Maullika Sharma, New Delhi V. DCIT Circle-35 (1), New Delhi

ITA 2749/DEL/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3961 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 17-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Set aside
• Section: 271(1)(c)

Judgement Text

ITA NO. 2749/DEL/2008 A..Y. 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2749/DEL/2008 (A.Y. 2005-06) MAULLIKA SHARMA, VS. DCIT, CIRCLE-35(1), NEW DEL HI 40, PUSHPANJALI, VIKAS MARG EXTN., NEW DELHI 110 092 (PAN: AATPS 6181 R) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. SANJAY SOOD, CA DEPARTMENT BY : SH. M.P. SINGH, SR. DR PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 01.02.20 08 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. THE ISSUE RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 91,734/- IMP OSED U/S 271(1)(C) OF THE IT ACT. 3. THE FACTS OF THE LEADING TO LEVY OF PENALTY A RE AS UNDER:- IN THIS CASE RETURN OF INCOME WAS FILED ON 30.7. 2005 DECLARING AN INCOME OF RS. 20,14,740/-. THE ASSESSMENT WAS COMPL ETED ON TOTAL ITA NO. 2749/DEL/2008 A..Y. 2005-06 2 INCOME OF RS. 28,32,333/-. THE DISALLOWANCE OF CLAI M OF LONG TERM CAPITAL GAIN OF RS. 8,17,593/- U/S 10(38) WAS MADE IN THE ASSESSMENT ORDER. IN ORDER TO VERIFY THE ASSESSEE CLAIM U/S 10(38) OF THE IT ACT VIDE ORDER SHEET ENTRY DATED 21.2.2007 SHE WAS ASK ED TO FURNISH SOURCE OF INVESTMENT IN THE SHARES FROM WHICH LONG TERM CAPITAL GAIN HAS BEEN DERIVED. THE ASSESSEE WAS ALSO ASKED TO FU RNISH THE COPY OF DEMAT ACCOUNT SHOWING ACQUISITION AND SALE OF THE S HARES. IN RESPONSE TO THE ABOVE QUERY, THE ASSESSEE HAD F ILED REVISED RETURN ON 28.03.07 REDUCING THE CLAIM U/S 10(38) OF THE IT ACT TO RS. 12,11,782/- AS AGAINST RS. 20,29,375/- CLAIMED IN T HE ORIGINAL RETURN. 4. IN THIS BACKGROUND THE ASSESSING OFFICER DEDUCE D THAT ASSESSEE HAS REVISED RETURN FILED AFTER THE SPECIFIC QUERY WAS RAISED AN D HENCE THE DECLARATION OF ENHANCED INCOME ON ACCOUNT OF CLAIM OF DEDUCTION U /S 10(38) CANNOT BE SAID TO BE VOLUNTARILY. ACCORDINGLY, PENALTY OF RS. 91, 734/- U/S 271(1)(C) WAS LEVIED. 5. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOM E TAX (APPEALS) CONFIRMED THE LEVY OF PENALTY. 6. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THE IDENTICAL SITUATION IN THE CASE OF HUSBAND OF THE ASSESEE IN ITA NO. 2750/DEL/08 FOR A.Y. 2005-06, TH E TRIBUNAL HAD DELETED THE PENALTY U/S 271(1)(C) VIDE ORDER DATED 31.7.2009. THE TRIBUNAL HELD AS UNDER:- 4. WE HAVE HEARD THE PARTIES AND CONSIDERED THE RI VAL SUBMISSIONS. IT IS TRUE THAT THE REVISED RETURN WAS FILED AFTER A QUE RY WAS RAISED VIDE ITA NO. 2749/DEL/2008 A..Y. 2005-06 3 ORDER SHEET ENTRY DATED 21.2.2007. HOWEVER, AFTER P ERUSAL OF THE AFORESAID INQUIRY, IT IS NOTICED THAT WHAT THE ASSE SSING OFFICER REQUIRED WAS A COPY OF DEMAT ACCOUNT AND THE SOURCE OF ACQUISITION OF THE SHARES. THIS IS A GENERAL INQUIRY AND ON RE CEIPT OF INFORMATION FROM THE DEMAT ACCOUNT AN ON EXAMINATION OF THE SAM E, THE COUNSEL OF THE ASSESSEE REALIZED HIS MISTAKE AND REVISED TH E CLAIM OF CAPITAL GAIN IN RESPECT OF SHARES, WHICH WERE ACQUIRED MORE THAN A YEAR AGO. IN THESE CIRCUMSTANCES, IT IS A MERE OMISSION AND M ISUNDERSTANDING OF THE CORRECT FACTS AT THE TIME OF FILING OF ORIGINAL RETURN WHICH WAS SUBSEQUENTLY RECTIFIED THOUGH AFTER THE QUERY RAISE D BY THE ASSESSING OFFICER. AS TO WHAT AMOUNTS TO CONCEALMENT OF INC OME OR FURNISHING INACCURATE PARTICULARS THEREOF IS ESSENTIALLY A Q UESTION OF FACT AND TO FIND OUT THAT OR TO DECIDE WHICH, ALL THE ATTENDIN G CIRCUMSTANCES HAVE TO BE TAKEN INTO ACCOUNT. THE QUESTION IS AT WHAT POINT OF TIME THIS MATERIAL FEET IS TO BE FOUND OUT. GENERALLY IT IS WITH REFERENCE TO THE RETURN OF INCOME AND AT THAT TIME IT IS TO BE SEEN WHETHER THERE WAS CONCEALMENT OF INCOME FROM OR FURNISHING OF INACCUR ATE PARTICULARS THEREOF IN THE RETURN OF INCOME CHARGEABLE TO TA X. BUT THERE MAY BE CASES, WHERE AN INCOME IS NOT DECLARED IN THE RE TURN OR THE PARTICULARS OF INCOME SHOWN INACCURATELY IN THE RET URN BUT ASSESSEE ON REALIZATION OF MISTAKE, OMISSION OR MISDEED REC TIFIES THE MISTAKE AND CORRECT HIMSELF AND CLEANS HIS BREAST AND CANNO T BE ACCUSED OF CONCEALMENT EVEN THOUGH THERE WAS AN OMISSION IN THE RETURN FILED ORIGINALLY. BY THE TIME THE ASSESSING OFFICER TAK ES UP THE ISSUE AND COMES ACROSS THE INFORMATION IN HIS POSSESSION, I F THE ASSESSEE ITA NO. 2749/DEL/2008 A..Y. 2005-06 4 MAKES UP THE DEFICIENCY AND OFFERS THE INCOME OR FU RNISHES ACCURATE PARTICULARS AND OFFERED THE INCOME TO TAX, IN THESE CIRCUMSTANCES, IN OUR OPINION, IT IS NOT A CASE OF CONCEALMENT MUCH L ESS A DELIBERATE OR MALAFIDE CLAIM BY THE ASSESSEE. IN VIEW OF THE AFO RESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT IT IS NOT A FIT CASE FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) AND ACCORDINGLY , WE DELETE THE SAME. 8. WE FIND THAT FACTS OF THE PRESENT CASE ARE IDENT ICAL AND THE ASSESSEE HAS RECTIFIED THE MISTAKE IN EARLIER RETURN VOLUNTARILY . IT CANNOT BE SAID THAT ON THE FACT OF THE CASE THAT ASSESSING OFFICER HAD IDENTIFIED THE MISTAKE BEFORE THE ASSESSEE RECTIFIED THE SAME. MOREOVER HONBLE APEX COURT I N THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010. VIDE ORDER DATED 17.3.2010 HAS HELD THAT THE LAW LAID DOWN IN THE D ILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANING OF WORD CONCEALMENT AND I NACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMEND ER TEXTILE CASE WAS ONLY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS HELD T HAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1)(C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN I N CASE OF EVERY RETURN WHERE THE CLAIM IS NOT ACCEPTED BY THE AO FOR ANY REASON, THE ASSESSEE WILL INVITE THE PENALTY U/S 271(1)(C). THIS IS CLEARLY NOT THE INT ENDMENT OF LEGISLATURE. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. ITA NO. 2749/DEL/2008 A..Y. 2005-06 5 10. IN THE RESULT, THIS APPEAL FILED BY THE ASSESS EE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2010 U PON CONCLUSION OF THE HEARING. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 17/05/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES