Jagdip Singh, New Delhi v. DCIT, New Delhi

ITA 4501/DEL/2009 | 2004-2005
Pronouncement Date: 29-01-2010 | Result: Allowed

Appeal Details

RSA Number 450120114 RSA 2009
Assessee PAN AAMPS1395J
Bench Delhi
Appeal Number ITA 4501/DEL/2009
Duration Of Justice 2 month(s) 2 day(s)
Appellant Jagdip Singh, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 29-01-2010
Date Of Final Hearing 27-01-2010
Next Hearing Date 27-01-2010
Assessment Year 2004-2005
Appeal Filed On 26-11-2009
Judgment Text
ITA NO. 4501/DEL/2009 A.Y. 2004-05 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 4501/DEL/2009 A.Y. : 2004-05 SHRI JAGDIP SINGH VS. DCIT CRICLE-8(1) A-9/13-C VASANT VIHAR NEW DELHI NEW DELHI 110 057 [PAN: AAMPS1395J] (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BALJIT SINGH CA. DEPARTMENT BY : SHRI B.K. GUPTA SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDERS OF THE LD. CIT(A) DATED 12.10.2009 PERTAINING TO ASSESSMENT YE AR 2004-05. 2. THE ISSUES RAISED IS THAT LD. CIT(A) HAS ERRED IN SUSTAINING THE PENALTY OF RS. 2 20 246/- UNDER SECTION 271(1)(C) OF THE IT AC T. 3. THE BRIEF FACTS OF THE CASE IS THAT THE APPELLAN T IS AN INDIVIDUAL DERIVING HIS INCOME FROM SALARY INTEREST INCOME FROM HOUSE PROPERTY AND INCOME FROM CAPITAL GAIN. THE APPELLANT FILED ITS RETURN OF INCOME ON 29.10.2004 DECLARING TOTAL INCOME AT RS. 23 22 218/-. THE ASSESSMENT W AS COMPLETED U/S 143(3) OF THE IT ACT ON 28.8.2006 COMPUTING TOTAL INCOME AT RS. 28 94 290/- AS AGAINST RETURNED INCOME OF RS. 23 22 218/-. THE ADDITIONS INCLUDE ADDITION ON LONG TERM CAPITAL GAINS TO THE EXTENT OF RS. 5 72 069/-. THE APPELLANT SOLD LAND AND BUILDING IN RANI BAGH NANITAL (UTTARANCHAL). THE APPELLANT HAS SHOWN LOSS OF ITA NO. 4501/DEL/2009 A.Y. 2004-05 2 RS. 4033/- ON SUCH TRANSACTION HOWEVER THE REVENU E HAS ASSESSED LTCG AT RS. 5 72 069/-. AGAINST THE ORDER OF THE REVENUE THE APPELLANT MOVE D AN APPEAL BEFORE THE CIT(A) AND VIDE APPEAL NO. 135/06-07 DATED 27.9 .2009 THE LD. CIT(A) HAS CONFIRMED THE ORDER OF THE AO I.E. SUSTAINED THE AD DITION MADE IN LTCG. AGAINST SAID ORDER OF LD. CIT(A) THE APPELLANT MOV ED BEFORE THE LD. ITAT AND THE LD. ITAT SUSTAINED SUCH DECISION OF THE LD. CIT(A) THEREBY CONFIRMING THE ADDITION. THEREAFTER THE AO HAS GIVEN OPPORTUNITY TO THE APP ELLANT AND AFTER HEARING THE APPELLANT HE HAS IMPOSED PENALTY @ 100% OF TAX SOUGHT TO BE EVADED AT RS. 2 20 246/-. 4. UPON ASSESSEES APPEAL LD. CIT(A) NOTED THAT AO HAS HELD THAT ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME AND FUR NISHED THE INACCURATE PARTICULARS THEREOF AMOUNTING TO RS. 572070/-. ASS ESSEES SUBMISSION BEFORE THE LD. CIT(A) WAS AS UNDER:- THAT DURING THE YEAR 1984 BECAUSE OF RIOTS THE F ACTORY OF THE APPELLANT LOCATED AT GT KARNAL ROAD AZADPUR DELHI WAS BURNE D DOWN AND ALONGWITH OTHER THINGS THE APPELLANT LOST ALL ITS R ECORDS AND IT WAS NOT POSSIBLE TO PRODUCE SUCH RECORDS IN SUPPORT OF CLAI M IN FAVOUR OF THE APPELLANT FOR NOT INVOKING THE PROVISION OF SECTION 271(1)(C). THAT THE APPELLANT PRODUCED CERTAIN DOCUMENTS LIKE CERTIFICATE FROM THE BUYER SHRI MASIUDDIN HALDWANI (UTTARANCHAL) RATI ON CARD OF THE BUYER CERTIFICATE FROM TEHSILDAR AND AN AFFIDAVIT FROM T HE APPELLANT STATING THAT THERE WAS A BUILDING ON THE LAND SOLD AND THUS TH E ASSESSE HAD RIGHTLY CLAIMED THE INDEXATION ON THE COST OF THE BUILDIN G TOWARDS LTCG. THAT THE BASIC POINT OF ADDITION MADE BY THE AO WAS TO THE FACT THAT THERE WAS NO EVIDENCE TO SHOW THE EXISTENCE OF A BU ILDING ON THE LAND ITA NO. 4501/DEL/2009 A.Y. 2004-05 3 SOLD. HOWEVER THAT MISTAKE HAS BEEN RECTIFIED BY THE APPELLANT BY FILING THE ABOVE DOCUMENTS BOTH BEFORE THE AO AND THE LD. CIT(A) BUT UNFORTUNATELY SUCH DOCUMENTS WERE NOT APPRECIATED B OTH BY AO AND THE LD. CIT(A). FURTHERMORE THE LD. AO COULD HAVE SUM MONED THE BUYER TO ASCERTAIN THE FACTS WHICH HE HAS NEVER DONE. THAT THE PENALTY PROCEEDINGS IS ALTOGETHER A SEPARA TE PROCEEDING IN COMPARISON TO THAT OF THE ASSESSMENT PROCEEDING. TH E PENALTY PROCEEDINGS CAN BE INITIATED IF THE APPELLANT; (A) FAILS TO OFFER EXPLANATION OR (B) THE EXPLANATION IS FOUND TO BE FALSE IN THE OPINION OF THE LD. AO/CIT(A) OR (C) THE APPELLANT IS NOT ABLE TO SUBST ANTIATE THE BONAFIDE OF THE FACT. ADMITTEDLY THE APPELLANT HAS NOT FAILED TO OFFER AN EXPLANATION. FURTHER THERE WAS NO FINDING OF THE REVENUE THAT SUCH EXPLA NATION WAS FALSE AND ALSO THE APPELLANT HAS SUBSTANTIATED HIS EXPLANATIO N THROUGH THE ABOVE REFERRED DOCUMENTS. HENCE THIS NOT A FIT CASE FOR INVOKING OF PENALTY PROCEEDING. 4.1 LD. CIT(A) DID NOT ACCEPT THESE CONTENTIONS AN D CONFIRMED THE AOS ORDER. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT ASSESSEES CASE IS THAT HE HAS PURCHASED A PLOT OF LAND AND CONSTRUCTED BUILDING ON THE SAME IN THE FINANCIAL YEAR 1984-85. DURING THE ASSESSMENT YEAR 2004-05 ASSESSEE HAS SOLD THE LAND AND BUILDIN G. AO FROM THE AGREEMENT OF SALE NOTED THAT PROPERTY SOLD WAS SIMPLY A PLOT OF LAND. THERE WAS NO MENTION OF ANY CONSTRUCTION BUILDING. AS A RESU LT THERE WAS REDUCTION IN THE INDEXATION VALUE IN THE COST OF CONSTRUCTION WHICH WAS ADDED BY THE AO WHILE COMPUTING LONG TERM GAIN. ASSESSEES SUBMISSION TH AT HE WAS UNABLE TO FILE A RECORDS OF CONSTRUCTION OF BUILDING AS IT WAS (I) 20 YEARS OLD AND (II) IT WAS ITA NO. 4501/DEL/2009 A.Y. 2004-05 4 BURNT DURING FIRE IN 1984 RIOTS AT DELHI. HOWEVER THESE SUBMISSIONS WERE NOT ACCEPTED BY THE AUTHORITIES. THE MATTER ULTIMATELY TRAVELLED TO THE TRIBUNAL. THE TRIBUNAL CONCLUDED AS UNDER:- LD. CIT(A) HAS CATEGORICALLY ASKED CERTAIN DETAILS . IF NOT BEFORE LD. CIT(A) THE SAME COULD HAVE BEEN FILED BY THE ASSES SEE AT LEAST BEFORE US. THE ASSESSEE HAS NOT FILED ANY SUCH DETAILS BEFORE US TO PROVE THE EXISTENCE OF BUILDING ON SAID LAND. AS RIGHTLY CON TENDED BY LEARNED DR APPARENT IS REAL UNLESS PROVED OTHERWISE BY THE PER SON ALLEGES SO. THE ASSESSEE HAS NOT PROVED THAT THE APPARENT IS NOT RE AL AND HAS NOT PROVED BY ANY INDEPENDENT EVIDENCE THE EXISTENCE OF BUILDI NG ON THE SAID LAND. THE CERTIFICATE BY PATWARI OR THE CERTIFICATE OF P URCHASE IS VAGUE NOT PROVING THE EXISTENCE OF BUILDING ON THE LAND ON TH E DATE OF SALE. WE THEREFORE DO NOT FIND ANY MERIT IN THIS APPEA L. THE ASSESSEE COULD NOT REBUT THE FINDING GIVEN BY CIT(A). WE THEREFO RE UPHOLD THE SAME. 7. A READING OF THE ABOVE MAKES IT CLEAR THAT THE A DDITION HAS BEEN SUSTAINED ON THE GROUND THAT ASSESSEE HAS NOT BEEN ABLE TO COGENTLY PROVE THE FACT THAT BUILDING HAD BEEN CONSTRUCTED ON THE LAND . ASSESSEES PLEA IS THAT THE CONSTRUCTION WAS 20 YEARS AGO AND RECORDS PERTAININ G TO THE SAME GOT BURNT IN 1984 RIOTS. THE ASSESSEE HAD PRODUCED CERTIFICA TE BY PATWARI. HOWEVER THESE WERE NOT ACCEPTED. AS IN THE AGREEMENT OF SA LE THERE WAS NO MENTION THAT BUILDING WAS THERE. NOW IN THE ABOVE BACKGROU ND WE HAVE TO SEE WHETHER THE PENALTY UNDER SECTION 271(1)(C) IS LEVI ED OR NOT. 8. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. IN THIS REGARD LD. DR HAD PLACED RELIANCE BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ELECTRICAL AGENCIES CORPORATION VS. CIT 253 ITR 619. IN THIS CASE IT WAS HELD THAT TRIBUNAL HAD TAKEN NOTE OF THE FACTUAL AS PECT AND NOTED THAT THE CLAIM WAS CLEARLY UNTENABLE NOT GENUINE AND THEREF ORE ASSESSEE COULD NOT BE SAID TO HAVE REBUTTED THE PRESUMPTION WHICH AROSE A GAINST IT IN THE LIGHT OF THE ITA NO. 4501/DEL/2009 A.Y. 2004-05 5 EXPLANATION TO SECTION 271(1)(C) OF THE IT ACT. LD. DR FURTHER PLACED RELIANCE UPON HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. ESCORTS FINANCE LIMITED WHEREIN VIDE ORDER DATED 24.8.2009 THE HON BLE HIGH COURT HELD THAT WHEN THE ASSESSEE HAD MADE A BOGUS CLAIM WHICH WAS PALPABLY WRONG PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. 8.1 WE FIND SECTION 271(1)(C) OF THE ACT POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALME NT OF INCOME. 8.2 NOW IN THE PRESENT CASE WE FIND THAT ALL THE PARTICULARS PERTAINING TO THE COMPUTATION OF CAPITAL GAIN/LOSS WERE DULY DISCLOSE D BY THE ASSESSEE. THE ASSESSEES CLAIM THAT THERE WAS A BUILDING ALSO BU ILT COUPLE OF DECADES AGO COULD NOT BE COGENTLY SUBSTANTIATED. THIS LED TO THE ADDITION. IN OUR OPINION ASSESSEES CONDUCT DOES NOT ATTRACT LEVY OF PENAL TY UNDER SECTION 271(1)(C). 8.3 UNDER THE CIRCUMSTANCES IN OUR OPINION THE CAS E LAWS RELIED BY THE LD. DR ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT C ASE AS ASSESSEES CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS OR THE CLAIM PALP ABLY WRONG SO AS TO ENTAIL THE PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT. IN THIS REGARD WE ALSO DRAW SUPPORT FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTA N STEEL VS. STATE OF ORISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE P ARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS O BLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. W HETHER PENALTY SHOULD BE ITA NO. 4501/DEL/2009 A.Y. 2004-05 6 IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATI ON IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A C ONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCR IBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS O F THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS N OT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE IT ACT. 10. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2010. SD/- SD/- [C.L. SETHI) [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 29/01/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES