IRM Trust, Ahmedabad V. The ACIT.,Circle-11, Ahmedabad

ITA 2853/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8001 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 20-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Business income; Maximum Marginal Rate; Retrospective amendment
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2853/AHD/2013 ( / ASSESSMENT YEAR : 2008-09) IRM TRUST 13, SANJIV BAUG SOCIETY NEW SHARDA MANDIR ROAD PALDI, AHMEDABAD / VS. THE ASST.CIT RANGE-11 AHMEDABAD $ ./ ./ PAN/GIR NO. : AAATI 0877 R ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI S.N. SOPARKAR, SR.ADV. ($'*) / RESPONDENT BY : SHRI V.K. SINGH, SR.DR +,*- / DATE OF HEARING 13/12/2017 ./0*- / DATE OF PRONOUNCEMENT 21/ 12 /2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS )-XVI, AHMEDABAD [CIT(A) IN SHORT] DATED 20/09/2013 UPHOLDING THE ASSESSING OFFICERS ACTION OF IMPOSING PENALTY AMOU NTING TO RS.21,03,000/- IN PENALTY PROCEEDINGS UNDER S.271(1 )(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ). ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 2 - 2. BRIEFLY STATED, THE ASSESSEE FILED RETURN OF I NCOME FOR THE AY 2008-09 WHEREIN INCOME FROM LONG TERM CAPITAL GAIN (LTCG) OF RS.92,76,732/- ON SALE OF FARM HOUSE WAS INTER ALIA DECLARED. THE RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT. THE A SSESSING OFFICER (AO) OBSERVED THAT AGAINST THE AFORESAID LTCG OF RS.92,7 6.732/- AND ABOVE, THE ASSESSEE HAS CLAIMED EXEMPTION OF RS.36,85,222/ - TAKING SHELTER OF SECTION 54 OF THE ACT. IT WAS FURTHER OBSERVED THA T THE AO THAT THE ASSESSEE HAS ALSO CLAIMED DEDUCTION TOWARDS LONG TE RM CAPITAL LOSS (LTCL) OF RS.55,91,510/- BROUGHT FORWARD FROM EARLI ER YEARS. THE AO DENIED THE DEDUCTION TOWARDS CAPITAL LOSSES BROUGHT FORWARD AS WELL AS EXEMPTION CLAIMED UNDER S.54 OF THE ACT AND HELD TH AT ENTIRE LONG TERM CAPITAL GAINS OF RS.92,76,732/- IS SUSCEPTIBLE TO INCIDENCE OF TAX. THE AFORESAID ACTION OF THE AO WAS CHALLENGED IN THE QU ANTUM PROCEEDINGS BEFORE THE CIT(A) AS WELL AS THE ITAT. THE CIT(A) CONFIRMED THE ACTION OF THE AO WHICH WAS, IN TURN, ENDORSED BY THE ITAT IN ITA NO.1719/AHD/2011 ORDER DATED 14/02/2017. THE DENIA L OF EXEMPTION CLAIMED BY THE ASSESSEE UNDER S.54 OF THE ACT AND A LSO REJECTION OF CLAIM OF BROUGHT FORWARD LOSSES INVITED PENALTY PROCEEDIN GS UNDER S.271(1)(C) OF THE ACT. THE AO VIDE PENALTY ORDER DATED 16/03/ 2012 IMPOSED PENALTY OF RS.21,03,000/- TOWARDS WRONGFUL CLAIM OF ADJUSTMENT TOWARDS BROUGHT FORWARD LONG TERM CAPITAL LOSSES AS WELL AS WRONGFUL DEDUCTION CLAIMED UNDER S.54 OF THE ACT. THE CIT(A ) IN FIRST APPEAL ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 3 - ENDORSED THE AFORESAID ACTION OF IMPOSITION OF PENA LTY VIDE ITS ORDER DATED 20/09/2013. 3. AGGRIEVED BY THE IMPOSITION OF PENALTY AND CONFI RMATION THEREOF BY THE FIRST APPELLATE AUTHORITY, THE ASSESSEE IS I N APPEAL BEFORE THE TRIBUNAL. 4. THE LD.SENIOR COUNSEL FOR THE ASSESSEE MR.S.N.SO PARKAR SUBMITTED THAT THE PENALTY HAS BEEN IMPOSED ON TWO ASPECTS; NAMELY (I) DISALLOWANCE OF DEDUCTION UNDER S.54 OF THE ACT AMO UNTING TO RS.36,85,222/- AND (II) DISALLOWANCE OF SET OFF OF BROUGHT FORWARD LONG TERM CAPITAL LOSSES OF RS.55,91,510/-. ADDRESSING THE SECOND ASPECT OF DISALLOWANCE OF SET OFF OF BROUGHT FORWARD CAPITAL LOSSES FIRST, THE LD.COUNSEL SUBMITTED THAT THE AFORESAID LOSS AROSE IN THE AY 2006-07, THE RETURN FOR WHICH WAS FILED ON 31/10/2006. THE RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT UNDER S.143(3) OF THE ACT. THE ASPECT TOWARDS LOSS WAS BROUGHT ON RECORD BY THE ASSESSEE VIDE ITS SUBMISSION DATED 19/11/2008 RELEVANT TO AY 2006-07 BEFORE THEN AO. IT WAS SUBMITTED THAT ASSESSEE SPECIFICALLY BROUGHT TO THE NOTICE OF THE AO IN THE AY 2006- 07 OF ITS CLAIM TOWARDS LONG TERM CAPITAL GAIN OF RS.55,92,841/-. IT WAS SUBMITTED THAT IT IS A DIFFERENT MATTER THAT TH E ASSESSMENT ORDER PASSED FOR AY 2006-07 DOES NOT SPECIFY THE AFORESAI D AMOUNT OF LOSS TO BE CARRIED FORWARD. THE LD.COUNSEL ACCORDINGLY SUB MITTED THAT THE ASSESSEE WAS ENTITLED UNDER LAW TO SET OFF CAPITAL LOSS OF RS.55,92,841/- ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 4 - AROSE TO IT IN AY 2006-07 WHICH HAS BEEN CLAIMED AS DEDUCTION IN THE AY 2008-09 CONCERNED. AS REGARDS THE FIRST ASPECT I.E. EXEMPTION CLAIMED UNDER S.54 OF THE ACT, THE LD.COUNSEL SUBMI TTED THAT THE ASSESSEE-TRUST IS IN THE NATURE OF DISCRETIONARY TR UST AND THUS IS AKIN TO INDIVIDUAL-ASSESSEE AND THEREFORE THE LOSS DEDUCTIB LE TO INDIVIDUAL IS APPLICABLE TO THE ASSESSEE IN VIEW OF THE JUDICIAL PRECEDENTS IN THE CASE OF CWT VS. TRUSTEES OF H.E.H. NIZAMS FAMILY TRUST (19 77) 108 ITR 555 AND IN THE CASE OF CIT VS. DEEPAK FAMILY TRUST (NO. 1) (1995) 211 ITR 575 (GUJ.). 5. THE LD.COUNSEL ACCORDINGLY SUBMITTED THAT ALTHOU GH THE QUANTUM APPEAL HAS BEEN DECIDED AGAINST THE ASSESSEE, THE I SSUES INVOLVED ARE QUITE DEBATABLE AND THUS CANNOT INVITE CONSEQUENCES IN THE FORM OF PENALTY UNDER S.271(1)(C) OF THE ACT. THE LD.COUNS EL THEREAFTER INVITED OUR ATTENTION TO AN INTERIM ORDER OF ADMISSION OF T HE TAX APPEAL IN THE TRIBUNALS ORDER IN QUANTUM PROCEEDINGS AS PER TAX APPEAL NO.780 OF 2017, ORDER DATED 09/10/2017 WHEREBY BOTH THE ISSUE S OF DISALLOWANCES I.E. DEDUCTION U/S.54 OF THE ACT AND ELIGIBILITY FO R SET OFF OF BROUGHT FORWARD LOSSES HAS BEEN ADMITTED FOR ADJUDICATION O N MERITS IN QUANTUM PROCEEDINGS. THE LD.COUNSEL ACCORDINGLY SUBMITTED THAT THE CIRCUMSTANCES NARRATED ABOVE WOULD SHOW THAT THE IS SUES INVOLVED IS HIGHLY DEBATABLE AND THERE IS NO CONCEALMENT OF PAR TICULARS OF INCOME PER SE . ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 5 - 6. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AND STRIDENTLY OPPOSED THE CONTEN TIONS MADE ON BEHALF OF THE ASSESSEE. THE LD.DR SUBMITTED THAT A READIN G OF SECTION 54 OF THE ACT WOULD SUGGEST THAT DEDUCTION ELIGIBLE UNDER S.5 4 OF THE ACT IS RESTRICTED TO SPECIFIED CLASSES OF THE ASSESSEE, NA MELY INDIVIDUALS AND HUFS SUBJECT TO OTHER CONDITIONS PRESCRIBED THERE IN. THE ASSESSEE BEING A TRUST IS NEITHER INDIVIDUAL NOR HUF AND THU S NOT ELIGIBLE FOR CLAIM OF AFORESAID DEDUCTION. THE LD.DR POINTED OU T TO A SPECIFIC FINDING OF THE ITAT ON FACTS IN QUANTUM PROCEEDINGS THAT THE ASSESSEE IS ASSESSED IN THE STATUS OF AOP AND THEREFORE AS A C OROLLARY DOES NOT FALL IN THE CATEGORY SPECIFIED UNDER S.54 OF THE ACT. THE LD.DR ACCORDINGLY SUBMITTED THAT THE DEDUCTION CLAIMED BY THE ASSESSE E UNDER S.54 OF THE ACT RUNS COUNTER TO THE VERY SCHEME OF SECTION 54 O F THE ACT. THEREFORE, PENALTY WAS FULLY JUSTIFIED FOR SUCH A PALPABLY WRO NG CLAIM. 7. AS REGARDS SECOND ASPECT OF THE MATTER, NAMELY SET OFF OF CARRIED FORWARD OF CAPITAL LOSSES THE LD.DR SUBMITTED THAT THE COORDINATE BENCH HAS DENIED THE AFORESAID DEDUCTION INTER ALIA ON A CLEAR REASONING THAT NO SUCH CAPITAL LOSS WAS DECLARED IN THE RETURN OF INC OME FILED BY THE ASSESSEE. THE LD.DR FURTHER REFERRED TO THE ASSESS MENT ORDER AND SUBMITTED THAT NEITHER THE CLAIM OF LTCLS WAS INCLU DED IN THE RETURN OF INCOME FOR AY 2006-07 WHERE THE CLAIM IS PURPORTED LY ORIGINATED NOR ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 6 - THE RETURN WAS FILED WITHIN THE STIPULATED TIME PER IOD UNDER S.139(1) OF THE ACT AND THEREFORE THE IMPUGNED CAPITAL LOSS WAS AT ANY RATE, NOT ELIGIBLE FOR CARRIED FORWARD AND SET OFF IN SUBSEQU ENT ASSESSMENT YEAR. UNDER THESE CIRCUMSTANCES, IT WAS CLAIMED THAT SUC H SET OFF OF LTCL WAS CLEARLY CONTRARY TO THE STATUTORY PROVISIONS FOR WH ICH THE ASSESSEE CANNOT ESCAPE INCIDENCE OF PENALTY. THE LD.DR ACCORDINGLY SUBMITTED THAT NO INTERFERENCE WITH THE ORDER OF THE CIT(A) IS CALLED FOR. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW, CASE-LAWS CITE D AND MATERIAL PLACED ON RECORD. THE CONTROVERSY IN THE PRESENT CASE REV OLVES AROUND IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT ON ALLEGED WRONGFUL CLAIM OF DEDUCTION UNDER S.54 OF THE ACT AND WRONGF UL DEDUCTION TOWARDS SET OFF OF CARRIED FORWARD LTCLS. 9. WE SHALL DWELL UPON THE MAINTAINABILITY OF PEN ALTY UNDER S.271(1)(C) OF THE ACT ATTRIBUTABLE TO DEDUCTION UNDER S.54 OF THE ACT AMOUNTING TO RS.36,85,222/- FIRST. WE TAKE NOTE OF THE LIMITED CONTENTION ON BEHALF OF THE ASSESSEE THAT ASSESSEE-TRUST IS ASSESSED IN THE CAPACITY OF DISCRETIONARY TRUST AND THEREFORE ALL THE BENEFICIAL PROVISIONS A PPLICABLE TO AN INDIVIDUAL IS AVAILABLE TO THE AFORESAID PRIVATE DISCRETIONARY-TRUST. IT IS THUS THE CASE OF THE ASSESSEE THAT STATUS OF THE DI SCRETIONARY TRUST HAS BEEN INAPPROPRIATELY TAKEN AS AOP INSTEAD OF INDIVIDUAL . IN THIS REGARD, WE ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 7 - NOTE THE CATEGORICAL OBSERVATIONS OF THE COORDINATE BENCH OF THE ITAT IN QUANTUM PROCEEDINGS (ITA NO.1719/AHD/2011) THAT THE ASSESSEE-TRUST IS NEITHER AN INDIVIDUAL NOR A HINDU UNDIVIDED FAMILY (HUF). WE FIND A CLEAR OBSERVATION OF THE TRIBUNAL THAT THE STATUS O F THE ASSESSEE IS ASSOCIATION OF PERSON (AOP). THIS BEING SO, THE AS SESSEE WAS CLEARLY NOT ENTITLED IN LAW TO CLAIM DEDUCTION UNDER PLAIN AND UNEQUIVOCAL PROVISIONS OF SECTION 54 OF THE ACT. THIS FINDING CLEARLY GOES TO SUPPORT THAT THERE IS NO SCOPE WHATSOEVER FOR ANY DEBATE ON NON-AVAILABILITY OF DEDUCTION OF SECTION 54 OF THE ACT. SIGNIFICANTLY , WE FURTHER NOTICE THAT THE ASSESSEE ITSELF HAS TREATED THE AFORESAID TRUST AS AN AOP IN LINE WITH PROVISIONS OF S.164 OF THE ACT. FOR INSTANCE, THE ASSESSEE HAS CLEARLY MENTIONED IN ITS RETURN FOR AY 2006-07 THAT ITS IS ASSESSABLE AT MAXIMUM MARGINAL RATE (PAGE 26 OF THE PAPER-BOOK) . THIS FACT UNFLINCHINGLY PROVES THAT THE ASSESSEE HAD TAKEN A SPECIFIC POSITION ITSELF FOR TAXATION IN THE STATUS OF AOP. WE ALSO FIND TH AT THE ASSESSEE HAS APPLIED FLAT RATE OF TAXATION (AT 30%) APPLICABLE T O ASSESSEE HOLDING THE STATUS OF AOP, UNLIKE INDIVIDUALS WHERE SLAB RATE S FOR DIFFERENT LEVEL OF INCOME IS SPECIFIED. SAME IS THE CASE FOR RETURN F ILED RELEVANT AY 2007- 08. NEEDLESS TO SAY, DETERMINATION OF STATUS OF AN ASSESSEE IS A PART OF PROCESS OF COMPUTATION OF INCOME AND ASSESSMENT. T HIS CLEARLY GOES TO SHOW WITHOUT ANY NEED FOR INTERPRETATION THAT THE A SSESSEE WAS NOT SUSCEPTIBLE TO TAX AT PAR WITH INDIVIDUAL. THEREFO RE, WE FAIL TO FIND LEGITIMACY OF ANY SORT IN THE CLAIM OF DEDUCTION UN DER S.54 OF THE ACT. ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 8 - THE DEDUCTION UNDER S.54 IS ENTITY SPECIFIC AND AVA ILABLE ONLY TO INDIVIDUAL AND HUF. THE ASSESSEE HEREIN HAS DECLAR ED ITS STATUS AS AOP AND CONDUCTED ITSELF IN THIS MANNER. HENCE, THE DE DUCTION CLAIMED WAS PRIMA-FACIE CONTRARY TO ABUNDANTLY CLEAR STATUTORY PROVISION OF S.54 OF THE ACT. A SPURIOUS PLEA IS SOUGHT TO BE TAILORED TO S UPPORT A WHOLLY UNJUSTIFIED CLAIM WHICH IS FOUND TO BE UNTRUE AND M ISLEADING AS A MATTER OF FACT. THE DEDUCTION CLAIMED UNDER S.54 OF THE ACT WAS PRIMA-FACIE CONTRARY TO THE STATUTORY PROVISION. 9. THE DECISIONS RELIED UPON ON BEHALF OF THE ASSES SEE TO GIVE THE STATUS OF THE ASSESSEE A COLOUR OF INDIVIDUAL ARE T OTALLY DISSIMILAR IN FACTS. IN DEEPAK FAMILY TRUST 211 ITR 575 (GUJ.) RELIED UP ON BY THE ASSESSEE, THE TRUSTEES OF THE DISCRETIONARY TRUST WERE ASSESS ED AS INDIVIDUAL AND NOT AS AOP. THE DEDUCTION UNDER S.80L WERE ALLOWED IN THAT CASE IN VIEW OF CERTAIN INTERPRETATION ON RETROSPECTIVE AMENDMENT I N SECTION 80L(I) BY FINANCE ACT, 1994. HOWEVER, AS NOTED ABOVE, THE AS SESSEE HAS ADMITTEDLY OFFERED ITSELF AS AN ASSESSABLE ENTITY I N THE STATUS OF AOP AS PERMISSIBLE IN LAW. THEREFORE, THERE IS NO CASE F OR ITS STATUS AS INDIVIDUAL. THE DEDUCTION UNDER S.54 OF THE ACT IS THUS TOTALLY OUSTED. WE DO NOT SEE ANY POSSIBILITY OF DEBATE SURFACING I N THE LIGHT OF DEEPAK FAMILY TRUST CASE RELIED UPON. SIMILARLY, THE DECI SION IN THE CASE OF TRUSTEES OF H.E.H. NIZAMS FAMILY TRUST IS OF NO CO NSEQUENCE IN THE FACTS OF THE ASSESSEE WHERE THE ASSESSEE ITSELF HAS CLAIMED ITS STATUS AS ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 9 - AOP AND SOUGHT TO DERIVE CONSEQUENTIAL BENEFIT IN T HE FORM OF CARRY FORWARD LOSSES FOR OTHERWISE BELATED RETURN. 10. AT THIS JUNCTURE, WE ALSO TAKE NOTE OF SECOND PLEA OF THE ASSESSEE THAT ALL MATERIAL FACTS RELEVANT TO CLAIM TOWARD DE DUCTION UNDER S.54 WERE DISCLOSED AND THEREFORE NO PENALTY CAN BE IMPOSED I N VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN RELIANCE P ETROPRODUCTS PVT.LTD. (2010) 322 ITR 158(SC). WE ARE NOT IMPRES SED BY SUCH PLEA. THE DEDUCTION UNDER S.54 DEPENDS ON STATUS OF ASSES SEE. THIS MATERIAL FACT OF STATUS AS AOP WAS KEPT ASIDE FOR WRONGFU L AND INELIGIBLE CLAIM DEVOID OF ANY MERITS. NEEDLESS TO SAY, THE PENA LTY UNDER S.271(1)(C) OF THE ACT IS IN THE CIVIL LIABILITY AND AVAILABLE AS A RECOURSE TO THE REVENUE AS A REMEDY FOR LOSS OF POSSIBLE REVENUE DEDUCTION CLAIMED UNDER S.54 IN ITSELF IS FOUND TO CONTRARY TO MANDATE OF LAW. I N THESE CIRCUMSTANCES, WE FIND DIFFICULT TO ADMIT THE PLEA ON BEHALF OF THE A SSESSEE THAT THE ISSUE OF DEDUCTIBILITY IS DEBATABLE OF ANY SORT. 11. AS OBSERVED, THE CLAIM OF DEDUCTION UNDER S. 54 CARRIED IS CLEARLY IN CONTRAVENTION OF STATUTORY MANDATE AND HENCE CANN OT BE BRACKETED IN LEAGUE OF BONAFIDE ACTION. THE ASSESSEE HAS TOTA LLY FAILED TO DEMONSTRATE THE BONAFIDE OF ITS ACTION EXCEPT EX-PARTE ADMISSION OF THE APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT AGAINS T THE QUANTUM PROCEEDINGS. THE HONBLE GUJARAT HIGH COURT IN TH E CASE OF CIT VS. ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 10 - DHARANSHI V.SHAH 366 ITR 140 (GUJ.) HAS HELD THAT T HE ADMISSION OF APPEAL IS UNDER S.260A PER SE IS INCONSEQUENTIAL FOR DETERMINATION OF IMPOSITION OF PENALTY. AS WE NOTICE THAT THE ACTI ON OF THE ASSESSEE PRIMA-FACIE LACKS BONAFIDE BOTH ON FACTS AS WELL AS ON LAW, T HE CONSEQUENCES OF PENALTY IS INESCAPABLE. THEREFORE, WE DO NOT FIND ANY ERROR IN THE CONCLUSION DRAWN BY THE CIT(A). CONS EQUENTLY, WE DECLINE TO INTERFERE THEREWITH. 12. WE SHALL NOW TURN TO THE OTHER ASPECT NAMELY BO NAFIDES OF CLAIM OF CARRIED FORWARD LTCLS PURPORTEDLY AROSE IN AY 2006- 07. IT IS THE CASE OF THE ASSESSEE THAT LONG TERM CAPITAL LOSS WAS CLA IMED IN THE RETURN OF INCOME FOR AY 2006-07 BY WAY OF COMPUTATION OF INCO ME. THIS FACT WAS ALSO BROUGHT TO THE NOTICE OF THE AO IN THE COURSE OF SCRUTINY PROCEEDINGS. HOWEVER, THE AO HAS DECLINED TO ALLOW THE CARRY FORWARD OF THE CAPITAL LOSS MAINLY ON THE GROUND THAT (I) T HE RETURN OF INCOME WAS NOT FILED UNDER S.139(1) AND (II) THE LOSS WAS NOT SHOWN AS PART OF THE RETURN OF INCOME. IT IS CLAIMED ON BEHALF OF THE A SSESSEE THAT THE DUE DATE FOR FILING THE RETURN OF INCOME FOR AY 2006-07 WAS EXTENDED FROM 31/07/2006 TO 31/10/2006 VIDE ORDER OF THE CBDT DAT ED 24/02/2006 UNDER S.119(2)(B) OF THE ACT. THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR FILED ON 30/10/2006 IS THEREFORE WI THIN EXTENDED DUE DATE PRESCRIBED UNDER S.139(1) OF THE ACT. IN THI S REGARD, WE NOTE THAT ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 11 - THE EXTENSION HAS BEEN GRANTED BY THE CBDT IN THE M ATTER OF DUE DATE UNDER S.139(1) WHERE THE ASSESSEE FALLS WITHIN THE CATEGORY OF NON- CORPORATE TAX PAYERS (EXCLUDING INDIVIDUALS AND HUF S NOT HAVING BUSINESS INCOME). THUS, INDIVIDUALS AND HUFS NOT H AVING BUSINESS INCOME WERE UNDER CONTINUING OBLIGATION TO FILE THE RETURN ON OR BEFORE 31/07/2006. THUS BY VIRTUE OF STATUS OF ASSESSEE AS AOP, THE EXTENDED DUE DATE UNDER S.139(1) WOULD BE 31/10/2006 IN TERM S OF THE CBDT CIRCULAR. THUS, MITIGATING CIRCUMSTANCES EXISTS TO PROVE THE BONAFIDES FOR POSSIBILITY OF CARRY FORWARD OF CLAIM OF CAPIT AL LOSSES UNDER S.80 IN THE LIGHT OF THE FACT THAT THE ASSESSEE IS ASSESSAB LE ENTITY AS AN AOP. IN THE GIVEN CIRCUMSTANCES, WE DO NOT SEE ANY CULPABIL ITY OR IMPROPRIETY IN CLAIMING SET OFF OF CARRY FORWARD LOSS CLAIMED AS P ER RETURN OF INCOME FILED WITHIN THE EXTENDED DUE DATE UNDER S.139(1) O F THE ACT. HENCE, THE PLEA RAISED ON BEHALF OF THE ASSESSEE FOR CANCELLAT ION OF PENALTY ON THIS ISSUE IS QUITE PLAUSIBLE. 13. AS REGARDS SECOND PLEA OF REVENUE, WE NOTE THAT THE ASSESSEE HAS SHOWN THE LTCL IN THE ROI AND ALSO APPRISED THE AO AT THE TIME OF ASSESSEE. THUS, NOTWITHSTANDING THE FACT THAT CAPI TAL LOSS DOES NOT APPEAR IN THE STATUTORY FIRM FOR FILING ROI, THE BE NEFIT OF AMBIGUITY MUST GO IN FAVOUR OF THE ASSESSEE IN SO FAR AS PENALTY P ROCEEDINGS ARE CONCERNED. CONSEQUENTLY, WE FIND MERIT IN PLEA OF ASSESSEE FOR CANCELLATION OF PENALTY ON ADDITIONS MADE OWING TO DISALLOWANCE OF CARRY ITA NO.2853/AHD /2013 IRM TRUST VS. ACIT ASST.YEAR 2008-09 - 12 - FORWARD CAPITAL LOSSES. WE THEREFORE DIRECT THE AO TO DELETE THE PENALTY LEVIED ON THIS SCORE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 21 / 1 2 /201 7 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 21/ 12 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-XVI, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 5.12.2017 (DICTATION-PAD 2 9-PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 5.12.2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.21.12.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.12.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER