Income Tax Appellate Tribunal - Delhi
Suresh Kejriwal,, New Delhi vs Department Of Income Tax on 27 April, 2015
ITA NO.2301/Del/2013
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "G", NEW DELHI
BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER
AND
SHRI H.S. SIDHU, JUDICIAL MEMBER
I.T.A. No. 2301/DEL/2013
A.Y. : 2009-10
INCOME TAX OFFICER, SHRI SURESH KEJRIWAL,
WARD 29(2), NEW DELHI VS. 2280, GALI HINGA BEG,
ROOM NO. 112, DRUM SHAPE TILAK MARG,
BUILDING, DELHI - 110 006
IP ESTATE, NEW DELHI - 2 (PAN: AALPL1056D)
(APPELLANT) (RESPONDENT)
Department by : Sh. B.R.R. KUMAR, SR. DR
Assessee by : Sh. AJAY WADHWA, ADV.
Date of Hearing : 27-04-2015
Date of Order : 27-04-2015
ORDER
PER H.S. SIDHU : JM This appeal by the Revenue is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi dated 15.02.2013 pertaining to assessment year 2009-10 on the following grounds:-
"1. The Ld. CIT(A) has erred in law and facts in deleting the penalty of Rs. 7,11,394/- imposed by the AO u/s. 271(1)(c) of the Income Tax Act, 1961.
2. The Ld. CIT(A) has erred in law and facts in deleting the penalty by ignoring the fact that the disallowance u/s. 54F was made for owing more than one residential 1 ITA NO.2301/Del/2013 property at the time of transfer of original asset and the voluntary surrender by the assessee was not accepted."
2. The brief facts of the case are that the assessee is the proprietor of M/s Suresh Trading Co. and is engaged in the business of wholesale trading of chemicals. The assessee had filed the returned income of Rs 7,97,998/-. The assessee had earned the Long Term Capital Gain (in short, LTCG) of Rs 31,39,425/- which the assessee claimed to have invested with TDI for the construction of a flat and the assessee claimed deduction u/s 54F. The case was taken up for scrutiny and it was found that the construction of the flat has not been completed within 3 years as provided u/s 54F and accordingly, the assessee has withdrawn the claim of deduction u/s 54F and has offered the LTCG income and has paid the tax with interest in this AY. The AO had initiated the penalty proceedings u/s 271(1)(c) and has levied the penalty u/s 271(1)(c) of Rs. 7,11,394/- vide the order of the AO on the ground that the assessee did not make a genuine claim of deduction u/s 54F. The AO has also noted that the assessee owns more than one house and as such the assessee was not eligible for deduction u/s 54F.
3. Against the penalty order, the assessee appealed before the Ld. CIT(A), who vide impugned order dated 15.2.2013 has deleted the penalty levied by the AO.
4. Aggrieved with the order of the Ld. CIT(A), Revenue is in appeal before us.
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5. Ld. DR relied upon the order of the AO and reiterated the contention raised in the grounds of appeal.
6. On the contrary, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A).
7. We have heard both the parties and perused the relevant records available with us, especially the order of the revenue authorities. We find that the AO is not justified to levy the penalty as the assessee had withdrawn the claim of deduction u/s 54F and has offered the income of Rs 31,39,425/- to buy mental peace with the department on the condition that there will be no penalty & prosecution. The assessee has not submitted any inaccurate particulars of income to warrant the penalty u/s 271(1)(c). The assessee had made a genuine investment for the construction of a flat with TDI and it is only a coincidence that the builder could not construct the flat within 3 years and as such the assessee had to withdraw the claim of deduction u/s 54F and there is no concealment of income, as per law the assessee was required to offer the LTCG in the AY 2012-13 as provided u/s 54F in case the assessee was not able to get the possession of the flat within 3 years and in that case the assessee would have saved a huge interest u/s 234B & 234C of the I.T. Act. Regarding the other property, it was submitted that the flat at Daryaganj is utilised for commercial/business purpose of the assessee and the Janta flat does 3 ITA NO.2301/Del/2013 not belong to the assessee as the assessee had only given an advance of Rs 8,900/- to an employee of the assessee to book the flat. Regarding the Model Town flat it is submitted that it is the residential house of the assessee. It is also submitted that the assessee has not concealed any particulars of income and has not furnished any inaccurate particulars of income and as such the AO is not justified to levy the penalty u/s 271(l)(c) as the assessee has voluntarily withdrawn the claim of deduction u/s 54F and has offered the L TCG income for tax and has paid the due tax with interest to the government.
7.1 It is also submitted that the assessee has accepted the addition with a view to buy peace with the department and also to avoid the litigation and the assessee also relied on the various case laws to support his claim that no penalty can be levied on surrendered income and some of the case laws are as under :-
(i) CIT Vs Harshvardhan Chemicals & Minerals Ltd, 259 ITR 212 [2003] (Raj)
(ii) CIT Vs Adamkhan, 223 ITR 264 [1997] (Mad)
(iii) Akshay Bhander Vs CIT, 220 ITR 325 [1996] (Gau)
(iv) CIT Vs Dhingra Metal Works, 328 ITR 384 [2010] (Del)
(v) CIT Vs Suresh Chandra Mittal, 251 ITR 9 [2001] (SC) 4 ITA NO.2301/Del/2013 7.2 The AO has not detected any concealment of income either in the return of income or in the books of accounts of the assessee as the assessee has submitted all the details to the AO. We find considerable cogency in the assessee's contention that the case of the assessee is also supported by the case of CIT Vs. Reliance Petroproducts Pvt. Ltd (2010) 322 ITR 158 (SC) in which it has been held that mere making of a claim which is unsustainable law cannot be treated as furnishing of inaccurate particulars of income and as such will not attract the penalty proceedings U/S 271(1)(c) of the I.T. Act.
7.3 We also find force in the assessee's contention that it has been held in the case of CIT Vs Harshvardhan Chemicals & Minerals Ltd, 259 ITR 212 [2003] (Raj), that no penalty is leviable for any addition which is debatable, arguable and a controversial addition. In the case of CIT Vs Adamkhan, 223 ITR 264 [1997] (Mad), it has been held that no penalty is leviable in the case of additions which are made on estimated income or a conditional surrender is made by the assessee to avoid the penalty and to buy peace with the department. In the case of Akshay Bhander Vs CIT, 220 ITR 325 [1996] (Gau), it has been held that the penalty is a quasi-criminal in nature and no penalty can be levied unless there is evidence of concealment or the assessee is held guilty of concealment. 5
ITA NO.2301/Del/2013 7.4 Keeping in view of the above facts and circumstances, we find that the CIT(A) has rightly observed that the AO is not justified to levy the penalty as the assessee has voluntarily offered the income to buy peace with the department and to avoid future litigation and as such the AO is not justified to levy the penalty within the meaning of section 271(1)(c) and accordingly, Ld. CIT(A) cancelled the penalty levied by the AO. In the background of the aforesaid discussions and precedents, we find no infirmity in the order of the Ld. CIT(A) and therefore, no interfere is required on our part, hence, we uphold the impugned order passed by the Ld. CIT(A).
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 27/04/2015.
Sd/- Sd/-
[N.K. SAINI] [H.S. SIDHU]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date 27/04/2015
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant -
2. Respondent -
3. CIT
4. CIT (A)
5. DR, ITAT TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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