Sh. Bant Singh, Ludhiana V. ITO, Ludhiana

ITA 494/CHANDI/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51442 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Additional evidence; Wrong claim
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 494 TO 497/CHD/2011 ASSESSMENT YEARS: 2002-03 TO 2005-06 SHRI BANT SINGH VS. THE I.T.O. WARD VII(3), C/O AMAR SINGH LUDHIANA 710-E, BHAI RANDHIR SINGH NAGAR LUDHIANA PAN: AAHPH 7106 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 04.08.2011 DATE OF PRONOUNCEMENT : 30.08.2011 ORDER THESE FOUR APPEALS BY THE ASSESSEE ARE AGAINST THE COMMON ORDER OF CIT(A)-II, LUDHIANA DATED 29.3.2011 RELATING TO ASS ESSMENT YEARS 2002-03 TO 2005-06 AGAINST THE PENALTY ORDER PASSED U/S 271 (1)(C) OF THE I.T. ACT, 1961. 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEALS IS AGAINST THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. 3. ALL THE FOUR APPEALS RELATING TO SAME ASSESSEE O N THE SAME ISSUE OF LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT WERE HEAR D TOGETHER AND ARE DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. 2 4. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE ARISING IN ALL THE ABOVE MENTIONED APPEALS WAS AGAINST PENALTY LEV IED U/S 271(1)(C) OF INCOME-TAX ACT. THE AO HAD LEVIED PENALTY U/S 271(1 )(C) IN THE RESPECTIVE ASSESSMENT YEARS AS UNDER:- ASSESSMENT YEAR AMOUNT 2002-03 RS. 9,463/- 2003-04 RS. 9,979/- 2004-05 RS. 9,693/- 2005-06 RS. 13,662/- 5. SINCE COMMON GROUNDS HAVE BEEN RAISED IN ALL THE ASSESSMENT YEARS AND THE FACTS BEING SIMILAR IN ALL THE ASSESSMENT Y EARS, A REFERENCE IS BEING MADE TO THE FACTS RELATING TO ASSESSMENT YEAR 2002-03 TO ADJUDICATE THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APP EALS. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FURNISHED THE RETURN OF INCOME DECLARING INCOME OF RS. 2,98,910/- ON 23.7.2002, AFTER CLAIMING EXEMPTION AT RS. 30,924/- BEING THE HOUSE RENT PAID BY THE ASSESSEE. THE RETURN OF INCOME WAS PROCESSED U/S 1 43(1) OF THE ACT. THE ASSESSING OFFICER RECEIVED A COMPLAINT THAT THE ASS ESSEE WAS LIVING IN HIS OWN HOUSE AT 710-E, BRS NAGAR, LUDHIANA AND HAD WRO NGLY CLAIMED DEDUCTION IN RESPECT OF HOUSE RENT ALLOWANCE. AS PE R THE ASSESSING OFFICER ENQUIRY WAS MADE THROUGH THE INSPECTOR OF HIS OFFIC E AND IT WAS REPORTED THAT THE ASSESSEE WAS LIVING IN 710-E, BRS NAGAR, LUDHIANA ON RENT AND PAYING RENT OF RS. 5,200/- PER MONTH. ENQUIRY WAS MADE FROM THE EXECUTIVE OFFICER, IMPROVEMENT TRUST, LUDHIANA REGA RDING OWNERSHIP OF THE SAID HOUSE AND IT WAS INFORMED BY THE IMPROVEME NT TRUST VIDE THEIR LETTER NO. LIT/10571 DATED 26.10.2006 THAT THE OWNERSHIP OF H.NO. 710- E, BRS NAGAR, LUDHIANA, AS PER THEIR OFFICE RECORDS , STANDS IN THE NAME 3 OF SHRI BANT SINGH, S/O SHRI PURAN SINGH. H.NO. 710 E, BRS NAGAR LUDHIANA . THE ASSESSING OFFICER IN VIEW THEREOF ISSUED N OTICE U/S 148 OF THE INCOME TAX ACT. THE ASSESSEE IN RESPONSE TO THE SAME STATED THAT HE HAD ALREADY SUBMITTED HIS ANNUAL RETURN WHICH MA Y BE ACCEPTED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE GAVE NO OBJECTION TO THE ADDITION REGARDING WRONG CLAIM OF HOUSE RENT ALLOWANCE. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE FOR THE PENALTY PROCEEDINGS INITIATED U/S 271 (1)(C) OF THE ACT. T HE SAID NOTICE WAS SERVED THROUGH AFFIXTURE BY THE INSPECTOR WITH THE HELP OF THE NOTICE SERVER ON 8.1.2008. NEITHER ANY BODY ATTENDED ON T HE SAID DATE NOR ANY REPLY WAS FILED BY THE ASSESSEE AND THE ASSESSING O FFICER THEREAFTER DECIDED THE SAID CASE ON MERITS. IN VIEW OF THE AS SESSEE HAVING GIVEN NO OBJECTION TO THE ADDITION ON ACCOUNT OF WRONG CLAIM OF HOUSE RENT ALLOWANCE, THE ASSESSING OFFICER WAS OF THE VIEW T HAT THE SAME CLEARLY ESTABLISHED THAT THE ASSESSEE HAD FURNISHED INACCUR ATE PARTICULARS OF INCOME BY CLAIMING DEDUCTION IN RESPECT OF THE HOU SE RENT ALLOWANCE AMOUNTING TO RS. 30,924.- WHILE LIVING IN ITS OWN H OUSE, WHICH FACT IS CONFIRMED BY THE IMPROVEMENT TRUST VIDE REPLY DATED 26.10.2006. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY O F RS. 9,463/- U/S 271 (1)(C) OF THE ACT. THE CIT(A) UPHELD THE LEVY OF P ENALTY U/S 271 (1)(C) OF THE ACT. THE ASSESSEE IS IN APPEAL AGAINST THE SAI D LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. 7. THE LD. AR FOR THE ASSESSEE FAIRLY ADMITTED THAT THE QUANTUM ADDITION HAS BEEN CONFIRMED IN THE CASE OF THE ASSE SSEE. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE TRIBUNAL IN ASSES SEES CASE HAD VIDE PARA 6 THOUGH CONFIRMED THE ADDITION BUT THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT CONCLUSIVELY LEAD TO LEVY OF PEN ALTY U/S 271(1)(C) OF 4 THE ACT. IT WAS URGED BY THE LD. AR FOR THE ASSESS EE THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS WERE INDEPENDEN T AND RELIANCE WAS PLACED ON ANANTHARAM VEERSINGHAIAH & COMPANY V CIT [123 ITR 457 (SC)] AND CIT V J.K. SYNTHETICS LTD [219 ITR 267 (DEL)]. THE LD. AR POINTED OUT THAT THE EVIDENCE OF AGREEMENT TO SELL ENTERED INTO BY THE ASSESSEE WAS FILED BEFORE THE CIT(A) WHICH WAS ADMI TTED BY THE CIT(A) UNDER WHICH THE POSSESSION WAS HANDED OVER TO THE P URCHASER OF THE PROPERTY. IT WAS FURTHER STATED BY THE LD. AR THAT THE NON SUBMISSION OF THE INCOME FROM CAPITAL GAIN ON THE SALE OF SUCH PR OPERTY SHOULD NOT GO AGAINST THE ASSESSEE IN VIEW OF THE REPORT OF THE I NSPECTOR THAT RENT WAS BEING PAID BY THE ASSESSEE. WHERE THE PAYMENT OF T HE RENT IS NOT DOUBTED, THE CLAIM BEING MERELY DISALLOWED DOES NOT JUSTIFY LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. THE LD. DR FOR THE REVENUE PLACING RELIANCE ON THE ORDER OF THE AUTHORITIES BELOW POINTED OUT THAT OWN ERSHIP AND POSSESSION OF THE HOUSE WAS WITH THE ASSESSEE AND THE ASSESSIN G OFFICER HAD CAST DOUBTS ON PAYMENT OF RENT. IT WAS FURTHER POINTED O UT BY THE LD. DR THAT THE AGREEMENT TO SELL PRODUCED AS ADDITIONAL EVIDEN CE BY THE ASSESSEE WAS DOUBTED BY THE TRIBUNAL AND ADDITION WAS CONFIRMED. 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORDS. THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME HAD CLAIM ED DEDUCTION ON ACCOUNT OF HOUSE RENT ALLOWANCE OF RS. 30,924/-. T HE ASSESSEE WAS OWNER OF PROPERTY NO. 710-E, BHAI RANBIR SINGH NAGAR, LUD HIANA AND WAS IN POSSESSION OF THE SAID PROPERTY. THE CLAIM OF THE ASSESSEE WAS THAT IT WAS LIVING IN THE SAID HOUSE ON RENT AND RENTAL OF RS. 5,200/- PER MONTH WAS BEING PAID. THE ASSESSEE HAD CLAIMED HOUSE RENT AL LOWANCE OF RS. 30,924/- WHICH WAS DISALLOWED BY THE ASSESSING OFFI CER AS THE HOUSE IN WHICH THE ASSESSEE WAS LIVING CONTINUED TO BE IN TH E NAME OF ASSESSEE. 5 THE ASSESSING OFFICER MADE ENQUIRES FROM THE IMPROV EMENT TRUST, LUDHIANA IN THIS REGARD, WHO REPORTED THAT THE HOUS E WAS REGISTERED IN THE NAME OF THE ASSESSEE. BEFORE THE CIT(A), THE ASSESS EE FILED THE COPY OF THE AGREEMENT TO SELL DATED 8.1.1999 UNDER WHICH T HE SAID PROPERTY WAS SOLD IN THE YEAR 1999 TO ONE SHRI AMAR SINGH S/O SH RI TULSI RAM FOR RS. 14 LACS. THE CIT(A) ADMITTED THE SAID EVIDENCE BUT HELD THAT THE SAME DOES NOT HELP THE ASSESSEE IN PROVING THE SALE OF T HE SAID HOUSE. THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE AS NO REC EIPT OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS FILED O N RECORD. FURTHER, THE ASSESSEE HAD ALSO AGREED TO THE AFORESAID ADDITION BEFORE THE ASSESSING OFFICER. THE ASSESSEE IN APPEAL BEFORE THE TRIBUNA L CONTENDED THAT BECAUSE OF CERTAIN TECHNICAL DIFFICULTIES, THE OWNE RSHIP OF THE HOUSE CONTINUED TO STAND IN THE NAME OF THE ASSESSEE IN T HE RECORDS OF THE IMPROVEMENT TRUST, LUDHIANA BUT IN FACT IT WAS SOLD FOR A CONSIDERATION OF RS. 14 LACS AS PER AGREEMENT TO SELL DATED 8.1.1999 , RECEIVED IN CASH. BEFORE THE TRIBUNAL IT WAS POINTED OUT BY THE LD. C OUNSEL THAT THE SAID ADDITION WAS AGREED TO BE MADE IN THE BACKGROUND OF PECULIAR PROBLEMS FACED BY THE ASSESSEE WHO WAS A SENIOR CITIZEN HAVI NG HEALTH PROBLEMS AND ALSO WITH REGARD TO THE COMPLAINT BY HIS DAUGHTER A GAINST HER HUSBAND IN CIVIL COURT. 9. THE TRIBUNAL IN ITA NOS. 1042 TO 1046/CHANDI/200 9 VIDE ORDER DATED 31.12.2009 VIDE PARA 6 HELD AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. IN SUM AND SUBSTANCE, THE CLAIM OF THE ASSESSEE HAVING PAID THE HOUSE RENT TO A THIRD PERSON FOR LIVING IN HOUSE NO.710-E, BRS NAGAR, LUDHIANA HAS BEEN FOUND TO BE FALSE BY THE ASSESSING OFFICER. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE CONTINUES TO BE THE OWNER OF THE SAID HOUSE AS PER THE RECORDS OF THE 6 IMPROVEMENT TRUST, LUDHIANA AND, THEREFORE, THE CLAIM OF THE ASSESSEE HAVING PAID RENT FOR STAYING IN THE SAID HOUSE IS WRONG. IN THIS CONNECTION, THE ASSESSEE HAS PRESSED INTO SERVICE AN AGREEMENT TO SELL DATED 8.1.1999 IN TERMS OF WHICH THE SAID HOUSE IS STATED TO HAVE BEEN SOLD TO ONE SHRI AMAR SINGH FOR RS.14 LACS. THE SAID PLEA, WHICH IS THE BEST EVIDENCE WITH THE ASSESSEE, WAS NOT AT ALL BROUGHT ON RECORD BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. TO THE CONTRARY, BEFORE THE ASSESSING OFFICER, THE ASSESSEE AGREED FOR THE ADDITION IN QUESTION. THE SAID AGREEMENT TO SELL DATED 8.1.1999 WAS BROUGHT OUT ONLY BEFORE THE COMMISSIONER OF INCOME-TAX (A) BY WAY OF ADDITIONAL EVIDENCE. IN OUR CONSIDERED OPINION, THE AGREEMENT IN QUESTION DOES NOT INSPIRE CONFIDENCE SO AS TO ACCEPT THE VERSION CANVASSED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME-TAX (A) AND ALSO BEFORE US. FIRSTLY, IN TERMS OF THE SAID AGREEMENT, THE ASSESSEE CLAIMS TO HAVE SOLD THE HOUSE FOR A CONSIDERATION OF RS.14 LACS STATED TO HAVE BEEN RECEIVED IN CASH VIDE AGREEMENT DATED 8.1.1999. EVIDENTLY, THE ASSESSEE IS AN OLD INCOME-TAX ASSESSEE AND THERE IS NO EVIDENCE TO SHOW THAT SUCH SALE HAS BEEN REPORTED IN THE ANNUAL INCOME- TAX RETURN FOR THE RELEVANT ASSESSMENT YEAR. IN TH E COURSE OF HEARING BEFORE US, WHEN IT WAS PUT TO THE LEARNED COUNSEL AS TO WHETHER THE ASSESSEE HAS RETURNED SUCH SALE IN HIS INCOME-TAX RETURN FOR THE ASSESSMENT YEAR, THERE WAS NO AFFIRMATIVE RESPONSE. FURTHER, IT IS FOUND THAT SUCH AGREEMENT TO SELL HAS NOT BEEN REGISTERED AND THE ENTIRE SALE CONSIDERATION IS STATED TO HAVE BEEN RECEIVED IN CASH; INDEED, THERE IS NO INDEPENDENT EVIDENCE TO SUPPORT THE TRANSACTION CANVASSED ON THE BASIS OF SUCH AGREEMENT DATED 8.1.1999. CONSIDERING THE ENTIRE SET OF CIRCUMSTANCES, INCLUDING THE FACTUM OF SUCH PRINCIPAL EVIDENCE NOT HAVING BEEN INEXPLICABLY LED BEFORE THE ASSESSING OFFICER, WE FIND THAT THE COMMISSIONER OF INCOME-TAX (A) WAS JUSTIFIED IN SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2002-03 IS DISMISSED AS NO OTHER PLEA HAS BEEN RAISED BY THE APPELLANT BEFORE US. 10. AS PER THE ORDER OF THE TRIBUNAL, THE AGREEMENT IN QUESTION DOES NOT INSPIRE CONFIDENCE SO AS TO ACCEPT THE VERSION CANV ASSED BY THE ASSESSEE BEFORE THE CIT(A) AND BEFORE THE TRIBUNAL. THE TRI BUNAL CAME TO THE ABOVE SAID FINDINGS AS THE ASSESSEE HAD NOT REPORTE D THE SALE OF PROPERTY 7 IN ITS RETURN OF INCOME IN THE RELEVANT ASSESSMENT YEAR. FURTHER, THE AFORESAID AGREEMENT TO SELL WAS NOT REGISTERED AND THE ENTIRE CONSIDERATION WAS RECEIVED IN CASH. THE TRIBUNAL HELD THAT THERE WAS NO INDEPENDENT EVIDENCE TO SUPPORT THE TRANSACTION CANVASSED ON TH E BASIS OF SUCH AGREEMENT DATED 8.1.1999. THE ADDITION MADE IN THE CASE WAS THUS UPHELD BY THE TRIBUNAL. 11. PENALTY FOR CONCEALMENT U/S 271 (1)(C) OF THE A CT IS IMPOSABLE IN ALL SUCH CASES WHERE THE ASSESSEE HAD EITHER CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. EITHER OF THE TWO CONDITIONS ARE TO BE SATISFIED BEFORE PENALTY U/S 271(1)(C) OF THE ACT IS TO BE IMPOSED BY WAY OF EXPLANATION 1 TO SECTION 271 (1)(C), CERT AIN DEEMED PROVISIONS REGARDING CONCEALMENT OF INCOME ARE POSTULATED. ON E OF THE TWO SITUATIONS SO DEEMED IS WHERE IN RESPECT OF ANY FAC TS MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OF FERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR THE C IT(A) AND SECOND IS WHERE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUT ATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NO T ABLE TO SUBSTANTIATE THE EXPLANATION AND THE ASSESSEE FAILS TO PROVE THAT SU CH THE EXPLANATION IS BONAFIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL TH E FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF TOTAL INCOM E HAD BEEN DISCLOSED. AS HELD BY THE VARIOUS COURTS, ASSESSMENT PROCEEDIN GS AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND MERELY BECAUSE AN ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE DOES NOT JUSTIFY THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT AUTOMATICALLY. IN THE FACTS OF THE PRESENT CASE BEFORE US THE ASSESSEE HAD CLAIMED A D EDUCTION ON ACCOUNT OF HOUSE RENT ALLOWANCE. THE SAID DEDUCTION WAS CLAIME D ON ACCOUNT OF RENT 8 PAID BY THE ASSESSEE FOR OCCUPATION OF 710-E, BHAI RANBIR SINGH, NAGAR, LUDHIANA. DURING THE COURSE OF ASSESSMENT, ON ENQU IRIES MADE FROM THE OFFICE OF THE IMPROVEMENT TRUST, LUDHIANA IT TRANSP IRED THAT OWNERSHIP OF THE SAID PROPERTY STOOD IN THE NAME OF THE ASSESSEE . HOWEVER, AS PER THE ENQUIRIES MADE BY THE INSPECTOR OF THE WARD, IT WAS REPORTED THAT THE ASSESSEE WAS PAYING MONTHLY RENT OF RS. 5,200/- PER MONTH. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE HAD PLACED RELI ANCE ON THE COPY OF THE AGREEMENT TO SELL EXECUTED ON 8.1.1999 TO ESTABLISH THAT THE SAID ASSET WAS SOLD BY THE ASSESSEE AND BECAUSE OF CERTAIN TECHNIC ALITIES; THE SAME WAS NOT REGISTERED IN THE NAME OF THE PURCHASER. THE A BOVE SAID STAND OF THE ASSESSEE WAS FOUND TO BE FALSE BY THE CIT(A) AND TH E TRIBUNAL AS (A) THE AGREEMENT TO SELL RELATING TO AN IMMOVABLE PROPERTY WAS NOT REGISTERED AND THE ENTIRE SALE CONSIDERATION WAS CLAIMED TO HA VE BEEN RECEIVED IN CASH. B) FURTHER, NO INDEPENDENT EVIDENCE WAS FUR NISHED TO SUPPORT THE ABOVE SAID TRANSACTIONS. THE ASSESSEE THOUGH WAS AN OLD INCOME TAX ASSESSEE BUT HAD FAILED TO RETURN / REPORT THE SAID SALE OF HIS ASSET IN HIS ANNUAL INCOME. THE AGREEMENT IN QUESTION WAS THUS REJECTED BY THE TRIBUNAL. THE TRIBUNAL ALSO OBSERVED THAT THE CLAI M OF THE ASSESSEE OF HAVING PAID HOUSE RENT TO A THIRD PERSON FOR LIVING IN HIS OWN HOUSE WAS FOUND TO BE FALSE BY THE ASSESSING OFFICER. THE AS SESSEE HAD RAISED NO OBJECTION TO THE ABOVE ADDITION REGARDING WRONG CLA IM OF HOUSE RENT ALLOWANCE TO ITS INCOME BEFORE THE ASSESSING OFFICE R. 12. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF T HE CASE, THE ASSESSEE OFFERED AN EXPLANATION AND AS PER THE ASSESSEE THE COMPLETE FACTS RELATING TO THE SAME WERE DISCLOSED WHICH WERE MATERIAL FOR THE COMPUTATION OF TOTAL INCOME IN THE HANDS OF THE ASSESSEE. HOWEVER , THE ASSESSEE HAVING FAILED TO SUBSTANTIATE ITS CLAIM BEFORE THE ASSESSI NG AUTHORITIES RESULTED IN 9 REJECTION OF THE AFORESAID CLAIM OF THE ASSESSEE. SUCH REJECTION OF CLAIM OF ASSESSEE DOES NOT WARRANT THE IMPOSITION OF PENA LTY U/S 271 (1)(C) OF THE ACT. THE CASE OF THE ASSESSEE BEFORE US IS THA T IT HAD PAID HOUSE RENT OF RS. 5,200/- PER MONTH AS THE HOUSE IN WHICH HE W AS LIVING IT WAS INITIALLY OWNED BY HIM WAS SOLD BY HIM. THE INSPEC TOR OF THE WARD OF THE ASSESSING OFFICER IN HIS REPORT HAS ALSO REPORTED T HE FACTUM OF ASSESSEE PAYING RENT OF RS. 5,200/- PER MONTH. THE CLAIM OF THE ASSESSEE WAS REJECTED BECAUSE OF THE REASONS MENTIONED IN THE PA RAS HEREINABOVE BUT REJECTION OF THE CLAIM DOES NOT MAKE ASSESSEE LIABL E FOR LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. ACCORDINGLY, THE ASSESS ING OFFICER IS DIRECTED TO DELETE THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT. 13. THE FACTS IN THE APPEALS RELATING TO ASSESSMENT YEARS 2003-04 TO 2005-06 BEING SIMILAR, THE AFORESAID DECISION IN AS SESSMENT YEAR 2002-03 WILL MUTATIS-MUTANDIS BE APPLICABLE TO THESE ASSESS MENT YEARS ALSO. THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT IS THUS DE LETED. 14. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUGUST, 2011 SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 30 TH AUGUST, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 10