Devendra Narendrabhai Thakker, Ahmedabad V. ACIT, Circle-5(2), Ahmedabad

ITA 762/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7944 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JYOTISH M SHAH
• Keywords: Capital asset; Principle of natural justice; Bonafide belief; Wrong claim; Difference of opinion; Bonafide mistake; Ignorance of law
• Section: 143(3); 133A; 263

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD OLHE VGEN] YS[KK LNL OLHE VGEN] YS[KK LNL OLHE VGEN] YS[KK LNL OLHE VGEN] YS[KK LNL; ;; ; , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NO. 762/AHD/2018 ( / ASSESSMENT YEAR : 2011-12) DEVENDRA NARENDRABHAI THAKKER, C/O MAFFICK LOGISTICS, 228, AKSHAR ARCADE, OPP. MEMNAGAR FIRE STATION, NAVRANGPURA, AHMEDABAD-14 / VS. ACIT, CIR 5(2), AHMEDABAD. ./ ./ PAN/GIR NO. : ABFPT 6354 E ( / APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : SHRI JYOTISH M. SHAH , A.R. !' $ # / RESPONDENT BY : SHRI PRASOON KABRA , SR.D.R. % &' $ () / DATE OF HEARING 30 /0 5 /2018 *+,- $ () / DATE OF PRONOUNCEMENT 03 /07 /2018 . / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-5, AHMADABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-5/DCIT CIR.5(2)/60/2016-17 DATED 07/02/20 18 ARISING IN THE PENALTY ORDER PASSED UNDER S.271(1)(C) OF THE I NCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATE D 23/02/2017 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. INVALID & BAD ORDER: A) THE COMMISSIONER OF INCOME TAX (APPEALS)-5, AHMEDAB AD, ERRED IN REJECTING THE GROUND OF PENALTY LEVIED ON THE BASIS OF NOTICE U/S 274.271 DATED 30.08.2016 IS INVALID & BAD IN LAW AS IT DOES NOT STATE CLEAR DEFAULT FOR WHICH IT IS ISSUED'. THE CIT(A) ERRED IN STATING THAT 'IN THE NOTICE ISS UED U/S 271 (L)(C) OF THE ACT THE DEFAULT HAS BEEN CLEARLY SPEC IFIED. B) WITHOUT PREJUDICE TO ABOVE : THE ORDER PASSED BY CIT(A) IS INVALID & BAD AS IT V IOLATES PRINCIPLES OF NATURAL JUSTICE. THE ORDER IS PASSED WITHOUT CONSIDERING AND DEALING WITH WRITTEN SUBMISSION FILED WITH HIM IN ITS PROPER PER SPECTIVE. 2. ON MERITS : THE CIT(A) ERRED IS PASSING THE ORDER ON ORIGINAL G ROUNDS OF APPEAL AND NOT CONSIDERING REVISED GROUNDS OF APPEA L FILED ON 28.12.2017 3. (A) CIT(A) ERRED IN CONFIRMING PENALTY NOT ACCEP TING THE CONTENTION THAT : I. INCOME & CLAIM BOTH ARE DISCLOSED IN RETURN OF I NCOME II. CLAIM ALLOWED BY OFFICER AFTER DUE VERIF ICATION. B) THE CIT(A) ERRED IN NOT ACCEPTING THE CONTENTION TH AT, IT IS SETTLED PRINCIPLE THAT WHAT IS KNOWN TO THE DEPARTM ENT CANNOT BE CONSIDERED AS CONCEALMENT. C) THE CIT(A) ERRED IN CONFIRMING THE PENALTY STATING THAT 'THE APPELLANTS CONTENTION THAT ALL DETAILS HAVE BE EN FURNISHED WHILE FILING THE RETURN OF INCOME IS NOT CORRECT'. 4. THE CIT(A) ERRED IN NOT CONSIDERING FACTS THAT T HOUGH PROCEEDINGS U/S 263 ITSELF IS INVALID IN LAW ON FAR TS OF THE CASE, TO BUY MENTAL PEACE AND AVOID LITIGATION, AGREED BEFORE PR .CIT, FOR DISALLOWANCE OF CLAIM, WITH CLEAR UNDERSTANDING THA T NO PENALTY BE LEVIED. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 3 - 5. THE CIT(A) ERRED IN CONFIRMING PENALTY WITHOUT C ONSIDERING & DEALING WITH THE CASE LAWS, FILED AND RELIED IN WRI TTEN SUBMISSION. 3. BEFORE COMING TO THE SPECIFIC ISSUE, IT IS RELEV ANT TO UNDERSTAND THE BRIEF HISTORY OF THE CASE. THE ASSESSEE DURING THE YEAR HAS SOLD ITS NON-AGRIC ULTURAL LAND LOCATED AT 8/6, MOUJE KADIYALI, TALUKA-RAJULA, DIST -AMRELI, GUJARAT. THE IMPUGNED LAND WAS NOT NOTIFIED IN THE URBAN ARE A FOR THE EXEMPTION UNDER SECTION 54G OF THE ACT. THE ASSESSE E ON THE SALE OF SUCH LAND HAS EARNED A LONG-TERM CAPITAL GAIN OF RS . 1,18,60,239/- ONLY. THE ASSESSEE AGAINST SUCH LONG-TERM CAPITAL G AIN HAS CLAIMED DEDUCTION U/S 54EC AND 54G FOR RS. 44,00,000/- & 74 ,65,134/- RESPECTIVELY. THE ASSESSEE, AN INDIVIDUAL, ENGAGED IN THE BUSINES S OF FORWARDING AND CUSTOMS CLEARANCE. HE FILED HIS RETURN OF INCOM E DATED 29/09/2011 DECLARING TOTAL INCOME OF RS. 43,83,330/ - ONLY. THE INCOME TAX RETURN OF THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT AT THE INCOME DECLARED IN RETURN. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY AND ACCORDINGL Y, NOTICES U/S 143(2)/142(1) WAS SERVED UPON THE ASSESSEE. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AFTER MAKING THE DISALLOWANCES OF CERTAIN EXPENSES FOR RS.1,53,9 70/- ON AD-HOC BASIS VIDE ORDER DATED 30.01.2014. SUBSEQUENTLY, THE LEARNED CIT U/S 263 OF THE ACT OB SERVED THAT THE ORDER PASSED U/S 143(3) OF THE ACT IS ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE GROUND THAT T HE ASSESSEE HAS CLAIMED EXEMPTION U/S 54G FOR RS.74,65,134/- FOR WH ICH HE WAS NOT ELIGIBLE. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 4 - ACCORDINGLY, THE ORDER OF THE AO WAS SET ASIDE BY T HE LEARNED CIT U/S 263 OF THE ACT VIDE ORDER DATED 16.03.2016 WITH THE DIRECTION TO DISALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54G OF THE ACT FOR RS. 74,65,134/- ONLY. ACCORDINGLY, A SHOW-CAUSE NOTICE WAS ISSUED BY THE AO UPON THE ASSESSEE FOR DISALLOWING THE DEDUCTION U/S 54G OF T HE ACT. IN COMPLIANCE TO IT, THE ASSESSEE SUBMITTED THAT HE HAS ALREADY PAID TAXES ALONG WITH INTEREST FOR THE WRONG CLAIM OF DE DUCTION U/S 54G OF THE ACT. IT WAS ALSO CLAIMED THAT DEDUCTION U/S 54G FOR RS.74,65,134/- WAS CLAIMED INADVERTENTLY ON THE MIS INTERPRETATION OF THE PROVISIONS OF LAW. ACCORDINGLY, THE AO ADDED THE SUM OF RS.74,65,134/- ON ACCOUNT OF WRONG DEDUCTION CLAIM UNDER SECTION 54G OF THE ACT. HOWEVER, THE AO IN HIS ASSESSMENT ORDER PASSED U/S 143(3)/ 263 OF THE ACT DATED 30.08.2016 INITIATED THE PENALTY PROC EEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE AO SUBSEQUENTLY ISSUED A NOTICE U/S 274 OF THE ACT VIDE DATED 30.08.2016 FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INCOME. THE AS SESSEE IN COMPLIANCE TO IT, SUBMITTED THAT THE DEDUCTION U/S 54G OF THE ACT WAS CLAIMED INADVERTENTLY AND ACCORDINGLY, THE ASSESSEE AGREED FOR THE IMPUGNED ADDITION BEFORE THE LEARNED PR. CIT. THE A SSESSEE HAS ALREADY PAID THE TAXES FOR RS.25,91,680/- ALONG WIT H INTEREST FOR RS.32,600/- ON 15.03.2016 AND 26.09.2016 RESPECTIVE LY. THUS THERE SHOULD NOT BE ANY QUESTION FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 5 - THE ASSESSEE ALSO SUBMITTED THAT ALL THE NECESSARY DETAILS ABOUT CAPITAL GAIN AND ITS EXEMPTION U/S 54G WERE DULY FI LED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT. THEREFORE, THERE WAS NEITHER ANY CONCEALMENT OF INCOME NOR FUR NISHING INACCURATE PARTICULARS OF INCOME DELIBERATELY. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE AND LEVIED THE PENALTY OF RS.22,61,935/- BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A). THE ASSESSEE BEFORE THE LEARNED CIT(A) SUBMITTED THAT T HE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS DEFECTIVE AS IT DOES NOT SPELL OUT SPECIFIC CHARGE FOR LEVYING THE PENALTY WHETHER IT IS FOR CONCEALMENT OF INCOME OR FURNISHING PARTICULARS OF INCOME. THER EFORE, IN THE ABSENCE OF SPECIFIC CHARGE MENTIONED IN THE NOTICE ISSUED U/S 274 OF THE ACT, THE PENALTY U/S 271(1)(C) CANNOT BE LEVIED UPON THE ASSESSEE. THE DISPUTE IN THE INSTANT CASE IS RELATING TO THE CLAIM FOR THE EXEMPTION U/S 54G OF THE ACT WHICH IS A DEBATABLE I SSUE BUT THE ASSESSEE TO AVOID THE LITIGATION WITH THE DEPARTMEN T AND TO BUY PEACE OF MIND AGREED TO SUCH ADDITION. IT WAS ALSO CLAIMED THAT THE AO ALLOWED THE DEDUCTI ON U/S 54G OF THE ACT AFTER DUE VERIFICATION IN THE ASSESSMENT PROCEE DINGS. THEREFORE, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS DELIBE RATELY FURNISHED INACCURATE PARTICULARS OF INCOME. HOWEVER, THE LEARNED CIT(A) DISREGARDED THE CONTENT ION OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 6 - DECISION: 3.3 IN THIS CASE, THE ASSESSEE HAS FILED RETURN OF INCOME IN 29.09.2011. ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED ON 30.1.2014 DETERMINING TOTAL INCOME AT RS.45,37,300/ -. SUBSEQUENTLY, THE PR. CIT, AHMEDABAD-5 VIDE ORDER U/S 263 OF THE ACT, DTD. 16.3.2016 HELD THAT ORDER U/S.143(3) OF THE ACT DTD. 30.1.201 4 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND DIRECTED THE AO TO PASS A FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN THE ORDER. THE ASSESSMENT U/S. 143(3) R.W.S. 263 WAS FINALIZED ON 30.08.2016 AT TOTAL INCOME OF RS.1,20,02,434/- AFTER DISALLOWING REDUCTION CLAIMED BY THE ASSESSEE U/S.54G AMOUNTING TO RS.74,65,134/- . LONG TERM CAPITAL GAIN OF RS.1,80,60,239/- HAD ARISEN IN THE HANDS OF THE ASSESSEE ON SALE OF LAND WHICH IS A NON-AGRICULTURA L LAND AND NOT A NOTIFIED URBAN AREA FOR THE PURPOSE OF SECTION 54G. CAPITAL GAIN OF RS.74,65,134/- WAS UTILIZED FOR THE PURPOSE OF NEW CAPITAL ASSET SITUATED AT AHMEDABAD WHICH COMES UNDER THE TERRITO RY OF URBAN AREA OF AHMEDABAD. BOTH THE CONDITIONS REQUIRED AS FOR THE SECTION 54G OF THE ACT FOR CLAIMING EXEMPTION UNDER THE SAI D SECTION WERE NOT FULFILLED IN THE INSTANT CASE. DURING THE ASSESSMEN T PROCEEDINGS THE ASSESSEE ADMITTED TO HAVE MADE AN ERROR IN CLAIMING DEDUCTION U/S 54G OF THE ACT. ACCORDINGLY, THE AO HAS DISALLOWED THE CLAIM OF EXEMPTION U/S.54G OF THE ACT. THEREAFTER PENALTY PR OCEEDINGS U/S.271(1)(C) OF THE ACT WAS INITIATED. DURING THE PENALTY PROCEEDINGS THE ASSESSEE HAS SUBMITTED THAT THE INCORRECT CLAIM U/S.54G IN THE RETURN OF INCOME WAS THE RESULT OF A GENUINE MISTAK E ON PART OF THE ASSESSEE AND THAT THE ASSESSEE HAD ACCEPTED THE MIS TAKE DURING THE PROCEEDING SUNDER THE ACT. THE AO HAS REJECTED THE SUBMISSIONS OF THE ASSESSEE AND HELD THAT IN A CASE WHERE ANY PARTICUL AR FILED IN THE RETURN OF INCOME BY THE ASSESSEE FOUND TO BE INACCU RATE, ERRONEOUS OR FALSE AND WHICH HAS AN IMPACT ON TOTAL INCOME RETUR N BY THE ASSESSEE. IT WOULD ATTRACT LIABILITY FOR PENALTY U/S.271(1)(C ) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, THE AO HAS LEVIED PENALTY AMOUNTING TO RS. 22,62,000/- U/S.271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF THE INCOME BY WAY OF WRONG CLAIM OF DEDUCTION U/S. 54G OF THE ACT. 3.4. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS OBJECTED THE PENALTY PROCEEDINGS ON THE GROUND THAT NOTICE U /S. 274 R.W.S. 271 WAS NOT RECEIVED WITH THE ORDER U/S.143(3) R.WS. 26 3 OF THE ACT DTD. 30.08.2016 AND IN THE NOTICE NO CLEAR DEFAULT IS ME NTIONED WHETHER ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 7 - THIS FOR CONCEALED INCOME OR INACCURATE PARTICULARS OF INCOME. IT IS CONTENDED THAT RETURN OF INCOME WAS FILED DISCLOSIN G FULL DETAILS OF CAPITAL GAIN VIS-A-VIS CLAIM MADE U/S.54G. IT IS AL SO CONTENDED THAT ORIGINAL ORDER U/S. 143(3) WAS PASSED AFTER DUE VER IFICATION OF CASE BV TWO DIFFERENT OFFICERS IN REFERENCE TO CLAIM U/S.54 G ALSO AND THE CLAIM WAS ALLOWED. IT IS CONTENDED THAT ORDER U/S.263 AUT OMATICALLY PROVES THAT CLAIM WAS MADE BY THE ASSESSEE AND ALLOWED BY THE OFFICERS ORIGINALLY, QUESTION OF NONDISCLOSURE OF FACT OR FI LING INACCURATE PARTICULARS OF INCOME DOES NOT ARISE. IT IS ALSO CO NTENDED THAT MERELY ON ACCOUNT OF DIFFERENT OPINION NO PENALTY CAN BE I MPOSED. FURTHER II IS CONTENDED THAT IF EVEN CLAIM IS NOT SUSTAINABLE IN LAW NO PENALTY CAN BE IMPOSED. 3.5. FACTS OF THE CASE AND THE SUBMISSIONS ARE CONS IDERED. A PERUSAL OF ASSESSMENT ORDER. IT IS FOUND THAT PENALTY PROCE EDINGS U/S.271(1)(C) OF THE ACT WAS PROPERTY INITIATED AND PENALTY NOTICE U/S.274 R.W.S. 271(1)(C) OF THE ACT WAS ISSUED ON 3 0.08.2016 WHICH WAS DULY SERVED UPON THE ASSESSEE. IN THE NOTICE IS SUED U/S.271(1)(C) OF THE ACT THE DEFAULT HAS BEEN CLEARLY SPECIFIED. THEREFORE, OBJECTIONS RAISED REGARDING THE INITIATION OF PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE DISMISSED. THE APPELLANT HAS CLAIMED DEDUCTION U/S.54G OF THE ACT WHICH WAS NOT ALLOWABLE THEREFORE THE SAME WAS DISA LLOWED BY THE AO IN THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 26 3 OF THE ACT. ! THEREAFTER PENALTY U/S.271(1)(C) WAS LEVIED FOR FUR NISHING INACCURATE PARTICULARS OF INCOME IN THE RETURN OF INCOME. THE ASSESSEE HAS ADMITTED DURING THE ASSESSMENT PROCEEDINGS THAT THE DEDUCTION HAS BEEN WRONGLY CLAIMED IN THE RETURN OF INCOME AND AD MITTED THE MISTAKE. REGARDING PENALTY IT WAS CONTENDED THAT IT IS A BONAFIDE MISTAKE THEREFORE NO PENALTY CAN BE LEVIED, A PERUS AL OF SECTION 54G OF THE ACT CLEARLY SHOWS THAT THE MAIN CONDITIONS FOR AVAILING THE EXEMPTION U/S. 54G ARE AS UNDER:- 1. THE CAPITAL GAIN HAD ARISEN ON SALE OF PROPERTY SITUATED IN AN URBAN AREA AND 2. THE INDUSTRIAL UNDERTAKEN SHOULD BE SHIFTED TO ANY AREA OTHER THAN AN URBAN AREA. IN THE INSTANT CASE THE CAPITAL GAIN HAD ARISEN ON SALE OF NON- AGRICULTURAL LAND SITUATED IN NON-NOTIFIED URBAN AR EA FOR THE PURPOSE OF SECTION 54G OF THE ACT. FURTHER THE NEW CAPITAL ASSET PURCHASED IS ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 8 - ALSO SITUATED AT AHMEDABAD AND COMES UNDER TERRITOR Y OF URBAN AREA OF AHMEDABAD, THIS CLEARLY SHOWS THAT THE APPELLANT HAS FAILED TO FULFILL BOTH THE CONDITIONS PRESCRIBED U/S.54G OF T HE ACT. IN SPITE OF THAT THE APPELLANT HAS CLAIMED DEDUCTION WHILE FILI NG THE RETURN OF INCOME. IN THE PRESENT CASE, THE ASSESSEE MADE A CL AIM WHICH IS NOT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT AN Y BASIS AND IN SUCH A SITUATION IT WOULD BE DIFFICULT TO SAY THAT THE A PPELLANT WOULD STILL NOT BE LIABLE TO PENALTY U/S.271(1)(C) OF THE ACT. IN VARIOUS JUDGMENTS, IT IS ESTABLISHED THAT WHENEVER THERE IS A DIFFEREN CE BETWEEN THE RETURNED INCOME AND THE ASSESSED INCOME, THERE IS I NFERENCE OF CONCEALMENT. THE ONUS IS ON THE ASSESSEE TO REBUT T HE INFERENCE OF CONCEALMENT, IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO DO SO. THE APPELLANT'S CONTENTION THAT ALL DETAILS HAVE BEEN F URNISHED WHILE FILING THE RETURN OF INCOME LS NOT CORRECT. THE APPELLANT' S PLEA THAT THE DISALLOWANCE OF CLAIM OF DEDUCTION MERELY ON ACCOUN T OF DIFFERENCE OF OPINION IS NOT AT ALL CORRECT. AS PER THE PROVISION S OF ACT IT IS VERY MUCH CLEAR THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITION U/S.54G OF THE ACT AND THEREFORE, DEDUCTION U/S.54G OF THE ACT IS NOT ALLOWABLE TO THE APPELLANT. CONSIDERING THE ABOVE, PENALTY LEVIE D BY THE AO IS JUSTIFIED AND THE SAME IS CONFIRMED. THUS THE GROUN DS OF APPEAL ARE DISMISSED. 4. ACCORDINGLY, THE APPEAL STANDS DISMISSED. BEING AGGRIEVED BY ORDER OF LEARNED CIT(A) ASSESSEE IS IN THE SECOND APPEAL BEFORE US. THE LEARNED AR BEFORE US FILED A PAPER BOOK WHICH I S RUNNING FROM PAGES 1 TO 79 AND MADE WRITTEN SUBMISSIONS WHICH AR E REPRODUCED AS UNDER: INVALID & BAD PENALTY PENALTY LEVIED IS INVALID & BAD AS NOTICE U/S 274 R .W.S 271 FOR PENALTY U/S 271(1)(C) DOES NOT STATE CLEAR DEFAULT FOR WHIC H IT IS ISSUED. PENALTY NOTICE DOES NOT MENTION SPECIFICALLY, WHETH ER IT IS ISSUED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IT SPECIFIES ..... HAVE CONCEALED THE PARTICULARS OF YOUR INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.... ................... ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 9 - WHILE ISSUING NOTICE FOR PENALTY AO HAS TO APPLY MI ND FOR SPECIFIC DEFAULT. (S.C.) SSA'S EMERALD MEADOWS 386 ITR 13 (MUMBAI (TAT) MEHERJEE CASSINATH HOLDING P. LTD. IT AT ONLINE 11- 05-2017 WITHOUT PREJUDICE TO ABOVE FACTS RETURN OF INCOME WAS FILED DISCLOSING FULL DETAILS OF CAPITAL GAINS VIS-A- VIS CLAIM MADE U/S 54-G. ORIGINAL ORDER U/S 143(3) DATED 30-01-2014 WAS PASS ED AFTER DUE VERIFICATION OF CASE BY TWO DIFFERENT OFFICERS, IN REFERENCE TO CLAIM U/S 54-G ALSO, CALLING FOR RELEVANT DETAILS FROM TIME T O TIME. CLAIM U/S 54- G WAS ALLOWED. AFTER FINALIZATION OF ASSESSMENT, ON ACCOUNT OF AUD IT OBJECTION, NOTICE U/S 263 WAS ISSUED BY PR. COMMISSIONER OF INCOME TA X. SAID NOTICE WAS ISSUED ON ACCOUNT OF DIFFERENT OPINION THAN INC OME TAX OFFICERS, REGARDING CLAIM ALLOWED U/S 54-G. ORDER U/S 263 AUTOMATICALLY PROVES THAT CLAIM WAS M ADE BY THE ASSESSEE AND ALLOWED BY OFFICERS ORIGINALLY, QUESTI ON OF NON DISCLOSURE OF FACTS OR FILING INACCURATE PARTICULARS OF INCOME DOES NOT ARISE. NOTICE U/S 263 DATED 12-02-2016 WAS ISSUED. APPEARED BEFORE PR. COMMISSIONER OF INCOME TAX ON 2 9-02-2016 AND DISCUSSED THE ISSUE. AFTER DISCUSSION, AGREED FOR D ISALLOWANCE, TO BUY MENTAL PEACE AND TO AVOID LONG DRAWN LITIGATION, AS CLAIM U/S 54-G FOUND DEBATABLE. THE SAID AGREEMENT WAS MADE BEFORE PR. COMMISSIONER OF INCOME TAX WITH CLEAR UNDERSTANDING THAT PENALTY PROCEEDINGS WOULD NOT BE INITIATED. PAID RS. 25,91,680/- ON 15-03-2016. ORDER U/S 263 IS DATED 16-03-2016. ORDER U/S 143(3) R.W.S 263 IS DATED 30-08-2016. SUBMISSION ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 10 - ON FACTS, WHEN DETAILS ARE DEARLY DISCLOSED, ALLOWE D BY AO AFTER DUE VERIFICATION, IT CANNOT BE CONCEALMENT OR INACCURAT E PARTICULARS OF INCOME. MAY IT BE WRONG CLAIM OR CLAIM WRONGLY ALLO WED BUT QUESTION OF FURNISHING INACCURATE PARTICULARS OF INCOME DOES NOT ARISE. 1. ENTIRE INCOME DECLARED IN RETURN OF INCOME. ALL FACTS ARE ON RECORD. NOT CONCEALED ANY MATERIAL FACTS. DELHI ITAT- TIDE WATER MARINE INTERNATIONAL - 97 TT J 139 AHMEDABAD ITAT-RUPAM MERCANTILE LTD 91 ITD 237/85 T TJ 609 AHMEDABAD ITAT -GUJARAT STATE FINANCIAL SERVICES LT D - 39 SOT 570 AHMEDABAD ITAT-ABDU REHMAN MIRZA FAMILY TRUST AHMEDABAD ITAT-SUDHABENT. PARIKH GUJ. H.C. - GEETA PRINTS P. LTD. 247 CTR 620 2. DISCLOSED/OFFERED EXPLANATION - MERELY ON ACCOUNT O F DIFFERENT OPINION-NO PENALTY AHMEDABAD- ITAT-KARNAVATI INF. P . LTD. 193 TAXMAN 3 ISSUE (XIII) AHMEDABAD GUJ STATE FERTILIZERS & CHEMICALS LTD. 19 3 TAXMAN 26 (DIGEST) DELHI H.C. BACARDI 206 CTR 250 3. EVEN CLAIM IS NOT SUSTAINABLE IN LAW- NO PENALTY MUMBAI ITAT- AJIT B. ZOTA 40 SOT 543 (AIFTP -1561-( 9398) S.C. PRICE WATERHOUSE COOPERS PVT. LTD. S.C. RELIANCE PETRO PRODUCTS 4. WRONG CLAIM OF REVENUE LOSS - NO CONCEALMENT GUJ H.C. - BTX CHEMICALS P. LTD. 288 ITR 796 /205 C TR 252 5. NO EVIDENCE-ASSESSEE CONCEALED AHMEDABAD ITAT- GRUH FINANCE LTD. 316 ITR 441 CONCEALMENT IMPLIES DELIBERATE ACT S.C. K.C. BUILDERS 265 ITR 562 6. ASSESSEE ADMITTING MISTAKE - APPLYING PROVISION OF S. 263- BEFORE LEVYING PENALTY, ADMITTED NO PENALTY. GUJ.H.C MILEX CABLE INDUSTRIES -261 ITR 675-182 CTR 442 ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 11 - THE LEARNED AR ALSO FURTHER SUBMITTED AS UNDER: DURING THE COURSE OF HEARING TODAY ON 17/05/2018, YOUR HONOURS INSTRUCTED TO GIVE CLARIFICATION REGARDING HOW THE CLAIM U/S 54G WAS MADE ON THE BASIS OF THE FACTS OF THE CASE. I, DEVENDRA N. THAKKER, SOLEMNLY DECLARE THE FOLLOW ING: THIS IS REGARDING THE CLAIM MAD U/S 54G. SIR, I WAS UNDER THE BONAFIDE BELIEF THAT IF ON THE SALE OF A CAPITAL ASSET, IF T HE SALES PROCEEDS ARE INVESTED IN ANOTHER CAPITAL ASSET, THEN EXEMPTION W OULD BE AVAILABLE. THE CONCERNED GAIN WAS FROM SALE OF LAND AT RAJULA. AGAINST THE SALE, I PURCHASED ANOTHER COMMERCIAL PROPERTY. I MADE INQ UIRIES REGARDING THE DISTANCE OF RAJULA FROM KADIYALI. I ALSO INVEST ED THE SUMS IN NEW PROPERTY FOR THE PURPOSE OF BUSINESS. I WAS ADVISED ON THE BASIS OF VARIOUS CASE LAWS WHEREIN THE COURT HAD ALLOWED DED UCTION SAYING THAT ONE SHOULD NOT GO IN TO THE INTRICACIES OF LAW S AND IF THE INTENTION OF INVESTING THE FUNDS WITHIN TIME LIMIT IS FULFILL ED, THEN EXEMPTION WOULD BE ALLOWABLE. I HAD TAKEN THE PRINT OUT FROM GOOGLE REGARDING THE DISTANCE FROM RAJULA TO KADIYAII, WHERE THE PROPERTY WAS SITUATED . COPY OF THE MAP IS ENCLOSED. THE DEDUCTION IS AVAILABLE ON SHIFTING FROM URBAN A REA TO ANY OTHER AREA. URBAN AREA MEANS ANY SUCH AREA WITHIN THE LIMITS OF MUNICIPAL CORPORATION OR MUNICIPALITY AS THE CENTRAL GOVERNME NT MAY NOTIFY FROM TIME TO TIME. THE NEW PROPERTY IS SITUATED AT SOLA, WHICH ACCORDING TO ME; FELL OUTSIDE THE AHMEDABAD MUNICIP AL CORPORATION AT THAT TIME. CORPORATION LIMITS WERE DRASTICALLY C HANGED DURING THAT PERIOD. ON FACTS, I WAS ADVISED REGARDING THE ALLOWABILITY OF DEDUCTION. I WAS UNDER THE BONAFIDE BELIEF THAT EXEMPTION WOULD BE A VAILABLE. ALL THE RELEVANT DETAILS LIKE SALE DEED, PURCHASE DEED, DIS TANCE ETC. WERE PRODUCED DURING THE ASSESSMENT PROCEEDING BEFORE TH E ACIT/ DCIT ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 12 - AND AFTER DUE VERIFICATION THE CLAIM WAS ALLOWED AF TER SCRUTINY BY TWO OFFICERS. THE POINT CAME UNDER DISCUSSION WITH THE PR. CIT, W HO EXPLAINED TO US REGARDING THE DISALLOWABILITY OF THE CLAIM. BUT THE N IT WAS AGREED, THAT IF WE PAY THE DUE TAXES, THEN NO PENALTY WOULD BE LEVIED. SO I GENUINELY ACCEPTED THE ERROR ON MY PART AND PAID TH E DUE TAXES, TO BUY PEACE OF MIND, EVEN BEFORE THE ORDER WAS PASSED BY THE ASSESSING OFFICER. IN VIEW OF THE BONAFIDE BELIEF AS STATED ABOVE, THE CLAIM WAS MADE. I HAVE NOT FILED ANY INACCURATE PARTICULARS WHILE MAK ING THE CLAIM. ON THE OTHER HAND, LEARNED DR SUBMISSION BEFORE US ARE AS UNDER: SUB:- REJOINDER TO ASSESSEE'S SUBMISSION DATED 17. 05.2018 REGARDING EXEMPTION U/S. 54G. DURING THE COURSE OF HEARING, IN THE ABOVE MENTIONE D CASE YOUR HONOURS HAVE DIRECTED TO THE A.R. TO GIVE CLARIFICA TION REGARDING CLAIM OF EXEMPTION U/S. 54G AND TO JUSTIFY ASSESSEE'S REA L INTENTION BEHIND THIS CLAIM. ASSESSEE HAS MADE SUBMISSIONS IN THIS R EGARD AND REJOINDER TO WHICH IS HEREUNDER: 1. ASSESSEE'S RUNNING A BUSINESS CONCERN IN THE NAME O F 'MAFFICK LOGISTICS' WHICH IS ENGAGED IN CUSTOM CLEARANCE AND LOGISTIC BUSINESS., SINCE ALMOST 20 YEARS AND SEEMS TO BE A SEASONED CU STOM CLEARANCE AGENT AND VERY WELL AWARE OF TAXATION LAWS. IN THIS REGARD, INFORMATION AVAILABLE ON INTERNET IS ALSO ATTACHED HEREWITH. 2. FURTHER, ASSESSEE CLAIM THAT HE HAS BEEN 'ADVISED O N THE BASIS OF CASE LAWS WHEREIN THE COURT HAD ALLOWED DEDUCTION SAYING THAT ONE SHOULD NOT GO IN TO THE INTRICACIES OF LAWS AND IF THE INT ENTION OF INVESTING THE FUNDS WITHIN TIME LIMIT IS FULFILLED, THEN EXEM PTION WOULD BE ALLOWABLE'. HOWEVER, ASSESSEE HAS FAILED TO INFORM THAT WHO HAS GIVEN HIM SUCH LEGAL ADVISE AND WHAT ARE THE CASE LAWS ON WHICH HE RELIED. 3. SECTION 54G WAS INTRODUCED TO PROMOTE BALANCE REGIO NAL AND INDUSTRIAL DEVELOPMENT IN INDUSTRIALLY BACKWARD NON -URBAN AREAS. IT STIPULATED TWO ESSENTIAL CONDITIONS (I) CAPITAL GAI N SHOULD ARISE TRANSFER OF LAND USED FOR THE PURPOSE OF BUSINESS S ITUATED IN A URBAN AREA AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEARS O R 3 YEARS OF ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 13 - TRANSFER PURCHASED / ACHIEVED LAND OR BUILDING FOR THE PURPOSE OF HIS BUSINESS, IN A NON URBAN AREA. IN THIS CASE, NOT ONLY LEGISLATIVE INTENT HAS BEEN DEFEATED BUT BOTH THE CONDITIONS ARE ALSO NOT FULFILLED AS FIRST LY THE LAND WHICH IS SOLD IS NOT IN URBAN AREA AND LAND WHICH IS PURCHAS ED IS IN URBAN AREA I.E. PROPER AHMEDABAD. INTENTIONAL IGNORANCE OF LAW, NOT ONLY RELATED TO I NCOME TAX ACT BUT ALSO TO MUNICIPAL AND URBAN LAND HOLDINGS C AN'T BE SAID TO BE BONAFIDE AS A ASSESSEE HIMSELF WAS AS CUSTOM CLEARA NCE AGENT SINCE LAST 20 YEARS AND REGULARLY FILING HIS INCOME TAX R ETURNS. IN THIS CASE, ALL THAT HAS BEEN DONE BY ASSESSEE IS WITH CLEAR IN TENTION TO AVOID TAXES BY DISRESPECTING THE LEGAL SYSTEM AND WITH CL EAR MENSREA AND MALAFIDE INTENTION TO AVOID TAXES. HENCE, IT IS REQ UESTED THAT PENALTY SHOULD BE LEVIED IN THIS CASE. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LO WER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54G OF THE AC T. IN FACT, THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54G OF THE AC T WAS DENIED BY THE AO INCONSEQUENT TO THE DIRECTION ISSUED BY THE LEARNED CIT U/S 263 OF THE ACT. THE ASSESSEE DURING THE PROCEEDINGS U/S 263 OF THE ACT AGREED TO THE ADDITION FOR THE WRONG CLAIM OF D EDUCTION U/S 54G OF THE ACT FOR RS.74,65,134/- BUT SUBMITTED THAT IT WAS CLAIMED INADVERTENTLY. THEREFORE, THE ASSESSEE PLEADED BEFO RE THE LOWER AUTHORITIES NOT TO LEVY THE PENALTY U/S 271(1)(C) O F THE ACT. HOWEVER, THE AO WAS PLEASED TO LEVY THE PENALTY ON ACCOUNT O F FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 271(1)(C) OF T HE ACT AND THE VIEW OF THE AO WAS SUBSEQUENTLY UPHELD BY THE LEARN ED CIT(A). THE LEARNED AR BEFORE US HAS CHALLENGED THE PENALTY ORDER ON TWO COUNTS; FIRSTLY , THE NOTICE ISSUED U/S 274 OF THE ACT IS DEFECTIVE , AND SECONDLY, THE MISTAKE WAS COMMITTED BY HIM INADVERTENTLY DUE TO WRONG INTERPRETATION OF THE LAW. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 14 - THERE IS NO AMBIGUITY THAT THERE WAS NO SPECIFIC CH ARGE MENTIONED BY THE AO IN THE NOTICE ISSUED U/S 274 OF THE ACT W HETHER IT WAS LEVIED ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME. BUT ON PERUSAL OF THE PENALT Y ORDER WE NOTE THAT THE PENALTY WAS LEVIED ON ACCOUNT OF FURNISHIN G INACCURATE PARTICULARS OF INCOME. THEREFORE, WE ARE OF THE VIE W THAT THE LOWER AUTHORITIES WAS CONSCIOUS WHILE LEVYING THE PENALTY IN THE ORDER U/S 271(1) OF THE ACT. THEREFORE, THE PENALTY PROCEEDI NGS CANNOT BE HELD INVALID MERELY ON THE GROUND THAT THE NOTICE D OES NOT SPECIFY THE SPECIFIC CHARGE FOR LEVYING THE PENALTY. IN HOL DING SO, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF THE JURIS DICTIONAL HIGH COURT IN THE CASE OF SNITA TRANSPORT PVT. LTD. VS. ACIT REPORTED IN 42 TAXMAN.COM 54, WHEREIN IT WAS HELD AS UNDER: 9. REGARDING THE CONTENTION THAT THE ASSESSING OFFICE R WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY W AS BEING IMPOSED NAMELY FOR CONCEALING THE PARTICULARS OF IN COME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD TH AT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DID ORDER IN ITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY TH AT HE PASSED, HE CLEARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN V IEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOM E. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNED, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF INCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISION OF THIS C OURT IN CASE OF MANU ENGINEERING WORKS (SUPRA). IN THE SAID DECISION, TH E DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MA Y BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETH ER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY TH EM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY THE AUTHORITY, PENA LTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTH ORITY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE S AID THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME.' IT WAS IN THIS RESPECT THE BENCH OBSERVED ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 15 - THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMI NAL CASE OR A QUASI- CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCO ME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF S UCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT F INDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' IN VIEW OF THE ABOVE, WE HOLD THAT NOT MENTIONING T HE SPECIFIC CHARGE IN THE NOTICE ISSUED U/S 274 OF THE ACT CANNOT VITI ATE THE PENALTY PROCEEDINGS U/S 271(1) OF THE ACT. THE CASE LAW RELIED ON THE LEARNED AR, I.E. CIT VS. SSAS EMERALD MEADOWS IS NOT APPLICABLE TO THE INSTANT FACTS OF T HE CASE. THE HONBLE SUPREME COURT, IN THIS CASE, HAS JUST DISMI SSED THE SLP, AND THEREFORE IT CANNOT BE SAID THAT THE ORDER OF HONB LE HIGH COURT GOT MERGED WITH THE ORDER HONBLE SUPREME COURT. IN THI S REGARD WE FIND SUPPORT & GUIDANCE FROM THE JUDGMENT OF HONBLE SUP REME COURT IN THE CASE OF WORKMEN OF COCHIN PORT TRUST V. BOARD OF TRUSTEES OF THE COCHIN PORT TRUST [1978] 3 SCC 119 (A THREE-JUDGE BENCHS DECISION) WHEREIN IT WAS OBSERVED THAT DISMISSAL OF SPECIAL L EAVE PETITION BY THE SUPREME COURT BY A NON-SPEAKING ORDER OF DISMIS SAL WHERE NO REASONS ARE GIVEN DOES NOT CONSTITUTE RES JUDICATA. ALL THAT CAN BE SAID TO HAVE BEEN DECIDED BY THE COURT IS THAT IT WAS NO T A FIT CASE WHERE SPECIAL LEAVE SHOULD BE GRANTED. IT WAS HELD THAT A N ORDER DISMISSING A SPECIAL LEAVE PETITION, MORE SO WHEN IT IS BY A N ON-SPEAKING ORDER, DOES NOT RESULT IN THE MERGER OF THE ORDER IMPUGNED INTO THE ORDER OF THE SUPREME COURT. IN THE INSTANT CASE THERE IS DIRECT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SNITA TRANSPORT PVT LTD. (SUPRA) WHERE IT WAS OBSERVED CATEGORICALLY THAT NON MENTIO NING THE SPECIFIC CHARGE IN THE NOTICE ISSUED U/S 274 OF THE ACT CANNOT MAKE THE PENALTY PROCEEDINGS U/S 271(1) OF THE ACT AS I NVALID. ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 16 - SIMILARLY, THE CASE LAW RELIED ON THE ASSESSEE, I.E . PRICE WATERHOUSE COOPERS PVT. LTD. (SUPRA) ALSO DOES NOT SUPPORT THE CASE OF THE ASSESSEE. IN THE CASE OF WATERHOUSE COOPERS PVT. LTD. (SUPRA), THERE WAS DISCLOSURE IN THE TAX AUDIT REPORT FOR THE DISA LLOWANCE TO BE MADE IN THE TAX AUDIT FOR THE PROVISION OF GRATUITY UNDER SECTION 40A(7) OF THE ACT. BUT THE SAME WAS NOT DISALLOWED IN THE COMPUTATION OF INCOME. THEREFORE, THERE WAS NO DELI BERATE ACT EITHER TO CONCEAL THE INCOME NOR TO FURNISH THE INACCURATE PARTICULARS OF INCOME. SIMILARLY, WE ALSO NOTE THAT THE FACTS OF THE CASE, I.E. RELIANCE PETROPRODUCTS PVT. LTD. DOES NOT SUPPORT THE CASE O F THE ASSESSEE. IT IS BECAUSE THE RELATED TRANSACTIONS WERE DISCLOSED IN THE ACCOUNTS, BUT THE SAME WAS NOT DISCLOSED IN THE STATEMENT OF INCOME INADVERTENTLY. THUS THERE WAS NO DELIBERATE ACT EIT HER TO CONCEAL THE INCOME NOR TO FURNISH THE INACCURATE PARTICULARS OF INCOME. IN THE CASE ON HAND, THE ASSESSEE WAS WELL AWARE OF ALL THE PROVISIONS OF ACT AND ACCORDINGLY, HE HAS RIGHTLY CLAIMED THE DEDUCTION U/S 54EC OF THE ACT. THE ASSESSEE IN THE INSTANT CASE H AS CLAIMED THE DEDUCTION U/S. 54G OF THE ACT AGAINST THE TRANSFER OF AGRICULTURE LAND, WHICH WAS NOT NOTIFIED FOR THE PURPOSE OF SECTION 5 4G OF THE ACT. THUS THE DEDUCTION CLAIMED UNDER SECTION 54G OF THE ACT IS CONTRARY TO THE PROVISIONS OF LAW. IN THE GIVEN FACTS & CIRC UMSTANCES THE ASSESSEE CANNOT TAKE THE SHELTER OF THE IGNORANCE O F THE PROVISIONS OF LAW. SIMILARLY, THE ASSESSEE AGREED TO SUCH ADDITION IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT, CANNOT BE THE GROUND FOR NOT LEVYING THE PENALTY. IN THIS REGARD, WE ALSO RELY ON THE JU DGMENT OF SUPREME COURT IN THE CASE OF MAK DATA (P) LTD. VS. CIT REPO RTED IN 38 TAXMANN.COM 448 WHEREIN IT WAS HELD AS UNDER: ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 17 - 8. ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM OF RS.40,74,000/- WITH A VIEW TO AVO ID LITIGATION, BUY PEACE AND TO CHANNELIZE THE ENERGY AND RESOURCES TO WARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOM E TAX DEPARTMENT. STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER THE EXPLANATION 1 TO SECTION 271(L)(C) OF THE ACT. IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT RELEASE THE APPELLANT -ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PRO VIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEA LED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME I N THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURREN DER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH COND UCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANN OT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE CO URSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOC UMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEME NTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURS E OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARIN G AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE I NCOME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TR ANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FIL ED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORIC AL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. IN VIEW OF ABOVE, WE HOLD THAT THE ASSESSEE WAS GUI LTY OF FURNISHING THE INACCURATE PARTICULARS OF INCOME. THEREFORE, WE DO NOT FIND ANY ITA NO.762/AHD/2018 DEVENDRA NARENDRABHAI THAKKER VS. ACIT ASST.YEAR 2011-12 - 18 - INFIRMITY IN THE ORDER OF LOWER AUTHORITIES. HENCE, THE GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 03/07/2018 SD/- S D/- JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; ( RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 03/07/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. /01( % 2( / CONCERNED CIT 4. % 2( ( ) / THE CIT(A)-5 AHMEDABAD. 5. 567 !(&01 , ) 01- , 8 / / DR, ITAT, AHMEDABAD 6. 79 :' / GUARD FILE. % & / BY ORDER, ' 5( !( //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 21/06/2018(DICTATION PAD 7 PAGES ATTACHED AT THE END OF THIS APPEAL- FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22/06/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S02/07/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER