Smt. Rekha Agarwal, Meerut V. ITO, New Delhi

ITA 1024/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7455 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-12-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 20-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Deemed to accrue or arise in india; Accommodation entries
• Section: 148

Judgement Text

ITA NO. 1024/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1024 /DEL/201 3 A.Y. : 1998 - 99 SMT. REKHA AGARWAL, FLAT NO. 6090/5, SECTOR - D/6, VASANT KUNJ, NEW DELHI (PAN: AAIPA0325N ) VS. INCOME TAX OFFICER, WARD 24(4), NEW DELHI (APPELLANT ) (RESPONDENT ) ASSESSEE BY : SH. K. SAMPATH, ADVOCATE DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING: 29 - 12 - 2014 DATE OF ORDER : 31 - 12 - 2014 ORDER PER H.S. SIDHU, J M THIS APPEAL BY THE ASSESSEE IS DIRECTED A G AINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXIII , NEW DELHI DATED 10.1.2013 PERTAINING TO ASSESSMENT YEAR 1998 - 99 ON THE FOLLOWING GROUNDS: - 1. THAT THE PENALTY IMPOS E D U/S. 271(1)(C) WITHOUT PROVIDING OPPORTUNITY BEING HEARD IN BAD IN LAW. HENCE, IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. LD. CIT(A) IS IN ERROR TO CONFIRM THE SAME. ITA NO. 1024/DEL/2013 2 2. THAT THE PENALTY IMPOSED BY AO ON THE BASIS OF ITAT ORDER DATED 12.2.2010, ACCORDING TO WHICH, INCOME ASSESSED BY ITAT IS DEEMED INCOME, ON WHICH PENALTY U/S. 271(1)(C) IS NOT PERMISSIBLE. THE ASSESSEE FURNISHED ALL THE PARTICULARS OF HER INCOME AND FURNISHED INF ORMATION THEREFORE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTIC U LAR OF HER INCOME. AS DECIDED SUPREME COURT JUDGMENT, COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. HENCE, PENALTY IMPOSED OF RS. 90,0 00/ - IS ARBITRARY, UNJUST AND AGAINST THE VERDICT OF SUPREME COURT JUDGMENT AND CIT(A) IS IN ERROR IN CONFIRMING THE SAME. 3. THAT THE ASSESEE HAS RIGHT TO ADD / DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDINGS. 2. IN THIS CASE THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE INVESTIGATION WING, KANPUR THAT THE ASSESEE WAS ENGAGED IN THE BUSINESS OF PROVIDING BOGUS ACCOMMODATION ENTRIES. NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE FOR THE ASSTT. YEAR 1998 - 99. DURING THE ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE NATURE OF CREDIT ENTRIES AMOUNTING TO RS. 7,04,340/ - RECEIVED BY BANK DRAFT FROM M/S CMS SECURITIES. AS THE ASSESSEE WAS UNABLE TO PROVIDE ANY EVIDENCE IN SUPPORT OF HER CLAIM THAT THE CREDITS REPRESENTED SE TTLEMENT OF TRADING IN SHARES, THE AMOUNT OF RS. 7,04,340/ - WAS ITA NO. 1024/DEL/2013 3 ASSESSED AT THE ASSESSEE S INCOME FROM UNDISCLOSED SOURCES. IN FIRST APPEAL, THE ADDITION WAS DELETED, BUT BEFORE THE ITAT, THE ADDITION WAS CONFIRMED TO THE EXTENT OF RS. 3,00,000/ - AND THE BALANCE DELETED, AS THE ENTRIES PERTAINED TO THE ASSESSMENT YEAR 1999 - 00. SHOW CAUSE NOTICE OF PENALTY UNDER SECTION 271(1)(C) WAS ISSUED TO THE ASSESSEE FOR CONCEALMENT OF INCOME, TO WHICH NO REPLY WAS FILED. THE AO PROCEEDED TO LEVY THE PENALTY U/ S. 271(1)(C) AT 100% OF THE TAX SOUGHT TO BE EVADED, WHICH WORKED OUT TO RS. 90,000/ - VIDE HIS ORDER DATED 30.8.2010. 3 . AGAINST THE ABOVE PENALTY ORDER DATED 30.8. 201 0 PASSED BY THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 10 . 1 .201 3 DISMISSED THE APPEAL OF THE ASSESSEE. 4 . AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 10 . 1 .201 3 , ASSESSEE IS IN APPEAL BEFORE US. 5 . LD. COUNSEL OF THE ASSESSEE CONTEN DED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED COMPLETE DETAILS OF SHARES SOLD BY THE ASSESSEE, WHICH INCLUDES COPY OF BILLS, COPY OF SHARE CERTIFICATE AND COMPLETE DETAILS OF BANK. IT WAS FURTHER SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT THE PARTICULARS ITA NO. 1024/DEL/2013 4 FURNISHED BY THE ASSESSEE WAS NEITHER INACCURATE, NOR THERE WAS ANY CONCEAL MENT OF PARTICULARS OF INCOME. 5.1 LD. COUNSEL OF THE ASSESSEE FURTHER STATED THAT THE ASSESSEE HAS FILED VOLUNTARILY HER RETURN OF INCOME SHOWING LONG TERM CAPITAL GAIN WHICH LATER ON HAS NOT BEEN ACCEPTED BY THE REVENUE AUTHORITIES. THEREFORE, HE REQUESTED THAT THE PENALTY IN DISPUTE IS NOT LEVIABLE, IN VIEW OF THE HON BLE SUPREME COU RT DECISION IN RELIANCE PETROPRODUCTS PVT. LTD (SUPRA). HE FURTHER DRAW OUR ATTENTION TOWARDS PAGE NO. 45 OF THE PAPER BOOK, ORDER OF THE CIT(A) DATED 6.12.2006 FOR THE ASSTT. YEAR 1998 - 99 AND ALSO DRAW OUR ATTENTION TOWARDS PARA 10 OF THE SAME ORDER AND STATED THAT THE LD. CIT(A) HAS HELD THAT ON SIMILAR FACTS THE ITAT, DELHI BENCH IN THE CASES OF SMT. RASHI AGGARWAL AND SMT ANU JAIN HAS HELD THAT THE SALE OF SHARES ARE GENUINE, BUT IN THE PENALTY PROCEEDINGS THE PENALTY IN DISPUTE HAS BEEN IMPOSED BY HOLDING THAT THE SALE AND PURCHASE OF SHARES ARE NOT GENUINE. THEREFORE, THERE ARE CONTRARY VIEW HAS BEEN TAKEN BY THE REVENUE AUTHORITIES, HENCE, T HE PENALTY IS NOT LEVIABLE. 6. LD. DEPARTMENTAL REPRESENTATIVE CONTROVERTED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL OF THE ASSESSEE AND HE RELIED UPON THE ORDER OF LD. CIT(A). LD. DR DRAW OUR ATTENTION TOWARDS THE PARA 38 OF THE ORDER OF THE ITAT PAS SED IN ITA NO. 1392/DEL/2007 (A.Y. 1998 - 99) IN REVENUE S APPEAL, WHICH THE ASSESSEE HAS ATTACHED IN THE 2 ND ITA NO. 1024/DEL/2013 5 PAPER BOOK AND SUBMITTED THAT THE ITAT HAS GIVEN ITS FINDING THAT ASSESSEE HAS INTRODUCED ITS INCOME IN THE BANK ACCOUNT AS UNDISCLOSED MONEY. TH EREFORE, THE PENALTY IN DISPUTE HAS RIGHTLY BEEN LEVIED BY THE REVENUE AUTHORITIES IN THE CASE OF THE ASSESSEE AND HE SAME MAY BE UPHELD BY DISMISSING THE APPEAL OF THE ASSESSEE. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE ORDERS PASSED BY THE R EVENUE AUTHORITIES ALONGWITH THE PAPER BOOKS FILED BY THE ASSESSEE. 7.1 WE FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSEE S CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. 7.2 IN THIS REGARD , WE FIND THAT HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE WHEREIN IT WAS HELD AS UNDER: - 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER S. 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY ITA NO. 1024/DEL/2013 6 RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER S. 271 (1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLAT URE.' 8 . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, WE FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 9 . IN THE RESULT, THE A PPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 / 12 /20 1 4 . SD/ - SD/ - [ N.K. SAINI ] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - SMT. REKHA AGGARWAL, C/O VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES, MEERUT. 2. RESPONDENT ITO, WARD - 24(4), NE W DELHI 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 1024/DEL/2013 7