Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 7964 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-01-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
18-12-2018
Assessment Year
2008-2009
Appeal Filed On
06-06-2017
Judgement Text
[ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.424/IND/2017 ASSESSMENT YEAR: 2008-09 ITO - 2(2) INDORE / VS. SMT. MANORAMA DEVI AGRAWAL 6/2, NORTH RAJMOHALLA, INDORE(M.P.) ( APPELLANT ) ( REVENUE ) P.A. NO. AGUPA5295K APPELLANT BY SHRI R.P. MOURYA, SR.D.R. RESPONDENT BY NONE ( W RITTEN SUBMISSION) DATE OF HEARING: 18.12.2018 DATE OF PRONOUNCEMENT: 08.01.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE CIT(A)-I, INDORE DATED 29.3.2017 PERTAINING TO T HE [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 2 ASSESSMENT YEAR 2008-09. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACT AND IN THE CIRCUMSTANCES OF CAS E, LD. CIT(A) HAS ERRED IN LAW BY DELETING THE PENALTY OF RS.51,69,316/- LE VIED BY THE A.O. U/S 271(1)(C) OF THE ACT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN LAW BY DELETING THE PENALTY OF RS.51,69,31 6/- LEVIED BY THE A.O. U/S 271(1)(C) OF ACT IGNORING THE CONCEALMENT OF IN COME. THE ONLY EFFECTIVE GROUND IN THE REVENUES APPEAL IS AGAINST DELETION OF PENALTY AS IMPOSED BY THE ASSESSIN G OFFICER IN RESPECT OF THE DEEMED MARKET VALUE OF PRO PERTY U/S 50C OF THE ACT. 2. BRIEFLY STATED FACTS ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 16.12.2010. THE A.O. WHILE FRAMING THE ASSESSMENT MAD E ADDITION OF CAPITAL GAIN OF RS.2,28,28,961/- BY INVOKIN G THE PROVISIONS OF SECTION 50C OF THE ACT. THE A.O. ALSO INITIATED PENALTY U/S 271(1)(C) OF THE ACT. SUBSEQUENTLY, THE A.O. [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 3 VIDE ORDER DATED 9.3.2015 IMPOSED PENALTY U/S 271(1)( C) OF THE ACT AMOUNTING TO RS.51,69,316/-. 3. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISS IONS, PARTLY ALLOWED THE APPEAL. THE LD. CIT(A) THEREBY DELE TED THE PENALTY IN RESPECT OF THE VALUATION ADOPTED BY THE A.O. BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT. AGAINST THIS, REVENUE IS IN PRESENT APPEAL. 4. LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE PENALTY. HE FURTHER SUBMITTED THAT THE ASSESSEE DELIBERATELY DID NOT ADOPT THE TRUE CONSIDERATION, THE REFORE, HE SUBMITTED THAT THE A.O. WAS JUSTIFIED IN IMPOSING THE PENALTY. 5. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE OPPOSED T HE SUBMISSIONS OF THE LD. D.R. AND REITERATED THE SUBMIS SIONS [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 4 AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESSEE ARE AS UNDER: THE ASSESEE SUBMITS BEFORE YOUR OFFICE; IN CONNECT ION WITH THE APPEAL FILED BY THE LD. ITO-2(2) AGAINST THE ORDER PASSED BY CIT(A) FOR DELETING THE PENALTY OF RS.51,69,319/- LEVIED U/S 271(1)(C) OF THE INCOME T AX ACT, 1961. THE POINT WISE SUBMISSION IS PRESENTED AS UNDER:- 1. THE LD. CIT(A) WAS JUSTIFIED IN LAW BY DELETING THE PENALTY OF RS.51,69,316/- LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) DELETED THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 L EVIED BY THE A.O. ON THE ADDITION MADE U/S 50C OF THE ACT. HENCE UNDER THE SAME FACTS THE CIT(A) WAS JUSTIFIED IN DELETING SUCH PENALTY PROCE EDINGS. 3. THE ASSESSEE REQUESTS BEFORE YOUR OFFICE KINDLY ALL OW US TO ELABORATE THE CURRENT PROVISIONS OF LAWS AND RULINGS OF TRIBU NALS AND THE HON'BLE COURTS IN RESPECT OF THE CASE, WHICH PRESEN TED AS UNDER:- FIRSTLY, SECTION 271(1)(C) OF INCOME TAX ACT, 1961 SPECIFICALLY AND CLEARLY DETERMINES THE NATURE AND EXTENT OF ITS APPLICABILI TY, THE PROVISIONS OF SECTION 271(1)(C) PROVIDES FOR IMPOSITION OF PENALTY FOR; (A) CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF INCOME. CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME IS THE CONDITION PRECEDENT FOR LEVY OF PENAL TY AND SUCH SATISFACTION MUST BE ARRIVED AT IN THE COURSE OF ANY PROCEEDING UNDER THE ACT. FURTHERMORE, SUCH SATISFACTION IS TO BE ARRIVED AT FROM THE ACCOUNTS OF THE ASSESSEE. IT IS SUBMITTED THAT THE PENALTY PROCEEDINGS INITIA TED ARE NOT AUTOMATIC AND REQUIRES MORE CLARITY. IT IS PRESUMED BY THE DEPAR TMENT THAT IN EVERY CASE WHERE ADDITION IS MADE, PENALTY IS A SINE QUA NON. IN THE CONCERNED CASE PRESENT BEFORE YOUR OFFICE TH E ASSESSEE HAS NOT AT ALL FURNISHED ANY INACCURATE PARTICULARS OR CONCEALED I NCOME, IN ANY MANNER. HOWEVER, THE LEARNED ASSESSING OFFICER HAS MADE ADD ITION UNDER SECTION 50C OF INCOME TAX ACT, 1961 WHICH IS CLEARLY AND SPECIFICA LLY A DEEMING PROVISION. FURTHER VARIOUS DECISIONS AND JUDGEMENTS HAS BEEN P RONOUNCED BY VARIOUS APPELLATE AUTHORITIES IN FAVOUR OF ASSESSEE CLARIFY ING THE FACT THAT PENALTY [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 5 PROCEEDINGS U/S 271(1)(C) ARE BAD IN LAW AND DO NOT SUSTAIN, WHERE ADDITIONS ARE BASED ON DEEMING FICTION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT LD. CIT(A) HAS DECIDED THIS ISSUE IN PARA NOS.5.1 TO 5.6 OF THE ORDE R, WHICH IS REPRODUCED AS UNDER FOR THE SAKE OF CLARITY. 5.1 BRIEFLY STATED THE FACTS ARE THAT THE APPELLANT HAD SHOWN LONG TERM CAPITAL LOSS OF RS.427039/- ON SALE OF LAND FOR A C ONSIDERATION OF RS.1826000/-. THE COST OF ACQUISITION WAS SHOWN AT RS.408900/- AN D AFTER INDEXATION IT WAS TAKEN AT RS.2253039/-. DURING THE COURSE OF ASSESS MENT PROCEEDINGS IT WAS NOTICED THAT THE LAND WAS VALUED AT RS.25082000/- F OR THE PURPOSE OF STAMP DUTY VALUATION. THE APPELLANT CONTENDED THAT THE L AND WAS AGREED TO BE SOLD VIDE AGREEMENT DATED 6.5.1995 FOR A CONSIDERATION O F RS.1251151/-. HOWEVER, AS ALL THE TERMS OF THE AGREEMENT COULD NOT BE FULF ILLED HENCE THE LAND WAS SOLD TO ANOTHER PARTY WITH THE FIRST PARTY CONSENTING TO TH E SAID SALE. THERE WAS DISPUTE REGARDING LAND. APPELLANT THEREFORE CONTENDED THAT THE VALUATION ADOPTED FOR STAMP DUTY PURPOSES WAS NOT JUSTIFIED. AS THE APPE LLANT OBJECTED TO THE VALUATION REFERENCE WAS MADE TO THE DEPARTMENTAL VA LUATION OFFICER WHO ALSO ESTIMATED THE VALUE AT RS.25082000/-. THE LTCG WAS ACCORDINGLY COMPUTED AT RS.22828961/- WHICH WAS ALSO CONFIRMED IN APPEAL. THE A.O. THEREAFTER LEVIED PENALTY U/S 271(1)(C) OF THE ACT. 5.2 DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLATE ARGUED THAT NO PENALTY WAS ATTRACTED AS NO INACCURATE PARTICULARS WERE SUBMITTED NOR THERE WAS ANY CONCEALMENT. THE PENALTY HAS BEEN LEVIED ON TH E ADDITION MADE BY INVOKING SECTION 50C WHICH IS A DEEMING PROVISION AND NO PEN ALTY IS ATTRACTED ON ADDITIONS BASED ON DEEMING FICTION. APPELLANT PLAC ED RELIANCE ON SEVERAL DECISIONS ALREADY REPRODUCED AT PARA 3 ABOVE. 5.3 THE CRUX OF THE APPELLANTS ARGUMENT IS THAT TH E PROVISIONS OF SECTION 50C ARE DEEMING PROVISIONS AND ARE THEREFORE LIMITED TO THE PURPOSE FOR WHICH THEY HAVE BEEN BROUGHT INTO THE STATUTE AND CANNOT BE EX TENDED FOR LEVY OF PENALTY WHEN THE DEEMING PROVISION DOES NOT PROVIDE FO THE SAME. [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 6 5.4 A PERUSAL OF THE DECISIONS ESTABLISHES THAT THE EXTANT JUDICIAL POSITION IS THAT NO PENALTY FOR CONCEALMENT CAN BE WHERE ADDITI ON IS MADE ON ACCOUNT OF DEEMING PROVISION OF SEC 50C. HOWEVER FROM THE REC ORD IT IS SEEN THAT THE APPELLANT HAD ONLY DISCLOSED SALE CONSIDERATION OF RS.1826000/-. THE APPELLANT HAD RECEIVED RS.1500000/- IN ADDITION TO THE ABOVE AMOUNT WHICH WAS NOT CONSIDERED BY THE APPELLANT IN THE COMPUTATION OF L TCG. THE APPELLANT HAS ARGUED THAT THE ABOVE AMOUNT WAS RECEIVED IN THE F. Y. 2011-12 AND HENCE IT WAS NOT CONSIDERED. IT IS HOWEVER TO BE NOTED THAT THE AMOUNT WAS RECEIVABLE ON SALE OF THE LAND AND THIS FACT WAS NOT DISCLOSED IN THE RETURN. THEREFORE NOTWITHSTANDING THE FACT THAT THE PROVISIONS OF SEC TION 50C HAVE BEEN INVOKED IN DETERMINING THE DEEMED SALE CONSIDERATION THE APPEL LANT HAD FAILED TO DISCLOSE THE CONSIDERATION OF RS.1500000/- RECEIVED BY IT AN D THEREFORE TO THAT EXTENT WAS LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. 5.6 FROM THE ABOVE IT IS THUS EVIDENT THAT IN THE C ASE THE APPELLANT HAD DELIBERATELY CONCEALED THE MATERIAL FACTS. THOUGH THE ADDITION TO THE INCOME WHICH FORMS THE BASIS FOR THE PENALTY WAS ONLY ON A CCOUNT OF APPLICATION OF THE DEEMING PROVISIONS OF SECTION 50C HOWEVER THE APPEL LANT FAILED TO DISCLOSE THE CONSIDERATION OF RS.1500000/- AND TO THAT EXTENT WA S LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE DISCUSS ION THE PENALTY IS SUSTAINED ON THE CONCEALMENT OF RS.1500000/-. THE A.O. IS THERE FORE DIRECTED TO RECALCULATE THE PENALTY ON THE ABOVE AMOUNT ONLY. THE ABOVE GR OUNDS OF THE APPELLANT ARE THEREFORE PARTLY ALLOWED. 7. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E SALE CONSIDERATION WAS ADOPTED BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH IS ADMITTEDLY A DEEMIN G PROVISION. THE ASSESSEE HAS RELIED UPON VARIOUS CASE L AWS IN HIS SUBMISSIONS. HOWEVER, THE REVENUE HAS NOT BR OUGHT ANY CONTRARY DECISION TO OUR NOTICE. THEREFORE, TAKIN G A CONSISTENT VIEW, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF [ITA 424/IND/2017] [SMT. MANORAMA DEVI AGRAWAL, INDORE] 7 THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. GROUN D RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 . 01.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 08/01/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE
Mehul