Gujarat High Court
Principal Commisisoner Of Income Tax-5 vs Kalpana M Bhatt....Opponent(S) on 11 September, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
O/TAXAP/659/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 659 of 2017
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PRINCIPAL COMMISISONER OF INCOME TAX-5....Appellant(s)
Versus
KALPANA M BHATT....Opponent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 11/09/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. This appeal is filed by the Revenue challenging the judgement of the Income Tax Appellate Tribunal dated 14.12.2016 raising following question for our consideration:
"Whether the Appellate Tribunal was right in law and on facts in deleting the penalty of Rs. 22,44,00/- u/s. 271(1)(c) of the Act levied against the disallowance of exemption u/s. 54 of the Act of Rs. 1,00,00,000/-?"
2. The issue pertains to penalty imposed by the Assessing Officer against the respondent-assessee. The Tribunal, by the impugned order, confirmed the view of the CIT(Appeals) deleting the penalty. The Tribunal, of course, cited the sole reason of the Page 1 of 3 HC-NIC Page 1 of 3 Created On Sat Sep 16 12:47:21 IST 2017 O/TAXAP/659/2017 ORDER quantum additions being deleted for confirming the view of the CIT (Appeals). Learned counsel for the Revenue, therefore, would be correct in pointing out that when the Revenue has, challenged the judgment of the Tribunal concerning the quantum additions which appeal is pending before the High Court, the question of penalty should normally be further examined. However, for reasons entirely different from those recorded by the Tribunal it may be possible to confirm the order of the CIT (Appeals) deleting the penalty. This is so because the very issue on which the Assessing Officer had initiated proceedings and ultimately imposed the penalty proceedings for and ultimately imposed penalty was a highly debatable legal issue as can be seen from the Tribunal's following observations in the judgement considering the quantum additions:
"7. We have considered the rival submissions and perused the material available on record and the paper book containing 1 to 149 pages filed by the assessee. From the facts of the case it is evidence that the grouse of the learned AO for denying exemption u/s. 54 of the Act was due to the following three reasons: (1) the asset which is the subject matter of transfer belonged to the assets of Late Shri Prabhashankar Patni which is separate assessable entity and not the assessee. (2) The asset which is the subject matter of transfer is predominantly is a case of transfer of land and the same cannot be treated as transfer of building with land appurtenant thereto as envisaged u/s. 54 of the Act. (3) The subject matter of assets being transferred was converted to commercial asset and no more remained as house property as defined u/s. 22 of the Act."Page 2 of 3
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3. Thus, the Tribunal outlined three objections of the Revenue against granting the exemption to the assessee under section 54 of the Income Tax Act. The Tribunal thereafter proceeded to deal with each one of them threadbare and overruling each of the Revenue's objections. There is no element of any suppression on part of the assessee of material facts. The assessee had neither withheld the source of income nor provide accurate particulars about the income.
4. Under the circumstances, tax appeal is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) Jyoti Page 3 of 3 HC-NIC Page 3 of 3 Created On Sat Sep 16 12:47:21 IST 2017