ITO, Agra V. Smt. Sunita Oberoi, Agra

ITA 474/AGR/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9125 (ITAT-AGRA)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 1995-1996
• Appeal Filed On: 22-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.474/AGR/2009 ASST. YEAR: 1995-96 INCOME-TAX OFFICER 1(1), VS. SMT. SUNITA OBER OI, AGRA. 305, NAVJYOTI APARTMENTS, BYEPASS ROAD, AGRA. (PAN : NOT MENTIONED) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R. SAHU, JR. D.R. RESPONDENT BY : NONE ORDER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 10.09.2009 BY WHICH THE CIT(A) HAS DELETED THE PENA LTY IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (THE ACT HE REINAFTER) AMOUNTING TO RS.4,33,744/-. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THO UGH NOTICE WAS SENT THROUGH REGISTERED AD WHICH WAS RETURNED WITH THE REMARK THAT NO PERSO N IS FOUND AT THE ADDRESS GIVEN. I, THEREFORE, DECIDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. D.R. 3. LD. D.R. REFERRING TO THE PENALTY ORDER PASSED U NDER SECTION 271(1)(C) CONTENDED THAT SINCE THE DEDUCTION AS CLAIMED BY THE ASSESSEE UNDE R SECTION 54F WAS NOT ALLOWED TO THE ASSESSEE, EVEN THE ORDER OF THE A.O. WAS CONFIRMED BY THE TRIBUNAL ALTHOUGH THE CIT(A) HAS ALLOWED THE DEDUCTION TO THE ASSESSEE. THIS CLEARL Y PROVES THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF THE INCOME AND FILED INACCURATE PART ICULARS OF INCOME. HE VEHEMENTLY CONTENDED THAT THE CIT(A) WAS NOT CORRECT ON THE FACTS OF TH E CASE TO DELETE THE ADDITION. 2 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LD. D.R. I NOTED THAT IN THIS CASE THE ASSESSEE HAS SUBMITTED THAT SHE FILED RETURN DE CLARING INCOME OF RS.1,28,283/-. THE AO COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.7, 23,825/- BY MAKING ADDITION ON ACCOUNT OF DEPOSITS OF RS.5,67,134/- IN THE BANK ACCOUNT OF TH E ASSESSEE WHICH HE HAS CLAIMED TOWARDS THE SALE PROCEEDS OF SHARES. THE A.O. DID NOT AGREE WI TH THE CLAIM OF THE ASSESSEE ON LONG TERM CAPITAL GAIN (LTCG) AS WELL AS DEDUCTION CLAIMED UN DER SECTION 54F. ULTIMATELY, WHEN THE MATTER WENT BEFORE THE TRIBUNAL, THE LD. THIRD MEMB ER EXAMINED THE GENUINENESS OF THE CLAIM OF THE ASSESSEE AND THE LTCG AND FOUND IT TO BE GENUIN E, BUT IN RESPECT OF THE CLAIM OF DEDUCTION UNDER SECTION 54F, THE LD. THIRD MEMBER TOOK THE VI EW THAT THE ASSESSEE WAS NOT CORRECT IN CLAIMING THE DEDUCTION UNDER SECTION 54F. THE A.O. , AFTER GIVING SHOW CAUSE TO THE ASSESSEE FOR INITIATION OF THE PROCEEDINGS UNDER SECTION 271(1)( C), IMPOSED PENALTY ON THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS CONCEALED HER INCOME AND ALSO SUBMITTED INACCURATE PARTICULARS OF HER INCOME. PENALTY OF RS.4,33,744/- WAS IMPOSED ON TH E ASSESSEE BEING THE AVERAGE OF THE MINIMUM AND THE MAXIMUM PENALTY IMPOSABLE. WHEN TH E MATTER WENT BEFORE THE CIT(A), THE CIT(A) , I NOTED, DELETED THE PENALTY, BY HOLDING A S UNDER :- I HAVE CONSIDERED THE RELEVANT FACTS AND THE RIVAL CONTENTIONS. IN THE IMPUGNED PENALTY ORDER, THE A.O. HAS IMPOSED PENALT Y U/S. 271(1)(C) REJECTING THE ARGUMENTS OF THE APPELLANT AND RELYING ON THE ASSES SMENT ORDER AS UPHELD BY THE LD. CIT(A)-I, AGRA. HOWEVER, AS NARRATED/REPRODUCE D HEREINABOVE, THE HONBLE ITAT, AGRA HAS FINALLY HELD THE LONG TERM CAPITAL G AINS TO BE GENUINE AND ACCORDINGLY DELETED THE ADDITION OF RS.5,67,134/-. HENCE PENALTY IMPOSED U/S.271(1)(C) OF THE ACT ON THIS GROUND DOE NOT SUR VIVE. THE IMPUGNED ADDITION FINALLY STANDS CONFIRMED NOT ON THE GROUNDS THAT TH E LONG TERM CAPITAL GAINS IS BOGUS BUT ON ACCOUNT OF THE INADMISSIBILITY OF DEDU CTION U/S.54F OF THE ACT. IN THIS CONTEXT, THE APPELLANTS ARGUMENT APPEARS TO B E TENABLE SINCE IN THE REMAND REPORT, THE A.O. HAS REPORTED THAT THE PROPERTY WAS USED BY THE APPELLANT FOR RESIDENTIAL PURPOSES, WHICH WAS UPHELD BY THE JUDIC IAL MEMBER OF THE ITAT, AGRA. THERE IS NO MATERIAL/EVIDENCE ON RECORD TO S HOW THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS REGARDING INVESTME NT IN THE IMPUGNED PROPERTY OR CONCEALED ANY PARTICULARS THEREOF. THE CLAIM WA S NOT FOUND TO BE FALSE BUT 3 UNTENABLE DUE TO THE ABSENCE OF CONCRETE, CONTEMPOR ANEOUS EVIDENCE AND ITS IMPROBABILITY. 5. SECTION 271(1)(C) READS AS UNDER :- 271.(1) IF THE ASSESSING OFFICER OR THE COMMISSION ER (APPEALS) [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDE R THIS ACT, IS SATISFIED THAT ANY PERSON - (A) .. (B) .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR (D) .. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, - EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEA LS) OR THE COMMISSIONER TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND [FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THA T ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 6. FROM THE PERUSAL OF THE AFORESAID SECTION, IT IS APPARENT THAT PENALTY U/S 271(1)(C ) IS LEVIABLE IF THE A.O. IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF THE INCOME. THE PENALTY PROCEEDINGS AND THE ASSESSMENT PROCEEDI NGS, BOTH ARE DIFFERENT. EXPLANATION 1 TO SECTION 271(1)(C) STATES THAT THE AMOUNT ADDED OR D ISALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RE SPECT OF WHICH PARTICULARS HAVE BEEN 4 CONCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE ONE BUT IS REBUT TABLE ONE. IT ONLY SHIFTS THE ONUS ON THE ASSESSEE. EXPLANATION 1 REFERS TO THE TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICULARS OF INCOME IS DEEMED. THE FIRST SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WHICH IS FOUND BY THE A.O. O R THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY F ACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH, THE ASSESSEE I S NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION WAS BONAFIDE ONE AND TH AT ALL THE FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESU MPTION AVAILABLE UNDER EXPLANATION TO SECTION 271(1)(C), CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES (A) OR (B). 7. IN THIS CASE, I NOTED THAT THE A.O. HAS NOT BROU GHT OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE UNDER SECT ION 271(1)(C) OF THE ACT. HE HAS NOT BROUGHT OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICUL ARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. 8. I HAVE GONE THROUGH THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. LTD., 282 ITR 642, IN WHICH IT WAS HELD AS UNDER: IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STATE WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BE EN FURNISHED BY THE ASSESSEE. --------------------------------------------------- ----------------- --------------------------------------------------- ------------------------ 5 HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE C OMMISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRI BUNAL HAD FAILED TO APPRECIATE THIS LEGAL. ISSUE. THE RATIO IN CIT V. MANU ENGINE ERING WORKS 132 ITR 306(GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT B E UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. 9. I NOTED THAT SIMILAR VIEW HAS BEEN TAKEN BY A BENCH OF I.T.A.T. DELHI IN ITA NO.2275/DEL/2009 IN THE CASE OF RAJ RANI MITTAL TO WHICH THE UNDERSIGNED IS THE AUTHOR. SINCE THE A.O. HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE WH ETHER THE PENALTY HAS BEEN IMPOSED ON THE CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME, IN MY VIEW, THE PENALTY CANNOT BE SUSTAINED. I HAVE ALSO GONE THRO UGH THE DECISION OF THIS BENCH IN ITA NO.296/AGR./2007 IN THE CASE OF SHRI CHANDRA SHEKHA R GUPTA AND NOTED THAT THE CASE OF THE ASSESSEE IS ALSO COVERED BY THAT DECISION. I, ACCO RDINGLY, CONFIRM THE ORDER OF THE CIT(A) DELETING THE PENALTY. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2010). SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 5 TH FEBRUARY, 2010. PBN/* 6 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, AGRA TRUE COPY