Shri Sampatlal B. Shah, Ahmedabad V. The Income tax Officer, Ward-2(2)(5), Ahmedabad

ITA 460/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0940 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMEET KUMAR VERMA
• Assessee Lawyers: S N DIVATIA
• Keywords: Principle of natural justice
• Section: 271(1)(c)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 460/AHD/2017 ( ASSESSMENT YEAR : 2012-13) SHRI SAMPATLAL B. SHAH 2/A, AMBALAL PARK, JAWAHAR CHOWK, SABARMATI, AHMEDABAD - 380005 / VS. THE ITO WARD- 2 (2)(5), PRATYAKSH KAR BHAVAN, AMBAWADI, AHMEDABAD ./ ./ PAN/GIR NO. : ACSPS6030N ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI SUMEET KUMAR VERMA, SR. D.R. DATE OF HEARING 24/01/2019 !'# / DATE OF PRONOUNCEMENT 25/03/2019 ORDER PER MAHAVIR PRASAD, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE LEVY OF PENALTY OF RS.1,63,100/- UNDER S.271(1)(C) OF THE I NCOME TAX ACT, 1961 (THE ACT) BY THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS)-10, AHMEDABAD [ IN SHORT CIT(A)], APPEAL NO. CIT(A)-1 0/ITO WARD 2(2)(5)/327/15-16 DATED 08.12.2016 ARISING FROM THE PENALTY ORDER DATED 28.09.2015 AND FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: ITA NO. 460/AHD/2017 [SHRI SAMPATLAL B. SHAH VS. ITO] AY 2012-13 - 2 - 1.1 THE ORDER PASSED U/S.250 ON 8-12-2016 FOR A.Y .2012-13 BY CIT(A)-10, ABAD UPHOLDING THE PENALTY OF RS.163100/- LEVIED 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 AN D OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED PENALTY. 2.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AN D ON FACTS IN CONFIRMING THE PENALTY OF RS. 163100/- LEVIED U/S 271(1)(C) BY AO. 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 PENALTY OF R S.163100/- LEVIED U/S271(1)(C) BYAO 3.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW A ND ON FACTS IN HOLDING THAT THERE WAS CONCEALMENT OF INCOME BY CLAIMING INADMIS SIBLE DEDUCTION U/S 57. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E AO HAD FAILED TO LEVY DEFINITE CHARGE OF CONCEALMENT OR FURNISHING INACCU RATE PARTICULARS OF INCOME SO THAT ENTIRE ORDER LEVYING PENALTY WAS ILL EGAL & UNLAWFUL. 2. FACTS OF THE CASE ARE THAT THE APPELLANT HAD CLA IMED INTEREST EXPENSES OF RS.7,39,450/- AGAINST THE INCOME FROM OTHER SOUR CES. THE APPELLANT SUPPORTED HIS CLAIM ON THE GROUND THAT THE LOAN WAS TAKEN TO ACQUIRE LAND AND IT WAS LATER ON SOLD IN THE NEXT YEAR AND SHORT TERM CAPITAL GAIN OF RS.19,21,506/- WAS DECLARED. THE AO CONCLUDED THAT THE DEDUCTION WAS NOT ADMISSIBLE UNDER S.57 OF THE ACT AND IT COULD NOT B E JUSTIFIED IN VIEW OF MAJOR INCOME BEING SALARY. HENCE, THE CLAIM WAS DI SALLOWED. THE ASSESSEE/APPELLANT DID NOT PREFER ANY APPEAL IN ORD ER TO AVOID COSTLY AND LONG LITIGATION. IN THE MEANWHILE, AO INITIATED PROCEED INGS UNDER S.271(1)(C) OF THE ACT IN RESPECT OF SAID DISALLOWANCE OF INTEREST EXPENSES. THE CONTENTION OF THE APPELLANT WAS THAT HE HAD NOT CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE PARTICULARS, HENCE PENALTY CANNOT BE IM POSED. BUT CIT(A) WAS NOT CONVINCED WITH THE PLEA OF THE APPELLANT AND CO NFIRMED THE PENALTY ORDER OF THE AO. ITA NO. 460/AHD/2017 [SHRI SAMPATLAL B. SHAH VS. ITO] AY 2012-13 - 3 - 3. NOW, BY WAY OF SECOND APPEAL, THE APPELLANT IS B EFORE US. THE QUESTION IS TO BE DECIDED BY US IN A CASE WHERE THE ASSESSEE HAS FURNISHED ALL THE DETAILS AND SOME OF THE CLAIMS WHICH WERE NOT A LLOWED OR SUSTAINED BY THE REVENUE AUTHORITIES WHETHER ON SUCH DISALLOWANC E PENALTY CAN BE IMPOSED OR NOT. THERE ARE SEVERAL JUDGMENTS OF THE HONBLE SUPREME COURT AND HIGH COURTS WHICH STATE WHERE THE ASSESSEE HAS FURNISHED PARTICULARS WHICH NOT FOUND TO BE INACCURATE PER SE AND NOTHING HAS BEEN CONCEALED FROM THE REVENUE AUTHORITIES AND ON THE BASIS OF SU CH DISALLOWANCE OF CLAIM, PENALTY CANNOT BE LEVIED. THEREFORE, WE ARE OF THE FIRM OPINION THAT IN SUCH CASE WHERE THE ASSESSEE MADE CERTAIN CLAIM, WHICH WAS DISALLOWED BY THE REVENUE AUTHORITIES, ON SUCH DISALLOWANCE, P ENALTY CANNOT BE IMPOSED. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. SD/- SD/- ( PRADIP KUMAR KEDIA ) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 25/03/2019 TRUE COPY S.K.SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE '. ()* + / CONCERNED CIT 4. +- / CIT (A) .. /01 22)*3 )*#3 45( / DR, ITAT, AHMEDABAD 6. 178 9 / GUARD FILE. BY ORDER / 3 /4 )*#3 45( THIS ORDER PRONOUNCED IN OPEN COURT ON 25/03/20 19