CHANDRIKABEN K.SHAH, MUMBAI V. ITO 19(1)(3), MUMBAI

ITA 3233/MUM/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1386 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Set aside; Capital Gains
• Section: 271(1)(c); 54

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 3233/MUM/2015 (ASSESSMENT YEAR 2008-09) SMT. CHANDRIKABEN K. SHAH UNIT NO. 8, 16, SARVODAYA MILL COMPOUND, TARDEO ROAD, MUMBAI-400 034. PAN : ANAPS5776Q VS. ITO-19(1)(3) MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI BRAJENDRA KUMAR DATE OF HEARING 04.02.2021 DATE OF PRONOUNCEMENT 09.02.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 30.3.2015 AND PERTAINS TO ASSESSMENT Y EAR 2008-09. 2. THE ISSUE RAISED IS THAT LEARNED CIT(A) ERRED IN SUSTAINING PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT AMOUNTING TO RS. 7,7 8,864/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAD REJECTED THE ASSESSEE'S CLAIM OF DEDUCTION U/S.54 IN RESPECT OF LONG TERM CAPITAL GAINS ON SALE OF FL AT. IT WAS SEEN BY THE ID. A.R. THAT THE ASSESSEE HAD MADE L.T.C.G. OF RS.3 2,74,88 5/- BUT THE SAME WAS CLAIMED EXEMPT ON THE GROUND THAT THE ASSESSEE HAD PURCHASED A NEW PROPERTY. HOWEVER UPON MAKING ENQUIRIES IT WAS FOUN D THAT FIRSTLY, THE PURCHASE AGREEMENT SUBMITTED BY THE ASSESSEE WAS NO T REGISTERED. SECONDLY, THE STAMP PAPER ON WHICH THE AGREEMENT WAS TYPED WA S SAID TO HAVE BEEN ISSUED BY THE MSSIDC LTD., GROUND FLOOR OF MHADA CO MPLEX, BANDRA (EAST), MUMBAI-51, BUT THE SAID ENTITY IN RESPONSE TO LETTE R U/S.133(6) STATED THAT THE STAMP PAPER IN QUESTION WAS ISSUED TO ONE, SHRI B.K . SHARMA AND NOT TO THE M/S. ARIHANT UNIVERSAL REALTY PVT. LTD. & OTHERS 2 ASSESSEE, AND THUS, IN THE TOTALITY OF FACTS, LD. A .O. HELD THAT THE ASSESSEE HAD MADE A FICTITIOUS CLAIM U/S.54. UPON ASSESSEES APP EAL LEARNED CIT(A) CONFIRMED THE DISALLOWANCE. 4. PENALTY U/S. 271(1)(C) OF THE ACT WAS ALSO LEVIE D ON THE ADDITION. IN THE PENALTY ORDER THE ASSESSING OFFICER COPIED THE ORDE R OF LEARNED CIT(A) AND THEREAFTER REFERRED TO HON'BLE SUPREME COURT DECISI ON IN THE CASE OF UNION VS. DHARMEDRA TEXTILE PROCESSORS (295 ITR 244) THAT MEN S REA IS NOT ESSENTIAL IN SECTION 271(1)(C) OF THE ACT. HE HELD THAT THE ASSE SSEE HAD NOT DECLARED TRUE AND CORRECT PARTICULARS. HE FURTHER HELD THAT THE A SSESSEE WAS GUILTY OF CONCEALMENT. 5. UPON ASSESSEES APPEAL LEARNED CIT(A) AFFIRMED T HE LEVY OF PENALTY. HE ALSO RELIED UPON THE DECISION OF DHARMEDRA TEXTILE PROCESSORS (SUPRA). 6. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE THE ITAT. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. WE FIND THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED WITH REFERENCE TO DENIAL OF EXEMPTION U/S. 54 OF THE ACT. THE ASSESSEE HAS FURN ISHED ALL NECESSARY PARTICULARS. THE ASSESSING OFFICER WAS NOT SATISFIE D AND HE PROCEEDED TO DISALLOW THE CLAIM OF EXEMPTION U/S. 54 OF THE IT A CT. WE NOTE THAT THE DENIAL OF ASSESSEES CLAIM CANNOT IPSO FACTO LEAD TO A CON CLUSION THAT THE ASSESSEE IS LIABLE TO BE VISITED WITH VIGOROUS OF PENALTY U/S. 271(1)(C) OF THE ACT. THIS PROPOSITION IS DULY SUPPORTED BY THE DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD., (322 ITR 158)(SC). IN THE PRESENT CASE WE FIND THAT THE ASSESSEE HAS FURNISHED PARTIC ULARS OF ITS CLAIM. THE ASSESSING OFFICER HAS FOUND FAULT WITH THE REGISTRA TION DOCUMENTS AND ACCORDINGLY DENIED EXEMPTION. IN OUR CONSIDERED OPI NION THE AUTHORITIES BELOW ARE ALSO AWARE OF THIS PROPOSITION. THEY HAVE WRONG LY RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS (SUPRA). THE DECISION FROM DHARMENDRA TEXTILE PROCE SSORS (SUPRA) NEVER PROVIDED THAT PENALTY U/S. 271(1)(C) OF THE ACT HAS TO BE LEVIED EVEN IN THE CASE M/S. ARIHANT UNIVERSAL REALTY PVT. LTD. & OTHERS 3 WHERE CLAIM CANNOT BE SAID TO BE MALAFIDE. HENCE, I N OUR CONSIDERED OPINION THE ASSESSEES CONDUCT IS NOT CONTUMACIOUS TO WARRA NT LEVY OF PENALTY. IN THIS REGARD WE ALSO RELY UPON THE DECISION OF HON'BLE SU PREME COURT IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA (83 ITR 26), W HEREIN THE LARGER BENCH OF THE HON'BLE SUPREME COURT HELD THAT THE AUTHORITY M AY NOT LEVY PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMAC IOUS. 7. IN OUR CONSIDERED OPINION THE ASSESSEES CLAIM I N THIS CASE WAS NOT EX- FACIE BOGUS. HENCE, ASSESSEES CONDUCT CANNOT SAID TO BE CONTUMACIOUS AS THE ASSESSEE HAS SUBMITTED ALL NECESSARY PARTICULAR. HE NCE, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, PENALTY U/S . 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. ACCORDINGLY, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND DELETE THE PENALTY. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULE S BY PLACING THE RESULT ON NOTICE BOARD ON 9.2.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 09/02/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI