Ilaben Jhaveri, Ahmedabad V. The Income tax Officer,Ward-10(1), Ahmedabad

ITA 318/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5660 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 02-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PS G
• Keywords: Capital asset; Business income; Revised return; Set aside; Capital Gains
• Section: 143(3); 142(1); 139(5); 143(1); 143(2); 139(1); 139(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.318/AHD/2010 A. Y.: 2006-07 ILABEN JHAVERI, 202, POOJA APARMENT, MOTINAGAR, PALDI, AHMEDABAD VS THE INCOME TAX OFFICER, WARD 10 (1), AHMEDABAD PA NO. ABYPS 5546 G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI J. M. TRIVEDI, AR RESPONDENT BY SHRI K. M. MAHESH, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- XVI, AHMEDABAD DAT ED 1-12-2009 FOR ASSESSMENT YEAR 2006-07, CHALLENGING LEVY OF PENAL TY LEVIED U/S 271 (1) ( C ) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HER RETURN OF INCOME ON 19-03-2007 FOR RS.1,83,341/- WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT. THE ASSESSEE IS DERIVING COMM ISSION INCOME AS AGENT OF LIFE INSURANCE CORPORATION OF INDIA, AND B AJAJ ALLIANZ INSURANCE CO. AFTER THE AO ISSUED NOTICE DATED 07-11-2007 U/S 143(2) AND NOTICE U/S 142(1) DATED 19-05-2008 OF THE IT ACT CALLING F OR THE DETAILS INCLUDING SOURCE OF CREDIT ENTRIES IN HER BANK STAT EMENT AND DETAILS OF EXPENSES, SHE REVISED HER RETURN OF INCOME ON 26-05 -2008 BY ENHANCING HER INCOME TO RS.2,50,780/-. THE RETURN OF RS.72,44 0/- WAS ON ACCOUNT OF NET BUSINESS INCOME OF RS.34,304/-, SHORT TERM C APITAL GAINS OF RS.13,456/- AND NET INCOME FROM OTHER SOURCES OF RS .24,680/-. THE AO HELD THAT SINCE THE REVISED RETURN FILED ON 26-05-2 008 IS BEYOND THE ITANO.318/AHD/2010 ILABEN JHAVERI, AHMEDABAD VS ITO W-10(1), AHMEDABAD 2 PRESCRIBED TIME LIMIT OF SECTION 139(5) OF THE IT A CT AND THE REVISED RETURN IS FILED ONLY AFTER THE NOTICE U/S 142(1) OF THE IT ACT WAS ISSUED TO HER, IT WAS NOT A VOLUNTARY REVISED RETURN. THEREFO RE, ADDITIONAL INCOME OF RS.72,440/- WAS SUBJECT TO MINIMUM PENALTY OF RS.18 ,073/-. THE PENALTY ORDER WAS CHALLENGED BEFORE THE LEARNED CIT (A) AND IT WAS CONTENDED THAT SINCE THE REVISED RETURN WAS FILED B EFORE DETECTION OF THE CONCEALMENT BY THE DEPARTMENT, THEREFORE, REVISED R ETURN WAS FILED VOLUNTARILY. THERE IS NO CONCEALMENT OF INCOME. THE LEARNED CIT(A) NOTED THAT THE ORIGINAL RETURN ITSELF WAS FILED ON 19-03- 2007 BEYOND THE TIME LIMIT PRESCRIBED IN SECTION 139(1) OF THE IT ACT. N O VALID REVISED RETURN IS FILED BECAUSE IT WAS FILED BEYOND 31-03-2008. THE R EVISED RETURN WAS FILED ONLY AFTER ISSUE OF NOTICE U/S 142(1) OF THE IT ACT WHEN THE DETAILS OF THE EXPENDITURE AND BANK ACCOUNTS WERE CALLED FOR. THE LEARNED CIT(A), THEREFORE, HELD THAT REVISED RETURN WAS NOT VALID A ND VOLUNTARILY FILED. THEREFORE, PENALTY WAS RIGHTLY IMPOSED AND ACCORDIN GLY DISMISSED THE APPEAL OF THE ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE NOTICE U/S 142(1) DATED 19-05-2008 WAS RECEIVED BY THE ASSESSE E IN THE SECOND WEEK OF JUNE, 2008 (11-06-2008) MUCH AFTER FILING O F THE REVISED RETURN, THEREFORE, IT IS NOT A FIT CASE OF CONCEALMENT OF I NCOME. HE HAS FILED COPY OF THE NOTICE DATED 19-05-2008 IN WHICH ALL THE ABO VE ITEMS ON WHICH THE ASSESSEE FILED REVISED RETURN, THE AO HAS NOT ISSUE D ANY NOTICE TO THE ASSESSEE. HE HAS, THEREFORE, SUBMITTED THAT IT IS N OT DETECTION OF CONCEALMENT OF INCOME BY THE DEPARTMENT AND THE ASS ESSEE BONA FIDE FORGOT TO FILE ALL THE DETAILS BEING AN OLD LADY. T HEREFORE, IT IS NOT A FIT CASE OF IMPOSITION OF PENALTY IN THE MATTER. HE HAS RELI ED UPON THE ORDER OF THE ITAT AHMEDABAD BENCH IN THE CASE OF ITO VS BABITABE N RAMESHBHAI PATEL 116 TTJ 421. ON THE OTHER HAND, THE LEARNED D R RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE FILED ITANO.318/AHD/2010 ILABEN JHAVERI, AHMEDABAD VS ITO W-10(1), AHMEDABAD 3 INVALID REVISED RETURN ONLY AFTER ISSUE OF NOTICE U /S 142(1) OF THE IT ACT. THEREFORE, THE ASSESSEE HAS CONCEALED PARTICULARS O F INCOME. THE REVENUE DEPARTMENT DETECTED THE CONCEALMENT OF INCO ME. THEREFORE, PENALTY WAS RIGHTLY IMPOSED BY THE AUTHORITIES BELO W. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND THE MATERIALS AVAILABLE ON RECORD. THE LEARNED CIT(A) NOTED HAT T HE ASSESSEE FILED EVEN ORIGINAL RETURN BEYOND THE PRESCRIBED TIME LIMIT P ROVIDED U/S 139(1) OF THE IT ACT. HOWEVER, SECTION 139(4) OF THE IT ACT P ROVIDES THAT ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN TIME ALLOWED TO HIM U/S SUB SECTION (1) OR WITHIN THE TIME ALLOWED UNDER A NOTI CE ISSUED U/S 142(1) OF THE IT ACT, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE COMPLETION OF THE ASSESSMENT WHICHEV ER IS EARLIER. THE ASSESSMENT YEAR UNDER APPEAL IS 2006-07 AND THE ASS ESSEE FILED RETURN OF INCOME ON 19-03-2007, THEREFORE, THE SAME COULD BE TREATED AS RETURN FILED U/S 139(4) OF THE IT ACT. ACCORDING TO THE AO WHEN NOTICE DATED 19-05-2008 WAS ISSUED TO THE ASSESSEE, THE INVALID REVISED RETURN WAS FILED ON 26-05-2008 AND THEREBY THE ASSESSEE DETECT ED THE CONCEALMENT AND FILED REVISED RETURN. THE LEARNED COUNSEL FOR T HE ASSESSEE RELIED UPON THE ORDER OF THE ITAT AHMEDABAD BENCH IN THE C ASE OF ITO VS BABITABENI RAMESHBHAI PATEL (SUPRA) IN WHICH IT WAS HELD AS UNDER: HELD : FROM THE NOTICES ISSUED AND INSPECTORS REPORT IT IS CLEAR THAT THERE WAS NOTHING CONTEMPLATED ABOUT CAP ITAL GAIN BEFORE FILING REVISED RETURN BY THE ASSESSEE. FURTH ERMORE, THE FACT WAS ALSO IN DISPUTE, WHETHER LAND WAS BEYOND 8 KMS. OF MUNICIPAL LIMIT, IN VIEW OF TWO VERSIONS, ONE BY AS SESSEE AND OTHER BY AO. ASSESSEES VERSION IS BASED ON CERTIFI CATE OF GRAM PANCHAYAT SATING THAT THE LAND WAS 10.5 KMS. A WAY FROM HIMMATNAGAR, AND THEREFORE, NO TAX WAS CHARGEA BLE ON THE SALE OF CAPITAL ASSET, WHEREAS AOS CLAIM WAS T HAT IT WAS WITHIN 8 KMS. FROM BOUNDARY LINE OF HIMMATNAGAR I.E . GOKULNAGAR, AS DEPICTED IN THE MAP OF HIMMATNAGAR J ILLA OBTAINED FROM JILLA PANCHAYAT OFFICE AND CONSEQUENT LY THE ITANO.318/AHD/2010 ILABEN JHAVERI, AHMEDABAD VS ITO W-10(1), AHMEDABAD 4 GAIN ARISING ON THE SALE OF THE AGRICULTURE LAND WA S TAXABLE. BE THAT AS IT MAY, NECESSARY PARTICULARS WERE ALSO ALREADY ON RECORD AND THE FACT THAT ASSESSEE HAD SOLD LAND AND MADE SOME CAPITAL GAINS WAS DECLARED BY ASSESSEE HERSELF AND CONSEQUENTLY, IT IS NOT A FIT CASE FOR LEVY OF PENA LTY UNDER S. 271(1) ( C), THEREFORE, CIT(A) WAS JUSTIFIED IN DEL ETING THE PENALTY. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED COP Y OF THE NOTICE DATED 19-05-2008 ISSUED U/S 142(1) OF THE IT ACT IN WHICH THE AO HAS CALLED FOR CERTAIN INFORMATION BUT NO SPECIFIC DETAILS ON NET BUSINESS INCOME, SHORT TERM CAPITAL GAIN AND NET INCOME FROM OTHER S OURCES HAVE BEEN CALLED FOR ON WHICH PENALTY HAS BEEN IMPOSED. THE A SSESSEE TOOK A SPECIFIC PLEA BEFORE THE AO AT THE PENALTY STAGE TH AT THE SAID NOTICE WAS RECEIVED BY THE ASSESSEE IN THE SECOND WEEK OF JUNE , 2008. SUCH SUBMISSIONS OF THE ASSESSEE HAVE BEEN INCORPORATED IN THE PENALTY ORDER BUT THE AO DID NOT ADVERSELY COMMENCED UPON THE SUB MISSION OF THE ASSESSEE. THEREFORE, IT APPEARS THAT THE ASSESSEE H AS IN FACT RECEIVED THE NOTICE DATED 19-05-2008 IN JUNE, 2008 I.E. AFTER FI LING OF THE REVISED RETURN ON 26-06-2008. MAY BE THE REVISED RETURN IS INVALID BEING NOT FILED IN ACCORDANCE WITH LAW, BUT THE DETAILS CONTAINED I N THE REVISED RETURN SHOWS THAT THE ASSESSEE SURRENDERED ADDITIONAL INCO ME OF RS.72,440/- ON ACCOUNT OF THE ABOVE THREE ITEMS. THUS, BEFORE A NYTHING COULD BE DETECTED AGAINST THE ASSESSEE, THE ASSESSEE DISCLOS ED ALL THE PARTICULARS OF HER INCOME AND MADE SURRENDER BEFORE THE AO. THU S, ALL THE PARTICULARS WERE BEFORE THE AO AT THE TIME OF FRAMI NG OF THE ASSESSMENT AND THE ASSESSEE NEVER DISPUTED THE ADDITION OF THE SAME. IT IS, THEREFORE, NOT A CASE OF DETECTION OF ANY CONCEALMENT OR FILIN G OF ANY INACCURATE PARTICULARS BEFORE COMPLETION OF THE ASSESSMENT ORD ER U/S 143(3) OF THE IT ACT. SINCE NOTHING WAS MENTIONED IN THE NOTICE D ATED 19-05-2008 SPECIFICALLY ABOUT ALL THE ABOVE THREE ITEMS OF INC OME. THEREFORE, THE ORDER IN THE CASE OF BABITABEN RAMESHBHAI PATEL (SU PRA) WOULD SQUARELY APPLY TO THE FACTS OF THIS CASE. CONSIDERING THE AB OVE FACTS, IT IS CLEAR THAT ITANO.318/AHD/2010 ILABEN JHAVERI, AHMEDABAD VS ITO W-10(1), AHMEDABAD 5 THE ASSESSEE OFFERED EXPLANATION REGARDING NON-INCL USION OF THE INCOME IN THE ORIGINAL RETURN AND MADE SURRENDER BEFORE COMPL ETION OF THE ASSESSMENT. THE EXPLANATION OF THE ASSESSEE THUS C OULD BE CONSIDERED AS BONA FIDE BECAUSE OF THE MATERIAL FACTS WERE DIS CLOSED AT THE ASSESSMENT STAGE BEFORE THE AO BEFORE ACTUAL DETECT ION OF CONCEALMENT OF INCOME BY THE ASSESSEE. CONSIDERING THE NATURE OF B USINESS OF THE ASSESSEE AND SMALL INCOME DECLARED IN THE RETURN OF INCOME AND THE FACTS NOTED ABOVE, WE ARE OF THE VIEW THAT IT IS NOT A FI T CASE FOR IMPOSITION OF PENALTY. WE ACCORDINGLY, SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND CANCEL THE PENALTY. 5. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED ON 9-07-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 9-07-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD