Shri Krupeshbhai Narharibhai Patel, Baroda V. The Dy.CIT.,Central Circle-1, Baroda

ITSSA 307/AHD/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3704 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 25-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Section: 143(3); 153A

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NO. 307/AHD/2014 / ASSESSMENT YEAR: 2006-07 SHRI KRUPESH NARHARIBHAI PATEL, 15, PARISHRAM SOCIETY, SUBHANPURA, VADODARA-390023 PAN : ADHPP 6422 B VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, VADODARA ASSESSEE BY : SHRI MILIN MEHTA, AR REVENUE BY : SHRI V K SINGH, SR DR / DATE OF HEARING : 09/04/2018 / DATE OF PRONOUNCEMENT: 12/04/2018 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 6-07 IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, AHMEDAB AD VIDE APPEAL NO.CIT(A)- IV/1/BRD/CC-1/13-14, DATED 06.05.2014, ARISING OUT OF ORDER UNDER SECTION 271(1)(C) R.W.S. 274 OF THE INCOME-TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT), FRAMED ON 28.12.2013 BY THE DCIT, CENTRAL CI RCLE-1, BARODA. 2. THE SOLITARY GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I V, AHMEDABAD ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF DEPUTY COMMISSION OF INCOME-TAX, CENTRAL CIRCLE-1, BARODA IN LEVYING PENALTY U/S 271 (1)(C) R.W.S. 274 OF THE INCOME-TAX ACT, 1961 ON THE DISALLOWANCE OF SHORT T ERM CAPITAL LOSSES U/S. 94(7) OF THE ACT. 3. BRIEFLY STATED FACTS, AS CULLED OUT FROM THE REC ORD, ARE THAT ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT WAS COM PLETED IN THE CASE OF THE ASSESSEE ON 23.12.2010. ASSESSING OFFICER MADE VAR IOUS ADDITIONS WHICH, INTER ALIA, INCLUDED DISALLOWANCE UNDER SECTION 94(7) OF THE AC T AT RS.22,38,207/-. SUBSEQUENTLY, PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) R.W.S. 274 OF THE ACT WERE INITIATED. DURING THE COURSE OF PENALTY PROCEE DINGS, IT WAS CONTENDED BY IT(SS)A NO. 307/AHD/2014 SHRI KRUPESH NARHARIBHAI PATEL VS. DCIT AY : 2006-07 - 2 THE ASSESSEE THAT ALL THE INFORMATION RELATING TO P URCHASE AND SALE OF MUTUAL FUNDS, DATE OF PURCHASE, DATE OF SALES, AMOUNT CLAI MED, RECORD DATE AS WELL AS DIVIDEND RECEIVED WERE FURNISHED IN THE RETURN OF I NCOME AND DUE TO INADVERTENT MISTAKE, PROVISIONS OF SECTION 94(7) OF THE ACT WERE NOT COMPLIED WITH. HOWEVER, LEARNED ASSESSING OFFICER WENT AHEA D TO IMPOSE THE PENALTY OF RS.7,75,000/- FOR THE ALLEGED DISALLOWANCE UNDER SE CTION 94(7) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. BEFOR E THE LEARNED CIT(A), ASSESSEE FAILED TO SUCCEED. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, REFERRED TO THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF WALTER SALDHANA VS. DCIT, REPORTED IN [2011] 44 SOT 26 (MUMBAI), VIDE ITA NO. 444/MUM/2010, FOR THE ASSESSMENT YEAR 2006-07, WHEREIN SIMILAR ISSUE HAS BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESSEE. 5. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDERS OF BOTH THE LOWER AUTHORITIES AND ALSO SUBMI TTED THAT THE ASSESSEE HAS MADE THIS MISTAKE CONSISTENTLY FOR THREE ASSESSMENT YEARS FROM AYS 2006-07 TO 2008-09, WHICH SHOWS THAT THERE WAS MAL-INTENTION F OR NOT MAKING THE DISALLOWANCE OF LOSS AS STIPULATED IN THE PROVISION S OF SECTION 94(7) OF THE ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS AGAINST THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS.7, 75,000/- FOR THE ALLEGED DISALLOWANCE OF SHORT TERM CAPITAL LOSS UNDER SECTI ON 94(7) OF THE ACT. ON PERUSAL OF RECORD, WE FIND THAT THIS FACT IS NOT DI SPUTED THAT THE ASSESSEE HAS DISCLOSED ALL NECESSARY INFORMATION RELEVANT TO THE PURCHASE, SALE, RECORD DATE AND DIVIDEND RECEIVED IN RESPECT OF MUTUAL FUNDS. IT MADE A BONA FIDE CLAIM ON THE STRENGTH OF THE INFORMATION AVAILABLE WITH IT, BUT NOWHERE CONNOTES THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME OR CONCEALED PARTICULARS IT(SS)A NO. 307/AHD/2014 SHRI KRUPESH NARHARIBHAI PATEL VS. DCIT AY : 2006-07 - 3 OF INCOME. WE FURTHER FIND THAT VERY SAME ISSUE OF PENALTY IMPOSITION FOR THE ADDITION TOWARDS DISALLOWANCE UNDER SECTION 94(7) O F THE ACT CAME UP BEFORE THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF WALTER SALDHANA VS. DCIT, REPORTED IN [2011] 44 SOT 26 (MUMBAI), WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- 5. FROM THE ABOVE DISCUSSION OF SCHEME OF THE ACT, TWO IMPORTANT THINGS COME OUT ARE THAT IT IS THE DUTY OF THE ASSESSEE TO FURN ISH PARTICULARS OF INCOME SIMULTANEOUSLY HE HAS RIGHT TO CLAIM ALL EXEMPTIONS AND DEDUCTIONS PROVIDED IN THE ACT, ACCORDING TO THE ASSESSEE FOR WHICH HE IS ENTITLED. THE DUTY OF THE ASSESSING OFFICER IS TO ASSESS REAL AND CORRECT INC OME IN ACCORDANCE WITH LAW. THE CBDT IN ITS CIRCULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 'REGARDING DEPARTMENTAL ATTITUDE TOWARDS' - STATED THAT THE CB DT IN ITS CIRCULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 'REGARDING DEPART MENTAL ATTITUDE TOWARDS' - STATED THAT OFFICERS OF THE DEPARTMENT MUST NOT TAK E ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIE S TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIM ING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICA TE THAT SOME REFUND OR RELIEF IS DUE TO HIM. IT IS FURTHER STATED THAT OFFICERS SHOU LD, WHEN REQUESTED, FREELY ADVISE ASSESSEES THE WAY IN WHICH ENTRIES SHOULD BE MADE I N VARIOUS FORMS, THEY SHOULD NOT THEMSELVES MAKE ANY IN THEM ON THEIR BEHALF. WH ERE SUCH ADVICE IS GIVEN, IT SHOULD BE CLEARLY EXPLAINED TO THEM THAT THEY ARE R ESPONSIBLE FOR THE ENTRIES MADE IN ANY FORM AND THAT THEY CANNOT BE ALLOWED TO PLEA D THAT THEY WERE MADE UNDER OFFICIAL INSTRUCTIONS. 16. IN THE LIGHT OF ABOVE DISCUSSION WE CONSIDER TH E FACTS OF THE CASE UNDER CONSIDERATION. ON PERUSAL OF THE ORDERS OF REVENUE AUTHORITIES, WE FIND THAT THE PENALTY U/S 271(1)(C) WAS LEVIED ON THE GROUND THAT THE ASSESSEE VIOLATED OF PROVISIONS OF SECTION 94(7) OF THE ACT BY NOT IGNOR ING LOSSES WHILE COMPUTING SHORT TERM CAPITAL GAINS ON TRANSACTIONS RELATED TO SECTION 94(7) OF THE ACT. IT IS IMPORTANT TO STATE HERE THAT THE AO MADE THE ADDITI ON ONLY ON THE BASIS OF MATERIAL AND INFORMATIONS FURNISHED BY THE ASSESSEE . THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LD. (322 ITR 158) ( AT PAGE 164 ) REGARDING THE WORD 'PARTICULARS' USED IN SECTION 271(1)(C) HAS HE LD THAT THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTIC ULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. BUT IN THE CASE UNDER CONSIDERATION WE FIND THAT THE ASSESSEE HAS FURNISHED FULL DETAIL AND HAS NOT CONCEALED ANY PARTICULARS OF INCOME OR HAS FURNISHED ANY INACCURATE PARTICULAR OF INCOME. FURTHER, WE NOTICED THAT THAT THERE WERE NO SUCH SPECIFIC REQUIREMENTS IN THE RETURN FORM APPLICABLE TO THE Y EAR UNDER CONSIDERATION. SUCH REQUIREMENT OF THE COLUMN IN THE RETURN HAS BEEN IN SERTED BY AMENDMENT IN RETURN FORM, ITR-6, AT PAGE 17, 'SCHEDULE CG CAPITA L GAIN' S NO3 (D) WHICH IS IT(SS)A NO. 307/AHD/2014 SHRI KRUPESH NARHARIBHAI PATEL VS. DCIT AY : 2006-07 - 4 APPLICABLE FROM AY 2007-08. IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (322 ITR 158) (SC) THE HON'BLE SUPREME COURT HELD THAT W HERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RE TURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY U/S 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AM OUNT TO FURNISHING INACCURATE PARTICULARS. THE CASE OF THE ASSESSEE UN DER CONSIDERATION IS SQUARELY COVERED BY THE ABOVE JUDGMENT OF THE APEX COURT. TH E ASSESSEE DEMONSTRATED THAT THEIR CLAIM WAS BONAFIDE CLAIM. IN THE LIGHT OF ABO VE DISCUSSION, WE DON'T FIND THAT THE CASE UNDER CONSIDERATION IS A FIT CASE FOR LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT WE THEREFORE CANCELLED THE PEN ALTY LEVIED. 7. ON PERUSAL OF THE ABOVE FINDINGS OF THE TRIBUNAL AS WELL AS LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HE ISSUE AS WELL AS THE FACTS ARE ALMOST IDENTICAL AND LEARNED DEPARTMENTAL REPRESENT ATIVE FAILED TO BRING AN CONTRARY FACTS IN THIS ASPECT. WE, THEREFORE, RESPE CTFULLY FOLLOWING THE TRIBUNALS DECISION DATED 20.08.2010 IN THE CASE OF WALTER SAL DHANA (SUPRA), CANCEL THE PENALTY OF RS.7,75,000/- LEVIED BY THE ASSESSING OF FICER UNDER SECTION 271(1)(C) OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 12 TH APRIL, 2018 AT AHMEDABAD. SD/- SD/- (MAHAVIR PRASAD) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED 12/04/2018 '#$% &%/ COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT 2. '*) / THE RESPONDENT. 3. , / CONCERNED CIT 4. , ) ( / THE CIT(A)- 5. % '## , , /DR,ITAT, AHMEDABAD, 6. 5 / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT.REGISTRAR) ITAT, AHMEDABAD