Shri Kamla Bhatt, Dehradun V. ITO, Dehradun

ITA 5554/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0809 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 23-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH VERMA
• Keywords: Bonafide belief; Bonafide mistake
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C , NEW DELHI BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 5554/DEL/2015 AY: 2011 - 12 SMT. KAMLA BHATT T - 1, SHIVALIK LUXURY APARTMENTS 1, CURZON ROAD DEHRADUN PAN: ALWPB0488Q VS . ITO, WARD 2(1) DEHRADUN (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ROHIT TIWARI, ADV. RESPONDENT BY : SH. SUBHASH VERMA, SR.D.R. DATE OF HEARING : 10.09.2018 DATE OF PRONOUNCEMENT : 14.09.2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT PENALTY APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 16/07/15 PASSED BY LD. CIT (A), DE H RADUN FOR ASSESSMENT YEAR 2011 - 12 ON FOLLOWING GROUNDS OF APPEAL: 1 . THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED WRONGLY IN SUSTAINING THE PENALTY ORDER WHICH IS UNJUSTIFIED. 2 . THAT IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE IMPOSITION OF PENALTY IS UNCALLED FOR AND UNWARRANTED AS THE APPELLANT HAS ACTED UNDER BONAFIDE BELIEF OF THE COUNSEL. 3 . THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT HAS FILED HER RETURN OF INCOME VOLUNTARILY WITHOUT RECEIVING REASONS RECORDED FOR INITIATING THE REOPENING OF THE ASSE SSMENT. THE IMPOSITION OF PENAL TY IS ERRONEOUS. ITA 5554/DEL/2015 A.Y. 2011 - 12 MRS KAMLA BHATT VS. ITO 2 4 . THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT HAS NOT ACTED DISHONESTLY OR WITH ANY MALAFIDE INTENTION TO CONCEAL HER INCOME OR FURN ISH INACCURATE PARTICULARS OF INCOME. THE IMPOSITION OF PENALTY IS UNFAIR. 5 . THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS NOT UNDERGONE THE COMPLETE REPLY WHILE CONFIRMING THE PENALTY BUT HAS QUOTED A DISTINGUISHABLE CASE WHILE CONFIRMING THE ORD ER, THE SAME IS BAD AT LAW. 6 . THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, THE AO AND THE LEARNED OT (A) HAS NOT GIVEN A CORRECT FINDING WHETHER THE ASSESSEE HAD CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS FOR WHICH HE IS BEING PENALIZED. 7 . THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, THE ITO HAS RECORDED HIS SATISFACTION FOR CONCEALMENT OF INCOME WHEREAS HE HAS IMPOSED THE PENALTY ON DIFFERENT CHARGE I.E. FURNISHING INACCURATE PARTICULARS OF HER INCOME AND TO SAVE HIS SKIN, IN CONFUSING MIND HE HAS ADDED AND HAS CONCEALED HER INCOME IN THE PENALTY ORDER. THE SAME IS BAD AT LAW AND ILLEGAL. 8 . THAT THE IMPOSITION OF THE PENALTY OF RS. 26,00,000/ - AS SUSTAINED BY THE ID. CIT(A) MAY PLEASE BE DELETED. 9 . THAT IN FACT AND CIRCUMSTANCE OF THE CASE, APPEL LANT BE PERMITTED TO ADD OR DELETE ANY GROUNDS OF APPEAL. 2. B RIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED ITS ORIGINAL RETURN DECLARING INCOME OF RS. 2,22,513/ - BEING INTEREST EARNED ON FIXED DEPOSITS WITH BANK. SUBSEQUENTLY A SSESSING O FFICER CAME IN POSSESSION OF INFORMATION FROM R EGISTRAR OF P ROPERTIES, DE H RA DUN THAT ASSESSEE HAD SOLD A PROPERTY FOR RS.1.55 CRORES DURING THE YEAR UNDER CONSIDERATION. LD.AO OBSERVED THAT ASSESSEE HAS NOT DECLARED CAPITAL GAINS ON SUCH SALE IN ORIGINAL RETURN OF INCOME. LD.AO ACCORDINGLY ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT,1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') ON 18/02/14. IN COMPLIANCE TO THE NOTICE ISSUED, ASSESSEE SUBMITTED RETURN OF INCOME ON 27/03/14 DECLARING INCOME OF RS.1,26,68,090/ - . LD.A.O. THEREAFTER ISSUED NOTICE UNDER SECTION ITA 5554/DEL/2015 A.Y. 2011 - 12 MRS KAMLA BHATT VS. ITO 3 143(2) AND 142 (1) OF THE ACT, IN RESPONSE TO WHICH REPRESENTATIVE OF ASSESSEE APPEARED BEFORE LD.AO AND FURNISHED WRITTEN SUBMISSIONS. BASED UPON SUCH SUBMISSIONS MADE BY ASSESSEE, LD.A.O. COMPLETED ASSESSMENT AT TOTAL INCOME OF RS.1,26,68,090 / - . LD.AO ALSO INITIATE D PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME , ON THE GROUND THAT , ASSESSEE HAD NOT DECLARED LONG TERM CAPITAL GAIN INITIALLY BUT DISCLOSED THE SAME AFTER RECE IPT OF NOTICE UNDER SECTION 148 OF THE ACT. 3. DURING PENALTY PROCEEDINGS, ASSESSEE SUBMIT TED VIDE REPLY DATED 0 9/05/2014, THAT IT WAS UPON ADVICE RECEIVED BY HER FROM HER C OUNSEL , BASED UPON WHICH SHE DEPOSITED ENTIRE SALE PROCEEDS IN BANK AS FIXED DEPOSITS. STATE B ANK OF INDIA, DE H RADUN BRANCH ACCORDINGLY HAD ISSUED FIXED DEPOSIT RECEIPTS OF RS.1,50,00,000/ - ON 17/01/11. IT HAS BEEN SUBMITTED BEFORE LD. AO DURING PENALTY PROCEEDINGS IN REPLY ITSELF THAT UPON RECEIPT OF NOTICE UNDER SECTION 148 OF THE ACT ASSESSEE CONTACTED HER ADVISOR PROFESSIONAL , WHO THEN SUGGESTED H ER TO PAY THE LONG TE RM CAPITAL GAIN TAX BECAUSE SHE HAD NOT DEPOSITED THE SAID AMOUNT WITH THE BANK UNDER SPECIAL SCHEME WHICH WAS NOTIFIED BY CENTRAL G OVERNMENT. ASSESSEE THEREAFTER PAID THE TAXES. 3.1 . LD. AO HOWEVER REJECTED ASSESSEE S SUBMISSIONS AND LEVIED PENALTY FOR CONCEALMENT OF INCOME. 4. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) WHO UPHELD PENALTY LEVIED BY LD.A.O. 5. AGGRIEVED BY ORDER OF LD.CIT(A) ASSESSEE IS IN APPEAL BEFORE US NOW. 6. LD. C OUNSEL SUBMITTED THAT ASSESSEE NEVER INTENDED TO CONCEAL ANY PARTICULARS O F INCOME AND IT WAS A BONAFIDE MISTAKE ITA 5554/DEL/2015 A.Y. 2011 - 12 MRS KAMLA BHATT VS. ITO 4 ON BEHALF OF ASSESSEE DUE TO MIS - GUIDANCE BY HER ADVISER PROFESSIONAL . HE SUBMITTED THAT , UPON REALISING THE MISTAKE ASSESSEE WAS IMMEDIATELY ASKED TO RECTIF Y THE SAME , BY PAYING TAXES ON SALE PROCEEDS. IT HAS BEEN SUBMITTED THAT A DMITTEDLY TAX WAS PAID SUBSEQUENT TO RECEIPT OF NOTICE UNDER SECTION 147 OF THE ACT , HOWEVER , HE SUBMITTED THAT IT DOES NOT AMOUNT TO CONCEALMENT UNDER SECTION 271(1)(C) OF THE A CT. LD. C OU NSEL SUBMITTED THAT MERELY BECAUSE TAXES AND INTEREST THEREON WERE PAID SUBSEQUENT TO RECEIPT OF NOTICE UNDER SECTION 147 OF THE ACT , IT CANNOT BE INFERRED THAT, THERE WAS CONCEALMENT ON BEHALF OF ASSESSEE , A S EXPLANATION OFFERED BY ASSESSEE WAS BONA FI DE. 7. ON THE CONTRARY LD.SR.DR SUBMITTED THAT HAD NOTICE UNDER SECTION 147 OF THE ACT NOT BEEN ISSUED TO ASSESSEE , TAXES WOULD NOT HAVE BEEN PAID ON SALE PROCEEDS. IT DEFINITELY AMOUNTS TO CONCEALMENT OF INCOME AS RETURN OF INCOME ORIGINALLY FILED BY ASSESSEE DID NOT REVEAL CAPITAL GAINS EARNED BY ASSESSEE UPON SALE OF PROPERTY. H E SUPPORTED THE ORDER PASSED BY AUTHORITIES BELOW IN LEVYING PENALTY. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US . 9. ADMITTEDLY ASSESSEE HAS PAID TAX ES ON SALE PROCEEDS UPON RECEIPT OF NOTICE UNDER SECTION 147 OF THE A CT. HOWEVER , UPON PERUSAL OF REPLY DATED 9/05/2014 FILED BY ASSESSEE BEFORE LD. AO, IT IS DISCERNIBLE THAT THERE WAS GENUINE REASON FOR NON - DEPOSITING OF SALE PROCEEDS IN THE MANNER PRESCRIBED UNDER THE A CT. ASSESSEE HAD ACTED BONAFIDELY UPON ADVICE RECEIVED FROM H ER ADVISER PROFESSIONAL AND SALE PROCEEDS WERE DEPOSITED IN STATE BANK OF INDIA IN FIXED DEPOSITS. THE VERY FACT THAT ASSESSEE ITA 5554/DEL/2015 A.Y. 2011 - 12 MRS KAMLA BHATT VS. ITO 5 IMMEDIATELY PAID TAX UPON RECEIPT OF NOTICE IN THE RETURN FILED IN LIEU OF NOTICE UNDER SECTION 147 OF THE ACT , CANNOT BE CON STRUED AS MALAFIDE ACT. THE EXPLANATION OFFERED BY ASSESSEE V IDE HER REPLY DATED 09/05/14 HAS NOT FOUND TO BE FALSE BY AUTHORITIES BELOW. IMPOSITION OF PENALTY EVEN IF TAX LIABILITY IS ADMITTED, IS NOT AUTOMATIC. WE ARE , THEREFORE , OF CONSIDERED OPINION THAT THERE WAS NO WILFUL CONCEALMENT ON BEHALF OF ASSESSEE WHICH IS DISCERNIBLE FROM THE SUBMISSIONS ADVANCED BY ASSESSEE IN HER REPLY DATED 9/05/2014. 9.1. ACCORDINGLY , WE DELETE THE PENALTY LEVIED BY LD.AO AND ALLOW THE GROUNDS RAISED BY ASSESSEE. 10. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE O PEN C OURT ON 1 4 / 0 9 / 2 0 1 8 . S D / - S D / - (N.K.SAINI) (BEENA A PILLAI) ACCOUNTANTMEMBER JUDICIAL MEMBER DT. 1 4 . 0 9 . 2018 GMV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 5554/DEL/2015 A.Y. 2011 - 12 MRS KAMLA BHATT VS. ITO 6 DETAILS DATE DRAFT DICTATED ON DRAGON 1 1 /09/18 DRAFT PLACED BEFORE AUTHOR 12/09/18 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER APPROVED DRAFT COMES TO THE SR. PS/PS KEPT FOR PRONOUNCEMENT O R D E R U P L O A D E D O N : FILE SENT TO BENCH CLERK DATE ON WHICH THE FILE GOES TO HEAD CLERK DATE ON WHICH FILE GOES TO A.R. DATE OF DISPATCH OF ORDER