Sh. Harpreet Singh, New Delhi V. ITO, New Delhi

ITA 6132/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6905 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Revised return
• Section: 54

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI SHRI J.SUDHAKAR REDDY, A.M AND S HRI C.M. GARG , JM ITA NO: 6 13 2/DEL/201 3 AY : - 200 8 - 09 SH. HARPREET SINGH VS. ITO, WARD 14(1) D 12, MAHARANI BAGH NEW DELHI NEW DELHI 110 065 PAN: AIDPS 1124 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ARVIND KUMAR , ADV. & SH. RK GUPTA, ADV. RESPONDENT BY : SHRI AMRIT LAL, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(A) - XVII , NEW DELHI DATED 31.8.2013 PERTAINING TO THE ASSESSMENT YEAR (AY) 2008 - 09 . 2. THE ASSESSEE IS AN INDIVIDUAL AND IS WORKING AS A DIRECTOR IN M/S PARKWOOD DEVELOPERS P.LTD. HE ALONG WITH TWO OF HIS OTHER RELATIVES WERE CO - OWNERS IN AN ANCESTRAL PROPERTY. THIS PROPERTY WAS SOLD AND LONG TERM CAPITAL GAINS HAD ARISEN. THE ASSESSEE HA S RECEIVED RS.3.25 CRORES BEING 1/3 RD SHARE OF INHERITED PROPERTY AT CHANDIGARH WHICH WAS SOLD. THE ASSESSEE CALCULATED CAPITAL GAINS AT RS.2,78,33,566/ - . AS PER S.54 OF THE INCOME TAX ACT, 1961 (THE ACT) AS THE AMOUNT CAPITAL GAINS WAS NOT UTILISED BY T HE ASSESSEE FOR PURCHASE OR CONSTRUCTION OF NEW RESIDENTIAL HOUSE BEFORE 2 THE DUE DATE OF FURNISHING OF RETURN OF INCOME, HE CLAIMED THAT THE AMOUNT HAS BEEN DEPOSITED IN ACCORDANCE WITH THE CAPITAL GAINS ACCOUNT SCHEME, 1988 WITH THE PUNJAB NATIONAL BANK , MINTO ROAD, NEW DELHI ON 9.8.2008 AND 12.8.2008. THE A.O. VERIFIED THIS CLAIM OF THE ASSESSEE. M/S PUNJAB NATIONAL BANK WHILE ACKNOWLEDGING THAT THE ASSESSEE HAD DEPOSITED THESE AMOUNTS OF RS.2,80,00,000/ - ON 9.8.2008 AND 12.8.2008, SUBMITTED THAT THE AMOUNTS WERE NOT DEPOSITED UNDER THE CAPITAL ACCOUNT SCHEME, 1988. WHEN POINTED OUT THE ASSESSEE FILED A REVISED RETURN OFFERING THE LONG TERM CAPITAL GAIN FOR TAX. HE CLAIMED THAT, WHILE DEPOSITING THE MONEY IN THE BANK THE ASSESSEE IN ADVERTENTLY DID N OT MENTION THAT THIS MONEY SHOULD BE DEPOSITED UNDER THE CAPITAL GAIN ACCOUNT SCHEME ONLY. THE A.O. COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS.3,10,09,080/ - . THEREAFTER HE INITIATED PENALTY U/S 271(1)(C ) OF THE ACT ON THE GROUND THAT TH E ASSESSEE HAD CONCEALED THE TRUE PARTICULARS OF INCOME. LATER PENALTY U/S 271(1)(C ) WAS LEVIED ON 30.5.2011 BY HOLDING THAT THE ASSESSEE HAS WILFULLY AND KNOWINGLY FILED INACCURATE PARTICULARS OF INCOME. 3. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY REJECTED THE CONTENTIONS OF THE ASSESSEE THAT THERE WAS AN INADVERTENT MISTAKE ON HIS PART IN NOT STATING IN THE APPLICATION FOR DEPOSIT BEFORE THE BANKING AUTHORITIES THAT THE AMOUNTS IN QUESTION SHOULD BE HELD AS D EPOSITS UNDER THE CAPITAL GAIN ACCOUNT SCHEME. FURTHER AGGRIEVED THE ASSESSEE IS BEFORE US. 4. AFTER HEARING RIVAL CONTENTIONS WE FIND THAT IN THIS CASE, NON MENTIONING OF THE ACCOUNT IN WHICH THE AMOUNT HAS TO BE DEPOSITED IN THE BANK BY THE ASSESSEE, WHILE MAKING FIXED DEPOSITS, HAS LEAD TO THIS ADDITION. THE INTENTION OF THE ASSESSEE TO DEPOSIT THE AMOUNT IN THE BANK SPECIFIED U/S 54 OF THE ACT CANNOT BE DOUBTED. THUS IN OUR VIEW THE EXPLANATION GIVEN BY THE ASSESSEE IS BONAFIDE. THE MISTAKE IS INADVERTENT. 3 5. THOUGH THE A.O. INITIATED PENALTY PROCEEDINGS ON THE GROUND THAT THERE WAS CONCEALME NT OF INCOME, WHILE PASSING ORDER U/S 271(1)(C ) OF THE ACT, THE CHARGE HAS BEEN FRAMED AS WILFULLY AND KNOWINGLY FILING INACCURATE PARTICULARS OF INCOME. IN OUR VIEW THE ASSESSEE HAD FURNISHED ALL NECESSARY INFORMATION AND THERE IS NO INTENTION OF FURNI SHING INACCURATE PARTICULARS OF CONCEALMENT OF INCOME. 5.1. WE PLACE RELIANCE ON THE FOLLOWING CASES. (I) THE HON BLE SUPREME COURT WHILE DECIDING THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PRIVATE LIMITED REPORTED IN (2010) 322 ITR 158 HAS OBSERVED T HAT THE LEGISLATURE DID NOT INTEND TO IMPOSE PENALTY ON EVERY ASSESSEE WHOSE CLAIM WAS REJECTED BY THE ASSESSING OFFICER. WHAT WAS SOUGHT TO BE COVERED UNDER SECTION 271 (1)(C ) IS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICU LARS OF INCOME . ON THE BASIS OF VARIOUS JUDICIAL PRECEDENTS IT CAN BE DISCERNED THAT THE FACTS AND CIRCUMSTANCES IN EACH CASE HAS TO BE SEEN IN THE CONTEXT AND THE PENALTY PROVISION SHOULD BE APPLIED TO SEE WHETHER THERE WAS A CONCEALMENT OF PARTICULARS OF INCOME OR WHETHER THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME. (II) DIL I P N. S HROFF VS . JCIT , (200 7 ) 291 ITR 519 , WHEREIN THE HON' B LE S U P R E M E C OU R T HEL D AS FOLLOWS: '8 3 . IT IS OF S OM E SIGNIFICANCE T H AT IN THE S TANDARD PR O FORM A U SE D B Y TH E ASSESS IN G OFFICER IN I SS UING A NOTICE DE S PITE TH E FACT TH A T TH E S AM E PO S TULAT ES THAT INAPPROPRIAT E W ORDS AND PARAGRAPHS WE R E TO B E D E L E T E D , BUT THE S AME HAD NOT BE E N DON E . THUS, THE ASSES S ING OFFIC E R H I M SE LF W A S NOT S UR E A S TO W H E TH E R H E HAD PRO C EEDED ON TH E BASIS THAT TH E ASSESSEE HAD C ONC E AL E D H IS IN C OM E OR H E HAD FURNI S HED INA CC URAT E P A R T I C ULAR S. E VE N B EF OR E U S , T H E L E ARNED ADDITIONAL SOLI C ITOR G E N E RAL W HIL E PL ACI N G TH E OR D ER OF ASS ESS MENT LAID EMPHA S I S THAT HE HAD D E ALT W ITH BOTH TH E SI TUATION S . 4 84 . T HE IMPUGNED ORD E R , TH E REFORE , SUFF E R S FROM NON - APPLI CA T IO N OF MIND . IT WAS A L SO BOUND TO COMPL Y W ITH T HE PRIN C IPL E S OF NATURAL JU ST I CE . [S EE MALABAR INDU S T R IAL C O . LTD . V . COMMI SS ION E R OF IN CO M E TA X , K E RA LA STAT E , (2000) 2 SCC 7 18J ' 6. APPLYING THE PROPOSITIONS LAID DOWN IN THE ABOVE CASES TO THE FACTS OF THE PRESENT CASE AND KEEPING IN VIEW OUR FINDING THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS BONAFIDE AND THAT THE MISTAKE WAS INADVERTENT, WE DELETE THE PENALTY LEVIED U/S 271(1)(C ) OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT ASSESSEE S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 T H JANUARY, 2017. S D / - S D / - ( C.M. GARG ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 2 7 T H JANUARY, 2017. @ MANGA COPY OF THE ORDER FORW ARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR