Brij Kishore Gupta, Kanpur V. ITO, Kanpur

ITA 144/LKW/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48346 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Keywords: Gift; Income from undisclosed sources; Revised return
• Section: 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, LUCKNOW. BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NO.144(LKW.)/2011 A.Y. : 2001-02 BRIJ KISHORE GUPTA, VS. THE ITO-2(1), 117/H-2/87, PANDU NGAR, KANPUR. KANPUR. PAN AARPG1736G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GARG, ADVOCATE RESPONDENT BY : SHRI P.K.BAJAJ, SR.D.R. O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 30.11.2010 OF THE LD. CIT(A)-I, DEHRADUN HOLDING CONCURRENT JU RISDICTION OVER THE CASE BY VIRTUE OF THE ORDER OF THE CCIT, KANPUR, LUCKNOW DATED 23.6.2010. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE CONFIRMATION OF PENALTY OF RS.52,800 LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT TH E ACT). 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE FILED THE RETURN OF INCOME ON 26.11.2001, WHICH WAS SUBSEQUENTLY REVISE D ON 8.4.2002 SHOWING TOTAL INCOME OF RS.3,21,280. THE AO GOT THE INFORMATION THAT THE ASSESSEE HAD RECEIVED GIFTS OF RS.1,60,000, BUT HE DID NOT HAVE ANY EVIDENCE IN SUPPORT OF THE GIFTS. ON THE BASIS OF THE SAID INFORMATION, THE AO ISSUED NOTICE UNDER SECTION 148 OF THE ACT TO THE ASSESSEE ON 25.3.2004. LATER ON, 2 THE ASSESSMENT WAS FRAMED ON AN INCOME OF RS.3,37, 280 UNDER SECTION 143(3)/148 OF THE ACT ON 22.12.2004. THE AO CONSIDE RED THE AMOUNT OF RS.1,60,000 AS AN INCOME FOR WHICH THE ASSESSEE CO ULD NOT OFFER ANY EXPLANATION AND ALSO MADE AN ADDITION OF RS.16,000 AS EXPENDITURE INCURRED ON ACCOUNT OF ARRANGEMENT OF CREDIT ENTRIES. ACCOR DINGLY, THE ADDITION OF RS.16,000 WAS MADE. 3. THE AO ISSUED SHOW CAUSE PENALTY NOTICE DATED 22.12.2004 UNDER SECTION 271(1)(C) OF THE ACT. IN RESPONSE TO THE A BOVE, THE ASSESSEE SUBMITTED THAT HE FILED THE RETURN OF INCOME SUO M OTU AND INCLUDED THE AMOUNT OF CHEQUES RECEIVED PRIOR TO ANY NOTICE FROM THE DEPARTMENT. IT WAS FURTHER SUBMITTED THAT IN ORDER TO AVOID LEGAL LIT IGATION AND TO BUY PEACE OF MIND THE CREDIT ENTRY OF RS.1,60,000 IN SAVINGS BAN K ACCOUNT WAS INCLUDED. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL, 251 ITR 9(S. C.). THE AO WAS NOT SATISFIED FROM THE REPLY OF THE ASSESSEE AND WAS OF THE VIEW THAT THE ASSESSEE CONCEALED THE INCOME. THE AO OBSERVED THAT THE ASSE SSEES SECOND RETURN COULD NOT BE ACCEPTED AS A REVISED RETURN AND DISC LOSURE MADE THEREIN COULD NOT TAKE PLACE IN THE ORIGINAL RETURN. HE ACCORDI NGLY LEVIED THE PENALTY OF RS.52,800 UNDER SECTION 271(1)(C) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AND SUBMITTED THAT THE REVISED RETURN HAD BEEN FURNISHED VOLUNTARILY B EFORE THE ASSESSEE HAD BEEN CONFRONTED WITH ANY ADVERSE COMMENTS WHICH TH E DEPARTMENT MIGHT HAVE AGAINST HIM. THEREFORE, THE PENALTY WAS NOT LE VIABLE UNDER SECTION 271(1)(C) OF THE ACT. RELIANCE WAS PLACED ON THE JU DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA) AND THE DECISION 3 OF THE I.T.A.T.,LUCKOW BENCH IN THE CASE OF ADDL.CI T VS. NEHA BENEFICIARY TRUST IN ITA NO.629(LUC.)/2005. 5. THE LD.CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE DEPARTMENT HAD DETECTED THE BANK ACCOUNT (THROUGH WHICH THE BOGUS GIFTS HAD BEEN CHANNELISED) AS EARLY AS FEBRUARY, 2002, WHICH REVEALED THAT THE ASSESSEE WAS A BENEFICIARY OF THE RACKET AND INFORMATION TO THAT EFFECT WAS AVAILABLE WITH THE DEPARTMENT. ACC ORDING TO THE LD.CIT(A), IT WAS A DIFFERENT MATTER THAT THE ASSESSEE FURNIS HED THE REVISED RETURN BEFORE HE WAS CONFRONTED WITH THE ADVERSE EVIDENCE AGAINS T HIM, BUT WHETHER HE FURNISHED THE REVISED RETURN OR NOT, THE DEPARTMENT WAS GOING TO QUESTION HIM ANYWAY AND INITIATE PROCEEDINGS FOR TAXING THE CONCEALED INCOME. THE LD.CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAD IN TENDED TO PLOUGH BACK HIS INCOME IN THE FORM OF ALLEGED GIFTS AND THEREBY EVA DE THE PAYMENT OF TAX ON THE SAME BY DECIDING TO JOIN THE RACKET OF THE BOGU S GIFTS. HE ALSO POINTED OUT THAT THE ALLEGED GIFT WAS RECEIVED BEFORE MARC H, 2001 AND THE RETURN OF INCOME WAS FURNISHED ON 26.11.2001 BY SHOWING THE A MOUNT AS GIFT WHICH SHOWS THAT IN SPITE OF KNOWING FULLY WELL THAT THE ASSESSEE HAD PLOUGHED BACK HIS UNACCOUNTED INCOME IN THE GARB OF ALLEGED GIFTS AND IF CAUGHT, WAS LIABLE TO PENAL ACTION AND PROSECUTION, HE DECIDED TO GO AHEAD WITH HIS PLAN. THEREFORE, THE OFFENCE OF CONCEALMENT OF PARTICUL ARS OF INCOME HAD BEEN COMMITTED WHEN THE ORIGINAL RETURN SHOWING THE AMOU NT AS GIFT WAS FURNISHED. THE LD.CIT(A) CONFIRMED THE PENALTY LEVI ED BY THE AO. 6. NOW, THE ASSESSEE IS IN APPEAL. 4 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE RETURN OF INCOME WAS REVISED BY THE ASSESSEE WITHIN THE STIPULATED P ERIOD WHICH WAS AVAILABLE UPTO 31.3.2003 AND THE AO ISSUED THE NOTICE UNDER S ECTION 148 OF THE ACT ON 25.3.2004 I.E. MUCH AFTER THE DATE WHEN THE ASSESSE E REVISED HIS RETURN OF INCOME. HE FURTHER SUBMITTED THAT THE AO MADE THE A SSESSMENT BY CONSIDERING THE INCOME OF RS.3,21,280 SHOWN BY THE ASSESSEE IN HIS REVISED RETURN OF INCOME AND ONLY MADE THE ADDITION OF RS. 16,000 ON THE BASIS OF PRESUMPTION. THEREFORE, IT WAS NOT ESTABLISHED THA T THE ASSESSEE EITHER CONCEALED THE INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME. THEREFORE, THE PENALTY UNDER SECTION 271(1)(C) WAS NOT LEVIABLE. HE ACCORDINGLY PRAYED TO DELETE THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD.CIT(A). 8. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. STRONGLY S UPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE FURNISHED ORIGINAL RETUR N OF INCOME ON 26.11.2001 UNDER SECTION 139(1) OF THE ACT. THE ASSESSEE REVIS ED THE SAID RETURN UNDER SECTION 139(5) OF THE ACT ON 8.4.2002. THE PROVIS IONS CONTAINED IN SECTION 139(5) OF THE ACT READ AS UNDER : IF ANY PERSON, HAVING FURNISHED A RETURN UNDER SU B-SECTION (1), OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142, DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THERE IN, HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXP IRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE T HE COMPLETION OF THE 5 ASSESSMENT, WHICHEVER IS EARLIER: PROVIDED THAT WHERE THE RETURN RELATES TO THE PREVI OUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL, 1988, OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 9.1 FROM THE ABOVE PROVISIONS, IT IS CLEAR THAT THE ASSESSEE COULD HAVE REVISED THE RETURN BEFORE THE EXPIRY OF ONE YEAR F ROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE AS SESSMENT, WHICHEVER IS EARLIER. IN THE INSTANT CASE, THE ASSESSMENT YEAR INVOLVED IS 2001-02. THEREFORE, THE ASSESSEE COULD HAVE REVISED THE RETU RN OF INCOME UPTO 31.3.2003, SINCE THE ASSESSMENT WAS NOT COMPLETED B Y THE AO. THE ASSESSEE REVISED THE RETURN OF INCOME ON 8.4.2002 I.E. MUCH BEFORE THE STIPULATED TIME ALLOWED UNDER SECTION 139(5) OF THE ACT. THE AO IS SUED THE NOTICE UNDER SECTION 148 OF THE ACT ON 25.3.2004 I.E. MUCH AFTER THE DATE WHEN THE REVISED RETURN WAS FILED BY THE ASSESSEE. THE SAID REVISED RETURN WAS FILED BY THE ASSESSEE SUO MOTU AND THE DEPARTMENT HAD NOT BR OUGHT ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT ANY ACTION WAS TAKEN AGAINST THE ASSESSEE BY CONSIDERING THE SUM OF RS.1,60,000 AS CONCEALED/UNE XPLAINED INCOME. IN THE INSTANT CASE, WHEN THE ASSESSEE REVISED THE RET URN WITHIN STIPULATED PERIOD AND THE AO CONSIDERED THE INCOME DISCLOSED IN THE REVISED RETURN FOR THE PURPOSES OF ASSESSMENT FRAMED UNDER SECTION 143(3)/ 148 OF THE ACT, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE CON CEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS SUCH , THE PENALTY UNDER SECTION 271(1)(C) WAS NOT LEVIABLE IN THE PRESENT C ASE. IN THAT VIEW OF THE 6 MATTER, THE IMPUGNED ORDER OF THE LD.CIT(A) IS SET ASIDE AND THE PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) IS CANCELL ED. 10. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 15. 6.2011. SD. (N.K.SAINI) ACCOUNTANT MEMBER JUNE 15TH ,2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.