Lalit Kumar Kalwar Vs ITO (ITAT Jaipur)
In the case of Lalit Kumar Kalwar Vs ITO, the quantum appeal was allowed by the ITAT Jaipur. The appeal challenged the validity of the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.
The appellant claimed a deduction under Section 54F of the Act, which was denied by the assessing officer. The denial of the deduction resulted in the levy of a penalty of Rs. 4,17,900. The appellant appealed against the penalty to the Commissioner of Income Tax (Appeals), Ajmer, but the appeal was dismissed.
However, in a recent order by the ITAT in ITA No. 379/JP/2018, the impugned addition made under Section 54F was deleted. The tribunal found that the appellant had invested the entire actual sales consideration received in the purchase and construction of a new house, in accordance with the provisions of Section 54F(1) of the Act.
Based on the findings of the ITAT in the quantum appeal, it was concluded that the penalty could not hold its ground when the deduction under Section 54F had been granted. Consequently, the penalty of Rs. 4,17,900 was vacated.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal is filed by assessee aggrieved from the order of the Learned Commissioner of Income Tax (Appeals), Ajmer [here in after “ld.CIT(A)”] dated 19.09.2017 for the assessment year 2013-14, which in turn arises from the order of the penalty of levy by the ITO, Ward-2(3) on 22.09.2016 u/s 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).
2. The assessee has marched this appeal on the following grounds:-
“1. That on the facts and in the circumstances of the case, the ld. Cit(A) erred in upholding the validity of order of imposition of penalty u/s 271(1)(c) of the Act.
2. That on the facts and in the circumstances of the case the ld. CIT(A) erred in sustaining the penalty of Rs. 4,17,900/- u/s 271(1)(c) of the Act.
3. That on the facts and in the circumstances of the case the ld. CIT(A) erred in not considering the application for adjournment filed before him. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing.
5. The petitioner prayers for justice & relief.”
3. During the course of hearing, the ld. AR of the assessee submitted that the penalty has been levied in respect of the deduction claimed u/s 54F of the Act was denied to the assessee and consequently thereto the income of long term capital gain was determined at Rs. 20,28,370/-. As the deduction was denied and the same was confirmed by the ld. CIT(A), the ld. AO levied penalty of Rs. 4,17,900/-.
3.1 The assessee preferred an appeal before the ld. CIT(A), Ajmer against the order of the levying the penalty. The said appeal of the assessee dismissed wherein the ld. CIT(A) has recorded following findings :
“4.2 I have gone through the penalty order, statement of facts and grounds of appeal carefully. The penalty has been levied in respect of the addition of Rs. 20,28,370/- made by the AO under the head “Long Term Capital Gain”. The appellant has not furnished any written submission on this issue. In view of the facts discussed by the AO in the penalty order, I am of the considered view that the AO has rightly levied the penalty of Rs. 4,17,900/- u/s 271(1)(c) in respect of the addition of Rs. 20,28,370/- made by the AQ under the head “Long Term Capital Gain” because the appellant had filed inaccurate particulars of income of Rs. 20,38,370/-. Accordingly, penalty of Rs. 4,17,900/- levied by the AO u/s 271(1)(c) is hereby confirmed.”
4. As the assessee did not receive any favour from the appeal filed before ld. CIT(A), the present appeal filed against the said order of the ld. CIT(A) before this tribunal on the grounds as reiterated in para 2 above.
5. A propose to the grounds of appeal, the ld. AR of the assessee filed written submission on merits but at bar the ld. AR of the assessee submitted that in the recent past order of the ITAT in ITA No. 379/JP/2018 dated 30.05.2023 pronounced wherein the impugned addition made u/s 54F of the Act has been deleted by the tribunal. The relevant finding of in the quantum appeal wherein the impugned addition has been deleted by the ITAT is reproduced here in below:-
“6. We have heard rival contentions, perused the material available on record and gone through the orders of the revenue authorities. As per the facts of the present case, assessee has sold shops and received actual sale consideration of Rs. 12,00,000/-, which was less than the value accepted by the DLC of Rs. 20,78,310/-. However, assessee claimed long term capital gain at NIL after seeking exemption under section 54F of the IT Act. The reason for the assessee to compute long term capital gain as NIL was as according to the assessee the entire actual sale consideration was invested in the purchase and construction of the residential house. The details of investment made by the assessee has been enumerated as under :-
