Shri Jai Chand Bansal, Chandigarh V. DCIT, Chandigarh

CO 25/CHANDI/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9344 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J S NAGAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 557/CHD/2013 ASSESSMENT YEAR: 2009-10 THE DCIT, VS. SHRI JAI CHAND BANSAL, CENTRAL CIRCLE I # 2048, SEC 15-C, CHANDIGARH CHANDIGARH PAN NO. ABJPB2717R C.O. NO. 25/CHD/2013 (IN ITA NO. 557/CHD/2013) ASSESSMENT YEAR: 2009-10 SHRI JAI CHAND BANSAL, VS THE DCIT, CENTRAL CIRCL E-1, # 2048, SEC 15-C, CHANDIGARH CHANDIGARH PAN NO. ABJPB2717R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.NAGAR RESPONDENT BY : S/SHRI SUDHIR SEHGAL & ASHOK GOYAL DATE OF HEARING : 25/02/2014 DATE OF PRONOUNCEMENT : 26/02/2014 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION S BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) CEN TRAL, GURGAON DATED 07/03/2013. 2. IN THE APPEAL OF THE REVENUE, FOLLOWING GROUND HAS BEEN RAISED:- (I) THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACT BY RESTRICTING THE QUANTUM OF PENALTY LEVIED U/S 221(1 ) OF THE 2 I.T. ACT, 1961 TO THE 5% OF THE UNPAID SELF ASSESSM ENT TAX INSTEAD OF 20% AS LEVIED BY THE AO. THE ONLY REA SON GIVEN IS THAT CHARGING 20% IS BIT HASH IGNORING THE FACT THAT SELF ASSESSMENT TAX IS CHARGED ON INCOME WHICH ASSESSEE ADMITS THAT HE HAS EARNED DURING LAST FINANCIAL YEAR. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT A S EARCH WAS CONDUCTED IN THIS GROUP. DURING THE SEARCH, A TOTAL SURRENDER OF RS . 6.65 CRORES WAS MADE BY THE GROUP OUT OF WHICH A SUM OF RS. 3 CRORES WAS OFFERE D IN THE HANDS OF THE ASSESSEE AS PER FOLLOWING DETAILS:- ASSESSMENT YEAR AMOUNT SURRENDERED 2009-10 RS. 2,90,00,000 2010-11 RS. 10,00,000 TOTAL RS. 3,00,00,000 4. THE ABOVE SURRENDER WAS HONORED AND RETURNS WERE FILED ACCORDINGLY. HOWEVER, ASSESSEE DID NOT HAVE FUNDS, THEREFORE, TA X COULD NOT BE PAID AS THE ASSESSMENT TAX U/S 140A OF THE ACT. A SUM OF RS. 1 4 LAKHS WAS SEIZED DURING THE SEARCH WHICH CREATED FINANCIAL CONSTRAINTS. SI MILAR SURRENDER WAS MADE IN THE HANDS OF WIFE OF THE ASSESSEE SMT. KANTA DEVI B ANSAL SON OF THE ASSESSEE SHRI ANIL BANSAL WHO HAS ALREADY FILED THE RETURN A CCORDINGLY. THE ASSESSEE WAS THE CHAIRMAN OF MAA SARASWATI EDUCATIONAL WELFARE T RUST AND HUGE INVESTMENT HAVE BEEN MADE THERE IN LAND AND BUILDING, THEREFOR E, NO LIQUID FUNDS WERE EASILY AVAILABLE BECAUSE OF THE CONSTRAINTS OF FUND S, THE TAXES COULD NOT BE PAID ALONGWITH THE RETURN. BEFORE ASSESSING OFFICER, NO EFFECTIVE APPEARANCE WAS MADE IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY U/S 221(1) AND THEREFORE, ASSESSING OFFICER LEVIED 20% OF THE TOTA L TAX AS PENALTY AMOUNTING TO RS. 19,56,234/-. 5. ON APPEAL, IT WAS MAINLY SUBMITTED THAT THERE WA S HUGE CRUNCH OF FUNDS AND I.E WHY TAX COULD NOT BE PAID. IT WAS FURTHER S UBMITTED THAT A SUM OF RS. 97 LAKHS WAS PAID ALONGWITH THE INTEREST TO THE TUNE O F RS. 141.54 LAKHS FROM 3 24.9.2011 TO 30.11.2011. FURTHER AMOUNTS HAVE BEEN DEPOSITED BY OTHER FAMILY MEMBERS IN RELATION TO VARIOUS PROCEEDS. IT WAS RE QUESTED THAT A LENIENT VIEW MAY BE TAKEN IN THESE CIRCUMSTANCES. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS HELD THAT IT WOULD BE REASONABLE IF 5% OF THE TAX IS LEVIED AS PENALTY. 7. BEFORE US, LD. DR STRONGLY SUPPORTED THE ORDER O F ASSESSING OFFICER. 8. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND SUBMITTED THAT THERE WAS NO JUSTIFICATION EVEN IN LEVY OF 5% PENALTY BECAUSE ASSESSEE HAS BEEN FACING CRUN CH OF FUNDS. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT LD. CIT(A) HAS ADJUDICATED THIS ISSUE VIDE PARA 4 WHICH READS AS UNDER:- 4. I HAVE CONSIDERED THE ASSESSEES SUBMISSION AND THE IMPUGNED ORDER. AS PER THE PROVISIONS OF THE ACT, T HE ASSESSEE IS CONSIDERED TO BE IN DEFAULT FOR FAILURE TO PAY THE WHOLE OR A PART OF SELF-ASSESSMENT TAX PAYABLE U/S 140 A (I) AND THERE BY RENDERING ITSELF LIABLE FOR PENALTY U/S 221(1). THE SELF-ASSE SSMENT TAX WAS PAYABLE AS PER THE DETERMINED TOTAL INCOME FOR THE YEAR WORKED OUT BY THE ASSESSEE HIMSELF. THE ASSESSEE DURING THE APPEAL PROCEEDINGS HAS PUT FORTH FINANCIAL CONSTRAINTS AS REASONS WHY THE TAX COULD NOT BE PAID ON TIME. THAT CONSEQUENT TO THE SEARCH OPERATION AND S URRENDER OF RS. 6.65 CRORE BY THE GROUP (RS. 3 CRORE BY ASSESSEE), THE ASSESSEE HAD NO FUNDS FOR PAYMENT OF TAXES U/S 140 A. HUGE TAXES WERE PAID BY THE FAMILY MEMBERS APART FROM THE TAX TO BE PAID AT THE TIME OF FILING APPLICATION BEFORE THE HONBLE SETTLEMENT CO MMISSION. IT WAS ALSO STATED THAT ASSESSEE COOPERATED WITH THE DEPAR TMENT AS FAR AS TAXES WERE CONCERNED CONSEQUENT TO THE SEARCH. 4 I FIND THE ASSESSEE AND THE CASE OF MAA SARAWATI E DUCATIONAL SOCIAL WELFARE TRUST HAD APPROACH HONBLE SETTLEMEN T COMMISSION IN THE MONTH OF DECEMBER, 2011 AND SO ALL DUE TAXES AS WELL AS THE FEE FOR ADMITTANCE WERE REQUIRED TO BE DEPOSITED. T HE ASSESSEE ITERATED THAT HE HAS PAID A TOTAL TAX OF RS. 141.54 LACS FOR YEAR WHICH COMPRISED OF RS. 97.81 AS THE PRINCIPLE WHICH IS THE SELF- ASSESSMENT TAX ALONG WITH RS. 43.73 LACS AS INTERES T THEREON BETWEEN 24-09-2011 AND 31-12-2011. THE IMPUGNED PEN ALTY ORDER WAS PASSED ON 20-06-2011. THE RETURN OF INCOME FOR THE YEARS UNDER CONSIDERATION WAS FILED ON 31-03-2010 I.E; THE LAST DAY OF THE FINANCIAL YEAR. NO DOUBT THERE WAS A DELAY AND IN T ERMS OF SECTION 140 A(3) AND THE ASSESSEE IS DEEMED TO BE ASSESSEE IN DEFAULT. IT IS ALSO SEEN THAT PRIOR TO THE LEVY OF PENALTY, OPPORT UNITY WAS AFFORDED FOLLOWED BY ISSUE OF SHOW-CAUSE. NO SUBMISSION NOR ANY APPEARANCE WAS STATED FILED / MADE. HOWEVER ONE CANNOT OMIT TH E FACT THAT THE TAXES EMANATING FROM THE SEARCH BY THE GROUP HAD BE EN PAID AND SETTLEMENT COMMISSION WAS ALSO APPROACHED. THE SELF ASSESSMENT TAX OF RS. 97.81 LACS ALONGWITH THE INTEREST WAS AL SO PAID IN PARTS BY 31-12-2011. EVIDENCE OF THE PAYMENT BY THE ASSES SEE AND THE GROUP WAS ALSO FURNISHED. BE THAT AS IT MAY, THE LE VY OF PENALTY WAS DUE TO NON-PAYMENT OF SELF-ASSESSMENT TAX AND ASSES SEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE ISSUED BY THE A.O. IN THIS REGARD. HENCE CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE I THINK IT WILL BE IN THE FITNESS OF THINGS TO DIRECT THE A.O. TO LEVY PENALTY @ OF 5% INSTEAD OF 20% WHICH IS CONSIDERED A BIT HARS H. 10. IN OUR OPINION, THE LD. CIT(A) HAS CORRECTLY DE CIDED THE ISSUE IN THE CIRCUMSTANCES OF THE CASE. WE FIND NO REASON TO D EVIATE FROM THE FINDINGS OF LD. CIT(A). ACCORDINGLY, WE CONFIRM THE ORDER OF CI T(A) AND THE APPEAL OF THE REVENUE IS DISMISSED. 11. C.O. NO. 25/CHD/2013 12. IN THIS C.O., THE ASSESSEE HAS RAISED THE FOLLO WING CROSS OBJECTIONS:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS) (CENTRAL), GURGAON HAS ERRED IN RESTRICTING THE PEN ALTY TO 5% 5 OF THE UNPAID AMOUNT OF SELF ASSESSMENT TAX, WHICH IS HIGHLY EXCESSIVE . 13. BOTH THE PARTIES WERE HEARD. 14. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIN D THAT WHILE ADJUDICATING THE APPEAL OF THE REVENUE WE HAD ALREADY CONFIRMED THE LEVY OF PENALTY @ 5%, THEREFORE, THE CROSS OBJECTIONS HAVE BECOME INFRUCT UOUS AND ACCORDINGLY THE SAME ARE DISMISSED AS INFRUCTUOUS. 14. IN THE RESULT, CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.02.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 26 TH FEBRUARY, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH