2023 (11) TMI 993 - AT - Income Tax

Penalty u/s 271(1)(c) - addition on sale of land and not granted benefit of u/s.54F - AR submitted that the assessee under bonafide belief has made the claim u/s 54 of the Act in respect of Long Term Capital Gain since the assessee has purchased land for the construction of residence - HELD THAT - It is pertinent to note that the assessee has under bonafide belief claimed the exemption u/s 54 in respect of Long Term Capital Gain as the assessee has made investments during the year. The same was disclosed by the assessee in the details of return of income as well as during the assessment proceedings and thus the element of concealment of particulars of income does not get attracted in assessee s case. The decision of Hon ble Apex Court RELIANCE PETROPRODUCTS PVT. LTD. 2010 (3) TMI 80 - SUPREME COURT is squarely applicable in assessee s case. The decisions relied by the DR will not be applicable in the present case as the limb under which Section 271(1)(c) of the Act was invoked is missing in the present assessee s case, in fact, the quantum thereafter has been deleted in assessee s case and, therefore, the very basis of the penalty does not survive. Appeal of assessee allowed. Condonation of delay - delay of 1823 days in filing the present appeal - HELD THAT - In the present case, the circumstances are perused, as the assessee is not staying in India and during the said period he was under the bonafide belief that his brothers will be able to co-ordinate with the Tax Consultant regarding Income Tax matters. In the exceptional circumstances, in the present case, it is appropriate to condone the delay as held in various decisions of Hon ble Apex Court that when delay is explained in detail and appears to be genuine and bonafide, the same should be condoned. Hence, the delay in the present case was genuinely explained by the assessee and, therefore, we are condoning the delay.

Summary

Issues:
1. Delay in filing the appeal.
2. Addition of amount on sale of land and benefit under section 54F of IT Act.
3. Validity of assessment made under section 147 of the Act.
4. Imposition of penalty under section 271(1)(c) of the Act.

Delay in Filing the Appeal:
The appeal was filed 1823 days late due to the assessee's belief that his brothers were handling his financial and tax matters. The brothers passed away, causing a delay in realizing the pending tax issues. The Tribunal condoned the delay, citing genuine and bona fide reasons specific to this case.

Addition on Sale of Land and Benefit under Section 54F:
The assessee contested the addition of Rs.46,64,901 on the sale of land and the denial of benefits under section 54F of the IT Act. The Tribunal found that the assessee had genuinely claimed exemption under section 54 of the Act for Long Term Capital Gain, making the penalty imposed unjustified. The penalty was overturned based on the assessee's bonafide belief and compliance with tax laws.

Validity of Assessment under Section 147:
The assessment under section 147 of the Act was challenged as being bad in law. However, the Tribunal did not delve into this issue as the appeal was allowed based on other grounds related to the penalty imposed.

Imposition of Penalty under Section 271(1)(c):
The Assessing Officer imposed a penalty of Rs.45,61,650 for concealing particulars of income. The assessee argued that the claim under section 54 of the Act was made in good faith, supported by investments made during the year. The Tribunal agreed that there was no concealment of income and overturned the penalty, citing relevant case law and the absence of the basis for the penalty.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the genuine belief in claiming exemptions under the IT Act and the absence of concealment of income. The delay in filing the appeal was condoned due to the unique circumstances surrounding the handling of financial matters by the assessee's deceased brothers.