SMT. KAVITA SACHDEV,INDORE vs. ITO-3(4), INDORE, INDORE

आदेश/O R D E R

Per Vijay Pal Rao, JM:

This appeal by the assessee is directed against the order dated 28th November, 2022, of Ld. CIT(A) arising from penalty order u/s 271(1)(c) of the Income-tax Act, 1961, for assessment year 2011-12.

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12

impugned order of the Ld. CIT(A). The Ld. Authorized Representative of the

assessee has referred to the medical record of the assessee running into 216 pages

and submitted that the assessee was suffering from various medical ailments and

was confined to bed-rest and, therefore, the assessee could not file the appeal

within a period of limitation. He has, thus, pleaded that the delay in filing the

appeal is neither intentional nor willful, but due to circumstances, which were

beyond control of the assessee and, therefore the same may be condoned.

objected to the condonation of delay by considering the reasons as medical

problems of the assessee.

record. The assessee in the application as well as supporting affidavit has explained

reasons for delay as suffering from various diseases and serious ailments. The

summary of the medical ailments and hospitalization is given in para 4 of the

affidavit as under :-

“4. I affirm that during the year 2022, I endured hospitalizations for various ailments as outlined below :

S.No. Reasons for admission (as Date of Date of Name of per discharge summary ) Admission Discharge Hospital

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12

We further note that the assessee has supported the reasons with medical record

showing that the assessee was undergoing treatment of various ailments and was

advised complete rest and in isolation for a period of about 6 months. Therefore,

having considered the reasons explained by the assessee that she was suffering

from various ailments and undergoing treatment, we are satisfied that the assessee

was having sufficient cause for not filing the appeal within the period of limitation

and accordingly the delay of 165 days in filing the present appeal, is condoned.

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding, the penalty order which is bad in law, unjustified, illegal, void ab-initio.

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12 6. In the case of the assessee, the assessment u/ 143(3) read with Section 147

was completed on 21st December, 2018, at a total income of Rs. 12,00,400/-. The

AO noted that the assessee did not file original return of income for the year under

consideration and as per the information the assessee sold the immovable property

with nine other co-owners for a consideration of Rs. 1,13,94,700/-. The AO issued

notice u/s 148 on 31st March, 2018. In reply, the assessee filed her return of

income declaring total income of Rs. 12,00,400/- from long term capital gain

interest and other sources. The AO also initiated the penalty proceedings u/s

271(1)(c) and levied a penalty equivalent to 100 % of the tax sought to be evaded,

amounting to Rs. 2,10,000/-. The assessee challenged the action of the AO before

the Ld. CIT(A) and explained that the assessee paid self-assessment tax of Rs.

2,02,083/- on 29.07.2011 and thereafter a further self-assessment tax of Rs.

8,310/- was also deposited on 19.06.2017. Thus, the assessee pleaded that when

the assessee had already paid self-assessment tax and there was no outstanding

demand u/s 156 of the Income-tax Act, 1961, then penalty levied u/s 271(1)(c) of

the Act is not valid/justified and the same be deleted. The Ld. CIT(A) did not accept

the contention of the assessee and confirmed the penalty le vied by the AO while

passing the impugned order.

submitted that the assessee diligently and voluntarily computed and paid self

assessment tax of Rs. 2,16,470/- through challan dated 29.07.2011. However, due

to the medical conditions and various ailments, the assessee is able to trace the

return of income. Even in response to notice u/s 148, the assessee filed the return

of income and declared the income of Rs. 12,00,400/-, which was accepted by the

AO while passing the order u/s 147 read with Section 143(3) of the Act. There is no

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12 addition made by the AO in the assessment framed u/s 147 read with section

143(3). Further, as per Explanation 4(c), when the assessee has already paid self-

assessment tax and nothing was outstanding, then penalty u/s 271(1)(c) is not

leviable. He has referred to the computation of income and penalty by the AO as

well as the demand u/s 156 and submitted that the AO has accepted the self-

assessment tax paid by the assessee, seven years prior to the notice issued u/s

148, then the amount of penalty ought to have been calculated, as per the formula

provided in clause (c) of Explanation 4 to Section 271(1)(c) of the Act. In the case of

the assessee, if the self-assessment tax paid prior to notice issued u/s 148 is taken

into consideration then there is no amount remains as tax sought to be evaded and

consequently, no penalty is leviable u/s 271(1)(c) of the Income-tax Act, 1961. The

Ld. Authorized Representative of the assessee has further submitted that the

assessee has paid self-assessment tax voluntarily much prior to the notice issued

u/s 148 and, therefore, there is no concealment of income or furnishing of

inaccurate particulars of income on the part of the assessee. Further, the return of

income filed by the assessee was accepted by the AO on which the self-assessment

tax was paid, seven years prior to the notice issued u/s 148. Hence, the penalty

levied by the AO, u/s 271(1)(c) is not justified and is liable to be deleted. In support

of his contention, he has relied upon the following decisions:-

(i) CIT vs. Pushpendra Surana, (2014) 264 CTR 204 (Raj).

(ii) CIT vs. Suresh Chandra Mittal, 241 ITR 124 (MP)

(iii) CIT vs. Gujarat State Electricity Corporation Ltd., 144 taxmann.com 165.

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12 8. On the other hand, the Ld. Departmental Representative had relied upon

the orders of the authorities below and submitted that the assessee did not file the

return of income u/s 139(1) of the Income-tax Act, 1961, but the return was filed

after issue of notice u/s 148. Therefore, the income declared by the assessee is not

voluntary, but in response to the notice u/s 148 of the Income-tax Act, 1961.

placed on record. Though the assessee did not file a valid return u/s 139, however,

the self-assessment tax was paid by the assessee of Rs. 2,16,470/- vide challan

dated 29.07.2011, placed at page no.17 of the paper book. Thereafter, the assessee

has paid tax of Rs. 8,310/- vide challan dated 19.06.2017. The AO has

acknowledged the self-assessment tax paid by the assessee in computation of

income and calculation of tax of Rs. 2,16,470/-, which is placed at page no. 8 of

the paper book. This fact is also reflected in Form No. 26AS placed at page no.18 of

the paper book. Therefore, there is no dispute that the assessee paid self-

assessment tax amounting to Rs. 2,16,470/- prior to the notice issued u/s 148

and, therefore, as per Explanation 4 to Section 271(1)(c), the amount of tax sought

to be evaded shall be determined in accordance with the formula provided in clause

(a) to (c) of the said Explanation. For ready reference, clause (c) of Explanation 4 to

Section 271(1)(c) of the Act are reproduced as under :-

“(c) where in any case to which Explanation 3 applies, the amount of

tax sought to be evaded shall be the tax on the total income

assessed as reduced by the amount of advance tax, tax

deducted at source, tax collected at source and self-assessment

tax paid before the issue of notice under section 148.”

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12

into consideration the amount of tax on the total income assessed as reduced by

the amount of advance tax, tax deducted at source, tax collected at source and self-

assessment tax paid before the issue of notice u/s 148. The case of the assessee is

covered by this clause (c) of Explanation 4 to Section 271(1)(c) and, hence, when

the AO has determined the total tax on the income assessed at Rs. 2,08,142/-

whereas the self-assessment tax paid by the assessee before the notice u/s 148

was issued is Rs.2,16,470/-, then balance would be nil and ,consequently, there

would be nil amount of tax sought to be evaded for the purpose of levy of penalty

u/s 271(1)(c) of the Income-tax Act, 1961. Accordingly, when the amount of tax to

be evaded is nil in the case of the assessee, then question of levy of levy of penalty

u/s 271(1)(c) does not arise and hence, the penalty levied by the AO u/s 271(1)(c)

,of Rs. 2,10,000/- is not justified and the same is deleted. Though the Ld.

Authorized Representative of the assessee has advanced various contentions

against the levy of penalty, however, the penalty found to be not justified and liable

to be deleted, on the ground of no amount of tax sought to be evaded, then other

pleas raised by the Ld. Authorized Representative of the assessee becomes

academic in nature and we do not propose to decide each and every argument

advanced by the assessee .

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Smt. Kavita Sachdev, Indore ITA No.255/Ind/2023 Assessment year 2011-12

Order pronounced in the open court on 16.05.2024.

Sd/- sd/- (B.M.BIYANI) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore िदनांक/Dated : 16.05.2024 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY

Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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