INCOME TAX OFFICER, JAIPUR vs. SHRI SHARWAN LAL MEENA, JAIPUR

PER VIJAY PAL RAO, JM :

This appeal by the revenue is directed against the order dated 14th December,

2017 of ld. CIT (A)-3, Jaipur arising from penalty order passed under section

271(1)(c) of the I.T Act for the assessment year 2006-07. None has appeared on

behalf of the assessee despite repeated notices issued, therefore, we propose to

hear and dispose off this appeal ex parte. The revenue has raised the following

grounds :-

(1) On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in deleting the complete penalty levied u/s 271(1)(c) of Rs. 11,90,750/- on legal heir of the deceased assessee instead of on pro rata basis.

(2) On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in deleting the penalty u/s 271(1)(c) levied on

2 ITA No. 320/JP/2018 Shri Shrawan Lal Meena, Jaipur.

legal representative u/s 159(2)(b) r.w.s. 161(1) even though penalty is a civil liability.

(3) The appellant craves leave to add, alter, amend, withdraw or insert any ground or grounds of appeal before or at the time of hearing is a civil liability.

1,75,37,564/- which was considered at a consideration of Rs. 1,77,41,000/-. The

assessee claimed deduction under section 54B and 54F which were disallowed by

the AO. Consequently, the AO initiated the penalty proceedings in respect of the

addition of capital gain due to disallowance of claim of deduction under section 54B and 54F of the Act and levied the penalty of Rs. 34,49,250/- vide order dated 18th

March, 2016. The assessee challenged the action of the AO before the ld. CIT (A).

The ld. CIT (A) deleted the penalty imposed by the AO under section 271(1)(c) on

the ground that the claim of benefit under section 54B and 54F disallowed on

technical reasons will not amount to furnishing of inaccurate particulars of income or

concealment of particulars of income.

allowed the claim of the assessee under section 54F of the Act. However, the claim

under section 54B was turned down by the Tribunal by following the decision of

Hon’ble Jurisdictional High Court in the case of Shri Kalya vs. CIT in DB IT Appeal

No. 112/2012. We further note that in a subsequent decision the Hon’ble

Jurisdictional High Court has decided the issue of deduction under section 54B in the

3 ITA No. 320/JP/2018 Shri Shrawan Lal Meena, Jaipur.

case of Shri Laxmi Narayan & Others vs. CIT, 402 ITR 117 (Raj.) in para 7 to 7.3 as

under :-

“ 7. On the first issue of sec. 263 in view of the decision of Malabar Industrial company Ltd. (supra) Sec. 263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give any right u/s 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department. 7.2. On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest it is not specified that it is to be in the name of assessee. 7.3. It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and, therefore, it will be considered a part of investment in the land and same is required to be accepted.”

The Hon’ble High Court has considered all the decisions on the point including the

decision in the case of Kalya vs. CIT (supra). Therefore, in view of the latest

4 ITA No. 320/JP/2018 Shri Shrawan Lal Meena, Jaipur.

decision of Hon’ble Jurisdictional High Court, we find that the claim of the assessee

under section 54B was a bonafide claim and disallowance of the same by the AO on

the ground that the land in question was purchased by the assessee in the name of

wife will not amount to concealment of income or furnishing of inaccurate particulars

of income.

3.1 As regards the disallowance under section 54F, when the claim of the

assessee was already allowed by the Tribunal in the quantum appeal, therefore, the

basis of levy of penalty itself was no more in existence. Accordingly, in view of the

above discussion, we do not find any error or illegality in the order of ld. CIT (A).

Order is pronounced in the open court on 06/06/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 06/06/2018. Das/

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

5 ITA No. 320/JP/2018 Shri Shrawan Lal Meena, Jaipur.