Prakashdeep Educational Society, Ghaziabad V. ITO, Ghaziabad

ITA 6153/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2903 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATIQ AHMAD SENIOR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Charitable institution
• Section: 50C; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6153/DEL./2016 (ASSESSMENT YEAR : 2012-13) PRAKASHDEEP EDUCATIONAL SOCIETY, VS. ITO, C/O SHRI AKHILESH KUMAR, ADVOCATE EXEMPTION WARD, CHAMBER NO.206 207, GHAZIABAD. ANSAL SATYAM, RDC RAJ NAGAR, GHAZIABAD. (PAN : AABTP4509L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AKHILESH KUMAR, ADVOCATE REVENUE BY : SHRI ATIQ AHMAD, SENIOR DR DATE OF HEARING : 20.03.2018 DATE OF ORDER : 21.03.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, PRAKASHDEEP EDUCATIONAL SOCIETY (HEREIN AFTER REFERRED TO AS THE ASSESSEE SOCIETY), BY FILING T HE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 20.09. 2016 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS), GHAZIABAD AFFIRMING THE PENALTY ORDER DATED 24.09.2015 PASSED U/S 271(1 )(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA THAT :- ITA NO.6153/DEL./2016 2 1. BECAUSE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (A) IS BADE IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AS NEITHER THERE IS ANY CONCEALMENT NOR ASSESSEE HAS FURNISHED ANY INACCURA TE PARTICULARS IN AS MUCH AS ADDITION ITSELF IS AGAINS T THE LAW OR AT LEAST DEBATABLE. 2. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (A) GROSSLY ERRED IN RECORDING A FINDING WHICH IS W RONG ON THE RECORD ITSELF THAT THERE IS INCORRECT CLAIM OF WRONG FACTS TO THE EXTENT THAT NO CAPITAL ASSET AND FURTHER ERRED IN NOT FOLLOWING LAW PRONOUNCED BY SUPERIOR AUTHORITIES. THEREFORE, PENALTY OF RS.1,51,100/- IMPOSED U/S 271(1)(C) IS ILLEGAL AND PRAYED TO BE QUASHED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT AT THE TOTAL INCOME 7,33,198/- UNDER SECTION 143 (3) O F THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), PENALTY PROCEEDING S WERE INITIATED AGAINST THE ASSESSEE SOCIETY U/S 271(1)(C) OF THE A CT ON THE GROUND THAT ADDITION OF RS.7,33,198/- WAS MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN BECAUSE THE ASSESSEE SOCIETY HAS FAILE D TO COMPLY WITH THE PROVISIONS CONTAINED U/S 11(1A) OF THE ACT FOR TREATMENT OF THE TRANSFER OF PROPERTY FOR CHARITABLE AND RELIGIOUS P URPOSES IS TRANSFERRED AND THE WHOLE OR ANY PART OF THE NET CO NSIDERATION IS UTILIZED FOR ACQUIRING ANOTHER CAPITAL ASSET TO BE SO HELD, THEN THE CAPITAL GAIN ARISING FROM THE TRANSFER SHALL BE DEE MED TO HAVE BEEN APPLIED TO THE CHARITABLE OR RELIGIOUS PURPOSES. B UT THE ASSESSEE ITA NO.6153/DEL./2016 3 SOCIETY HAS CONCEALED THE TAXABLE INCOME OF LONG TE RM CAPITAL GAIN AND THUS EVADED THE TAX THEREON. REJECTING THE CON TENTIONS RAISED BY THE ASSESSEE SOCIETY THAT THE ASSESSEE SOCIETY H AS FURNISHED THE ENTIRE DETAIL OF CAPITAL GAIN AND UTILIZATION OF TH E CAPITAL FUNDS AND HAS NOT FURNISHED INACCURATE PARTICULARS AND DELIBE RATELY CONCEALED THE TAXPAYER LONG TERM CAPITAL GAIN, THE AO IMPOSED THE PENALTY OF RS.1,51,100/- U/S 271(1)(C) OF THE ACT 3. ASSESSEE CHALLENGED THE PENALTY ORDER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALT Y OF RS.151,100/- LEVIED BY THE AO BY DISMISSING THE APP EAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL BY FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE SOCIETY HAS DISCLOSED THE FACTUM OF SALE OF THE LAND HELD BY THE ASSESSEE SOCIETY OF RS.46,50,000/- AND SHOWN CAPITAL GAIN ON THE SALE OF LAND OF RS.17 ,46,078/-. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE SOCIETY HAS U TILIZED THE PROFIT ON SALE OF LAND IN QUESTION FOR CHARITABLE PURPOSES AS PER AUDITED BALANCE SHEET, AVAILABLE AT PAGES 8 TO 10 OF THE PA PER BOOK. ITA NO.6153/DEL./2016 4 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER AUTHORITIES AND ARGUMENTS ADDRESSED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS? 7. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT DECID ED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY ITA NO.6153/DEL./2016 5 WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 8. BARE PERUSAL OF THE PENALTY ORDER APPARENTLY GOE S TO PROVE THAT THE PENALTY HAS BEEN IMPOSED BY THE AO MERELY ON THE GROUND THAT ASSESSEE SOCIETY SHOULD HAVE COMPLIED WITH THE PROVISIONS CONTAINED U/S 11(1A) OF THE ACT WHILE DEALING WITH THE TRANSFERRED PROPERTY OF THE TRUST AND THUS FURNISHED INACCURATE PARTICULARS WHILE FILING THE INCOME-TAX RETURN. WE ARE OF THE CONSID ERED VIEWED THAT WHEN THE ASSESSEE SOCIETY HAS FILED COMPLETE DETAIL S IN ITS RETURN OF INCOME BY BRINGING ON RECORD THE FACT THAT THE LAND OF THE TRUST HAS BEEN SOLD FOR RS.46,50,000/- BY SHOWING GAIN ON THE SALE OF LAND OF RS.17,46,078/- AND HAS CLAIMED PROTECTION U/S 50C O F THE ACT, IT IS CERTAINLY AN INCORRECT CLAIM UNDER LAW. 9. IN CASE, THE ASSESSEE SOCIETY HAS CLAIMED ANY DE DUCTION OR EXEMPTION, IT IS FOR THE TAX AUTHORITIES TO EXAMINE IF THE SAME IS SUSTAINABLE OR NOT. MORE SO, THE ASSESSEE SOCIETY HAS UTILIZED THE ITA NO.6153/DEL./2016 6 TOTAL GAIN OUT OF THE LAND SOLD FOR CHARITABLE WORK , WHICH FACT HAS NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES DURING ASSESSMENT. 10. COORDINATE BENCH OF THE TRIBUNAL WHILE DEALING WITH THE IDENTICAL ISSUE IN AL AMEEN EDUCATIONAL SOCIETY VS. DIRECTOR OF INCOME-TAX (EXEMPTION), BANGALORE (2012) 139 ITD 245 (BANGALORE) HELD THAT, IF CAPITAL GAIN IS APPLIED FOR CHARITABLE PURPOSE OF ASSESSEE NOT BY ACQUIRING A NEW ASSET BU T FOR OTHER CHARITABLE PURPOSE, THEN THERE IS NO REASON WHY IT SHOULD NOT BE CONSIDERED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE ENABLING ASSESSEE TO CLAIM EXEMPTION UNDER SECTION 11 (1). 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE SOCIETY HAS DISCLOSED ALL THE MATERIAL FACTS IN THE RETURN OF ITS INCOME, THO UGH CLAIMED THE EXEMPTION UNDER WRONG SECTION OF THE ACT, IT DOES N OT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. MORE SO, APPROPRIATING THE CAPITAL GA IN FOR CHARITABLE PURPOSE THOUGH NOT BY ACQUIRING NEW ASSET IS ALSO O NE OF THE WAY OF APPLYING CAPITAL GAIN FOR CHARITABLE PURPOSE AND IT SHOULD BE CONSIDERED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE TO CLAIM EXEMPTION U/S 11(1) OF THE ACT. 12. SO, IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, W E ARE OF THE CONSIDERED VIEW THAT AO HAS FAILED TO MAKE OUT THE CASE OF ITA NO.6153/DEL./2016 7 CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME BY THE ASSESSEE TO LEVY PENALTY RATHER IT IS A CASE OF IMPOSING PENALTY ON THE BASIS OF SUBJECTIVE SATISFA CTION WITHOUT COMPLETING NECESSARY INGREDIENTS TO INITIATE PENALT Y PROCEEDINGS U/S 271(1)(C) OF THE ACT, HENCE WE HEREBY DELETE THE PE NALTY LEVIED BY AO AND CONFIRMED BY LD. CIT (A) BY ALLOWING THE APP EAL FILED BY THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON THIS 21 ST DAY OF MARCH, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 21 ST DAY OF MARCH, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), GHAZAIBAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.