RADHA U LUTHRIA, MUMBAI V. ACIT CIR 21(2), MUMBAI

ITA 5551/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0973 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Keywords: Capital asset; Revised return; Bonafide mistake; Set aside
• Section: 271(1)(c); 54EC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.K. PANDA. ACCOUNTANT MEMBER I.T.A. NO. 5551/MUM/2009 ASSESSMENT YEAR : 2005-06 SMT RADHA U. LUTHRIA LUTHRIA HOUSE, ANANT RAO DEOL ROAD, JUHU, ANDHERI WEST, MUMBAI-400 049 PAN: AAPPA0467L VS. ASST. CIT. CIRCLE 21(2) MUMBAI APPELLANT RESPONDENT ASSESSEE BY : SHRI RAKESH JOSHI RESPONDENT BY : SHRI JITENDRA YADAV ORDER DATE OF HEARING: 20.07.2010 DATE OF ORDER: 29.07.2010 PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 12 TH AUGUST, 2009 OF THE CIT(A)-XXI, MUMBAI RELATING TO ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IN HER ONLY EFFECTIVE GROUND HAS CHALL ENGED THE ORDER OF THE CIT(A) IN SUSTAINING THE PENALTY O F RS.4,06,000 LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF T HE INCOME-TAX ACT, 1961 (THE ACT). 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE EARNED LONG TERM CAPITAL GAIN OF RS.18,20,05,761 ON SALE O F SHARES OF SHEENA INVESTMENT PVT. LTD. AGAINST THE SAID CAPIT AL GAIN THE ASSESSEE CLAIMED DEDUCTION OF RS.17,32,06,157 U/S. 54EC OF THE ACT. HOWEVER, FROM THE VARIOUS DETAILS FURNISH ED DURING THE I.T.A. NO. 5551/MUM/2009 SMT. RADHA U. LUTHRIA ==================== 2 COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER NOTED THAT THE TOTAL INVESTMENT MADE BY THE ASSESSEE IS O NLY RS.17,20,00,000 AS AGAINST RS.17,32,06,157 CLAIMED BY THE ASSESSEE. THEREFORE, THERE WAS EXCESS CLAIM OF DED UCTION U/S.54 EC OF THE ACT. THE ASSESSING OFFICER THEREA FTER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. 4. DURING THE PENALTY PROCEEDINGS IT WAS SUBMITTED THA T THE ASSESSEE HAS MADE SHORT INVESTMENT U/S. 54EC OF THE ACT UNDER AN IMPRESSION THAT AS SOON AS THE FULL CONSIDERATIO N IS RECEIVED ON ACCOUNT OF SALE OF LONG TERM CAPITAL ASSETS THE ASSESSEE WILL DEPOSIT THE SAME IN THE SPECIFIED SCHEME. HOWEVER, SINCE THE ASSESSEE DID NOT RECEIVE A PART OF THE AMOUNT IN TI ME, SHE COULD NOT MAKE THE INVESTMENT IN THE SAID SCHEME. SHE HA S FILED THE RETURN OF INCOME ON 31 ST AUGUST, 2005 AND THE SPECIFIED DATE FOR INVESTMENT IN THE SCHEME WAS TO EXPIRE ON 30 TH SEPTEMBER, 2005. DUE TO THE ABOVE REASONS THE ASSESSEE WAS UN ABLE TO INVEST IN THE SPECIFIC SCHEME. IT WAS FURTHER SUBM ITTED THAT THE ASSESSEE HAD ALREADY ACCEPTED THE ADDITION AND PAID THE TAXES THEREON. HOWEVER, THE ASSESSING OFFICER WAS NOT SA TISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND LEVIED TH E PENALTY OF RS.4,06,000 U/S. 271(1)(C) OF THE ACT. 5. IN APPEAL, THE LEARNED CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. WHILE DOING SO HE HELD THAT THE ASSESSEE DID NOT FILE ANY REVISED RETURN AFTER THE EXPIRY OF THE SPECIFIED DATE FOR INVESTMENT U/S. 54EC OF THE ACT. HAD THE ASSES SEES CASE NOT BEEN SELECTED FOR SCRUTINY THE ASSESSEE WOULD N OT HAVE CHOSEN TO REVISE THE INCOME ON HER OWN. HE FURTHER NOTED THAT IF THE ASSESSEES ARGUMENT THAT THE CLAIM MADE WAS SURRENDERED DURING THE ASSESSMENT PROCEEDINGS AND, THEREFORE, S HOULD NOT ENTAIL PENALTY, IS TAKEN TO ITS LOGICAL CONCLUSION, EVERY TAX PAYER I.T.A. NO. 5551/MUM/2009 SMT. RADHA U. LUTHRIA ==================== 3 MAY TRY TO FURNISH INCORRECT PARTICULARS OF DEDUCTI ONS OR OTHER CLAIMS, AND IF AND WHEN THE ASSESSING OFFICER CONFR ONTS HIM, MAY ACCEPT THE SAME TO BE A BONAFIDE MISTAKE. HE A LSO OBSERVED THAT TO ERR IS HUMAN AND THAT IS PRECISELY THE REASON THE LAW PROVIDES FOR FILING OF A REVISED RETURN. H E ACCORDINGLY UPHELD THE ORDER OF THE ASSESSING OFFICER LEVYING P ENALTY U/S. 271(1)(C) OF THE ACT. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE ASSESSING O FFICER AND THE CIT(A). THERE IS NO DISPUTE TO THE FACT THAT A S AGAINST THE CLAIM OF RS.17,32,06,157 U/S. 54EC OF THE ACT THE A SSESSEE HAS MADE INVESTMENT TO THE TUNE OF ONLY RS.17.20 CRORES . SINCE THE ASSESSEE DID NOT FILE THE REVISED RETURN OFFERING T HE CAPITAL GAIN OF RS.12,06,157 FOR WHICH NO INVESTMENT WAS MADE IN THE SPECIFIED SCHEME, THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.4,06,000 BEING 100% OF THE TAX SOUGHT TO BE EVAD ED. WHILE CALCULATING THE TAX, HE CALCULATED THE TAX AT 30% A S AGAINST 20% TAX ON LONG TERM CAPITAL GAIN. IT IS THE SUBMISSIO N OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT SINCE THE ASS ESSEE FILED RETURN OF INCOME ON 31 ST AUGUST, 2005 AND THE DUE DATE FOR INVESTMENT IN THE SPECIFIED SCHEME U/S. 54EC WAS 30 TH SEPTEMBER, 2005, THE ASSESSEE WAS UNDER THE IMPRESS ION THAT SHE WOULD MAKE THE BALANCE INVESTMENT BEFORE THE SP ECIFIED DATE ONCE THE FULL CONSIDERATION WAS RECEIVED. HOW EVER, SINCE THE FULL CONSIDERATION WAS NOT RECEIVED THE ASSESSE E COULD NOT DEPOSIT THE BALANCE AMOUNT. FURTHER DUE TO OVERSIG HT THE ASSESSEE DID NOT FILE THE REVISED RETURN. THEREFOR E, THIS BEING A BONAFIDE MISTAKE, NO PENALTY SHOULD BE LEVIED. HOW EVER, IT IS THE SUBMISSION OF THE LEARNED DR THAT SINCE THE ASS ESSEE HAS NOT DEPOSITED THE FULL AMOUNT BEFORE THE SPECIFIED DATE AND I.T.A. NO. 5551/MUM/2009 SMT. RADHA U. LUTHRIA ==================== 4 SINCE NO REVISED RETURN HAS BEEN FILED AND SINCE TH E TAX WAS PAID ONLY AFTER THE ASSESSING OFFICER DETECTED THE SHORTFALL OF THE INVESTMENT, THEREFORE, PENALTY LEVIED BY THE ASSESS ING OFFICER HAS RIGHTLY BEEN UPHELD BY THE CIT(A). 7. WE FIND IN THE INSTANT CASE THE ASSESSING OFFICER W HO REGULARLY DOES ASSESSMENT WORK HAS FOR THE PURPOSE OF DETERMINING THE PENALTY CALCULATED THE TAX @ 30% ON LONG TERM CAPITAL GAIN ON SHORT INVESTMENT AS AGAINST 20% APP LICABLE FOR CALCULATING THE TAX ON LONG TERM CAPITAL GAIN. SIM ILARLY, THE CIT(A) WHILE UPHOLDING THE ORDER OF THE ASSESSING O FFICER LEVYING THE PENALTY HAS HIMSELF ADMITTED IN HIS ORDER THAT TO ERR IS HUMAN. THEREFORE, WHEN THE ASSESSING OFFICER CAN MAKE A WRONG CALCULATION THOUGH BY INADVERTENT ERROR AND T HE CIT(A) ADMITS THAT TO ERR IS HUMAN, THEREFORE, IT IS QUI TE POSSIBLE THAT THE ASSESSEE ALSO INADVERTENTLY MIGHT NOT HAVE FILE D THE REVISED RETURN AFTER THE EXPIRY OF THE SPECIFIED DATE FOR T HE INVESTMENT. FURTHER THE ASSESSEE IN THE INSTANT CASE DURING THE ASSESSMENT STAGE ITSELF HAS ADMITTED THE LAPSE AND PAID THE TA X. WE, THEREFORE, HOLD THAT THIS IS NOT A FIT CASE FOR LEV Y OF PENALTY U/S. 271(1)(C) OF THE ACT. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL T HE PENALTY LEVIED BY HIM. THE GROUND RAISED BY THE ASSESSEE I S ACCORDINGLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2010 SD/- (D. MANMOHAN) VICE PRESIDENT SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATE 29 TH JULY, 2010 I.T.A. NO. 5551/MUM/2009 SMT. RADHA U. LUTHRIA ==================== 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-XXI, MUMBAI 4. THE CIT, CITY-21, MUMBAI 5. THE DR D BENCH. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES, MUMBAI TPRAO