SH RAM CHARAN MODI L/H LATE SMT SHEETA MODI, Alwar V. DCIT, Alwar

ITA 459/JPR/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99334 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Opportunity of being heard

Judgement Text

RAVK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 459/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 RAM CHARAN MODI, L/H- LATE SMT. SHEELA MODI, E-60, INDUSTRIAL AREA, KHAIRTHAL, DIST.- ALWAR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AOEPS 5869 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSIONS JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/09/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/09/2015. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 12/03/2015 OF THE LEARNED C.I.T.(A), ALWAR FOR A.Y. 2009-10. THE SOLE GROUND OF ASSESSEES APPEAL IS AGAINST CONFIRMING T HE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT RS. 1,05,420/-. THE ASSESSEES CASE WAS SCRUTINIZED U/S 1 43(3) OF THE ACT BY 2 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT MAKING ADDITION OF RS. 5,11,740/- ON ACCOUNT OF LON G TERM CAPITAL GAIN. THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS INITIATED FOR CONCEALING THE PARTICULARS OF INCOME TO THE TUNE OF RS. 5,11,740/-. BEFORE IMPOSING THE PENALTY U/S 271(1)(C), THE LD A SSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS AVAI LED BY THE ASSESSEE VIDE LETTER DATED 12/1/2012. THE ASSESSEE S SUBMISSIONS HAS BEEN REPRODUCED ON PAGE 1 AND 2 OF THE PENALTY ORDE R. THE LD ASSESSING OFFICER HELD THAT THE ASSESSEE ACCEPTED THAT HE HAD FILED INACCURATE PARTICULARS OF INCOME BUT HIS INTENTION WAS NOT TO D O SO. THE ASSESSEES SUBMISSION WAS ALSO CONSIDERED THAT HE DID NOT HAVE ANY KNOWLEDGE OF INCOME TAX LAW AND RETURN OF THE INCOME WAS FILED BY HIS COUNSEL. ALTHOUGH THE RETURN OF INCOME WAS PREPARED OR FILED BY THE COUNSEL OF THE ASSESSEE BUT IT WAS DULY SIGNED BY THE ASSESSEE. THEY SHOULD HAVE CHECKED IT BEFORE SIGNING. THE ASSESSEE SIGNED VERIF ICATION OF PARTICULARS OF INCOME AT PAGE 3 OF ITR FILED ON 21/10/2009 WHICH HAS ALSO BEEN REPRODUCED BY THE ASSESSING OFFICER ON PAGE 2 OF TH E PENALTY ORDER. THERE WAS ALSO NO FORCE IN THE ASSESSEES CONTENTION THAT THE ASSESSEE WAS AGREED TO PAY TAX ON SUCH CAPITAL GAIN DURING TH E ASSESSMENT PROCEEDINGS. WITHOUT REVISING THE RETURN WITHIN THE TIME LIMIT PROVIDED 3 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT BY THE IT ACT. THE ASSESSEE WAS AGREED TO PAY TAX ON LY WHEN INCOME TAX AUTHORITY FOUND THE DISCREPANCY AND SHE HAD NO WAY EXCEPT TO PAY TAX. THE ACCEPTANCE OF SUCH CAPITAL GAIN ONLY A WAY B Y WHICH SHE MIGHT GET RELIEF FROM PENALTY PROCEEDINGS. THE CASE LAW RE LIED UPON BY THE ASSESSEE BEFORE THE ASSESSING OFFICER HAD ALSO NOT CONVINCED TO HIM AND WERE NOT SQUARELY APPLICABLE ON THE FACTS AND CIRCUM STANCES OF THE CASE OF THE ASSESSEE. THE LD ASSESSING OFFICER FINALLY IM POSED 100% MINIMUM PENALTY ON TAX SOUGHT TO BE EVADED AT RS. 1 ,05,620/-. 2. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 4.3 I HAVE GONE THROUGH THE PENALTY ORDER AS WELL A S SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT A P ENALTY OF RS. 1,05,420/- HAS BEEN IMPOSED BY THE A.O. ON A CCOUNT OF NON-DISCLOSURE OF LONG TERM CAPITAL GAINS (LTCG) EARNED ON SALE OF PROPERTY. THE APPELLANT HAD DISCLOSED THI S AMOUNT IN THE COURSE OF ASSESSMENT PROCEEDINGS AFTE R BEING CONFRONTED ON THIS ISSUE BY THE A.O. 4.4 THE APPELLANT HAS STATED THAT NEITHER PARTICULAR S OF INCOME HAVE BEEN CONCEALED NOR INACCURATE PARTICULARS OF I NCOME HAVE BEEN FURNISHED. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS GAINS ON SALE OF PROPERTY WERE OFFERED F OR 4 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT TAXATION ON THE ADVICE OF THE COUNSEL OF THE ASSESS EE WHO HAS NOW EXPIRED. FURTHER, RELIANCE HAS BEEN PLACED O N CERTAIN JUDICIAL DECISIONS TO SUBSTANTIATE ITS CONT ENTIONS. 4.5 HAVING CONSIDERED THE MATERIAL PLACED ON RECORD , I FIND THAT IT IS NOT DISPUTED THAT LTCG ON SALE OF PROPERT Y WAS NOT DISCLOSED BY THE APPELLANT IN THE RETURN OF INC OME FILED. BASED ON THE INFORMATION GATHERED BY THE A.O., THE APPELLANT HAD NO OPTION BUT TO DECLARE THE SAME IN THE COURSE OF ASSESSMENT PROCEEDINGS. NO APPEAL HAS BEE N FILED ON THIS ISSUE AS IT WAS ACCEPTED BY THE APPELL ANT THAT GAINS MADE ON SALE OF PROPERTY WERE NOT DECLARED. 4.6 FURTHER, CASE LAWS CITED BY THE APPELLANT HAVE B EEN FOUND TO BE DISTINGUISHABLE ON FACTS AND ARE NOT APPLICAB LE. THUS, I FIND NO MERIT IN THE SUBMISSIONS FILED BY THE APP ELLANT AND HOLD THAT A.O. WAS JUSTIFIED IN INITIATING THE PROCEEDINGS U/S 271(1)(C) OF THE IT ACT. FOR THIS PROPOSITION, HE PLACED RELIANCE ON THE FOLLOWING JUD GMENTS: (I) MAK DATA PVT. LTD. VS. CIT 358 ITR 593 (SC) (II) CIT VS. ARCOTECH LTD. 93 DTR 313 (DEL.) (III) SHARMA ALLLOYS (INDIA) LTD. VS. ITO 357 ITR 379 (MAD.) (IV) SANGHVI SWISS REFILLS PVT. LTD. VS. CIT (SC) 88 CCH 039 1SCC-ITA NO. 250/2011. (V) PUNSUMI ENGINEERS LTD. VS. CIT 110 DTR (RAJ) 23 1 (2014). 5 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT IN VIEW OF THE ABOVE FACTS, HE CONFIRMED THE LEVY O F PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED OF RS. 1,05,420/- IMPOSED BY THE A.O. U/S 271(1)(C) OF THE IT ACT, 1961. 3. NOW THE ASSESSEE IS APPEAL BEFORE US. NO BODY APP EARED ON BEHALF OF THE ASSESSEE BUT WRITTEN SUBMISSIONS HAS B EEN FILED. IN HIS WRITTEN SUBMISSIONS, IT HAS BEEN SUBMITTED THAT THE DCIT, CENTRAL CIRCLE- ALWAR, HAS IMPOSED PENALTY U/S 271(1)(C) OF THE ACT ON NOT DISCLOSING LONG TERM CAPITAL GAIN EARNED ON AGRICULTURAL LAND SOLD. EARLIER, THIS CASE WAS REPRESENTED BY SHRI T.N. GOYAL, ADVOCATE, WHO HAS EXPIRED ON 7/7/2011. THERE WAS A NOTE IN THE RETURN FOR A.Y. 200 9-10 BY THE LD COUNSEL THAT AGRICULTURAL LAND SOLD DURING THE YEAR , WHICH WAS BEYOND 8 KM FROM THE MUNICIPAL AREA. THE ASSESSEE WAS ALSO PAY ING RENT ON AGRICULTURAL LAND TO THE STATE GOVT.. THE LD EARLIE R COUNSEL DID NOT CONSIDER IT TAXABLE LONG TERM CAPITAL GAIN, THEREFO RE, HE DID NOT INCLUDE THE LONG TERM CAPITAL GAIN EARNED ON AGRICULTURAL L AND SOLD. THE ASSESSEE ALSO EXPIRED, THEREFORE, HE DECIDED TO DISCLOSE THE LONG TERM CAPITAL GAIN IN THE INCOME DURING THE ASSESSMENT PROCEEDINGS TO BUY THE PEACE. THE LD ASSESSING OFFICER ORALLY ASSURED THE ASSESSEES AR THAT NO PENALTY U/S 271(1)(C) WOULD BE IMPOSED ON IT. THERE WAS NO INTENTI ON OF ASSESSEE TO 6 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT EVADE THE TAX. IF THERE WAS NO ASSURANCE FROM THE AS SESSING OFFICER FOR NOT IMPOSING PENALTY U/S 271(1)(C), THE ASSESSEE MI GHT NOT HAVE SURRENDERED THE LONG TERM CAPITAL GAIN ON AGRICULTU RAL LAND. IT IS FURTHER SUBMITTED THAT THE LD CIT(A) HAS NOT ALLOWED ANY OPPO RTUNITY BEFORE CONFIRMING THE PENALTY. THE ASSESSEE HAS EXPIRED, IT IS ILLEGAL ON PART OF THE AUTHORITY TO IMPOSE THE PENALTY ON EXPIRED PERS ON. IT IS LAW OF LAND THAT PENALTY PROCEEDINGS ARE QUASI CRIMINAL IN NATU RE UNTIL AND UNLESS MENS REA FOR TAX EVASION IS NOT PROVED, NO PENALTY CAN BE IMPOSED. IN THE WRITTEN SUBMISSIONS, IT HAS ALSO BEEN STATED THA T THE CASE LAW APPLIED BY THE LD CIT(A) I.E. MAK DATA PVT. LTD. VS. CIT (SUPRA) IS NOT APPLICABLE ON THE FACTS OF THE CASE AS THE ASSESSEE HAS DISCLOSED THE AGRICULTURAL LAND IN THE NOTE GIVEN IN THE RETURN. THE AGRICULTURAL LAND WAS CULTIVATED AND IS BEYOND 8 KM FROM THE MUNICIPAL AREA AND RENT ON IT WAS PAID BY THE ASSESSEE. THE LEGAL HEIR SHRI RAM CHARAN MODI OFFERED THIS AMOUNT TO BUY THE PEACE AS PER DIRECTI ON OF THE ADVOCATE. HE FURTHER DISTINGUISHED THE CASE OF CIT VS. ARCOTE CH LTD. AND SHARMA ALLOYS (INDIA) LTD. VS. ITO (SUPRA), SANGHVI SWISS R EFILLS PVT. LTD. VS. CIT AND PUNSUMI ENGINEERS LTD. VS. CIT (SUPRA), THERE FORE, HE PRAYED TO DELETE THE PENALTY CONFIRMED BY THE LD CIT(A). 7 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT 4. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LOWER AUTHORITIES AND PRAYED TO UPHOLD THE ORDER OF THE LD CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE ALREADY EXPIRED ON 2/10/2011. THE ASSESSMENT WAS COMPLETED ON 12/12/2011 BY THE LD ASSESSING OFFICER. IT IS UNDISPUTED FACT THAT THE PRESENT COUNSEL SHRI SHREE CHAND GUPTA HAD FILED AN AFFIDAVIT DATE D 20 TH MAY, 2015 AND MADE ASSERTION THAT ERSTWHILE ADVOCATE LATE SHRI T.N . GOYAL HAD ADVISED TO THE ASSESSEE THAT LONG TERM CAPITAL GAI N ON AGRICULTURAL LAND SOLD DID NOT COME UNDER THE PURVIEW OF INCOME TAX AC T AS THE LAND WAS AGRICULTURAL, CULTIVATED AND WHICH IS BEYOND 8 KMS FROM THE MUNICIPAL AREA. THE ASSESSEE HAS DISCLOSED BY PUTTING A NOTE I N THE RETURN, WHICH HAS NOT BEEN DISPUTED BY THE REVENUE THAT AGRICULTU RAL LAND SOLD DURING THE YEAR IS NOT TAXABLE. HOWEVER, FACTS HAVE BEEN DI SCLOSED IN THE NOTE GIVEN IN THE RETURN. THE ASSESSEE HAS DISCLOSED THE TRANSACTION AND AS PER THE ADVICE OF THE ADVOCATE, THE RETURN WAS PREPA RED AND CLAIMED EXEMPTED. NOW BOTH I.E. ASSESSEE AND ADVOCATE HAD EX PIRED, THE PARTICULARS OF INCOME HAVE BEEN DISCLOSED BY THE AS SESSEE IN THE RETURN. THE ASSESSEE ALWAYS HAD BEEN CLAIMING THAT THE LAND I S AS AGRICULTURAL 8 ITA NO. 459/JP/2015 RAM CHARAN MODI VS. DCIT LAND AND BEYOND 8 KMS FROM THE MUNICIPAL AREA, WHICH HAS ALSO NOT BEEN DISPUTED BY THE REVENUE. THE ASSESSEE HAD NOT F URNISHED INACCURATE PARTICULARS OF INCOME AND NOT CONCEALED THE INCOME ON IT. THEREFORE, WE REVERSE THE ORDER OF THE LD CIT(A). 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON ... SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH SEPTEMBER, 2015 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- RAM CHARAN MODI, L/H- LATE SMT. SHEEL A MODI, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE, ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.459/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR