Income Tax Appellate Tribunal - Ahmedabad
Shri Krupeshbhai Narharibhai Patel,, ... vs The Dy.Cit.,Central Circle-1,, Baroda on 12 April, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ ''D'' अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, AHMEDABAD
BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
IT(SS)A No. 307/Ahd/2014
नधारण वष/Assessment Year: 2006-07
Shri Krupesh Narharibhai Patel, Vs. Deputy Commissioner of
15, Parishram Society, Income-tax,
Subhanpura, Vadodara-390023 Central Circle-1,
PAN : ADHPP 6422 B Vadodara
Assessee by : Shri Milin Mehta, AR
Revenue by : Shri V K Singh, Sr DR
सु न वाई क ता र ख / Date
of Hearing : 09/04/2018
घोषणा क तार ख / Date of Pronouncement: 12/04/2018
आदे श/O R D E R
PER MANISH BORAD, ACCOUNTANT MEMBER:
This appeal of the assessee for Assessment Year 2006-07 is directed against the order of the learned CIT(A)-IV, Ahmedabad vide appeal No.CIT(A)- IV/1/BRD/CC-1/13-14, dated 06.05.2014, arising out of order under Section 271(1)(c) r.w.s. 274 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), framed on 28.12.2013 by the DCIT, Central Circle-1, Baroda.
2. The solitary grievance raised by the assessee is as follows:-
"The learned Commissioner of Income-tax (Appeals)-IV, Ahmedabad erred in fact and in law in confirming the action of Deputy Commission of Income-tax, Central Circle-1, Baroda in levying penalty u/s 271(1)(c) r.w.s. 274 of the Income-tax Act, 1961 on the disallowance of short term capital losses u/s. 94(7) of the Act."
3. Briefly stated facts, as culled out from the record, are that assessment under Section 153A r.w.s. 143(3) of the Act was completed in the case of the assessee on 23.12.2010. Assessing Officer made various additions which, inter alia, included disallowance under section 94(7) of the Act at Rs.22,38,207/-. Subsequently, penalty proceedings under Section 271(1)(c) r.w.s. 274 of the Act were initiated. During the course of penalty proceedings, it was contended by IT(SS)A No. 307/Ahd/2014 Shri Krupesh Narharibhai Patel Vs. DCIT AY : 2006-07 -2- the assessee that all the information relating to purchase and sale of mutual funds, date of purchase, date of sales, amount claimed, record date as well as dividend received were furnished in the return of income and due to inadvertent mistake, provisions of Section 94(7) of the Act were not complied with. However, learned Assessing Officer went ahead to impose the penalty of Rs.7,75,000/- for the alleged disallowance under Section 94(7) of the Act for furnishing inaccurate particulars of income. Before the learned CIT(A), assessee failed to succeed. Now the assessee is in appeal before the Tribunal.
4. Learned Counsel for the assessee, at the outset, referred to the decision of the Co-ordinate Bench of this Tribunal in the case of Walter Saldhana vs. DCIT, reported in [2011] 44 SOT 26 (Mumbai), vide ITA No.444/Mum/2010, for the assessment year 2006-07, wherein similar issue has been adjudicated and decided in favour of the assessee.
5. On the other hand, learned Departmental Representative relied upon the orders of both the lower authorities and also submitted that the assessee has made this mistake consistently for three assessment years from AYs 2006-07 to 2008-09, which shows that there was mal-intention for not making the disallowance of loss as stipulated in the provisions of Section 94(7) of the Act.
6. We have heard the rival contentions and perused the record placed before us. The solitary grievance of the assessee is against the imposition of penalty under section 271(1)(c) of the Act at Rs.7,75,000/- for the alleged disallowance of Short Term Capital Loss under Section 94(7) of the Act. On perusal of record, we find that this fact is not disputed that the assessee has disclosed all necessary information relevant to the purchase, sale, record date and dividend received in respect of mutual funds. It made a bona fide claim on the strength of the information available with it, but nowhere connotes that the assessee has furnished inaccurate particulars of income or concealed particulars IT(SS)A No. 307/Ahd/2014 Shri Krupesh Narharibhai Patel Vs. DCIT AY : 2006-07 -3- of income. We further find that very same issue of penalty imposition for the addition towards disallowance under section 94(7) of the Act came up before the Co-ordinate Bench of this Tribunal in the case of Walter Saldhana vs. DCIT, reported in [2011] 44 SOT 26 (Mumbai), wherein the Tribunal has held as under:-
"5. From the above discussion of scheme of the Act, two important things come out are that it is the duty of the assessee to furnish particulars of income simultaneously he has right to claim all exemptions and deductions provided in the Act, according to the assessee for which he is entitled. The duty of the Assessing Officer is to assess real and correct income in accordance with law. The CBDT in its Circular No. 14(XL35) of 1955 dated 11.04.1955 'regarding departmental attitude towards' - stated that The CBDT in its Circular No. 14(XL35) of 1955 dated 11.04.1955 'regarding departmental attitude towards' - stated that Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. It is further stated that officers should, when requested, freely advise assessees the way in which entries should be made in various forms, they should not themselves make any in them on their behalf. Where such advice is given, it should be clearly explained to them that they are responsible for the entries made in any form and that they cannot be allowed to plead that they were made under official instructions.
16. In the light of above discussion we consider the facts of the case under consideration. On perusal of the orders of revenue authorities, we find that the penalty u/s 271(1)(c) was levied on the ground that the assessee violated of provisions of section 94(7) of the Act by not ignoring losses while computing short term capital gains on transactions related to section 94(7) of the Act. It is important to state here that the AO made the addition only on the basis of material and informations furnished by the assessee. The Apex Court in the case of Reliance Petroproducts Pvt. Ld. (322 ITR 158) ( at page 164 ) regarding the word 'particulars' used in section 271(1)(c) has held that there can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. But in the case under consideration we find that the assessee has furnished full detail and has not concealed any particulars of income or has furnished any inaccurate particular of income. Further, we noticed that that there were no such specific requirements in the return form applicable to the year under consideration. Such requirement of the column in the return has been inserted by amendment in return form, ITR-6, at page 17, "Schedule CG capital gain" S No3 (d) which is IT(SS)A No. 307/Ahd/2014 Shri Krupesh Narharibhai Patel Vs. DCIT AY : 2006-07 -4- applicable from AY 2007-08. In the case of Reliance Petroproducts Pvt.Ltd. (322 ITR 158) (SC) the Hon'ble Supreme Court held that where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty u/s 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The case of the assessee under consideration is squarely covered by the above judgment of the Apex court. The assessee demonstrated that their claim was bonafide claim. In the light of above discussion, we don't find that the case under consideration is a fit case for levy penalty under section 271(1)(c) of the Act we therefore cancelled the penalty levied."
7. On perusal of the above findings of the Tribunal as well as looking to the facts and circumstances of the case, we find that the issue as well as the facts are almost identical and learned Departmental Representative failed to bring an contrary facts in this aspect. We, therefore, respectfully following the Tribunal's decision dated 20.08.2010 in the case of Walter Saldhana (supra), cancel the penalty of Rs.7,75,000/- levied by the Assessing Officer under Section 271(1)(c) of the Act and allow the appeal of the assessee.
8. In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 12th April, 2018 at Ahmedabad.
Sd/- Sd/-
(MAHAVIR PRASAD) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 12/04/2018
आदे श क "#त$ल%प अ&े%षत/Copy of the Order forwarded to :
1. अपीलाथ) / The Appellant
2. "*यथ) / The Respondent.
3. संबं धत आयकर आय, ु त / Concerned CIT
4. आयकर आय, ु त (अपील)/ The CIT(A)-
5. %वभागीय "#त#न ध,आयकर अपील य अ धकरण ,राजोकट/DR,ITAT, Ahmedabad,
6. गाड5 फाईल /Guard file.
आदे शानस ु ार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt.Registrar) आयकर अपील य अ धकरण ITAT, Ahmedabad