Mr. Sanjay Agarwal, New Delhi V. Addl. CIT, New Delhi

ITA 1545/DEL/2013

• Counselvise Citation: 154520114 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 15-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: SANJEEV BINDAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 1545/DEL/2013 ASSESSMENT YEAR : 2006 - 07 SANJAY AGARWAL, 23/5, KALA BHAWAN, SHAKTI NAGAR, NEW DELHI. A AFPA0065L VS. ADDL. CIT, CENT. RANGE III, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SANJEEV BINDAL, C.A RESPONDENT BY : SH. B.R.R. KUMAR, SR. DR DATE OF HEARING: 17.02.2015 DATE OF PRONOUNCEMENT: 16.04.2015 O R D E R PER I.C. SUDHIR, J.M. THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE ORDER ON THE SOLE GROUND THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271D OF THE ACT AT RS. 35,50,000/ - WITHOUT APPRECIATING THE COMPLETE FACTS AND CIRCUMST ANCES OF THE CASE. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE RELEVANT FACTS ARE THAT THE AO LEVIED PENALTY U/S 27 1D AT RS. 31,50,000/ - FOR ACCEPTING CASH LOAN FROM RITE PAC INDUSTRIES PRIVATE ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 2 LIMITED IN CONTRAVENTION OF PROVISION OF SECTION 269SS OF THE ACT. THE LD. CIT(A) HAS ALSO UPHELD THE PENALTY WITH THIS OBSERVATION THAT THE ASSESSEE KEPT ON CHANGING ITS STAN D ABOUT THE TRANSACTION AND NO RESPONSE WAS RECEIVED FROM THE AO ON THE SUBMISSION MADE BEFORE THE LD. CIT(A) BY THE ASSESSEE BY WAY OF REMAND REPORT. 4. IN SUPPORT OF THE GROUND THE LD. AR REITERATED SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND RE FERRED PAGE NOS. 1 TO 236 OF THE PAPER BOOK I.E. COPIES OF LEDGER ACCOUNT OF M/S RITE PAC INDUSTRIES PVT. LTD. IN THE BOOKS OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION , ASSESSMENT PASSED U/S 153A/143(3) OF THE ACT, ACKNOWLEDGEMENT OF FILING OF RETURN OF INCOME, COMPUTATION OF ASSESSABLE INCOME FOR THE YEAR ALONG WITH BALANCE SHEET, MOU S F OR SALE AND CANCELLATION OF SALE OF CIVIL L INES PROPERTY ADDRESSED BY RITE PAC INDUSTRIES PVT. LTD., BANK STATEMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION, BANK STATEMENT OF RELEVANT PERIOD OF RITE PAC INDUSTRIES PVT. LTD., PURCHASE DEED OF CIVIL L INE PROPERTY, SALE DEEDS OF CIVIL L INE PROPERTY SOLD TO DIFFERENT PERSONS ON 01/08/2005 FOR DIFFERENT AREA AND CONSIDERATION, CBDT CIRCULAR NO. 387 DATED 06/07 /1984, AND WRITTEN SUBMISSION S FILED BEFORE THE LD. CIT(A) THAT THE CASH TRANSACTIONS IN QUESTION WERE WITHIN THE FAMILY CONCERNS AND THE ASSESSEES ARE OUTSIDE THE AMBIT OF PENALTY U/S 271D OF THE ACT. IN SUPPORT HE PLACED RELIANCE ON SEVERAL DECISIONS IN CLUDING THE FOLLOWING ONE: G.D. SUBRAYA, SHERGA VS. ITO (2006) 10 SOT 378 (BANG.); ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 3 DR. B.G. PANDA VS. DCIT (2000) 111 TAXMAN 86 (CAL.); MOHAN KARKARE VS. DCIT (1995) 52 ITD 236 (IND.) . 5. THE LD. DR ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WITH THIS CONTENTION THAT THE LD. CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL. 6. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT THE LD. CIT(A) WHILE REPRODUCING THE SUBMISSION OF THE ASSESSEE BEFORE HIM IN PARA NO. 3.5 OF THE FIRST APPEL LATE ORDER HAS NOTED IN PARA NO. 3.6 THAT HE HAD FORWARDED THE SUBMISSION OF THE ASSESSEE TO THE AO FOR HIS COMMENTS VIDE LETTER DATED 09/08/2012 AND THERE WAS NO RESPONSE FROM THE AO TILL THE DATE OF PASSING OF THE FIRST APPELLATE ORDER. IN THE SAID SUBM ISSION OF THE ASSESSEE THE ASSESSEE HAD ALSO SUBMITTED THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE BY THE AO AND THE PENALTY ORDER WAS PASSED WITHIN FOUR DAYS OF THE NOTICE. THE ASSESSEE HAD ALSO FURNISHED HIS EXPLANATION IN THE SAID SUBMISS ION. FOR A READY REFERENCE THE SAID SUBMISSION OF THE ASSESSEE REPRODUCED IN PARA NO. 3.5 OF THE FIRST APPELLATE ORDER IS BEING REPRODUCED HEREUNDER: (I) ON PERUSAL OF THE PENALTY ORDER, IT WOULD BE SEEN THAT THE SAID PROCEEDINGS WERE INITIATED BY TH E ADDL. CIT, CENTRAL RANGE 3 NEW DELHI BY ISSUE OF THE FIRST NOTICE ON 24/06/2011 AND THE PENALTY ORDER WAS PASSED ON 28/06/2011 WITHIN JUST 4 DAYS. THE LD. ADDL. CIT DID NOT APPRECIATE THE FACTS CORRECTLY BEFORE IMPOSING THE PENALTY. IT WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT M/S RITE PAC INDUSTRIES PVT. LIMITED, A COMPANY IN WHICH THE FAMILY OF THE ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 4 APPELLANT HAS INTEREST, WANTED TO BUY THE 1/5 TH CO - OWNERSHIP SHARE OF THE APPELLANT IN A PROPERTY (16, RAM KISHORE ROAD, CIVIL LINES, DELHI) FROM THE APPELLANT AND FOR WHICH IT GAVE MONEY TO THE APPELLANT IN CASH ON IMPREST ACCOUNT (TO MEET THE CONSTRUCTION COST OF THE PROPERTY) AND WHICH WAS DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT IN THE ROUTINE MANNER. SINCE SOMETIMES LATER IN JUNE, 2005 THE S AID COMPANY THOUGHT OTHERWISE AS THE OTHER CO - OWNERS WERE NOT WILLING TO RETAIN THE PROPERTY FOR A LONG PERIOD AND WITHDREW THE OPTION TO BUY THE SAID SHARE IN THE PROPERTY, THE APPELLANT RETURNED THE SAID MONEY DURING THE RELEVANT PREVIOUS YEAR ITSELF AND NOT ON 03/05/2006 AS MENTIONED IN THE PENALTY ORDER. THIS ENTIRE PROPERTY WAS SOLD BY THE CO - OWNERS INCLUDING THE APPELLANT TO SOMEONE ELSE DURING THE RELEVANT A.Y. FOR RS. 240 LACS IN WHICH THE APPELLANT S SHARE WAS RS. 48 LACS. NECESSARY SHORT TERM CA PITAL GAIN OF RS. 4,19,871/ - ON ITS SALE WAS DULY DECLARED IN THE RETURN OF INCOME FILED IN DUE COURSE AND WHICH HAS ALSO BEEN ACCEPTED U/S 153A/143(3) OF THE IT ACT BY THE AO. PHOTOCOPIES OF THE ASSESSMENT ORDER, BALANCE SHEET, COMPUTATION OF THE ASSESSA BLE INCOME FOR THE RELEVANT PERIOD, COPIES OF THE LETTER FOR SALE OF CIVIL LINES PROPERTY ADDRESSED BY M/S RITE PAC INDUSTRIES PVT. LTD., BANK STATEMENT OF THE APPELLANT AND M/S RITE PAC INDUSTRIES PVT. LTD. FOR REFUNDING THE AMOUNTS OF RS. 36,50,000/ - DUR ING THE RELEVANT PERIOD ARE ENCLOSED IN THE PAPER BOOK 1 TO 125 FOR YOUR KIND APPRECIATION 7. SINCE UNDISPUTEDLY THE AO HAS NOT EXAMINED THE CORRECTNESS OF THE ABOVE SUBMISSION, DURING THE REMAND PROCEEDINGS, WE IN THE INTEREST OF JUSTICE SET ASIDE THE MATTE R TO THE FILE OF THE AO TO EXAMINE THE ABOVE SUBMISSION OF THE ASSESSEE AND TH E DOCUMENTS FILED IN SUPPORT, WHICH AS PER THE ASSESSEE ARE ALREADY ON THE RECORD OF THE AUTHORITIES BELOW AND ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 5 DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WHILE DECIDING THE ISSUE AFRESH THE AO WILL ALSO EXAMINE THAT THERE WAS ACTUALLY NO CHANGE OF STAND OF THE ASSESSEE ON THE EXPLANATION REGA RDING THE RECEIPT OF RS. 31,50,0 00/ - TO ESTABLISH ITS BONAFIDE FOR NON - APPLICATION OF THE PENAL PRO VISION U/S 271D OF THE ACT. 8. THE GROUND IS THUS, ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/04/2015 SD/ - SD/ - ( T.S. KAPOOR ) ACCOUNTANT MEMBER ( I.C . SUDHIR ) JUDICIAL MEMBER DATED: 16.04.2015 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 6 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE A UTHOR 13.04 .2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 15.04 .2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 16.04.2015 4. DRAFT APPROVED BY THE SECOND MEMBER 16.04.2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 16.04.2015 6. DATE OF PRONOUNCEMENT OF ORDER 16.04.2015 7. DATE OF F ILE SENT TO THE BENCH CLERK 16.04.2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO. 1545/D/2013 MR. SANJAY AGGARWAL 7