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TMI Blog2016 (3) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... n be sustained. However, in our considered opinion it is not a fit case for levy of penalty under the provisions of section 271(1)(c) of the Act. The application of penal provisions is not automatic and the levy itself depends upon the facts and circumstances of each case. In the present case, the assessee has already suffered by paying tax on the amount on which he was otherwise eligible to claim deduction u/s. 54/54F of the Act. In view of the peculiar facts of the case we delete the penalty levied u/s. 271(1)(c) and allow the appeal of the assessee. - Decided in favour of assessee - ITA No. 1563/PN/2012 - - - Dated:- 22-1-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Sunil Pathak For The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee preferred an appeal against the penalty order before the Commissioner of Income Tax (Appeals) . The Commissioner of Income Tax (Appeals) vide impugned order confirmed the levy of penalty u/s. 271(1)(c) and dismissed the appeal of the assessee. Now, the assessee is in second appeal before the Tribunal against the findings of Commissioner of Income Tax (Appeals). 3. Shri Sunil Pathak appearing on behalf of the assessee submitted that the assessee is a salaried employee and was ignorant about the provisions of tax laws. The assessee was under the bonafide belief that the Capital Gain was not required to be declared in the return of income. As soon as the assessee came to know that he has committed mistake and that he was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. AR draws support from the decision of Hon'ble Karnataka High Court in the case of Director of IT, International Taxation Vs. Mrs. Jennifer Bhide reported as 349 ITR 80 and the decision of Hon'ble Delhi High Court in the case of CIT Vs. Ravinder Kumar Arora reported as 342 ITR 38. The ld. AR contended that no penalty can be levied in the facts and circumstances of the present case. 4. On the other hand Shri Dheeraj Kumar Jain representing the Department submitted that the assessee is a Sr. Government Officer, he is supposed to know the law of land. The assessee purchased the new property on 11-12-2007 that is in the period relevant to the assessment year 2008-09, whereas the assessment year under consideration is 2006-07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he did not disclose the fact of investment voluntarily. As far as the decision of Hon'ble Bombay High Court in the case of Prakash Vs. Income Tax Officer is concerned the facts of the said case are distinguishable. The Hon'ble High Court in the said case had disallowed the deduction u/s. 54 as the investment was made in the name of adopted son. In the present case, the assessee had made investment in the name of his wife. The relation of husband and wife is in fiduciary capacity, therefore, the ratio laid down by the Hon'ble Bombay High Court will not apply in the instant case. The ld. AR further submitted that where two views are possible, the view in favour of the assessee should be taken. The ld. AR placed reliance on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had invested the amount towards the purchase of flats within the specified period. 7. As regards the eligibility of assessee to claim deduction on flats purchased in the name of wife is concerned, the assessee can claim exemption u/s. 54/54F of the Act, in view of the decision of Hon'ble Delhi High Court in the case of CIT Vs. Ravinder Kumar Arora (supra). The Hon'ble High Court in unequivocal terms has held that the investment made in the name of wife is eligible for deduction u/s. 54F of the Act. To support the stand of Department, the ld. DR has placed reliance on the decision rendered by the Hon'ble Punjab and Haryana High Court in the case of Jai Narayan Vs. Income Tax Officer (supra). In the said case the investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty, the penalty has been rightly levied for concealing particulars of income. The facts of the present case suggest that it is a peculiar case where the assessee was not aware about the taxation provisions. The assessee had not disclosed the Capital Gains arising from sale of property in his return of income and at the same time had not claimed relief u/s. 54/54F of the Act for which he was eligible. The assessee accepted the addition made in assessment proceedings without any protest. In such circumstances the addition in assessment proceedings can be sustained. However, in our considered opinion it is not a fit case for levy of penalty under the provisions of section 271(1)(c) of the Act. 9. The ld. DR has placed reliance on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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