Tejas Ghanshyambhai Patel Vs ITO (ITAT Ahmedabad)
Assessee, a proprietor who sold an immovable property as co-owner & received ₹1.8 Cr (30% share), claimed deduction u/s 54EC (₹50L) & u/s 54F (₹36.27L). The return was filed belatedly (24-03-2017) & revised belatedly. AO denied both deductions & added ₹86.27L, thereafter levied penalty u/s 271(1)(c) for furnishing inaccurate particulars.
In quantum appeal, CIT(A) accepted that the investments were mostly within the allowed timeline (till 31-07-2016) & directed AO to proportionately allow deduction u/s 54EC/54F. Thus, the very basis of addition was partially removed. However, penalty proceedings continued ex parte & minimum penalty of ₹1,70,414 was sustained by CIT(A).
Before ITAT, Assessee argued that belated return u/s 139(4) does not disqualify deduction, relying on Jignesh Jaysukhlal Ghiya (ITAT Ahmedabad, 07-08-2024). Therefore, there was no concealment or furnishing of inaccurate particulars.
ITAT held:
- Since CIT(A) in quantum appeal allowed deductions proportionately, there was no concealment of income.
- Filing belated return within 139(4) does not deny deduction, as held in Jignesh Jaysukhlal Ghiya.
- Penalty was levied only because Assessee did not appear, not because of any deliberate concealment.
- There was no concealment or furnishing of inaccurate particulars, hence penalty u/s 271(1)(c) deleted.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
