Ram Kumar Gupta, Meerut V. ITO, Ward- 2(2), Meerut

ITA 4666/DEL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6454 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 19-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Revised return; Bonafide mistake
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4666 /DEL./2017 (ASSESSMENT YEAR : 2013-14) SHRI RAM KUMAR GUPTA, VS. ITO, WARD 2 (2), 72-A, HANS VILLA, SURAJ KUND ROAD, MEERUT. MEERUT. (PAN : AATPG4466B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ROHIT AGGARWAL, FCA REVENUE BY : SHRI S.S. RANA, CIT DR DATE OF HEARING : 08.01.2019 DATE OF ORDER : 16.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, SHRI RAM KUMAR GUPTA (HEREINAFTER RE FERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.05.2017 PASSED BY LD. CIT (APPEALS), MEERUT, BY PARTLY ALLOWING THE PENALTY O RDER DATED 29.09.2016 PASSED U/S 271(1)(C) OF THE INCOME-TAX A CT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2013-14 O N THE GROUNDS INTER ALIA THAT :- 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE BY CONFIRMING THE IMPOSITION OF C ONCEALMENT ITA NO.4666/DEL./2017 2 PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 T O THE EXTENT OF RS.47,360/- ALLEGEDLY HOLDING THAT MISTAKE WAS NOT BONA FIDE AND THE REVISED COMPUTATION OF INCOME FILED BY THE APPE LLANT CANNOT BE CONSIDERED AS SUO-MOTU AND THE OBSERVATION MADE BY THE LD. CIT (A) TO THE EFFECT THAT REVISION OF INCOME WAS M ADE AFTER DISCOVERY OF CONCEALMENT ON THE PART OF THE LD. AO IS ILL-FOUNDED AND ARE DEVOID OF SUPPORTING MATERIAL ON RECORD. 2. THAT THE LD. CIT (A) HAS ERRED ON FACT BY NOT AC CEPTING THE EXPLANATION GIVEN BY THE ASSESSEE THAT THE CLAIMING OF LONG TERM CAPITAL LOSS WAS ONLY A BONAFIDE CLERICAL MISTAKE A ND NO MALAFIDE INTENTION WAS INVOLVED THEREIN AND ALSO THAT THERE WAS NO CONCEALMENT OF INCOME ON THE PART OF THE APPELLANT AND THEREFORE THE CONFIRMATION OF PENALTY OF RS.47,360/- IS TOTAL LY UNJUST, UNLAWFUL & UNWARRANTED AND THEREFORE THE SAME DESER VES TO BE CANCELLED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961, PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT . ASSESSEE IN ITS ORIGINAL RETURN FILED ALONG WITH COMPUTATION OF INC OME HAS SHOWN THE CAPITAL LOSS OF RS.1,10,503/- UNDER THE LONG TE RM CAPITAL GAINS AND THEREAFTER HE HAS REVISED COMPUTATION OF INCOME SHOWING LONG TERM CAPITAL GAIN PROFIT OF RS.2,29,870/-. AO REAC HED THE CONCLUSION THAT THE ASSESSEE BY FILING THE ORIGINAL RETURN HAS SHOWN TOTAL INCOME AS LONG TERM CAPITAL GAIN PROFIT OF RS .3,40,373 AND THEREBY FURNISHED THE INACCURATE PARTICULARS OF HIS INCOME. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE TH AT IT WAS A BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE AND TH AT HE HAS ITA NO.4666/DEL./2017 3 IMMEDIATELY REVISED THE RETURN EVEN BEFORE ISSUANCE OF THE SHOW- CAUSE NOTICE BY THE AO DURING ASSESSMENT PROCEEDING S AND PENALTY PROCEEDINGS ARE NOT MAINTAINABLE, AO PROCEEDED TO L EVY THE PENALTY OF RS.71,000/- I.E. @ 100% ON THE CONCEALED AMOUNT OF RS.3,40,373/- U/S 271(1)(C) OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS GIVEN PART RELIEF BY RESTRICTIN G THE PENALTY TO RS.47,360/- ON THE CONCEALED INCOME OF RS.2,29,873/ - BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE ASSESS EE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE HAS FILED THE ORIGINA L RETURN WITH COMPUTATION OF INCOME SHOWING CAPITAL LOSS OF RS.1, 10,503/- UNDER LONG TERM CAPITAL GAIN WHICH WAS LATER ON REVISED B Y SHOWING LONG TERM CAPITAL GAIN PROFIT OF RS.2,29,870/-. IT IS A LSO NOT IN DISPUTE THAT REVISED RETURN ALONG WITH COMPUTATION OF INCOM E FILED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE REVENUE. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER REVENUE AUTHORI TIES AND ITA NO.4666/DEL./2017 4 ARGUMENTS ADDRESSED BY THE LD. AR TO THE PARTIES, T HE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT? 7. THE LD. AR FOR THE ASSESSEE CHALLENGING IMPUGNED ORDER CONTENTED THAT PENALTY LEVIED BY THE AO AND CONFIRM ED BY LD. CIT (A) IS NOT SUSTAINABLE ON THE GROUNDS INTER ALIA TH AT AO, AT THE TIME OF PASSING THE ASSESSMENT ORDER, HAS NOT MADE HIMSE LF SATISFIED AS TO UNDER WHICH LIMB OF SECTION 271(1)(C) THE PENALT Y IS SOUGHT TO BE LEVIED; THAT WHEN THE REVISED RETURN FILED BY THE A SSESSEE HAS BEEN ACCEPTED BY THE REVENUE WITHOUT ANY OBJECTION, THE SAME IS TO BE TREATED AS BONAFIDE AND RELIED UPON THE DECISION RE NDERED BY THE HONBLE MADHYA PRADESH HIGH COURT IN CASE OF CIT VS . SURESH CHAND MITTAL (2001) 241 ITR 124 (MP) , CONFIRMED BY THE HONBLE APEX COURT CITED AS (2001) 251 ITR 9 . 8. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE CONTENDED THAT WHEN THE ASSESSEE HAS PROVED TO HAVE FILED THE RETURN WHEN CORNERED BY THE AO DURING ASSESSMENT PROCEEDINGS, T HE PENALTY HAS BEEN RIGHTLY LEVIED/CONFIRMED AND RELIED UPON THE D ECISION ITA NO.4666/DEL./2017 5 RENDERED BY THE HONBLE APEX COURT IN MAK DATA (P.) LTD. VS. CIT- 358 ITR 593 . 9. BARE PERUSAL OF THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT GOES TO PROVE THAT AT THE TIME OF COMPLETIN G THE ASSESSMENT, AO HAS NOT SATISFIED HIMSELF AS TO WHETHER ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME DURING THE ASSESSMENT PROCEEDINGS RATHER RECORDED GENERAL SATISFACTION THAT PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT HAS BEEN INITIATED SEPARATELY . SO, WHEN AT THE TIME OF COMPLETING THE ASSESSMENT ORDER, THE AO WAS NOT SUR E ENOUGH AS TO UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HE SOUGHT TO INITIATED THE PENALTY PROCEEDINGS, THE SUBSEQUENT P ENALTY PROCEEDINGS ARE NOT SUSTAINABLE IN THE EYES OF LAW. 10. MOREOVER, AO WHILE PASSING THE ORDER UNDER SECT ION 271(1)(C) OF THE ACT PROCEEDED TO INITIATE THE PENA LTY PROCEEDINGS, AS IS EVIDENT IN PARA 2 OF THE PENALTY ORDER, ON TH E PREMISE THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME, HOWEV ER, AO WHILE RECORDING HIS FINDING IN PARA 3 PAGE 3 OF THE PENAL TY ORDER PROCEEDED TO HOLD THAT THE ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF INCOME. SO, ON THE ONE HAND, AO IS INITIATING THE PENALTY PROCEEDINGS FOR CONCEALMENT OF PARTICULARS OF INCOME BUT LEVIED THE PENALTY FOR FURNISHING THE INACCURATE PA RTICULARS OF ITA NO.4666/DEL./2017 6 INCOME. ALL THESE FACTS GO TO PROVE THAT THE AO HA S NOT RECORDED SATISFACTION BY APPLYING HIS MIND TO INITIATE THE P ENALTY PROCEEDINGS AS REQUIRED U/S 271(1)(C) BUT ON THE WHIMS AND FANC IES LEVIED THE PENALTY AS PER HIS SUBJECTIVE SATISFACTION. SO, WH EN AO HIMSELF IS NOT SURE AS TO UNDER WHICH LIMB OF SECTION 271(1)(C ) HE IS GOING TO IMPOSE THE PENALTY, THE ENTIRE PENALTY PROCEEDINGS STAND VITIATED AND AS SUCH PENALTY IS LIABLE TO BE DELETED ON THIS SCORE ONLY. 11. FURTHERMORE, WHEN REVENUE WITHOUT ANY OBJECTION HAS ACCEPTED THE REVISED RETURN FILED BY THE ASSESSEE C LAIMING LONG TERM CAPITAL GAIN PROFIT OF RS.2,29,870/- WHICH WAS ON A CCOUNT OF THE FACT THAT THE ASSESSEE HAS RECORDED THE FULL COST O F THE LAND WHEREAS HE HAS PURCHASED HALF SHARE OF THE LAND IN QUESTION TO CLAIM THE LONG TERM CAPITAL GAIN. THIS MISTAKE ON THE PART O F THE ASSESSEE APPEARS TO BE BONAFIDE PARTICULARLY IN THE FACE OF THE FACT THAT THE REVISED RETURN HAS BEEN ACCEPTED BY THE REVENUE WIT HOUT ANY OBJECTION. 12. HONBLE MADHYA PRADESH HIGH COURT IN CASE CITED AS SURESH CHAND MITTAL (SUPRA) LATER ON CONFIRMED BY HONBLE SUPREME COURT HELD THAT ONCE THE REVISED RETURN ALONG WITH EXPLANATION HAS BEEN ACCEPTED BY THE REVENUE WITHOUT ANY OBJECTION THE SAME COULD BE TREATED AS BONAFIDE ONE BY RETURNING FOLLO WING FINDINGS :- ITA NO.4666/DEL./2017 7 IT IS WELL SETTLED THAT UNDER S. 271(1)(C), INITIA L BURDEN LIES ON THE REVENUE TO ESTABLISH THAT ASSESS EE HAD CONCEALED THE INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE BURDEN SHIFTS TO THE ASSESSEE ONLY IF HE FAILS TO OFFER AN Y EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS EXPLANATION WHICH IS FOUND TO BE FALSE BY THE ASSESSING AUTHORITY. HOWEVER, PROVISO TO EXPLN. 1 PROVIDES FOR SHIFTING OF THIS BURDEN AGAIN WHERE T HE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE BONA FIDE. IN THE PRESENT CASE, THOUGH IT IS TRUE THAT ASSESSEE HAD NOT SURRENDERED AT ALL AND THAT HE HAD DONE SO ON THE PERSISTENT QUERIES MADE BY AO BUT ONCE THE REVISED ASSESSMENT WAS REGULARIZED BY THE REVENUE AND ONCE THE ASSESSING AUTHORITY HAD FAILED TO TAKE ANY OBJECTION IN THE MATTER, THE DECLARATIO N OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURNS AND HIS EXPLANATION THAT HE HAD DONE SO TO BUY PEAC E WITH THE DEPARTMENT AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BONA FIDE IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. THEREFORE, TRIBUNAL WAS JUSTIFIED IN CANCELLING THE PENALTY LEVIED BY A O AND AFFIRMED BY CIT (A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. MOREOVER, MERELY CLAIMING EXEMPTION FROM THE CA PITAL GAIN TAX BY DISCLOSING THE TRANSACTION WHICH IS SUBJECT MATTER OF THE CAPITAL GAIN TAX DOES NOT ATTRACT THE PENALTY U/S 2 71(1)(C) OF THE ACT. SO, FILING AN INCORRECT CLAIM WOULD NOT AMOUNT TO F URNISHING OF INACCURATE PARTICULARS OF INCOME WHEN THE ENTIRE TR ANSACTION OF PURCHASE AND SALE OF LAND HAS BEEN BROUGHT ON RECOR D BY THE ASSESSEE. HONBLE SUPREME COURT IN CASE CITED AS CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) DECIDED THE IDENTICAL ISSUE BY RETURNING FOLLOWING FINDINGS :- ITA NO.4666/DEL./2017 8 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 14. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE C ASE LAW RELIED UPON BY THE LD. DR FOR THE REVENUE I.E. MAK DATA (P.) LTD. (SUPRA) IS NOT APPLICABLE TO THE FACTS AND CIRCUMST ANCES OF THE CASE BECAUSE IN THAT CASE NUMEROUS QUERIES HAVE BEEN RAI SED BY THE AO DURING ASSESSMENT PROCEEDINGS AND DURING ASSESSMENT PROCEEDINGS, ITA NO.4666/DEL./2017 9 THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF IN COME. BUT IN THE INSTANT CASE, BEFORE THE ISSUANCE OF NOTICE U/S 143 (2), ASSESSEE IN ORDER TO RECTIFY HIS MISTAKE FILED REVISED RETURN W ITH EXPLANATION THAT INSTEAD OF CLAIMING HALF OF THE COST OF THE LA ND IN QUESTION HE HAS CLAIMED FULL COST OF THE LAND DUE TO INADVERTEN CE AND OVERSIGHT WHICH APPEARS TO BE A BONAFIDE MISTAKE AND AS SUCH, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE NOT ATTRAC TED. 15. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT PENALTY LEVIED BY THE AO AND C ONFIRMED BY LD. CIT (A) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE ORDERED TO BE DELETED. CONSEQUENTLY, APPEAL FILED BY THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.