Sanjay Chandulal Upadhyay, Ahmedabad V. The Income Tax Officer, Ward-2(1)(3), Ahmedabad

ITA 340/AHD/2023

AI Insights

The case revolves around a penalty imposed on Sanjay Chandulal Upadhyay by the Income Tax Officer for alleged inaccuracies in his income tax returns for the Assessment Year 2013-14. Initially, Upadhyay filed a return declaring an income of INR 5,60,737, which he later revised to INR 9,93,733. The Assessing Officer made further additions, leading to a total income assessment of INR 11,80,970, and initiated penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars of income. The CIT(A) upheld the penalty, which Upadhyay contested in the ITAT. The ITAT, referencing the Supreme Court's decision in CIT vs. Reliance Petroproducts (P) Limited, found that Upadhyay's actions did not amount to deliberate concealment or furnishing of inaccurate particulars, leading to the allowance of his appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129370 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 07-05-2023
• Other Referred Cases: CIT vs. Reliance Petroproducts (P) Limited, 322 ITR 158
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Bonafide mistake
• Section: 271(1)(c); 143(3); 250

Judgement Text

ITA No.340/Ahd/2023 Assessment Year: 2013-14 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.340/Ahd/2023 Assessment Year: 2013-14 Sanjay Chandulal Upadhyay, 403, Elegance-16, Opp. Shail Complex, B/h. Girish Gold Drink, C.G. Road, Ahmedabad - 380 009. [PAN – AAHPU 8760 E] Vs. Income Tax Officer, Ward – 2(1)(3), Ahmedabad. (Appellant) (Respondent) Assessee by None Revenue by Shri N.J. Vyas, Sr. DR Da te o f He a r in g 03.08.2023 Da te o f P ro n o u n ce m e n t 08.09.2023 O R D E R This appeal is filed by the Assessee against order dated 16.03.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2013-14. 2. The Assessee has raised the following ground of appeal :- “1. The Learned CIT(A) grossly erred in law and on facts of the case in passing the order u/s. 250 of the IT. Act dated 16/03/2023 confirming the penalty of INR 1,92,000/- for A.Y. 2013-14. 2. The Learned CIT(A) grossly erred in law and on facts of the case in passing the impugned order without appreciating the legal and factual position that in as much as the appellant had filed return of income disclosing the short-term capital gain. Penal provision of section 271(l)(c) is not attracted. 3. The Learned CIT(A) grossly erred in law and on facts of the case in passing the impugned order and levying penalty with respect to short term capital gain of INR 7,83,507/- in utter disregard to the fact that the appellant had voluntarily filed a revised return of income disclosing short term capital gain, before the department had detected the omission and before ITA No.340/Ahd/2023 Assessment Year: 2013-14 Page 2 of 3 the department had issued any show cause notice in that regard. 4. The Learned CIT(A) grossly erred in law and on facts of the case in passing the impugned order and levying penalty with respect to disallowance of cost of improvement of INR 1,87,234/- (being 90% disallowance of AUDA charges i.e., Rs.2,08,037) on his own assumption and whim that the total expenses should have borne by all co-owners of the property and ignoring the general business module in the case. 5. The Learned CIT(A) grossly erred in law and on facts of the case in passing the impugned order without recording a finding of fact in the penalty order to the effect that appellant had submitted the default of concealment of income or furnishing the inaccurate particulars of income. 6. The Learned CIT(A) grossly erred in law and on facts of the case in passing the impugned order without considering the various judgments which were specifically brought to the notice of the CIT(A) in the written submission filed. 7. It is therefore prayed that impugned penalty may please be deleted.” 3. The return of income was filed by the assessee on 31.01.2014 declaring total income of Rs.5,60,737/-. Thereafter, the assessee has filed his revised return of income on 31.03.2015 declaring total income at Rs.9,93,733/-. The assessment was completed under Section 143(3) of the Income Tax Act, 1961 vide order dated 25.02.2016 determining total income of Rs.11,80,970/-. During the assessment proceedings the Assessing Officer noticed that the assessee had claimed expenses relating to AUDA to the tune of Rs.2,08,037/- which was related to the entire land and, therefore, the Assessing Officer made addition of Rs.6,20,210/- under the head of “Capital Gain”. Thereafter, penalty proceedings under Section 271(1)(c) of the Act was initiated for furnishing of inaccurate particulars of income and notice under Section 174 read with Section 271(1)(c) of the Act was issued on 25.05.2016. In response to the said notice, the assessee filed its reply which was taken into account and the Assessing Officer imposed penalty of Rs.1,92,000/- under Section 271(1)(c) of the Act. 4. Being aggrieved by the Penalty Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. ITA No.340/Ahd/2023 Assessment Year: 2013-14 Page 3 of 3 5. At the time of hearing none appeared on behalf of the assessee , therefore, the submissions made by the assessee before the CIT(A) are taken as contentions of the assessee for the present appeal before the Tribunal (ITAT). 6. The Ld. DR relied upon the Assessment Order, Penalty Order and the order of the CIT(A). 7. Heard the Ld. DR and perused all the relevant material available on record. The assessee while computing the income and filing revised income was under bonafide mistake/bonafide belief that the assessee can claim the entire charges of amount paid to the AUDA as Capital Gain as deduction under Capital Gain. The said standard belief or mistake cannot be termed as furnishing of inaccurate particulars or concealment of income. The decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Limited, 322 ITR 158 is applicable in assessee’s case. Therefore, the penalty does not survive. Appeal of the assessee is allowed. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 8 th September, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 8 th September, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad