Mukesh Kumar Gupta (HUF), Karnal V. ITO, Karnal

ITA 6311/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3999 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 27-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K L ANEJA
• Keywords: Wrong claim
• Section: 143(3); 54B; 263; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-6311/DEL/2015 ( ASSESSMENT YEAR: 2007-08) MUKESH KUMAR GUPTA (HUF) BANU MAL NAGAR, MODEL TOWN, KARNAL AAAHM6884S VS ITO WARD-2 AAYAKAR BHAWAN SECTOR 12 KARNAL ASSESSEE BY SH. K.L. ANEJA, ADV. REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS CHALLENGING THE ORDE R DATED 14.10.2015 IN APPEAL NO. 40/KNL/2013-14 PASSED BY T HE LD. COMMISSIONER OF INCOME TAX (APPEALS), KARNAL (HEREI NAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LD. CIT (A) IS AGAINST LAW A ND FACTS. 2. THAT ORDER NOT DELETING THE PENALTY IGNORING THE FA CTS AND CASE LAW IS AGAINST LAW AND FACTS. DATE OF HEARING 19.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 6311/DEL/2015 2. ORIGINAL ASSESSMENT OF THE ASSESSEE WAS COMPLETE D ON 22.05.2009 U/S 143(3) OF THE INCOME TAX ACT (FOR SH ORT REFERRED TO AS THE ACT) AT A TOTAL RETURN OF RS. 1,01,514/- A ND AT THAT TIME AO NOTICED THAT THE ASSESSEE HAD EARNED LONG TERM C APITAL GAINS AT RS. 49,68,385/- AND TO SAVE THE SAME THE ASSESSEE P URCHASED THE CAPITAL GAIN BONDS OF RURAL ELECTRIFICATION CORPORA TION OF A VALUE OF 32 LACS AND CLAIMED EXEMPTION U/S 54B OF THE ACT. FOR THE BALANCE OF THE AMOUNT HE PURCHASED AGRICULTURAL LAN D WORTH RS. 26,09,400/- AND EXEMPTION U/S 54B WAS ALLOWED. HOW EVER, THE CIT (A) HOLDING THAT THE ALLOWANCE OF EXEMPTION OF RS. 17,68,385/- WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF RE VENUE IN PROCEEDINGS U/S 263(1) OF THE ACT, SET ASIDE THE MA TTER OF THE AO FOR FRESH CONSIDERATION, PURSUANT TO WHICH THE AO R EASSESSED THE INCOME OF THE ASSESSEE AND DENIED THE EXEMPTION U/S 54B OF THE ACT AS IT WAS AVAILABLE ONLY TO THE INDIVIDUAL ASSE SSES AND NOT TO THE HUF. SIMULTANEOUSLY THE AO INITIATED PROCEEDIN GS U/S 271(1)(C ) OF THE ACT AND LEVIED A PENALTY OF RS. 3 ,96,840/-. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE CIT (A) BY WAY OF IMPUGNED ORDER, HENCE, THIS APPEAL BY THE ASSESSEE. 3 ITA NO. 6311/DEL/2015 3. IT IS THE SUBMISSION OF THE LD. AR THAT THOUGH E XEMPTION U/S 54B WAS NOT AVAILABLE TO THE HUF PRIOR TO THE FINAN CE ACT, 2012, HOWEVER, VIDE CLAUSE 18 OF FINANCE BILL, 2012 EXEMP TION U/S 54B WAS EXPRESSLY ALLOWED BY THE STATUTE WITHOUT ANY CH ANGE IN THE FACTS AND ENVIRONMENT THAT WERE PREVAILING PRIOR TH ERETO AND ACCORDING TO THE LD. AR WHEN THE STATUTE ITSELF CON SIDERED THAT THE DENIAL OF EXEMPTION U/S 54B OF THE ACT WAS WITHOUT ANY COGENT REASONS AND ALLOWED IT SUBSEQUENTLY, IT CANNOT BE S AID THAT THE ASSESSEE TRIED TO EVADE TAX WHEN HE TRULY AND FULLY DISCLOSED ALL THE MATERIAL FACTS AT THE TIME OF ORIGINAL ASSESSMENT A ND CONSIDERED BY THE AO. PER CONTRA, IT IS THE ARGUMENT OF THE LD. D R THAT SINCE THIS MATTER RELATES TO THE YEAR 2007-08 AMENDMENT ALLOWI NG EXEMPTION U/S 54B OF THE ACT IN RESPECT OF THE HUF CANNOT BE EXTENDED TO THE FACTS OF THE CASE, AS SUCH, THE AUTHORITIES BELOW A RE JUSTIFIED IN HOLDING THAT THERE IS FURNISHING OF INACCURATE PART ICULARS. 4. WE HAVE CAREFULLY GONE THROUGH THE RECORD. THE VERY FACT THAT IN THE SCRUTINY ASSESSMENT THIS ISSUE HAS NOT ARISE N BUT SUBSEQUENTLY ONLY DURING THE AUDIT IT WAS FOUND RES ULTING IN REVISION OF THE ASSESSMENT U/S 263 OF THE ACT SHOWS THAT THERE IS A 4 ITA NO. 6311/DEL/2015 BONA FIDE ISSUE IN THIS RESPECT ON THE PART OF THE PERSONS IN VOLVED THEREIN. MERELY BECAUSE SUBSEQUENTLY THE MISTAKE W AS POINTED OUT DURING THE AUDIT DOES NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT THERE IS AN ACTIVE INVOLVEMENT OF MIND ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PARTICULARS. AS A M ATTER OF FACT IT IS ONLY ON THE DETAILS FURNISHED BY THE ASSESSEE THE R EVENUE COULD POINT OUT THE QUESTION OF ALLOWABILITY OR OTHERWISE OF THE EXEMPTION U/S 54B OF THE ACT. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NEITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS THEREOF. AT THE BEST THE CLAIM MADE BY THE ASSESSE E WAS A WRONG CLAIM, BUT NOT A FALSE CLAIM. WITH THIS VIEW OF TH E MATTER, WE DIRECT THE AO TO DELETE THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA 5 ITA NO. 6311/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI