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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal by the department against the order of the Commissioner of Income Tax(Appeals)-XXI, Ahmedabad, dated 02/05/2013 for the Assessment Year (AY) 2009-10, on the following Grounds: The ld. CIT(A) has erred in law and on facts in deleting the i. penalty u/s.271(1)(c) of the Act. ii. The ld. CIT(A) erred in law in admitting additional evidences (affidavit) in violation of Rule 46A and further erred in relying on the same in arriving at the finding of “bonafide mistake”.
ITA No.2022/Ahd/2013 ITO vs. Anilkumar Kanaiyalal Patel Asst.Year –2009-10 - 2 - iii. The ld.CIT (A) erred in arriving at factual finding of “bonafide mistake” when the facts on record including show-cause notice of the AO indicate malafides and clear intent to evade substantial tax. 2. The relevant facts as culled out from the materials on record are as under:- In this case, assessee is a salaried person and working as a teacher. On perusal of the details filed by the assessee it noticed that the assessee with three person sold agricultural land situated at Charodi Village Dist. Ahmedabad. This agricultural land was sale on 24/09/2008. The total Sale value was Rs.5,39,00,000/-. The assessee's share on the sale consideration is Rs.1,34,75,000/-. During the course of assessment proceeding, the assessee was requested to explain the sale consideration with taxes paid thereon. The assessee stated that it was an agricultural land and it did not come under the purview of income. The assessee was appraised with fact that such land is situated within 8 Kms. From the urban area and hence, transaction attract provision of section 45 i.e. capital Gain. A Show-cause notice was issued to the assessee. In this regard, the assessee in response submitted his detailed reply on 07/12/2011, which is reproduce here as under: “During the year under review assessee has not purchased any immovable property. However land held as co-owner with other three person and situated at Chharodi, Taluka Daskroi was sold for Rs.5,39,00,000/-. The assessee is having 1/4th Share in the sales made. We are enclosing herewith copy of documents of purchase of land, sale of land, copy of 7/12 showing revenue record and proof agricultural activities, copy of Form 8A showing revenue record and proof of agricultural land ownership as Annexure-2. The assessee had sold land the land Agriculture land located at village Chharodi, Ta. Daskroi which was bought as 25% Co-owner during December -2004. This
ITA No.2022/Ahd/2013 ITO vs. Anilkumar Kanaiyalal Patel Asst.Year –2009-10 - 3 - Agricultural Land is sold on 25-09-2008 for 5.39 crores and assessee's share in sales consideration is Rs.1,34,75,000/- being computed @25%. The assessee filed his return through accountant, who was having knowledge that the transaction under question is exempt because the land sold is agricultural land and same is situated beyond 8 Km. limit from Municipal Corporation. The assessee is a teacher in private school and is not conversant with the IT Laws. Due to above referred reasons the long term capital gain income amounting to Rs.1,32,22,199/- could not be offered or taxation. There was no malafide intention in not declaring income but for the reasons explanation herein above. The above referred facts were explained to the assessee by the chartered accountant who was consulted after getting the letter from IT Department. The CA explained the provisions of the Act and after getting the clarification the assessee hereby suo moto offers the long term income amounting to Rs.1,32,22,199/- agreeing to file the revised statement of income and paying the tax and interest thereon, The assessee through this letter pleads that he is a school teacher in a private school and does not have any knowledge about IT laws. For buying peace of mind and avoiding undue litigation, the assessee voluntary agree to pay the tax with a humble request that no penalty be levied under section 271 (1)(C), The assessee making arrangement for fund for making the payment of tax. The copy of computation showing Long Term Capital Gain and the proposed and arrived tax liability of Rs.43,07,860/-. Which the assessee agree to pay is enclose as Annexure-3.” But ld. AO was not agree with the contention of the assessee and made an addition of Rs.1,32,22,199/-. Penal proceeding under u/s.271(1)(c) were separately initiated.
2.2 In order penalty was levied by the ld. ITO u/s.271(1)(c) of the I.T. Act.
ITA No.2022/Ahd/2013 ITO vs. Anilkumar Kanaiyalal Patel Asst.Year –2009-10 - 4 - 3. Against the said order assessee preferred first statutory appeal before the ld. CIT(A) who partly allowed the appeal of the assessee.
Now appeal is before us.
We have gone through the relevant record and impugned order. Ld.AR cited an order of our own Bench in ITA No.667/Ahd/2014 for asst. year 2009-10. In which, one of the co-owner of the same property, penalty was deleted with following observation: “The undisputed fact is that the property sold by the assessee along with three other persons was agricultural land situate at village Chhoradi. The assessee was under a bona fide belief that any gains arising out of the said agricultural land is exempt from tax. It is equally true that when the AO pointed out the agricultural land lies within the municipal corporation limit and is liable for capital gains tax. The assessee immediately agreed for capital gains tax liability. Not only the assessee but also all the co-owner; their respective return of income accepted the capital gains tax liability. Therefore, the bona fide of the assessee cannot be doubted. In our considered opinion, the levy of penalty on the given facts is not justifiable and the First Appellate Authority has rightfully deleted the penalty and therefore, no interference is called for.” 5.2 Ld. AR also cited an another order in ITA No.1975/Ahd/2014 for asst. year 2009-10. In this case, it was held as under: “When the matter was agitated before the ld.CIT(A). It was brought to the notice of the ld.CIT(A) that in the case of the co-owner of the impugned land, the penalty levied by the A.O. has been deleted. After considering the facts and the submissions, the First Appellate Authority observed as under:- “6.3 Thus, on consideration of entire facts, affidavit filed by appellant, order of CIT(A) in case of one of the co-partners, decision of I.T.A.T. referred supra and also the order of Shri Bharatbhai B. Patel, one of the co-owner decided by me in
ITA No.2022/Ahd/2013 ITO vs. Anilkumar Kanaiyalal Patel Asst.Year –2009-10 - 5 - appeal No. CIT(A)/GNR/41/2012-13 dated 24/12/2013, it is held that appellant has not willfully concealed any particulars of income but had bonafide belief that land is agricultural land and beyond 8 kms away from Municipal limits. Thus, the case law relied upon is squarely applicable to the facts of the appellant's case. Therefore, penalty of Rs.29,68,908/- levied by AO u/s.271(1)(c) of the Act on addition of capital gain arising out sale of agricultural land is hereby directed to be deleted.”
We find that the said order of the First Appellate Authority has been confirmed by the Tribunal in ITA No.667/Ahd/2014 vide order dated 16/06/2017. The relevant findings of the Tribunal reads as under:- “9. The undisputed fact is that the property sold by the assessee along with three other persons was agricultural land situate at village Chhoradi. The assessee was under a bona fide belief that any gains arising out of the said agricultural land is exempt from tax. It is equally true that when the A.O. pointed out the agricultural land lies within the municipal corporation limit and is liable for capital gains tax. The assessee immediately agreed for the capital gains tax liability. Not only the assessee but also all the co-owners in their respective return of income accepted the capital gains tax liability. Therefore, the bona fide of the assessee cannot be doubted. In our considered opinion, the levy of penalty on the given facts is not justifiable and the First Appellate Authority has rightfully deleted the penalty and, therefore, no interference is called for.”
As the penalty has been deleted in the case of the co-owner on identical set facts, we do not find any error or infirmity in the findings of the ld.CIT(A). Appeal filed by the Revenue is accordingly dismissed.”
Respectfully following the above said two orders, we dismiss the appeal of the department.
ITA No.2022/Ahd/2013 ITO vs. Anilkumar Kanaiyalal Patel Asst.Year –2009-10 - 6 - 7. In the result, appeal filed by the department is dismissed. This Order pronounced in Open Court on 31/10/2017
Sd/- Sd/- एन.के. �ब�लैया महावीर �साद (लेखा सद�य) (�या�यक सद�य) ( MAHAVIR PRASAD ) ( N.K. BILLAIYA ) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 31/10/2017
Priti Yadav, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-XXI, Ahmedabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 24/10/2017(dictation-pad 3 pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member 30/10/2017 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S……. 7. Date on which the file goes to the Bench Clerk………………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………