The ITO, Ward-2(4), Surat V. Shri Madanlal M.Kapadia, Surat

ITA 376/AHD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67593 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Keywords: Wrong claim
• Section: 143(3); 54F

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.376/AHD/2013 [ASSTT.YEAR : 2008-2009] ITO, WARD-2(4) SURAT. /VS. SHRI MADANLAL M. KAPADIA 2/998, NARSINGH SHERI SAGRAMPURA, SURAT. PAN : ACFPK 2321 M ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI J.P. JANGID, SR.DR 4& 1 2 )/ ASSESSEE BY : SHRI MEHUL SHAH 5 1 &(*/ DATE OF HEARING : 14 TH AUGUST, 2013 678 1 &(*/ DATE OF PRONOUNCEMENT : 23-08-2013 )9 / O R D E R PER ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF THE CIT(A)-II, SURAT DATED 23.11.2012 FOR THE ASSESSMENT YEAR 2008-2009. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CIT(A) IN DELETIN G PENALTY OF RS.3,59,118/-LEVIED UNDER SECTION 271(1)(C) OF THE I.T.ACT. ITA NO.376/AHD/2013 -2- 2. THE FACTS IN BRIEF ARE THAT IN THE ASSESSMENT PROCE EDINGS UNDER SECTION 143(3) OF THE ACT, THE ASSESSEE HAS SHOWN L ONG TERM CAPITAL GAIN OF RS.15,84,804/- ON ACCOUNT OF SALE OF PLOT ( 50% SHARE WITH HIS WIFE) IN THE RETURN OF INCOME, AND AGAINST THIS CLA IM, THE ASSESSEE CLAIMED DEDUCTION OF RS.15,96,903/- AS CAPITAL GAIN EXEMPT. THE AO REJECTED THE CLAIM OF THE ASSESSEE AND MADE ADDITIO N ON THE GROUND THAT THE ASSESSEE HAS OWNED OTHER RESIDENTIAL PROPE RTIES AND THEREFORE WAS NOT ELIGIBLE FOR DEDUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO, THE ASSESSEE HAS HIMSELF WITHDRAW N THE CLAIM AND PAID TAX ON THE CAPITAL GAIN. AGAINST THIS ADDITIO N, THE ASSESSEE HAS NOT PREFERRED ANY APPEAL. THE AO SUBSEQUENTLY INIT IATED PENALTY PROCEEDINGS AND IMPOSED THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT VIDE ORDER DTD. 30.5.2011 ON T HE GROUND THE ASSESSEE MADE A WRONG CLAIM UNDER SECTION 54F, AND THAT, ONLY WHEN THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY, THE ASSESSEE WITHDREW THE CLAIM AND ACCEPTED THE MISTAKE. THE A CTION OF THE AO IN IMPOSING PENALTY UNDER SECTION 271(1)(C) WAS CHALLE NGED BEFORE THE LEARNED CIT(A), WHO DELETED THE PENALTY. AGGRIEVE D BY THE ORDER OF THE CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 3. BEFORE US, THE LEARNED DR RELIED ON THE ORDER OF TH E AO AND SUBMITTED THAT THE CIT(A) HAS NOT APPRECIATED THE F ACT THAT THE ASSESSEE HIMSELF HAS ADMITTED HIS WRONG CLAIM MADE UNDER SECTION 54F OF THE ACT ONLY WHEN THE CASE WAS UNDER SCRUTIN Y BY THE DEPARTMENT. HE FURTHER SUBMITTED THAT THE ASSESSE E HAS NEVER TRIED TO REVISE ITS RETURN OF INCOME FOR SUCH WRONG CLAIM OF DEDUCTION UNDER SECTION 54F, WHICH ITSELF INDICATES THAT THE ASSESS EE HAS DELIBERATELY CONCEALED ITS INCOME AND FILED INACCURATE PARTICULA RS OF INCOME, FOR ITA NO.376/AHD/2013 -3- WHICH, THE AO WAS JUSTIFIED IN IMPOSING PENALTY UND ER SECTION 271(1)(C) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A), AND REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A). HE SUB MITTED THAT THE ASSESSEE, UNDER BONA FIDE BELIEF, MADE THE CLAIM OF DEDUCTION UNDER SECTION 54F, AND AS SOON AS THE MISTAKE WAS POINTED OUT TO THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS ABOUT THE WR ONG CLAIM, THE ASSESSEE IMMEDIATELY WITHDREW ITS CLAIM AND PAID TH E TAX THEREON. THE IMPUGNED CLAIM WAS MADE BY THE ASSESSEE DUE TO WRONG UNDERSTANDING OF PROVISION OF THE LAW. THE LEARNED AR SUBMITTED THAT THE LEARNED CIT(A) HAS CORRECTLY APPRECIATED THE UN INTENTIONAL INADVERTENCE ON THE PART OF THE ASSESSEE IN CLAIMIN G THE DEDUCTION, AND DELETED THE PENALTY ACCORDINGLY, AND THEREFORE, THE IMPUGNED ORDER OF THE LEARNED CIT(A) BE UPHELD AND THE APPEAL OF THE REVENUE BE DISMISSED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT IT IS NOT A FIT CA SE WHERE THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS ATTRACTED. ADMITTEDLY, THE ASSESSEE HAS NOT CONCEALED ANY INCO ME OR FILED ANY INACCURATE PARTICULARS OF INCOME, BUT ONLY ON MISTA KEN UNDERSTANDING OF THE PROVISIONS OF THE LAW CLAIMED THE DEDUCTION OF RS.15,96,903/- UNDER SECTION 54F OF THE ACT. BONA FIDE MISTAKE OF THE ASSESSEE IN CLAIMING THE DEDUCTION CAN BE JUDGED FROM THE FACT THAT AS SOON AS THE MISTAKE WAS POINTED OUT, THE ASSESSEE IMMEDIATELY W ITHDREW ITS CLAIM AND PAID TAX THEREON, AND EVEN NOT PREFERRED ANY AP PEAL BEFORE THE HIGHER AUTHORITIES FOR THE ADDITION. THESE FACTS H AVE BEEN APPRECIATED BY THE LEARNED CIT(A), AND HE RECORDED A FINDING TH AT THE ASSESSEE ITA NO.376/AHD/2013 -4- VOLUNTARILY SURRENDERED THE CLAIM OF DEDUCTION FOR TAXATION, WHEN THE ASSESSEE NOTICED THAT IT WAS A WRONG CLAIM. THE LE ARNED CIT(A) HAS FURTHER RECORDED THAT THERE IS NO MATERIAL ON RECOR D TO SHOW THAT THE AO HAS UNEARTHED NEW FACTS OR DUG OUT SOME INFORMAT ION WHICH WAS NOT FURNISHED BY THE ASSESSEE, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURA TE PARTICULARS THEREOF SO AS TO ATTRACT PENALTY U/S.271(1)(C) OF T HE ACT. THE RELEVANT FINDINGS OF THE LEARNED CIT(A) GIVE AT PARA 6 OF TH IS ORDER ARE AS UNDER: 6. I HAVE CONSIDERED THE FACTS OF THE CASE AND FOU ND THAT THE MISTAKE COMMITTED BY ASSESSEE WAS BONA FIDE AND AS SOON AS HE CAME TO KNOW ABOUT THE MISTAKE, HE VOLUNTARILY SURRENDERED THE SAME AMOUNT FOR TAXATION. FROM THE SUBMISSIONS, IT IS CLEAR THAT ALL THE FACTS WERE BE FORE AO AND DEDUCTION WAS CLAIMED INADVERTENTLY IN THE RETURN W HICH WAS WITHDRAWN WHEN CAME TO NOTICE THAT IT WAS WRONGLY C LAIMED. HOWEVER, THERE IS NO MATERIAL ON RECORD TO SHOW THA T AO HAS UNEARTHED NEW FACTS OR DUG OUT SOME INFORMATION WHI CH WAS NOT FURNISHED BY ASSESSEE THEREFORE IT CANNOT BE SA ID THAT ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURA TE PARTICULARS THEREOF SO AS TO ATTRACT PENALTY U/S. 2 71(1)(C) OF THE ACT. THIS OPINION IS A SUPPORTED BY THE DECISION OF ITAT JODHPUR IN THE CASE OF DEVI DASS SUKHANI VS ITO (10 1 TTJ 551) ALSO WHEREIN IT WAS HELD THAT ASSESSEE HAVING WRONGLY CLAIMED EXEMPTION U/S. 54 IN THE RELEVANT ASSESSMEN T YEAR AFTER WITHDRAWING SUCH CLAIM MADE IN EARLIER YEAR UNDER B ONAFIDE MISCONCEPTION AND BELIEF, PENALTY U/S. 271(1)(C) CO ULD NOT BE LEVIED IN ABSENCE OF ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS O R HAD CONSCIOUSLY CONCEALED TAXABLE INCOME. IN A RECENT C ASE VIZ. CIT VS RELIANCE PETROPRODUCTS (P) LTD., REPORTED IN 230 CTR 320, HON'BLE SUPREME COURT HAS ALSO HELD THAT IN OR DER TO ATTRACT THE PROVISIONS OF SECTION 271(1)(C), THERE HAS TO BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF HIS INCOME BY THE ASSESSEE AND MAKING AN INCORRE CT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE P ARTICULARS ITA NO.376/AHD/2013 -5- THEREFORE PENALTY U/S. 271(1)(C) IS NOT ATTRACTED. THUS, TAKING INTO CONSIDERATION THE FACTS OF THE CASE AND LEGAL POSITION AS EXPLAINED IN AFORESAID DECISIONS, IN MY OPINION, AP PELLANT'S MISTAKE IS BONAFIDE AND HE HAS NOT DELIBERATELY CON CEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS THEREFOR E THE PROVISIONS OF SECTION 271(1)(C) ARE NOT ATTRACTED I N HIS CASE. WITH THIS CONCLUSION, I CANCEL THE PENALTY IMPOSED BY AO AND ALLOW THE APPEAL. ADMITTEDLY, THE REVENUE HAS NOT BROUGHT ANY NEW MAT ERIAL TO ESTABLISH THERE IS A CONCEALMENT OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS OF INCOME TO ATTRACT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, EXCEPT THAT, ASSESSEE HAD ACCEPTED ITS MIS TAKE AND NOT SUO MOTTO REVISED ITS RETURN OF INCOME. FROM THE ORDER OF T HE CIT(A), WE FIND THAT THERE IS AN INADVERTENT ERROR IN CLAIMING THE DEDUCTION BY THE ASSESSEE, AND IN THE ABSENCE OF ANY EVIDENCE TO EST ABLISH THAT THE ASSESSEE HAD DELIBERATELY FURNISHED INACCURATE PART ICULARS OR CONCEALED ITS INCOME CONSCIOUSLY, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 271(1)(C) DOES NOT GET ATTRACTED, AND THERE FORE, THE CIT(A) IS JUSTIFIED IN DELETING THE PENALTY, WHICH WE CONFIRM , AND THE GROUND OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD