Ita/597/2013 Of The Commissioner Of Income Tax v. Smt. K.s. Saraswathi

IN THB HIGH COURT OF KARNATAKA AT BANGALOREDATEKD THIS THE 3[th]DAY OF JUNE 2014 PRESENT THR HON BLE MR. JUSTICE N. KUMAR. AND THR HON’BLE MRS. JUSTICBK B MANOHAR ITA No.597 OF 2013 BETWEEN; 1.The Commissioner of Income-Tax,C.R.Building, Queens Road,Bangalore.2.tThe Income Tax Officer,Ward-4(1),|C.R. Building,Queens Road,Bangalore._ APPKRLLANTS(By Sri.Kamaladhar.G., Advocate)AND:K.S. Saraswathi,#/21, 10[th]‘A’ main4[th]Block, JayanagarBangalore-560 O11RBSPONDENT(By Sri.Chandrashekar, Advocate for Sriyuths. R. RamaMurthy and Kashinath Kalmath, Advocates) -0-0-0-O- This ITA is filed under Section 260-A of I.T. Act,|1961 arising out of Order dated 31.07.2013 passed inITA.No.914/BANG/2013, fortheAssessmentYear2008-09 praying to formulate the substantial questionsof law stated therein and to allow the appeal and setaside the order passed by the ITAT, Bangalore in [TANo.914/BANG/2013 dated 31.07.2013 and confirm theorder of the Appellate Commissioner confirming theorder passed by the Income Tax, Ward-4(1), Bangalore. This appeal coming on for admission this day,|N.,KUMAR, J.delivered the following:- JUDGMENT The revenue has preferred this appeal against the.order passed by the Tribunal setting aside the penaltyimposed under Section 271(1)(c) of the Income Tax Act.| D2 It is not in dispute that the assessee|purchased the property on 31.8.2006. As seen from thekatha extract dated 12.06.2006 1.e. prior to the date ofpurchase of the property by the assessee, the BangaloreMahanagara Palike had treated the property as non-residential. The vendor of the property had also let outthe property for commercial purpose as is clear from thelease deed entered into by the vendor in favour of thelessee. After the purchase of the property, the katha extract, which is dated 13.7.2011, describes’ theproperty as non-residential. Therefore, prior to)purchase and subsequent to purchase the property was_used for non-residential purpose. The plan is of theyear 1974 which shows that it is a_ residentialconstruction and that plan was obtained and producedby the assessee before the assessing authority on18.10.2010 when the authorities called upon them to)produce the plan. As is clear from the_ letter|withdrawing the exemption claimed under Section 54F,.the assessee was in complete dark about the fact thatthe property was a non-residential property and in thecourse of the enquiry based on the aforesaid documents.when it was pointed out that mere user of the propertyfor commercial purpose would not make it a commercialproperty, without murmuring she has withdrawn theclaim for exemption. That shows the bonafides on thepart of the assessee. It is not a case where the assesseedeliberately with an intention to avoid payment of taxhas filed the return on 31.7.2008 claiming exemption under Section 94(f) of the Act. The mistake as rightlyheld by the authorities is a bonafide one. Prima-tfaciethe documents produced show that it was used as acommercial property. In those circumstances, we are ofthe view that the Tribunal in proper exercise of itsdiscretion aiter taking into consideration the entirematerial on record has rightly held that Section271(1)(c) is not attracted. In that view of the matter, wedo not see any merit in this appeal. No substantialquestion of law do arise for consideration.| Accordingly, the appeal is dismissed. Sd/-|JUDGE. Sd/-| JUDGE. *alb/-.