Case Law Details
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal filed by the Revenue is directed against the order of ld. Commissioner of Income-tax (Appeals)- 1, Indore [in short referred to as the CIT (A)] dated 27.09.20 16 arising out of the order u/s 271(1)(c) of the Income Tax Act dated 27.03.20 15 framed by the Income Tax Officer-2(5), Indore pertaining to Assessment Year 2009-10.
2. Briefly stated of facts as culled out from the records are that assessment u/s 143(3) of the I.T. Act was framed in the case of assessee on 29.12.2011 assessing income at Rs. 2,52,000/- and agriculture income at Rs. 85,000/-. Subsequently the Learned Assessing Officer (in short Ld.A.O) on the basis of information received regarding sale of land on 28.9.2008 wherein stamp valuation authority adopted stamp valuation at Rs. 2,90,80,000/- as against sale consideration shown at Rs. 1,83,20,000/- , reopened the assessee’s case and issued notice u/s 148 of the Act. Due to non compliance on the part of the asseesee as the notices were not sent to the proper address, there were no submission on record given by the assessee and the Ld.A.O accordingly framed ex-parte order u/s 154 rws 143 of the Act calculating the long term capital gain at Rs. 96,93,340/-.
3. Simultaneously penalty proceedings u/s 271(1)(c) of the Act were initiated. In quantum appeal before the Ld. CIT(A) assessee partly succeeded. Subsequently the Ld.A.O issued notice u/s 271(1)(c) of the Act vide order dated 27.3.2015 and imposed penalty of Rs. 19,38,700/- on the alleged concealment of income of Rs. 96,93,340/-. Against this penalty assessee preferred an appeal before the Ld.CIT(A) and succeeded. The Ld. CIT(A) was of the view that the alleged transaction of sale of land has been shown by the assessee in the return of income through Hindu Undivided Family (HUF) and all necessary details have been submitted therein and therefore there was no case of furnishing incorrect particulars of income.
4. Now the revenue has filed an appeal before the Tribunal against the order of Ld.CIT(A) and supported the penalty order of Ld.A.O. The Ld. Counsel for the assessee relied on the findings of Ld. CIT(A).
5. We have heard rival contentions and perused the records placed before us. The revenue’s sole grievance is against the order of CIT(A) deleting Rs. 19,38,700/- levied by the A.O u/s 271(1)(c). We find that the impugned penalty is levied on concealment of long term capital gain arised on account of sale of agricultural land situated at Bijalpur near Rejendra Nagar, Indore. The sale agreement was entered on 25.9.2008. The agriculture land was jointly held by Smt. Nandi Bai Patel, Narayan Mali (assessee) and Dayaram Mali. The alleged transactions of sale of agriculture land and long term capital gain was shown in the return of income filed by the assessee on 31/12/2011 in the status of HUF. It was contended by the counsel for the assessee before the lower authorities that the sale transaction and long term capital gain were shown in the return of income of HUF on the advice of Tax consultant. However, all necessary details including the claim of deduction/rebate u/s 54B as well as 54F in respect of purchase of new agriculture land and residential house were shown in the return of income filed by the assessee’s HUF.
6. Now the issue before us is whether the Ld.A.O was justified in levying penalty u/s 271(1)(c) of the Act on the long term capital gain assessed in the hand of assessee. We find that the Ld.CIT(A) deleted the impugned penalty observing as follows;
“5. Ground Nos. 1 to 3: All the above grounds of the appellant are directed against the levy of penalty of Rs. 1938700/- u/s 271 (1)(c) of the Act. The detailed facts of the case as per the penalty order are reproduced at Para No. 2 above and the detailed submissions of the appellant are reproduced at Para No. 3 above.
5.1 The crux of the appellant,s argument is that the penalty order has been passed by the AO without taking note of the submission that the LTCG was shown by the appellant in the hands of Narayan Patel Mali HUF in the return filed in the case of HUF before the ITO 2(1), Ujjain. It is also argued that the order has been passed without issuing notices at the current address. During the course of appellate proceedings the appellant has also contended that there was no concealment and or submission of inaccurate particulars of income was all the facts were disclosed in the return filed in the case of HUF and the LTCG was shown in the hands of the HUF on being advised that since the property was ancestral property it will amount to be property of HUF.
5.2 On perusal of the assessment order and penalty order, it is seen that penalty has been levied on the addition of Rs. 9693340/- being LTCG determined without even allowing the cost of acquisition and expenses incurred towards the transaction and without examining the claim of exemption u/s 54B/54F which was shown in the hands of HUF. Thus a claim was made by the appellant and a view had been adopted based on consultation that the property belonged to the HUF. The AO was however not in agreement with such claim. No doubt return of income showing LTCG in the hands of the appellant individual was not filed however all relevant facts were already on record by way of the return in the case of the HUF. The claim even if disallowed that the property belonged to HUF has been negated on a difference of opinion and therefore the claim warranted to be seen on merits. The dis allowance was thus merely a rejection of a claim on account of difference of opinion which does not attract the rigours of penalty u/s 271 (1)(c)of the Act.
5.2 From the material on record it is evident that all details in respect of the claim were available on record. It is not the case that the claim has been established to be bogus or untrue by way of any material evidence placed on record. No material facts were suppressed or concealed and the particulars placed on record were in no way found to be false or incorrect. In the light of the above the contention of the appellant that no penalty was attracted is found to be justified in the light of the various judicial pronouncements including the judgment of the Hon,ble Supreme Court in the case of CIT vs. Reliance Petro Products 322 ITR 158 (SC), wherein it has been held as under:–
“The argument of the revenue that submitting n incorrect claim for expenditure would amount to giving inaccurate particulars of such income is not correct. By no stretch of imagination can the making of an incorrect claim in law tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regard the income of the assessee”.
In view of the above the penalty of Rs. 1938700/- is directed to be deleted. These grounds of the appellant are therefore allowed.”
7. From the detailed findings of the Ld.CIT(A) and in light of judgment of Hon’ble Supreme Court in the case of CIT vs. Reliance Petro Products 322 ITR 158 (SC) as well as given facts and circumstances of the case we are of the considered view that the assessee has filed all the details of the alleged transaction of sale of agriculture land as well as various rebates and exemptions claimed which have been shown in the income tax return filed by the assessee in the capacity of his HUF. It cannot be presumed that the assessee concealed particulars of income or furnished inaccurate particulars of income because the assessee has shown transaction of sale of agriculture land in the hands of assessee’s HUF as the property in question was ancestral. We, therefore find no reason to interfere in the findings of Ld. CIT(A) deleting the penalty u/s 271(1)(c) of the Act levied at Rs. 19,38,700/- by the Ld. A.O.
8. We accordingly dismiss the appeal of revenue.
The order pronounced in the open Court on 12.01.2018.
Very good, it is understandable and helpful