DCIT, Jaipur V. TULIP GLOBAL PVT. LTD., Jaipur

ITA 553/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1981 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 25-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL
• Assessee Lawyers: VINOD GUPTA CA DHK
• Keywords: Bonafide mistake
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 553/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. DY. COMMISSIONER OF INCOME - TAX, CIRCLE-3, JAIPUR. CUKE VS. M/S TULIP GLOBAL, PVT. LTD. 305, IIIRD FLOOR, JAIPUR TOWER, OPP. ALL INDIA RADIA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCT 8239 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.L. CHANDEL (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VINOD GUPTA(C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11.07.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/07/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-4, JAIPUR, DATED 10.03.2016 PERTAINING TO ASSESSMENT Y EAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) HAS ERRED IN CANCELLING THE PENALTY U/S 271(1)(C) AMOUNTING TO RS. 30,63,280/- TO IMPOSED BY THE AO, WITHOUT AP PRECIATION MATERIAL FACTS OF THE CASE. 2 ITA NO. 553/JP/2016. M/S TULIP GLOBAL PVT. LTD., JAIPUR. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN CANCELLING THE PENALTY /S 2 71(1)(C) WITHOUT APPRECIATING CONTENTS OF THE REMAND/ ENQUIRY REPORT FURNISHED DURING THE APPELLATE PROCEEDINGS. 2. BRIEFLY, STATED THE FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT, AND THE ASSESSMENT UNDER SECTI ON 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FRAM E VIDE ORDER DATED 28/03/2014. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF CAPITAL GAIN AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) READ WITH SECTION 274 OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICE R PASSED A PENALTY ORDER U/S 271(1)(C) OF THE ACT IMPOSING THE PENALTY OF RS. 30 ,63,280/-. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSION DELETED THE PENALTY. 3. NOW, THE REVENUE IS IN FURTHER APPEAL. 4. LD. D/R VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NO T JUSTIFIED IN DELETING THE PENALTY. HE SUBMITTED THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, FROM THE COMPUTATION OF TOTAL INCOME IT WAS NOTICED BY THE A O THAT THE ASSESEE HAD SHOWN LONG-TERM CAPITAL LOSS OF RS. 69,49,613/- ON SALE O F IMMOVABLE PROPERTY. ON FURTHER PERUSAL OF SALE DEED AND PURCHASE DEED IT WAS NOTIC ED THAT THE ASSESSEE HAD SOLD A BUILDING FOR SALE CONSIDERATION OF RS. 4,21,00,000/ - ON 2 ND SEPTEMBER 2011. THE PROPERTY SOLD IN QUESTION WAS PURCHASED BY THE ASSE SSEE ON 09/07/2009 FOR CONSIDERATION OF RS. 3,90,00,000/-. HOWEVER, ON PE RUSAL OF RETURN OF INCOME FILED BY THE ASSESSEE FOR THE RELEVANT PERIOD, IT WAS NOTICE D THAT ASSESSEE HAD SHOWN LONG 3 ITA NO. 553/JP/2016. M/S TULIP GLOBAL PVT. LTD., JAIPUR. TERM CAPITAL LOSS OF RS. 69,49,613/-. THEREFORE, TH E ASSESSEE WAS SHOW CAUSED AS TO WHY THE SHORT TERM CAPITAL GAIN OF RS. 24,91,843/- MAY NOT BE ADDED IN THE TOTAL INCOME INSTEAD OF LONG-TERM CAPITAL LOSS OF RS. 69, 49,613/-. 5. LD. DEPARTMENTAL REPRESENTATIVES SUBMITTED THAT SINCE THE CASE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND IT WAS ONLY UPON THE AO CONFRONTING THE ASSESSEE, THE ASSESSEE HAS OFFERED THE SHORT-TERM CAPITAL GAI N FOR TAXATION. UNDER THESE FACTS, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN D ELETING THE PENALTY. HE PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COU RT REFERRED IN THE CASE OF N.G. TECHNOLOGIES (IN LIQUIDATION) VS. COMMISSIONER OF I NCOME-TAX (2016) 70 TAXMANN.COM 37 (SC). 6. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND HE SUBMITTED THAT IT WAS A BONAFIDE MISTAKE. THE ASSESSEE HAS NOT CONCEALED ANY MATERIAL FACTS FROM THE AO, TRUE VALUE OF THIS SALE AND PURCHASE OF THE PROPERTY WAS DULY PLACED BEFORE THE AO. IN SUPPORT OF THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE PLA CED RELIANCE ON THE FOLLOWING CASE LAWS:- PRICE WATERHOUSE COOPERS (P.) LTD. VS. CIT (2012) 3 48 ITR 306/25 TAXMANN.COM 400/211 TAXMAN 40 (SC) DEEPI RUPINDER SINGH ARORA, ITA NO. 1073/MUM/ 2015 V. ACIT (ITAT MUMBAI) UDAYAN MUKHERJEE VS. CIT [291 ITR 318 (CAL)] (CALCU TTA HIGH COURT) 4 ITA NO. 553/JP/2016. M/S TULIP GLOBAL PVT. LTD., JAIPUR. CIT VS. PITAMBARDAS DHULICHAND [273 ITR (MP) 271] ( MADHYA PRADESH HIGH COURT) S. CHANDRASHEKHAR VS. ACIT (2017) 148 DTR 322 (KAR. ) (KARNATAKA HIGH COURT) 7. WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . UNDISPUTED FACTS IN THE CASE ARE THAT THE ASSESSEE HAD CLAIMED LOSS ON THE SALE OF THE PROPERTY; THE ASSESSEE HAS ALSO CARRIED FORWARD SUCH LOSS. THE EXPLANATION O F THE ASSESSEE FOR DOING SO BEFORE THE LD. CIT(A) WAS THAT INADVERTENTLY THE WRONG KEY OF COMPUTER WAS PRESSED WHICH RESULTED INTO THIS MISTAKE. LD. CIT(A) ACCEPTED TH IS EXPLANATION ON THE BASIS THAT ALL DETAILS RELEVANT FOR COMPUTATION OF CAPITAL GAIN WA S DULY DISCLOSED IN THE INCOME-TAX RETURN. THE FACTUM OF DISCLOSING THE MATERIAL FACT S RELEVANT TO THE COMPUTATION OF CAPITAL GAIN IS NOT DISPUTED BY THE REVENUE. IT IS SETTLED POSITION OF LAW THAT A PENALTY CANNOT BE IMPOSED WHERE THE ASSESSEE HAS A BONAFIDE EXPLANATION. NOW, THE QUESTION IS WHETHER THE ASSESSEE IN PRESENT CAS E HAS BONAFIDE EXPLANATION. THE CONTENTION OF THE ASSESSEE IS THAT DUE TO HUMAN ERR OR, A WRONG KEY OF COMPUTER WAS PRESSED CONSEQUENTLY, IN PLACE SHORT TERM GAIN, LONG TERM CAPITAL LOSS WAS COMPUTED. HOWEVER, WHEN POINTED OUT BY THE AO THIS MISTAKE WAS DETECTED. THERE IS NO DISPUTE IF IT IS A HUMAN ERROR THE EXPLANATIO N CAN BE TERMED AS BONAFIDE, NO PENALTY CAN BE ATTRACTED. HOWEVER, IN PRESENT CASE NO MATERIAL IS PLACED ON RECORD TO INFER CONCLUSIVELY THAT IT WAS A HUMAN ERROR. T HE INFERENCE THAT IT WAS HUMAN ERROR OR NOT WOULD DEPEND UPON CIRCUMSTANCES OF EAC H CASE. THE HONBLE SUPREME 5 ITA NO. 553/JP/2016. M/S TULIP GLOBAL PVT. LTD., JAIPUR. COURT UNDER THE SIMILAR FACTS IN THE CASE OF N.G. T ECHNOLOGIES (IN LIQUIDATION) VS. CIT (SUPRA) HAS UPHELD THE LEVY OF PENALTY. WE THE REFORE, RESPECTFULLY FOLLOWING THE SAME SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE PENALTY ORDER. THUS, APPEAL OF THE REVENUE IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 553/JP/2016 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 27 TH DAY OF JULY 2017. SD/- SD/- HKKXPUN ( DQY HKKJR ) ( BHAGCHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27/07/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DY. CIT, CIRCLE-3, JAIPUR. 2. THE RESPONDENT- M/S TULIP GLOBAL PVT. LTD. 305, IIIRD, JAIPUR TOWER , JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 553/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 553/JP/2016. M/S TULIP GLOBAL PVT. LTD., JAIPUR.