The Asstt. Commissioner of Income Tax, Pathankot V. Sh. Satya Pal Saini, Ex-MLA, Pathankot

ITA 640/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7872 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Bonafide belief; Question of law; Reasonable cause; Revised return
• Section: 54F; 142(1); 260A; 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER I.T.A NO.640/(ASR)/2015 ASSESSMENT YEAR: 2007-08 PAN: APUPS5712C. A. C. I. T., CIRCLE-VI, PATHANKOT VS. SH. SATYA PAL SAINI, EX-MLA S/O SH. PIARA LAL SAINI, GARDEN COLONY, MISSION ROAD, PATHAKOT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAHUL DHAWAN (D. R.) RESPONDENT BY: SH. P. N. ARORA (ADV .) DATE OF HEARING: 02.08.2017 DATE OF PRONOUNCEMENT: 11.08.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDE R OF LD. CIT(A), AMRITSAR DATED 30.09.2015 FOR ASST. YEAR: 2007-08. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: (I) ON FACTS AND LAW, THE LD. CIT(A), AMRITSAR HAS ERRED IN DELETING THE PENALTY NOT APPRECIATING THAT (JOINT DEVELOPMENT AG REEMENT) IS AGREEMENT TO SELL POSSESSION LETTER AND IRREVO CABLE POWER OF ATTORNEY AND RESOLUTION BY THE MEMBERS ALLOWING T HE SOCIETY TO ENTER INTO A CONTRACT WITH THE DEVELOPERS. AND TRA NSFER OF ASSET WITHIN THE MEANING OF SECTION 2(47) OF THE INCOME T AX ACT, 1961. (II) ON FACTS AND LAW, THE LD. CIT(A), AMRITSAR HAS ERRE D IN DELETING THE PENALTY NOT APPRECIATING THE APPLICABILITY OF APEX COURT JUDGMENT IN S. CHATHANATHA KAIYALAR VS. THE CENTRAL BANK OF IND IA LTD. IN AIR 1965 SC 1856. ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 2 (III) ON FACTS AND LAW THE LD. CIT(A), AMRITSAR FAILED TO APPRECIATE THAT THE ASSESSEE HAD PAID/UNDERTOOK TO PAY TAX ON CAPITAL G AINS ACCRUING TO HIM THUS ADMITTING THAT THE TRANSACTION WAS OF A NA TURE WHERE CAPITAL GAIN WAS EXIGIBLE? (IV) ON FACTS AND LAW, THE LD. CIT(A), AMRITSAR FAILED T O APPRECIATE THAT PENALTY AMOUNT REDUCED AS PER THE ORDER OF THE HON' BLE PUNJAB & HARYANA HIGH COURT, CHANDIGARH PASSED IN I.T.A. NO. 200 OF 2013 (O & M) DATED 22.07.2015. (V) APPELLANT CRAVES LEAVE TO AMEND OR ADD ANY OR MORE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSESS EE WAS A MEMBER OF A HOUSING SOCIETY, NAMED AS THE PUNJABI COOPERATIVE H OUSE BUILDING SOCIETY LTD. MOHALI AND WAS HOLDING A PLOT OF 1,000 YARDS. THE SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEME NT WITH HASH BUILDING (P.) LTD. & TATA HOUSING DEVELOPMENT COMPANY LTD. W HEREBY THE ASSESSEE WAS TO TRANSFER HIS LAND AND IN LIEU OF THAT WAS TO GET A SALE CONSIDERATION OF RS. 1,65,00,000/- PLUS TWO FURNISHED FLATS, THE VALUE OF WHICH WAS CONSIDERED TO BE RS. 2,02,50,000/-. OUT OF THE TOT AL CONSIDERATION, THE ASSESSEE RECEIVED CERTAIN AMOUNT FROM TATA HOUSING DEVELOPMENT COMPANY, HOWEVER, THE AGREEMENT COULD NOT BE COMPLE TED AND THE ASSESSEE DID NOT RECEIVE THE BALANCE SALE CONSIDERA TION AND ALSO DID NOT RECEIVE THE FURNISHED FLATS. THE ASSESSEE DID NOT D ECLARE ANY CAPITAL GAIN IN THE RETURN OF INCOME AS IN HIS OPINION THE TRANSACT ION OF SALE WAS NOT COMPLETED. THE ASSESSING OFFICER, HOWEVER, HELD THA T THE TRANSACTION HAD TAKEN PLACE AND ASSESSEE WAS LIABLE TO DECLARE CAPI TAL GAIN IN THE RETURN OF INCOME AND THEREFORE HE MADE THE ADDITION. BEFORE L D. CIT(A), AND HON'BLE TRIBUNAL, THE ASSESSEE LOST THE APPEALS HOWEVER, TH E HON'BLE PUNJAB & ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 3 HARYANA HIGH COURT ALLOWED RELIEF TO THE ASSESSEE A ND HELD THAT ASSESSEE WAS NOT REQUIRED TO DECLARE, ENTIRE CAPITAL GAINS B UT WAS REQUIRED TO DECLARE ENTIRE CAPITAL GAIN BASIS OF AMOUNT RECEIVE D DURING THE YEAR. IN THE MEANTIME, THE PENALTY ORDER U/S 271(1)(C) OF THE AC T FOR CONCEALMENT OF PARTICULARS OF INCOME WAS INITIATED AND THE ASSESSE E WAS IMPOSED THE PENALTY OF RS. 76,72,715/-, HOWEVER, AFTER GIVING A PPEAL EFFECT OF THE ORDER OF THE HON'BLE PUNJAB & HARYANA HIGH COURT, THE PEN ALTY AMOUNT WAS REDUCED TO RS. 14,81,040/- WHICH REPRESENTED THE PE NALTY ON THE CAPITAL GAINS ON RECEIPT BASIS WHICH THE ASSESSEE HAD NOT DECLARED IN THE ORIGINAL RETURN OF INCOME. HOWEVER, ASSESSEE HAD DECLARED PR OPORTIONATE CAPITAL GAINS IN THE REVISED RETURN OF INCOME WHICH THE ASS ESSING OFFICER HAD NOT CONSIDERED AS THE REVISED RETURN WAS BELATED. 4. AGAINST THE PENALTY ORDER, THE ASSESSEE FILED BE FORE LD. CIT(A) WHO DELETED THE PENALTY BY HOLDING AS UNDER. IN THE ORIGINAL RETURN FILED BY THE ASSESSEE ON 29 -03- 2008, NO INCOME UNDER THE HEAD CAPITAL GAINS WAS SHOWN, BUT ON HIM OWN MOTION, THE ASSESSEE HAD FILED A REVISED RETURN ON 24-02-20 10 FOR THE YEAR UNDER CONSIDERATION DISCLOSING AN INCOME OF RS. 21,80,330/- + AGRICULTURE INCOME RS 100,000/- WITH THE REMARKS REVISED RETURN THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE REVISE D RETURN ON THE GROUND THAT THE RETURN FOR A Y 2007-08 COULD BE REVISED ON OR BEFORE 31-03-2009 WHEREAS THE ASSESSEE HAD FILED THE REVISED RETURN O N 24-02-201 0 I.E AFTER 31-03-2009 WHICH CANNOT BE TREATED AS REVISED RETUR N ALL. THE FACT THAT ALL THE MATERIAL FACTS WHICH WERE REQUIRED TO COMPUTE T HE CORRECT CAPITAL GAINS WERE FURNISHED BY THE APPELLANT IN HIS SECOND RETUR N FILED ON 24-02-2010 CLAIMED AS REVISED RETURN WAS HOWEVER FILED ONLY AFTER THE RECEIPT OF NOTICE U/S 148 OF THE ACT DATED 15-02-2010 SERVED BY SPEED POST ON 19-02-2010. THEREFORE THE AO WAS JUSTIFIED IN NOT TAKING COGNIZ ANCE OF THE RETURN FILED ON 24.02.2010. IT IS CLEAR FROM THE ARGUMENTS RAISED BY THE APPELL ANT THAT THERE WERE CERTAIN CONTROVERSIES AND DISPUTES IN REGARD T O THE TRANSFER OF PLOT. IN FACT, THERE WERE VARIOUS ISSUES WHICH HAD STILL NOT BEEN ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 4 RESOLVED AND THE CONSTRUCTION OF BUILDING IN WHICH THE APPELLANT WAS TO GET A FLAT AS A PART OF SALE CONSIDERATION, HAS NOT STARTED TILL DATE. IN THESE PECULIAR CIRCUMSTANCES, THE BELIEF O F THE APPELLANT THAT THE CAPITAL GAINS ON WHICH HE HAS TO PAY TAX H AS TO BE COMPUTED ONLY ON THE BASIS OF THE AMOUNT WHICH HE H AS ACTUALLY RECEIVED, CANNOT BE CONSIDERED TO BE TOTALLY UNREAS ONABLE, THOUGH IT WAS NOT STRICTLY LEGAL. THIS APPEARS TO BE A REASONABLE COURSE FOR NOT DISCLOSING THE INCOME UNDER THE HEAD CAPITAL GAINS IN THE ORIGINAL RETURN FILED ON 29.03.2008 IN RESPECT OF PROPERTY IN QUESTION. I HAVE ALSO CONSIDERED THE RECENT JUDGMENT HONBLE P&H HIGH COURT IN THE CASE OF C.S ATWAL VS CIT, LUDHIANA, ITA NO.200 OF 2013(0&M) DATED 22.07.2015. THE SAID APPEAL WAS FILED BEFORE THE HO NBLE PUNJAB & HARYANA HIGH COURT U/S 260A OF THE ACT AGAINST THE ORDER DATED 29.07.2013, PASSED U/S 254(1) OF THE ACT PASSED BY THE HONBLE ITAT, CHANDIGARHB BENCH, CHANDIGARH IS ITA NO. 448/CHD/ 2011 FOR AY 2007- 08. THE HONBLE COURT HAD HELD AS UNDER:- 1.0................................................ ......................... ................................................... ......................... ................................................... ...............................PERUS AL OF THE JDA DATED 25.02.2007 READ WITH SALE DEEDS DATED 02. 03.2007 AND 25.04.2007 IN RESPECT OF 3.08 ACRES AND 4.62 ACRES RESPECTIVELY WOULD REVEAL THAT, THE PARTIES HAD AGREED FOR PRO-RATA TR ANSFER OF LAND. 2. NO POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR T O THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE OF JDA DATED 25.02. 2007 SO AS TO FALL WITHIN THE DOMAIN OF SECTION 53A OF 1882 ACT. 3. THE POSSESSION DELIVERED, IF AT ALL, WAS AS A LI CENSE FOR THE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFEREE. 4. FURTHER SECTION 53A OF 1882 ACT, BY INCORPORATIO N, STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND ALL THE ESSENTIAL I NGREDIENTS OF SECTION 53A OF 1882 ACT WERE REQUIRED TO BE FULFILLED. IN THE ABSE NCE OF REGISTRATION OF JDA DATED 25.02.2007 HAVING BEEN EXECUTED AFTER 24.09.2 007, THE AGREEMENT DOES NOT FALL UNDER SECTION 53A OF 1882 ACT AND CON SEQUENTLY SECTION 2(47)(V) OF THE ACT DOES NOT APPLY. 5. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSE SSEE- APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM THE DEVELOPER, CA PITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VIEW OF CANCELLATION OF JDA DATED 25.02.2007, NO FURTHER AMOUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN TAKEN. IT W AS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVED, CAPITAL GAINS TAX. SHA LL BE DISCHARGED THEREON IN ACCORDANCE WITH LAW. IN VIEW IF OF THE A FORESAID STAND, WHILE DISPOSING OF THE APPEALS, WE OBSERVE THAT THE ASSES SEE APPELLANTS SHALL REMAIN BOUND BY THEIR SAID STAND. ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 5 6. THE ISSUE OF EXIGIBILITY TO CAPITAL GAINS TAX HA VING BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE QUESTION OF EXEMPTION UNDER SE CTION 54F OF TINE ACT WOULD NOT SURVIVE ANY LONGER AND HAS BEEN RENDERED ACADEMIC. 7. THE TRIBUNAL AND THE AUTHORITIES BELOW WERE NOT RIGHT IN HOLDING THE ASSESSEE-APPELLANT TO BE LIABLE TO CAPITAL GAINS TA X IN RESPECT OF REMAINING LAND MEASURING 13.5 ACRES FOR WHICH NO CONSIDERATIO N HAD BEEN RECEIVED AND WHICH STOOD CANCELLED AND INCAPABLE OF PERFORMA NCE, AT PRESENT DUE TO VARIOUS ORDERS PASSED BY THE SUPREME COURT AND THE HIGH COURT IN PILS. THEREFORE, THE APPEALS ARE ALLOWED. THE FACTS OF THE CASE OF THE APPELLANT ARE IDENTICA L TO THOSE OF THE ABOVE CITED CASE OF SH. C.S ATWAL DECIDED BY HONBL E PUNJAB & HARYANA HIGH COURT VIDE ORDER DATED 22.07.2015. FOLLOWING T HE SAID DECISION OF HONBLE HIGH COURT IN THE CASE OF SH. C.S ATWAL NO PENALTY FOR FILING INACCURATE PARTICULARS OF INCOME U/S 271(1)( C) OF THE ACT SURVIVES IN THE CASE OF THE APPELLANT NO PENALTY U/S 271(1)( C) OF THE A CT SURVIVES. IN VIEW OF DISCUSSION, IT IS HELD THAT PENALTY FOR FILING INACCURATE PARTICULARS OF INCOME HAS BEEN WRONGLY LEVIED IN TH E INSTANT CASE AND THE SAME IS ACCORDINGLY CANCELLED. GROUNDS OF APPEAL TA KEN BY THE APPELLANT ARE ALLOWED. 5. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LD. DR SUBMITTED THAT THE ASS ESSEE HAD FILED REVISED RETURN OF INCOME WHEREIN THE CAPITAL GAIN O N THE BASIS OF RECEIPT WAS DECLARED BUT THAT RETURN WAS INVALID RETURN AS THAT WAS NOT FILED WITHIN THE PRESCRIBED PERIOD OF TIME AND HE FURTHER SUBMITTED THAT SUCH REVISED RETURN WAS FILED BY ASSESSEE IN RESPONSE TO NOTICE BY DEPARTMENT U/S 148 OF THE ACT, AND THEREFORE, IT WAS PRAYED TH AT THE ORDER OF LD. CIT(A) MAY BE CANCELLED AND THAT OF ASSESSING OFFIC ER BE UPHELD. 6. THE LD. AR, ON THE OTHER HAND, SUBMITTED THAT TH E REVISED RETURN WAS FILED VOLUNTARILY AND IT WAS FURTHER SUBMITTED THAT IN THE REVISED RETURN OF INCOME, THE ASSESSEE HAD DECLARED CAPITAL GAINS ON THE BASIS OF ACTUAL RECEIPTS AND THEREFORE, THERE WAS NO CONCEAL MENT OF INCOME. THE LD. ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 6 AR SUBMITTED THAT THOUGH THE REVISED RETURN FILED B Y ASSESSEE WAS BELATED BUT THE PENALTY PROCEEDINGS ARE DIFFERENT A ND DURING PENALTY PROCEEDINGS, THE ASSESSING OFFICER WAS BOUND TO TAK E INTO ACCOUNT, THE REVISED RETURN OF INCOME WHEREIN, COMPLETE PARTICUL ARS OF TRANSACTION OF CAPITAL GAIN WAS DISCLOSED. THE LD. AR FURTHER ARGU ED THAT LD. CIT(A) HAS DELETED THE PENALTY AS HE CONSIDERED THE EXPLANATIO N OF ASSESSEE FOR NON DISCLOSURE OF CAPITAL GAINS AS REASONABLE. THE LD. AR IN THIS RESPECT RELIED ON THE JUDGMENT OF HON'BLE AMRITSAR BENCH IN THE CA SE OF SH. ASHOK KUMAR IN ITA NO. 571 & 572. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE FILED ITS R ETURN ORIGINAL RETURN OF INCOME ON 29.03.2008 AND SUBSEQUENTLY ANOTHER RETUR N OF INCOME WAS FILED ON 24.02.2010, DECLARING AN INCOME WHICH INCL UDED THE INCOME FROM CAPITAL GAIN. THE SAID RETURN WAS TO BE FILED ON OR BEFORE 31.03.2009 WHEREAS IT WAS FILED ON 24.02.2010 AND THEREFORE, W HILE MAKING ASSESSMENT, THE ASSESSING OFFICER IGNORED THE REVIS ED RETURN AND COMPLETED THE ASSESSMENT PROCEEDINGS ON THE BASIS O F ORIGINAL RETURN. IN THE PENALTY PROCEEDINGS ALSO THE ASSESSING OFFICER DID NOT CONSIDER THE FACT OF ASSESSEE HAVING FILED THE REVISED RETURN OF INCO ME AND IMPOSED THE PENALTY TO THE EXTENT OF 76,72,715/- WHICH HOWEVER WAS REDUCED TO RS. 14,81,040/-. THE REDUCTION IN PENALTY WAS MADE TO G IVE APPEAL EFFECT OF THE ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT WH EREIN THE HON'BLE COURT HAD HELD THAT CAPITAL GAIN WAS LIABLE TO BE D ECLARED ON THE BASIS OF ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 7 ACTUAL RECEIPTS DURING THE YEAR. THE LD. CIT(A) HOW EVER DELETED THE PENALTY BY HOLDING THAT THERE WERE CERTAIN CONTROVE RSIES AND DISPUTES IN REGARD TO THE TRANSFER OF PLOT AND VARIOUS ISSUES WHICH HAD STILL NOT BEEN RESOLVED AND THE CONSIDERATION OF BUILDING IN WHICH THE APPELLANT WAS TO GET A FLAT HAD NOT STARTED TILL DATE AND THEREFORE, IN THESE CIRCUMSTANCES, THE BELIEF OF THE APPELLANT THAT THE CAPITAL GAINS ON WHICH HE HAS TO PAY TAX HAS TO BE COMPUTED ONLY ON THE BASIS OF THE AMOUNT WHICH HE HAS ACTUALLY RECEIVED WAS A REASONABLE BELIEF. THE LD. CIT(A) HA S HELD THAT THOUGH THE REVISED RETURN WAS NOT STRICTLY LEGAL BUT THE REASO N FOR NOT DISCLOSING THE INCOME UNDER THE HEAD OF CAPITAL GAINS IN THE ORIGI NAL RETURN WAS NOT UNREASONABLE. WE FIND THAT LD. CIT(A) HAS PASSED A REASONED AND SPEAKING ORDER WHEREIN HE HAS UPHELD THE ACTION OF ASSESSING OFFICER IN NOT ACCEPTING THE REVISED RETURN BUT AT THE SAME TIME, HE HAS CONSIDERED THE CAUSE FOR NOT DISCLOSING THE CAPITAL GAINS IN ORIGI NAL RETURN AS REASONABLE AND HAD DELETED THE PENALTY. 8. AS REGARDS THE OBJECTION OF LD. DR REGARDING BEL ATED REVISED RETURN, WE FURTHER FIND THAT HON'BLE ITAT DELHI BENCH IN TH E CASE OF ASHOK RAJ NATH IN ITA NO. 2970/(DEL/2012 VIDE ORDER DATED 31. 08.2012 HAS CONSIDERED THE ISSUE OF BELATED REVISED RETURN WITH RESPECT TO PENALTY PROCEEDINGS AND HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: 8. WE HAVE HEARD THE ID. DR AND GONE THROUGH THE F ACTS OF THE CASE. AS IS APPARENT FROM THE AFORESAID FACTS, THE AO LEVIED PENALTY U/S 271 (1 )(C) OF THE ACT IN RESPECT OF AN AMOUNT OF RS.60,39,824/-CO MPRISING ADDITION ON ACCOUNT OF RENTAL INCOME- RS.4,63,388/- DISALLOWANC E OF INTEREST ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 8 RS.2,51,507/-,ADDITION TOWARDS SHORT TERM CAPITAL G AINS ON SALE OF PROPERTIES-RS.10,50,950/-;SHORT TERM CAPITAL GAINS ON SALE OF SHARES- RS.1,60,503/- AND LONG TERM CAPITAL GAINS-RS.40,98, 919/-. THE ID. CIT(A) CANCELLED THE PENALTY ON THE GROUND THAT DISALLOWAN CE OF INTEREST WAS DELETED BY THE ITAT WHILE ISSUE RELATING TO ADDITIO N TOWARDS RENTAL INCOME HAD BEEN RESTORED TO THE FILE OF THE AO AND ADDITIO NAL INCOME TOWARDS CAPITAL GAINS ON SALE OF PROPERTIES AND SHARES WAS DISCLOSED BY THE ASSESSEE SUO MOTU DURING THE COURSE OF ASSESSMENT P ROCEEDING. THE ASSESSEE SUBMITTED REVISED RETURN SINCE IN THE ORIG INAL RETURN LONG TERM CAPITAL GAIN ON UTI LIQUID PLUS FUND INSTITUTION PL AN WAS CLAIMED EXEMPT U/S 10(38) OF THE ACT AS ALSO TO REFLECT CORRECT FIGURE S OF SALE OF LAND AT KHERI SADH AND RENTAL INCOME. MERELY BECAUSE THE ASSESSEE DISCLOSED ADDITIONAL INCOME SUO MOTU AFTER ISSUE OF A NOTICE U/S 143(2) OF THE ACT, DOES NOT AMOUNT TO DETECTION OF CONCEALMENT BY THE AO. APPAR ENTLY, THE ASSESSEE HAD GIVEN ALL PARTICULARS OF HIS INCOME AND HAD DISCLOS ED ALL FACTS TO THE AO DURING THE ASSESSMENT PROCEEDINGS.. IT IS NOT THE C ASE OF THE AO THAT IN REPLY TO A QUERY OF THE AO, SOME NEW FACTS WERE DISCOVERE D OR THE AO HAD DUG OUT SOME INFORMATION WHICH WAS NOT FURNISHED BY THE ASS ESSEE. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT NO PENALT Y IS LEVIABLE. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PRO CEEDINGS ARE SEPARATE AND DISTINCT AND AS HELD BY HONBLE SUPREME COURT I N THE CASE OF ANANTHRAMAN VEERASINGHAIAH & CO. VS. CIT, 123 ITR 4 57, THE FINDING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLU SIVE FOR THE PURPOSES OF THE PENALTY PROCEEDINGS. IT IS, THEREFORE, NECES SARY TO REAPPRECIATE AND RECONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETH ER THE ADDITION MADE IN THE QUANTUM PROCEEDINGS ACTUALLY REPRESENTS THE CON CEALMENT ON THE PART OF THE ASSESSEE AS ENVISAGED IN SEC. 271(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SAID PRO VISIONS. IT IS ALSO WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE P URPOSE OF IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE DIFFERENT THAN THOSE A PPLIED FOR MAKING OR CONFIRMING THE ADDITIONS. THE HONBLE KERALA HIGH C OURT IN THE CASE OF CIT V. M. GEORGE & BROS. [1986] 160 ITR 511 HELD THAT WHER E THE ASSESSEE FOR ONE REASON OR THE OTHER AGREES OR SURRENDERS CERTAIN AM OUNTS FOR ASSESSMENT, THE IMPOSITION OF PENALTY SOLELY ON THE BASIS OF TH E SURRENDER WILL NOT BE WELL-FOUNDED. HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. SURAJ BHAN [2007] 159 TAXMAN 26 WHILE FOLLOWING THE DECISION IN CIT V. SURESH CHANDRA MITTAL [2001] 251 ITR 9 (SC), HELD THAT WHEN AN ASSESSEE FILES A REVISED RETURN SHOWING HIGHER INCOME AND GI VES AN EXPLANATION THAT HE OFFERED HIGHER INCOME TO BUY PEACE OF MIND AND A VOID LITIGATION, PENALTY CANNOT BE IMPOSED MERELY ON ACCOUNT OF HIGHER INCOM E HAVING BEEN SUBSEQUENTLY DECLARED. THE HONBLE APEX COURT IN CI T V. SURESH CHANDRA MITTAL, [2001] 251 ITR 9/119 TAXMAN 433, UPHELD THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT RENDERED IN THE C ASE OF CIT VS. SURESH CHANDRA MITTAL [2000] 241 ITR 124, WHERE IN SIMILAR CIRCUMSTANCES IT WAS HELD THAT THE INITIAL BURDEN LIES ON THE REVENUE TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED THE INCOME HAD FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. THE BURDEN SHIFTS TO THE ASSESSEE ONLY IF H E FAILS TO OFFER ANY EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE BY THE ASSESSING OFFICER. 8.1 IN QUDAI INTERNATIONAL VS. INCOME TAX OFFICER 2009 (13) MTC 622 (TRIB), THE ITAT LUCKNOW BENCH 'A' HELD THAT 'MERE RAISING OF QUERY BY THE ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 9 ASSESSING OFFICER DID NOT AMOUNT TO DETECTION OF CO NCEALMENT. IT CANNOT THEREFORE, BE SAID THAT THE REVISED RETURN WAS FILE D AFTER DETECTION OF CONCEALMENT AND WAS NOT VOLUNTARY. THE TERM 'DETECT ION' ITSELF IMPLIES THE ASSESSING OFFICER HAD REACHED A CONCLUSION BUT THE QUERY RAISED BY THE ASSESSING OFFICER WAS ONLY FIRST STEP IN DETECTION OF CONCEALMENT. IF THE ASSESSEE VOLUNTARILY REVISED THE RETURN, IT COULD N OT BE SAID THAT IT DOES NOT FULFILL REQUIREMENTS OF SECTION 139(5) OF THE ACT.' THE FACTS OF THE PRESENT CASE ARE ALSO SIMILAR TO THE FACTS OF THE AFORESAID REFE RRED TO CASE. 8.2 SIMILARLY, IN THE CASE OF DY. CIT VS. TARUN A GARWAL 2009 (13) MTC 831, THE ITAT LUCKNOW BENCH 'A' HELD THAT 'THE ASSESSEE HAD SURRENDERED THE AMOUNT BEFORE ANY SPECIFIC DETECTION OF UNDISCLOSED INCOME OR EVEN BEFORE THE ISSUE OF NOTICE. EVEN THOUGH A GENERAL ENQUIRY WAS GOING ON AND NOTICES HAD BEEN ISSUED TO SOME OF HIS RELATIVES AND THE AM OUNT MIGHT HAVE BEEN SURRENDERED BECAUSE OF COMPULSION OF CIRCUMSTANCES, IT WAS NOT SUFFICIENT TO PENALISE THE ASSESSEE AS THE FACTUM OF DETECTION WA S NOT THERE.' IN THE INSTANT CASE ALSO, NOTHING IS BROUGHT ON RECORD THA T THERE WAS ANY DETECTION AT THE LEVEL OF THE AO TO SUGGEST THAT THE ASSESSEE CONCEALED THE INCOME ON ACCOUNT OF CAPITAL GAINS, WHICH WAS OFFERED FOR TAX ATION SUO MOTU IN THE REVISED RETURN. 8.3 MERELY BECAUSE A NOTICE U/S 143(2) HAD ALREADY BEEN ISSUED AND THE ASSESSEE FILED REVISED RETURN THEREAFTER, DISCLOSIN G ADDITIONAL INCOME TOWARDS CAPITAL GAINS, WHICH WAS NOT CORRECTLY SHOW N IN THE ORIGINAL RETURN, DOES NOT TANTAMOUNT TO DETECTION OF CONCEALMENT OF INCOME U/S. 271(1)(C) OF THE ACT. HONBLE MADHYA PRADESH HIGH COURT IN THE C ASE OF CIT V. S.V. ELECTRICALS P. LTD., 155 TAXMAN 158 AND HONBLE JHA RKHAND HIGH COURT IN CIT V. ASHIM KUMAR AGARWAL, 153 TAXMAN 226 HELD THAT WHERE THE ASSESSEE SURRENDERS HIS FULL INCOME, THOU GH AT A LATER STAGE, THERE WAS NO QUESTION OF ANY CONCEALMENT ON HIS PART AND CONSEQUENTLY, NO PENALTY UNDER SECTION 271(1)(C) WA S LEVIABLE, AND THAT A OMISSION FROM RETURN OF INCOME DID NOT AMOUN T TO CONCEALMENT. HONBLE JURISDICTIONAL HIGH COURT WHILE ADJUDICATIN G THE ISSUE OF LEVY OF PENALTY U/S 271 (1 )(C) OF THE ACT IN THE CASE O F CIT VS. HARNARAIN IN THEIR DECISION DATED 31 ST OCTOBER,2011 IN ITA NO.2072/2010 CONCLUDED THAT 'SURRENDER OF THE AMOUNT BY THE ASSE SSEE AFTER RECEIPT OF THE QUESTIONNAIRE COULD NOT LEAD TO AN INFERENCE TH AT IT WAS NOT VOLUNTARY, IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SUGGEST TH AT IT WAS BOGUS OR UNTRUE. IT IS FURTHER EVIDENT THAT THERE WAS NEITHE R ANY DETECTION NOR ANY INFORMATION IN THE POSSESSION OF THE REVENUE WHICH MIGHT LEAD TO A CONCLUSION THAT THERE WAS A DETECTION BY THE REVENU E OF CONCEALMENT. ACCORDINGLY, THE QUESTION OF LAW FRAMED IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 9.. IN THE INSTANT CASE, THE ASSESSEE VOLUNTARY D ISCLOSED ADDITIONAL INCOME DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND PAID TAX THEREON. IN THE LIGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS, IT CANNOT BE SAID IN THE CASE BEFORE US, ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF AS SESSMENT PROCEEDINGS WAS NOT VOLUNTARY OR THAT THE ASSESSEE WANTED TO CONCEAL THE INCOME. EVEN THOUGH THE REVISED RETURN WAS FOUND TO BE INVALID, THE AO ACCEPTED THE INCOME AS DECLAR ED IN THE ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 10 REVISED RETURN AND COMPUTATION. THE AO DID NOT BRING ANY MATERIAL ON RECORD THAT THE DECLARATION O F INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURN OR HIS E XPLANATION WAS NOT BONAFIDE. IN THESE CIRCUMSTANCES, THERE APP EARS TO BE NO BASIS FOR IMPOSITION OF PENALTY ON THE GROUND TH AT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME . SINCE THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL NOR BROUGHT TO OUR NOTICE ANY CONTRARY DECISION SO AS TO ENABLE US TO TAKE DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED T O INTERFERE. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 10. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TE RMS OF RESIDUARY GROUND NO.2 IN THE APPEAL; ACCORDINGLY, THIS GROUND IS ALSO DISMISSED. IN THE PRESENT CASE THE ONLY OBJECTION OF LD. DR IS THAT SINCE THE REVISED RETURN WAS NOT VALID, NO COGNIZANCE OF THE SAME SHOULD HAVE BEEN TAKEN. IN THIS RESPECT, WE FIND THAT WHIL E DELETING THE PENALTY, EVEN LD. CIT(A) HAS HELD THE REVISED RETUR N TO BE INVALID BUT HE HAS DELETED THE PENALTY BY HOLDING THAT NON DISC LOSURE OF CAPITAL GAIN IN THE ORIGINAL RETURN OF INCOME WAS BASED ON REASONABLE CAUSE. WE ALSO HOLD THAT DUE TO SPECIFIC CIRCUMSTANCES OF THE CASE THERE WAS REASONABLE CAUSE FOR NOT DECLARING THE CAPITAL GAIN IN THE ORIGINAL RETURN OF INCOME AS THE ASSESSEE DID NOT R ECEIVE THE FULL CONSIDERATION AND A MAJOR DISPUTE AROSE AMONG THE P ARTIES. THE FACT THAT UPTO HON'BLE TRIBUNAL THE ASSESSEE LOST THE CA SE IN QUANTUM PROCEEDINGS AND ONLY GOT RELIEF FROM THE HON'BLE PU NJAB & HARYANA HIGH COURT MAKES THE ISSUE DEBATABLE AND FOR A DEBA TABLE ISSUE PENALTY CAN NOT BE IMPOSED. THE HON'BLE AMRITSAR BENCH IN ITA NO. 571 AND 572 VIDE ORDER DATED 06.08.2012 HAD DELETED THE PENALTY U/S 271(1) (C) WHEREIN THE ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 11 ORIGINAL RETURN WAS FILED AS BELATED RETURN AND THE REFORE ASSESSEE WAS NOT ENTITLED TO FILE REVISED RETURN OF INCOME BUT ASSESSEE FILED REVISED RETURN OF INCOME. IN THAT CA SE THE HON'BLE TRIBUNAL HAD HELD THAT THERE WAS A TECHNICAL BREACH OF THE PROVISIONS OF ACT. THE FINDINGS OF HON'BLE TRIBUNAL ARE REPRODUCED BELOW: 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE ID. CIT(A) AN D THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N. ARORA, A DVOCATE THAT THOUGH THE ORIGINAL RETURN HAS NOT BEEN FILED UNDER SECTION 13 9(1) OF THE ACT OR IN PURSUANCE OF NOTICE UNDER SECTION 142(1) OF THE ACT , BUT THE ASSESSEE ON ITS OWN HAD DISCOVERED THE OMISSION OR WRONG STATEMENT AND HAS REVISED THE RETURN WITHIN JUST FOUR DAYS OF FILING OF THE ORIGI NAL RETURN, WHICH WAS A BELATED RETURN, IS NOT UNDER DISPUTE. THIS ACT OF T HE ASSESSEE IS DELIBERATE AND THE ASSESSEE WAS HONEST IN REVISING THE RETURN AND STATING THE FACTS BEFORE THE INCOME TAX DEPARTMENT AND THAT WAS POSSI BLE ONLY BY FILING A REVISED RETURN OF INCOME. THE ASSESSEE HAD FILED TH E ORIGINAL RETURN UNDER BONAFIDE BELIEF AND ON FINDING OMISSION/WRONG STATE MENT, THE ASSESSEE REVISED THE RETURN FOR THE REASONS MENTIONED IN THE REVISED RETURN AND EXPLANATION SUBMITTED BEFORE THE AUTHORITIES BELOW. AS PER DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF G.L. DIDWANIA VS. ITO REPORTED IN 224 ITR 687, WHERE IT HAS BEEN HELD AS UNDER: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING AND PENAL TY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR CONSCIOUS DISREGARD OF OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MER ELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILUR E TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORI TY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMST ANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO I MPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BR EACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 9.1. THE RATIO LAID DOWN BY THE HONBLE SUPREME COU RT, IN THE CASE OF G.L. DIDWANIA VS. ITO (SUPRA), IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, THE ASSESSEE ON FINDING OMISSION OR WRONG STATEMENT HAD ACTED DELIBERATELY AND HAS COME OUT W ITH HONESTY TO REVISE ITA NO. 640(ASR)/2015 ASSESSMENT YEAR: 2007-2008 12 THE RETURN WITHIN JUST FOUR DAYS OF FILING THE BELA TED RETURN. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAD FILED THE BELATED RETURN AND AS PER SECTION 139(5), THE REVISED RETURN CANNOT BE FILED IN SUCH A CASE. THERE IS TECHNICAL BREACH OF THE PROVISIONS OF THE ACT. BUT AT THE SAME IT FLOWS FROM A BONAFIDE BELIEF OF THE ASSESSEE, WHICH HAS BEEN COR RECTED BY REVISING RETURN IMMEDIATELY AFTER FOUR DAYS OF FILING THE ORIGINAL RETURN. THEREFORE, RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF G.L. DIDWANIA VS. ITO 9KSUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CANCELLED THE PENALTY SO L EVIED. 9. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE JUDICIAL PRECEDENTS, WE HOLD THAT LD. CIT(A) HAD RI GHTLY DELETED THE PENALTY. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY REVEN UE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.08.2017. SD/- SD/- (N.K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11.08.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER