Smt.Anilaben Navinchandra Thakkar, Ahmedabad V. Income Tax Officer,Ward-5(3)(1), Ahmedabad

ITA 3442/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8480 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 10-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Principle of natural justice; Reasonable cause; Reassessment proceedings

Judgement Text

, ,LK ,LK,LK ,LK- -- -,E ,E,E ,E- -- -LH LHLH LH- -- - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO. 3442/ AHD/201 5 ( / ASSESSMENT YEAR: 2011-12) SMT. ANILABEN NAVINCHANDRA THAKKAR, PROP. AAKRUTI PACKAGING, 12, HARIKRISHANA SOC. PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD 380 006 / VS. THE ITO, WARD 5(3)(1), NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD. ./ '#$# ./ PAN/GIR NO. : AAWPT 4447 L ( % & / APPELLANT ) .. ( ' & / RESPONDENT ) % & ( / APPELLANT BY : SHRI S. N. DIVATIA, A.R. ' & ) ( / RESPONDENT BY : SHRI PRAJNA PARAMITA, SR. D.R. *+ ) , / DATE OF HEARING 09/03/2018 -./0 ) , / DATE OF PRONOUNCEMENT 19/04/2018 #1 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS)-5, AHMEDABAD [CIT(A) IN SHORT] VIDE A PPEAL NO.CIT(A)-5/ITO.WD.5(3)(1)/94/2014-15 DATED 05/10/2 015 ARISING IN THE PENALTY ORDER PASSED UNDER S.271(1)(C) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 19/02/2015 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.3442/AHD/15 SMT. ANILABEN NAVINCHANDRA THAKKAR VS. ITO ASST.YEAR 2011-12 - 2 - 2. THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE READS AS UNDER:- 1.1 THE ORDER PASSED U/S.250 ON 05/10/2015 FOR A.Y . 2011-12 BY CIT(A)-5 ABAD UPHOLDING THE PENALTY OF RS.6,65,680/ - IMPOSED U/S.271(1)(C) BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO T HE IMPUGNED PENALTY. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT THE APPELLANT HAD FURNISHED INACCUR ATE PARTICULARS OF INCOME BY NOT INCLUDING LTCG ON SALE OF HOUSE PROPERTY CLAIMED EXEMPT IN A.Y.2008-09 THOUGH THE C ONDITIONS PRECEDENT FOR IT WERE NOT FULFILLED. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE PEN ALTY OF RS.6,65,680 LEVIED U/S 271(1)(C). 3.1 WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALT ERNATIVE, THE PENALTY OF RS.6,65,680/- IMPOSED BY AO AND CONFIRME D BY CIT(A) IS EXCESSIVE AND ERRONEOUS SO THAT THE SAME SHOULD BE REDUCED. 3. THE BRIEF FACTS OF THE CASE ARE THAT FOR ASST. Y EAR 2011-12 IN REASSESSMENT PROCEEDINGS WAS LONG TERM CAPITAL GAIN AROSE AS A RESULT OF SALE OF RESIDENTIAL HOUSE PROPERTY. AS PE R RECORDS, ASSESSEE HAS SOLD RHP FOR TOTAL SALE CONSIDERATION OF RS.70, 00,000/- DURING THE PREVIOUS YEAR. THE LONG TERM CAPITAL GAIN WAS W ORKED OUT BY THE ASSESSEE AT RS.36,54,330/- FOR ASST. YEAR 2008- 09 AND ASSESSEE HAS INVESTED RS.15,00,000/- IN REC BOND U/S.54EC OF THE ACT. THE ASSESSEE IS ALSO INVESTED RS.22,50,000/- FOR CAPITA L GAIN ACCOUNT SCHEME IN FORM OF FD WITH BANK OF BARODA. AS PER PR OVISIONS OF SECTION 54(1) OF THE ACT, RS.22,50,000/- WAS TO BE UTILIZED FOR NEW RHP WITHIN TIME LIMIT PRESCRIBED. LATER ON IT WAS N OTICED THAT THE ASSESSEE HAS NOT UTILIZED R.22,50,000/- FOR NEW RHP WITHIN TIME ITA NO.3442/AHD/15 SMT. ANILABEN NAVINCHANDRA THAKKAR VS. ITO ASST.YEAR 2011-12 - 3 - LIMIT PRESCRIBED U/S.54(1) OF THE ACT, AS SUCH AMOU NT NOT SO UTILIZED SHALL BE CHARGED U/S.45 OF THE ACT. ASSESSEE HAS FU RNISHED A RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10, 2010-11 AND 201 1-12 AS UNDER: A.Y. DATE OF FILING 2009 - 10 02/03/2010 2010 - 11 14/03/2011 2011 - 12 17/03/2012 4. THE PERIOD OF THREE YEARS FROM THE DATE OF TRANS FER/SALE OF ORIGINAL ASSET EXPIRES ON 01/06/010. THE DATE FALLS DURING THE PREVIOUS YEAR RELEVANT TO A.Y.2011-12. AS PER PROVI SO TO PROVISIONS OF SECTION 54(2) OF THE ACT, THE AMOUNT OF CAPITAL GAIN NOT SO UTILIZED. 5. WITH THE ABOVE BACKGROUND THE ASSESSMENT PROCEED INGS WERE TAKEN UP FOR A.Y. 2011-12 BY INVOKING THE PROVISION OF SECTION 147/148 OF THE ACT. 6. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, A SSESSEE ADMITTED THAT WE AGREE THAT WE ARE LIABLE TO THE C APITAL GAIN TAX. AFTER THIS ADMISSION, LD. AO HELD THAT ASSESSEE HAS COMMITTED THE DEFAULT AND AS SUCH AMOUNT RS.22,50,000/- NOT SO UT ILIZED WAS CHARGED U/S.45 OF THE ACT, AS THE INCOME OF PREVIOU S YEAR 01/04/2010 TO 31/03/2011 RELEVANT TO A.Y.2011-12. A CCORDINGLY, RS.22,50,000/- WAS TAXED UNDER THE HEAD LONG TERM C APITAL GAIN FOR A.Y. 2010-11 AND PENALTY PROCEEDINGS WERE ALSO INIT IATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALED THE INCOME VIDE ORDER U/S.143(3) R.W.S.147 OF THE ACT. THEREAFTER, PENALTY PROCEEDINGS WERE ALSO INITIATED. DURING THE PENALTY PROCEEDINGS, ASSESSEE STATED THAT THOUGH SHE HAS AD MITTED THAT THE ASSESSEE WAS LIABLE TO LONG TERM CAPITAL GAIN AND A CCORDINGLY ITA NO.3442/AHD/15 SMT. ANILABEN NAVINCHANDRA THAKKAR VS. ITO ASST.YEAR 2011-12 - 4 - ASSESSEE HAS ACCEPTED THE ASSESSMENT ORDER AND TAX HAS BEEN PAID AS PER ASSESSMENT ORDER. IT IS SEEN FROM THE RECORD TH AT ASSESSEE AS NOT PREFERRED APPEAL AGAINST THE ORDER U/S.143(3) OF TH E ACT. 7. BUT IN PENALTY PROCEEDINGS, LD. AO HELD THAT ASS ESSEE HAS FURNISHED INACCURATE PARTICULARS OF HER INCOME UNDE R THE HEAD LONG TERM CAPITAL GAIN OR HAS CONCEALED THE INCOME WITHI N THE MEANING OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT. HENC E, ASSESSEE HAS COMMITTED THE DEFAULT WHICH ATTRACTS THE PENALTY U/ S.271(1)(C) AND LEVIED THE PENALTY OF RS.6,65,680/-. 8. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) BUT TO NO AVAIL. NOW APPEAL I S BEFORE US. 9. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. LD. AR STATED THAT APPELLANT HAS INVESTED A PART OF AMOUNT OF CAPITAL GAIN IN BUYING RESIDENTIAL HOUSE. BUT DUE T O SUDDEN INCREASE IN PROPERTY PRICE AND OTHER DISPUTE, THE BUILDER HA S REVISED THE PRICE OF HOUSES, WHICH WAS NOT AS PER THE UNDERSTANDING O F ASSESSEE HENCE THE SAME COULD NOT MATERIALIZE. HOWEVER, LATER ON A SSESSEE COULD NOT INVEST THE SAME MONEY DUE TO TREMENDOUS INCREASE IN THE PRICE OF RESIDENTIAL HOUSE PROPERTY. THEREFORE, UNDER COMPEL LING CIRCUMSTANCES, THE ASSESSEE AGREED TO PAY TAX AND A LREADY ASSESSEE HAS PAID CAPITAL GAIN TAX. 10. IN SUPPORT OF ITS CONTENTION, APPELLANT FILED A COPY OF BANK PASS BOOK WHERE THE AMOUNT WAS DEPOSITED AND IN SUPPORT OF ITS CONTENTION ASSESSEE ALSO CITED A JUDGMENT OF APEX C OURT IN THE MATTER OF UNION OF INDIA VS. RAJASTHAN SPG. & WVG. MILLS (200 9) WHEREIN IT HAS BEEN HELD THAT MERE NONPAYMENT OR S HORT-PAYMENT OF TAX WOULD NOT INEVITABLY LEAD TO IMPOSITION OF P ENALTY. ITA NO.3442/AHD/15 SMT. ANILABEN NAVINCHANDRA THAKKAR VS. ITO ASST.YEAR 2011-12 - 5 - 11. IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (2010), DELIP N. SHROFF VS. CIT (2007) IT HAS BEEN HELD THAT MERELY BECAUSE AN ADDITION IS MADE TO THE INCOME DECLARE BY ASSESSEE, PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED. 12. IN THIS CASE, LONG TERM CAPITAL GAIN WAS WORKED OUT AND CLAIMED THAT RS.15,00,000/- HAS BEEN INVESTED IN RE C. BOND AND RS.22,25,000/- WAS DEPOSITED IN BANK OF BARODA. AS PER CERTIFICATE DATED 30/09/2007 ISSUED BY THE BANK OF BARODA. 13. BECAUSE OF HIKE IN THE PRICE OF THE HOUSE, ASSE SSEE COULD NOT PURCHASE THE PROPERTY AND ASSESSEE HAS ALSO PAID TA X AFTER GOING THROUGH THE AFORESAID JUDGMENT AND FACTS OF THE CAS E ARE CONSIDERED. WE ARE OF THE CONSIDERED OPINION THAT APPELLANT SHO ULD BE GIVEN BENEFIT OF SECTION 273(B) OF THE ACT AS THERE WAS A REASONABLE CAUSE FOR NOT INVESTED THE MONEY IN THE PROPERTY. THEREFO RE, WE DELETE THE PENALTY CONFIRMED BY THE CIT(A). 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19/04/2018 SD/- SD/- ( ) ( ) ( PRADIP KUMAR KEDIA ) ( MAHAVIR PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 19/ 04/2018 PRITI YADAV, SR. PS ITA NO.3442/AHD/15 SMT. ANILABEN NAVINCHANDRA THAKKAR VS. ITO ASST.YEAR 2011-12 - 6 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. % & / THE APPELLANT 2. ' & / THE RESPONDENT. 3. 456, # # 7, / CONCERNED CIT 4. # # 7, (%) / THE CIT(A)-5, AHMEDABAD. 5. 89: ,*56, # % %56 0,'. ; /DR,ITAT, RAJKOT 6. : <+ / GUARD FILE. % & / BY ORDER, '8, , //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , '. ; / ITAT, RAJKOT