Pushipinder Bansal, Patiala V. ITO, Patiala

ITA 34/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86213 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RISHAB KAPOOR
• Keywords: Wrong claim
• Section: 54F; 27; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 34/CHD/2015 (ASSESSMENT YEAR : 2009-10) PUSHPINDER BANSAL, VS. THE INCOME TAX OFFICER, PROP. M/S AMAR BIO COAL INDUSTRIES, WARD 2, DAUN KALAN ROAD, BHADURGARH, PATIALA. PATIALA. PAN: AEWPB9477J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RISHAB KAPOOR RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 18.03.2015 DATE OF PRONOUNCEMENT : 20.03.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APP EALS), PATIALA DATED 28.10.2014, CHALLENGING THE LEVY OF P ENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 2. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE HAS WR ONGLY COMPUTED THE LONG TERM CAPITAL GAIN ON ACCOUNT OF S ALE OF ONE RESIDENTIAL HOUSE AND A PLOT. THE ASSESSING OFFIC ER FOUND DURING THE YEAR, THE ASSESSEE HAS SOLD ON 9.5.2008 ONE RESIDENTIAL HOUSE AT MALWA ENCLAVE PATIALA FOR RS.1 0 LACS, WHICH WAS PURCHASED FOR RS.2 LACS ON 24.7.2001. T HE 2 ASSESSEE ALSO SOLD ON 8.5.2005 ANOTHER PLOT IN MALW A ENCLAVE FOR RS.28,50,000/- WHICH WAS PURCHASED FOR RS.3,50, 000/- ON 24.7.2001. IN THE COMPUTATION OF INCOME AGAINST T OTAL SALE CONSIDERATION OF BOTH THE PROPERTIES I.E. RS.38,50, 000/-, THE ASSESSEE HAD SHOWN CAPITAL GAIN OF RS.30,43,945/- A FTER APPLYING INDEXED COST. AGAINST IT, THE ASSESSEE C LAIMED DEDUCTION UNDER SECTION 54 OF THE ACT AT RS.24,35,0 00/- ON ACCOUNT OF ONE HOUSE PURCHASED FOR RS.9,35,000/- IN MALKANA VILLAGE, TEHSIL SAMANA AND A FLAT NO.5, JASSA SINGH ROAD, PATIALA PURCHASED FOR RS.15 LACS. BESIDES IT, DED UCTION OF RS.6,30,000/- WAS ALSO CLAIMED ON ACCOUNT OF INVEST MENT IN SPECIFIED BONDS. AFTER CLAIMING DEDUCTION, CAPITA L GAIN WAS DECLARED AT NIL. IT WAS POINTED OUT TO THE ASSESS EE THAT THE DEDUCTION UNDER SECTION 54 OF THE ACT IS ADMISSIBLE AGAINST CAPITAL GAIN ON ACCOUNT OF PURCHASE OF RESIDENTIAL HOUSE ONLY. AS REGARDS SALE OF PLOT, DEDUCTION UNDER SECTION 54 F OF THE ACT IS TO BE ALLOWED AGAINST CAPITAL GAIN CHARGEABLE TO TAX ON ACCOUNT OF PURCHASE OF RESIDENTIAL HOUSE AND BONDS. ACCORDINGLY, THE LONG TERM CAPITAL GAIN CHARGEABLE TO TAX WAS CALCULATED AT RS.4,79,262/- AND ADDITION WAS ACCORD INGLY MADE. 3. SECONDLY, THE ASSESSEE WAS OWNING TWO RESIDENTI AL HOUSES BUT NO INCOME UNDER THE HEAD HOUSE PROPERTY WAS DECLARED BY THE ASSESSEE. THE ASSESSEE WAS ASKED TO INTIMATE IN WHICH HOUSE HE RESIDED DURING THE YEAR UNDER CONSIDERATION AND TO EXPLAIN AS TO WHY HOUSE PROPER TY INCOME IN RESPECT OF ONE HOUSE, WHICH WAS NOT OCCUPIED BY THE 3 ASSESSEE, MAY NOT BE ASSESSED TO TAX. THE ASSESSE E INTIMATED THAT HE IS RESIDING IN FLAT NO.5, GROUND FLOOR, JASSA SINGH ROAD, PATIALA AND OFFERED TO ASSESS REN TAL INCOME OF SECOND HOUSE AT VILLAGE MALKANA TEHSIL SAMANA. THE ASSESSING OFFICER TAKING INTO CONSIDERATION THE MAR KET RATE MADE ESTIMATED ADDITION OF RS.20,790/- UNDER THE HE AD INCOME FROM HOUSE PROPERTY. 4. THIRDLY, IT WAS NOTED THAT THE ASSESSEE HAD NOT SHOWN INTEREST INCOME EARNED FROM BANK AND FDRS WIT H THE BANK. THE ASSESSEE HAS EARNED INTEREST OF RS.3415 FROM STATE BANK OF PATIALA AND INTEREST ON FDRS IN A SUM OF RS.7000/- BUT NO INTEREST HAS BEEN SHOWN IN THE RET URN OF INCOME. THE ASSESSING OFFICER ACCORDINGLY MADE AD DITION OF RS.10,415/-. THE ASSESSING OFFICER ON ALL THESE T HREE ADDITIONS INITIATED PENALTY PROCEEDINGS. THE ASSE SSEE IN REPLY TO SHOW CAUSE NOTICE BRIEFLY SUBMITTED THAT T HE FACTS FOR CALCULATING CAPITAL GAIN WERE DECLARED AND THE ASSE SSEE MADE CLAIM OF DEDUCTION OUT OF CAPITAL GAIN AND THAT THE ASSESSEE DID NOT DERIVE ANY INCOME FROM ONE RESIDENTIAL HOUS E, FOR WHICH NOTIONAL INCOME WAS ADDED. THEREFORE, IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME. WITH REGARD TO THE INTERES T INCOME, IT WAS STATED THAT INADVERTENTLY INTEREST INCOME COULD NOT BE SHOWN IN THE RETURN OF INCOME. THE ASSESSING OFFI CER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND LEVIED MINIMUM PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ALL THE ABOVE ADDITIONS. 4 5. THE LEARNED CIT (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. THE LEARNED COUNSEL FOR ASSESSEE REITERATED THE SUBMISS ION MMADE BEFORE THE AUTHORITIES BELOW AND RELIED UPON THE OR DER OF THE I.T.A.T., AGRA BENCH IN THE CASE OF SARV PRAKASH KA POOR VS. DCIT, AGRA, 26 TAXMANN.COM 256 (AGRA) IN WHICH IT W AS HELD AS UNDER : IT : WRONG CLAIM OF EXEMPTION WHERE ASSESSEE CL AIMED EXCESS DEDUCTION WHILE MISUNDERSTANDING PROVISIONS OF SECTIONS 54 AND 54F, PENALTY ORDER PASSED UNDER SEC TION 271(1)(C) WAS TO BE SET ASIDE. 7. HE HAS ALSO RELIED UPON THE DECISION OF RAJAS THAN HIGH COURT IN THE CASE OF CHANDRA PAL BAGGA VS. IN COME TAX APPELLATE TRIBUNAL, 128 TAXMAN 632 (RAJ) IN WHICH I T WAS HELD: IF AN ASSESSEE HAS CLAIMED EXEMPTION OF CAPITAL G AINS AFTER DISCLOSING THE RELEVANT BASIC FACTS AND DUE T O IGNORANCE OF THE PROVISIONS OF THE ACT AND NOT OFFERED THAT A MOUNT FOR TAX, IN SUCH CASE, PENALTY SHOULD NOT BE IMPOSED. IN SU CH CASES, IT IS RATHER THE DUTY OF THE ASSESSING OFFICER TO ASK FOR FURTHER DETAILS AND TAX INCOME IF IT IS LIABLE TO BE TAXED. 8. HE HAS ALSO RELIED UPON THE DECISION OF THE HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SHAHABAD CO-OP. SUGAR MILLS LTD., 322 ITR 73 (P&H), IN WHICH IT WAS HELD : 5 SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 PE NALTY FOR CONCEALMENT OF INCOME ASSESSMENT YEAR 1995-96 MAKING OF WRONG CLAIM UNDER SECTION 80P IS NOT AT P AR WITH CONCEALMENT OR GIVING OF INACCURATE INFORMATIO N (IN FAVOUR OF ASSESSEE). 9. THE LEARNED COUNSEL FOR ASSESSEE STATED THAT TH E ASSESSEE HAS NOT CHALLENGED ALL THE THREE ADDITIONS ON MERITS AND NO APPEAL IS PENDING ON QUANTUM. 10. ON THE OTHER HAND, THE LEARNED D.R FOR THE REV ENUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 11. CONSIDERING THE SUBMISSIONS OF THE PARTIES IN THE LIGHT OF THE FINDINGS OF THE AUTHORITIES BELOW AND MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE PENALTY IS NOT LEVIABLE ON FIRST TWO ADDITIONS. IT IS NOT IN DISPUTE THAT TH E ASSESSEE HAS DECLARED ALL THE FACTS WITH REGARD TO THE COMPUTATI ON OF LONG TERM CAPITAL GAIN IN THE RETURN OF INCOME AS WELL A S BEFORE THE ASSESSING OFFICER AT THE ASSESSMENT STAGE. ACCORD ING TO THE ASSESSING OFFICER, THE CLAIM OF THE ASSESSEE FOR DE DUCTION UNDER SECTION 54 OF THE ACT WAS ADMISSIBLE AGAINST CAPITAL GAIN ON ACCOUNT OF PURCHASE OF RESIDENTIAL HOUSE ON LY. AS REGARDS SALE OF PLOT, THE DEDUCTION UNDER SECTION 5 4F OF THE ACT WAS TO BE ALLOWED AGAINST CAPITAL GAIN ON ACCOU NT OF PURCHASE OF RESIDENTIAL HOUSE AND THE BONDS. THESE FACTS WOULD CLEARLY DISCLOSE THAT THOUGH THE ASSESSEE DEC LARED COMPLETE FACTS WITH REGARD TO LONG TERM CAPITAL GAI N BEFORE THE ASSESSING OFFICER AND PART OF THE CLAIM OF THE ASSE SSEE WAS ALSO ACCEPTED WITH REGARD TO LONG TERM CAPITAL GAIN ON SALE OF 6 RESIDENTIAL HOUSE BUT FOR SALE CONSIDERATION OF PLO T, THE ASSESSING OFFICER PROPOSED TO MAKE ADDITION OF RS.4 ,79,262/-. IT, THEREFORE, APPEARS THAT THE ASSESSEE CLAIMED EX CESSIVE DEDUCTION WHILE MISUNDERSTANDING THE PROVISIONS OF SECTIONS 54 AND 54F OF THE ACT. THE CLAIM OF THE ASSESSEE A PPEARS TO BE BONAFIDIE. THEREFORE, MAKING THE WRONG CLAIM PE RSE MAY NOT AMOUNT TO CONCEALMENT OR GIVING OF INACCURATE P ARTICULARS OF INCOME. THE DECISIONS RELIED UPON BY THE LEARNE D COUNSEL FOR ASSESSEE ABOVE CLEARLY SUPPORT THE CASE OF THE ASSESSEE THAT NO PENALTY IS LEVIABLE ON ACCOUNT OF CAPITAL G AIN. FURTHER WITH REGARD TO ADDITION OF RS.20,790/- ON ACCOUNT O F NOTIONAL INCOME FROM HOUSE PROPERTY, THE ASSESSEE HAS NOT AC TUALLY EARNED ANY RENTAL INCOME AND SINCE THE ASSESSEE WAS HAVING TWO RESIDENTIAL HOUSES, THEREFORE, NOTIONAL INCOME FROM HOUSE PROPERTY IN RESPECT OF ONE HOUSE SHALL HAVE TO BE C ALCULATED. THEREFORE, THERE IS NO QUESTION OF MAKING ANY INACC URATE PARTICULARS OF INCOME IN THE RETURN OF INCOME AS IS PROPOSED BY THE ASSESSING OFFICER. THE ASSESSEE HAS NOT EAR NED ANY INCOME, THEREFORE, IT MAY NOT BE A CASE OF CONCEALM ENT OF INCOME. 12. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PEPTROPRODUCTS PVT. LTD., 322 ITR 158 HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 SUGGESTS THAT IN ORDER TO BE C OVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULA RS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USE IN SECTION 27 1(1)(C) 7 WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INC ORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXP OSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVO KED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT C LAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACC URATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCO RRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE R ETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 13. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF TH E VIEW THAT PENALTY IS NOT LEVIABLE WITH REGARD TO THE ADD ITIONS MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN AND ADDITION O N ACCOUNT OF NOTIONAL INCOME FROM HOUSE PROPERTY. THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT ARE SET ASIDE AND PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS CANCELLED. 14. HOWEVER, WITH REGARD TO LEVY OF PENALTY ON ADD ITION ON ACCOUNT OF INTEREST IS CONCERNED, IT IS ADMITTED FACT THAT 8 THE ASSESSEE EARNED INCOME FROM STATE BANK OF PATIA LA AS WELL AS ON FDRS WITH HDFC BANK. THE INTEREST WAS NOT S HOWN BY THE ASSESSEE IN THE RETURN OF INCOME. THEREFORE, IT IS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME IN WHI CH THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION. THEREFOR E, LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THIS HEAD IS WHOLLY JUSTIFIED. THE ORDERS OF THE AUTHORITIES B ELOW TO THAT EXTENT ARE CONFIRMED AND THE APPEAL OF THE ASSESSEE ON THIS ITEM IS DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO RE -CALCULATE THE LEVY OF PENALTY AS PER THIS ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF MARCH, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH MARCH, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH