SHRI NIRMAL KUMAR BARDIA, Jaipur V. DCIT, Jaipur

ITA 842/JPR/2012

• Counselvise Citation: 84223114 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G G MUNDRA
• Keywords: Salary income; Bonafide belief; Wrong claim; Tax effect; Ignorance of law
• Section: 143(3); 54F; 133A; 153A; 90

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 842/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 NIRMAL KUMAR BARDIA, M/S KALPATARU GEMS, UMMAID BHAWAN, BARA GANGORE KA RASTA, JAIPUR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ABAPB 9576 F VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI G.G. MUNDRA (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/06/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 07/09/2015 VKNS'K @ ORDER PER: BENCH THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25/09/2012 PASSED BY THE LEARNED CIT (A) CENTRAL, J AIPUR FOR A.Y. 2006- 07. THE SOLE GROUND OF APPEAL IS AGAINST CONFIRMING THE PENALTY OF RS. 7,11,833/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREAFTER REFERRED AS THE ACT). ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 2 2. IN THIS CASE AS SEARCH SEIZURE ACTION U/S 132(1) AND SURVEY U/S 133A OF THE ACT WAS CARRIED OUT ON 23/08/2007 AT THE RESIDENCE AND BUSINESS PREMISES LOCATED AT 24, BARDIYA COLONY & 1 507, BARA GANGORE KA RASTA, JOHARI BAZAR, JAIPUR AND SURVEY WAS CONDUC TED AT BRANCH OFFICE LOCATED AT 109/114A, TRINITY BUILDING, 76/78, DHANJI STREET, MUMBAI AND K-5, KESHAV PATH, JAIPUR OF THE RMC GROU P OF JAIPUR. THE ASSESSEE BELONGED TO THIS GROUP. IN THE COURSE OF S EARCH AND SURVEY ACTION, CASH, JEWELLERY, VALUABLES, BOOKS OF ACCOUNT AND DOCUMENTS WERE FOUND AND SEIZED/IMPOUNDED AS PER PANCHNAMA/ORD ER OF RESPECTIVE DATES. THE LD ASSESSING OFFICER OBSERVED THAT IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 153A READ WITH SECTI ON 143(3) OF THE ACT. NOTICE U/S 153A WAS ISSUED FOR A.Y. 2006-07 ON 25/01/2008 AND ASSESSEE WAS ASKED TO PREPARE A TRUE AND CORRECT RETURN OF HIS TOTAL INCOME IN RESPECT OF HIS ASSESSABLE FOR THE YEAR UN DER CONSIDERATION IN THE FORM PRESCRIBED IN RULE 12 OF THE INCOME TAX RUL ES, 1962 (IN SHORT THE RULES). IN RESPONSE TO NOTICE U/S 153A, RETURN DECLARING INCOME OF RS. 23,68,116/- WAS FILED ON 28/2/2008. IN ORIGINAL RETURN U/S 139(1), THE ASSESSEE HAD DECLARED INCOME OF RS. 20,14,520/- , WHICH WAS FILED ON 31/10/2006. THE ASSESSEE HAD DISCLOSED RS. 3,53, 599/- SALARY ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 3 RECEIVED FROM M/S RMC GEMS THAI CO. LTD., BANGKOK I N RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A. THE ASS ESSEE SERVED AS EMPLOYEE IN M/S RMS GEMS THAI CO. LTD., BANGKOK. HE HAD RECEIVED 105000 THAI BHAT PER MONTH FROM 01/01/2006 TO 31/12/ 2006. THE LD ASSESSING OFFICER FURTHER OBSERVED THAT SALARY FOR THE THREE MONTHS PERTAINING TO THE F.Y. 2005-06 WAS SURRENDERED IN TH E YEAR UNDER CONSIDERATION. THIS INCOME FROM SALARY WAS NOT DISCLO SED IN RETURN OF INCOME FILED U/S 139(1). PROPORTIONATE SALARY FOR T HE THREE MONTHS AMOUNTS TO 315000 THAI BHAT AND INDIAN CURRENCY @ RS. 1.1225 PER BHAT IT AMOUNTS TO RS. 3,53,599/-. ON THIS INCOME A SSESSEE HAD FILED RETURN IN THAILAND AND PAID TAX ON IT AND HAD CLAIM ED REBATE U/S 90 OF RS. 47,456/-. THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS INITIATED FOR FURNISHING WRONG PARTICULARS AND CONCE ALMENT OF INCOME IN RESPECT OF INCOME OF RS. 3,53,599/- BY THE ASSESSIN G OFFICER. THE ASSESSMENT FOR A.Y. 2006-07 WAS COMPLETED AT ASSESSE D INCOME OF RS. 41,33,070/- AGAINST THE RETURNED INCOME OF RS. 23,6 8,116/-. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THE ASSESSEE HAD SOLD THREE PROPERTIES I.E. PLOT OF KALYAN COLONY ON 12/ 01/2006 FOR RS. 26,75,600/-, PLOT OF CHITRAKOOT ON 12/07/2005 FOR R S. 8,50,000/- AND ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 4 AGRICULTURAL LAND ON 13/02/2006 AT RS. 1.5 CRORES. THE LONG TERM CAPITAL GAIN WAS SHOWN BY THE ASSESSEE AT RS. 34,74,458/- AND CLAIMED EXEMPTION U/S 54F FOR WHOLE AMOUNT BY INVESTMENT IN CONSTRUCTION OF HOUSE BUT ON VERIFICATION, THE LD ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD PURCHASED ANOTHER RESIDENTIAL FLAT AT 5-KALYAN COLONY, JAIPUR FOR RS. 24,72,700/- ON 11/05/2006 I.E. BEFOR E THE DATE OF FILING OF RETURN OF INCOME. NO OTHER DEPOSITS IN CAPITAL GAIN ACCOUNT SCHEME HAD BEEN MADE, THEREFORE, LD ASSESSING OFFICER ALLOWED P ROPORTIONATE EXEMPTION U/S 54F AND CALCULATED TAXABLE LONG TERM CAPITAL GAIN AT RS. 17,64,952/-. 2.1 THE PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT WAS INITIATED BY THE ASSESSING OFFICER FOR FURNISHING WRONG PARTICULA RS AND CONCEALMENT OF INCOME IN RESPECT OF INCOME OF RS. 17,64,952/-. BEFORE IMPOSING THE PENALTY, THE LD ASSESSING OFFICER GAVE SHOW CAUSE NO TICE ON 31/3/2009 AND 24/08/2009. THE ASSESSEE ALSO REPLIED VIDE LETTE R DATED 19/08/2009 AND 31/08/2009. AFTER CONSIDERING THE ASSESSEES RE PLY, THE LD ASSESSING OFFICER HELD THAT SALARY OF THE ASSESSEE AS CLAIMED THAT HE WAS UNDER A BONAFIDE BELIEF THAT HE DECLARED HIS INCOME FROM SA LARY IN HIS RETURN OF INCOME IN THAILAND AND PAID TAX THEREON IN THAILAND THEN HE WOULD NOT ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 5 NEED TO INCLUDE THE SAME IN HIS RETURN OF INCOME IN INDIA SINCE TAX ON THAT INCOME HAD ALREADY BEEN PAID IN THAILAND, WAS NO T FOUND CONVINCING TO THE ASSESSING OFFICER BY CONSIDERING THE EXPLANATION-1 OF SECTION 271(1)(C) OF THE ACT, WHICH MAY CLEAR THAT WH EN THE ASSESSING OFFICER IS SATISFIED THAT ANY PERSON HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOT AL INCOME OF ANY PERSON UNDER THIS ACT, SUCH PERSON FAILS TO OFFER A N EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFIC ER TO THE FALSE, OR SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT AB LE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFID E AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMP UTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN THE CASE OF THE ASSESSEE COMES WITHIN THE PURVIEW OF SECTION 271(1)(C) OF THE ACT. AS PER LAW, THE ASSESSEE WAS REQUIRED TO GIVE COMPLETE AND TRUE DETAILS OF HIS INCOME INCLUDING ALL/ANY INCOME ARISING TO HIM OUTS IDE INDIA I.E. GLOBAL INCOME. HOWEVER, THE ASSESSEE FAILED TO FURNISH SUCH TRUE AND COMPLETE DETAILS OF INCOME BY OMITTING TO FURNISH DETAILS IN RESPECT OF HIS SALARY INCOME EARNED FROM RMC GEMS THAI CO. LTD., BANGKOK. THE LD ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 6 ASSESSING OFFICER FURTHER HELD THAT MISTAKE OF LAW I S NOT EXCUSE, IGNORANTIA JURIS NON EXCUSAT AND ANYONE WHO COMMITS IT, DOES IT AT HIS OWN PERIL. THE ASSESSEE HAD NOT BROUGHT ON ANY MATERI AL EVIDENCE ON RECORD TO ESTABLISH THAT THE MISTAKE WAS BONAFIDE. M OREOVER, SECTION 271(1)(C) OF THE ACT READ WITH ITS EXPLANATION-1, DO ES NOT TALK OF ANY PARTICULAR INTENTION OR MEANS REA FOR FASTENING PEN ALTY. IF THE ACTUS OF ASSESSEE FALLS WITHIN THE FOUR CORNERS OF THE PROVIS IONS OF THE SAID SECTION, THE IMPOSITION OF THE PENALTY IS INDEPENDE NT OF ANY MENTAL STATE OF THE ASSESSEE AND AS SUCH A CLAIM OF BONAFI DE MISTAKE OF LAW DOES NOT COME TO HIS RESCUE. THE LD ASSESSING OFFICE R FURTHER HELD THAT THE ASSESSEE HAD ALSO CLAIMED EXEMPTION U/S 54F WAS CLAIMED EXCESS ON THE BASIS OF ADVICE OF THE COUNSEL OF THE ASSES SEE. THE ASSESSEE HAS DISCLOSED LONG TERM CAPITAL GAIN AMOUNTING TO RS. 5 0,25,600/- AND SAME HAD BEEN CLAIMED INVESTED IN A RESIDENTIAL PROPERTY . HOWEVER, THE ASSESSEE ACTUALLY INVESTED RS. 24,74,700/- AND CLAI MED BENEFIT FOR THE WHOLE AMOUNT. THE EXCESS CLAIM OF THE ASSESSEE AMOUN TING TO RS. 17,64,954/-, WHICH WAS DISALLOWED BY THE ASSESSING OFF ICER IN QUANTUM ADDITION. NOW THE ASSESSEES REPLY IS PERFUNCTORY AN D DO NOT CARRY ANY WEIGHT BY SAYING THAT THE TAX WAS PAID ON AMOUNT ADDE D BACK DOES NOT ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 7 ABSOLVE THE ASSESSEE OF THE WRONG COMMITTED BY HIM. THE LD ASSESSING OFFICER ALSO CONSIDERED THE CASE LAW SUBMITTED BEFOR E THE ASSESSING OFFICER, WHICH WAS FOUND DISTINGUISHABLE FROM THOSE O F THE SAID CASE LAWS AND THEREFORE, THE LD ASSESSING OFFICER IMPOSED PENALTY AT RS. 7,11,833, WHICH IS 100% TAX SOUGHT TO BE EVADED. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT( A), WHO HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED SUBMISSION OF THE A SSESSEE, OBSERVATION OF THE A.O. AND OTHER RELEVANT ISSUES R ELATING TO THIS CASE. IT MAY BE NOTED THAT TWO ISSUES ARE INVOL VED WHERE ADDITIONS ARE MADE FORMING PART OF IMPOSITION OF PENALTY. I) SALARY INCOME FROM M/S RMC GEMS THAI CO. LTD. BANGKOK RS. 353599/- (II) DISALLOWANCE OF WRONG CLAIM U/S 54F OF IT ACT RS. 1764952/- TOTAL RS. 2118551/- THE ASSESSMENT YEAR INVOLVED IS 2006-07 AND ORIGINA L RETURN U/S 139(1) OF IT ACT WAS FILED ON 31/10/2006, AFTER S EARCH ON 23/08/2007 RETURN WAS FILED U/S 153A ON 28/02/200 8. ADMITTEDLY THE SALARY INCOME AMOUNTING TO RS. 35359 9/- FROM EMPLOYER AT BANGKOK FOR THE PERIOD 01/01/2006 TO 31/04/2006 WAS NOT SHOWN IN THE ORIGINAL RETURN. SIMI LARLY ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 8 REGARDING WRONG CLAIM OF DEDUCTION U/S 54F OF IT ACT, AMOUNTING TO RS. 1764952/-, THERE IS NO DISPUTE THA T SUCH CLAIM WAS NOT ALLOWABLE AS PER PROVISIONS OF IT ACT A ND EVEN THEN THE APPELLANT CLAIMED THE SAME. SUCH WRONG CLAI M WAS MADE BOTH IN ORIGINAL RETURN AND RETURN FILED IN CO MPLIANCE TO NOTICE U/S 153A OF THE IT ACT. IT MAY BE NOTED TH AT THE ASSESSEE ADMITTED SUCH WRONG CLAIM DURING THE ASSESS MENT PROCEEDINGS ONLY WHEN VIDE ORDERSHEET ENTRY DATED 18/03/2009, THE A.O. SPECIFICALLY REQUIRED THE ASSE SSEE TO JUSTIFY SUCH CLAIM. IN THIS BACKGROUND IT IS TO BE SEEN WHETHER SUCH ISSUES CONSTITUTED CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCO ME OR NOT. THE A.O.S CONTENTION IS THAT SUCH MISTAKE WERE NOT BONAFIDE AND THAT IT TANTAMOUNT TO CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCO ME. THE APPELLANT ALSO ADMITTED TO HAVE OMITTED SUCH INCOME BY WAY OF SALARY BEING NOT SHOWN IN THE RETURN AND WRONG CLAIM U/S 54F OF IT ACT BUT IT IS STATED THAT SALARY WAS PAID/RECEIVED IN BANGKOK AND TAX WAS DEDUCTED THEREO N. THE APPELLANT FURTHER STATED THAT HE WAS UNDER BONAF IDE BELIEF THAT SUCH SALARY INCOME WAS NOT TO BE INCLUDE D WHILE FILING RETURN OF INCOME IN INDIA. SIMILARLY REGARDI NG WRONG AND EXCESS CLAIM U/S 54F OF IT ACT IT IS STATED THAT DUE TO IGNORANCE OF LAW SUCH CLAIM WAS MADE AND NO MALAFIDE COULD BE ATTRIBUTED. ON CAREFUL CONSIDERATION OF TH E FACTS AND CIRCUMSTANCES OF THIS CASE, IT IS NOTED THAT TH E ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 9 SUBMISSION OF THE APPELLANT CANNOT BE ACCEPTED AND TREATED AS GENUINE INASMUCH AS, THE APPELLANT IS REGULARLY ASSESSED TO TAX, DERIVING INCOME FROM BUSINESS AND PROFESSIO N, THE ACCOUNTS ARE AUDITED BY CHARTERED ACCOUNTANTS AND T HE APPELLANT IS ASSISTED BY TAXATION EXPERTS ON REGULA R BASIS. IN THIS BACKGROUND IT CANNOT BE BELIEVED THAT SUCH WRON G CLAIM WERE MADE AND SALARY INCOME WAS NOT SHOWN DUE TO IGNORANCE OF LAW AND IN FACT SUCH OMISSION CANNOT SA ID TO BE UNINTENTIONAL OR BONAFIDE. THOUGH IT IS CORRECT THAT THE BASIC FACTS RELATING TO THESE TWO ISSUES ARE SHOWN BY THE APPELLANT BUT THE FACT REMAINED THAT INCOME WAS EVAD ED BY WAY OF WRONG CLAIM OF DEDUCTION U/S 54F OF IT ACT AND NOT SHOWN THE SALARY INCOME IN INDIA WHEREAS THE SAME WAS TAXABLE. THE IMPORTANT ISSUE TO BE NOTED IS THAT SUC H ADMISSION OF INCOME DURING THE ASSESSMENT PROCEEDIN GS AND IN THE RETURN FILED SUBSEQUENT TO SEARCH IN RES PECT OF SALARY INCOME WAS NEVER VOLUNTARY AND IT WAS ONLY WHEN THE ISSUE OF CONCEALMENT WAS DETECTED BY THE A.O. DURING THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE AGREED FOR SUCH ADDITIONS. IT IS A SETTLED LAW THAT SIMPLY BECAUSE ASSESSEE AGREED TO ADDITION OF CONCEALED INCOME AFTER DETECT ION THEREOF BY THE DEPARTMENT THEN ASSESSEE CANNOT ESCA PE FROM IMPOSITION OF PENALTY U/S 271(1)(C) OF IT ACT. RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS: (I) CIT VS. RAKESH SURI 331 ITR 458 (ALL) ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 10 (II) CIT VS. SUSHMA DEVI AGARWAL 67 DTR 430 (ITAT, KOLKATTA) IT MAY FURTHER BE STATED THAT WILLFUL CONCEALMENT I S NOT AN ESSENTIAL INGREDIENTS FOR ATTRACTING AND IMPOSING P ENALTY AS THE PENALTY UNDER FISCAL STATUTES ARE FOR BREACH OF CIVIL LIABILITIES. RELIANCE IS PLACED ON THE FOLLOWING CA SE LAW FOR ABOVE MENTIONED PROPOSITION OF LAW: (I) UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSO RS 306 ITR 277 (SC). (II) CIT VS. ATUL MOHAN JINDAL 317 ITR 1 (SC). KEEPING IN VIEW THE DETAILED DISCUSSIONS MADE ABOVE , IT IS HELD THAT THE APPELLANTS CASE WAS COVERED U/S 271(1 )(C) OF IT ACT AND THE A.O. HAS ACCORDINGLY RIGHTLY IMPOSED PENALTY OF RS. 7,11,833/-. THE ACTION OF THE A.O. IS ACCORDI NGLY CONFIRMED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE REITERATED THE ARGUMENTS MADE BEFORE THE L D CIT(A). HE HAS FURTHER SUBMITTED THAT THE ASSESSEE NEVER AGREED TO MAKE ADDITION/DISALLOWANCE AND NO PENALTY COULD BE IMPOSE D NOR HE ARGUED THAT AS DEFAULT WAS NOT WILLFUL SO PENALTY IS NOT IMP OSABLE. THE CASE LAW CITED BY THE LD CIT(A) ARE NOT ON FACTS OF THE CASE AND SO THE SAME ARE ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 11 NOT APPLICABLE. THE ASSESSEE HAS NEITHER FURNISHED I NACCURATE PARTICULARS OF INCOME NOR CONCEALED ANY PARTICULARS OF INCOME. THE ASSESSEE WAS IN BONAFIDE BELIEF THAT ON THE SALARY I NCOME IN BANGKOK DUE TAX WAS DEDUCTED AND PAID THERE AND HE HAS NOT B ROUGHT THE INCOME IN INDIA AND THEREFORE, THE SAID SALARY INCO ME IS NOT INCLUDIBLE IN THE RETURN OF INCOME BEING FILED IN INDIA. THE ASSES SEE VOLUNTARILY INCLUDED THE INCOME IN RETURN FILED U/S 153A WHEN HE WAS APPRISED OF THE CORRECT LEGAL POSITION WHICH WAS NOT KNOWN TO HIM NOR WAS THE SAME BROUGHT TO HIS NOTICE BY HIS COUNSEL WHEN HE FI LED ORIGINAL RETURN. EVEN THOUGH SALARY INCOME WAS INCLUDIBLE WHILE DETERM INING TOTAL INCOME IN INDIA YET HE WAS ENTITLED TO CREDIT OF TAX ES PAID THEREON IN BANGKOK IN ACCORDANCE WITH PROVISIONS OF SECTION 90 OF I. T. ACT, 1961 AND SAME WAS ALSO ALLOWED IN ASSESSMENT MADE. THUS A N OMINAL TAX EFFECT WAS THERE AND, THEREFORE, ASSESSEE COULD NOT BE EXPECTED TO SUPPRESS DISHONESTLY THE SAID SALARY INCOME FROM HI S RETURN. THE INADVERTENT ERROR OF LAW WAS OCCURRED DUE TO NOT BEIN G AWARE OF LAW AND BECAUSE OF NOT GETTING PROPER ADVICE FROM THE C OUNSEL WHO FILED THE RETURN. THE LD. A.O. ALSO NOT HELD EITHER IN ASSESSM ENT PROCEEDINGS NOR ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 12 IN PENALTY PROCEEDINGS THAT CONDUCT OF ASSESSEE IN NOT DOING SO WAS CONTUMACIOUS OR FRAUDULENT. HE FURTHER SUBMITTED THAT AS REGARDS TO DISALLOWANC E OF DEDUCTION U/S 54F, IT IS SUBMITTED THAT ASSESSEE HAD CAPITAL GAINS DURING THE YEAR TOTALING TO RS. 34,74,458/- ON NET SALES CONSIDERAT ION OF RS. 50,25,600/- AS PER DETAILS GIVEN IN ASSESSMENT ORDER. THE SALE C ONSIDERATION AND CAPITAL GAIN WAS CORRECTLY DISCLOSED IN RETURN FILED GIVING FULL PARTICULARS AND THE SAME WAS ACCEPTED BY A.O. IN ASSESSMENT. THE ASSESSEE ALSO MADE INVESTMENT OF RS. 50,25,600/- I.E. TOTAL NET S ALE CONSIDERATION IN CONSTRUCTION OF A NEW HOUSE DURING THE YEAR ITSELF A ND THE SAME HAS ALSO BEEN FOUND CORRECT BY A.O. IN ASSESSMENT. THE A SSESSEE ON THESE FACTS CLAIMED DEDUCTION U/S 54F, IN RESPECT TO WHOLE OF CAPITAL GAINS WORKED OUT FOR THE YEAR UNDER ASSESSMENT. HOWEVER THE ASSESSEE WAS UNAWARE OF THE CLAUSE (B) OF PROVISO TO SECTION 54F (1) THAT HE SHOULD NOT PURCHASE ANY RESIDENTIAL HOUSE OTHER THAN THE N EW ASSET (HOUSE UNDER CONSTRUCTION) WITHIN A YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSETS GIVING RISE TO CAPITAL GAIN DURING THE YEAR. THE ASSESSEE APART FROM INVESTING IN CONSTRUCTION OF NEW HOUSE AS ABOVE PURCHASED A RESIDENTIAL FLAT 5 KALYAN COLONY, JAIPUR FOR RS. 24,72,700/- WHICH WAS ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 13 IN VIOLATION OF SAID CLAUSE (B) OF PROVISION TO SEC TION 54F (1). THUS ON THESE FACTS IN LAW THE ASSESSEE COULD ENTITLED FOR P ROPORTIONATE DEDUCTION OF PURCHASE OF A NEW HOUSE I.E. FOR RS. 24 ,72,700/- IN PLACE OF HIS INVESTMENT IN CONSTRUCTION OF A NEW HOUSE AMO UNTING TO RS. 50,25,600/-. THIS LED TO DISALLOWANCE OF CLAIM OF DE DUCTION U/S 54F BY ASSESSEE TO THE EXTENT OF RS. 17,64,952/- AS WORKED OUT IN ASSESSMENT ORDER. HE FURTHER SUBMITTED THAT IT WILL BE THUS FOUND THA T BOTH ADDITION/DISALLOWANCE OCCURRED IN ASSESSMENT DUE TO BONAFIDE ERRORS OF LAW ON THE PART OF ASSESSEE AND THERE IS NEITHER NON -DISCLOSURE OF FULL PARTICULARS NOR THERE WAS ANY FRAUDULENT OR BOGUS CL AIM. IN RESPECT TO ABOVE TWO ADDITIONS, ASSESSEE HAS FURNISHED EXPLANAT ION AND THAT EXPLANATION WAS NOT FOUND TO BE FACTUALLY INCORRECT OR FALSE. IT IS SETTLED LAW THAT THE PENALTY ON THE GROUND OF CONCEALMENT OF PARTICULARS OR NON-DISCLOSURE OF FULL PARTICULARS CAN BE LEVIED ON LY WHEN IN THE ACCOUNTS/RETURN ON ITEM HAS BEEN SUPPRESSED DISHONE STLY OR THE ITEM HAS BEEN CLAIMED FRAUDULENTLY OR A BOGUS CLAIM HAS BEEN MADE. WHEN THE FACTS ARE CLEARLY DISCLOSED IN THE RETURN OF IN COME, PENALTY CANNOT BE LEVIED AND MERELY BECAUSE AN AMOUNT IS NOT ALLOWED O R TAXED TO ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 14 INCOME, IT CANNOT BE SAID THAT THE ASSESSEE HAD FIL ED INACCURATE PARTICULARS OR CONCEALED ANY INCOME CHARGEABLE TO T AX. FURTHER, CONSCIOUS CONCEALMENT IS NECESSARY. EVEN IF SOME DE DUCTION OR BENEFIT IS CLAIMED BY THE ASSESSEE WRONGLY BUT BONA FIDE AN D NO MALA FIDE CAN BE ATTRIBUTED, THE PENALTY WOULD NOT BE LEVIED. THE S UPPORT IS DERIVED FROM THE JUDGEMENT OF APEX COURT IN CASE OF K.C. BU ILDERS VS. ACIT (2004) 265 ITR 562 (SC) AND CIT VS. SKYLINE AUTO PR ODUCTS P. LTD. (2004) 271 TIR 335. THE ASSESSEE BEFORE CIT (A) RELIED ON THE HON'BLE AP EX COURT JUDGMENT IN CASE OF CIT VS. RELIANCE PETRO PRODUCTS P. LTD. (2010) 322 ITR 158 WHEREIN IT WAS HELD. THAT MERE MAKING OF CLAIM WHICH IS NOT SUBSTANTIABL E IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN THIS CONTEXT IT IS CONTENDED THAT THE CLAIM OF T HE APPELLANT WAS NEITHER BOGUS OR FRAUDULENT AND EVEN IF SUCH CLAIM HAS BEEN MADE WHICH HAS NOT BEEN ALLOWED THEN KEEPING IN VIEW THE RA TIO OF JUDGMENT DECIDE BY THE HON'BLE SUPREME COURT MENTIONED ABOVE , THE CASE OF THE APPELLANT CANNOT SAID TO BE FURNISHING OF INACCURAT E PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE APPELLANT HAS F URTHER PLACED ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 15 RELIANCE ON THE JUDGMENT OF HON'BLE ITAT, MUMBAI BEN CH IN CASE OF NARANG INTERNATIONAL HOTELS PVT. LTD. VS. DCIT REP ORTED IN (2012) 137 ITD 53. THE LD. CIT (A) GAVE FINDING (PARA 6 OF APPEAL ORDE R LAST LINE) THAT THOUGH IT IS CORRECT THAT BASIC FACTS RELATIN G TO THESE TWO ISSUES ARE SHOWN BY APPELLANT . IN VIEW OF THE ABOVE SPECIFIC FINDING THE SAID JUDG MENTS ARE TO BE APPLIED WHICH HAS NOT BEEN DEALT BY CIT (A) IN HIS AP PEAL ORDER. AS REGARDS TO FINDING THAT THE SUBMISSION OF APPELLANT S CANNOT BE ACCEPTED AND TREATED AS GENUINE IN AS MUCH AS THE APPELLANT IS REGULARLY ASSESSED TO TAX DERIVING INCOME FROM BUSINESS OR PR OFESSION, THE ACCOUNTS ARE AUDITED BY CHARTERED ACCOUNTANT AND TH E APPELLANT IS ASSISTED BY TAXATION EXPERT ON REGULAR BASIS, IT IS SUBMITTED THAT RELIANCE IS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF PRICE WATER HOUSE COOPER PVT. LTD. VS. CIT (2012) 348 ITR 306 WHEREIN IT IS OBSERVED THAT EVEN A REPUTED FIRM HAVING GREAT EXPE RTISE AVAILABLE WITH IT, IT WAS POSSIBLE THAT A MISTAKE COULD OCCUR. THE S UPREME COURT FURTHER HELD THAT WHILE SUBMITTING RETURN THE ASSESS EE SHOULD HAVE BEEN CAREFUL BUT DUE TO THE ABSENCE OF DUE CARE A BONAFI DE AND INADVERTENT ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 16 MISTAKE DID NOT MEAN THAT ASSESSEE WAS GUILTY OF FUR NISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL THE INCOME. THE DELHI HIGH COURT IN SHERVANI HOSPITALITIES LTD. VS. CIT (2013) 89 DTR (DE L) 169 AFTER DISCUSSING VARIOUS JUDGMENTS ON THE ISSUE HELD THAT MERELY MAKING A CLAIM WHICH IS HELD NOT SUSTAINABLE UNDER LAW SHOULD NOT LEAD TO PENALTY U/S 271 (1) (C), WHEN ASSESSEE HAD FURNISHED FULL P ARTICULARS. IN VIEW OF ABOVE FACTS AND POSITION OF LAW THE LD. CIT (A) IS WR ONG AND HAS ERRED IN LAW IN CONFIRMING PENALTY OF RS. 7,11,833/- LEVIE D BY A.O. U/S 271 (1) (C) OF I. T. ACT, 1961 WHICH DESERVES TO BE DELETED. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS A FACT THAT THE ASSESSEE HAD NOT DISCLOSED THE SALARY RECEIVED FROM RMC GEMS THAI CO. LTD., BANGKOK AT RS. 3,53,599/- BUT DISCLOSED AFTER SEARCH PROCEEDING CARRIED OUT IN CASE OF ASSESSEE AND RETURN FILED U/ S 153A OF THE ACT. THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND, KALYAN COLONY PLOT AND PLOT OF CHITRAKOOT IN THE CO MPUTATION OF INCOME AND TAXABLE LONG TERM CAPITAL GAIN WAS ALSO CLAIMED BY THE ASSESSEE ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 17 EXEMPTED BY MAKING INVESTMENT IN RESIDENTIAL HOUSE. HOWEVER, THE ASSESSEE PURCHASED ANOTHER RESIDENTIAL HOUSE OTHER THAN THE NEW ASSETS WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSETS. THE ASSESSEE PURCHASED ANOTHER RESIDENTIAL HOUSE PLOT NO. 5-K, KALYAN COLONY, JAIPUR FOR RS. 24,72,700/- ON 11/5/2 006, THEREFORE, THE ASSESSEE HAS CLAIMED EXCESS EXEMPTION U/S 54F(I) OF THE ACT. THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSEE HAD DISC LOSED SALARY RECEIVED FROM RMC GEMS THAI CO. LTD., BANGKOK VOLUNT ARILY HAS NOT SUBSTANTIATED WITH ANY EVIDENCE. THE ASSESSING OFFICE R ISSUED NOTICE U/S 153A TO FILE THE RETURN IN RESPONSE TO SURVEY P ROCEEDINGS. THEREAFTER, THE ASSESSEE HAS DISCLOSED THE SALARY RE CEIVED IN THAI BHAT IN BANGKOK IN GLOBAL INCOME. SIMILARLY THE EXCESS C LAIM OF EXEMPTION U/S 54F HAD ALSO NOT BEEN REVISED EVEN NOTICE U/S 1 53A WAS ISSUED TO THE ASSESSEE. THE ASSESSEE WAS AVAILING EXPERT OPINIO N ON TAXATION MATTER AS HE WAS FILING RETURN SINCE LONG AND HAD NU MBER OF BUSINESSES. THEREFORE, THE ASSESSEES CLAIM THAT HE WAS IGNORANT ABOUT LEGAL POSITION OF SALARY RECEIVED IN BANGKOK AND SECOND H OUSE PURCHASED DURING THE YEAR UNDER CONSIDERATION AND CLAIMED DED UCTION U/S 54F BY NOT DISCLOSING THE FACTS OF THE ANOTHER HOUSE PURCH ASED IN THE RETURN, ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 18 PROVED THAT THE ASSESSEES ACTION WAS NOT BONAFIDE. WE HAVE CONSIDERED VIEW THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME. THE CASE LAW CITED BY THE ASSESSEE ARE NOT SQUARELY APPLICABLE O N IT. THE CASE LAWS RELIED BY THE LD CIT(A) CIT VS. RAKESH SURI 331 ITR 45 8 (ALL) IS SQUARELY APPLICABLE WHEREIN THE HONBLE COURT HAS HELD THAT T HE ASSESSEE HAS CONCEALED THE MATERIAL FACT AND GIVE INCORRECT STAT EMENT OF FACT IN THE APPLICATION AND ALSO NOT PROVIDED INFORMATION REQUI RED BY THE ASSESSING OFFICER AFTER RECEIPT OF NOTICE. ACCORDINGLY, ACTIO N OF THE ASSESSEE WAS NEITHER BONAFIDE NOR VOLUNTARY, THEREFORE, PENALTY IS LIABLE. THE OTHER CASE LAWS ALSO ON MENS REA IS APPLICABLE AS REFERRED BY THE LD CIT(A) IN HIS ORDER. THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. VS. CIT (2013) 358 ITR 593 AFTER CONSIDERING THE DECI SION OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (SUPRA) AND CIT VS. ATUL MOHAN JINDAL (SU PRA) HELD THAT EXPLANATION 1 TO SECTION 271(1)(C) OF THE INCOME-TA X ACT, 1961 , RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS N OTICED BY THE ASSESSING OFFICER, BETWEEN THE REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 19 RELIABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS TO THE DEPA RTMENT TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED INCOME AND NOT O THERWISE. VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOM E, HE HAS TO BE ABSOLVED FROM PENALTY. THEREFORE, WE HAVE CONSIDERED VIEW THAT THE LD CIT(A) WAS RIGHT TO CONFIRM THE PENALTY ON GIVEN CIRC UMSTANCES. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD CIT(A) 7. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 07/09/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 07 TH SEPTEMBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI NIRMAL KUMAR BARDIA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE-2, JAIPUR. ITA 842/JP/2012_ NIRMAL KUMAR BARDIA VS. DCIT 20 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 842/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR