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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER VIKAS AWASTHY, JM
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-7, Pune dated 04.02.2016 for the assessment year 2009-10, confirming levy of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
2 ITA No.1271/PUN/2016 A.Y.2009-10
The notice of appeal was sent to the assessee on 22.02.2018 through
RPAD for 27.03.2018. The notice was duly served upon the assessee as is
evident from acknowledgement available on file. Despite service of notice,
neither the assessee nor any Authorized Representative of assessee has put in
appearance. Since notice of appeal has been duly served, we are taking up this
appeal for hearing with the assistance of ld. DR and on the basis of material
available on record.
The brief facts of the case as emanating from records are: The assessee
filed return of income for the impugned assessment year on 25.07.2009
declaring total income of Rs.13,54,320/-. The case of assessee was selected for
scrutiny. Accordingly, statutory notice u/s.143(2) was issued to the assessee on
20.08.2010. In the course of scrutiny assessment proceedings, the Assessing
Officer observed that the assessee has claimed exemption u/s.54B, 54F and
54EC of the Act on capital gains arising from sale of land at Baramati. During
assessment proceedings, the assessee withdrew his claim of exemption of
Rs.5,22,000/- u/s.54B of the Act. As regards assessee’s claim of exemption
u/s.54F Rs.5,77,454/- for investment in house, the Assessing Officer
disallowed the claim in toto in absence of any cogent evidence. The claim of
exemption u/s.54EC Rs.100,00,000/- investment in REC Bonds, was restricted
to Rs. 50,00,000/- by the Assessing Officer. Penalty proceedings u/s.271(1)(c) of
the Act were also initiated for furnishing inaccurate particulars of income. The
Assessing Officer vide order dated 26.03.2014 levied penalty of Rs.13,82,140/-
u/s.271(1)(c) of the Act for furnishing inaccurate particulars of income.
Aggrieved by levy of penalty u/s.271(1)(c), the assessee filed appeal before
the Commissioner of Income tax (Appeals). The Commissioner of Income Tax
(Appeals) deleted the penalty in respect of assessee’s claim of exemption u/s.
3 ITA No.1271/PUN/2016 A.Y.2009-10
54EC. However, penalty in respect of claim of exemption u/s. 54B and 54F were
upheld against which, the assessee is in appeal before the Tribunal.
Dr.Vivek Aggarwal representing the Department vehemently supported
the findings of Commissioner of Income Tax (Appeals) and prayed for dismissing
the appeal of assessee.
We have heard the submissions made by the ld. DR and have perused the
orders of Authorities below. Penalty proceedings were initiated u/s.271(1)(c) of
the Act by the Assessing Officer on account of assessee’s wrong claim of
exemptions viz.
(i) exemption u/s.54B Rs.5,22,000/- for purchase of agricultural land,
(ii) exemption u/s.54F Rs.5,77,454/-for purchase of house and
(iii) exemption u/s.54EC Rs.50,00,000/- on account of investment in REC
Bonds.
Since the penalty in respect of exemption u/s.54EC has been deleted by
the Commissioner of Income Tax(Appeals), the assessee in appeal has assailed
confirming levy of penalty u/s.271(1)(c) Rs.2,49,136/- on the remaining two
disallowance. The Commissioner of Income Tax (Appeals) has confirmed the levy
of penalty by observing as under:
“7.6 I have carefully considered the facts of the case & law apparent from records. The appellant has stated that, she has purchased some properties. The evidence in respect of such properties have never been furnished before the AO either in assessment proceedings or during the penalty proceedings. On what basis this figures of Rs.5,22,000/- u/s 54B and Rs.5,77,454/-u/s 54F has been taken by the appellant has not been explained. The mistake there could be inadvertent mistake as decided by the Apex court in the case of Price Water (decision to) In the ease of appellant what is mistake and what is the basis of mistake is not known. How inadvertent mistake has occurred has not been explained by the assessee. The claim could be right or wrong. In case the claim is right it is to be allowed and in case the claim is wrong it has to be disallowed. In this case what is wrong claim has not been explained by the appellant. The very foundation of the mistake has
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not been explained by showing that what is the property whose value is of amount mentioned above. Once such things is shown to the assessing officer then only it could be said that there was a genuine claim of the exemption on mistaken belief. In other words, the very basis of formation of belief by the appellant has not been explained. Had it been explained by cogent evidence on the basis of which appellant claim exemption in the original return of the income then such claim could have been examined whether it is right or wrong. If wrong claim is withdrawn before detection of the assessing officer then also it could be said that there is bona-fide mistake.”
We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in confirming of levy of penalty in respect of disallowance of exemption u/s.54B and 54F of the Act. Accordingly, the impugned order is upheld and appeal of the assessee is dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced on Wednesday, the 28th day of March, 2018
Sd/- Sd/- (डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी /VIKAS AWASTHY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 28th March, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeals)-7, Pune. 4. The CIT-7, Pune. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6. / / True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.