Sh. Sunil Bansal, Chandigarh V. DCIT, Chandigarh

CO 26/CHANDI/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9812 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

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. 804/CHD/2013 ASSESSMENT YEAR: 2009-10 THE DCIT VS. SHRI SUNIL BANSAL CENTRAL CIRCLE I # 2048, SEC 15-C CHANDIGARH CHANDIGARH PAN NO. ABVPB5333R & CO NO. 26/CHD/2013 (IN ITA NO. 804/CHD/2013) ASSESSMENT YEAR: 2009-10 SHRI SUNIL BANSAL VS THE DCIT, CENTRAL CIRCLE -1, # 2048, SEC 15-C CHANDIGARH CHANDIGARH PAN NO. ABVPB5333R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SH MAHAVIR SINGH RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 11/08/2014 DATE OF PRONOUNCEMENT : 28/08/2014 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 T HE CIT(A) CENTRAL, GURGAON DATED 14.05.2013. 2 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING EFFECTIVE GROUND:- (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY RESTRICTING THE QUANTUM OF PENALTY LEVIED U/S 221(1) OF THE I.T. ACT, 1961 TO THE 5% OF THE UNPAID SELF ASSESSMENT TAX INSTEAD OF 20% AS LEVIED BY THE ASSESSING OFFICER. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT A S EARCH WAS CONDUCTED IN THIS GROUP. DURING THE SEARCH, A TOTA L SURRENDER OF RS. 6.65 CRORES WAS MADE BY THE GROUP. 4. IT SEEMS SOME AMOUNT WAS SURRENDERED IN THE HAND S OF THE ASSESSEE ALSO WHICH WAS HONOURED AND RETURN WAS FIL ED ACCORDINGLY. HOWEVER, THE SELF ASSESSMENT TAX AMOUNTING TO RS. 2 8,44,170/- WAS NOT FILED. WE FURTHER FIND THAT SOME SURRENDER WERE M ADE IN THE HANDS OF SMT. KANTA DEVI BANSAL WIFE OF SHRI J.C. BANSAL AND SHRI ANIL BANSAL ANOTHER SON OF SHRI J.C. BANSAL WHO HAS ALS O FILED THE RETURN ACCORDINGLY. BEFORE AS IT WAS STATED THAT SHRI J. C. BANSAL AND OTHER PERSONS HAD MADE HUGE INVESTMENTS IN LAND AND BUILD ING OF MAA SARASWATI EDUCATIONAL WELFARE TRUST AND, THEREFOR E, LIQUID FUNDS WERE NOT EASILY AVAILABLE AND THAT IS WHY TAXES COULD NOT 3 OUT OF WHICH A SUM OF RS. 3 CRORES WAS OFFERED 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, TAX COULD NOT BE PAID AS THE ASSESSMENT TAX U/S 140A OF THE A CT. A SUM OF RS. 14 LAKHS WAS SEIZED DURING THE SEARCH WHICH CREATED FI NANCIAL CONSTRAINTS. SIMILAR SURRENDER WAS MADE IN THE HANDS OF WIFE OF THE ASSESSEE SMT. KANTA DEVI BANSAL SON OF THE ASSESSEE SHRI ANIL BAN SAL WHO HAS ALREADY FILED THE RETURN ACCORDINGLY. THE ASSESSEE WAS THE CHAIRMAN OF MAA SARASWATI EDUCATIONAL WELFARE TRUST AND HUGE IN VESTMENT HAVE BEEN MADE THERE IN LAND AND BUILDING, THEREFORE, NO LIQUID FUNDS WERE EASILY AVAILABLE BECAUSE OF THE CONSTRAINTS OF FUND S, THE TAXES COULD NOT BE PAID ALONGWITH THE RETURN. BEFORE ASSESSING OFF ICER, NO EFFECTIVE APPEARANCE WAS MADE IN RESPONSE TO THE SHOW CAUSE N OTICE FOR LEVY OF PENALTY U/S 221(1) AND THEREFORE, ASSESSING OFFICER LEVIED 20% OF THE TOTAL TAX AS PENALTY AMOUNTING TO RS. 5,68,834/-. 5. ON APPEAL IT WAS MAINLY SUBMITTED THAT THERE WAS HUGE CRUNCH OF FUNDS THAT IS WHY THE TAX COULD NOT BE PAID. FURTHE R THE ASSESSEE SHRI SUNIL BANSAL S/O SHRI J.C. BANSAL WAS STAYING WITH HIM IN A JOINT 4 FAMILY AND FACTS AND CIRCUMSTANCES AS EXPLAINED IN THE CASE OF SHRI J.C. BANSAL APPLIES IN THIS CASE ALSO. 6. THE LD. CIT(A) CONSIDERED THE ISSUE AND AFTER F OLLOWING THE ORDER IN THE CASE OF SHRI J.C. BANSAL FOR ASSESSMEN T YEAR 2009-10 IN APPEAL NO. 4C/09LDH/CIT(A)(C)/2011-12 DATED 07.03.2 013 REDUCED THE PENALTY TO 5%. 7. BEFORE US, LD. DR STRONGLY SUPPORTED THE ORDER O F ASSESSING OFFICER. 8. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND ALSO RELIED ON T HE DECISION OF TRIBUNAL IN CASE OF DCIT VS. JAI CHAND BANSAL, CH ANDIGARH IN ITA NO. 557/CHD/2013. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT LD. CIT(A) HAS ADJUDICATED THIS ISSUE VIDE PARA 4 W HICH 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 THEREBY RENDERING ITSELF LIABLE FOR PENAL TY U/S 221(1). THE SELF-ASSESSMENT TAX WAS PAYABLE AS PER THE DETERMINED TOTAL INCOME FOR THE YEAR WORKED OUT BY THE ASSESSEE HIMSELF. 5 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 SURRENDER OF RS. 6.65 CRORE BY THE GR OUP (RS. 3 CRORE BY ASSESSEE), THE ASSESSEE HAD NO FUND S 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 COMMISSION. IT WAS ALSO STATED THAT ASSESSEE COOPER ATED WITH THE DEPARTMENT AS FAR AS TAXES WERE CONCERNED CONSEQUENT TO THE SEARCH. I FIND THE ASSESSEE AND THE CASE OF MAA SARAWATI EDUCATIONAL SOCIAL WELFARE TRUST HAD APPROACH HONB LE SETTLEMENT COMMISSION IN THE MONTH OF DECEMBER, 201 1 AND SO ALL DUE TAXES AS WELL AS THE FEE FOR ADMITTA NCE WERE REQUIRED TO BE DEPOSITED. THE ASSESSEE ITERATED THA T HE HAS PAID A TOTAL TAX OF RS. 141.54 LACS FOR YEAR WHICH COMPRISED OF RS. 97.81 AS THE PRINCIPLE WHICH IS TH E SELF- ASSESSMENT TAX ALONG WITH RS. 43.73 LACS AS INTERES T THEREON BETWEEN 24-09-2011 AND 31-12-2011. THE IMPUGNED PENALTY ORDER WAS PASSED ON 20-06-2011. TH E RETURN OF INCOME FOR THE YEARS UNDER CONSIDERATION WAS FILED ON 31-03-2010 I.E; THE LAST DAY OF THE FINANC IAL YEAR. NO DOUBT THERE WAS A DELAY AND IN TERMS OF SECTION 140 A(3) AND THE ASSESSEE IS DEEMED TO BE ASSESSEE IN D EFAULT. IT IS ALSO SEEN THAT PRIOR TO THE LEVY OF PENALTY, OPPORTUNITY WAS AFFORDED FOLLOWED BY ISSUE OF SHOW-CAUSE. NO SUBMISSION NOR ANY APPEARANCE WAS STATED FILED / MA DE. HOWEVER ONE CANNOT OMIT THE FACT THAT THE TAXES EMA NATING FROM THE SEARCH BY THE GROUP HAD BEEN PAID AND SETT LEMENT COMMISSION WAS ALSO APPROACHED. THE SELF ASSESSMENT TAX OF RS. 97.81 LACS ALONGWITH THE INTEREST WAS ALSO P AID IN PARTS BY 31-12-2011. EVIDENCE OF THE PAYMENT BY THE 6 ASSESSEE AND THE GROUP WAS ALSO FURNISHED. BE THAT AS IT MAY, THE LEVY OF PENALTY WAS DUE TO NON-PAYMENT OF SELF- ASSESSMENT TAX AND ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE ISSUED BY THE A.O. IN THIS REGARD. HEN CE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE 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 HARSH. 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 DEVIATE FROM THE FINDINGS OF LD. CIT(A). ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) AND THE APPEAL OF THE REVENUE IS DISMISSED. 11. C.O. NO. 26/CHD/2013 12. IN THIS C.O. THE ASSESSEE HAS RAISED THE FOLLOW ING CROSS OBJECTIONS:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) (CENTRAL), GURGAON HAS ERRED IN RESTRICTING THE PENALTY TO 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 ALREA DY CONFIRMED THE LEVY OF PENALTY @ 5%, THEREFORE, THE CROSS OBJECTIO NS HAVE BECOME INFRUCTUOUS AND ACCORDINGLY THE SAME ARE DISMISSED AS INFRUCTUOUS. 7 15. IN THE RESULT, CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/08/2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 28 TH AUGUST, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR