GEETADEVI MITTAL, MUMBAI v. DCIT., CENT,CIR-47, MUMBAI

ITA 418/MUM/2013 | 2008-2009
Pronouncement Date: 11-04-2014 | Result: Allowed

Appeal Details

RSA Number 41819914 RSA 2013
Assessee PAN AAGPM3930P
Bench Mumbai
Appeal Number ITA 418/MUM/2013
Duration Of Justice 1 year(s) 2 month(s) 27 day(s)
Appellant GEETADEVI MITTAL, MUMBAI
Respondent DCIT., CENT,CIR-47, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 11-04-2014
Assessment Year 2008-2009
Appeal Filed On 14-01-2013
Judgment Text
SMT. GEETADEVI MITTAL 1 VK;DJ VIHYH; VF/KDJ.K TH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI JH JH JH JH FOT; IKY JKO] U;KF;D LNL; OA JH UJSUNZ DQEKJ FC YYS;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K BEFORE SHRI VIJAY PAL RAO JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA ACCOUNTANT MEMBER VK;DJ VIYH LA[;K /ITA NO. 418/MUM/2013 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR:- 2008-09 SMT. GEETADEVI MITTAL 16 TH FLOOR MITTAL TOWERS 210 NARIMAN POINT MUMBAI 400 021. VS. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -47 AAYAKAR BHAVAN MAHARISHI KARVE MARG. MUMBAI PAN: - AAGPM3930P APPELLANT RESPONDENT ASSESSEE BY/ FU/KKZFJRH DH VKSJ LS SHRI S.C. TIWARY REVENUE BY/ JKTLP DH VKSJ LS SHRI R.K. SAHU ORDER PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23.11.2012 OF CIT(A) ARISING FROM PENALTY ORDER PAS SED U/S 271(1)(C) FOR A.Y. 2008-09. GROUNDS OF APPEAL READS AS UNDER:- LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRE D IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX IN LEVYING PENALTY OF RS. 21 81 389/- UNDER SECTION 271(1)(C) OF THE INCOME-T AX ACT 1961 ON THE DATE OF HEARING 01.04.2014 DATE OF PRONOUNCEMENT 11.04.2014 SMT. GEETADEVI MITTAL 2 GROUND THAT THE APPEALLANT HAS FILED INACCURATE PAR TICULARS OF INCOEM AND THEREBY CONCEALED TAXABLE CAPITAL GAIN ARISING OUT OF LAND SITUATED AT MAHALUNGE PUNE. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE PENALTY LEVIED OUGHT TO BE DELETED. 2. BREIF FACTS EMERGING FROM THE RECORDS ARE THAT T HE ASSESSEE FILED HER RETURN OF INCOME U/S 139(1) OF THE ACT ON 31 ST JULY 2008 DECLARING TOTAL INCOME AT RS. 33 58 290/-. DURING THE COURSE OF ASSESSMENT PROCEE DINGS THE ASSESSEE FILED REVISED COMPUTATION OF INCOME ON 16.11.2010 AND OFF ERED LONG TERM CAPITAL GAIN OF RS. 96 26 610/- ON SALE OF LAND AT MAHALUNGE PU NE. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ACCEPTING THE REVIS ED COMPUTATION OF TOTAL INCOME. THE AO INITIATED THE PROCEEDINGS U/S 271(1) (C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT DISCLOSED THE CAPITAL GAI NS ON SALE OF LAND EITHER IN THE RETURN OF INCOME FILED U/S 139(1) OF THE ACT OR IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT AND THE ASSESSEE HAS PAID THE CAPIT AL GAINS TAX ONLY ON 30.10.2010. THE ASSESSEE OBJECTED TO THE LEVY OF PE NALTY AND CONTENDED THAT THE ASSESSEE HAS VOLUNTARILY OFFERED THE CAPITAL GAIN W ITHOUT ANY DETECTION OR QUESTION ON THE PART OF THE AO. THE ASSESSEE HAS AL SO EXPLAINED THAT WHEN THE LAND WAS PURCHASED BY THE ASSESSEE IT WAS AN AGRICU LTURAL LAND AND REMAINED AGRICULTURAL LAND BUT DUE TO EXPANSION OF MUNICIPAL LIMIT OF PUNE THE LAND IN QUESTION DOES NOT FALL UNDER THE EXCLUSION CLAUSE O F CAPITAL ASSET AS PER SECTION 2(14). THUS THE ASSESSEE EXPLAINED THAT DUE TO BONA FIDE BELIEF THE ASSESSEE DID NOT OFFER THE CAPITAL GAIN TO TAX IN THE ORIGINAL R ETURN OF INCOME. THE AO DID NOT ACCEPT THE CONTNETION AND EXPLANTION OF THE ASSESSE E ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE REVISED RETURN AND OFFER ED THE CAPITAL GAIN ONLY BY WAY OF REVISED COMPUTATION OF INCOME ONLY AFTER SOME EN QUIRIES WERE MADE BY THE DEPARTMENT. ACCORDINGLY THE AO LEVIED THE PENALTY O F RS. 21 81 389/- BEING 100% OF THE TAX SOUGHT TO BE EVADED. 3. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEFO RE CIT(A) BUT COULD NOT SUCCEED. SMT. GEETADEVI MITTAL 3 4. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE OFFERED CAPITAL GAIN VOLUNTARILY WITHOUT ANY DETECT ION OR QUESTION BY THE AO. THE LD. AR HAS EMPHASIZED THE EXPLANATION OF THE ASSESS EE THAT THE LAND IN QUESTION WAS PURCHASED IN THE YEAR 1989 WHICH WAS AN AGRICUL TURAL LAND BUT DUE TO EXPANSION OF CITY LIMITS OF PUNE THE LAND HAS FALL EN WITHIN THE URBAN LIMITS AT THE TIME OF SALE. WHEN THE ASSESSEE REALISED THIS B ONAFIDE MISTAKE THE CAPITAL GAIN ARISING FROM SALE OF LAND WAS OFFERED TO TAX. THE CONDUCT OF OFFERING THE TAX BY ASSESSEE IS VOLUNTARY AND DUE TO BONAFIDE BELIEF THAT THE CAPITAL GAIN ARISING FROM THE SALE OF AGRICULTURAL LAND IS NOT TAXABLE. HE HAS REFERRED THE REPLY AND EXPLANATION OF THE ASSESSEE BEFORE THE AO IN THE PE NALTY PROCEEDINGS WHICH ARE REPORDUCED BY THE AO IN PARA 9 AS UNDER:- 1.THE ASSESSEE HAS FILED HIS RETURN OF INCOME U/S 139(1) OF THE ACT SHOWING TOTAL INCOME OF RS. 33 58 290/- ON 31/07/2 008. . R ~ 2. IN THE YEAR 1989 THE ASSESSEE ACQUIRED AGRICU LTURE LAND NEAR PUNE. WHEN THE LAND WAS ACQUIRED' IT WAS ON AGRICULTURE LAND SITUATED OUTSIDE THE_ MUNICIPAL LIMIT OF PUNE DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD THE SAID AGRICULTURE LAND. AT THE TIME OF F ILING THE RETURN THE ASSESSEE WAS OF THE VIEW THAT THE SAID LAND IS AGRICULTURE LAND AND DID NOT OFFER THE PROFIT ARISING ON TRANSFER OF SAID LAND. 3. THE ASSESSEE BY WAY OF FOOTNOTE IN THE COMPUTATI ON OF INCOME FOR ORIGINAL RETURN FILED (COPY ENCLOSED) HAD DISCLOSED THAT CAPITAL GAN ON SALE OF AGRICULTURE LAND IS NOT CONSIDERED AS INCOME AS AGRICU FURE ON IS NO(AN ASSET U/S 2(14) OF THE INCOME TAX ACT'. 4. SUBSEQUENTLY/ THE ASSESSEE COME TO KNOW THAT DUE TO EXPANSION OF PUNE CITY THE SAID AGRICULTURE LAND IN THE YEAR OF TRANSFER WAS FALLING WITH 8 KM OF THE MUNICIPAL LIMITS OF PUNE. CONSEQUENTLY THE SAID LA ND LOST ITS IDENTIFY AS AGRICULTURE LAND 5. THE ASSESSEE IMMEDIATELY ON REALIZING BONAFIDE MISTAKE COMMITTED BY HIM HAS SUO-MOTO FILED A REVISED COMPUTATION OF INCOME DECLARING LONG TERM CAPITAL GAIN OF RS. 96 26 610/- ON 16.11.2010 AND TAXES THEREON WERE DULY PAID ON 30. 10.2010. THUS AS PER THE SAID REV ISED COMPUTATION THE ASSESSEE HAS DECLARED TOTAL INCOME OF RS 1 2~84 900/ - AND DEPOSITED THE DIFFERENTIAL TAX ON 30.10.2010. 6. THE PROPOSED PENALTY PROCEEDINGS ARE INITIATED I N RESPECT OF THE ABOVE DISCLOSURE MADE BY-THE ASSESSEE ON THE GROUND THAT ASSESSEE HAS FILED INACCURATE SMT. GEETADEVI MITTAL 4 PARTICULARS OF INCOME AND THAT AT THE TIME OF SALE THE ASSESSEE OUGHT TO HAVE ACKNOWLEDGED THE PRESENT POSITION OF LAND AND OFFER THE SOME TO CAPITAL GAINS TAX. 7. FROM THE FACTS STALED ABOVE IF MAY BE APPRECIAT ED THAT THE ASSESSEE HAS SUO-MOTO MADE THE DISCLOSURE AND MED COMPLETE PARTICULARS OF INCOME ON TRANSFER OF THE SAID LAND AND FILED THE REVISED COMPUTATION OF TOTAL INCOME BEFORE IT BEING POINTED BY THE AD. THE INCOME ASSESSED IS RS. L 29 84 900/- WHICH IS THE SAME AS DECLARED BY THE ASSESSEE IN THE REVISED COMPUTATION OF INCOME. THUS THE ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF INFORMATION AND PART ICULARS TILED BY THE ASSESSEE. 8. WE SUBMIT THAT SINCE THE ASSESSEE HAS ALREADY OF FERED THE ABOVE AMOUNT FOR TAX NO PENALTY IS WARRANTED U/S 271 (1 )(C) OF THE ACT. IN THIS CONNECTION WE INVITE YOUR ATTENTION INTER OLIA T O THE FOLLOWING DECISIONS: CIT VS RELIANCE PETROPRODUCTS (P) LID [230 ETR 0320 (SC) 2010J 'THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSES SEE CAN FURNISH THE' PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE: THE LIABILITY WOULD ARISE. WE MUST 'HASTEN TO ADD H ERE THAT IN THIS CASE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSE E IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER S. 271(1) (C) OF THE ACT. A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW; BY ITSELT WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. ' SIR SHADILAL SUGAR AND GENERAL MILLS LID V/S CLT [168 ITR 705 (SC)] 'ADMISSION OF FACT THAT THERE HAS BEEN AN EXCESS CL AIM OR DISALLOWANCE IS NOT THE SAME THING AS DELIBERATE CONCEALMENT OR FURNISH ING INACCURATE PARTICULARS' CIT V SATINDER KAUR [258 ITR 58 (CHD)] 'BONAFIDE BELIEF THAT AN AMOUNT IS NOT TAXABLE THOUGH IT IS TAXABLE IN LAW SHOULD AVOID PENALTY. CIT V/S M. GEORGE & BROTHERS [160 ITR 511 (KER)] WHERE THE ASSESSEE FOR ONE REASON OR THE OTHER AGR EES OR SURRENDERS CERTAIN AMOUNTS FOR ASSESSMENT THE IMPOSITION OF PENALTY S OLELY ON THE BASIS OF THE ASSESSEE'S SURRENDER WILL NOT BE WELL FOUNDED. DEPE NDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE THE COURT HAS TO DECIDE WHETHER PENALTY IS JUSTITIED. II IN VIEW OF ABOVE FACTS AND JUDICIAL DECISIONS WE REQUEST YOUR GOOD SELF TO DROP THE PENALTY PROCEEDINGS.. SMT. GEETADEVI MITTAL 5 5. THE LD. AR THEN REFERRED THE FINDING OF THE AO WHER EBY THE EXPLANATION OF THE ASSESSEE WAS REJECTED ON THE GRO UND THAT ASSESSEE HAD SUFFICIENT TIME TO COME FORWARD AND PAY LEGITIMATE TAX DUE ON CAPITAL GAINS AROSE ON SALE OF LAND AT PUNE. THE LD. AR FURTHER P OINTED OUT THAT IN PARA 12 OF THE PENALTY ORDER THE AO HAS MENTIONED THAT ONLY ON APPREHENSION THAT THIS OFFICE AFTER DUE ENQUIRY WITH THE PUNE INCOME TAX AUTHORITIES UNEARTHED THE FACT THAT THE ASSESSEE HAS COME FORWARD TO FIL E A REVISED COMPUTATION BUT NO SUCH RECORD OR ANY ALLEGED ENQUIRY CONDUCTED BY THE TAX AUTHORITIES HAS BEEN BROUGHT ON RECORD OR CONFRONTED TO THE ASS ESSEE BY THE AO EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE PEN ALTY PROCEEDINGS. THEREFORE THE REFERENCE MADE TO THE ALLEGED ENQUIR Y BY THE AO IS ONLY A CONJECTURE AND SURMISES WITHOUT ANY SUCH FACTS RECO RDED IN THE ASSESSMENT ORDER. THE LD. AR THEN REFERRED THAT THE AO HAS LEV IED PENALTY BY RELYING ON THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. ZOOM COMMUNICATIONS LTD. (191 TAXMAN 179) AS WELL AS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DH ARMENDAR TEXTILE PROCESSORS. WHEREAS THOSE DECISIONS ARE NOT APPLICA BLE IN THE FACTS OF THE ASSESSEES CASE AS THERE IS NO CONCEALMENT ON THE P ART OF THE ASSESSEE WHEN THE ASSESSEE HAS HERSELF OFFERED THE CAPITAL GAIN W ITHOUT ANY DETECTION OR QUESTION RAISED BY THE DEPARTMENT. HE HAS RELIED UP ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN SPI NNING & WEAVING MILLS (224 CTR (SC) 1) AND SUBMITTED THAT THE DECISION IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS AS OBSERVED BY THE HONBLE SUPREME COURT MUST BE UNDERSTOOD TO MEAN THAT THOUG H THE APPLICATION OF SECTION 11AC OF CENTRAL EXCISE ACT WOULD DEPEND UPO N THE EXISTING OR OTHER WISE OF THE CONDITIONS EXPRESSLY STATED IN SECTION. ONCE THE SECTION IS APPLICABLE IN A CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED EQUAL TO THE DUTY DETERMINED UNDER SUB-SECTION 2 OF SECTION 11A. THE HONBLE SUPREME COURT HOWEVER OBSERVED THAT THE DECISION IN THE CASE OF D HARMENDRA TEXTILE SMT. GEETADEVI MITTAL 6 PROCESSORS CANNOT BE SAID TO HELD THAT SECTION 11AC WOULD APPLY TO EACH CASE OF NONPAYMENT OR SHORT PAYMENT OF DUTY REGARDL ESS OF CONDITIONS EXPRESSLY MENTIONED IN THE SECTION FOR ITS APPLICAT ION. THUS THE LD. AR HAS SUBMITTED THAT THE DECISION IN THE CASE OF DHARMEND RA TEXTILE PROCESSORS WOULD NOT BE UNDERSTOOD TO MEAN THAT EVERY CASE OF NON PAYMENT OR SHORT PAYMENT OF TAX WOULD INVITE PENALTY. HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS (P) LTD. (322 ITR 158) AS WELL AS THE DECISION IN THE CASE OF DI LIP N. SHROFF VS. JCIT (291 ITR 519) AND SUBMITTED THAT EXPRESSIONS CONCEALED A S USED IN SECTION 271(1)(C) SIGNIFIES THE DELIBERATE ACT OR OMISSION ON THE PART OF THE ASSESSEE. SUCH DELIBERATE ACT MUST BE EITHER FOR THE PURPOSE OF CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS. WHEN THE ASSESSEE HAS FURNISHED THE EXPLANATION WHICH IS BONAFIDE AND ALL THE FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME HAS BEEN DISCLOSED BY T HE ASSESSEE THEN EVEN THE EXPLANATION IS NOT ACCEPTED BY THE INCOME TAX AUTHORITIES THE PENALTY CANNOT BE LEVIED. THE LD. AR HAS POINTED OUT THAT W HILE OFFERING THE LONG TERM CAPITAL GAIN TO TAX THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF INCOME BY SHOWING THE SALE O LAND AND SALE PROCEED S AS WELL AS CAPITAL GAIN. WHEN THE REVISED INCOME WAS FILED BEFORE ANY DETECT ION OR QUESTION IN THE ORIGINAL RETURN BY THE ITO IT IS A VOLUNTARY ACT ON THE PART OF THE ASSESSEE AND FURTHER THE REVISED COMPUTATION OF INCOME WAS A CCEPTED BY THE AO THEN PENALTY IS NOT LEVIABLE ON THE BASIS OF THE ORIGINA L RETURN. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE FOLLOWING DECISIO NS. (I) DR. HARMOHAN SINGH KOCHAR VS. ACIT (ITAT JODHPUR) (II) BOMBAY CLOTL SYNDICATE VS. CIT 214 ITR 210 (BOM) (III) CIT VS. RAJENDRA PRASAD GUPTA 220 ITR 849 (PAT) (IV) CIT VS. J.V. APPADURAI CHETTIAR CO. 221 ITR 849 (MA D) SMT. GEETADEVI MITTAL 7 6. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THERE WAS A SEARCH U/S 132 IN THE CASE OF PHOENIX GROUP OF ASSOCIATE CONCE RNED. THE ASSESSEE BELONGS TO THE MITTAL GROUP WHICH IS ONE OF THE LEADING GRO UPS IN THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL BUILDING S THEREFORE THE ASSESSEE IS NOT A LAY PERSON WHO DOES NOT KNOW THE STATUS OF T HE LAND IN QUESTION. EVEN AFTER SEARCH THE ASSESSEE HAS NOT DISCLOSED THE CPA ITAL GAIN ARISING FROM THE SALE OF ALND IN QUESTION. THE ASSESSEE EVEN DID NOT COME OUT WITH CORRECT PARTICULARS OF INCOME WITHIN THE TIME LIMIT OF REVISED RETURN A S PER SECTION 139(5) OF THE INCOME TAX ACT. WHEN THE CAPITAL GAIN OFFERED BY TH E ASSESSEE IS NOT BY WAY OF REVISED RETURN. THUS THE ASSESSEE CANNOT TAKE THE B ENEFIT OF VOLUNATARY DISCLOSURE IN THE REVISED COMPUTATION. THE LD. DR H AS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MAK DATA (P) LTD. (352 ITR 1) AND SUBMITTED THAT IN THE ABSENCE OF EXPLANATION TH E CAPITAL GAIN IN QUESTION NOT OFFERED IN THE ORIGINAL RETURN OF INCOME WILL A MOUNT TO CONCEALMENT OF INCOME. THE SAID DECISION OF HONBLE DELHI HIGH COU RT HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT (358 ITR 593). THE LD. DR HAS THEN RELIED UPON THE THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. BANSAL ABUSHAN BHANDAR (42 TAXMANN. COM 9) AND SUBM ITTED THAT WHEN THE ASSESSEE HAS OFFERED THIS UNDISCLOSED INCOME DUE TO THE APPREHENSION OF BEING CORNERED BY THE DEPARTMENT IT WAS A DELIBERATE ACT OF CONCEALMENT INVITING PENALTY U/S 271(1)(C). THE LD. DR HAS ALSO RELIED U PON THE DECISION OF CHENNAI BENHC OF THIS TRIBUNAL IN THE CASE OF ACIT VS. SMT . J. MYTHILI (35 TAXMANN.COM 86). THUS THE LD. DR HAS SUBMITTED THAT WHEN THE AS SESSEE HAS NOT OFFERED THE CAPITAL GAIN IN QUESTION WITHIN THE TIME LIMIT PROV IDED UNDER THE ACT THEN THE OFFERING OF THE SAME AFTER THE LAPSE OF A CONSIDERA BLE TIME AND DUE TO THE APPREHENSION OF BEING CAUGHT WILL NOT BE CONSIDERED AS VOLUNTARY OFFER OF INCOME TO TAX. 7. IN REBUTTAL THE LD. AR OF THE ASSESSEE SUBMITTE D THAT SEARCH & SIEZURE HAS NOTHING TO DO WITH THE INCOME IN QUESTION. THE RETURN OF INCOME HAS BEEN SMT. GEETADEVI MITTAL 8 FILED AFTER THE SEARCH & SEIZURE ACTION. THE DISCLO SURE WAS MADE BY THE ASSESSEE VOLUNTARILY PRIOR TO DETECTION BY THE REVENUE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESMENT IN THIS CASE HAS BEEN COMPLETED U/S 143(3) OF THE INCOME TAX ACT AND NOT U/S 153A OF THE INCOM E TAX ACT. THE ASSESSEE HAS FILED THE REVISED COMPUTATION OF INCOME WHEREBY IT OFFERED THE LONG TERM CAPITAL GAIN OF RS. 96 26 610/- ON 16-11-2010 ARISI NG FROM SALE OF LAND WHICH WAS ACQUIRED BY THE ASSESEE IN THE YEAR 1989. THE A O HAS COMPLETED THE ASSESSMENT BY ACCEPTING THE CAPITAL GAIN OFFERED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE ASSESSMENT ORDER THE AO HAS MENTIONED THE INITIATION OF PROCEEDINGS U/S 271(1)( C) ON THE GROUND THAT THE ASSESSEE PAID THE CAPITAL GAIN ONLY ON 30.10.2010 AND FAILED TO BRING FORWARD THIS FACT IN THE RETURN OF INCOME. IT IS PERTINENT TO NOTE THAT THERE IS NOTHING IN THE ASSESMENT ORDER OR OTHERWISE BROUGHT ON REOCRD BY THE AO TO SHOW THAT THE CAPITAL GAIN OFFERED BY THE ASSESSEE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS IS DUE TO DETECTION OF THE SAME BY THE REVENUE AUTH ORITIES. IN THE ABSENCE OF ANY SUCH CIRCUMSTANCES OR FACTS BROUGHT ON RECORD TO SH OW THAT THE CAPITAL IN QUESTION WAS UNEARTHED OR DETECTED BY THE REVENUE A UTHORITIES PRIOR TO THE OFFERING TO TAX BY THE ASSESSEE IT CANNOT BE SAID THAT THE CONDUCT OF THE ASSESSEE TO OFFER THE CAPITAL GAIN TO TAX IS NOT VOLUNTARY. THE ASSESSEE FURNISHED EXPLANATION THAT THE LAND IN QUESTION WAS ACQUIRED IN THE YEAR 1989 BEING AN AGRICULTURAL LAND AND LETTER ON DUE TO EXPANSION OF CITY LIMITS OF PUNE THE AGRICULTURAL LAND SITUATED OUTSIDE THE LIMITS FALL S UNDER THE LIMITS OF CITY AND CONSEQUENTLY LOST THE BENEFIT OF THE EXCLUSION CLAU SE OF SECTION 2(14)(III) OF THE INCOME TAX ACT. THIS IS A BONAFIDE EXPLANATION FOR NOT OFFERING THE CAPITAL GAIN ON SALE OF AGRICULTURAL LAND TO TAX AS THE ASSESSEE HAS STATED TO BE UNDER BONAFIDE BELIEF. WHEN THE ASSESSEE SUO MOTO FILED T HE REVISED COMPUTATION OF INCOME DECLARING THE CAPITAL GAIN AND PAID TAX THER E UPON THEN THE EXPLANATION SO OFFERED BY THE ASSESSEE CANNOT BE DISBELIEVED IN THE ABSENCE OF CONTRARY FACT SMT. GEETADEVI MITTAL 9 OR RECORD. IN THE CASE OF BOMBAY CLOTH SYNDICATE V S. CIT (SUPRA) THE ASSESSEE FILED THE REVISED RETURN AND ON THE BASES OF SAID R ETURN THE ITO ASSESSED THE TAX AND INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C ) AND ULTIMATELY IMPOSED THE PENALTY BY APPLYING THE EXPLANATION TO SECTION 271( 1)(C). THE HONBLE HIGH COURT HAS OBSERVED IN PARA 6 AS UNDER:- 6. WE SEE NO JUSTIFICATION FOR CONCLUSION THAT THE RE TURN DATED 24-5-1971 IS NOT A 'REVISED RETURN' AS CONTEMPLATED UNDER SECTION 139( 5). THE INCORRECTNESS IN THE ORIGINAL RETURN HAD NOT BEEN DISCOVERED BY THE ITO. ACCOUNT BOOKS WERE IMPOUNDED BY HIM MERELY TO REMOVE THE SUSPICION WHICH AROSE I N HIS MIND DUE TO SOME DISCREPANCIES AND TO FIND OUT THE TRUTH. MUCH BEFOR E THE ENQUIRY WAS COMPLETED AND ANY DISCOVERIES OF EVASION WERE MADE THE RETURN WAS FILED. THAT APART THE DEPTT. HAVING ASSESSED THE INCOME OF THE ASSESSEE ON THE BASIS OF THAT RETURN AND TAKEN THE ADVANTAGE OF EXTENDED PERIOD OF ONE YEAR FOR COMPLETION OF ASSESSMENTS UNDER SECTION 153(1)(C) FROM THE DATE OF ITS FILING CANNOT BE ALLOWED TO TAKE A STAND THAT IT WAS NOT A REVISED RETURN UNDER SECTION 139( 5). THE DEPARTMENT'S STAND AMOUNTS TO APPROBATE AND REPROBATE WHICH IS NOT PER MISSIBLE IN LAW. 9. SINCE THE CORRECT INCOME WAS OFFERED MUCH BEFORE THE ENQUIRY WAS COMPLETED AND ANY DETECTION OF CONCEALMENT WAS MADE THEREFORE THE HONBLE HIGH COURT HELD THAT THE DEPARTMENT CANNOT BE ALLOW ED TO TAKE STAND THAT IT WAS NOT A REVISED RETURN U/S 139(5). IN THE CASE OF CIT VS. J.V. APPADURAI CHETTIAR CO. THE HONBLE MADRAS HIGH COURT HAS DEALT WITH T HE CASE OF PENALTY WHEREIN THE ASSESSEE DID NOT OFFER THE CASH CREDIT UNDER T HE BONAFIDE IMPRESSION THAT THERE IS A PROOF FOR ESTABLISHING THAT THIS AMOUNT OF RS. 10 000/- WAS ADVANCED BY THE CREDITORS AND SUBSEQUENTLY OFFERED THE SAID AMOUNT IN THE REVISED RETURN. THE HONBLE HIGH COURT IN PARA 9 HAS HELD A S UNDER:- 9. ACCORDING TO THE FACTS ARISING IN THE PRESENT C ASE IN THE ORIGINAL RETURN THE CASH CREDIT OF RS. 10 000 WAS NOT DISCLOSED. THE CA SH CREDIT IS STANDING IN THE NAME OF ONE GOPAL MUDALIAR. THE ASSESSEE POSSESSED A CONFIRMATORY LETTER FROM THE SAID CREDITOR. THEREFORE THE ASSESSEE WAS UNDE R THE BONA FIDE IMPRESSION THAT THERE IS PROOF FOR ESTABLISHING THAT THIS SUM OF RS . 10 000 WAS ADVANCED BY THE CREDITOR. THE ASSESSEE CAME TO KNOW THAT THE SAID G OPAL MUDALIAR DENIED HAVING ADVANCED SUCH AMOUNT TO THE ASSESSEE ONLY AFTER THE INVESTIGATION WAS COMPLETED BY THE INSPECTOR OF IT DEPARTMENT. THEREFORE ON TH E DATE WHEN THE ORIGINAL RETURN WAS FILED WE CANNOT SAY THAT THE ASSESSEE HAD ANY MALA FIDE INTENTION ON HIS PART IN NOT DISCLOSING THE CASH CREDIT IN THE ORIGINAL R ETURN. IT IS NO DOUBT TRUE THAT MERELY ON THE GROUND OF FILING A REVISED RETURN TH E ASSESSEE IS NOT ENTITLED TO CLAIM SMT. GEETADEVI MITTAL 10 THAT NO PENALTY IS EXIGIBLE UNDER S. 271(1)(C) OF T HE ACT. AS PER THE PROVISION OF S. 139(5) OF THE ACT THE ASSESSEE IS ENTITLED TO FILE A REVISED STATEMENT BEFORE COMPLETION OF THE ASSESSMENT BY THE AO. IF THE NON- DISCLOSURE OF THE CASH CREDIT IS DUE TO ANY OMISSION OR DUE TO ANY WRONG STATEMENT DEFINITELY THE ASSESSEE CAN CLAIM THAT THERE IS NO CONCEALMENT OF PARTICULARS I N FILING THE ORIGINAL RETURN. IN THE PRESENT CASE THE ASSESSEE WAS DEPENDING UPON THE C ONFIRMATORY LETTER GIVEN BY THE CREDITOR WHO ULTIMATELY DENIED THE ADVANCEMENT OF LOAN TO THE ASSESSEE IN THE INVESTIGATION CONDUCTED BY THE INSPECTOR OF IT DEPA RTMENT. THEREFORE THERE IS NO MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE W HILE FILING THE ORIGINAL RETURN HAS WANTONLY AND DELIBERATELY FILED A FALSE RETURN CONTAINING INACCURATE PARTICULARS OF ITS INCOME. IF THIS IS ESTABLISHED THE REVISED RETURN FILED UNDER S. 139(5) OF THE ACT WOULD BE ACCEPTABLE AND THERE CA NNOT BE ANY CONCEALMENT OF PARTICULARS IN THE ORIGINAL RETURN FILED. IN THAT V IEW OF THE MATTER WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE TRIBUNAL IN CANCELLING THE PENALTY LEVIED UNDER S. 271(1)(C) OF THE ACT. ACCORDINGLY WE ANSW ER THE QUESTION REFERRED TO US IN THE AFFIRMATIVE AND AGAINST THE DEPARTMENT. NO COST S. 10. THE DECISION RELIED UPON BY THE LD. DR ARE BASE D ON THE FACT THAT THE AMOUNTS SURRENDERED BY THE ASSESSEE WAS IN VIEW OF THE DETE CTION MADE BY THE AO AND THEREFORE THE DECISIONS ARE NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. IN THE CASE OF CIT VS. MAK DATA (SUPRA) THE HONBLE DELHI HIGH COURT HAS NOTE THE FACT THAT THAT THERE WAS ABSOLUTELY NO EXPLANATION FROM THE ASSE SSEE IN RESPECT OF THE AMOUNT SURRENDERED. ONLY WHEN THE AO CALLED UPON THE ASSES SEE TO PRODUCE THE EVIDENCE TO THE NATURE OF THE SOURCE OF AMOUNT RECEIVED AS SHARE CA PITAL THE CREDITWORTHINESS OF THE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS THE ASSESSEE SIMPLY FOLDED UP AND SURRENDERED THE SUM. THUS IT IS CLEAR THAT IN THE S AID CASE THE ASSESSEE SURRENDERED THE INCOME WHEN THE AO HAS CORNERED THE ASSESSEE AND AS KED TO EXPLAIN THE SOURCE GENUINENESS AND CREDITWORTHINESS OF THE APPLICANT. SIMILARLY IN THE CASE OF CIT VS. BANSAL ABUSHAN BHANDAR THE ASSESSEE OFFERED THE UN DISCLOSED INCOME ON BEING CORNERED BY THE DEPARTMENT AND IT WAS FOURND THAT T HERE WAS A DELIBERATE ACT OF CONCEALMENT OF INCOME BY THE ASSESSEE. IN THE CASE OF ACIT VS.SMT MYTHILE (SUPRA) THE TRIBUNAL HAS NOTED THE FACT THAT THE ASSESSEE DID N OT FILE THE RETURN OF INCOME WITHIN TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT Y EAR AS ALLOWED U/S 153(1). AS IT IS CLEAR FROM THE FACTS OF THESE DECISIONS RELIED UPON BY THE LD. DR THAT IN ALL CASES THE ASSESSEE SURRENDERED THE AMOUNT ONLY WHEN IT WAS DE TECTED OR THE ENQUIRY WAS MADE BY THE AO IN RESPECT OF A PARTICULAR CLAIM OF THE A SSESSEE. WHEREAS IN THE CASE OF THE ASSESSEE THERE WAS NO SUCH DETECTION OF CAPITAL GAI N OR ANY ENQUIRY MADE BY THE AO WITH RESPECT TO CAPITAL GAIN IN QUESTION. THE ASSES SEE OFFERED THE CAPITAL GAIN PRIOR TO SMT. GEETADEVI MITTAL 11 ANY SUCH DETECTION BY THE DEPARTMENT AND EVEN PRIOR TO THE COMPLETION OF ENQUIRY IN THE ASSESSMENT PROCEEDINGS. THEREFORE THIS ACT AND CONDUCT OF THE ASSESSEE CANNOT BE TERMED AS OFFERING THE INCOME DUE TO APPREHENSION O R BEING CORNERED BY THE REVENUE. IT IS NOT THE CASE OF DISALLOWANCE OF ANY CLAIM THERE FORE THE QUESTION OF BOGUS OR ABSOLUTE INCORRECT CLAIM OF THE ASSESSEE DOES NOT ARISE. WE FIND THAT IN THE PECULIAR FACTS OF THE PRESENT CASE WHERE THE LAND IN QUESTION IS AN AGRIC ULTURAL LAND AND IT REMAINED AS AN AGRICULTURAL LAND BUT FOR THE PURPOSE OF ICNOME TAX AND DUE TO THE EXPANSION OF THE MUNICIPAL LIMIT OF CITY OF PUNE IT IS EXCLUDED FROM THE EXCLUSION CLAUSE OF SECTION 2(14)(III). THEREFORE THE EXPLANATION OF THE ASSES SEE THAT SHE WAS UNDER BONAFIDE BELIEF THAT THE CAPITAL GAIN ARISING FROM THE SALE OF AGRI CULTURAL LAND IS NOT TAXABLE AT THE TIME OF FILING OF THE ORIGINAL RETURN IS A BONAFIDE EXPL ANATION AND THEREFORE DOES NOT FALL UNDER THE EXPLANATION TO SECTION 271(1)(C). SINCE T HE ASSESSMENT YEAR UNDER CONSIDERATION DOES NOT FALL UNDER THE YEAR IMMEDIAT ELY PRECEDING TO THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED AND THEREFORE REFERENCE MADE BY THE AO TO THE RETURN FILED U/S 153A IS NOT RELEVANT. IN VIEW OF T HE ABOVE DISCUSSION AS WELL AS CIRCUMSTANCES OF THE CASE WE DELETE THE PENALTY U /S 271(1)(C). 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 11 -04-2014 SD/- SD/- ( N.K. BILLAIYA ) ( VIJAY PAL RAO ) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 11 -04-2014 SKS SR. P.S