INCOME TAX OFFICER v. DARYO SINGH
[Citation -1986-LL-1107-3]

Citation 1986-LL-1107-3
Appellant Name INCOME TAX OFFICER
Respondent Name DARYO SINGH
Court ITAT
Relevant Act Income-tax
Date of Order 07/11/1986
Judgment View Judgment
Keyword Tags compulsory acquisition • imposition of penalty • bona fide belief
Bot Summary: For the delay in the filing of the return a notice was issued under s. 271(1)(a) and after considering the assessee s reply a penalty of Rs. 22,717 was imposed by the ITO. In appeal against the levy of penalty, the assessee submitted that he was a n agriculturist, whose income was not taxable at all under the IT Act, that he was not having any business income, that his lands were compulsorily acquired by the Govt. Lastly, the attention of the AAC was drawn to an order passed by his predecessor AAC in the case of the assessee s brother Shri Bal Ram where a penalty of Rs. 1,43,681 imposed for the same assessment year on identical grounds, was cancelled. The AAC who heard this appeal on a careful consideration of the facts of the case and following the order of his predecessor in the case of Bal Ram, held that this was not a fit case for the imposition of a penalty. During the course of arguments before us, it was brought to our notice that the order of the AAC in the case of Shri Bal Ram had come up for consideration before the Tribunal at the instance of the ITO Distt. The Tribunal in the case of Shri Bal Ram has made the following observations: 4. 7th Dec., 1982 in the case of ITO vs. Shri Surjan Singh 3 ITD 438 held that no capital gains tax was leviable on the transfer of agricultural lands situated in Nangal Dewat village in the Union Territory of Delhi. On these facts and circumstances of the case, we hold that the levy of penalty is not justified.


G. KRISHNAMURTHY, SR. V.P. This is appeal filed by ITO against order passed by AAC by which he cancelled penalty of Rs. 22,717 levied by ITO under s. 271(1)(a) of IT Act. From order passed by ITO under s. 271(1)(a) it is seen that assessee filed return of income on 9th Feb., 1976 when it was due on 31st July, 1974 after delay of 28 months. assessment was completed on total income of Rs. 95,674, which was later on reduced in appeal to Rs. 5,441 consulting in demand of Rs. 45,434. For delay in filing of return notice was issued under s. 271(1)(a) and after considering assessee s reply penalty of Rs. 22,717 was imposed by ITO. In appeal against levy of penalty, assessee submitted that he was n agriculturist, whose income was not taxable at all under IT Act, that he was not having any business income, that his lands were compulsorily acquired by Govt. and it is only on account of compensation received by him that liability to pay capital gains tax arose, that assessee was aware of provisions of IT Act particularly capital gains tax and that he was under bona fide belief that he was not liable to tax at all, which was main reason for delay in filing of return. It was further submitted that assessee owned agricultural lands in village Nangal Dewat and that taxability of capital gains on compulsory acquisition of those agricultural lands was still moot point. It was further submitted in case of another assessee Shri Narain Singh of same village, Tribunal held that capital gains tax was not leviable in respect of such lands. It was further pointed out that ITO ought to have given finding in penalty order that assessee had no reasonable cause for late submission of return and in absence of such finding imposition of penalty was not justified. Lastly, attention of AAC was drawn to order passed by his predecessor AAC in case of assessee s brother Shri Bal Ram where penalty of Rs. 1,43,681 imposed for same assessment year on identical grounds, was cancelled. AAC who heard this appeal on careful consideration of facts of case and following order of his predecessor in case of Bal Ram, held that this was not fit case for imposition of penalty. He held that assessee was under bona fide belief that his income was not liable to capital gains tax. He, therefore, cancelled penalty. It was against this order of AAC that present appeal was filed. During course of arguments before us, it was brought to our notice that order of AAC in case of Shri Bal Ram had come up for consideration before Tribunal at instance of ITO Distt. VII(3) and Delhi Bench 'E of Tribunal by its order in ITA No. 46 of 1983 cancelled penalty. Relying upon this order, it was submitted that cancellation of penalty in this case was justified and should be upheld. departmental representative, however, submitted that penalty was rightly imposed and should have been upheld. But in our view imposition of penalty is not proper. Tribunal in case of Shri Bal Ram has made following observations: "4. We have considered rival submissions and perused through copy of order of Tribunal dt. 31st Dec., 1982 Tribunal, Delhi Bench 'A in its order dt. 7th Dec., 1982 in case of ITO vs. Shri Surjan Singh (1983) 3 ITD 438 (Del) held that no capital gains tax was leviable on transfer of agricultural lands situated in Nangal Dewat village in Union Territory of Delhi. assessee had reasonable and bona fide belief that he is not liable to tax on his transfer of agricultural lands in same village of Nangal Dewat. delay in filing of Income-tax return is with reasonable cause. Further, Tribunal also vide its order dt. 13th Dec., 1982 deleted capital gains from assessed income. On these facts and circumstances of case, we hold that levy of penalty is not justified. We confirm action of AAC in deleting penalty". It is now admitted that facts in this case are similar to facts in case of Shri Bal Ram. When in case of Shri Bal Ram Tribunal held that delay in filing of return was with reasonable cause, we fail to see how in this case same cannot be held to be reasonable cause more particularly when Bench of Tribunal held that no capital gains tax was leviable on transfer of agricultural lands situated in Nangal Dewat village in Union Territory of Delhi. We, therefore, confirm order of AAC and dismiss this appeal. *** INCOME TAX OFFICER v. DARYO SINGH
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