The Dy. Commissioner Income-tax, Pathankot V. Smt. Utha Rani, Pathankot

ITA 652/ASR/2014

• Counselvise Citation: 65220914 RSA 2014
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARSEM LAL
• Assessee Lawyers: ASHWANI KALIA
• Keywords: Capital asset

Judgement Text

I.T.A. NO.: 652/ASR/2014 ASSESSMENT YEAR: 2006 - 07 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL A MRITSAR BENCH, A MRITSAR. [CORAM: PRAMOD KUMAR AM AND A.D. JAIN, JM ] I.T.A. NO. 652/ASR/2014 ASSESSMENT YEAR: 2006 - 07 DY. COMMISSIONER OF INCOME - TAX, CIRCLE - VI, PATHANKOT . ......... ...... .... APPELLANT VS . SMT. USHA RANI, W/O SH. SUBHAS CHANDER, 221 - GANDHI NAGAR, PATHANKOT . .RESPONDENT PAN AAYPR 2781D APPEARANCES BY: TARSEM LAL....... FOR THE APPELLANT ASHWANI KALIA.... F OR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 5/6/2015 DATE OF PRON OUNCING THE ORDER : 31/8/ 201 5 O R D E R PER PRAMOD KUMAR , AM : BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED THE CORRECTNESS OF THE ORDER DATED 26 TH AUGUST, 2014 PASSED BY THE LD. CIT(A) IN THE MATTER OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2006 - 07. 2. GRIEVANCE RAISED IN THIS APPEAL IS AS FOLLOWS 1. WHETHER, IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS RIGHT IN DELETING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME - TA X ACT, 1961 AMOUNTING TO RS.5,02,880/ - WHEN THE AO HAS I.T.A. NO.: 652/ASR/2014 ASSESSMENT YEAR: 2006 - 07 PAGE 2 OF 4 CATEGORICALLY PROVED THE MALA FIDE INTENTION OF THE ASSESSEE. IT HAS BEEN PROVED THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF HIS INCOME AND HAD TRIED TO MISLEAD THE DEPARTMENT BY GIVING WRONG FACTS W.R.T. APPLICABILITY OF SHORT - TERM CAPITAL GAIN ON THE SALE OF LAND UNDER CONSIDERATION, WHEN THE HONBLE PUNJAB & HARYANA HIGH COURT VIDE ORDER DATED 29.04.2013 IN ITA NO.190 OF 2012 HAS ALREADY SET ASIDE THE ORDERS OF THE CIT(A) AMRITSAR AND HONB LE ITAT AMRITSAR BENCH, AMRITSAR AND RESTORED THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3), WHEREIN IT IS HELD THAT THE LAND UNDER CONSIDERATION IS SITUATED WITHIN THE LIMIT OF 8 KMS FROM THE MUNICIPALITY, WOULD BE A CAPITAL ASSETS AND THE SALE OF WHICH WOULD ATTRACT CAPITAL GAIN. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE SOLD FOR RS.16 LAKHS, AGRICULTURAL LAND ADMEASURING 8 KANALS SITUATED AT VILLAGE ISLAMPUR, TEHSIL PATHANKOT. I N A NOTE APPENDED TO THE COMPUTATION OF INCOME, FORMING PART OF THE INCOME TAX RETURN, THE ASSESSEE DISCLOSED THIS FACT AND STATED THAT SINCE LAND IS SITUATED 9 KM. AWAY FROM THE MUNICIPAL LIMITS I.E. PATHANKOT, CAPITAL GAINS IN RESPECT OF THIS SALE ARE NO T TAXABLE. A CERTIFICATE FROM TEHSILDAR WAS ALSO ATTACHED. HOWEVER, THE ASSESSING OFFICER, AS PER LOCAL INQUIRIES, FOUND THAT THE LAND IS SITUATED JUST 5 KM FROM NALWA BRIDGE OCTROI POST, I.E. THE MUNICIPAL LIMIT. WHEN ASSESSEE WAS CONFRONTED WITH THESE FA CTS, SHE OFFERED THE CAPITAL GAINS TO TAX. THE MATTER, HOWEVER, DID NOT REST THERE. THE ASSESSING OFFICER ALSO IMPOSED PENALTY OF RS.5,02,880/ - FOR CONCEALMENT OF INCOME. HOWEVER, WHEN THE MATTER WAS CHALLENGED IN APPEAL BEFORE THE CIT(A), HE DELETED THE I MPUGNED PENALTY BY OBSERVING AS FOLLOWS : - 6. I HAVE GONE THROUGH ASSESSEES SUBMISSION, VARIOUS CASE LAWS AND PENALTY ORDER OF THE AO IN THIS REGARD. IN THIS CASE, HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT DISTANCE OF AGRICULTURE LAND HAS TO BE C OMPUTED FROM THE NEAREST URBAN AREAS NOT NECESSARILY FROM THE MUNICIPALITY WHERE LAND SITUATED GOT REGISTERED. EARLIER IN THIS CASE, HONBLE ITAT, AMRITSAR AND CIT(A), AMRITSAR HAS DECIDED THIS ISSUE ON THE BASIS OF DCIT VS. CAPITAL LOCAL AREA BANK LTD. BY ACCEPTING THE PLEA OF THE ASSESSEE THAT DISTANCE HAS TO BE MEASURED FROM REVENUE I.T.A. NO.: 652/ASR/2014 ASSESSMENT YEAR: 2006 - 07 PAGE 3 OF 4 LIMITS OF TEHSIL, PATHANKOT. WHERE THE LAND IN QUESTION WAS REGISTERED AND, THEREFORE, MUNICIPAL LIMITS OF PATHANKOT ARE RELEVANT TO DETERMINE WHETHER LAND IS CAPITAL ASSET O R NOT. SIMILAR DECISION ON THIS ISSUE ARE AVAILABLE FROM OTHER TRIBUNALS, HIGH COURT IN THIS REGARD. THUS IT CAN BE SEEN THAT ISSUE IS DEBATABLE AND DO HAVE TWO INTERPRETATION AT THAT POINT OF TIME. THOUGH NOW HONBLE JURISDICTIONAL HIGH COURT HAS DECIDED THAT IT IS TO BE MEASURED FROM NEAREST MUNICIPAL LIMITS. AT PRESENT NO SUPREME COURT DECISION IS AVAILABLE ON THE ISSUE. HONBLE PUNJAB & HARYANA HIGH COURT HAS HELD IN THE CASE OF CIT VS. HARYANA WHERE HOUSING CORPORATION 340 ITR 215 (P&H) THAT WHERE DE4D UCTION HAS BEEN ALLOWED/DISALLOWED AND CONFLICTING DECISION EXISTS ON THE SUBJECT, PENALTY U/S 271(1)(C) CANNOT BE LEVIED. HONBLE SUPREME COURT HAS ALSO HELD IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS THAT PENALTY CANNOT BE IMPOSED EVEN FOR MAKING UNS USTAINABLE CLAIM. PENALTY CAN BE LEVIED WHEN PARTICULARS SUBMITTED BY THE ASSESSEE HAVE BEEN PROVED FALSE. IN VIEW OF JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT DECISION IN THIS REGARD, PENALTY LEVIED BY THE AO IS DELETED ON THE ISSUE. 4. THE A SSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. WE FIND THAT THE ISSUE IN APPEAL IS, AS NOTED BY THE CIT(A), COVERED IN FAVOUR OF THE ASSESSEE BY CO - ORDINATE BENCHS ORDER, AND THERE WAS A LEGAL CONTROVERSY, THOUGH NOW SETTLED BY HONBLE JURISDICTIONAL HIGH COURT AGAINST THE ASSESSEE, ON THE MANNER IN WHICH DISTANCE OF 8 KM IS TO BE COMPUT ED. AT THE POINT OF TIME WHEN INCOME TAX RETURN WAS FILED THE ASSESSEE DID NOT HAVE THE BENEFIT OF GUIDANCE OF HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT, WHICH WAS DELIVERED ON 1.3.2011, ON THIS ISSUE. UNDOUBTEDLY, NOW THAT THE LAW HAS BEEN LAID DOWN BY THEIR LORDSHIPS, IT IS WHAT THE LAW ALWAYS WAS. HOWEVER, IN THESE CIRCUMSTANCES BONA FIDES OF ASSESSEES CLAIM ABOUT NON - TAXABILITY OF CAPITAL GAIN IN QUESTION, CANNOT BE DOUBTED. IN VIEW OF THESE DISCUSSIONS, AS I.T.A. NO.: 652/ASR/2014 ASSESSMENT YEAR: 2006 - 07 PAGE 4 OF 4 ALSO BEARING IN MIND E N TIRETY OF THE CASE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A), AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED TODAY ON 31 ST DAY OF AUGUST 2015 UNDER PROVISO TO RULE 34(4) OF THE APPELLATE TRIBUNAL (INCOME - TAX) RULES, 1963. SD/XX SD/XX A.D. JAIN PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AMRITSAR, THE 31 ST DAY OF AUGUST 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT ( 3) COM MISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL A MRITSAR BENCH AMRITSAR