Sh. Sh. Sandeep Narang, Amritsar. V. The Deputy Commissioner of Income tax, Amritsar.

ITA 138/ASR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9517 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2016
• Assessment Year: 1992-1993
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI T.S.KAPOOR, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.138/ASR/2014 ASSESSMENT YEAR: 1992-93 SHRI RAJ KUMAR NARANG, (DECD.), VS. THE DCIT, THRU L/H (SON) SHRI SANDEEP NARANG, CIRCLE IV, AMRITSAR AMRITSAR . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PADAM BAHL RESPONDENT BY : SHRI RAHUL DHAWAN DATE OF HEARING : 22.11.2016 DATE OF PRONOUNCEMENT : 24.11.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE SHRI RAJ KUMAR NARANG (SINCE DECEASED REPRESENTED THROUGH HIS LEGA L REPRESENTATIVE) AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), AMRITSAR [HEREINAFTER REFERRED TO AS CIT(A)] DATED 17.01.20 14 RELATING TO ASSESSMENT YEAR 1992-93. 2 2. THE ASSESSEE HAS AGITATED THE LEVY OF PENALTY U/ S 271(1)(C) OF THE ACT. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE OFFER ED AN INCOME OF RS. 21 LAKHS ON ACCOUNT OF WINNING OF LOTTERY PRIZE IN THE YEAR RELEVANT TO ASSESSMENT YEAR 1993-94. THE ASSESSING OFFICER, HOWEVER, WAS O F THE VIEW THAT THE INCOME DID NOT RELATE TO THE ASSESSMENT YEAR 1993-9 4, RATHER TO THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 1992-93. THE ASSES SING OFFICER WAS OF THE VIEW THAT IN FACT IT WAS THE MODUS OPERANDI OF THE ASSESSEE TO INTRODUCE HIS UNDISCLOSED INCOME OF THE ASSESSMENT YEAR 1992-93 I N ASSESSMENT YEAR 1993-94. HE, THEREFORE, REOPENED THE ASSESSMENT PRO CEEDINGS FOR ASSESSMENT YEAR 1992-93 AND ADDED THE SAID LOTTERY PRIZE INCOM E IN THE ASSESSMENT YEAR 1992-93 AND HELD THAT THIS WAS THE UNDISCLOSE D INCOME OF THE ASSESSEE FOR THE SAID YEAR. HE FURTHER OBSERVED THAT EVEN OT HERWISE DEMAND DRAFT WAS RECEIVED BY THE ASSESSEE ON 28.3.1992 AND HENCE THE INCOME FROM LOTTERY OUGHT TO HAVE BEEN ASSESSED IN ASSESSMENT YEAR 1992 -93 ITSELF AND NOT IN ASSESSMENT YEAR 1993-94. THE MATTER TRAVAELLED UP T O THE LEVEL OF THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DT. 15.6.2007 CONFIRMED THE ADDITION SO MADE BY THE ASSESSING OFFICER IN RELATION TO THE AS SESSMENT YEAR 1992-93. 3. THE ASSESSING OFFICER ALSO INITIATED PENALTY PRO CEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PENALTY ON ACCOUNT OF CONCEA LMENT OF INCOME FOR THE ASSESSMENT YEAR 1992-93. THE LD CIT(A) ALSO CONFIR MED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER. THE ASSESSEE HAS T HUS FILED THE PRESENT 3 APPEAL BEFORE THIS TRIBUNAL AGITATING THE ABOVE LEV Y OF PENALTY U/S 271(1)(C) OF THE ACT. 4. BEFORE US, LD. AR OF THE ASSESSEE HAS STATED THA T THE ASSESSEE HIMSELF IS NO MORE IN THIS WORLD AS HE HAS DIED ON 7.9.2013 . THE PENALTY APPEAL IS NOW REPRESENTED BY HIS LEGAL HEIRS. THE LD. AR HAS FURTHER STATED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DIFFERENT PROCEEDINGS AND THAT THE ASSESSEE HAS RIGHT TO AGIT ATE A POINT IN THE PENALTY PROCEEDINGS WHICH INADVERTENTLY COULD NOT BE TAKEN DURING THE ASSESSMENT PROCEEDINGS. FURTHER, THAT SINCE PENALTY PROCEEDING S ARE QUASI CRIMINAL PROCEEDINGS, HENCE, THEY ARE TO BE ADJUDICATED INDE PENDENT OF THE ASSESSMENT PROCEEDINGS. THE LD. AR HAS FURTHER SUBMITTED THAT IN THE QUANTUM PROCEEDINGS THERE IS A MISAPPRECIATION OF THE FACT THAT THE ALLEGED INCOME OF THE ASSESSEE BELONGED TO ASSESSMENT YEAR 1992-93. H E HAS INVITED OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER IN QUANTUM PROCEEDING WHEREIN IT HAS BEEN MENTIONED THAT THE ASSESSEE WON THE PRIZE MONEY OF DURGA LAXMI SUPER BUMPER LOTTERY VIDE ITS DRAW HELD ON 10.02.1991. THE LD AR HAS SATED THAT EVEN IF IT IS ASSUMED THAT IT WAS THE UNDISCLOSED INCOME OF THE ASSESSEE WHICH HAS BEEN ROUTED THROUGH DRAW OF LOTS, EVEN THEN THE DRAW OF LOT WAS HELD ON 10.2.1991 AND UNDER THE CIR CUMSTANCES THE ASSESSEE MIGHT HAVE PAID MONEY PRIOR TO 10.2.1991. IF THAT I S SO, THEN THE ADDITION COULD NOT HAVE BEEN MADE IN ASSESSMENT YEAR 1992-93 RATHER THAT OUGHT TO 4 HAVE BEEN MADE IN THE ASSESSMENT YEAR 1991-92. HE H AS FURTHER STATED THAT THOUGH THE ADDITION MADE IN THE ASSESSMENT YEAR 19 92-93 HAS BEEN UPHELD BY THE TRIBUNAL, BUT, THIS ARGUMENT OF THE ASSESSEE CAN BE LOOKED INTO AT THIS STAGE FOR THE PURPOSE OF ADJUDICATING THIS PENALTY APPEAL. HE HAS FURTHER SUBMITTED THAT EVEN OTHERWISE IT IS NOT A CASE OF C ONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. THE ASSESSEE IN FACT HIMS ELF HAD DECLARED THE INCOME IN THE ASSESSMENT YEAR 1993-94 BUT THE ASSESSING OF FICER WAS OF THE VIEW THAT THE INCOME BELONGED TO ASSESSMENT YEAR 1992-93 . THAT THE ASSESSEE HIMSELF HAD OFFERED THE INCOME FOR TAXATION. THAT THE DEPARTMENT HAD NOT RECOVERED IT OUT OF ANY SEARCH ACTION OR OTHERWISE . THE ISSUE WAS AS TO IN WHICH YEAR THE SAID INCOME WAS TO BE TAXED AND THAT IT WAS NOT CASE OF CONCEALMENT OF INCOME. 5. ON THE OTHER HAND, LD. DR HAS STRONGLY RELIED U PON THE FINDINGS OF THE LOWER AUTHORITIES AS WELL AS THE ORDER OF THE TRIBU NAL IN QUANTUM PROCEEDINGS. THE LD. DR HAS FURTHER RELIED UPON CERTAIN CASE LAW S TO CONTEND THAT ONCE THE ITAT HAS GIVEN A SPECIFIC FINDING THAT IMPUGNED U NDISCLOSED INCOME OF THE ASSESSEE BELONG TO ASSESSMENT YEAR 1992-93, NOW THE ASSESSEE WAS ESTOPPED FROM AGITATING THE YEAR OF TAXABILITY. HE HAS FURT HER SUBMITTED THAT SINCE IN THE QUANTUM PROCEEDINGS, THE INCOME HAS BEEN DECLAR ED AS UNDISCLOSED INCOME FOR ASSESSMENT YEAR 1992-93, THE IMPUGNED PE NALTY HAS RIGHTLY BEEN LEVIED BY THE LOWER AUTHORITIES. 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. IT IS AN ADMITTED FACT ON THE FILE THAT IMP UGNED ADDITION FOR THE ASSESSMENT YEAR 1992-93 HAVE NOT BEEN MADE ON ACCOU NT OF DISCOVERY OF ANY INCOME BY THE OFFICIALS OF THE DEPARTMENT IN ANY SE ARCH / SURVEY ACTION OR FROM ANY INFORMATION DERIVED OR OTHERWISE. IT IS F ACT ON THE FILE THAT ASSESSEE HIMSELF OFFERED THE INCOME IN QUESTION FOR THE ASSE SSMENT YEAR 1993-94. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT SOURCE DISCLOSED BY THE ASSESSEE WAS IN FACT IS A COLORABLE DEVICE ADOPTED BY THE ASSESSEE TO INTRODUCE HIS UNACCOUNTED MONEY IN THE YEAR 1993-94 . HE WAS OF THE VIEW THAT INCOME IN QUESTION WAS UNDISCLOSED INCOME OF T HE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR 1992-93. NO DOUBT THE ABOV E FINDINGS OF THE ASSESSING OFFICER HAVE BEEN UPHELD BY THE TRIBUNAL IN QUANTUM PROCEEDINGS. HOWEVER, THE FACT WHICH CANNOT BE LOST OF SIGHT IS THAT IMPUGNED INCOME HAS NOT BEEN DISCOVERED ON ACCOUNT OF ANY EFFORT MADE B Y THE DEPARTMENT OR THAT THE ASSESSEE WAS FOUND IN POSSESSION OF UNDISCLOSED INCOME FOR WHICH HE COULD NOT EXPLAIN THE SOURCE DURING THE YEAR 1992-9 3. RATHER THE ASSESSEE HIMSELF OFFERED THE INCOME IN THE YEAR 1993-94 AND THEREFORE, IT CANNOT BE SAID TO BE CASE OF CONCEALMENT OF INCOME. ANOTHER IMPORTANT FACT RELEVANT FOR THE ADJUDICATION OF THIS PENALTY APPEAL IS THAT THE DATE OF LOTTERY DRAW, WHICH WAS HELD ON 10.2.1991. UNDER THE CIRCUMSTANCE S, THE REASONABLE PRESUMPTION IS THAT EVEN IF IT WAS UNDISCLOSED INCO ME OF THE ASSESSEE WHICH 6 WAS ROUTED THROUGH THE LOTTERY DRAW, THE SAID MONE Y MIGHT HAVE BEEN PAID BY THE ASSESSEE TO THE CONCERNED LOTTERY ORGANIZATION PRIOR THE DECLARATION OF THE PRIZE IN FAVOUR OF THE ASSESSEE ON 10.2.1991. IF TH AT WAS SO, THEN THE INCOME ON THAT ACCOUNT COULD HAVE BEEN TAXED IN THE HANDS OF THE ASSESSEE FOR ASSESSMENT YEAR 1991-92 AND NOT FOR ASSESSMENT YEAR 1992-93. LOOKING FROM ANY ANGLE AND CONSIDERING THE OVER ALL FACTS A ND CIRCUMSTANCES OF THE CASE, WE DO NOT THINK IT A FIT CASE FOR LEVY OF PEN ALTY U/S 271(1)(C) OF THE ACT. THE PENALTY LEVIED, IS THEREFORE, ORDERED TO B E DELETED. 7. IN THE RESULT, THE APPEAL THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.11.2016. SD/- SD/- (T.S KAPOOR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24 TH NOVEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR