Rakesh Jain, New Delhi V. ACIT, Circle-31(1), New Delhi

ITA 7985/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1701 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 17-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL SENIOR
• Keywords: Invalid notice; Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings; Reasonable cause; Set aside
• Section: 271(1)(c); 54F; 27; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.7985 /DEL./2018 (ASSESSMENT YEAR : 2014-15) SHRI RAKESH JAIN, VS. ACIT, CIRCLE 31 (1), 172-B, CARIAPPA MARG COLONY, NEW DELHI. KHIRKI EXTENSION, M.B. ROAD, SAINIK FARM, NEW DELHI 1110 062. (PAN : AAEPJ0815A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY KUMAR, FCA SHRI RAJESH JAIN, FCA REVENUE BY : SHRI SURENDER PAL, SENIOR DR DATE OF HEARING : 11.06.2019 DATE OF ORDER : 13.06.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, SHRI RAKESH JAIN (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 06.03.2018 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS)-11, NEW DELHI QUA THE ASSESSME NT YEAR 2014-15 ON THE GROUNDS INTER ALIA THAT :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN SUSTAINING PENALTY U/S 271( 1)(C) OF THE ITA NO.7985/DEL./2018 2 ACT AMOUNTING TO RS. 20,30,403/- IMPOSED BY THE ASS ESSING OFFICER ON ALLEGEDLY CLAIMING WRONG EXEMPTION OF RS 67,68,010/- U/S 54F OF THE ACT ON CONSTRUCTION OF FIRST FLOOR O F PROPERTY AT SAINIK FARMS. THAT THE LEARNED CIT (A) PASSED THE A PPELLATE ORDER EX-PARTY. 2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE AN D AS PER LAW, THE ORDERS PASSED BY THE ASSESSING OFFICER & C IT(A) ARE LIABLE TO BE QUASHED AS THE PENALTY U/S 271(1)(C) O F THE ACT WAS NOT SPECIFIC IN THE ASSESSMENT ORDER AS TO WHICH LI MB OF THE PROVISIONS OF THE SECTION, THE SAME HAS BEEN INITIA TED. 3. THAT THE ORDER PASSED U/S 271(1)(C} OF THE ACT I S ILLEGAL, ARBITRARY BEING PASSED IN UTTER VIOLATION OF NATURA L JUSTICE AS THE APPELLANT WAS NOT GIVEN SHOW CAUSE NOTICE U/S 274 O F THE ACT SPECIFYING THE EXACT CHARGE I LIMB UNDER WHICH THE AO HAS INITIATED THE PENALTY. 4. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, T HE PENALTY US 271(1)(C) OF THE ACT IS NOT LEVIABLE AS THE APPE LLANT NEITHER CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE P ARTICULAR OF INCOME. THE EXEMPTION U/S 54F OF THE ACT, ON THE FA CTS WAS CLAIMED BY THE APPELLANT ON CONSTRUCTION OF FIRST F LOOR OF HIS HOUSE AT SAINIK FARM, ON THE ADVICE OF HIS CHARTERE D ACCOUNTANT. 5. WITHOUT PREJUDICE TO THE ABOVE, OTHERWISE ALSO P ENALTY LEVIED U/S 271(1)(C) OF THE ACT IS EXCESSIVE AS THE AMOUNT OF TAX LEVIED ON ADDITION OF LONG TERM CAPITAL GAIN AT 20% OF RS.67,68,010/- AND THE ACIT LEVIED PENALTY @ 30% OF RS 67,68,010/-. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 ( FOR SHORT THE ACT) ASSESSING THE TOTAL INCOME AT RS.1,60,72,970/ - BY MAKING ADDITION OF RS.67,68,010/- ON ACCOUNT OF DISALLOWAN CE OF CLAIM MADE UNDER SECTION 54 OF THE ACT, PENALTY PROCEEDIN GS BY WAY OF ISSUANCE OF NOTICE U/S 274 READ WITH SECTION 271(1) (C) OF THE ACT WERE INITIATED. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE ITA NO.7985/DEL./2018 3 THAT IT WAS NOT A CASE OF CONCEALMENT OF PARTICULAR S OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ATTR ACTING PENALTY U/S 271(1)(C) OF THE ACT, AO REACHED THE CONCLUSION THA T THE ASSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF I NCOME TO THE EXTENT OF RS.67,68,010/- AND THEREBY IMPOSED THE PE NALTY OF RS.20,30,403/- @ 100% OF THE TAX SOUGHT TO BE EVADE D U/S 271(1)(C) OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMIS SING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, ASSESSEE HAS CLAIMED DEDUCTION U/S 54 OF THE ACT QUA SALE OF TWO PROPERTIES. IT IS ALSO NOT IN DISPUTE THAT EXEMPTION QUA ONE PROPERTY HAS BEEN ALLOWED AND EXE MPTION QUA ANOTHER PROPERTY IS DISALLOWED BY DISPUTING THE CLA IM OF THE ASSESSEE THAT HE HAS CONSTRUCTED THE HOUSE SO AS TO AVAIL THE DEDUCTION U/S 54 OF THE ACT AS AO REACHED THE CONCL USION THAT THE ASSESSEE HAS JUST RENOVATED THE HOUSE. IT IS ALSO NOT IN DISPUTE THAT ITA NO.7985/DEL./2018 4 ASSESSEE HAS GIVEN ALL THE DETAILS QUA SALE OF THE PROPERTY AND CONSTRUCTION OF THE RESIDENTIAL PROPERTY AT KHIRKI EXTENSION. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS ACCEPTED THE QUANTUM, PAID THE TAX ALONG WITH INTEREST. 6. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACT S & CIRCUMSTANCES OF THE CASE, ORDER PASSED BY THE LOWE R REVENUE AUTHORITIES AND ARGUMENTS ADDRESSED BY THE LD. AUTH ORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, THE S OLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS O F SUCH INCOME DURING ASSESSMENT PROCEEDINGS? 7. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) CONTENDED INTER ALIA THAT AT THE VERY OUTSET, AO HAS FAILED TO SATISFY HIMSELF THAT AS TO WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME IN THE ASSESSMENT ORDER AS WELL AS IN THE SHOW-CAUSE NOTICE ISSUED U/S 274/271(1)(C) O F THE ACT SO AS TO INITIATE THE PENALTY PROCEEDINGS; THAT AT NO POI NT OF TIME, ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR HAS C ONCEALED THE PARTICULARS OF INCOME RATHER FURNISHED ALL THE DETA ILS NECESSARY FOR CLAIMING DEDUCTION U/S 54 OF THE ACT AND RELIED UPO N THE DECISION ITA NO.7985/DEL./2018 5 RENDERED BY HONBLE HIGH COURT OF MADRAS IN CIT VS. D. HARINDRAN (2018) 97 TAXMANN.COM 297 (MADRAS), HONBLE APEX COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (S.C.) , COORDINATE BENCH OF THE TRIBUNAL IN D. HARINDRAN VS . ITO ITA NO.233/MDS/2016 ORDER DATED 23.09.2016, HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY-359ITR 565 AND CIT VS. SSAS EMERAL A MEADOWS -73 TAXMANN.COM 241 (KAR.) (REVENUES SLP D ISMISSED IN 242 TAXMAN 180). 8. HOWEVER, ON THE OTHER HAND, LD. SENIOR DR IN ORD ER TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE CONTENDED INTER ALIA THAT THE ASSESSEE HAS CLAIMED THE DEDUCT ION U/S 54 OF THE ACT WITH MALAFIDE INTENTION WHICH AMOUNTS TO CONCEA LMENT OF PARTICULARS OF INCOME; THAT THE ASSESSEE HAS NEVER RAISED ANY QUESTION OF INVALID NOTICE OR SATISFACTION OF THE A O DURING THE PENALTY PROCEEDINGS NOR BEFORE THE LD. CIT (A) SO N O PREJUDICE HAS BEEN CAUSED TO THE ASSESSEE AS THE ASSESSEE HAS UND ERSTOOD THE PURPORT OF THE NOTICE U/S 274 R/W SECTION 271(1)(C) OF THE ACT AND RELIED UPON THE DECISION RENDERED BY THE HONBLE MA DRAS HIGH COURT IN SUNDARAM FINANCE LTD. VS. CIT (2018) 403 ITR 407 (MADRAS), IN WHICH SLP HAS ALSO BEEN DISMISSED BY H ONBLE SUPREME COURT IN THE CASE CITED AS SUNDARAM FINANCE LTD. VS. ITA NO.7985/DEL./2018 6 CIT (2018) 99 TAXMANN.COM 152 (SC) AND ALSO RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN CIT VS. ZOOM COMMUNICATION (P.) LTD. 327 ITR 510 (DELHI), CIT VS . ESCORTS FINANCE LTD. 328 ITR 44 (DELHI) & HONBLE APEX COUR T IN UOI VS. DHARAMENDRA TEXTILE PROCESSORS 306 ITR 277 (SC) . 9. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO P ERUSE THE NOTICE ISSUED BY AO U/S 274 READ WITH SECTION 271(1 )(C) OF THE ACT TO INITIATE THE PENALTY PROCEEDINGS WHICH IS EXTRAC TED AS UNDER FOR READY PERUSAL:- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. INCOME TAX OFFICE NEW DELHI. DATED: 27.12.2016 TO, SHRI RAKESH JAIN 172-B, CARIAPPA MARG COLONY KHIRKI EXTN., M.B. ROAD, SAINIK FARM, N.D. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2014-15 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 142(1)/143(2) OF THE INCOME TA X ACT, 1961 DATED HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2,3,4 AND 5. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11. 00 AM/PM ON 27.1.2017 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INCOME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPR ESENTATIVES ITA NO.7985/DEL./2018 7 YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UN DER SECTION 271(1)(C). SD/- ASSESSING OFFICER DELETE INAPPROPRIATE WORDS AND PARAGRAPHS. 10. BARE PERUSAL OF THE ASSESSMENT ORDER PARTICULAR LY PARA 3.7 GOES TO PROVE THAT EVEN AT THE TIME OF ASSESSMENT, AO WAS NOT SURE ENOUGH IF THE ASSESSEE HAS CONCEALED HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND THEN ISSUED TH E NOTICE DATED 27.12.2006 U/S 274/271(1)(C) OF THE ACT, AVAILABLE AT PAGE 11 OF THE PAPER BOOK, AGAIN WITH CONFUSED MIND IF HE IS GOING TO CHARGE THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF INCOME 11. WHEN INITIATION OF PENALTY PROCEEDINGS BY THE A O RIGHT FROM THE STAGE OF FRAMING THE ASSESSMENT TILL SERVING OF THE NOTICE U/S 271(1)(C) READ WITH SECTION 274 OF THE ACT ARE VAGU E AND AMBIGUOUS AND WITHOUT APPLICATION OF MIND RATHER IN ITIATED AND COMPLETED THE PENALTY PROCEEDINGS IN MECHANICAL MAN NER, WE ARE OF THE CONSIDERED VIEW THAT THE PENALTY PROCEEDINGS ARE NOT SUSTAINABLE. 12. HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALA MEADOWS - (2016) 73 TAXMANN.COM 248 (SC) WHILE DISMISSING THE SLP FILED BY THE REVENUE QUASHING THE PENALTY BY TH E TRIBUNAL AS ITA NO.7985/DEL./2018 8 WELL AS HONBLE HIGH COURT ON GROUND OF UNSPECIFIED NOTICE HAS HELD AS UNDER:- SECTION 274, READ WITH SECTION 271(1)(C), OF THE I NCOME-TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF (CONDI TIONS PRECEDENT) - ASSESSMENT YEAR 2009-10 - TRIBUNAL, RE LYING ON DECISION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTORY [2013] 359 1TR 565/218 TAXMAN 423/35 TAXMANN.COM 250, ALLO WED APPEAL OF ASSESSEE HOLDING THAT NOTICE ISSUED BY AS SESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271 (1 )(C) WAS BAD IN LAW, AS IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271 (1 )(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR C ONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME - HIGH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECISION OF DIVISION BENCH AND, THEREFORE, THERE WA S NO SUBSTANTIAL QUESTION OF LAW ARISING FOR DETERMINATI ON - WHETHER SINCE THERE WAS NO MERIT IN SLP FILED BY REVENUE, S AME WAS LIABLE TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF ASSESSEE] 13. HONBLE MADRAS HIGH COURT IN SUNDARAM FINANCE LTD. (SUPRA) UPHELD THE ORDER PASSED BY THE TRIBUNAL CON FIRMING THE PENALTY LEVIED ON THE BASIS OF NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE ACT IN WHICH SPECIFIC CHARGE WAS NOT POINTED OUT BY RETURNING THE FOLLOWING FINDINGS :- 16. WE HAVE PERUSED THE NOTICES AND WE FIND THAT T HE RELEVANT COLUMNS HAVE BEEN MARKED, MORE PARTICULARLY, WHEN T HE CASE AGAINST THE ASSESSEE IS THAT THEY HAVE CONCEALED PA RTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME. THEREFORE, THE CONTENTION RAISED BY THE ASSESSEE IS LIABLE TO BE REJECTED ON FACTS. THAT APART, THIS ISSUE CAN NEVER BE A QUESTION OF LAW IN THE ASSESSEE S CASE, AS IT IS PURELY A QUESTI ON OF FACT. APART FROM THAT, THE ASSESSEE HAD AT NO EARLIER POI NT OF TIME RAISED THE PLEA THAT ON ACCOUNT OF A DEFECT IN THE NOTICE, THEY WERE PUT TO PREJUDICE. ALL VIOLATIONS WILL NOT RESULT IN NULLIFYING THE ORDERS PASSED BY STATUTORY AUTHORITIES. IF THE CASE OF THE ASSESSEE IS THAT THEY HAVE BEEN PUT TO PREJUDICE AND PRINCIP LES OF NATURAL JUSTICE WERE VIOLATED ON ACCOUNT OF NOT BEING ABLE TO SUBMIT AN EFFECTIVE REPLY, IT WOULD BE A DIFFERENT MATTER. TH IS WAS NEVER THE PLEA OF THE ASSESSEE EITHER BEFORE THE ASSESSING OF FICER OR BEFORE ITA NO.7985/DEL./2018 9 THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNA L OR BEFORE THIS COURT WHEN THE TAX CASE APPEALS WERE FILED AND IT W AS ONLY AFTER 10 YEARS, WHEN THE APPEALS WERE LISTED FOR FINAL HE ARING, THIS ISSUE IS SOUGHT TO BE RAISED. THUS ON FACTS, WE COU LD SAFELY CONCLUDE THAT EVEN ASSUMING THAT THERE WAS DEFECT I N THE NOTICE, IT HAD CAUSED NO PREJUDICE TO THE ASSESSEE AND THE ASSESSEE CLEARLY UNDERSTOOD WHAT WAS THE PURPORT AND IMPORT OF NOTICE ISSUED UNDER SECTION 274 R/W. SECTION 271 OF THE ACT. THEREFORE, PRINCIPLES OF NATURAL JUSTICE CANNOT BE READ IN ABS TRACT AND THE ASSESSEE, BEING A LIMITED COMPANY, HAVING WIDE NETW ORK IN VARIOUS FINANCIAL SERVICES, SHOULD DEFINITELY BE PR ECLUDED FROM RAISING SUCH A PLEA AT THIS BELATED STAGE. 17. THUS, FOR THE ABOVE REASONS, SUBSTANTIAL QUEST IONS OF LAW NOS.1 AND 2 ARE ANSWERED AGAINST THE ASSESSEE AND I N FAVOUR OF THE REVENUE. THE ADDITIONAL SUBSTANTIAL QUESTION OF LAW, WHICH WAS FRAMED IS REJECTED ON THE GROUND THAT ON FACTS THE SAID QUESTION DOES NOT ARISE FOR CONSIDERATION AS WELL A S FOR THE REASONS SET OUT BY US IN THE PRECEDING PARAGRAPHS. 14. HOWEVER, WE ARE OF THE CONSIDERED VIEW THAT IN THE INSTANT CASE, NOT ONLY THE NOTICE ISSUED TO THE ASSESSEE UN DER SECTION 274 READ WITH SECTION 271(1)(C) IS DEFECTIVE BUT AO HAS NOT EVEN MADE HIMSELF SATISFIED AT THE TIME OF MAKING DISALLOWANC E / ADDITION IN ASSESSMENT ORDER IF THE ASSESSEE HAS FURNISHED INAC CURATE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF HIS INCOME RATHER TO BE ON THE SAFER SIDE HE HAS INVOKED BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT. 15. SO, WE ARE OF THE CONSIDERED VIEW THAT THIS IS NOT MERELY A CASE OF SERVING A DEFECTIVE NOTICE UNDER SECTION 27 4 READ WITH SECTION 271(1) ON THE ASSESSEE RATHER IT IS A CASE OF NON-APPLICATION OF MIND ON THE PART OF THE AO TO MAKE HIMSELF SATIS FIED AS TO UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, HE IS G OING TO ITA NO.7985/DEL./2018 10 INITIATE/LEVY THE PENALTY ON THE ASSESSEE AND AS SU CH, DECISION OF SUNDARAM FINANCE LTD. (SUPRA) RELIED UPON BY THE LD. DR FOR THE REVENUE IS NOT APPLICABLE TO THE FACTS AND CIRCUMST ANCES OF THE CASE. 16. SECONDLY, WHEN WE EXAMINE THE CASE OF THE ASSES SEE ON MERITS, IT IS CATEGORIC PLEA OF THE ASSESSEE THAT A T NO POINT OF TIME, HE HAS CONCEALED THE PARTICULARS OF INCOME OR HAVE FURNISHED INACCURATE PARTICULARS OF INCOME BECAUSE HE HAS GIV EN THE NECESSARY DETAILS AS TO CLAIMING DEDUCTION U/S 54 O F THE ACT IN THE FORM OF DETAIL OF COST OF CONSTRUCTION OF PROPERTY, WHICH HAS NOT BEEN FOUND TO BE INCORRECT, RATHER AO TAKEN THE VIE W THAT NEW HOUSE HAS NOT BEEN CONSTRUCTED RATHER ASSESSEE HAS EXPENDED THE AMOUNT FOR RENOVATION/INTERIOR DESIGNING OF THE PRO PERTY AND WHICH CANNOT BE TERMED AS CONSTRUCTION. 17. WE ARE OF THE CONSIDERED VIEW THAT FROM THE FAC TS AND CIRCUMSTANCES OF THE CASE, ASSESSMENT ORDER AND ORD ER PASSED BY THE LD. CIT (A), AN IOTA OF MALAFIDE ON THE PART OF THE ASSESSEE IN CLAIMING DEDUCTION U/S 54 HAS NOT COME ON RECORD AN D AS SUCH DECISION RENDERED BY HONBLE HIGH COURT IN CASE OF ZOOM COMMUNICATION (P.) LTD. (SUPRA) AS RELIED UPON BY THE LD. DR FOR THE REVENUE IS NOT APPLICABLE. RATHER THE FACTS OF THIS CASE IS COVERED BY HONBLE APEX COURT IN CASE OF CIT VS. RELIANCE PETRO ITA NO.7985/DEL./2018 11 PRODUCTS PVT. LTD. (SUPRA) WHEREIN IT IS HELD THAT MERELY MAKING CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WOU LD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME BY R ETURNING FOLLOWING FINDINGS :- A GLANCE AT THE PROVISIONS OF SECTION 271(L)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, TH ERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(L)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATT RACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. W HERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSE E IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THE RE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( L)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 18. COORDINATE BENCH OF THE TRIBUNAL IN CASE CITED AS SHRI D. HARINDRAN VS. ITO (SUPRA) DECIDED THE IDENTICAL ISS UE IN FAVOUR OF THE ASSESSEE IN THE LIGHT OF THE DECISION RENDERED BY HONBLE APEX COURT IN CASE OF RAJASTHAN SPINNING AND WEAVING MIL LS AND DECISION RENDERED BY HONBLE MADRAS HIGH COURT IN CASE OF CIT VS. GEM GRANITES (2013) 86 CCH 160 BY HOLDING THAT EVEN IF IT IS ITA NO.7985/DEL./2018 12 CONSIDERED THAT THE CLAIM MADE BY THE ASSESSEE U/S 54/54F IS INCORRECT, IT WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME BY RETURNING FOLLOWING FINDIN GS :- 8. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF THE MADRAS HIGH COURT IN GEM GRANITES (SUPRA). THE MADR AS HIGH COURT AFTER REFERRING TO THE APEX COURT JUDGMENT IN RAJASTHAN SPINNING AND WEAVING MILLS FOUND THAT THE CONDITION S STATED IN 271(1)(C) MUST EXIST FOR LEVYING PENALTY. 9. IN VIEW OF THIS JUDGMENT OF THE APEX COURT AND MADRAS HIGH COURT, EVEN IF IT IS CONSIDERED THAT THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 54/54F IS INCORRECT, IT WOUL D NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. PENALTY CAN BE LEVIED ONLY IN RESPECT OF CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS. MAKING A CLAIM BEFORE THE ASSESSING OFFICER UNDER T HE STATUTORY PROVISIONS CANNOT BE CONSIDERED BY ANY STRETCH OF I MAGINATION THAT THE ASSESSEE HAS CONCEALED ANY PART OF THE INC OME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE CLAIM MA DE BY THE ASSESSEE UNDER SECTION 54/54F WAS DISALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDING, THAT CANNOT B E A REASON TO CONCLUDE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR CONCEALED ANY PART OF HIS INCOME. 19. EVEN OTHERWISE, PERUSAL OF THE COPY OF LEDGER A CCOUNT OF CAPITAL WORK-IN-PROGRESS QUA CONSTRUCTION OF RESIDE NTIAL PROPERTY FOR CLAIMING DEDUCTION U/S 54, AVAILABLE AT PAGES 3 TO 6 OF THE PAPER BOOK, WHICH HAS OTHERWISE NOT BEEN REJECTED BY THE AO, SHOWS THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54 OF THE AC T FOR RAISING CONSTRUCTION OF HOUSE BONAFIDELY QUA WHICH THE AO H AS TAKEN DIFFERENT VIEW THAT IT DOES NOT AMOUNT TO CONSTRUCT ION OF HOUSE RATHER IT IS RENOVATION/INTERIOR DESIGNING. IN THE FACE OF THE LEDGER ACCOUNT OF CAPITAL WORK-IN-PROGRESS BROUGHT ON RECO RD BY THE ITA NO.7985/DEL./2018 13 ASSESSEE, WHEN WE EXAMINE THE ASSESSMENT ORDER IT I S NOWHERE MENTIONED BY THE AO THAT AT ANY POINT OF TIME, HE H AS VISITED THE PROPERTY IN QUESTION OR THE PROPERTY CLAIMED TO HAV E BEEN CONSTRUCTED BY THE ASSESSEE WAS NOT HAVING SANCTION ED SITE PLAN. RATHER AO PROCEEDED TO REJECT THE CLAIM OF THE ASSE SSEE ON THE BASIS OF IMAGINATION THAT THE CONSTRUCTION CLAIMED BY THE ASSESSEE AMOUNTS TO RENOVATION/INTERIOR DESIGNING. 20. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT CASE LAWS RELIED UPON BY THE L D. DR ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE AND AS SUCH, AO HAS MISERABLY FAILED TO PROVE THAT THE ASSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT, HENC E PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT (A) IS NOT S USTAINABLE IN THE EYES OF LAW AND ORDERED TO BE DELETED. CONSEQU ENTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF JUNE, 2019. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBER DATED THE 13 TH DAY OF JUNE, 2019 TS ITA NO.7985/DEL./2018 14 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-11, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.