AJAY JAIN, MUMBAI V. DCIT 26(2), MUMBAI

ITA 5255/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3340 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 19-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MURLI
• Assessee Lawyers: A V KAMAT
• Keywords: Wrong claim; Revised return
• Section: 54; 139

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL -ABENCH MUMBAI , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMIT SHUKLA,JUDICIAL MEMBER ./I.T.A./5255/MUM/2014 , / ASSESSMENT YEAR: 2010-11 AJAY JAIN MUKUND M. CHITALE & CO. CHARTERED ACCOUNTANTS 205, AGARWAL SHYAMKAMAL A, VILE PARLE(E) MUMBAI-400 057. PAN: ABBPJ 7111 K VS. DCIT-26(2) SMT. K.G. MITTAL, AYURVEDIC HOSPITAL BLDG., CHARNI ROAD MUMBAI-400002. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI MURLI ASSESSEE BY: SHRI A.V. KAMAT / DATE OF HEARING: 09.03.2016 / DATE OF PRONOUNCEMENT: 16.03.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER OF CIT (A)-28,MUMBAI,DATED 12 /06/2014,THE ASSESSEE HAS FILED THE PRESENT APPEAL.THE EFFECTIVE GROUND OF APPEAL IS AB OUT CONFIRMATION OF THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT FOR FILING INACCURATE PARTICUL ARS OF THE INCOME. 2. ASSESSEE,AN INDIVIDUAL,FILED HIS RETURN OF INCOME O N 31/07/2010,SHOWING TOTAL INCOME OF RS. 75.64 LAKHS.THEREAFTER, A REVISED RETURN WAS FI LED ON 23/09/2011,DECLARING INCOME AT RS.62.83 LAKHS AFTER CLAIMING DEDUCTION U/S. 54 OF THE ACT.IN THE ORDER PASSED U/S.143 (3) OF THE ACT,THE DEDUCTION CLAIMED BY THE ASSESSEE WAS D ISALLOWED AND THE INCOME WAS ASSESSED AT RS.75.64 LAKHS.THE AO ALSO INITIATED PENALTY FOR FI LING INACCURATE PARTICULARS OF THE INCOME. IN RESPONSE TO THE NOTICE ISSUED BY THE AO FOR LEVY ING PENALTY,THE ASSESSEE STATED THAT HE HAD ALREADY PAID TAX ON LONG-TERM CAPITAL GAIN WHILE FI LING THE ORIGINAL RETURN. HOWEVER,THE AO WAS NOT SATISFIED WITH THE EXPLANATION OFFERED AND LEVIED A PENALTY OF RS. 3.95 LAKHS. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM, IT WAS ARGUED THAT THE A SSESSEE HAD NOT CLAIMED EXEMPTION U/S. 54 AGAINST CAPITAL GAIN IN HIS ORIGINAL RETURN AND HAD PAID TAX ON LONG-TERM CAPITAL GAIN,THAT SUBSEQUENTLY HE HAD INVESTED IN NEW HOUSE PROPERTY ON 15/01/2011 I.E. WITHIN TWO YEARS FROM THE SALE OF ORIGINAL HOUSE PROPERTY AND HAD FILED T HE REVISED RETURN BY CLAIMING EXEMPTION AS PER THE PROVISIONS OF THE ACT,THAT ALL THE FACTS AN D FIGURES HAD BEEN DISCLOSED IN THE RETURN OF INCOME, THAT THERE WAS NEITHER CONCEALMENT OF INCOM E NOT THE ASSESSEE HAD FURNISHED ANY INACCURATE PARTICULARS,THAT HE HAD NOT SOUGHT TO EV ADE ANY TAX, THAT THE TAXES WERE ALREADY PAID BY BRINGING OUT ENTIRE DETAILS ON RECORD.THE ASSESS EE RELIED UPON VARIOUS CASE LAWS AND REQUESTED THAT PENALTY PROCEEDINGS SHOULD BE DROPPE D. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE PENALTY ORDER, THE FAA HELD THAT THE ASSESSEE HAD SOLD HIS OLD HOUSE PROPERTY FOR RS. 12 .81 LACS, THAT THE SALE TRANSACTION RESULTED IN LONG-TERM CAPITAL GAIN WHICH WAS INITIALLY OFFER ED TO TAX IN THE RETURN FILED ON 31/07/2010, THAT BY WAY OF A REVISED RETURN THE ASSESSEE HAD CL AIMED DEDUCTION U/S. 54 FOR THE ENTIRE AMOUNT OF CAPITAL GAIN,THAT THE AMOUNT OF CAPITAL G AIN WAS NEITHER INVESTED TOWARDS PURCHASE 5255/M/14-AJAY JAIN 2 OF NEW WAS PROPERTY NOR THE SAME WAS INVESTED IN CA PITAL GAIN ACCOUNT SCHEME BEFORE THE DATE OF FILING OF RETURN U/S.139 (1) OF THE ACT,THA T ONE OF THE PRIMARY CONDITIONS FOR GRANT OF DEDUCTION U/S. 54 WAS NOT COMPLIED WITH, THAT THE A O HAD DISALLOWED A DIRECTION IN HIS ASSESSMENT ORDER THAT WAS ACCEPTED BY THE ASSESSEE IN WAS NOT CHALLENGED IN THE APPEAL, THAT THE ACTION OF THE ASSESSEE OF FILING REVISED RETURN AND CLAIMING DEDUCTION CASTED A SHADOW OF DOUBT ON THE BONA FIDES OF THE ASSESSEE, THAT THERE WAS NO DOUBT THAT THE ASSESSEE WAS NOT ENTITLED FOR CLAIMING DEDUCTION U/S. 54, THAT NO CO GENT EXPLANATION WAS FILED FOR CLAIMING THE DEDUCTION U/S. 54 IN THE REVISED RETURN. FINALLY,HE UPHELD THE ORDER OF THE AO. 4. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE (DR) SUPP ORTED THE ORDER OF THE FAA. THE AUTHORISED REPRESENTATIVE (AR) STATED THAT EXEMPTIO N U/S. 54 WAS AVAILABLE EVEN IF THE RETURN WAS NOT FILED AS PER THE PROVISIONS OF SECTION 139 (1) OF THE ACT, THAT THERE WAS NO DISPUTE THAT THE RETURN WAS FILED IN ACCORDANCE WITH THE PROVISI ONS OF SECTION 139 (4) OF THE ACT, THAT THE ASSESSEE HAD ALREADY PAID TAXES WHILE FILING THE OR IGINAL RETURN, THAT ALL THE INFORMATION WAS MADE AVAILABLE TO THE AO DURING THE ASSESSMENT PROC EEDINGS, THAT IT WAS NOT A CASE OF FILING INACCURATE PARTICULARS OR CONCEALING THE PARTICULA RS OF INCOME. HE RELIED UPON THE CASE OF RELIANCE PETRO PROUCTS(322 ITR 158). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT ASSESSEE HAD NOT CLAIMED EXEMPTION U/S. 54 OF THE A CT,WHILE FILING THE ORIGINAL RETURN. BUT LATER ON HE FILED A REVISED RETURN AND CLAIMED THE SAID EXEMPTION. AS PER THE SETTLED LAW, DEDUCTION U/S. 54 CANNOT BE DENIED TO AN ASSESSEE E VEN IF THE RETURN IS FILED BEYOND THE TIME LIMIT PRESCRIBED BY THE PROVISIONS OF SECTION 139 ( 1) OF THE ACT. IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAD ALREADY PAID THE TAX ES AND HAD FURNISHED THE DETAILS OF PROPERTY SOLD TO THE AO. THE ASSESSEE HAD NOT MADE ANY WRONG CLAIM FOR WHICH HE WAS NOT ENTITLED. FILING A REVISED RETURN IS A RIGHT RECOGNISED BY TH E ACT AND THE PARLIAMENT.THEREFORE,JUST BECAUSE THE ASSESSEE HAD FILED A REVISED RETURN AS PER THE PROVISIONS OF SECTION 139(4)OF THE ACT,IT CANNOT BE HELD THAT HE HAD CONCEDED THE PART ICULARS OF INCOME.THE AO/FAA HAVE NOT MENTIONED AS TO WHICH WERE THE PARTICULARS THAT COU LD BE HELD TO BE INACCURATE. IN THE CASE OF RELIANCE PETRO PRODUCTS (SUPRA) THE HONBLE APEX CO URT HAS CLEARLY HELD THAT MERE MAKING A CLAIM WOULD NOT RESULT IN IMPOSING THE CONCEALMENT PENALTY. IN THE CASE BEFORE US THE CLAIM WAS NOT A WRONG CLAIM RATHER IT WAS A CLAIM AS PE R THE PROVISIONS OF THE ACT. THEREFORE IT CAN SAFELY BE SAID THAT ASSESSEE HAD NEITHER FURNIS HED INACCURATE PARTICULARS NOR HAD CONCEALED HIS INCOME. REVERSING THE ORDER OF THE FAA, WE DECI DE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ! . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016. 16 , 2016 SD/- SD/- ( '#$ / AMIT SHUKLA ) ( %&' / RAJENDRA ) & () / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16 .03.2016. JV.SR.PS. 5255/M/14-AJAY JAIN 3 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.