Commissioner Of Income Tax, Karnal v. Deepak Kumar

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 191 of 2009 Date of Decision: March 8, 2010 Commissioner of Income Tax, Karnal …Appellant Versus Deepak Kumar …Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present:Mr. Sukant Gupta, Advocate,for the appellant-revenue. 1.To be referred to the Reporters or not? 2.Whether the judgment should be reported inthe Digest?the Digest? M.M. KUMAR, J. The revenue is in appeal under Section 260A of the Income-taxAct, 1961 (for brevity, ‘the Act’) against order dated 30.3.2007 (A-6),passed by the Income Tax Appellate Tribunal, Chandigarh Bench ‘B’,Chandigarh (for brevity, ‘the Tribunal’), in ITA No. 594/Chandi/2006, inrespect of the assessment year 2004-05. The Tribunal has affirmed theorder of the Commissioner of Income Tax (Appeals), Karnal, passed on24.5.2006. It is common case of both the parties that facts of the instantappeal were identical to the facts in the case of ACIT v. Amar Nath, ITANo. 592/Chandi/2006 (for the assessment year 2004-05). The Tribunal recorded the finding holding that the facts are identical and the contentionraised by the parties were also similar. It is appropriate to mention that theassessee-respondent disclosed all the particulars in his return filed underSection 143(1) of the Act. He had disclosed purchasing of 1,15,000 sharesof UBI for an amount of Rs. 18,40,000/- on 6.9.2002. He sold these shareson 8.9.2003 for a sum of Rs. 50,81,565/-. In another transaction he hadpurchased 2100 shares of Maruti for an amount of Rs. 2,62,500/- on4.7.2003. Out of those shares, he sold 1950 shares on 5.9.2003 for anamount of Rs. 5,16,153/-. In the first transaction there was long term capitalgain and in the second transaction there was short term capital gain. In thereturn filed by the assessee-respondent, he claimed that the profit on the saleof shares was exempt under Section 10(36) of the Act. The AssessingOfficer completed the assessment under Section 143(3) of the Act and itwas held that the assessee-respondent had wrongly claimed the profit onsale of shares under Section 10(36) of the Act. The allegation was that hehad concealed income to the extent of Rs. 35,21,650/-. While finalising theassessment, penalty proceedings under Section 271(1)(c) of the Act werealso initiated and penalty @ 100%, amounting to Rs. 4,10,440/- wasimposed.On appeal, the CIT(A) came to the conclusion that theprovisions of Section 271(1)(c) of the Act would not be attracted to the factsof the present case. The reason given for the aforesaid finding by the CIT(A) is that the return was filed by the assessee-respondent on the advisetendered by his counsel. In any case, all detailed facts along with the dateswere disclosed in the order of the CIT (A). In support of the aforesaid view,the CIT (A) placed reliance on the view taken by this Court in the case of CITv. Ajaib Singh and Co., 253 ITR 630 (P&H), and similar view takenby the Bombay and Madhya Pradesh High Court. It was found that thecounsel for the assessee-respondent had admitted his mistake in advising theassessee and the affidavit by the learned counsel was accepted by the CIT(A). Accordingly, it has been held that no litigant should suffer on accountof the mistake committed by the counsel because the advise tendered by thecounsel is accepted by the litigant, which is based on bona fide belief ofbeing correct. CITv. Ajaib Singh and Co., 253 ITR 630 (P&H), and similar view takenby the Bombay and Madhya Pradesh High Court. It was found that thecounsel for the assessee-respondent had admitted his mistake in advising theassessee and the affidavit by the learned counsel was accepted by the CIT(A). Accordingly, it has been held that no litigant should suffer on accountof the mistake committed by the counsel because the advise tendered by thecounsel is accepted by the litigant, which is based on bona fide belief ofbeing correct. On further appeal before the Tribunal, the view taken by theCIT (A) was upheld when, in fact, reliance was placed on the order passedby the Tribunal in Amar Nath’s case (supra). It has been found as a fact thatfurnishing of particulars of income has been accurately disclosed which arerelevant to long term capital gain along with the return of income. Theincome was claimed as exempt under Section 10(36) of the Act and theprovisions were to apply for the first time to the assessment year underconsideration i.e. with effect from 1.4.2004 relevant to the assessment year2004-05. The assessee-respondent had acted upon the advise of his counsel,who was dealing with his tax matters for the last many years. Having heard learned counsel, we are of the view that thequestion concerning bona fide mistake or belief is more or less a question offact, which has been decided by the CIT (A) on the basis of the affidavitfiled by the counsel. There is no finding of intentional and motivatedmistake which might have been resorted to by the assessee-respondent. We are not impressed with the argument of Mr. Sukant Gupta,learned counsel for the appellant-revenue, that the issue of bona fide beliefbased on the advise of the counsel should have been raised before the Assessing Officer and there was no scope for raising such an issue beforethe CIT (A) because it is an after thought. However, we do not find anymerit in the aforesaid submission. It is not unknown that income tax returnsare filed through the experts in the Income-tax laws and, therefore, theadvise given by the learned counsel can be acted upon with bona fide beliefto be correct. There is no rule of law that the aforesaid issue should havebeen pressed only before the Assessing Officer or there was any bar on theassessee-respondent not to raise this issue before the Appellate Authority.The affidavit filed by the counsel of the assessee, has been readily acceptedby the CIT (A) as well as by the Tribunal. It is well settled that if on theevidence adduced before the Assessing Officer or the Appellate Forum, apossible view has been taken then under Section 260A of the Act, nosubstantive question of law could be framed merely because another view ispossible. The appeal is, thus, without merit and accordingly the same isdismissed. (M.M. KUMAR)JUDGE March 8, 2010 (JITENDRA CHAUHAN)JUDGE Pkapoor