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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED
आयकर अपील�य अ�धकरण, राजकोट �यायपीठ, राजकोट । IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And Ms MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I.T.A. Nos.173 to 177/Rjt/2019 (�नधा�रण वष� / Assessment Year 2011-12) बनाम/ Late Abbashbhai Ismail Shekh I.T.O., L/h Jenamben Abbasbhai Shekh, Ward-1(5), Vs. Vanza no delo, O/s Khoja Gate, Jamnagar. Sandhi Jamatkhana Street, Jamnagar.
�थायी लेखा सं./जीआइआर सं./PAN/GIR No. : CWSPS9782D (अपीलाथ� /Appellant) (��यथ� / Respondent) अपीलाथ� ओर से / Appellant by : Shri Chetan Agarwal , A.R ��यथ� क� ओर से/Respondent by : Shri Suhas Mistry, Sr. D.R. सुनवाई क� तार�ख / Date of Hearing 27/02/2020 घोषणा क� तार�ख /Date of Pronouncement 28/02/2020 आदेश / O R D E R PER BENCH: The above appeals have been filed by the assessee against the separate orders of the Ld. Commissioner of Income-Tax (Appeals)-Jamnagar [Ld.CIT(A) in Short]arising in the matter of assessment order passed u/s.144 r.w.s 147 of the Income Tax Act, 1961(hereinafter referred to as the “Act” relevant to the Assessment Year 2011-12. Since issues involve in all these appeals are identical, we proceed to dispose of all the appeals by this common order for the sake of convenience and brevity
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 2 - 2. First we take ITA No.173/Rjt/2019 for adjudication. The assessee has raised the following grounds of appeal: Learned CIT(A) has erred in law as well as on facts in confirming addition made by Ld.AO for Rs.3,83,148/- as long term capital gain.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for Rs.3,83,148/- on account of long-term capital gain.
At the outset the learned AR for the assessee before us submitted that the income on account of long-term capital gain has been determined in the hands of the assessee in the capacity of legal representative of Late Abbasbhai I. Shekh whereas the assessee was subject to taxability of such capital gain income in her individual capacity.
4.1 The learned AR claimed that Late Abbasbhai I. Shekh was not the owner of the property with respect to which he has been taxed under the Act. The learned AR in support of his contention also filed the English translation of the sale deed which is placed on pages 48 to 59 of the paper book where the name of the assessee being seller was not appearing.
4.2 The learned AR also submitted that the proceedings under section 147 read with section 148 of the Act were initiated on the basis of the letter issued by the income tax officer (intelligence & criminal investigation) dated 10 October 2012 against the 11 persons of the family where the name of the deceased was not appearing.
In view of the above, the learned AR for the assessee claimed that there cannot be any addition to the total income of the assessee.
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 3 - 5. On the other hand, the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record before us. Admittedly, the income on account of long- term capital gain has been taxed in the hands of the assessee as legal heir of the deceased person. However, we note that the land with respect to which the long- term capital gain was computed, the name of the deceased assessee was not appearing in the sale deed which is placed on record. Thus it is inferred that the deceased was not the owner of such land. Accordingly the question of taxing the long-term capital gain in the hands of the deceased does not arise.
6.1 The argument of the assessee also gets strength from the notice issued by the income tax officer of intelligence and criminal investigation about the sale of the property in dispute which was not offered to tax. On perusal of such notice, available on record, we find that the name of the assessee is not appearing. Thus, it can be inferred that the deceased was not subject to tax on account of such capital gain. Accordingly the income determined in the hands of the assessee in legal hair capacity is not sustainable.
6.2 However, we note that the argument taken by the learned AR for the assessee before us was not arising from the order of the authorities below. Accordingly, in the interest of justice and fair play, we set aside the issue to the file of the AO for fresh adjudication as per the provisions of law in the light of the above stated discussion. Hence the grounds of appeal of the assessee is allowed for the statistical purposes. Coming to the ITA No. 174/RJT/2019, for A.Y. 2011-12 an appeal by the assessee.
The assessee has raised the following grounds of appeal:
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 4 - Learned CIT(A) has erred in law as well as on facts in confirming penalty of Rs.22,980/- levied by Ld.AO thereby totally ignoring the facts the case submitted during appellate proceedings.
At the outset we note that, the penalty is arising from the quantum addition of capital gain as discussed in ITA 173/RJT/2019 which has been restored by us to the file of the AO for fresh adjudication vide paragraph number 6 of this order. For the detailed discussion, please refer the relevant paragraph. As the quantum appeal has been restored back to the file of the AO, the penalty appeal filed before us is not sustainable. As such it becomes infructuous. Accordingly, we dismiss the same. Hence, the ground of appeal of the assessee is dismissed as infructuous.
In the result, the appeal of the assessee is dismissed as infructuous.
Coming to the ITA No. 175/RJT/2019, for A.Y. 2011-12 an appeal by the assessee.
The assessee has raised the following grounds of appeal:
Learned CIT(A) has erred in law as well as on facts in confirming penalty of Rs.10,000/- levied by Ld.AO thereby totally ignoring the facts the case submitted during appellate proceedings.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming the penalty of Rs. 10,000 under section 272B of the Act for not quoting the PAN as required under clause (5) of section 139A of the Act.
At the outset we note that, the assessee for the year under consideration has not furnished his return of income. This fact has not been disputed by the authorities below. Thus the question arises, whether the assessee can be visited with the penalty on account of non-quoting the PAN in the income tax return in a situation where the return was not furnished. In our view, the answer is negative.
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 5 - Accordingly, we hold that the penalty in the present facts and circumstances is not sustainable.
11.1 In addition to the above, it is also pertinent to note that we have observed in the appeal of the assessee bearing ITA No. 173/RJT/2019 that the deceased is not liable to tax on the capital gain in dispute subject to the verification by the AO. In the event, the assessee succeeds before the AO then also there is no question of filing the return of income and consequently the question of quoting the PAN in the return does not arise. Hence the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Coming to the ITA No. 176/RJT/2019, for A.Y. 2011-12 an appeal by the assessee.
The assessee has raised the following grounds of appeal:
Learned CIT(A) has erred in law as well as on facts in confirming penalty of Rs.10,000/- levied by Ld.AO thereby totally ignoring the facts the case submitted during appellate proceedings.
The only issue raised by the assessee is that the learned CIT (A) erred in 13. confirming the penalty of Rs.10,000 under section 271(1)(b) of the Act for non- compliance of the notice issued by the AO during the assessment proceedings.
At the outset, it is pertinent to note that we have observed in the appeal of the assessee bearing ITA No. 173/RJT/2019 that the deceased is not liable to tax on the capital gain in dispute subject to the verification by the AO. In the event, the assessee succeeds before the AO then, the entire assessment shall become the null and void. Thus in such a situation in our considered view there cannot be any penalty under section 271(1)(b) of the Act on account of non-compliance of notice.
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 6 - Moreover, the learned AR before us also submitted that the notice under section 148 of the Act was issued upon the deceased person. If that be so, the notice in itself under section 148 of the Act is invalid. Thus any non-compliance of the notice issued by the AO will not attract the penalty provision as specified under section 271(1)(b) of the Act. The learned DR at the time of hearing has not brought anything on record contrary to the arguments advanced by the learned AR for the assessee. Hence the ground of appeal of the assessee is allowed.
In the result, the appeal of the assesee is allowed.
Coming to the ITA No. 177/RJT/2019 fo A.Y. 2011-12, an appeal by the assessee.
The assessee has raised the following grounds of appeal: Learned CIT9A) has erred in law as well as on facts in confirming penalty of Rs.5,000/- levied by Ld.AO thereby totally ignoring facts of the case submitted during appellate proceedings.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming the penalty of Rs.5,000 under section 271F of the Act for not filing the income tax return in response to the notice issued under section 148 of the Act.
At the outset, it is pertinent to note that we have observed in the appeal of the assessee bearing ITA No. 173/RJT/2019 for A.Y. 2011-12 that the deceased is not liable to tax on the capital gain in dispute subject to the verification by the AO. In the event, the assessee succeeds before the AO then, the entire assessment shall become the null and void. Thus in such a situation in our considered view there cannot be any penalty under section 271F of the Act on account of non- compliance of notice issued for the filing of income tax return.
ITA Nos.173 to 177/Rjt/2019 A.Y.2011-12 - 7 - 18. Moreover, the learned AR before us also submitted that the notice under section 148 of the Act was issued upon the deceased person. If that be so, the notice in itself under section 148 of the Act is invalid. Thus any non-compliance of the notice issued by the AO will not attract the penalty provision as specified under section 271(1)(b) of the Act. The learned DR at the time of hearing has not brought anything on record contrary to the arguments advanced by the learned AR for the assessee. Hence the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
In the combined results, the appeal of the assessee bearing no.173/Rjt/2019 is allowed for statistical purpose and appeal bearing no.174/Rjt/2019 is dismissed whereas the appeals bearing nos. 175 to 177/Rjt/2019 are allowed.
This Order pronounced in Open Court on 28/02/2020
-Sd- -Sd- (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot, Dated 28/02/2020 manish