GURMEET SINGH,PUNJAB vs. ITO, WARD-2(2), ROPAR, PUNJAB
आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH, ‘SMC’, CHANDIGARH
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER
आयकर अपील सं./ ITA No. 713/CHD/2025
Ǔनधा[रण वष[ / Assessment Year : 2010-11
Gurmeet Singh,
939, Type II,
Nuhon Colony Ghanauli,
Rupnagar 140113
बनाम
Vs.
ITO,
Ward 2(2),
Ropar
èथायी लेखा सं./PAN NO: AGEPS7897P
अपीलाथȸ/Appellant
Ĥ×यथȸ/Respondent
( Virtual Hearing )
Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri. Parikshit Aggarwal,CA
राजèव कȧ ओर से/ Revenue by : Smt. Surinder Kaur Waraich, Addl. CIT,
Sr. DR
सुनवाई कȧ तारȣख/Date of Hearing
:
27-08-2025
उदघोषणा कȧ तारȣख/Date of Pronouncement
:
27-08-2025
आदेश/Order
This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), National
Faceless Appeal Centre, Delhi, dated 22.07.2024, for the assessment year 2010-11. 2. The facts in brief are that the assessee filed his return of income declaring total income of ₹3,36,320/-.
During reassessment proceedings u/s 147 r.w.s. 263 of the Act, it was 2
noticed that the assessee had received gifts aggregating to ₹11,15,000/-. Out of these, amounts of ₹1,00,000/- each were received from three cousins, namely, Shri Baldev Singh, Shri
Jaswinder Singh and Shri Nirmal Singh. The Assessing Officer treated the sum of ₹3,00,000/- as taxable income under the head “Income from other sources,” on the ground that cousins do not fall within the definition of “relative” as provided in section 56(2)(vii) of the Act. The penalty proceedings u/s 271(1)(c) were thereafter initiated and penalty of ₹97,743/- was levied on the assessee
3. In appeal, the Ld. CIT(A) confirmed the action of the Assessing Officer, holding that the assessee had furnished inaccurate particulars of income by claiming gifts from cousins as exempt, though such persons are not covered in the statutory definition of “relative” under section 56. 4. Before me, the Ld. Authorised Representative for the assessee submitted that the assessee is an agriculturist of old age, having limited knowledge of the Income-tax law. He received financial assistance from his cousins for the bona fide purpose of sending his son abroad. Under a genuine but mistaken belief, he considered his cousins to be covered within the scope of “relative” and did not include such receipts as taxable income. It was thus pleaded that the lapse, if any, was purely unintentional, without any element of concealment or furnishing of inaccurate particulars.
5. Per contra, Ld. DR relied on the orders of the lower authorities and submitted that the Assessee could not produce any evidence to substantiate his claim and, thus, was unable to controvert the penalty order.
6. I have considered the rival contentions and perused the record. There is no dispute that the gifts in question were received from cousins and that such relations do not fall in the definition of “relative” as envisaged under section 56(2)(vii) of the Act. However, the surrounding circumstances show that the assessee, being an agriculturist with limited exposure to legal provisions, acted under a bona fide and mistaken impression. The financial support from cousins was a matter of family arrangement, and the assessee disclosed the transactions in the assessment proceedings by filing affidavits and identity documents of the donors. This shows that there was no attempt to conceal facts.
The Hon’ble Supreme Court in various decisions has held that penalty u/s 271(1)(c) cannot be levied where there is a bona fide and inadvertent mistake and the assessee has disclosed primary facts. Applying this settled principle, the assessee’s case falls within the ambit of bona fide and unintentional error. The imposition of penalty in such facts is unjustified. 8. Accordingly, I hold that the assessee cannot be fastened with penal liability for a mere wrong claim arising out of ignorance of technical definition of “relative.” The penalty of ₹97,743/- levied u/s 271(1)(c) is directed to be deleted. 9. In the result, the appeal of the assessee is allowed. Order pronounced on 27.08.2025. ( LALIET KUMAR )
Judicial Member
“आर.के.”
आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to :
1. अपीलाथȸ/ The Appellant
2. Ĥ×यथȸ/ The Respondent
3. आयकर आयुÈत/ CIT
4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH
5. गाड[ फाईल/ Guard File
सहायक पंजीकार/