ITO (IT) 4(2)(1), MUMBAI vs. BALJI V. SWAMINATHAN, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that penalty under section 271(1)(c) is not leviable when the Assessing Officer merely changes the head of income, as there was no concealment or furnishing of inaccurate particulars by the assessee.
What were the facts?
The assessee declared income and later revised it. During assessment, the Assessing Officer reclassified long-term capital gains as short-term capital gains, leading to a penalty imposition.
What were the issues?
Whether penalty under section 271(1)(c) is exigible when the Assessing Officer reclassifies capital gains from long-term to short-term, without disputing the transfer of assets or disclosure of material facts.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Joginder Singh, & Shri Rajesh Kumar
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 27/02/2015 of Ld. Commissioner of Income Tax, Mumbai deleting penalty under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act) amounting to Rs.31,83,770/- without appreciating that prior to date of registration only a small fraction of small cost was paid by the assessee as advance, thus having no registration right/ownership in the property, prior to registration. 2. During hearing the learned D.R., Shri Kailash Kanojiya advanced arguments which are identical to the ground raised. Whereas none was present for the assessee in spite of issuance of registered AD notice. The assessee neither presented himself nor moved any adjournment petition. It seems that the assessee has nothing to say. Therefore, we have no option but to proceed ex-parte, qua the assessee and tend to dispose of this appeal on the basis of material available on record. 2.1 We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee declared income of Rs.3,58,89,646/- in his return filed on 31.07.2009. During assessment proceedings the assessee filed revised computation of income, wherein he declared income of Rs.2,54,98,285/-. The assessment was completed at a total income of Rs.3,23,61,660/- under section 143(3) of the Act wherein the long term capital gain, returned by the assessee, was considered as short term capital gain, amounting to Rs.3,17,31,060/-. Consequent to this assessment penalty of Rs.31,38,770/- was imposed. 2.2 On appeal before the learned CIT(A), considering the submissions of the assessee and various decisions including the decision from Hon'ble Apex Court in CIT vs. Reliance Petroproducts (2010) 230 CTR (SC) 320, and various other decisions, the penalty was deleted. The Revenue is aggrieved and is in appeal before the Tribunal. 2.3 Under the facts, available on record, question arises whether the penalty was rightly imposed which was due to change of heads of income. The Assessing Officer assessed the capital gain, which arose on account of transfer of capital assets, as short term capital gain, in place of long term capital gain returned by the assessee. It is noted that the learned Assessing Officer has nowhere disputed the transfer of capital assets. It is also a fact that the material facts with respect to transfer of capital asset were duly disclosed by the assessee in his return of income by categorically claiming long term capital gains. Thus neither there is concealment of income nor furnishing of inaccurate particulars of income. The assessee also fortified by the decision from Hon'ble Apex Court in CIT vs. Reliance Petroproducts Ltd. (supra). Penalty under section 271(1)(c) of the Act can be imposed in a situation where the assessee either furnished inaccurate particulars or concealed its income. In the present sets of facts even the Assessing Officer, as mentioned earlier, changed the head of income from long term capital gain to short term capital gain. In such a situation it can be concluded that at least penalty is not leviable under section 271(1)(c) of the Act, thus we find no infirmity in the conclusion drawn by the learned CIT(A). It is affirmed, resultantly, the appeal of the Revenue is dismissed. This order was pronounced in the open court in the presence of Ld. Representative from both sides at the conclusion of the hearing on 18/07/2016. Sd/- Sd/- (Rajesh Kumar) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 20/07/2016 ÇAÑA P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT (IT), Mumbai. 4. आयकर आयु�त / CIT(A)-55, Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.
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