Asstt.Commissioner of Income Tax,Circle-4, Nagpur V. Dr Sangeeta Mandnani, Nagpur

ITA 98/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3156 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P T IWARI
• Assessee Lawyers: M MANI
• Keywords: Revised return; Bonafide mistake
• Section: 271(1)(c); 54F; 139

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 9 8 / N AG / 20 1 2 ( ASSESSMENT YEAR S : 200 8 - 0 9 ) ACIT, CIRCLE 4 , NAGPUR (MS) - 440 001 VS. DR. SANGEETA MADNANI, BAYRAMJI TOWN, NAGPUR - 13 PAN/GIR NO. : A PLPM 2155 A ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : M R. D.P.TIWARI /ASSESSEE BY : MR. M.MANI DATE OF HEARING : 2 9 TH JAN ., 201 3 DATE OF PRONOUNCEMENT : 6 TH FEB. ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE DEPARTMENT BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 200 8 - 0 9 , WHICH HA S BEEN HEARD THROUGH E - CO URT, MUMBAI . 2 . THE DEPARTMENT IS OBJECTING IN DELETING THE PENALTY UNDER SECTION 271(1)(C) AT RS. 14,16,250/ - . 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE OWNING CERTAIN SHARES. THE SHARES WERE SOLD IN THIS YEAR. SHE REALIZED A SALE PRICE OF 6 CRORE . AT THE TIME OF SALE IT WAS THE INTENTION TO CONSTRUCT A HOUSE FOR ITA NO . 9 8 /20 1 2 2 RESIDENCE WITHIN A PERIOD OF 3 YEARS FOR CONSIDERATION OF RS. 1.5 CRORES. THE BALANCE OF TAX PAYABLE WAS PAID. AFTER THE SALE ON AMOUNT OF RS. 25 LACS WAS SPENT FOR CONSTRUCTION OF HOUSE TI LL THE RETURN WAS FILED. LATER ON IT WAS FOUND THAT IT WAS NOT POSSIBLE TO CONSTRUCT THE HOUSE BEFORE THE DUE DATE OF RETURN UNDER SECTION 139 AND THEREFORE, IT WAS DECIDED TO INVEST THE AMOUNT IN THE CAPITAL GAIN SCHEME A/C OF BANK. BY MISTAKE THE AMOUNT WAS INVESTED AS ON FD IN BANK. THIS MISTAKE WAS DISCOVERED LATER ON SOMETIMES IN THE END OF FEBRUARY, 2010. TO GET OVER THE DIFFICULTIES IT WAS FINALLY DECIDED NOT TO CLAIM THE DEDUCTION AND PAY THE TAX. ACCORDINGLY REVISED RETURN WAS FILED WITHDRAWING TH E CLAIM. IT TOOK SOME TIME TO FILE THE REVISED RETURN , HOWEVER, THE SAME WAS FILED ON A LATER STAGE . THE AO, HOWEVER, INITIATED PENALTY PROCEEDING UNDER SECTION 271(1)(C) AND LEVIED THE SAME. 4 . DETAIL SUBMISSIONS WERE FILED BEFORE THE LEARNED CIT(A) , WH ICH IS INCORPORATED IN THE ORDER OF THE CIT(A) IN PARA 5 AT PAGE 3 OF HIS ORDER. ALL THE WRITTEN SUBMISSIONS WERE SENT TO THE AO AND REMAND REPORT WAS SOUGHT. THE REMAND REPORT RECEIVED FROM THE AO IS ALSO INCORPORATED IN THE ORDER OF THE CIT(A) IN PARA 5. 1 AT PAGES 4 & 5 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, LEARNED CIT(A) FOUND THAT THE LEVY OF PENALTY IS NOT JUSTIFIED AT THE END OF THE AO. ACCORDINGLY, HE DELETED THE LEVY OF PENALTY. FINDINGS OF THE CIT(A) HAVE BEEN RECOR DED IN PARA 6 & 6.1 AT PAGES 5 & 6, WHICH ARE AS UNDER : - 6.0 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS OFFERED BY THE APPELLANT AND THE REMAND REPORT SUBMITTED BY THE AO. IT IS ITA NO . 9 8 /20 1 2 3 SEEN THAT APPELLANT HAS GOT CAPITAL GAIN AND DECIDED TO CONSTRUCT A HOUSE PROPERTY TO CLAIM EXEMPTION UNDER SECTION 54F. APPELLANT ALSO INVESTED AN AMOUNT OF RS. 1.5 CRORE IN CAPITAL GAIN ACCOUNT SCHEME, 1988. BUT NO ENDORSEMENT WAS MADE BY BANK. 6.1 HERE IN APPEAL IT IS SUBMITTED THAT THE APPELLANT HAS FIRST TRIED TO CO NSTRUCT A HOUSE BUT ATTEMPTS ARE FRUSTRATED BY MUNICIPAL CORPORATION RESULTING IN DELAY. SECONDLY, WHEN SHE FILED APPLICATION FOR CAPITAL GAIN SCHEME , THEN BANK DID NOT MAKE ENDORSEMENT ON THE FDR. IN THE MEANTIME, MUNICIPAL PERMISSION CAME AND SHE COMPLET ED THE HOUSE AS INTENDED ON 10/2010 (INSTEAD ON 04/2010) , HENCE, THERE WAS A DELAY OF 7 MONTHS IN COMPLETION AS PER SECTION 54F. BUT THE DELAY BETWEEN APRIL, 2008 TO SEPT., 2009 I.E. 1 YEAR & 6 MONTHS WAS NOT DUE TO APPELLANT AS SHE WAS PREVENTED BY MUNICI PALITY AND APPELLANT COULD HAVE BEEN APPLIED FOR EXEMPTION U/S.119(2) FOR CONDONATION OF DELAY. WHEN SURVEY TOOK PLACE, APPELLANT SURRENDERED JUST TO BUY PEACE. APPELLANT AT NO POINT OF TIME TRIED TO CONCEAL THE FACTS AND INTENTION APPEAR TO BE TO FOLLOW THE LAW. HOWEVER, HE R INTENTION GOT FRUSTRATED DUE TO OTHER AGENCIES AND SHE DECIDED TO OFFER THE WHOLE AMOUNT OF TAX THEREON BY REVISING THE RETURN. APPELLANT NEVER TRIED TO CONCEAL THE FACT AND PRESENTED THEM AS IT ALSO SHE NEVER CONCEALED ANY PARTICULAR FROM AO. CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, PENALTY IS NOT LEVIABLE. 5 . AGGRIEVED THEREBY, THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . FIRSTLY, L EARNED DR PLACED RELIANCE ON THE ORDER OF AO. RELIANCE WAS ALSO PLACE D O N THE DECISION OF USHA INTERNATIONAL , DECIDED IN ITA NO.1696/2006, DECIDED ON 5 - 11 - 2012 . ATTENTION OF THE BENCH WAS ALSO DRAWN ON PENALTY ORDER. PART OF THE PENALTY ORDER WAS ALSO READY BY THE LEARNED D R . 7 . ON THE OTHER HAND LEARNED COUNSEL OF THE A SSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A). FURTHER IT WAS SUBMITTED THAT THE HOUSE COULD NOT BE COMPLETED IN TIME AS THERE WAS VARIOUS FORMALITIES, WHICH WERE TO BE COMPLETED AND APPROVED BY THE APPROPRIATE AUTHORITY THEREFORE, THERE WAS NO MISTAKE ON THE PART OF THE ASSESSEE AND THE ASSESSEE CANNOT BE FORCED TO COMPLETE THE FORMALITIES WHICH WERE ITA NO . 9 8 /20 1 2 4 IMPOSSIBLE. IT WAS ALSO SUBMITTED THAT DUE TO MISTAKE OF THE BANK, THE AMOUNT WAS KEPT IN FD, HOWEVER, ON A LATER STAGE, THE BANK HAS ACCEPTED ITS MISTAKE. T HE ATTENTION OF THE BENCH WAS ALSO DRAWN ON THE WRITTEN SUBMISSION REPRODUCED IN THE ORDER OF THE CIT(A) . IT WAS FURTHER EXPLAINED THAT THE CONSTRUCTION OF THE HOUSE STARTED IN JUNE, 2007, HOWEVER, ON 4 - 4 - 2008 , THE NAGPUR MUNICIPAL CORPORATION DIRECTED TO STOP THE WORK OF CONSTRUCTION. AS PER THE DIRECTIVE, IT WAS STOPPED. THIS BAN CONTINUED UTPO 9 - 9 - 2009 AND WHEN IT WAS LIFTED THE HOUSE WAS CONSTRUCTED AND CONSTRUCTION WAS COMPLETED IN OCTOBER, 2010. ACCORDINGLY, IT WAS SUBMITTED THAT IF A PERIOD OF ONE YE AR AND SIX MONTHS IS IGNORED DUE TO BAN THEN THE HOUSE WAS CONSTRUCTED WITHIN THREE YEARS AND, THEREFORE, THE ASSESSEE WAS ENTITLED TO CLAIM EXEMPTION UNDER SECTION 54F, HOWEVER, JUST TO AVOID LITIGATION AND MULTIPLICITY OF INCOME TAX PROCEEDING, THE ASSES SEE THOUGHT FIT TO WITHDRAW THE CLAIM OF EXEMPTION UNDER SECTION 54F. ACCORDINGLY, A REVISED RETURN WAS FILED BY THE ASSESSEE. IT WAS SUBMITTED THAT NEITHER ANY INCOME WAS CONCEALED NOR ANY PARTICULAR WAS FURNISHED INACCURATELY, THEREFORE, PENALTY IS NOT LEVIABLE AND LEARNED CIT(A) WAS JUSTIFIED IN CANCELLING THE LEVY OF PENALTY. 8 . WE HAVE HEARD RIVAL SUBMISSION AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FOUND THAT LEARNED CIT(A) WAS JUSTIFIED IN CANCELLING THE LEVY OF PENALTY. THERE IS NO DISPUTE THAT THE ASSESSEE HAS DISCLOSED ALL THE FACTS TRULY WHILE FILING RETURN BY WHICH DEDUCTION UNDER SECTION 54F WAS ITA NO . 9 8 /20 1 2 5 CLAIMED. SINCE THERE WAS A BAN BY MUNICIPAL CORPORATION, ACCORDINGLY, CONSTRUCTION OF H OUSE WAS STOPPED AND THE AMOUNT WAS DEPOSITED IN THE BANK. AS STATED BY LEARNED AR THAT DUE TO MISTAKE OF THE BANK, THE AMOUNT WAS KEPT IN THE FD, HOWEVER, THE AMOUNT WAS DEPOSITED IN THE CAPITAL GAIN SCHEME AMOUNT IN THE BANK. IN OUR VIEW, COMPLETION OF T HE CONSTRUCTION OF THE HOUSE WAS NOT POSSIBLE BECAUSE OF BAN BY THE MUNICIPAL CORPORATION. THE AMOUNT WAS KEPT IN THE BANK, HOWEVER, WRONGLY IT WAS KEPT IN THE FD. THIS IS A TECHNICAL DEFECT, THEREFORE, ON TECHNICALITY THE LEVY OF PENALTY IS NOT JUSTIFIED AS HELD BY THE HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL, REPORTED IN 135 TAXMAN 461 . THIS MISTAKE IS BONAFIDE AND ON BONAFIDE MISTAKE, IN OUR CONSID ERED VIEW, PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE. THERE SHOULD BE SOME MATERIAL TO HO LD THAT THERE WAS A CONSCIOUS CONCEALMENT. THERE IS NO DISPUTE THAT THE CONSTRUCTION OF THE HOUSE WAS STARTED IN JUNE, 2007 , HOWEVER, THE SAME WAS STOPPED BY THE MUNICIPAL CORPORATION ON ACCOUNT OF SOME APPROVAL ETC. AS PER THE PROVISION OF LAW, IF THE HOU SE IS CONSTRUCTED WITHIN 3 YEARS THEN DEDUCTION UNDER SECTION 54F IS ALLOWABLE. IN THIS CASE, THERE WAS A BAN OF CONSTRUCTION, THEREFORE, THE ASSESSEE WITHDREW THE CLAIM OF DEDUCTION UNDER SECTION 54F BY FILING REVISED RETURN. ACCORDINGLY, WE ARE OF THE VI EW THAT THE PENALTY LEVIED BY THE AO WAS NOT JUSTIFIED AND THE LEARNED CIT(A) WAS JUSTIFIED IN CANCELLING THE LEVY OF PENALTY. THUS, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) IN CANCELLING THE LEVY OF PENALTY. ITA NO . 9 8 /20 1 2 6 9 . IN THE RESULT , APPEAL OF THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 6 TH DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 6 / 02 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI