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TMI Blog2014 (5) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... rsal of returned income claiming exempt LTC gain which has been erroneously shown - Held that:- We concur with the views of the ld. CIT(A) that the AO is quite justified in rejecting the assessee’s rectification application because the mistake sought to be amended is not a prima facie mistake. Secondly, the assessee is submitting corroborating evidence with the rectification application which requires investigations and verification and as such the same is outside the purview of provisions of section 154 of the Act. However, the correct course would have been by seeking remedy by moving revision application u/s 264 before the CIT_II, Amritsar soliciting for revision of order passed u/s 143(1) of the Act or by filing revised return.- Decided against assessee - I.T.A. No.579(Asr)/2011, I.T.A. No.187(Asr)/2014 - - - Dated:- 23-5-2014 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER Appellant by:Sh. Sham Sodhi, Advocate Respondent by:Sh. Mahavir Singh, DR ORDER PER BENCH ; These two appeals of the assessee arise from two different orders of the CIT(A), Amritsar, dated 07.10.2011 `15.01.2014 for the assessment year 2008-09 . Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agricultural Land sold was rightly treated as capital asset by the assessee because it was factually beyond the limits of Municipal Corporation, Amritsar and which was not the capital asset as per Notification dated 6th January, 1994 issued by Ministry of Finance and as per records maintained by the Revenue Department and Municipal Corporation of Amritsar and ignoring the factual position of the capital asset. 7. Whether the CIT(A) failed to appreciate the fact that at the initial stage of the case and before it would become a case of formation of opinion, if there is a mistake apparent on the records so it should have been at the initial stage be rectified u/s 154. 8. Whether the CIT(A) was correct in not deciding the appeal in favour of the assessee when accepting that there will be to opinions if the matter is investigated. 9. Whether the CIT(A) was right in rejecting the factual position of the land being Agricultural and ignoring the records of the Tehsildar Amritsar-1, Amritsar, which was filed along with the application for rectification and which becomes record on the file of the assessee and which indicated that the land was classified as Agricultural Land and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove additional grounds are legal. 5. That the above additional grounds have a bearing in the disposal of the appeal. It is, therefore, prayed that the above mentioned grounds of appeal may please be admitted in the interest of justice. 5. The brief facts of the case are that the assessee filed return of income on 26.03.2009 declaring income of ₹ 2,24,44,720/- as against the due date of 31.7.08 and it was found that as per return s col. No.10 page 2, as against the due self asstt. of ₹ 63,71,260/- the same is stated to have been paid, showing balance payable at NIL. Consequent upon processing u/s 143(1) made on 20.10.09, a demand of ₹ 67,31,828/- was created. On finding filing of wrong verification in the return and furnishing incorrect particulars therein, an intimation to this effect was given on 21.10.09 requiring the assessee for payment of demand created at ₹ 67,31,828/- by 21.11.09. In spite of receipt of intimation u/s 142(1) dt. 20.10.09, the assessee did not care to deposit the outstanding tax demand on the plea that until unless the loans given by him to his family concern, M/s. Nijjer Agro Foods Ltd. is recovered back, no taxes and inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be discharged immediately. After taking over-all view of the facts on all angles, the A.O. held that the default being without any reasonable cause, the same has been established and proceeded to impose a penalty of ₹ 50,00,000/- as against the self asstt. tax outstanding at ₹ 51,50,592/-. 6. The Ld. CIT(A) after considering the submissions of the assessee confirmed the action of the A.O. for levying penalty of ₹ 50 lacs under section 221(1) of the Act.. The Ld. CIT(A) has discussed the issue in detail in para 7 7.1 of his order. 7. The Ld. counsel for the assesee at the outset started arguments \with regard to admission of additional ground that the long term capital gains on the sale of agricultural land has been shown in the return of income as taxable by mistake on the legal advice of the counsel. in fact, it was not capital asset within the meaning of section 2(14) (iii). The tax due was included in the computation of income, which in fact, was not includible. The return was prepared by the Counsel of the assessee, who inadvertently included the tax payable and had shown self assessment as paid. In fact, the same amount was not paid, as the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the income tax liability and preferred to invest the entire sale consideration of agricultural land to his family concern, in which the assessee is stated to be Managing Director of M/s. Nijjer Agro Foods Ltd. The assessee was having sufficient cash in hand at ₹ 15,24,457/- as on 31.3.08 and had shown net agricultural income of ₹ 11,46,465/-. The AO specifically issued notice under section 221(1) vide letter dated 23.11.09, which is available in the order u/s 221(1) of the Act, which was duly served on 25.11.09 but remained uncomplied with. The Ld. counsel appearing on behalf of the assessee, of course, submitted reply dated 15.12.2009 which cannot be a good and sufficient cause for not levying the penalty. 9. We have heard the rival contentions and perused the facts of the case. As regards the additional ground raised by the assessee at this juncture with regard to the mistake on the legal advice of the counsel of the assessee, who stated to have included wrongly the capital gains, in fact, this is not proper forum to revise the claim by taking the shelter of additional ground. If the return had been filed wrongly and any claim had been made wrongly and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), the assessee shall not cease to be liable to any penalty merely by reason of the fact that before the levy of penalty he has paid to the tax. In fact, in the present case, the penalty u/s 221(1) of the Act was levied on 30.12.2009 on which date, the assessee was enjoying the money by investing the same in his sister concern in which he is stated to have incurred losses and by placing balance sheet of such company cannot help the assessee to prove good and sufficient cause and such action of investing money in the said concern M/s. Nijjar Agro Foods appears to be quite intentional for avoiding preferred liability of Income-tax. Therefore, there cannot be any good and sufficient cause established before any of the authorities below or even before us for not levying penalty. 9.2. In the facts and circumstances of the case, we find no infirmity in the order of the ld. CIT(A) who has actually confirmed the levy of penalty under section 221(1) of the Act. Thus, grounds 1 to 3 of the assessee are confirmed and the appeal is dismissed. 10. Now, we take up appeal of the assessee in ITA No.187(Asr)/2014. The brief facts of the case are that the assessee filed an application u/s 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake quite apparent from record and the matter is outside the purview of rectification on points of debatable nature on which more than to opinions are likely to be drawn, thereby deriving support from various case laws cited in support thereto. 12.1 We concur with the views of the ld. CIT(A) that the AO is quite justified in rejecting the assessee s rectification application because the mistake sought to be amended is not a prima facie mistake. Secondly, the assessee is submitting corroborating evidence with the rectification application which requires investigations and verification and as such the same is outside the purview of provisions of section 154 of the Act. However, the correct course would have been by seeking remedy by moving revision application u/s 264 before the CIT_II, Amritsar soliciting for revision of order passed u/s 143(1) of the Act or by filing revised return. 12.2. As regards to the various Tribunal s decisions cited by the Ld. counsel in support of his contention, the same are of little help as the issue in question is quite debatable on which more than two opinions could be drawn and secondly the additional evidence filed along with the rectification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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