TEJAS GHANSHYAMBHAI PATEL,AHMEDABAD vs. THE ITO, WARD-5(3)(1), AHMEDABAD

Aggrieved against the Penalty order, assessee filed before Ld. CIT(A) which has been confirmed. Against which assessee is in appeal before us raising the following Grounds of Appeal:

1. That on facts, and in law, the learned CIT (A) has grievously erred in confirming the levy of penalty of Rs.1,70,414/- u/s. 271(1) (c) of the Act.

2. That on facts, in law, and on evidence on record, it ought to have been held that there is neither concealment of income inaccurate particulars nor furnishing of income within the meaning of section 271(1) (c) of the Act.

3. The appellant craves liberty to add, alter, amend any ground of appeal.

5. Ld. Counsel for the assessee submitted that belated Return of Income cannot deny deduction u/s. 54F of the Act as held by the A.Y. 2016-17 Page No 3 Tejas Ghanshyanbhai Patel vs. ITO Co-ordinate Bench of this Tribunal in the case of Shri Jignesh Jaysukhlal Ghiya Vs. DCIT in dated 07-08- 2024. Thus Ld. Counsel pleaded that there is no concealment of income in claiming the deduction u/s. 54EC and u/s. 54F by the assessee and penalty imposed by the Lower Authorities are liable to be deleted.

6. Per contra, Ld. Sr. D.R. appearing for the Revenue supported the order passed by the Lower Authorities and requested to confirm the penalty levied by the Assessing Officer for concealment of income.

7. We have given our thoughtful consideration and perused the materials available on record. In fact the Ld. CIT(A) in the quantum appeal set aside the assessment with the direction to the A.O. to allow the claim of investment/deposit done on or before 31-07- 2016 and proportionately allow the claim of deduction u/s. 54F and u/s. 54EC by observing as follows: “I have carefully gone through the case laws (supra) and feel that the appellate authorities have full power to entertain the claim which is valid in law and which was not made before the AO as per ratio laid down by Hon'ble Bombay High Court's decision in the case of Pruthvi Brokers and Shareholders 349 ITR 336. The head note of the above judgment is reproduced hereunder for the sake of clarity- "Section 251, read with section 254, of the Income-tax Act, 1961- Commissioner (Appeals) - Powers of -Assessment year 2004-05 - Whether on assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it Held, yes Assessee-company claimed deduction under section 438 in respect of payment of SEBI fees of Rs. 20 lakhs paid - Subsequently assessee, in course of assessment proceedings before Assessing Officer, made a fresh claim for deduction of Rs. 40 lakhs stating that it had made another payment of SEBI fees of Rs. 40 lakhs A.Y. 2016-17 Page No 4 Tejas Ghanshyanbhai Patel vs. ITO on 9.5-2003 which pertained to provisions made for financial year 2001-02 and should be allowed on payment basis Bath appellate authorities had themselves considered additional claim and allowed it-Both orders expressly directed Assessing Officer to allow deduction of Rs. 40 lakhs under section 438 Whether since error in not claiming deduction in return of income was inadvertent and without any malafide intention as there was nothing on record that militated against sold finding, impugned additional claim of assessee was to be allowed-Held, yes in favour of assessee]" The facts of the case of the appellant are similar to the one decided by the honourable High Court of Bombay. Reliance is also placed on the decision of Jurisdictional High Court in the case of Shree Rama Multi Tech Ltd (2013) 35 taxmann.com 513 (Gujarat) wherein the similar issue was involved and the claim made before the CIT(A) was entertained. Similar view has also been taken by the Jurisdictional Gujarat High Court in its unreported decision in CIT v. Arvind Mills Ltd. [TAX APPEAL/1407/2011-ORDER DATED 05/07/2012]. The attention of the court was also invited to the decision of the Supreme Court in Goetze (India) Ltd. v. CIT (284 ITR 323). It has been held by the honourable High Court that the decision of honourable Supreme Court was not a bar on the power of the first Appellate Authority to allow a legitimate claim of the assessee even if he had not filed a revised return for making that claim. It is emphasized that it is not the case wherein all investment into new property/capital gain account/REC Bond has been done beyond stipulated timeframe. In fact, largely it is within the stipulated time in the case of this individual assessed wherein the management of accounts can be unorganized. In this backdrop, the justice is being dispensed in order to reduce avoidable litigation burden on judicial apparatus. As per documentary evidence such as copy of bank account and registration of sale deed on record, the appellant has largely complied with the spirit of the provisions under section 54F/54EC. However, the AO is directed to allow the claim of Investment/deposit done on or before 31/07/2016 and proportionately allow the claim of the appellant u/s 54F and 54EC. In other words any investment/deposit done after 31/07/2016 shall result into the disallowance on proportionate basis. The ground no.1 is partly allowed.” 7.1. However Ld. CIT(A) on the ground raised by the assessee namely initiation of penalty proceedings u/s. 271(1)(c) dismissed the same as it is consequential in nature, since no prejudice is caused to the interest of the Assessee at this juncture. In the penalty proceedings, the assessee failed to participate in spite of A.Y. 2016-17 Page No 5. Tejas Ghanshyanbhai Patel vs. ITO notice by Speed Post which has resulted in levying minimum penalty of Rs. 1,70,414/- for concealing the income.

8. Aggrieved against the penalty order, assessee filed appeal before Ld. CIT(A) who was confirmed the levy of penalty for concealing the income and dismissed the appeal. As extracted in the quantum appeal, Ld. CIT(A) proportionately allowed the deduction u/s. 54F and u/s. 54EC of the Act. Thus there is no concealment of income by the assessee. This was not properly brought out in the exparte penalty proceedings by the assessee and also before Ld. CIT((A).

9. Co-ordinate Bench of this Tribunal in the case of Shri Jignesh Jaysukhlal Ghiya (cited supra) held that when assessee furnishes Return of Income subsequent to the due date of filing u/s. 139(1) but within the extended time limit u/s. 139(4) of the Act, the benefit of investment made up to the date of furnishing of Return of Income cannot be denied. Thus in our considered view, there is no concealment of income by the assessee in filing the belated return. Thus the levy of penalty u/s. 271(1)(c) is liable to be deleted.

Order pronounced in the open court on 04-06-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 04/06/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee A.Y. 2016-17 Page No 6 Tejas Ghanshyanbhai Patel vs. ITO