Shri Maheshbhai M.Pandya, Vapi V. Income Tax Officer, Ward-6, Vapi

ITA 388/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1665 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Cost of acquisition
• Section: 148; 271(1)(c); 143(3); 50C; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकरअपीलसं./ITA No.388/SRT/2018 (Ǔनधा[रणवष[ / Assessment Year: (2008-09) (Physical Court Hearing) Shri Maheshbhai M Pandya 9, Dipkiran Co. Op. HSC, Society, Nr. N.H.-8, GIDC, Vapi, Vs. Income tax Officer, Ward-6 Vapi, èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AFUPP 6452 J (Appellant) (Respondent) Assessee by None Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 28.06.2022 Date of Pronouncement 20.09.2022 आदेश / ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by assessee, pertaining to Assessment Year (AY) 2008-09, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-Valsad dated 23.03.2018 which in turn arises out of a penalty order passed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 29.04.2016. 2. Grounds of appeal raised by the assessee are as follows: “1. The ld CIT(A) ought to have appreciated that ld. AO has erred in law and facts of the case in levying penalty of Rs.2,61,800/- u/s 271(1)(c) of the Act on which is wholly unsustainable in law and on facts and as such the appellant could not be charged with any guilt of furnishing inaccurate particulars of income or concealing particulars of income within mischief of Section 271(1)(c) of the Act. 2. The levy of penalty being without jurisdiction and totally uncalled for, deserves to be quashed. 3.In any case, the impugned penalty order is barred by limitation and thus without jurisdiction and illegal. 4. The learned CIT(A) in initiating and levying penalty under 271(1)(c) of the Act without recording mandatory satisfaction as contemplated under the Act at the time of framing the assessment order. Page | 2 388/SRT/2018/ (AY.08-09) Sh. Maheshbhai M Pandya. 5. Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and principles of natural justice and therefore deserves to be quashed. 6.The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 3. Brief facts of the issue in dispute are stated as under. The assessee before us is an individual and filed his filed original return of income on 11.07.2008, declaring total income of Rs.4,40,646/-. In response to notice u/s 148 of the Act, the assessee has filed return of income declaring total income Rs. 15,30,788/- on 24.09.2015. The assessment in this case was finalized u/s 143(3) r.w.s.147 of the Act vide order dated 28.10.2015 determining the total income at Rs.15,30,788/-. 4. During the course of assessment proceedings, it was noticed that assessee had purchase an agricultural land survey no. 178/1 on 30.10.2002 for a consideration of Rs.37,500/-. The property in question was converted in Non-agricultural land on 01.12.2003. During the year under consideration the assesses has sold the non-agricultural land at sale deed value of Rs.11,61,000/- However, the stamp duty valuation authority for the purpose of stamp duty has taken the value of the land of Rs.12,19,824/-. Therefore, as per the provisions of section 50C of the Act sale consideration of the property is deemed to be taken of Rs.12,19,824/- for long term capital gain purpose. The assessee has accepted the consideration of Rs.12,19,824/- for the computation of long term capital gain and has filed returned income accordingly. The assessee has shown long term capital gain Rs. 11,55,374/- after claiming the cost of acquisition and indexation. The assessee has shown long term capital gain and filed the return of income only after the issue of notice u/s148 of the Act. Since the assessee has not shown long term capital gain in his original return of income. Hence, the assessee has intentionally evaded the tax on his income earned during the year. Accordingly, penalty proceedings u/s 274 r.w.s.271(l)(c) of the I.T. Act is initiated for concealment of income and assessing officer imposed penalty at Rs. 2,61,800/-. Page | 3 388/SRT/2018/ (AY.08-09) Sh. Maheshbhai M Pandya. 5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before Ld. CIT(A),who has confirmed the action of the Assessing Officer. Aggrieved, the assessee is in appeal before us. 6. None appeared on behalf of the assessee. Notice of hearing of this appeal was sent to the assessee at the address given by the assessee in Form No.36, however, nobody appeared before the Bench. This appeal was listed for hearing on several times in past. Today i.e. on 28.06.2022 when the case was called for hearing, none appeared on behalf of the assessee nor any request for adjournment was made. It means that assessee is not interested in prosecuting this appeal. Therefore, we have heard ld DR for the Revenue. 7. Learned DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 8. We have heard ld DR for the Revenue and perused the material available on record. We note that ld CIT(A) has confirmed the penalty under section 271(1) (c ) of the Act observing as follows: “3.3. Decision: After considering the findings of the assessing officer and submissions of the appellant, I find that penalty was imposed u/s 271(l)(c) of the IT Act at Rs.2,61,800/-for the concealment of long term capital gain of Rs.11,55,374/-. The appellant claimed that there was no willful intention of concealment of income. On the other hand, the AO mentioned in the penalty order that appellant filed his original return of income on 11.07.2008 but failed to disclose the long term capital gain and even did not revise the return of income until the notice u/s 148 was issued & served to the appellant. In response to notice of 148, appellant filed return of income and accepted capital gain of Rs.11,55,374/-. Penalty under section 271(l)(c) is a civil liability for which willful concealment is not an essential ingredient and even here, the land sold was non agricultural land and the conversion of agricultural land to non agricultural land was done by the appellant himself on 01.12.2003. This NA land was sold during F.Y. 2007-08. All these process indicates that appellant had ample knowledge of capital gain on sale of land. Since capital gain was disclosed only after detection of concealment by Assessing Officer, assessee failed to discharge initial onus laid down upon it in terms of Explanation 1 to section 271(l)(c). In the current case, the decision of Hon'ble Supreme Court in the case of MAK Data (P.) Ltd, 358 ITR 593 (SC) will squarely apply and Page | 4 388/SRT/2018/ (AY.08-09) Sh. Maheshbhai M Pandya. therefore, penalty imposed by the AO u/s 271(l)(c) of Rs.2,61,800/- is hereby confirmed. Thus, ground of appeal no. 1 of the appellant is dismissed. With regards to ground of appeal no. 2, reasonable opportunity was not given to the appellant. It is noticed from the penalty order the appellant was given two opportunities dated 08.04.2016 and 18.04.2016 to file his reply but the assessee filed an adjournment application on 19.04.2016 and asked time till 25.05.2016. As the assessment order was passed in the month of October and there was no appeal against the assessment order, it was mandatory for the assessing officer to pass the penalty order within 6 months from the end of the month in which assessment order passed i.e. April in this case. Keeping in view the above, ground of appeal no. 2 is hereby dismissed. Vide ground of appeal no. 3, the appellant has contended that the AO has erred in law and on facts in initiating and levy penalty u/s 271(l)(c) of the Act without recording mandatory satisfaction. The Hon'ble Supreme Court decision in the case of MAK Data (P) Ltd, 358 ITR 593 (SC) clearly states that ‘In terms of section 271(l)(c), Assessing Officer has to satisfy whether penalty proceedings be initiated or not during course of assessment proceedings and Assessing Officer is not required to record his satisfaction in a particular manner or reduce it into writing' In view of above judgment, argument of appellant has no force. During assessment proceedings, penalty was already initiated so there is no need to record mandatory satisfaction. Thus, ground of appeal no. 3 of the appellant is hereby dismissed” 9. We have gone through the above order of ld CIT(A) and noted that there is no infirmity in the conclusion reached. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the appeal of the assessee. 10. In the result, the appeal filed by the assessee is dismissed. Order is pronounced in the open court on 20/09/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER स ु रत / Surat Ǒदनांक/ Date: 20/09/2022 DKP (Sr. PS Outsourcing) Page | 5 388/SRT/2018/ (AY.08-09) Sh. Maheshbhai M Pandya. Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat