RAVINDER REDDY KATTA,WARANGAL vs. INCOME TAX OFFICER, WARD-3, WARANGAL

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ITA 1244/HYD/2019Status: DisposedITAT Hyderabad24 June 2021AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a penalty under Section 271(1)(c) cannot be imposed merely because an addition was made under the deeming provisions of Section 50C. The assessee's conduct did not amount to concealment of taxable income.

What were the facts?

The assessee filed an appeal with a delay of 53 days. The appeal was against a penalty imposed under Section 271(1)(c) related to a long-term capital gain addition made under Section 50C.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when addition is made under Section 50C due to difference between sale consideration and stamp duty value. Whether deeming provisions of Section 50C automatically attract penalty for concealment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 50C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH : Hyderabad

Before: Shri S.S. GODARA & Shri L.P. SAHU

Hearing: 19/04/2021Pronounced: 24/06/2021

./2019 Assessment Year: 2010-11 Sri Ravindra Reddy Katta vs. ITO, Ward 3 Warangal Warangal [PAN: APHPK9602E] (Appellant) (Respondent) For Assessee : Sri G. Manikya Prasad, AR For Revenue: Sri Sunil Kumar Pandey, DR Date of Hearing : 19/04/2021 Date of Pronouncement : 24/06/2021 O R D E R PER S.S. GODARA, J.M.

This assessee’s appeal for A.Y. 2010-11 arises against the CIT(A)-3 Hyderabad’s order dated 12.03.2019 passed in case no.10390/2017-18 involving proceedings u/s 271(1)(c ) of the Income Tax Act, 1961 [for short ‘the Act’].

Heard both the parties. Case file perused.

It is seen that there is a delay of 53 days in filing asessee’s instant appeal. He has filed application for condonation of delay explaining reasons that the same is neither intentional nor wilful but on account of circumstances beyond control. We quote Collector Land Acquisition vs Mst.Katiji & others, 1987 AIR 1353 (SC) and university of Delhi vs Union of India Civil appeal no. 9488 & 9489/2019 dt. 17.12.2019, that such a delay supported by cogent reasons deserves to be condoned so as to make way for the cause of substantial justice. We accordingly condone the delay and proceed with the case.

2.

It emerges at the outset that both the learned lower authorities have imposed sec.271(1)(c ) penalty amounting to Rs.2,49,368/- pertaining to quantum long term capital gain addition on Rs.13,70,525/- made after invoking sec.50C of the Act in assessment order dated 18.7.2017. The Assessing officer’s as well as CIT(A)’s case that assessee’s act and conduct throughout to this effect amounts to concealment of particulars of his taxable income.

3.

We have given our thoughtful consideration to rival contentions against and in support of the impugned sec.271(1)(c ) penalty. Suffice to say, we are of the opinion that once the impugned addition has been made u/s 50C by applying deeming provision that the actual price of the assessee’s capital asset was not its market price on account of the stamp price concerned, it ought not to be held by any stretch of imagination that assessee had concealed his taxable income to the corresponding effect in such an instance. Hon’ble Apex Court landmark judgement in CIT vs. Reliance Petro Products Ltd. 322 ITR 158 (SC) has settled the law that each and every disallowance/addition made in the course of quantum does not ipso facto attract the impugned penal mechanism. We adopt the same ratio mutatis mutandis and direct the Assessing officer to delete the impugned penalty. This assessee’s appeal is allowed in above terms. Order pronounced in Open Court on 24/06/2021.

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