M/s. Manak Devi Surana, New Delhi V. ITO, New Delhi

ITA 787/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7021 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: SM MATHUR
• Keywords: Opportunity of being heard
• Section: 54F

Judgement Text

1 ITA NO. 787/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEM BER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 787/DEL/2013 (ASSESSMENT YEA R-2007-08) MANAK DEVI SURANA 88, OKHLA INDUSTRIAL AREA, PHASE-III NEW DELHI AALPS1048P (APPELLANT) VS ITO WARD-22(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. S. M. MATHUR, CA RESPONDENT BY SH. AMRIT LAL, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 29/11/ 2012 PASSED BY LD. CIT (A)S XXIII, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE IN UPHOLDING THE PENALTY ORDER PASSED BY LD. ASSESSING OFFICER U/S 271(1) (C) OF THE INCOME TAX ACT, 1961 . DATE OF HEARING 04.02.2016 DATE OF PRONOUNCEMENT 17.02.2016 2 ITA NO. 787/DEL/2013 2. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) WHILE UPHOLDING PENALTY ORDER U/S 271(1) (C) OF THE ACT, HAS ERRED IN LAW AS MUCH AS FACTS OF THE CASE IN NOT JUDICIAL LY DECIDING THE LEGAL ISSUE CHALLENGED BY THE APPELLAN T ABOUT THE VALIDITY OF THE ASSESSMENT ORDER IN VIEW OF THE BELATED APPROVAL OBTAINED FROM THE LD. JCIT. 3. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE IS NOT APPRECIATING THAT THE NOTICE U/S 271(1) (C) OF THE ACT, IS DEFECTIVE WHICH IS NOT SUSTAINABLE IN LAW BECAUSE T HE MANDATORY REQUIREMENT OF ISSUING SUCH NOTICE HAS NO T BEEN MAINTAINED BY THE LEARNED JCIT. 4. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE IN NOT APPRECIATING THAT THE WITHDRAWAL OF CLAIM OF EXEMPT ION WAS SOU-MOTU AND BEFORE THE DETECTION BY THE LD. ASSESSING OFFICER. 5. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE IS RELYING UPON THE JUDGMENT OF HONBLE ORISSA HIGH COURT IN T HE CASE OF CIT VS. ORISSA CORPORATION LTD. 159 ITR 78( HON'BLE SUPREME COURT) AND THEREBY DERIVED WRONG CONCLUSION OF UPHOLDING THE UNWARRANTED PENALTY U/S 271(1) (C) OF THE ACT OF RS.4, 27,579/-. IN VIEW OF ABOVE, THE APPELLANT PARTY THAT THE AFOR ESAID IMPUGNED PENALTY OF RS.4, 27,579/- MAY KINDLY BE DE LETED AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E APPELLANT. 3. GROUND NO.5 IS NOT AS PER THE INCOME-TAX RULES. THEREFORE, THE SAME IS NOT PRESSED BY THE LD. AR. GROUND NO. 1 IS GENERAL IN NATURE. GROUND NO. 2, 3 & 4 ARE CONTESTED BY THE A SSESSEE BEFORE US. 3 ITA NO. 787/DEL/2013 4. THE APPELLANT FILED RETURN OF INCOME FOR THE A.Y 2007-08 ON 22/8/2007, DISCLOSING INCOME OF RS.2,39,486/-. THE APPELLANT HAD DISCLOSED LONG TERM CAPITAL GAINS ON SALE OF LAND S ITUATED AT INDORE, IN RESPECT OF WHICH EXEMPTION U/S 54F OF RS.18,93,0 24/- WAS CLAIMED. DURING THE SCRUTINY ASSESSMENT PROCEEDING S, IT WAS FOUND FROM THE BALANCE SHEET AS ON 31/3/2007 THAT THE APP ELLANT WAS THE OWNER OF TWO RESIDENTIAL PROPERTIES, OTHER THAN THE THIRD RESIDENTIAL PROPERTY PURCHASED DURING THE YEAR AND IN RESPECT O F WHICH EXEMPTION U/S 54F HAD BEEN CLAIMED. APPROVAL WAS T AKEN FROM THE JCIT, RANGE-22, NEW DELHI, FOR COMPREHENSIVE SCRUTI NY, AND THE APPELLANT WAS REQUIRED TO JUSTIFY HER CLAIM FOR EXE MPTION. IN RESPONSE, THE AUTHORIZED REPRESENTATIVE FILED A LET TER DATED 17/9/2009 WITHDRAWING THE CLAIM AND OFFERING THE LO NG TERM CAPITAL GAINS OF RS.19, 05,431/- FOR TAX. THE ASSESSMENT W AS COMPLETED AT AN INCOME OF RS.21, 44,920/- AND PENALTY PROCEEDING S WERE INITIATED U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. DURING THE PENAL TY PROCEEDINGS, IT WAS SUBMITTED THAT THE APPELLANT WA S 78 YEARS OF AGE, WAS IGNORANT OF THE PROVISIONS OF LAW, AND HAD INADVERTENTLY CLAIMED THE EXEMPTION. MOREOVER, THE COMPUTATION O F INCOME HAD BEEN REVISED BEFORE THE COMPLETION OF ASSESSMENT. THE ASSESSING OFFICER HOWEVER, HELD THAT THE APPELLANT WAS REGULA RLY ASSESSED TO TAX AND HAD SUFFICIENT KNOWLEDGE OF THE LAW TO MAKE A CLAIM U/S 54F. MOREOVER, THE REVISION OF INCOME WAS NOT SUO MOTU, BUT AFTER THE INELIGIBILITY OF CLAIM WAS POINTED OUT BY THE A SSESSING OFFICER. PENALTY WAS LEVIED AT 100% OF THE TAX SOUGHT TO BE EVADED WHICH 4 ITA NO. 787/DEL/2013 WORKED OUT TO RS.4, 27,579/-. AGGRIEVED, THE APPEL LANT HAS FILED THIS APPEAL BEFORE LD. CIT(A) WHICH WAS DISMISSED. 5. THE LD. AR SUBMITS THAT THERE WAS NO CONCEALMENT ON HER PART AS THE EXEMPTION U/S 54F WAS NOT DISALLOWED BY THE ASSESSING OFFICER BUT THERE WAS NO MATERIAL ON RECORD, WE SHO WS THAT THE ASSESSEE HAS CONCEALED ANY DOCUMENT OR ANY INCOME T O THAT EFFECT BEFORE THE ASSESSING OFFICER. THERE WAS NO QUERY R AISED BY THE ASSESSING OFFICER AS RELATES TO LONG TERM CAPITAL G AIN WHICH IS EVIDENT ON PAGE 12 OF THE PAPER BOOK ON 17/9/2009. THE ASSESSEE HERSELF HAS WITHDRAWN CLAIM U/S 54F AND THUS THE SA ME WAS SUO MOTU WITHDRAWN BY THE ASSESSEE. THEREFORE, THE FIN DING GIVEN BY THE LD. CIT (A) THAT THERE IS FURNISHING OF INACCUR ATE PARTICULARS OF INCOME WAS NOT PROPER. 6. THE LD. DR RELIED UPON THE LD. CIT (A)S ORDER A ND SUBMITTED THAT THE SAME HAS TAKEN INTO ACCOUNT ALL THE CONTEN TIONS OF THE ASSESSEE AND HAS GIVEN RIGHT FINDING BY DISMISSING THE APPEAL OF THE ASSESSEE. 7. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE CONTENTIONS OF THE ASSESSEE THAT ALL THE MATERI AL PARTICULARS WERE DISCLOSED BEFORE THE ASSESSING OFFICER IS CORR ECT. IT IS PERTINENT TO NOTE THAT NO QUERY ABOUT THE LONG TERM CAPITAL G AIN HAS BEEN RAISED BY THE ASSESSING OFFICER. ALL THE DISCLOSURE IN RETURN OF INCOME HAS BEEN PROPERLY DONE BY THE ASSESSEE. MER ELY CLAIMING EXEMPTION U/S 54F AND THEREAFTER WITHDRAWING THE SA ME SUO-MOTTO BEFORE ANY ENQUIRY DOES NOT AMOUNT TO FURNISHING OF INACCURATE 5 ITA NO. 787/DEL/2013 PARTICULARS OF INCOME. THEREFORE, THE ASSESSEES E XPLANATION, IN OUR VIEW IS BONAFIDE. HENCE, WE CANCEL THE PENALTY LEV IED U/S 271(1)(C) AS CONFIRMED BY THE LD. CIT(A). 8. IN RESULT, THE APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17TH OF FEBRUARY, 2016. (J. SUDHAKAR REDDY) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17/02/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON .08.02.2016 PS 2. DRAFT PLACED BEFORE AUTHOR .08.02.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 6 ITA NO. 787/DEL/2013 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .02.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 7 .02.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 7 ITA NO. 787/DEL/2013