Sh. Satbir Nijjar, Amritsar. V. The Dy. Commissioner of Income-tax, Amritsar.

ITA 579/ASR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76953 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SHAM SODHI
• Keywords: Capital asset; Revision of order; Rectification of order; Additional evidence; Reasonable cause; Non compliance; Revised return; Bonafide mistake
• Section: 2(14); 142(1); 139(5); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.579(ASR)/2011 ASSESSMENT YEAR:2008-09 PAN :AATPN2220J SH. SATBIR NIJJAR, VS. DY.COMMR. OF INCOME TAX, C/O M/S. NIJJAR AGRO FOODS (P) LTD. CIRCLE V, AMRI TSAR. JANDIALA GURU, AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A. NO.187(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN :AATPN2220J SH. SATBIR NIJJAR, VS. ASSTT..COMMR. OF INCOME TA X, C/O M/S. NIJJAR AGRO FOODS (P) LTD. CIRCLE V, AMRI TSAR. JANDIALA GURU, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SHAM SODHI, ADVOCATE RESPONDENT BY:SH. MAHAVIR SINGH, DR DATE OF HEARING: 20/05/2014 DATE OF PRONOUNCEMENT:23/05/2014 ORDER PER BENCH ; THESE TWO APPEALS OF THE ASSESSEE ARISE FROM TWO DIFFERENT ORDERS OF THE CIT(A), AMRITSAR, DATED 07.10.2011 & `15.01.20 14 FOR THE ASSESSMENT ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 2 YEAR 2008-09 . SINCE THE FACTS IN BOTH THE APPEALS ARE INTER-CONNECTED, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL IN ITA NO.579(ASR)/2011: 1. THAT THE WORTHY CIT(A), AMRITSAR HAS GROSSLY ER RED IN CONFIRMING THE PENALTY LEVIED BY DCIT, CIRCLE-5, AM RITSAR U/S 221(1) OF INCOME TAX ACT AT RS.50,00,000/- FOR NON PAYMENT OF TAX DUE U/S 140A OF THE INCOME TAX ACT,1961. 2. THAT BOTH WORTHY CIT(A) AMRITSAR & DCIT, CIR.5, AMRITSAR HAVE FAILED TO APPRECIATE THE EXTREME FINANCIAL STR INGENCY FACED BY THE ASSESSEE AND BY NIJJER AGRO FOODS LTD. 3. THAT BOTH WORTHY CIT(A) AMRITSAR & DCIT, CIR.5, AMRITSAR HAVE FAILED TO APPRECIATE THAT THE DELAY IN PAYMENT OF TAXES DUE U/S 140A WAS UNINTENTIONAL. 3. IN ITA NO.187(ASR)/2014, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER THE CIT(A) IS JUSTIFIED IN HIS ORDER TH AT THE A.O. WAS RIGHT IN REJECTING THE APPLICATION U/S 154 AS THE C ASE HAS BEEN PROCESSED U/S 143(1) WHEREAS ALL THE CITED CASE LAW S FOR RECTIFICATION WAS SOUGHT AGAINST PASSING OF REGULAR ASSESSMENT ORDER U/S 143(3). 2. WHETHER THE CIT(A) IS JUSTIFIED IN OBSERVING THA T RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DEBATABLE, MISTAKE APPARENT FROM RECORD MUST BE OBVIOUS AND PATENT MISTAKE AND NOT S OMETHING WHICH CAN ESTABLISHED BY A LONG DRAWN PROCESS OF RE ASONS ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIO NS AND DOCUMENTS OUTSIDE THE RECORDS AND THE LAW IS IMPERM ISSIBLE WHEN APPLYING THE PROVISIONS OF SECTION 154. ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 3 3. WHETHER THE CIT(A) IS JUSTIFIED IN DISMISSING TH E APPEAL ON THE GROUND THAT THE MISTAKE SOUGHT TO BE AMENDED IS NOT A PRIMA FACIE MISTAKE AS IS EVIDENT FROM FACTS AND CIRCUMST ANCES OF THE CASE. 4. WHETHER THE CIT(A) IS JUSTIFIED IN DISMISSING TH E APPEAL ON THE GROUND THAT THE ASSESSEE IS SUBMITTING THE CORROBO RATIVE EVIDENCE AND OBSERVING THAT THE RECTIFICATION APPLI CATION REQUIRES INVESTIGATION AND VERIFICATION. 5. WHETHER THE CIT(A) WAS CORRECT IN HIS OBSERVATI ONS THAT THE CASE REQUIRES DEEP INVESTIGATION AND VERIFICATION FOR RECTIFICATION OF MISTAKE WHICH IS NOT PERMISSIBLE U NDER LAW AND NOT REMANDING THE CASE TO THE INCOME TAX AUTHORITIE S FOR PROPER VERIFICATION IN ORDER TO BRING THE TRUE FACTS OF TH E CASE. 6. WHETHER THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE AGRICULTURAL LAND SOLD WAS RIGHTLY TREATED AS CAPIT AL ASSET BY THE ASSESSEE BECAUSE IT WAS FACTUALLY BEYOND THE LI MITS OF MUNICIPAL CORPORATION, AMRITSAR AND WHICH WAS NOT T HE CAPITAL ASSET AS PER NOTIFICATION DATED 6 TH JANUARY, 1994 ISSUED BY MINISTRY OF FINANCE AND AS PER RECORDS MAINTAINED B Y THE REVENUE DEPARTMENT AND MUNICIPAL CORPORATION OF AMR ITSAR AND IGNORING THE FACTUAL POSITION OF THE CAPITAL AS SET. 7. WHETHER THE CIT(A) FAILED TO APPRECIATE THE FACT THAT AT THE INITIAL STAGE OF THE CASE AND BEFORE IT WOULD BECOM E A CASE OF FORMATION OF OPINION, IF THERE IS A MISTAKE APPAREN T ON THE RECORDS SO IT SHOULD HAVE BEEN AT THE INITIAL STAGE BE RECTIFIED U/S 154. 8. WHETHER THE CIT(A) WAS CORRECT IN NOT DECIDING T HE APPEAL IN FAVOUR OF THE ASSESSEE WHEN ACCEPTING THAT THERE WI LL BE TO OPINIONS IF THE MATTER IS INVESTIGATED. 9. WHETHER THE CIT(A) WAS RIGHT IN REJECTING THE FA CTUAL POSITION OF THE LAND BEING AGRICULTURAL AND IGNORING THE REC ORDS OF THE TEHSILDAR AMRITSAR-1, AMRITSAR, WHICH WAS FILED ALO NG WITH THE APPLICATION FOR RECTIFICATION AND WHICH BECOMES REC ORD ON THE FILE OF THE ASSESSEE AND WHICH INDICATED THAT THE L AND WAS ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 4 CLASSIFIED AS AGRICULTURAL LAND AND ALSO IS BEYOND 6 K.MS. AWAY FROM THE MUNICIPAL CORPORATION LIMITS, AMRITSA R. 4. IN ITA NO.579(ASR)/2011, THE ASSESSEE HAS ALSO T AKEN ADDITIONAL GROUNDS AND FILED AN APPLICATION, WHICH IS REPRODUC ED FOR THE SAKE OF CONVENIENCE AS UNDER: APPEAL NO.57(ASR)/2011 IN CASE OF SH. SATBIR NIJJE R C/O M/S. NIJJER AGRO FOODS (P) LTD. JANDIALA GURU, AMRITSAR FOR TH E A.Y. 2008-09 U/S 221(1)- PAN AATPN2220J RESPECTED SIR, SUB: APPLICATION FOR ADDING ADDITIONAL GROUNDS IN APPEAL. RESPECTFULLY SUBMITTED AS UNDER: 1) THAT THE ABOVE NOTED APPEAL IS FIXED FOR HEARING AT AMRITSAR ON 19/092013. 2) THAT IN THE APPEAL SOME ADDITIONAL GROUNDS ARE TO B E TAKEN UNDER RULE 11 OF THE ITAT ALONG WITH THE GROU NDS ALREADY FILED. 3) THAT THE FOLLOWING ADDITIONAL GROUNDS MAY PLEASE BE ADMITTED TO BE ADJUDICATED UPON THE MATTER OF APPEA L. I) THAT THE LONG TERM CAPITAL GAIN ON THE SALE OF AGRICULTURE LAND HAS BEEN SHOWN IN THE RETURN AS TA XABLE INCOME BY MISTAKE ON THE LEGAL ADVICE OF THE LD. A/ R WHICH WAS NOT THE CENTRAL ASSET WITHIN THE MEANING OF S.2(14)(III) READ WITH THE NOTIFICATION DATED 6 TH JANUARY, 1994. II) THAT THE LD. A/R OF THE ASSESSEE COMPUTED THE INCOME TAX PAYABLE BY THE ASSESSEE ON THE RETURNED INCOME ALSO INCLUDED THE TAX ON LONG TERM CAPITAL G AIN WHICH WAS NOT LEGALLY LEVIABLE AS THE AGRICULTURAL LAND IS NOT THE CAPITAL ASSET AND NO TAX IS LEGALLY LEVIABL E BY MISTAKE. III) THAT THE RETURN WAS PREPARED IN THE OFFICE OF THE LEARNED A/R OF THE ASSESSEE AND INADVERTENTLY THE I NCOME TAX AS SELF ASSESSMENT WAS SHOWN AS PAID IN THE COL UMN WHICH WAS NOT ACTUALLY PAID BY THE ASSESSEE AS THE OTHER ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 5 COLUMNS WHICH WAS NOT ACTUALLY PAID BY THE ASSESSEE AS THE OTHER COLUMNS OF THE SCHEDULE ARE LEFT BLANK BE FORE FILING OF THE RETURN IS AN UNINTENTIONAL MISTAKE. IV) THAT BOTH THE WORTHY CIT(A) AND DCIT CIR.5, AMRITSAR FAILED TO APPRECIATE THAT THE VERIFICATION BY THE ASSESSEE ON THE RETURN WAS NOT FALSE AS IT IS IN RE SPECT OF INCOME CHARGEABLE TO INCOME TAX AND NOT FOR THE PAY MENT OF TAX. V. THAT THE PENALTY U/S 221(1) IS NOT LEGALLY LEVI ABLE FOR NON PAYMENT OF TAX U/S 140(A) ON THE INCOME WHI CH HAS BEEN SHOWN WRONGLY IN THE RETURN BY MISTAKE AND ON WHICH NO TAX IS LEGALLY PAYABLE. VI. THAT THE ASSESSEE SHOULD NOT BE SUFFERED OR PENALIZED FOR THE WRONG ADVICE AND MISTAKE COMMITTE D BY THE LD. A/R AS THE MISTAKE WAS UNINTENTIONAL. 4. THAT ALL THE ABOVE ADDITIONAL GROUNDS ARE LEGAL. 5. THAT THE ABOVE ADDITIONAL GROUNDS HAVE A BEARING IN THE DISPOSAL OF THE APPEAL. IT IS, THEREFORE, PRAYED THAT THE ABOVE MENTIONED G ROUNDS OF APPEAL MAY PLEASE BE ADMITTED IN THE INTEREST OF JUSTICE. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 26.03.2009 DECLARING INCOME OF RS.2,24,44,720/- AS AGAINST THE DUE DATE OF 31.7.08 AND IT WAS FOUND THAT AS PER RETURNS CO L. NO.10 PAGE 2, AS AGAINST THE DUE SELF ASSTT. OF RS.63,71,260/- THE SAME IS S TATED TO HAVE BEEN PAID, SHOWING BALANCE PAYABLE AT NIL. CONSEQUENT UPON PRO CESSING U/S 143(1) MADE ON 20.10.09, A DEMAND OF RS.67,31,828/- WAS C REATED. ON FINDING FILING OF WRONG VERIFICATION IN THE RETURN AND FURN ISHING INCORRECT PARTICULARS THEREIN, AN INTIMATION TO THIS EFFECT WAS GIVEN ON 21.10.09 REQUIRING THE ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 6 ASSESSEE FOR PAYMENT OF DEMAND CREATED AT RS.67,31, 828/- BY 21.11.09. IN SPITE OF RECEIPT OF INTIMATION U/S 142(1) DT. 20.10 .09, THE ASSESSEE DID NOT CARE TO DEPOSIT THE OUTSTANDING TAX DEMAND ON THE PLEA THAT UNTIL & UNLESS THE LOANS GIVEN BY HIM TO HIS FAMILY CONCERN, M/S. NIJJER AGRO FOODS LTD. IS RECOVERED BACK, NO TAXES AND INTEREST CAN BE PAI D BY HIM. AS AGAINST THE TAX LIABILITY OF RS.63,71,260/- AS PER HIS OWN RETU RNED VERSION DECLARING INCOME OF RS.2,24,44,720/- INCLUDING LTC GAIN, THE ASSESSEE FAILED TO DEPOSIT IT FIRST ON 31.12.07 ON THE RECEIPT OF PART SALE PROCEEDS OF RS.75,00,000/- BY WAY OF CHEQUE DT. 31.12.07 AND TH E BALANCE AMOUNT OF RS.1,75,00,000/- WAS RECEIVED ON 24.03.2008 IN LIEU OF SALE OF HIS AGRICULTURAL LAND HOLDING MEASURING 24 KANALS 7 MA RLAS OF LAND TO GLOBAL SPIRITS PVT. LTD.; @-18/112, SECTOR 7, ROHINI, DELH I 110085 FOR A TOTAL SALE CONSIDERATION OF RS.2,50,00,000/-. FURTHER, IT IS T HE AOS CASE THAT THE ASSESSEE FAILED TO DISCHARGE THE TAX LIABILITY ON T HE RECEIPT OF FIRST INSTALMENT OF SALE CONSIDERATION OF RS.75,00,000/- ON 31.12.07 AND AGAIN ON FINAL PAYMENT OF REMAINING SALE CONSIDERATION OF RS.1,75, 00,000/- ON 25.3.2008 RATHER IT PREFERRED TO INVEST THE ENTIRE SALE CONSI DERATION AS UNSECURED TO HIS FAMILY CONCERNED, M/S. NIJJAR AGRO FOODS LTD. AND A S PER DETAILS FILED THE ASSESSEE HAS GOT TOTAL INVESTMENT OF RS.3.94 CRORES AS ON 31.3.08 WITH THE SAID SISTER CONCERN. FURTHERMORE, THE ASSESSEE HAS BEEN HOLDING SUFFICIENT ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 7 CASH IN HAND AT RS.15,24,457/- AS ON 31.3.08. MOREO VER, THE ASSESSEE HAS HIMSELF SHOWN NET AGRICULTURAL INCOME OF RS.11,46,4 65/- WHICH REMAINED AVAILABLE WITH HIM, BEING TOTALLY EXEMPT FROM INCOM E TAX. IN VIEW OF THE CONSTANT NON COMPLIANCE ON THE PART OF THE ASSESSEE , THE AO ISSUED SPECIFIC NOTICE U/S 221(1) ALONG WITH LETTER DT. 23.11.09. N EVERTHELESS, THE ABOVE NOTICE WAS GOT DULY SERVED ON 25.11.09 BUT IT REMAI NED UNCOMPLIED WITH, WITH THE EXCEPTION THAT THE ASSESSEES COUNSEL FILE WRITTEN REPLY ON 15.12.09 (LYING DULY INCORPORATED IN THE IMPUGNED PENALTY OR DER U/S 221(1) AT PAGES 3 & 4). AFTER CAREFULLY CONSIDERING THE ASSESSEES RE PLY, THE SAME DID NOT FIND FAVOUR WITH THE A.O. INSPITE OF THE FACT THE LD. C OUNSEL FOR THE ASSESSEE HAS FURNISHED ALONG WITH HIS REPLY, THE COPY OF FOLLOWI NG DOCUMENTS: - PERSONAL B/SHEET AS ON 31.3.08 FOR AY 2008-09 - COPY OF A/C WITH NIJJAR AGRO FOODS LTD. AS ON 31 .3.08 - ASSESSEES BANK STATEMENT WITH HDFC BANK - BALANCE SHEETS AS ON 31.3.06, 31.3.07 AND 31.3.0 8 - STATEMENT OF INCOME FOR THE A.YS 2004-05 TO 08-0 9 IT IS THE ASSESSEES SAND TAT AS SON AS A PART OF THE LOAN MADE TO ABOVE CONCERN IS RECEIVED BACK, THE TAX LIABILITY W OULD BE DISCHARGED IMMEDIATELY. AFTER TAKING OVER-ALL VIEW OF THE FACTS ON ALL ANGL ES, THE A.O. HELD THAT THE DEFAULT BEING WITHOUT ANY REASONABLE CAUSE, THE SAM E HAS BEEN ESTABLISHED AND PROCEEDED TO IMPOSE A PENALTY OF RS.50,00,000/- AS AGAINST THE SELF ASSTT. TAX OUTSTANDING AT RS.51,50,592/-. 6. THE LD. CIT(A) AFTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 8 CONFIRMED THE ACTION OF THE A.O. FOR LEVYING PENALT Y OF RS.50 LACS UNDER SECTION 221(1) OF THE ACT.. THE LD. CIT(A) HAS DIS CUSSED THE ISSUE IN DETAIL IN PARA 7 & 7.1 OF HIS ORDER. 7. THE LD. COUNSEL FOR THE ASSESEE AT THE OUTSET STARTED ARGUMENTS \WITH REGARD TO ADMISSION OF ADDITIONAL GROUND THAT THE LONG TERM CAPITAL GAINS ON THE SALE OF AGRICULTURAL LAND HAS BEEN SHO WN IN THE RETURN OF INCOME AS TAXABLE BY MISTAKE ON THE LEGAL ADVICE OF THE CO UNSEL. IN FACT, IT WAS NOT CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) ( III). THE TAX DUE WAS INCLUDED IN THE COMPUTATION OF INCOME, WHICH IN FAC T, WAS NOT INCLUDIBLE. THE RETURN WAS PREPARED BY THE COUNSEL OF THE ASSES SEE, WHO INADVERTENTLY INCLUDED THE TAX PAYABLE AND HAD SHOWN SELF ASSESSM ENT AS PAID. IN FACT, THE SAME AMOUNT WAS NOT PAID, AS THE OTHER COLUMNS OF T HE SCHEDULE WERE LEFT BLANK IN THE RETURN OF INCOME. ACCORDINGLY, THE AO AND THE LD. CIT(A) ARE NOT JUSTIFIED, WHO IN FACT, HAVE NOT APPRECIATED TH E FACTS OF THE CASE AND HAVE WRONGLY LEVIED THE PENALTY. THEREFORE, ON THIS AD DITIONAL GROUND ALONE AFTER ADMITTING, WHICH GOES INTO ROOT OF THE MATTER, THE SAME SHOULD BE ADMITTED AND THE APPEAL OF THE ASSESSEE IN ITA NO.579ASR)/20 11 SHOULD BE ALLOWED. 8. ON THE OTHER HAND, LD. JCIT(DR), MR. MAHAVIR SIN GH ARGUED THAT THE ONLY ISSUE BEFORE THE BENCH IS TO DECIDE THE PENALT Y CONFIRMED BY THE LD. ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 9 CIT(A) U/S 221(1) AMOUNTING TO RS.50 LACS FOR NON P AYMENT OF TAX DUE UNDER SECTION 221(1) OF THE ACT. THE SECOND ISSUE R AISED IS EXTREME FINANCIAL STRINGENCY BY THE ASSESSEE BY M/S. NIJJER AGRO FOOD S LTD. AND WHETHER THE PAYMENT OF TAXES IS INTENTIONAL OR UNINTENTIONAL AN D THE BENCH HAS TO DECIDE WHETHER THERE WAS DEFAULT OR NOT AND IF DEFAULT WAS THERE FOR GOOD AND SUFFICIENT REASON AND WHETHER PENALTY CAN BE LEVIED OR NOT. THE MERITS OF THE CASE CANNOT BE ARGUED BY THE LD. COUNSEL AND THE AD DITIONAL GROUND TAKEN ON MERITS BY THE LD. COUNSEL FOR THE ASSESSEE SHOULD B E DISMISSED. THE LD. DR FURTHER ARGUED THAT FILING OF THE RETURN OR WRONG FILING OF THE RETURN BY THE ASSESSEE CANNOT LEAD TO TAKING ADDITIONAL GROUND BE FORE THE ITAT BUT THE PROPER COURSE WOULD HAVE BEEN TO FILE THE REVISED RETURN OR TO GO IN PETITION U/S 264 OF THE ACT. IT IS SERIOUS LAPSE ON THE PART OF THE ASSESSEE, WHO HAD GIVEN FALSE DECLARATION IN RETURN OF INCOME BY SHOW ING SELF ASSESSMENT TAX HAVING BEEN PAID, HAD IN FACT, NOT BEEN PAID AMOUNT TO RS.67,31,828/-. FURNISHING OF THE FALSE VERIFICATION IN THE RETURN OF INCOME IS ALSO A SERIOUS LAPSE. NO EXPLANATION FOR FURNISHING FALSE VERIFICA TION, WRONG PARTICULARS OF RETURN WERE FURNISHED BEFORE THE LD. CIT(A) IN THE APPELLATE PROCEEDINGS. IT IS ONLY THE AO WHO DETECTED AND POINTED OUT TO TH E ASSESSEE. BUT NO EXPLANATION FOR SERIOUS LAPSE HAS BEEN SUBMITTED B EFORE THE LD. CIT(A) W.R.T. INSUFFICIENCY OF FUNDS. AS REGARDS THE INSUFFICIENC Y OF FUNDS, THE ASSESSEE ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 10 FAILED TO DISCHARGE THE TAX LIABILITY EVEN WHEN THE FUNDS WERE AVAILABLE WITH THE ASSESSEE AND ON THE RECEIPT OF FUNDS, INSTALMEN T OF SALES CONSIDERATION OF RS.75,00,000/- ON 31.12.2007 AND AGAIN ON FINAL PA YMENT OF REMAINING SALE CONSIDERATION OF RS,1,75,00,000/- ON 25.3.2008. RA THER, THE ASSESSEE HAS GIVEN BACK SEAT TO THE INCOME TAX LIABILITY AND PRE FERRED TO INVEST THE ENTIRE SALE CONSIDERATION OF AGRICULTURAL LAND TO HIS FAMI LY CONCERN, IN WHICH THE ASSESSEE IS STATED TO BE MANAGING DIRECTOR OF M/S. NIJJER AGRO FOODS LTD. THE ASSESSEE WAS HAVING SUFFICIENT CASH IN HAND AT RS.15,24,457/- AS ON 31.3.08 AND HAD SHOWN NET AGRICULTURAL INCOME OF RS .11,46,465/-. THE AO SPECIFICALLY ISSUED NOTICE UNDER SECTION 221(1) VID E LETTER DATED 23.11.09, WHICH IS AVAILABLE IN THE ORDER U/S 221(1) OF THE ACT, WHICH WAS DULY SERVED ON 25.11.09 BUT REMAINED UNCOMPLIED WITH. THE LD. C OUNSEL APPEARING ON BEHALF OF THE ASSESSEE, OF COURSE, SUBMITTED REPLY DATED 15.12.2009 WHICH CANNOT BE A GOOD AND SUFFICIENT CAUSE FOR NOT LEVYI NG THE PENALTY. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE AT THIS JUNCTURE WITH REGARD TO THE MISTAKE ON THE LEGAL ADVICE OF THE CO UNSEL OF THE ASSESSEE, WHO STATED TO HAVE INCLUDED WRONGLY THE CAPITAL GAINS, IN FACT, THIS IS NOT PROPER FORUM TO REVISE THE CLAIM BY TAKING THE SHELTER OF ADDITIONAL GROUND. IF THE RETURN HAD BEEN FILED WRONGLY AND ANY CLAIM HAD BEE N MADE WRONGLY AND THE ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 11 ASSESSEE AFTER FILING THE RETURN UNDER SECTION 139( 1) DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN, HE MAY FURNISH A RE VISED RETURN AT ANY TIME BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE RELEV ANT ASSESSMENT YEAR OR BEFORE COMPLETION OF ASSESSMENT, WHICHEVER IS EARLI ER U/S 139(5) OF THE ACT. ALTERNATIVELY, U/S 264 OF THE ACT, THE ASSESSEE CO ULD FILE A PETITION FOR REVISION WITHIN ONE YEAR FROM THE DATE ON WHICH THE ORDER IN QUESTION WAS COMMUNICATED TO HIM OR DATE ON WHICH HE OTHERWISE C AME TO KNOW OF IT, WHICHEVER IS EARLIER. BUT THE ASSESSEE JUST CHOSE N OT TO ADOPT ANY OF THE COURSES FOR GETTING THE REVISION OF THE CLAIMS. THE REFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE CANNOT BE ADMITTED AN D THEREFORE, REJECTED. 9.1. AS REGARDS OTHER GROUNDS, THE ORDER PASSED U/S 143(1) BY THE A.O. CREATED A DEMAND OF RS.67,31,830/- AGAINST THE ASSE SSEE, AS THE ASSESSEE DID NOT DEPOSIT TAX UNDER SECTION 140A OF THE ACT. THE RETURN OF INCOME IN THE PRESENT CASE WAS FILED ON 26.03.2009 WHICH WAS A BE LATED RETURN. THE ASSESSEE HAD CLAIMED AS PER COLUMN NO.9 (C) REGAR DING TAX PAID I.E. SELF ASSESSMENT TAX OF RS.63,71,260/- HAS BEEN PAID AND TAX PAYABLE AS PER COLUMN NO.10 AT PAGE 2 OF THE RETURN OF INCOME HAS BEEN DECLARED AT NIL. THE CASE WAS PROCESSED U/S 143(1) OF THE ACT ON 20. 10.2009 CREATING A DEMAND OF RS.67,31,828/-, AS THE CLAIM OF THE ASSES SEE REGARDING PAYMENT OF SELF ASSESSMENT TAX OF RS.63,71,260/- WAS FOUND TO BE WRONG SINCE NO TAXES ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 12 HAVE BEEN PAID AND WRONG VERIFICATION IN THE RETURN OF INCOME WAS MADE. THE INTIMATION FOR THE WRONG AND INCORRECT CLAIM MA DE BY THE ASSESSEE WAS GIVEN ON 21.10.2009 TO THE ASSESSEE. IN FACT, THE ASSESSEE SUBMITTED THAT THE AMOUNT GIVEN TO M/S. NIJJER AGRO FOODS, A FAMILY CO NCERN UNLESS IS RECEIVED BACK; NO TAXES AND INTEREST CAN BE PAID BY HIM. SUC H AN EXPLANATION BY THE ASSESSEE CAN NOT GO TO PROVE A GOOD AND SUFFICIENT CAUSE FOR NOT PAYING TAXES U/S 140A OF THE ACT. AFTER EVEN SELLING AGRICULTURA L LAND IN THE YEAR 2008, AS MENTIONED HEREINABOVE, THE ASSESSEE PREFERRED TO IN VESTMENT IN HIS OWN CONCERN M/S. NIJJER AGRO FOODS. INSTEAD OF MAKING PAYMENT OF TAXES TO INCOME TAX DEPARTMENT, WHICH IN FACT IS A PREFERRED LIABILITY. THEREFORE, AGAIN SUCH ACCOUNT OF THE ASSESSEE CANNOT GO PROVE GOOD AND SUFFICIENT CAUSE FOR NOT LEVYING PENALTY UNDER SECTION 221(1) OF THE ACT. AS PER EXPLANATION 221(1), THE ASSESSEE SHALL NOT CEASE TO BE LIABLE TO ANY PENALTY MERELY BY REASON OF THE FACT THAT BEFORE THE LEVY OF PENALTY HE HAS PAID TO THE TAX. IN FACT, IN THE PRESENT CASE, THE PENALTY U/S 221(1) OF THE ACT WAS LEVIED ON 30.12.2009 ON WHICH DATE, THE ASSESSEE WA S ENJOYING THE MONEY BY INVESTING THE SAME IN HIS SISTER CONCERN IN WHICH H E IS STATED TO HAVE INCURRED LOSSES AND BY PLACING BALANCE SHEET OF SUCH COMPANY CANNOT HELP THE ASSESSEE TO PROVE GOOD AND SUFFICIENT CAUSE AND SUC H ACTION OF INVESTING MONEY IN THE SAID CONCERN M/S. NIJJAR AGRO FOODS A PPEARS TO BE QUITE ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 13 INTENTIONAL FOR AVOIDING PREFERRED LIABILITY OF INC OME-TAX. THEREFORE, THERE CANNOT BE ANY GOOD AND SUFFICIENT CAUSE ESTABLISHED BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US FOR NOT LEVYIN G PENALTY. 9.2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, W E FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS ACTUALLY CONFIRMED THE LEVY OF PENALTY UNDER SECTION 221(1) OF THE ACT. THUS, GROUNDS 1 T O 3 OF THE ASSESSEE ARE CONFIRMED AND THE APPEAL IS DISMISSED. 10. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA N O.187(ASR)/2014. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED AN APPLICATION U/S 154 OF THE ACT DATED 03.02.2012 ALONGWITH COPY OF LETTE R DATED 01.02.2012 WITH THE REPORT OF THE TEHSILDAR-1, AMRITSAR. THE AO RE BUTTED THE CASE LAWS RELIED UPON ON THE PLEA THAT SOME CASE LAWS ARE NOT APPLICABLE BEING QUITE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE, WHEREAS IN ALL THE STATED CASE LAWS RECTIFICATION WAS SOUGHT AGAINST ORDER U/ S 143(1) OF THE ACT. THE AO AFTER PLACING RELIANCE ON THE FOLLOWING CASE LAW S, REJECTED THE APPLICATION U/S 154 BEING NOT MAINTAINABLE: 1) CIT VS. KESHRI METAL P. LTD. [1999] 237 ITR 165 (SC) 2) GAMMON INDIA LTD. V. CIT [1995] 214 ITR 50 (BOM .) 3) T.S.BALARAM, ITO VS. VOLKAR BROS [1971] 82 ITR 50 (SC) 4) CIT VS. HERO CYCLES P. LTD. 228 ITR 463 (SC) ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 14 10.1. THE AO FURTHER HELD THAT RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DEBATABLE. MISTAKE APPARENT FROM RECORD MUST BE OBV IOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LON G DRAWN PROCESS OF REASONS ON POINTS ON WHICH THERE MAY CONCEIVABLY B E TWO OPINIONS. MOREOVER, THE DOCUMENTS OUTSIDE THE RECORDS AND THE LAW IN IMPERMISSIBLE WHEN APPLYING THE PROVISIONS OF SECTION 154 OF THE ACT. 11. THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSES SING OFFICER. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE BRIEF FACTS IN THE PRESENT CASE ARE THAT THE AS SESSEE HAS SUO MOTO FILED HIS RETURN DATED 26.3.2009 FOR A.Y. 2008-09 DECLARING T OTAL INCOME OF RS.2,24,44,720/- COMPRISING OF SALARY OF RS. 9 LACS , LTC GAIN OF RS.21544386/-, INCOME FROM OTHER SOURCES AT RS.335/ - AND AGRICULTURAL INCOME FOR RATE PURPOSES AT RS.11,46,465/-. THE ABO VE LTC GAIN HAS BEEN REFLECTED ON THE TRANSFER OF HIS AGRICULTURAL HOLDI NGS SITUATED IN VILLAGE MEHARBANPURA, TEHSIL, AMRITSAR-1, WHICH LATER ON CL AIMED TO BE AN AGRICULTURAL LAND SITUATED BEYOND 6 KILOMETERS FROM AMRITSAR MUNICIPAL CORPN. LIMITS AND AS SUCH DOES NOT FALL AS A CAPITA L ASSET U/S 2[14] OF THE ACT BUT HAS SUO MOTO DETERMINED HIS SELF ASSESSMENT TAX LIABILITY OF RS. 50 LACS. THIS RETURN WAS PROCESSED U/S 143(1) ON 20.10.2009 CREATING A DEMAND OF RS.67,31,830/-. LATER ON THE ASSESSEE SOUGHT REVER SAL OF HIS RETURNED INCOME ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 15 CLAIMING EXEMPT LTC GAIN WHICH HAS BEEN ERRONEOUS LY SHOWN BY HIM. HOWEVER, THE AO HAS REJECTED THE RECTIFICATION APPL ICATION BEING NOT MAINTAINABLE ON THE PLEA THAT THE MISTAKE SOUGHT T O BE AMENDED IS NOT A MISTAKE QUITE APPARENT FROM RECORD AND THE MATTER I S OUTSIDE THE PURVIEW OF RECTIFICATION ON POINTS OF DEBATABLE NATURE ON WHIC H MORE THAN TO OPINIONS ARE LIKELY TO BE DRAWN, THEREBY DERIVING SUPPORT FR OM VARIOUS CASE LAWS CITED IN SUPPORT THERETO. 12.1 WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) TH AT THE AO IS QUITE JUSTIFIED IN REJECTING THE ASSESSEES RECTIFICATIO N APPLICATION BECAUSE THE MISTAKE SOUGHT TO BE AMENDED IS NOT A PRIMA FACIE M ISTAKE. SECONDLY, THE ASSESSEE IS SUBMITTING CORROBORATING EVIDENCE WITH THE RECTIFICATION APPLICATION WHICH REQUIRES INVESTIGATIONS AND VERIF ICATION AND AS SUCH THE SAME IS OUTSIDE THE PURVIEW OF PROVISIONS OF SECTIO N 154 OF THE ACT. HOWEVER, THE CORRECT COURSE WOULD HAVE BEEN BY SEEK ING REMEDY BY MOVING REVISION APPLICATION U/S 264 BEFORE THE CIT_II, AMR ITSAR SOLICITING FOR REVISION OF ORDER PASSED U/S 143(1) OF THE ACT OR B Y FILING REVISED RETURN. 12.2. AS REGARDS TO THE VARIOUS TRIBUNALS DECISIO NS CITED BY THE LD. COUNSEL IN SUPPORT OF HIS CONTENTION, THE SAME ARE OF LITTLE HELP AS THE ISSUE IN QUESTION IS QUITE DEBATABLE ON WHICH MORE THAN TWO OPINIONS COULD BE DRAWN AND SECONDLY THE ADDITIONAL EVIDENCE FILED ALONG WI TH THE RECTIFICATION ITA NO.579(ASR)/2011 ITA NO.187(ASR)/2014 16 APPLICATION REQUIRES LONG DRAWN INVESTIGATIONS AND VERIFICATION. ACCORDINGLY, THE MATTER IS QUITE OUTSIDE THE PURVIEW OF PROVISIO NS OF SECTION 154 OF THE ACT BEING NOT A PRIMA FACIE MISTAKE APPARENT FROM R ECORD. 12.3. ACCORDINGLY, IN VIEW OF OUR FINDINGS IN ITA N O.579(ASR)/2011 HEREINABOVE IN ASSESSEES OWN CASE AND OUR FINDINGS HEREINABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HA S RIGHTLY CONFIRMED THE ACTION OF THE A.O. THUS, ALL THE GROUNDS OF THE ASS ESSEE ARE DISMISSED. 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E IN ITA NO.579(ASR)/2011 & ITA NO.187(ASR)/2014 ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD MAY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23RD MAY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SATBIR NIJJER, AMRITSAR 2. THE DCIT, CIR.5, AMRITSAR 3. THE CIT(A), ASR 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR