ACIT, New Delhi V. Sh. Nikhil Chopra, New Delhi

ITA 1329/DEL/2012

• Counselvise Citation: 132920114 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-10-2014
• Assessment Year: 1999-2000
• Appeal Filed On: 19-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P CHANDRAKAR
• Keywords: Salary income; Corroborative evidences
• Section: 143(3)

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI R. S . SYAL, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV , JUDICIAL MEMBER ITA NO . 1329 / DEL / 201 2 ASSESSMENT YEAR : 1999 - 2000 ACIT, CIRCLE - 24(1) NEW DELHI. VS . SH. NIKHI L CHOPRA, 106, SAMADARSHINI FARM, DERA VILLAGE, BHATTIKALA ROAD NEW DELHI. (APPEL LANT) (RESPONDENT) A PPELLANT BY : SHRI ANOOP SHARMA, ADVOCATE RESPONDENT BY : SH RI J.P. CHANDRAKAR, SR. D.R. ORDER PER SHRI RAJPAL YADAV , J M : 1. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LD. CIT(A) DATED 23.12.2011 PASSED FOR A.Y. 1999 - 2000. THE SOLITARY GRIEVANCE OF REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.3,05,730/ - IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 07.08.2000 DECLARING AN INCOME OF RS.2,65,100/ - . THE ASSESSEE H AS DECLARED INCOME FROM SALARY, PROFESSIONAL INCOME AS A CRICKETER AND INCOME FROM OTHER SOURCES. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 2 ASSESSMENT AND NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED AND SERVED UPON THE ASSESSEE A N ASS ESSMENT ORDER U/S 143(3) WAS PASSED ON 28.03.2002. THE TAXABLE INCOME WAS DETERMINED AT RS.13,93,132/ - AS AGAINST INCOME OF RS.2,65,100/ - DECLARED BY THE ASSESSEE. ON APPEAL, LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL AND GRANT ED A RELIEF OF RS.95,977/ - OUT OF VARIOUS DISALLOWANCES MADE BY THE ASSESSEE. AGGRIEVED WITH THE ORDER OF CIT(A) , ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL HAS SET ASIDE THE ASSESSMENT ORDER AND REMITTED A L L THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR READJUDI CATION. LD. ASSESSING OFFICER HAS PASSED FRESH ASSESSMENT ORDER ON 31.12.2008 . H E DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.12,84,210/ - . IN THIS FRESH ASSESSMENT ORDER, ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE WITH REGARD TO VAR IOUS EXPENDITURE S INCURRED BY HIM FOR EARNING PROFESSIONAL INCOME. THE L D. ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT , A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE U/S 274 R.W.S. 271(1)(C) OF THE ACT. IN REPLY TO THE SAID SHOW CAUSE NOTICE , IT WAS CONTENDED BY THE ASSESSEE THAT THIS WAS THE FIRST YEAR IN WHICH THE ASSESSEE HAD SHOWN PROFESSIONAL INCOME , PRIOR TO THIS ASSESSMENT YEAR, H E WAS SHOWING ONLY SALARY INCOME . T HERE WAS NO PROPER PROFESSIONAL HELP REGARDING TH E MANAGEMENT OF AFFAIRS , THEREFORE, SUPPORTING VOUCHERS COULD NOT BE MAINTAINED OR PRODUCED BEFORE THE ASSESSING OFFICER. LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF ASSESSEE . H E OBSERVED THAT AN ADDITION OF ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 3 RS.10,19,110/ - WAS MADE TO T HE DECLARED INCOME OF THE ASSESSEE , ON WHICH TAXES OF RS.3,5,730/ - SOUGHT TO BE EVADED. LD. ASSESSING OFFICER ACCORDINGLY, IMPOSED THE PENALTY OF RS.3,05,730/ - . 3. ON APPEAL, LD.CIT(A) DELETED THE PENALTY. 4. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 271(1)(C) HAS DIRECTED BEARING ON THE CONTROVERSY, THEREFORE, WE DEEM IT APPROPRIA TE TO TAKE NOTE OF S ECTION 271 (1)(C) . IT READ AS UNDER: - SECTION 271, F AILURE TO FURNISH RETURNS , COMPLY WITH NOTICES, CONCEA LMENT OF INCOME, ETC. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE CIT IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B)** ** ** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACC URATE PARTICULARS OF SUCH INCOME. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I) AND (INCOME - TAX OFFICER,)** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLAUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NO T BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS: ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 4 EXPLANATIO N 1. - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER(APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE B EEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUBSECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEE N CONCEALED'. 5. A BARE PERUSAL OF THIS SECTION WOULD REVEAL THAT FOR VISITING ANY ASSESSEE WITH THE PENALTY, THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) DURING THE COURSE OF ANY PROCEEDINGS BEFORE THEM SHOULD BE SATISFIED, THAT THE ASSESSEE HAS; (I) CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS FAR AS THE QUANTIFICATION OF THE PENALTY IS CONCERNED, THE PENALTY IMPOSED UNDER THIS SECTION CAN RANGE IN BETWEEN 100% TO 300% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE, AS A RES ULT OF SUCH CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. THE OTHER MOST IMPORTANT FEATURES OF THIS SECTION IS DEEMING PROVISIONS REGARDING CONCEALMENT OF INCOME. THE SECTION NOT ONLY COVERED THE ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 5 SITUATION IN WHICH THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS, IN CERTAIN SITUATION, EVEN WITHOUT THERE BEING ANYTHING TO INDICATE SO, STATUTORY DEEMING FICTION FOR CONCEALMENT OF INCOME COMES INTO PLAY. THIS DEEMING FICTION, BY WAY OF EXPLANATION I TO SECTION 271(1)(C) POSTULATES TWO SITUATIONS; (A) FIRST WHETHER IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR LEARNED CIT(APPEALS); AND, (B) WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE ASSESSEE FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME. UNDER FIRST SITUATION, THE DEEMING FICTION WOULD COME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME OR BY ACTION OF THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GIVING A CATEGORICAL FINDING TO THE EFFECT THAT EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICTION WOULD COME TO PLAY BY THE FAILURE OF THE ASSESSEE TO SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSEE IS NOT ABLE TO PROVE THAT SUCH EXPLANAT ION WAS GIVEN BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 6 HAVE BEEN DISCLOSED BY THE ASSESSEE. THESE TWO SITUATIONS PROVIDED IN EXPLANATION 1 APPENDED TO SECTION 271(1)(C) MAKES IT CLEAR THAT THAT WH EN THIS DEEMING FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN THE RELATED ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, FOR THE PURPOSE OF SECTION 271(1)(C) WOULD BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WH ICH INACCURATE PARTICULARS HAVE BEEN FURNISHED. 6 . IN THE LIGHT OF ABOVE, LETS EXAMINE THE FACTS OF PRESENT CASE, THE FIRST ITEM OF DISALLOWANCE IS THE RENT PAID BY THE ASSESSEE. ACCORDING TO THE ASSESSEE, THE HOUSE HAS THREE ROOMS AND ONLY ONE ROOM IS BEI NG USED AS HIS PERSONAL BEDROOM OTHER TWO ROOMS ARE USED AS THE OFFICE. THEREFORE, HE CLAIMED PAYMENT OF RENT FOR THE USER OF HOUSE. THIS CLAIM HAS BEEN DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT IT WAS NOT EXCLUSIVELY USED FOR THE PURPOSE OF P ROFESSION. SIMILARLY, ASSESSEE HAS CLAIMED PAYMENT OF SALARY TO STAFF , MODELLING PUBLICITY , TRAVELLING , PRINTING AND STATIONARY , STAFF WELFARE ETC., THESE EXPENSES HAVE BEEN DISALLOWED FOR THE REASON THAT ASSESSEE FAILED TO PRODUCE SUPPORTING EVIDENCE. PER USAL OF THESE DETAILS WOULD SUGGEST THAT CLAIM OF THE ASSESSEE WAS NOT FOUND AS FALSE. IT WAS NOT ALLOWED BECAUSE THE ASSESSEE COULD NOT PROVE HIS CLAIM WITH SUPPORTING EVIDENCE. THE EXPLANATION OF THE ASSESSEE IS THAT HE COULD NOT SUBSTANTIATE HIS CLAIM D URING THE ASSESSMENT PROCEEDING , OTHERWISE, HE HAS DISCLOSED ALL PARTICULARS TRULY AND FULLY. THE LD. FIRST APPELLATE AUTHORITY HAS ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT PENALTY DESERVES NOT BE IMPOSED ITA NO. 1329 /DEL /2012 ASSESSMENT YEAR : 1999 - 2000 7 UPON THE ASSESSEE. IN OUR OPINION, L D. FIRST A PPELLATE AUTHORITY HAS APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE AND NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER. 7 . IN VIEW OF ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RE SULT, APPEAL OF THE REVENUE IS DISMISSED. TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 6 TH OCTO BER, 201 4 . SD/ - SD/ - ( R.S. SYAL ) ( RAJPAL YADAV ) A CCOUNTANT MEMBER J UDICIAL MEMBER DATED: 1 6 TH OCTOBER , 201 4 . AKS/ - COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NEW DELHI