ITO, Mohali V. Sh. Balwinder Singh Dhillon, Mohali

MA 21/CHANDI/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 5080 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Difference of opinion; Revised return
• Section: 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER MA NO. 21/CHD/2016 IN ITA NO. 1140/CHD/2014 ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, VS SHRI BALWINDER SING H DHILLON, WARD 6(3), # 86-B, SECTOR 71, MOHALI. MOHALI. PAN: ABIPD8959N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MITTAL, DR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 02.12.2016 DATE OF PRONOUNCEMENT : 07.12.2016 O R D E R PER BHAVNESH SAINI,JM THE DEPARTMENTAL APPEAL IN ITA 1140/2014 FOR ASSESSMENT YEAR 2008-09 WAS DECIDED BY THE TRIBUNAL VIDE ORDER DATED 03.08.2015 DISMISSING THE DEPARTMENTAL APPEAL. THE REVENUE, THROUGH ITO, WARD 6(3), MOHALI FILED T HE PRESENT MISCELLANEOUS APPLICATION UNDER SECTION 254 (2) OF THE INCOME TAX ACT FOR RECTIFICATION OF THE AFORESA ID ORDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT A HOUSING S OCIETY, NAMED AS THE DEFENCE SERVICES COOPERATIVE HOUSE BU ILDING SOCIETY LTD. MOHALI (HEREINAFTER REFERRED TO AS 'S OCIETY') CONSISTING OF 207 MEMBERS WAS FORMED, WHICH WAS THE OWNER OF 27.0 ACRES OF LAND IN VILLAGE KANSAL, DISTRICT M OHALI. THIS 2 SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT (HEREINAFTER REFERRED TO AS 'AGREEMENT') ON 27.04.2007 WITH M/S HASH BUILDERS (PVT.) LTD., CHAN DIGARH AND M/S. TATA HOUSING DEVELOPMENT COMPANY LTD., MUM BAI (HEREINAFTER REFERRED TO AS THDC), BY VIRTUE OF WHI CH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND ALSO CONSIDERATION IN KI ND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS ALSO A MEMBER OF THE SAID SOCIETY OWNING 250 SQ. YARDS LAND. THE TOTAL CONSIDERATION WAS SETTLED AT RS. 40,00,000/- PLUS A LLOTMENT OF ONE FLAT OF 1150 SQ. FEET TO THE ASSESSEE, OUT O F WHICH THE ASSESSEE HAD RECEIVED RS. 16 LACS. THE ASSESSEE HAD FURNISHED HIS RETURN OF INCOME FOR THE A.Y. 2008-09 ON 28.08.2008 DECLARING INCOME OF RS. 3,13,980/-. A RE VISED RETURN DECLARING INCOME OF RS. 18,30,180/- WAS FILE D SUBSEQUENTLY ON 24.10.2009, IN WHICH LONG TERM CAPI TAL GAIN OF RS. 15,04,702/- WAS DECLARED. THE ASSESSING OFFICER NOTICED THAT AS PER THE AGREEMENT DATED 27.04.2007, EACH OF THE MEMBERS OF THE SOCIETY INCLUDING THE ASSESSEE, OWNING PLOT OF 250 SQ. YARDS WERE TO RECEIVE RS. 40,00,000 /- IN CASH AND A FURNISHED FLAT MEASURING 1150 SQ. FT., W ITH MARKET VALUE OF RS. 51,75,000/-, CALCULATED AT THE RATE OF RS. 4500/- PER SQ. FT. THUS, THE TOTAL CONSIDERATIO N FOR TRANSFER OF PLOT CAME TO RS. 91,75,000/-. THE ASSES SING OFFICER COMPUTED THE INCOME BY WAY OF CAPITAL GAINS BY ADOPTING THIS AMOUNT AS SALE CONSIDERATION. FINALLY , THE ASSESSMENT WAS MADE BY TAKING CAPITAL GAINS INCOME AT RS. 89,28,284/-. PENALTY PROCEEDINGS U/S 271(L)(C) WERE ALSO 3 INITIATED. IN THE PENALTY PROCEEDINGS, THE ASSESSEE HAD FILED A REPLY, BUT THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION AND LEVIED MINIMUM LEVIABLE PENALTY OF RS. 20,25,000/-. 3. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEFO RE LD. CIT(APPEALS). THE LD. CIT(APPEALS), CONSIDERING THE SUBMISSION OF THE ASSESSEE AVAILABLE ON RECORD, CAN CELLED THE PENALTY. HIS FINDINGS IN PARA 5 & 6 ARE REPROD UCED AS UNDER : 5. I HAVE CONSIDERED THE FACTS OF THE CASE. AS PER THE PROVISIONS OF SECTION 271(L)(C), PENALTY CAN BE LEV IED, IF THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOM E OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. F OR THE SAKE OF READY REFERENCE, EXPLANATION-I BELOW SECTION 271(1)(C) IS REPRODUCED BELOW : 'EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSO N UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFI CER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER T O BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH H E IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROV E THAT SUCH EXPLANATION IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHA LL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 5.1 THUS, THE PENALTY FOR CONCEALMENT CAN BE LEVI ED WHEN THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OR I S NOT ABLE TO GIVE ANY SATISFACTORY EXPLANATION IN REGARD TO 4 ANY MATTER WHICH IS MATERIAL TO THE COMPUTATION OF INCOME. NOW WE EXAMINE THE FACTS OF THE PRESENT CAS E. IT IS NOTEWORTHY THAT THE VIEW TAKEN BY THE ASSESSI NG OFFICER THAT THE AMOUNT OF CAPITAL GAINS HAS TO BE COMPUTED BY TAKING THE TOTAL CONSIDERATION, ACTUALL Y RECEIVED OR RECEIVABLE BY THE APPELLANT AS SALE CONSIDERATION AND THAT THE TOTAL AMOUNT OF CAPITAL GAIN IS ASSESSABLE AS THE INCOME OF THE YEAR UNDER APPEA L, HAS BEEN UPHELD BY THE TRIBUNAL. THEREFORE, THE LIM ITED POINT FOR CONSIDERATION IS WHETHER THE APPELLANT HA S A REASONABLE EXPLANATION FOR HIS OMISSION TO DISCLOSE THE INCOME BY WAY OF CAPITAL GAINS IN THE RETURN. IN TH E ORIGINAL RETURN FILED BY HIM, NO INCOME UNDER THE H EAD CAPITAL GAINS WAS SHOWN, BUT ON HIS OWN, HE HAD FIL ED ANOTHER RETURN AND DISCLOSED ALL THE MATERIAL FACTS RELATING TO THE TRANSFER OF PLOT. IN THIS RETURN, S OME INCOME UNDER THE HEAD CAPITAL GAINS WAS SHOWN BUT T HE SALE CONSIDERATION SHOWN WAS ONLY THE AMOUNT WHICH HE HAD ACTUALLY RECEIVED DURING THE PREVIOUS YEAR. IT IS CLEAR FROM THE ARGUMENTS RAISED BY THE APPELLANT TH AT THERE WERE CERTAIN CONTROVERSIES AND DISPUTES IN RE GARD TO THE TRANSFER OF PLOT. IN FACT, I UNDERSTAND THAT THE VARIOUS ISSUES HAVE STILL NOT BEEN RESOLVED AND THE CONSTRUCTION OF THE BUILDING, IN WHICH THE APPELLAN T WAS TO GET A FLAT AS A PART OF SALE CONSIDERATION, HAS NOT STARTED TILL DATE. IN THESE PECULIAR CIRCUMSTANC ES, THE BELIEF OF THE APPELLANT THAT THE CAPITAL GAINS ON W HICH HE HAS TO PAY TAX HAS TO BE COMPUTED ONLY ON THE BA SIS OF THE AMOUNT WHICH HE HAS ACTUALLY RECEIVED, CANNO T BE CONSIDERED TO BE TOTALLY UNREASONABLE, THOUGH IT WAS NOT STRICTLY LEGAL. THE FACT THAT ALL THE MATERIAL FACTS WHICH WERE REQUIRED TO COMPUTE THE CORRECT CAPITAL GAINS WERE FURNISHED BY THE APPELLANT IN HIS SECOND RETURN, ESTABLISH HIS BONAFIDE CREDENTIALS. IN VIEW OF THIS DISCUSSION, IT IS HELD THAT PENALTY FOR CONCEA LMENT HAS BEEN WRONGLY LEVIED IN THE INSTANT CASE AND THE SAME IS ACCORDINGLY CANCELLED. GROUNDS OF APPEAL TA KEN BY THE APPELLANT ARE ALLOWED. 5 6. IN THE RESULT, THE APPEAL IS ALLOWED. 4. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OF FICER BEFORE THE TRIBUNAL IN DEPARTMENTAL APPEAL. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HA S DECLARED CAPITAL GAINS ON THE AMOUNT WHICH WAS RECEIVED BY E XECUTING THE SALE DEED AND FOR THE AGREEMENT TO SELL REGARDING W HICH NO TRANSACTIONS WERE COMPLETED, NO CAPITAL GAIN ARISES . THE ASSESSEE DECLARED ALL THE PARTICULARS IN THE RETURN OF INCOME AS WELL AS BEFORE ASSESSING OFFICER. THEREFORE, ON MER E DIFFERENCE OF OPINION, PENALTY WAS CORRECTLY CANCELLED BY THE LD. CIT(APPEALS). IT WAS ALSO SUBMITTED THAT ON IDENTICAL ISSUE, HON' BLE PUNJAB & HARYANA HIGH COURT IN ITS RECENT DECISION IN THE CA SE OF SHRI C.S.ATWAL VS CIT, LUDHIANA AND OTHERS IN BUNCH OF 8 5 APPEALS, DECIDED THE QUANTUM ISSUE IN FAVOUR OF THE ASSESSEE . IT WAS, THEREFORE, SUBMITTED THAT PENALTY WAS CORRECTLY CAN CELLED BY THE LD. CIT(APPEALS). THE TRIBUNAL, CONSIDERING FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE PARTIES, DISMISSED DEPARTMENTAL APPEAL. THE FINDINGS OF THE TRIBUNAL IN PARA 5 AND 6 OF THE ORDER DATED 03.08.2015 ARE REPRODUCED AS UNDER : 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE FACTS OF THE CASE OF ASSESSEE ARE ADMITTEDLY IDENTICAL AS HAVE BEEN DECIDED BY THE HON'BLE PUNJA B & HARYANA HIGH COURT IN THE CASE OF SHRI C.S. ATWAL V S CIT, LUDHIANA (SUPRA) IN WHICH THE HON'BLE HIGH COU RT DECIDED THE ISSUE OF EXIGIBILITY TO CAPITAL GAIN IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE CA SE OF THE PRESENT ASSESSEE ALSO, THE ASSESSEE HAS, OF HIS OWN FILED ANOTHER RETURN OF INCOME DISCLOSING ALL THE M ATERIAL FACTS RELATING TO TRANSFER OF PLOT AND HAS DISCLOSE D CAPITAL GAINS ON THE AMOUNT WHICH WAS ACTUALLY RECE IVED DURING THE YEAR UNDER CONSIDERATION. THE DISPUTE W AS LEFT REGARDING TRANSFER OF PLOT AND THE AMOUNT WHIC H WAS NOT YET RECEIVED THROUGH THE AGREEMENT TO SELL. TH E LD. 6 CIT(APPEALS), THEREFORE, ON PROPER APPRECIATION OF THE FACTS AND MATERIAL ON RECORD, CORRECTLY HELD THAT I T IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING INACC URATE PARTICULARS OF INCOME. THE EXPLANATION OF THE ASSE SSEE WAS BONAFIDE AND AFTER PASSING THE IMPUGNED ORDER, WHEN THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S.ATWAL VS CIT, LUDHIANA (SUPRA) HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESS EE, WOULD CLEARLY PROVE THAT IT IS NOT A FIT CASE OF LE VY OF THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREF ORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF LD. CIT(APPEA LS) IN DELETING PENALTY. THE DEPARTMENTAL APPEAL FAILS AN D IS DISMISSED. 6. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. 5. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME ON 28.08.2008 DECLARING I NCOME OF RS. 3,13,980/- WITHOUT DECLARING ANY INCOME UNDER T HE HEAD INCOME FROM CAPITAL GAINS. IT WAS ONLY AFTER SUR VEY UNDER SECTION 133A OF THE ACT ON THE PREMISES OF THE SOCI ETY ON 21.08.2008 AND PROCESSING OF RETURN UNDER SECTION 1 43(1) OF THE ORIGINAL RETURN DATED 22.06.2009, ASSESSEE FILE D ANOTHER RETURN DECLARING INCOME INCLUDING CAPITAL GAINS OF RS. 15,04,702/- ON 24.10.2009 SHOWING FULL CONSIDERATIO N OF THE TRANSACTION AT RS. 16 LACS ONLY. THUS, THE SAME CAN NOT BE TREATED AS BONAFIDE DECLARATION OF INCOME. THEREFO RE, ORDER OF THE TRIBUNAL MAY BE AMENDED SUITABLY. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ALL THE FACTS HAVE BEEN CONSIDER ED BY THE TRIBUNAL INCLUDING THE REVISED RETURN FILED BY THE ASSESSEE ON 24.10.2009 DECLARING HIGHER INCOME INCLUDING LON G TERM CAPITAL GAIN. HE HAS SUBMITTED THAT REVISED RETURN WAS FILED PRIOR TO ISSUE OF NOTICE UNDER SECTION 148 OF THE A CT ON 7 22.03.2010. NO SURVEY WAS CONDUCTED IN THE CASE OF THE ASSESSEE. THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. THERE IS NO MISTAKE APPARENT ON RECORD OF T HE TRIBUNAL, THEREFORE, MISCELLANEOUS APPLICATION OF T HE REVENUE MAY BE DISMISSED. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE FACTS AS NOTED ABOVE HAVE BEEN CONSIDERED BY THE AUTHORITIES BELOW AS WELL AS BY THE TRIBUNAL WHICH INCLUDE THE ORIGIN AL RETURN FILED BY THE ASSESSEE ON 28.08.2008 AND REVISED RE TURN FILED ON 24.10.2009 DECLARING LONG TERM CAPITAL GAIN. TH E NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSE SSEE ON 22.03.2010 AFTER FILING OF THE REVISED RETURN BY TH E ASSESSEE. ADMITTEDLY, NO SURVEY HAVE BEEN CONDUCTED IN THE CA SE OF THE ASSESSEE. THE CONTENTION OF LD. DR IS THAT THE REVISED RETURN FILED BY ASSESSEE DECLARING LONG TERM CAPITA L GAIN CANNOT BE SAID TO BE BONAFIDE DECLARATION. AS NOTE D ABOVE, ALL THE FACTS HAVE BEEN CONSIDERED NOT ONLY BY THE AUTHORITIES BELOW BUT BY THE TRIBUNAL ALSO WHILE DE CIDING THE DEPARTMENTAL APPEAL, THEREFORE, RE-APPRECIATION OF FACTS IN THE MISCELLANEOUS APPLICATION ARE NOT PERMITTED. IT IS WELL SETTLED LAW THAT TRIBUNAL HAS NO POWER TO REV IEW ITS OWN ORDER PASSED ON MERITS OF THE CASE. THEREFORE, SAME CANNOT BE AMENDED OR REVISED UNDER SECTION 254(2) O F THE ACT. 7(I) WE RELY UPON DECISION OF BOMBAY HIGH COURT IN THE CASE OF EARNEST EXPORTS LTD. 323 ITR 577, DECISION OF CALCUTTA HIGH COURT IN THE CASE OF ANAMIKA BUILDRS 251 ITR 8 585, DECISION OF A.P. HIGH COURT IN THE CASE OF IDE AL ENGINEERS 251 ITR 743, DECISION OF M.P. HIGH COURT IN THE CASE OF AGGARWAL WAREHOUSING 257 ITR 235. HON'BLE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD. 284 ITR 42 HELD THAT, MISTAKE MUST BE SO OBVIOUS THAT IT CAN BE EASILY CORRECTED TO WIT ANY ARITHMETICAL MISTAKE, W RONG QUOTATION OF SECTION ETC. AND NOT ON DEBATABLE ISSU ES. THE LD. DR HAS, THUS, FAILED TO POINT OUT ANY MISTAKE A PPARENT ON RECORD SO AS TO EXERCISE JURISDICTION UNDER SECT ION 254(2) OF THE INCOME TAX ACT. THE CONTENTIONS OF LD. DR A RE MERELY FOR REVIEWING THE ENTIRE ORDER OF THE TRIBUNAL WHIC H IS NOT PERMISSIBLE UNDER THE LAW. WE, THEREFORE, DO NOT FI ND ANY ERROR IN THE ORDER OF THE TRIBUNAL. THE MISCELLANE OUS APPLICATION OF THE REVENUE IS, ACCORDINGLY, DISMISS ED. 8. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 7 TH DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH