Ravi Vijayalakshmi Vs ITO (ITAT Chennai)
The assessee purchased an immovable property jointly with her spouse for ₹2 crore, whereas the stamp duty value attributable to her share was ₹3.82 crore. The AO invoked section 56(2)(vii)(b) and added the difference as income from other sources, resulting in assessed income of about ₹3.73 crore. Based on this addition, the AO levied penalty of ₹1.10 crore u/s 271(1)(c) alleging tax evasion.
The CIT(A) dismissed the assessee’s appeal primarily on the ground of delay of 34 days in filing the appeal, treating it as non-maintainable without examining the merits.
Before the ITAT, the Tribunal held that the delay was minor and satisfactorily explained (misplacement of the order by the audit assistant), and therefore the CIT(A) should have condoned the delay and decided the appeal on merits.
On merits, the Tribunal observed:
- The assessee had disclosed the actual consideration in the registered sale deed.
- The addition arose only because of the deeming fiction under section 56(2)(vii)(b) based on stamp duty valuation.
- Adoption of stamp duty value does not prove concealment or furnishing of inaccurate particulars.
- Penalty proceedings require independent evidence of concealment, which was absent.
The Tribunal therefore held that addition based purely on a deeming provision cannot automatically lead to penalty u/s 271(1)(c).
FULL TEXT OF THE ORDER OF ITAT CHENNAI
