE CONTENDS OF TAX AUDIT REPORT. IN THESE CIRCUMSTANCES, IT WAS HELD TO BE A SILLY/INAD VERTENT MISTAKE FOR WHICH THE PENALTY WAS NOT EXIGIBLE. 6.3 I FIND THAT THIS CASE LAW IS ABSOLUTELY NOT APP LICABLE ON THE FACTS OF THE CASE. NO CASE HAS BEEN MADE OUT THAT BY ANY REPORT /STATEMENTS WHATSOEVER BY ASSESSEE HAS INDICATED IN THE RETURN OF INCOME O R ACCOMPANYING DOCUMENTS THAT THE SALE CONSIDERATION OF RS.36,10,0 00/- WAS RECEIVED. NO CASE HAS BEEN MADE OUT THAT THE ASSESSEES CONSULTA NT HAS MADE AN ERROR. IN THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE ABOVE CASE LAW IN THE CASE OF PRICE WATERHOUSE COOPERS (P.) LTD (SUPRA) I S TOTALLY INAPPLICABLE ON THE FACTS OF THE PRESENT CASE. SMC-ITA NOS 2744 & 2745/AHD/2012 SMT. MANJU SURENDRA KUMAR MITTAL VS. ITO SMT. PREETI RAJENDRAKUMARMITTAL VS. ITO AY : 2008-2009 6 6.4 THEREFORE, IN MY CONSIDERED OPINION, THE ASSESS EE IN THIS CASE IS GUILTY OF CONCEALMENT OF INCOME AND THE ORDERS OF THE AUTH ORITIES BELOW ARE ON CORRECT APPRECIATION OF FACTS AND LAW. IN THESE CI RCUMSTANCES, I DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELO W. HENCE, I UPHOLD THE LEVY OF PENALTY IN BOTH THE CASES. 7. IN THE RESULT, BOTH APPEALS FILED BY THE ASSESSE E(S) STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST DECEMBER, 2016 AT AHMEDABAD. SD/- SHAMIM YAHYA (ACCOUNTANT MEMBER) AHMEDABAD; DATED 01/12/2016 *BIJU T., SR. PS / 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