Mr. Arun Kumar Gupta, New Delhi V. ITO, New Delhi

ITA 1490/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3825 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Gift; Question of law; Reasonable cause
• Section: 6

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1490/DEL/2016 A.Y. : 2011-12 SH. ARUN KUMAR GUPTA, VS. ITO, WARD 29(3), 23, BALDEV PARK, NEW DELHI PARWANA ROAD, NEW DELHI (PAN: AAOPG3713G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. K. SAMPATH, ADVOCATE DEPARTMENT BY : MS. ASHIMA NEB, SR. DR O R D E R PER H.S. SIDHU, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-16, NEW DELHI DAT ED 24.2.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL RAISED IN THE ASSESSEES APPEAL READ AS UNDER:- 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMIN G THE LEVY OF PENALTY OF RS. 15,57,762/- U/S. 271(1)(C) EVEN WH EN THE ASSESSEE WAS NOT APPRISED OF THE SPECIFIC CHARGE FOR IT S LEVY, I.E., WHETHER IT WAS FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, IN THE PENALTY NOTICE 2 AND NOT EVEN IN THE ASSESSMENT ORDER. THUS, THE PENALTY SO LEVIED SHOULD BE DELETED. ] 2. THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE LEVY OF PENALTY OF RS. 15,57,762/- U/S. 271(109C) ON ADDIT ION OF RS. 51,60,000/- MADE FOR GIFTS RECEIVED HAVING BEEN SURRENDERED BY THE ASSESSEE ON AGREED BASIS TO BUY PEACE AND AVOID LITIGATION WHILE IGNORING THE FACTS, SUBM ISSIONS AND REJECTING THE BONA FIDE EXPLANATION OF THE ASSESSEE. THUS, THE PENALTY SO LEVIED SHOULD BE CANCELLED. 3. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, M ODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN IND IVIDUAL AND ASSESSMENT IN THIS CASE WAS COMPLETED AT AN INCOME OF RS. 56,3 1,950/- AS AGAINST THE RETURNED INCOME OF RS. 3,61,150/-. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE CLAIMED TO HAVE RECEIVED GIFTS AM OUNTING TO RS. 51,60,000/- TO INVEST IN PURCHASE OF PROPERTY. AFTER T HOROUGH PROBING BY THE AO THE COUNSEL OF THE ASSESSEE SURRENDERED AN AMOUNT OF RS. 27,50,000/- VIDE LETTER DATED 20.1.2014. THE AO ASKED THE ASSESSEE TO SUBMIT THE DETAILS IN RESPECT OF REMAINING DONORS. THEN THE ASSESSEE SURRENDERED THE WHOLE AMOUNT OF RS. 51,60,000/- BY FILING AN AFFIDAV IT ON 28.3.2014 3 REQUESTING THEREIN NOT TO INITIATE THE PENALTY PROCEE DINGS IN LIGHT OF THE SURRENDER. THE AO STATED IN THE ASSESSMENT ORDER THAT PEN ALTY PROCEEDINGS BEING SEPARATE PROCEEDINGS AND SUBMISSIONS OF THE ASSESSEE SHA LL BE CONSIDERED AT THE TIME OF PENALTY PROCEEDINGS. THEREAF TER, THE AO INITIATED THE PENALTY PROCEEDINGS BY ISSUING A SHOW CAUSE NOTICE DATE D 29.3..2014 U/S. 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT). THE SAID PROCEEDINGS WERE COMPLETED VIDE THE PENALTY ORDER DATED 25.9.2014 WITH THE LEVY OF PENALTY OF R S. 15,57,762/- U/S. 271(1) OF THE ACT ON THE ADDITION OF RS. 51,60,000/- , BEING MINIMUM. 4. AGAINST THE AFORESAID PENALTY ORDER THE ASSESSEE APPEA LED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 24.2.2016 HAS DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED PENALTY IN DISPUTE. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE PENALTY PROCEEDINGS OUGHT TO FAIL, THE PENALTY W AS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. ALSO THE NOTICE FOR PENALTY U/S. 271 READ WITH SECTION 274 OF THE I. T. ACT, 1961 WAS AMBIGUOUS AND VAGUE IN AS MUCH AS IT IS STATED BOTH CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS. FOR THE SAKE OF REFERENCE, THE COPY OF NOTICE DATED 29.3.2014 FOR INI TIATION OF PENALTY PROCEEDINGS AND COPY OF PENALTY ORDER DATED 29.3.2014 WERE FILED BEFORE THE BENCH. HE FURTHER STATED THAT ENTIRE PENALTY PROCEE DINGS STAND VITIATED 4 AS THE NOTICE ITSELF IS NOT IN ACCORDANCE WITH LAW AND IN ORDER TO SUPPORT HIS CONTENTION, HE PLACED THE RELIANCE ON THE FOLLOWING DE CISIONS:- - HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF C IT & ORS. VS. M/S MANJUNATHA COTTON AND GINNIG FACTORY & ORS. (2013) 359 ITR 565 - APEX COURT DECISION IN THE CASE OF CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN CC NO. 11485/2016 DATED 05.8.2016. IN VIEW OF ABOVE, HE REQUESTED THAT THE PENALTY IN D ISPUTE MAY BE CANCELLED AND APPEAL OF THE ASSESSEE MAY BE ALLOWED. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF INDIAN OIL CORPORATION LTD. VS. STATE OF BIHA R & ORS. DATED 13.8.2016 REPORTED 1986 AIR 1780 AND THE DECISION OF THE HONBL E DELHI HIGH COURT DATED 5.2.2010 IN THE CASE OF CIT VS. ECS LTD. AND FIL ED THE COPIES OF THE AFORESAID DECISIONS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORD AVA ILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE NOTICE DATED 29.3.2014 ISSUED BY TH E AO FOR INITIATING THE PENALTY PROCEEDINGS AND DIRECTING THE ASSESSEE TO APPE AR BEFORE HIM AT 11.30 AM ON 25/04/2014 AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT ..IT APPEARS TO ME THAT YOU:- 5 *HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WIT H A NOTICE U/S. 142(1)/143(2) OF THE INCOME TAX ACT, 19 61 DATED________. * HAVE CONCEALED THE PARTICULARS OF INCOME OR FUR NISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2, 3, 4 AND 5... 7.1 AFTER PERUSING THE NOTICE DATED 29.3.2014 ISSUED B Y THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCU RATE PARTICULARS OF INCOME AS WELL AS IN THE PENALTY ORDER DATED 25.9.201 4 HE HAS STATED THAT HE IS SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR S OF INCOME WITHIN THE MEANING OF SECTION 271(1) OF THE I.T. AC T, 1961. WE ALSO FIND THAT THE CASE LAWS CITED BY THE LD. DR ARE BASED ON DIF FERENT FACTS OF CASE AND HENCE NOT APPLICABLE IN THE PRESENT CASE. THEREFOR E, IN VIEW OF ABOVE, THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW AND NEEDS TO BE DELETED. OUR AFORESAID VIEW IS FORTIFIED BY THE FOLL OWING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH 6 SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION N O SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS 7 HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPE CTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID, WE DELETE THE PENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/01/2018. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 24/01/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES