ITO, Chandigarh V. Ms. Anjana Sehgal, Chandigarh

ITA 780/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73574 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-03-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 10-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 780/CHD/2013 ASSESSMENT YEAR: 1997-98 THE ITO, WARD-1(3), VS. MS. ANJANA SEHGAL, CHANDIGARH CHANDIGARH PAN NO. AEKPS6204E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.NAGAR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 10/03/2014 DATE OF PRONOUNCEMENT : 20.03.2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 26.04.2013 OF CIT (APPEALS), CHANDIGARH. 2. IN THIS APPEAL. THE REVENUE HAS RAISED THE FOLLO WING EFFECTIVE GROUND:- 1. THE LD CIT(A) HAS ERRED IN DELETING PENALTY U/S 271(1)(C) OF I.T. ACT, 1961 BECAUSE AN ASSESSEE CA N BE HELD TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME WHERE THE ASSESSEE MADE A DEDUCTION, WHICH WAS INCORRECT IN LAW AND NOT AS PER PROVISION OF THE ACT. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THIS YEAR THE ASSESSEE HAD SOLD 8.5 ACRES OF LAND IN VILLAGE BALTANA, DIST RICT PATIALA, TEHSIL RAJPURA FOR RS. 88,66,750/-. NO CAPITAL GAIN WAS COMPUTED ON T HIS SALE AND A NOTE WAS GIVEN IN THE RETURN THAT THIS IS A CASE OF AGRICUL TURAL LAND WHICH IS SITUATED OUTSIDE THE MUNICIPAL LIMIT, THEREFORE, NO CAPITAL GAIN IS LEVIABLE. THE ASSESSING OFFICER DID NOT AGREE WITH THE SAME AND ON THE BASI S OF NOTIFICATION ISSUED BY THE GOVERNMENT, ASSESSED THIS LAND FOR CAPITAL GAIN PURPOSES. ON THIS POINT 2 PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE A LSO INITIATED. IN RESPONSE TO THE SHOW CAUSE NOTICE AGAINST THE PENALTY PROCEEDIN GS, IT WAS MAINLY STATED THAT IF THE LIMIT IS CONSIDERED FROM THE STATE OF PUNJA B, THEN THE SAME WAS BEYOND THE LIMIT OF 8 KMS. VARIOUS DECISIONS WERE ALSO REL IED ON. HOWEVER, THE ASSESSING OFFICER NOTICED THAT ADDITION HAS BEEN CO NFIRMED BY THE HONBLE HIGH COURT, THEREFORE, PENALTY WAS LEVIABLE AND TH EREFORE, HE LEVIED A MINIMUM PENALTY OF 100% AMOUNTING TO RS. 16,82,612/- 4. ON APPEAL, IT WAS MAINLY STATED THAT ASSESSEE HA S NOT CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME, THEREFORE, PENALTY PROCEEDINGS WAS NOT LEVIABLE. T HE LD CIT(A) AGREED WITH THE SUBMISSIONS AND DELETED THE PENALTY. 5. BEFORE US, LD DR SUPPORTED THE ORDER OF ASSESSIN G OFFICER. 6. ON THE OTHER HAND, THE LD COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAS SPECIFICALLY GIVEN A NOTE IN THE RETUR N OF INCOME THAT THIS WAS AGRICULTURAL LAND BEYOND THE LIMIT OF MUNICIPALITY AND AS SUCH NO CAPITAL GAIN WAS CHARGEABLE, THEREFORE, IT CANNOT BE SAID THAT A SSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. FURTHER, TAX HAS BEEN FINALL Y FOUND TO BE CHARGABLE BY THE HONBLE HIGH COURT ON THE BASIS OF NOTIFICATION NO. 9447 (F. NO. 164/3/87- IT(A-1) DATED 06.01.1994 BUT THE FACT REMAINS THAT ADDITION WAS DELETED EVEN BY THE TRIBUNAL. THIS SHOWS THAT ISSUE IS DEBATABLE. IN ANY CASE, A COPY OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V RAJIV BHATARA 94 DTR (P&H) 137 WAS FILED. IN THAT CASE IN SIMILAR C IRCUMSTANCES, PENALTY WAS HELD TO BE NOT LEVIABLE. HE ALSO RELIED THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF CIT V RELIANCE PETROPRODUCTS PVT LTD 32 2 ITR 15159 (SC). OBSERVED AS UNDER:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. FIRST OF ALL THE ASSESSEE HAS GIVEN 3 THE FOLLOWING NOTE IN THE RETURN OF INCOME WHICH IS REPRODUCED IN THE ASSESSMENT ORDER AND READS AS UNDER:- DURING THE ACCOUNTING PERIOD I SOLD AGRICULTURE LA ND AT VILLAGE, DISTT. PATIALA, TEHSIL: RAJPURA MEASURING 8.5 ACRES FOR RS. 83,66,750/-. NO LONG TERM CASITA GAIN TAX ARISES AS THE LAND IS OUTSIDE THE MUNICIPAL LIMITS AND THE PO PULATION OF THE VILLAGE IS LESS THAN TEN THOUSAND. 8. THIS CLEARLY SHOWS THAT ASSESSEE HAD DECLARED EV ERYTHING IN THE RETURN OF INCOME. MERELY BECAUSE THE PARTICULAR ITEM IS HELD TO BE TAXABLE DOES NOT MEANS THAT THE ASSESSMENT IS SUBJECT TO PENAL CONSEQUENC ES AND TAXABLE. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V R AJIV BHATARA (SUPRA) HELD AS UNDER:- PENALTY UNDER S. 271(1)(C) CONCEALMENT CAPITAL GAINS VIS--VIS AGRICULTURAL LAND ASSESSEES CLAIM OF L AND BEING SITUATED BEYOND 8 KMS OF MUNICIPAL LIMITS REJECTED AND PROFIT ASSESSED AS CAPITAL GAINS PENALTY LEVIED U/S 271( 1)(C) DELETED BY THE TRIBUNAL JUSTIFIED TRIBUNAL WHIL E UPHOLDING DELETION OF PENALTY NOTICED THAT THE ASSE SSEE HAD FURNISHED A CERTIFICATE DATED 19 TH JUNE 1996 FROM SUB DIVISIONAL ENGINEER WHEREIN IT WAS SPECIFIED THAT D ISTANCE FROM SONEPAT MUNICIPAL COMMITTEE TO VILLAGE KAMASPU R, TEHSIL AND DISTRICT SONEPAT WAS 8.2 KMS IT WAS NO TICED THAT THERE WAS VARIOUS CERTIFICATES WHEREIN DIFFERENT DI STANCES HAD BEEN MENTIONED AFTER CONSIDERING THE MATTER, THE TRIBUNAL CAME TO THE CONCLUSION THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PARTICUL ARS FURTHER, MERE MAKING OF A CLAIM WHICH WAS ULTIMATEL Y FOUND TO BE UNSUSTAINABLE MAY NOT BY ITSELF AMOUNT TO FUR NISHING OF INACCURATE PARTICULARS REGARDING THE INCOME. 9. THE ABOVE CASE IS ALMOST IDENTICAL TO THE FACTS OF THE CASE. IN ANY CASE THE HONBLE SUPREME COURT IN THE CASE OF CIT V RELIAN CE PETROPRODUCTS PVT LTD (SUPRA) HELD AS UNDER:- 4 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INF ORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INA CCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCU RATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THA T EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY EH ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARI SE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TH E TRUTH OR ERRONEOUS. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPIN ION THAT LD CIT(A) HAS CORRECTLY DELETED THE PENALTY AND ACCORDINGLY WE CO NFIRM HIS ORDER. 10. IN THE RESULTS, REVENUE APPEAL IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20.03.20 14 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 20 TH MARCH, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 5