Income Tax Appellate Tribunal - Jaipur
Shri Shankar Lal Saini, Jaipur vs Deputy Commissioner Of Income Tax, ... on 18 June, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"A" JAIPUR
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BEFORE: SHRI RAMESH. C. SHARMA, AM & SHRI VIJAY PAL RAO, JM
vk;dj vihy la-@ITA No. 1285/JP/2018
fu/kZkj.k o"kZ@Assessment Year : 2011-12
Shri Shankar Lal Saini cuke The DCIT,
Plot No. 480, Shanti Nagar, Vs. Circle-3,
Near Karni Mata Temple, Jaipur.
Khatipura Road, Jaipur-302006
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AQGPS 4878 Q
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITA No. 1341/JP/2018
fu/kZkj.k o"kZ@Assessment Year : 2011-12
The DCIT, cuke Shri Shankar Lal Saini
Circle-3, Vs. Plot No. 480, Shanti Nagar,
Jaipur. Near Karni Mata Temple,
Khatipura Road, Jaipur-302006
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AQGPS 4878 Q
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj l@
s Assessee by: Shri P.C. Parwal (CA)
jktLo dh vksj ls@ Revenue by : Shri Karni Dan (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 27/05/2019
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 18/06/2019
vkns'k@ ORDER
ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT PER: VIJAY PAL RAO, J.M. These cross appeals are directed against the order dated 12.09.2018 of ld. CIT (A), Jaipur for the assessment year 2011-12. The assessee has raised the following grounds as under:-
"1. Under the facts and circumstances of the case, the order passed u/s 271(1)(c) is illegal and bad in law.
2. The Ld. CIT(A) has erred on facts and in law in confirming the levy of penalty U/s 271(1)(c) of the IT Act, 1961 with reference to amount of Rs. 59,04,000/-.
3. The assessee craves to amend, alter and modify any of the grounds of appeals.
4. The appropriate cost be awarded to the assessee.
2. Ground no. 1 and 2 are regarding the validity of order passed U/s 271(1)(c) of the I.T. Act. The assessee is an individual and jointly with his brother sold agricultural land at Village Ramsinghpura, Tehsil Sanganer on 28.12.2010 and 09.02.2011 for a total consideration of Rs. 5,66,78,800/- in which the assessee's ½ share come to Rs. 2,78,39,400/-. The assessee filed his return of income on 21.02.2013 declaring long term capital gain at Rs. 64,61,650/- after claiming the deduction Under Section 54B and 54F of the Act. The AO has completed the assessment U/s 143(3) by making the additions inter alia on account of undisclosed sale consideration received in cash of Rs. 2
ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT 59,04,000/-. The other additions made by the AO on account of disallowance of deduction Under sections 54B & 54F of the Act were deleted by this Tribunal in quantum appeal and the order of this Tribunal has been confirmed by the Hon'ble jurisdictional High Court . In the mean time, the AO initiated the proceeding U/s 271(1)(c) and levied the penalty of Rs. 55,83,424/- vide order dated 31.03.2017. The ld. CIT(A) restricted the penalty levied U/s 271(1)(c) of the Act only to the extent of the addition made on account of undisclosed sale consideration received in cash. The penalty levied in respect of the other additions on account of disallowance of deduction U/s 54B & 54F of the Act were deleted by the ld. CIT(A) as those additions were deleted by this Tribunal and further confirmed by the Hon'ble jurisdictional High Court. Thus the issue in the present appeal is only regarding the levy of penalty in respect of undisclosed sale consideration.
3. Before us, the ld. AR of the assessee has submitted that the assessee has not suppressed any fact regarding the sale consideration in the assessment proceedings. The assessee in his statement recorded U/s 131 of the Act admitted the receipt of cash of Rs 59,04,000/- on sale of agricultural land. Since the assessee was not aware about the 3 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT intricacies of Income Tax Act and computed the capital gain by taking the sale consideration as mentioned in the sale deed. This is bonafide mistake as the capital gain was computed by the tax consultant based on sale documents and therefore, cash consideration received by the assessee was not taken into account at the time of filing the return of income. The ld. AR has referred to the assessment order and submitted that the AO has recorded the satisfaction for initiating the proceedings U/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income at page 3 and 4 of the assessment order whereas in para 3 of the penalty order the AO has observed that the non disclosure of sale consideration received in cash is concealment of income. Thus, the AO was not satisfied about the default on the part of the assessee whether it is furnishing of inaccurate particulars of income or concealment of particulars of income. In support of his contention, he has relied upon the Third Member decision in case of HPCL Energy Mittal Ltd. vs. ACIT (2018) 169 DTR 1 and submitted that the Tribunal has held that if a clear cut charge in the penalty notice or the penalty order is that of 'concealment of particulars of income' but it turns out to be a case of 'furnishing of inaccurate particulars of such income' or vice versa then also the penalty order cannot legally stand. The ld. AR of the assessee 4 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT has submitted that in the case in hand non disclosure of consideration received in cash of Rs. 59,04,000/- is a clear cut concealment of particulars of income as accepted by the AO at para 3 of the penalty order but still the AO has imposed the penalty for furnishing of inaccurate particulars of income and therefore, penalty order passed by the AO is legally not sustainable.
3.1 Alternatively, the ld. AR of the assessee has submitted that it is a case of bonafide mistake in filing the return in as much as the assessee has provided the copy of bank account and sale deed to the counsel. The cash amount was deposited in the bank account but the counsel while preparing the return has failed to consider the same and the assessee being not conversant with the technicalities of filing the return as prepared by the counsel and thus, there was bonafide mistake in not offering such amount for tax which was suo moto stated by the assessee when he was enquired about the deposit in the bank account. Thus, the ld. AR of the assessee has submitted that for such bonafide mistake the penalty should not be levied U/s 271(1)(c) of the Act.
4. On the other hand, the ld. DR has submitted that it is not a case of the assessee that he apprised the tax consultant all the correct facts about the sale consideration but only when the AO has examined the 5 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT assessee about the cash deposit in the bank account the assessee revealed the source of the same as sale consideration received in cash over and above the sale consideration received through cheque mentioned in the sale deed. Therefore, it is a clear case the concealment of particulars of income as the AO has observed in para 3 of the penalty order. The ld. DR has submitted that since the AO has levied the penalty in respect of three disallowances which falls under the different limbs of default and charges being furnishing of inaccurate particulars of income as well as concealment of particulars of income therefore, the penalty levied in respect of disallowance of claim of deduction U/s 54B & 54F of the Act falls in the category of furnishing of inaccurate particulars of income whereas the non disclosure of cash sale consideration received by the assessee falls in the category of concealment of particulars of income. He has relied upon the orders of the authorities below.
5. We have considered the rival submissions as well as relevant material on record. There is no dispute that in the inquiry made during the assessment proceedings the AO detected the fact that the assessee has received sale consideration in cash of Rs. 59,04,000/- which was not disclosed in the return of income. Further, the AO has also 6 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT disallowed the claim of deduction U/s 54B and 54F of the Act as there are violation of some provisions of Sections 54B & 54F for non depositing the amount in the capital gain account before investing the same for construction of house and purchase of agricultural land. The penalty proceedings were initiated in respect of all three disallowances/additions made by the AO. It is also clear from the facts that the disallowance made in respect of claim of deduction U/s 54B & 54F of the Act due to non deposit of the amount in the capital gain may if at all fall in the category of charge of furnishing of inaccurate particulars of income because the claim was not found to be bogus or false but it was only due to non deposit of the amount in the capital gain account. Further the said disallowance was deleted by the Tribunal and upheld by the Hon'ble High Court and therefore, the same is no more an issue before us in the penalty proceeding. As regards the non disclosure of the sale consideration received in cash, we find that the assessee has admitted the non disclosure of the same in the return of the income and it was detected by the AO only during the course of assessment proceedings and inquiry conducted by the AO. Therefore, the addition made by the AO on account of sale consideration received in cash which is subject matter of the appeal before us is clearly a case 7 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT of concealment of particulars of income. Hence, at the time of recording the satisfaction the AO has clearly set out of the charges of major disallowance in respect of claim of deduction U/s 54B &54F which falls in the category of furnishing of inaccurate particulars of income. Therefore, so far as the satisfaction recorded by the AO in view of Section 271(1B) of the Act once the AO has clearly recorded the satisfaction in the assessment order the same shall be deemed to constitute a satisfaction for initiation of penalty proceeding under clause
(c) of Section 271(1) of the Act. Hence, so far as the satisfaction of record by the AO in the assessment order there is no infirmity. As regards the certainty of charge since the penalty was initiated in respect of all three additions made by the AO out of which some additions fall in the category of furnishing of inaccurate particulars of income and other one which is the subject matter of the proceeding before us falls in the category of concealment of particulars of income. Therefore, the question of definite charge being furnishing of inaccurate particulars of income or concealment of particulars of income does not arise. It is a case of default on the part of the assessee falling under both limbs. In the penalty order U/s 271(1)(c) of the Act the AO has clearly made out in a case in para 3 by holding that the non disclosure of sale 8 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT consideration of Rs. 59,04,000/- received in cash is clearly concealment on the part of the assessee. Therefore, the AO has given its finding in para 3 as under:-
"3) During assessment proceedings it is found that assessee has sold two properties (i) land situated at Ramsinghpura (Dholai), Tehsil-Sanganer, Khasra No. 165 and 166, total land measuring 0.82 Hectare on 28/12/2010 to M/s Krishna Balram Residency Pvt. Ltd., Jaipur jointly with his brother Shri Sedhu Ram and shown total consideration of Rs.3,00,00,000/-. (ii) Land situated at Ramsinghpura(Dholai), Tehsil- Sanganer, Khasra No.163 land measuring 0.70 Hectare on 09/02/2011 to M/s Krishna Balram Residency Pvt. Ltd., Jaipur jointly with his brother Shri Sedhu Ram and shown total consideration of Rs.2,56,78,800/-
. Assessee has shown long term capital gain of Rs. 64,61,650/- after claiming deduction U/s 54B Rs. 1,60,00,000/- and u/s 54F Rs.52,00,000/-. During the assessment proceeding the AR of the assessee filed the calculation of long term capital gain and the calculation of LTCG as shown by the assessee is as under:-
Sale consideration i.e. share of assessee sale Rs. 5,56,78,800/2= =Rs. 2,78,39,400/-
Less:- Index cost 1970 i.e. 25000*711/100 =Rs. 1,77,750/-
Capital gain = Rs. 2,76,61,650/-
Less:- (a) Agriculture land purchase on 19/12/2010 U/s 54B = Rs/ 1,60,000/-
(b) Constructed residential house U/s 54F = Rs.52,00,000/-
Total deduction U/s 54B &54F = Rs. 2,12,00,000/-
Net capital gain = Rs. 64,61,550/-
9
ITA No. 1285 &1341/JP/2018
Shri Shankar Lal Saini vs. DCIT
During the assessment proceedings from the details filed by the assessee it is found that assessee has claimed deduction u/s 54B Rs.1,60,00,000/- on purchase of agriculture land on 19/12/2012 and u/s 54F Rs.52,00,000/- on construction of residential house. On perusal of the details filed by the assessee, it is found that the assessee has purchased a agriculture land on 19/12/2012 Khasra No.3541 situated at Village Tigariya, Tehsil Chomu measuring 3.78 Hectare land for total sale consideration of Rs.1,50,0,00,000/- from Mr. Jagdish and others. Assessee has also incurred stamp duty charges of Rs.80,000/- and registration charges etc. of Rs.6,87,190/-.
Regarding claim under section 54F of Rs. 52,00,000/-, the assessee has submitted a copy of valuation report from registered valuer in which total estimated construction value of the house constructed by the assessee is determined at Rs. 47,00,000/- as against Rs. 52,00,000/- claimed by the assessee." The AO has levied the penalty in respect of all additions on which both the limbs were attracted then we do not see any error or illegality in the order passed by the AO U/s 271(1)(c) of the Act. The decision relied upon the ld. AR will not help the case of the assessee. 5.1. As regards the alternate plea of the assessee that is a bonafide mistake, we find that the sale consideration in cash cannot be detected from the sale documents until and unless the assessee who was knowing a true facts disclosed the same to his tax consultant for the purpose of computing the capital gain. It is not the case of the assessee that the assessee has brought this fact to the knowledge of the tax 10 ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT consultant therefore, simply handing over the sale deed to the tax consultant would not discharge the assessee of his obligation to disclose the true and correct fact for the purpose of filing the return of income. Accordingly, we do not find any merit or substance in this plea of the ld. AR. Hence, the impugned order of the ld. CIT(A) sustaining the penalty levied U/s 271(1)(c) of the Act is upheld.
6. The Revenue has raised the following grounds as under:-
"1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the penalty u/s 271(1)(c) of the Act on Rs. 43,67,200/- on account of disallowance made U/s 54B and 54F of Rs. 2.12 cores despite the fact that the deletion of quantum of Rs. 2.12 crores by the High Court has been challenged by the Department before theApex Court through SLP?"
7. We have heard the ld. DR as well as the ld. AR and considered the relevant material on record. There is no dispute that the penalty levied by the AO on account of disallowance made U/s 54B &54F of the Act was deleted by the ld. CIT(A) on the ground that the said addition itself was deleted by this Tribunal in the quantum appeal and the Hon'ble jurisdictional High Court has already dismissed the Revenue's appeal filed against the order of the Tribunal. Thus the present appeal is filed by the Revenue only to keep the issue alive till the matter in the quantum appeal proceeding is decided by the Hon'ble Supreme Court. 11
ITA No. 1285 &1341/JP/2018 Shri Shankar Lal Saini vs. DCIT However, we find once the addition itself was detected and the order of this Tribunal was confirmed by the Hon'ble High Court then there is no need to file the appeal against the deletion of penalty by the ld. CIT(A) as in case the Revenue succeed before the Hon'ble Supreme Court in the quantum proceedings the penalty proceeding can again be initiated accordingly, the appeal of the Revenue's is dismissed.
In the result, the appeal of the assessee as well as appeal of the Revenue are dismissed.
Order pronounced in the open court on 18/06/2019.
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(Ramesh. C. Sharma) (Vijay Pal Rao)
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Tk;iqj@Jaipur
fnukad@Dated:- 18/06/2019.
*Santosh.
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Shankar Lal Saini, Jaipur.
2. izR;FkhZ@ The Respondent- DCIT, Circle-3, Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File {ITA No. 1285 & 1341/JP/2018} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 12