SHRI OMPRAKASH GUPTA, Jaipur V. ACIT, Alwar

ITA 1085/JPR/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5328 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-11-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 12-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Peak credit
• Section: 143(3); 142(1); 133A; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOE FLAG ;KNO] YS[KK LNL; ,OA JH YFYR DQEKJ] U; KF;D LNL; DS LE{K BEFORE: SHRI VIKRAM SINGH YADAV, AM & SHRI LALIET K UMAR, JM VK;DJ VIHY LA-@ ITA NO.1085/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 1999-2000 . SHRI OM PRAKASH GUPTA, PROP., M/S. OM PRAKASH GUPTA & SONS, RAJGARH, ALWAR. CUKE VS. THE ACIT, CIRCLE-1, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ABVPG 7715 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15 .03.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 31/03/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT (A), ALWAR DATED 03.10.2011 FOR THE ASSESSMENT YEAR 1999-2000. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT (A) HAS GROSSLY ERRED IN SUSTAINING THE PENALTY OF RS. 3,27,954/- U/S 271(1)(C) OF INCOME TAX ACT, 1961 WITHOUT PROPERLY A PPRECIATING THE SUBMISSION MADE BY ASSESSEE, THUS THE PENALTY S O LEVIED DESERVES TO BE DELETED. 1.1 THAT THE LD. CIT (A) HAS FURTHER ERRED IN UPHOLDING THE PENALTY WITHOUT CONSIDERING THE FACTS THAT PENALTY LEVIED O N SIMILAR ISSUES IN PRECEDING ASSESSMENT YEAR WHICH STOOD DEL ETED BY THE HONBLE ITAT, JAIPUR BENCH, THUS THE PENALTY UPHOLD IN THE YEAR UNDER APPEAL DESERVES TO BE DELETED. 2 ITA NO. 1085/JP/2011 SHRI OM PRAKASH GUPTA VS. ACIT 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF CLOTH MATERIAL AND ALSO ENGAGED IN MONEY LENDING BUSINESS. THE ASSESSEE HAS FILED HIS RETURN DECLARING TOTAL INCOME OF RS. 8,07,640/- ON 21.09.2000. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE IT ACT AS SESSING THE INCOME AT RS. 8,21,841/- VIDE ORDER DATED 18.02.2002. DURING THE COURSE OF SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 AT THE BUSINESS PREMISES O F THE ASSESSEE ON 22.08.1998 IN THE YEAR UNDER CONSIDERATION, TWO DIARIES I.E. SUR YA DIARY 1998 AND KAGTHURIA NO. 32 DIARY (KATHURIA NOTE BOOK NO. 32) WERE FOUND CO NTAINING TRANSACTION OF MONEY LENDING BUSINESS OF ASSESSEE. IN THE STATEMENT DURI NG THE COURSE OF SURVEY OPERATION, THE ASSESSEE ADMITTED THE TRANSACTIONS O F MONEY LENDING BUT THESE TRANSACTIONS ARE NOT RECORDED IN HIS REGULAR BOOKS OF ACCOUNT. SINCE THE ASSESSEE WAS NOT DISCLOSING HIS INCOME FROM MONEY LENDING BU SINESS, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED IN THE ASSES SMENT ORDER. 2.1. DURING THE COURSE OF PENALTY PROCEEDINGS, THE AO CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE BUT THE SAME WERE NOT FOUND AC CEPTABLE BY THE AO, THEREFORE, BY PLACING RELIANCE IN THE CASE OF CIT V S. VIJAY IRON STORES (2001) 252 ITR 408 (CAL.) HE TREATED THE ASSESSEES CASE AS FIT FO R PENALTY UNDER SEC. 271(1)(C) OF THE IT ACT. IN THE PRESENT CASE, SINCE THE ASSESSEE WAS DOING MONEY LENDING BUSINESS FOR THE LAST MANY YEARS AND DURING THE COU RSE OF SURVEY, HE ADMITTED CONCEALED INCOME OF ABOUT RS. 22 LACS FOR THREE ASS ESSMENT YERS INCLUDING THE ASSESSMENT YEAR UNDER CONSIDERATION, IT PROVES THAT THERE WAS A DELIBERATE ACT ON THE PART OF THE ASSESSEE TO CONCEAL SUCH MONEY LEND ING BUSINESS INCOME DURING THE A.Y. 1997-98, 1998-99 AND 1999-2000 AND PENALTIES U /S 271(1)(C) FOR A.Y. 1997-98 & 98-99 WERE ALSO IMPOSED WHICH HAVE BEEN CONFIRMED BY THE LD. CIT (A), ALWAR. 3 ITA NO. 1085/JP/2011 SHRI OM PRAKASH GUPTA VS. ACIT THE POSITION REGARDING CONCEALED INCOME DETECTED DU RING THE COURSE OF SURV EY, WHICH WAS CONDUCTED ON 22.08.98, FOR THE A.Y. 1997- 98, 1998-99 AND 1999-2000 VIS--VIS THE LEVY OF PENALTY U/S 271(1)(C) AND POS ITION OF PENALTIES IN APPEAL IS AS UNDER :- S.NO. ASSTT. YEAR INCOME CONCEALED PENALTY U/S 271(1)(C) LEVIED POSITION OF PENALTY IN APPEAL. 1. 1997 - 98 RS. 3,00,377/ - RS.1,63,176 (150%) IMPOSITION CONFIRMED BUT QUANTUM REDUCED TO 100%, SECOND APPEAL FILED. 2. 1998 - 99 RS.11,96,435/ - RS. 7,00,728 (200%) - DO - 3. 1999 - 2000 RS. 7,57,258/ - - - THE AO TAKING INTO CONSIDERATION THE FACT THAT IF T HE SURVEY WAS NOT CONDUCTED IN HIS CASE, THE ASSESSEE WOULD HAVE STILL CONTINUED THE P RACTICE OF NOT DISCLOSING THE MONEY LENDING BUSINESS INCOME TO THE DEPARTMENT. TH E AO FURTHER DREW SUPPORT FROM THE FACT THAT SURVEY U/S 133A OF THE IT ACT WA S CONDUCTED IN THIS CASE ON 22.08.1998 AND RETURN FOR THIS YEAR WAS DUE TO BE F ILED ON OR BEFORE 30.08.99 WHEREAS THE SAME WAS FILED ON 21.09.2000 EVEN WHEN SPECIAL AUDIT IN THIS CASE HAD ALSO BEEN COMPLETED BY THE SPECIAL AUDITOR ON 20.1. 2000. THIS PROVES BEYOND DOUBT THAT THE ASSESSEE HAD CONCEALED THE INCOME OF RS. 7 ,57,258/- DURING THE YEAR UNDER CONSIDERATION FROM MONEY LENDING BUSINESS. THEREFO RE, KEEPING IN VIEW THE PAST HISTORY OF THE CASE, THE AO HELD THAT THE ASSESSEE HAS CONCEALED THE INCOME OF RS. 7,57,258/- DURING THE YEAR UNDER CONSIDERATION, MAD E THE ADDITION OF RS. 3,27,954/- U/S 271(1)(C) OF THE IT ACT. 3. BEING AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A), WHO CONFIRMED THE PENALTY BY OBSERVING AS UNDER :- 4 ITA NO. 1085/JP/2011 SHRI OM PRAKASH GUPTA VS. ACIT 5.1. I HAVE PERUSED THE PENALTY ORDER AS WELL AS S UBMISSION OF THE ASSESSEE AND CASES RELIED UPON AS DISCUSSED ABOVE, IT IS FOUND THAT IN THIS CASE SPECIAL AUDIT WAS CONCLUDED ON 20.01.2000 AND RETURN WAS DUE ON 30.08.1999 WHEREAS THE APPELLANT FILED THE R ETURN ON 21.09.2000 WHICH WAS BELATED. THE DISCLOSURE OF INC OME WAS DUE TO SURVEY. THERE WAS A NO SCOPE TO EXPLAIN THE UNACCOU NTED INCOME. THUS, HE MADE THE DISCLOSURE BUT FULL COOPERATION W AS NOT GIVEN BY THE APPELLANT DURING THE COURSE OF SURVEY PERIOD AS WEL L AS IN FILING OF RETURN. HE ATTACKED THE SURVEY TEAM AND TRIED TO SN ATCH THE INCRIMINATING DOCUMENTS. SOME OF THE STAFF OF SURVE Y TEAM GOT INJURED AND HOSPITALIZED WHICH WAS INTERVENTION OF THE APPE LLANT IN PERFORMING THE GOVERNMENT DUTIES WHICH IS ALSO OFFENCE UNDER IP C. THUS, THE APPELLANT HAD NOT COOPERATED IN THE OFFICIAL PROCEE DINGS AS WELL AS IN FILING OF THE RETURN. HE DELIBERATELY KEPT UNDISCLO SED INCOME WITHOUT PAYING TAX. IN MY OPINION THE ASSESSEE HAD FURNISHE D INACCURATE PARTICULARS AND CONCEALED THE INCOME DELIBERATELY/I NTENTIONALLY. THEREFORE, I CONFIRMED THE PENALTY. 4. NOW THE ASSESSEE IS BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT ON IDENTICAL ISSUES AND SIMILAR SET OF FACTS AND CIRCUMSTANCES HAVING SAME SURVEY AND T HE DOCUMENTS IN A.YS. 1997-98 AND 1998-99 PENALTIES U/S 271(1)(C) WERE ALSO IMPOS ED IN CASE OF ASSESSEE AND THE SAME WERE DELETED BY THE HONBLE ITAT JAIPUR BENCH JAIPUR IN ITA NO. 1/JP/2002 FOR THE A.Y. 1997-98 VIDE ORDER DATED 01.09.2004 AN D IN ITA NO. 2/JP/2002 FOR THE A.Y. 1998-99 VIDE ORDER DATED 25.01.2007 BY OBSERVI NG THAT THE SURRENDER IN THE INSTANT CASE IS VOLUNTARY TO BUY PEACE. THE LD. A/ R FURTHER SUBMITTED THAT IN THE INSTANT CASE ALSO THE ASSESSEE DECLARED INCOME VOLU NTARILY AND RETURNED INCOME DOES NOT DIFFER FROM ASSESSED INCOME SUBSTANTIALLY AND H AS PAID FULL TAXES ON INCOME ASSESSED BY THE DEPARTMENT. AS REGARDS THE ALLEGAT ION OF BELATED RETURN, THE LD. A/R SUBMITTED THAT AT THE TIME OF SURVEY TIME LIMIT FOR FURNISHING THE RETURN OF INCOME WAS NOT EXPIRED FOR THE YEAR UNDER CONSIDERATION AN D FURTHER NO NOTICE U/S 142(1) OR 147/148 WAS ISSUED ON THE ASSESSEE BEFORE FILING TH E RETURN OF INCOME. THE RETURN 5 ITA NO. 1085/JP/2011 SHRI OM PRAKASH GUPTA VS. ACIT FOR THE YEAR UNDER APPEAL WAS FILED BY THE ASSESSEE VOLUNTARILY THOUGH BELATEDLY ON 21.09.2000 IN TERM OF PROVISION OF SECTION 139(4) A ND DUE COGNIZANCE OF THE SAME HAS BEEN TAKEN BY THE AO WHO AS SUBMITTED ABOVE NEV ER ISSUED ANY NOTICE U/S 142(1) NOR HAS COMPLETED THE ASSESSMENT U/S 144 BUT HAS COMPLETED IT U/S 143(3). IN THE RETURN OF INCOME SO FILED ASSESSEE HAS DULY I NCORPORATED THE PEAK BALANCE OF THE MONEY LENDING BUSINESS AND INTEREST WHICH HAS N OT BEEN DOUBTED BY THE LD.AO, THUS ALLEGATION OF THE LD. AO ARE BASELESS. THE LD . A/R FURTHER PLACING RELIANCE ON THE VARIOUS CASES OF HONBLE SUPREME COURT, HIGH CO URT INCLUDING THE ORDERS PASSED BY THE ITAT JAIPUR IN THE CASE OF SMT. DURGA DEVI S OMANI IN ITA NO. 672/JP/2011 DATED 31.10.2014 AND IN THE CASE OF SHRI ASHISH GUP TA IN ITA NO. 671/JP/2011 DATED 17.10.2014 PRAYED THAT THE PENALTY LEVIED MAY BE DE LETED, MORE PARTICULARLY WHEN THE AMOUNT ON WHICH SUCH PENALTY HAS BEEN LEVIED IS DECLARED IN THE RETURN OF INCOME FILED ORIGINALLY. 4.2. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE O RDERS OF THE LOWER AUTHORITIES AND REQUESTED TO CONFIRM THE LEVY OF PENALTY. 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSID ERED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE SUBMISSIONS AND THE RECO RDS, IT APPEARS THAT THE ASSESSEE HAS VOLUNTARILY SURRENDERED THE INCOME FROM MONEY L ENDING BUSINESS SUO MOTO TO BUY PEACE AND TO AVOID FURTHER LITIGATION. WE THUS FOLLOWING THE AFORESAID DECISION OF JAIPUR BENCH OF THE TRIBUNAL ON THE IDENTICAL IS SUES AND SIMILAR SET OF FACTS AND CIRCUMSTANCES OF THE CASE IN THE CASE OF ASSESSEE F OR A.Y. 1997-98 HOLD THAT THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271(1)(C) OF THE IT ACT AND THUS WHILE SETTING ASIDE ORDERS OF THE LOWER AUTHORITIES DIREC T THE AO TO DELETE THE SAME. 6 ITA NO. 1085/JP/2011 SHRI OM PRAKASH GUPTA VS. ACIT 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/20 16. SD/- SD/- FOE FLAG ;KNO YFYR DQEKJ (VIKRAM SINGH YADAV) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/03/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH GUPTA, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-1, JALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.1085/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR