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Income Tax Appellate Tribunal, “DB” BENCH, JABALPUR
O R D E R PER PAVAN KUMAR GADALE JM: These three appeals are filed by the assessee against the different orders of the National Faceless Appeal Centre (NFAC) /CIT(A) Delhi passed (i) under U/sec143(3) r.w.s 263 and U/sec 250 of the Act and (ii) U/sec 271(1)(b) and and U/sec 250 of the Act of the Act. Since all the appeals pertains to the same assessee and are interlinked, hence are clubbed, heard together and a consolidated order is passed.
ITA Nos. 88, 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. A.Y 2014-15. The assessee has raised the following grounds of appeal:
1That the Ld Appellate authority has grossly eared in facts and circumstances of the case to confirm the addition of Rs35,28,000/- 2That the addition of Rs. 35,28,000/- added considering addition U/s 56(2)(vii)(b)(ii) of IT Act, 1961, is arbitrary and bad in law.
That the Assessee 'crave leaves to raise any other ground/s on or before the date of hearing to prove that the order passed is bad.
The brief facts of the case are that the assessee is engaged in the business of purchase and sale of electronic goods. The assessee has filed the return of income for the A.Y 2014-15 on 30.11.2014 disclosing a total income of Rs. 4,77,190/-.Subsequently the case was selected for scrutiny under the CASS to verify ‘Large investment in property as compared to total income and mismatch in turnover reported in Audit report and ITR filed. The Assessing Officer (A.O) has considered the submissions filed on various dates and accepted the returned income and has passed the order u/s 143(3) of the Act on 26.10.2016 with the assessed total income of Rs. 4,77,190/-. Whereas the Pr.CIT on perusal of the records found that the assessee has 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. purchased immovable property for a consideration of Rs.42 lakhs and the stamp value of the property is Rs.77,28,000/- and there is a difference of Rs.35,28,000/- and observed that the difference has to be assessed under Income from other sources and is of the opinion that the A.O has not conducted proper enquires and set aside the order passed U/sec143(3) of the Act and issued directions to the assessing officer to re examine the issues afresh and passed the revision order U/sec263 of the Act dated 27-02- 2019. In compliance to the directions of the Pr. CIT, the AO has issued notice u/s 143(2) of the Act and notice U/sec142(1) of the Act on 03.05.2019,03.09.2019 11.09.2019 and 01.10.2019. Finally the assessee has filed the detailed submissions explaining that the property was purchased in F.Y 2012-13 for Rs.42,00,000/- and the assessee has paid consideration through cheques of Rs.21,00,000/- each in the month of October 2012 to Sri Hanuman das Gupta and Shri Ramdas Gupta and the property was registered in the F.Y 2013-14 i.e on 1-01- 2014 with incurring of stamp duty and registration expenses of Rs. 6.10 lakhs. Whereas the AO was not satisfied with the explanations and is of the opinion that the difference in the stamp value of the property and sale , 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. consideration has to be assessed under Income from other sources and invoked the provisions of Sec. 56(2)(vii)(b)(ii) of the Act and further the assessee has taken the possession of the property only in the F.Y 2013-14 i.e A.Y 2014-15 and made addition of Rs.35,28,000/- and assessed the total income of Rs.40,05,190/- and passed the order u/s 143(3) r.w.s 263 of the Act dated 10.12.2019.
3. Aggrieved by the order, the assessee has filed an appeal with the CIT(A). Whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO but has confirmed the action of the AO and dismissed the appeal of the assessee. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Honble Tribunal.
4. At the time of hearing, the Ld. AR submitted that the CIT(A) erred in confirming the addition irrespective of the fact that the assessee has submitted substantial information and the payments were made through account payee cheques and the property was registered in the F.Y 2013-14 but the total payments were made in the F.Y 2012- 13 and therefore the stamp duty applicable on the day of payments shall be applicable and substantiated the 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. submissions with the factual paper book and judicial decisions and prayed for allowing the assessee appeal.
5. Contra, the Ld. DR submitted that the assessee has not entered into agreement of sale at the time of payments and registration took place in the F.Y 2013-14 and the stamp duty value on the date of registration is applicable and the Ld,DR supported the order of the CIT(A).
6. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue as envisaged by the Ld. AR that the CIT(A) was erred in sustaining the addition of Rs.35.28 lakhs under section 56(2)(vii)(b)(ii) of the Act irrespective of the fact that the assessee has made payments for purchase of property through account payee cheques and complied with the provisions of the Act. Further the Ld. AR emphasized that these payments have been made in F.Y 2012-13 and the stamp duty value applicable on the date of payments is to be considered for registration purpose irrespective of the date of registration in F.Y.2013-14. We considered it appropriate to refer to the provisions of Sec. 56(2)(vii)(b) of the Act read as under:
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; , 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration; Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property addition and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of the this sub-clause; Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property;
7. We find that the contentions of the Ld.AR are that the sale consideration was paid in the F.Y 2012-13 based on the understanding between the parties though it was registered subsequently. Further before the CIT(A), the assessee has made submissions on the agreement as under:
That the assessee has entered into an agreement for purchase through oral agreement and has made full payment during 25.10.2012 to 29.10.2012 which has duly been recorded 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. in the sale deed on page No. 6 which establishes that the transaction was through banking channel only. 8. We considering the facts, submissions and information on record find that the assessee has complied with the provisions of the Act. We find that in the appellate proceedings before the CIT(A), the assessee has mentioned about the understanding and the oral agreement fallowed by the payments in the F.Y 2012-13 through banking channel and the provisions of Sec. 56(2)(vii)(b)(ii) of the Act are complied. Whereas the submissions of the assessee on the disputed issue made before the CIT(A) are emerged for the first time and the A.O has to examine the facts and the nature of transactions. Accordingly, to meet the ends of justice, we set aside the order of the CIT(A) and restore the entire disputed issues to the file of the Assessing officer to examine and verify the issues discussed above and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow the grounds of appeal
of the assessee for statistical purposes. , 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur.
9. In the result, the appeal filed by the assessee is allowed for statistical purposes. & 89/Jabalpur/2022, A.Y 2014-15
10. These two appeals are filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 271(1)(b) and section 250 of the Act.
11. The AO in the course of hearing proceedings has issued notice u/s 142(1) of the Act on various dates, whereas the assessee could not complied with the notices and the assessee has not disclosed the reasonable cause for non compliance to the notice u/s 142(1) of the Act therefore the AO has levied penalty u/s 271(1)(b) of the Act.
12. Aggrieved by the penalty orders, the assessee has filed an appeal before the CIT(A). Before the CIT(A), it was brought to the knowledge that the assessee on levy of penalty in non compliance of notice U/sec142(1) of the Act on 03.05.2019 has opted VSVS 2020 and the appeal was disposed off on 29-03-2022. Whereas in respect of other notices, we found that the CIT(A) has confirmed the levy of penalty and has dismissed the assessee appeal. Aggrieved 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. by the CIT(A) order, the assessee has filed an appeal before the Hon’ble Tribunal.
13. At the time of hearing, the Ld.AR of the assessee submitted that the assessee has cooperated in submitting the information before the AO and the Ld.AR mentioned that there is no wanton act of the assessee for non compliance and the information was filed before the assessing officer and the assessment order was passed U/sec143(3) r.w.s 263 of the Act. The Ld.AR substantiated the submissions with the judicial decisions and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A).
14. We heard the rival submissions and perused the material on record. Prima-facie the AO has levied the penalty u/s 271(1)(b) of the Act as the assessee has not complied with the notices. Whereas on perusal of the facts and the submissions of the Ld. AR, the notice U/sec142(1) of the Act was issued on various dates and the assessee has submitted the information subsequently in the assessment proceedings and the assessment order was passed u/s 143(3) r.w.s 263 of the Act dated 19.12.2018 which cannot be disputed. Whereas the CIT(A) has passed 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. two orders for the same penalty notice and the assessee has also filed the two appeals and accordingly the order of the CIT(A) and the appeal filed by the Assessee in the is not maintainable.
15. We find similar and identical issue was dealt in the fallowing judicial decisions and granted the relief to the assessee by deleting the penalty as under: 1.Decision of Hon'ble ITAT, Surat Bench in the case of RamabhaiKanjibhai Patel v/s DCIT, Surat in to 110/SRT/2023 dt. 11/05/2023. 2. Decision of Hon'ble ITAT, Mumbai Bench in the case of M/s Salasar Derivatives Pvt. Ltd v/s ITO, Mumbai in ITA No. 7 10 1916/MUM/2021 dt. 14/06/2021. 3. Decision of Hon'ble ITAT, Delhi Bench in the case of Shiv Kumar Nayyar v/s ACIT, Delhi in ITA No. 6203 & 6204/DEL/2019 dt.11 27 31/03/2021. 4. Decision of Hon'ble ITAT, Delhi Bench in the case of Jai Gopal Sondhi & Ors. V/S ITO, Delhi in ITA No. 6305/DEL/2017 dt. 28/10/2020. 5. Decision of Hon'ble ITAT, Kolkata Bench in the case of Prachi Enterprises Pvt. Ltd. v/s ITO, Kolkata in ITA No. 1596/KOL/2019 dt. 20/03/2020.
16. We found that the submissions made by the Ld. AR are realistic and when the assessment was completed u/s 143(3) r.w.s 263 of the Act, the penalty u/s 271(1)(b) of the ITA Nos. 88, 89 & 98/Jab/2022 Saleem Ahmed Khan, Jabalpur. Act cannot be imposed. Considering the facts, circumstances and the ratio of judicial decisions, we set- aside the order of the CIT(A) and direct the Assessing officer to delete the penalty and allow the grounds in favour of the assessee. 17. In the result, the appeal in ITA.No.98/Jab/2022 is allowed for statistical purpose and ITA.No.89/Jab/2022 is allowed.