SANDEEP BHIMRAO LAD, MUMBAI V. DCIT CIRCLE-3, THANE

ITA 1620/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 3800 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Bogus purchase; Depreciation; Peak credit; Retrospective amendment; Initiation of penalty proceedings; Wrong claim; Accommodation entries; Revised return; Unabsorbed depreciation
• Section: 271(1)(c); 133A; 274; 251; 113; 13; 22; 148

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAM LAL NEGI, JM ./ I.T.A. NO . 1620 / MUM / 2018 ( / ASSESSMENT YEAR: 20 09 - 10 ) SANDEEP BHIMRAO LAD, PROP - M/S SAI VENKATESH CONSTRUCTION, RO OM NO. 17, JEEVAN KAMAL CHS, KOPRI COLONY, MUMBAI - 400 603 . / VS. DCIT CIRCLE 3, ROOM NO. 2, 6 TH FLOOR, ASHAR IT PARK, ROAD NO. 16Z, WAGLE INDUSTRIAL ESTATE, THANE, PIN 400 604 ./ ./ PAN NO. ACCPL 9583 H ( / APPELLANT ) : ( / RESPONDENT ) & ./ I.T.A. NO . 1617 , 1618 & 1619 / MUM/ 2018 ( / ASSESSMENT YEAR: 2009 - 10 TO 2011 - 12 ) SUNNY ASHOK LAD, PROP - M/S SAI SIDDHANATH CONSTRUCTION, 602, DAMODAR APARTMENT, BEHIND ASHOK TALKIES, THANE(W), PIN - 400 601 / VS. ACIT CIRCLE 3, ROOM NO. 2, 6 TH FLOOR, ASHAR IT PARK, ROAD NO. 16Z, WAGLE INDUSTRIAL ESTATE, THANE, PIN 400 604 ./ ./ PAN NO. ACVPL 4760 F ( / APPELLANT ) : ( / RESPONDENT ) 2 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD / APPELLAN T BY : SHRI SUBODH RATNAPARKHI , AR / RESPONDENTBY : SHRI V. VINOD KUMAR , DR / DATE OF HEARING : 10 .10 .201 9 / DATE OF PRONOUNCEMENT : 31.10.2019 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT FOUR APPEAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 2 IN SHORT REFERRED AS LD. CIT(A) , PUNE, DATED 24.11 .17 AND 03.10.17 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2009 - 10 TO 2011 - 12 RESPECTIVELY. 2 . ALL THE APP EALS ARE HEARD TOGETHER AND ALL THE FACTS IN THESE APPEALS ARE SIMILAR, FOR THE SAKE OF CONVENIENCE , IT IS DISPOSED OF F BY THIS COMMON ORDER. TO DISPOSE OF F THESE APPEALS, WE HAVE TAKEN FACTS FROM AY 2009 - 10 BEARING ITA NO. 1620/MUM/18 . 3. THE BRIEF FACTS OF THE CASE ARE, THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 29.09. 2009 DE CLARING TOTAL INCOME AT RS. 45,58, 340/ - . SUBSEQUENTLY, THE CASE WAS REOPENED FOR SCRUTINY ON THE BASIS OF INFORMATION RECEIVED 3 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD FROM THE SALES TAX DEP ARTMENT, MAHARASHTRA. THE ABOVE INFORMATION CONTAINED THE DETAILS OF CERTAIN PERSON WHO HAD PROVIDED BOGUS PURCHASE BILLS TO THE ASSESSEE FOR ACCOMMODATION ENTRIES. THE ASSESSING OFFICER NOTICED THAT ONE OF THE PARTY WAS A PROVIDER OF BOGUS PURCHASE BILLS, ACCORDINGLY NOTICES UNDER SECTION 148 ALONG WITH REASON FOR REOPENING. WHEN THE ASSESSEE WAS NOT IN A POSITION TO SUBSTANTIATE THE ABOVE PURCHASE, AT THE SAME TIME ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE UNDER SECTION 133 (6) OF THE ACT AND THE NOTICES WERE RETURNED UNSERVED. ACCORDINGLY ASSESSING OFFICER TREATED THE ABOVE BOGUS PURCHASES AS INCOME OF THE ASSESSEE. 4. SUBSEQUENTLY PENALTY PROCEEDINGS WERE INITIATED BY ISSUE OF N OTICE UNDER SECTION 274 OF THE A CT ON 0 4 .0 3 . 2014 AND SERVED ON THE ASSESSEE. IN RESPONSE ASSESSEE FILED A LETTER DATED 0 1. 0 7.2014, FOR THE SAKE OF CONVENIENCE, IT IS REPRODUCED BELOW: '1. IN THE ORDER OF ASSESSMENT, YOU HONOUR HAD DISALLOWED THE PURCHASES OF F. Y. 200& - 09 AMOUNTING TO RS. 27,57,768/ - STATING PURCHASES ARE FROM SUSP ICIOUS DEALERS AS RECOGNIZED BY MAHARASHTRA SALES TAX DEPARTMENT. I HAD PURCHASED MATERIAL WHICH ARE 4 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD GENUINE PURCHASES & ALREADY SUBMITTED IN SUBMISSION INVOICE COPY, BANK STATEMENT \ & RELATED RECORDS SHOWING PAYMENT DETAILS FOR YOUR KIND CONSIDERATION. 2.1 BEING GOVERNMENT CONTRACTOR HAVE TO WORK IN STIPULATED TIME & PROCURE THE MATERIAL AS PER THE SITE REQUIREMENTS. SOME TIME THERE IS A PROBLEM OF WORKING CAPITAL TO PROCURE THE GOODS ON CREDIT FROM UNKNOWN PARTIES FOR VARIOUS SITES. DUE TO THE NON AVAILABI LITY OF TIME IT IS VERY DIFFICULT TO JUDGE THE - GENUINENESS OF THE PARTY & BEING A PROPRIETARY CONCERN WHERE THE ACTIVITIES OF THE BUSINESS ARE NOT DIVIDED AMONGST VARIOUS DEPARTMENTS DUE TO WHICH ALL DECISIONS ARE TAKEN BY THE ME & DUE TO THE LIMITATION P F EXPERTISE MAN POWER DECISION MAKING BECOMES VERY DIFFICULT & THEREFORE THIS TYPE PF SUSPICIOUS DEALERS MAY MISGUIDE US. 3. I HAD AGREED FOR THE DISALLOWANCE WITH THE INTENSI ON TO AVOID LITIGATION AND TO CO OPERATE WITH THE DEPARTMENT PROVIDED PENALTY U/S 271(L)(C) IS NOT INITIATED. SINCE THE ADDITION WAS ACCEPTED BY ME BY MAKING ADDITION IN THE RETURN & BY RECOMPUTATION OF TAX LIABILITY TO AVOID LONG DRAWN LITIGATION, AND FOR PEAC E OF MIND, PENALTY U/S 271(L)(C) CANNOT BE IMPOSED. \ 5 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 4. THAT THE PENALTY CA NNOT BE IMPOSED WHEN THE ADDI TION IS ACCEPTED CONDITIONALLY IN VIEW OF THE DECISIONS OF THE VARIOUS COURTS AS GIVEN BELOW. (I) CIT VS. KIRAN & CO. - 217 ITR 326 (BOM) (II) ITO VS. MAJIT SINGH BALDEV SINGH COMMISSION AGENTS - 69ITD197 (AMRITSAR) (1999) (II I) OT VS. SIR SHADILAT SUGGASR & GEN. MILLS LTD. - 168 ITR 705 (SC) (IV) CIT VS. SURESH CHANDRA MITTAL - 241ITR124 (MP) (V) ACIT VS. HERNAM SINGH BISHAN SINGH JEWELLERS PVT. LTD. - 69 TTJ 14 (DELHI) (2000) 5. IT IS OUR HUMBLE SUBMISSION THAT ONCE HAVING A CCEPTED THE SURRENDERED ADDITION) WHICH WAS MADE WITH THE INTENTION TO AVOID LONG DRAWN LITIGATION AND TO BUY PEACE WITH A SPECIFIC CONDITION ATTACHED THERETO THAT NO PENALTY U/S 271(L)(C) SHOULD BE LEVIED, THE DEPARTMENT SHOULD NOT NOW LEVY PENALTY UNDER THE SAID SECTION. OUR ABOVE SAY IS ALSO SUPPORTED BY THE FOLLOWING JUDICIAL DECISIONS ON THE ISSUE: - (I) CIT - VS - KIRAN & CO. 217 ITR 326 (BOMBAY) (1996) 6 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD THE ASSESSEE HAD MADE AN CONDITIONAL OFFER OF AN AMO UNT TO TAXATION SUBJECT TO NON - LEVY OF PEN ALTY U/S 271(1 )(C). THE PENALTY LEVIED U/S 271( 1)(C) WAS CANCELLED BY THE BOMBAY HIGH COURT HOLDING THAT ASSUMPTION OF CONCEALMENT OF INCOME WAS WITHOUT ANY, BASIS. (II) ITO - VS - MANJIT SINGH BALDEV SINGH COMMISSION AGENTS 69ITD197(AMRITSAR) (1999) IN TH IS CASE THE ASSESSEE SURRENDERED PEAK OF CASH CREDITS DURING ASST. PROCEEDINGS VIDE A LETTER WHICH STATED THAT THE ASSESSEE WAS AGREEABLE TO S URRENDER THE PEAK CREDITS ONLY IF SUCH SURRENDER WAS NOT SUBJECT TO PENALTY PROCEEDINGS U/S 271(1 )( C). HOWEVER, PENALTY U/S 271(1 )(C) WAS LEVIED. IT WAS HELD THAT THE A. O. SHOULD HAVE EITHER ACCEPTED THE TOTAL OFFER OR HE SHOULD HAVE WRITTEN AND INFORMED THE A PPELLANT THAT HIS SURRENDER IS NOT ACCEPTED. IT WAS STATED THAT THE A.O. CANNOT EAT CAKE FROM BOTH SIDES. T HE PENALTY U/S 271(1)(C) WAS DELETED. (III) SIR SHADILAL SUGAR & GEN. MILLS LTD. - VS - CIT 168 ITR 705 (SC) IN THIS CASE THE ASSESSEE SURRENDERED TWO SUMS FOR MAKING ADDITION. THE TTO IMPOSED PENALTY U/S 271(L)(C). THE APEX COURT STATED THAT ASSESSEE HAD 7 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD ADMITTED THAT THE AMOUNTS SURRENDERED WERE HIS INCOME BUT IT WAS NOT AN ADMISSION THAT THERE WAS A DELIBERATE CONCEALMENT. FROM AGREEING TO ADDITIONS, IT DOES NOT FOLLOW THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME. THERE MAY BE A HUNDRED AND ON E REASONS FOR SUCH ADMISSION, (IV) CIT - VS - SURESH CHANDRA MITTAL 241 ITR 124 (MP) ASSESSEE HAD DECLARED ADDITIONAL INCOME BY WAY OF REVISED RETURNS AFTER PERSISTENT QUERIES BY AO. ONCE THE REVISED RETURNS HAVE BEEN REGULARIZED BY THE REVENUE THE EXPLANATIO N OF THE ASSESSEE THAT HE HAS DEC LARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF VEXED LITIGAT ION COULD BE TREATED AS BONAFIDE AND PENALTY U/S 271(L)(C) WAS NOT LEVIABLE, (V) HARNAM SINGH BISHAN SINGH JEWELLERS PVT. LTD. - VS - ACTT 69 TTJ 14 (DELHI ) (2000) WHERE INCOME DISCLOSED BY ASSESSEE VOLUNTARILY AT THE TIME OF SURVEY WAS ASSESSED IN ITS HAND ON THE BASIS OF ADMISSION WHICH WAS CONDITIONAL THAT PENALTY WOU LD BE IMPOSED, PENALTY U/S 271(1 )(C) COULD NOT BE LEVIED. 6. NON - FILING OF APPEAL HAS NO BEARING ON PENALTY 8 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD (I) THE APPELLANT HAD NOT PREFERRED APPEAL AGAINST THE ADDITION BY AD H ERENCE TO THE PROMISE MADE UNDER THE LETTER DT. 25.02.2014. WE SUBMIT THAT NON - FILING OF APPEAL SHOULD NOT BE CONSTRUCTED TO MEAN THAT THE ADDITION IS CORRECT B Y LAW. (II) ON THIS ISSUE, RELIANCE IS PLACED ON THE DECISION IN THE CASE OF LAXMI JEWELLERY - VS - CIT, 171 ITR 649 (AP) WHEREIN THE HON. COURT HAS HELD THAT THE MERE FACT THAT THE ASSESSEE DID NOT APPEAL AGAINST THE ASSESSMENT WOULD NOT INDICATE THAT IT HA S ACCEPTED THE CORRECTNESS OF THE ADDITION. IT IS FURTHER SUBMITTED THAT APPELLANT PURSUANT TO LEVY OF PENALTY U/S 271(L)(C) HAS PREFERRED APPEAL AGAINST THE QUANTUM ADDITION ALSO. 7. THAT THE FULL FACTS HAVE BEEN DISCLOSED TO THE DEPARTMENT AND HENCE THE PENALTY WAS NOT IMPOSABLE IN THE CASE OF THE ASSESSEE IN VIEW OF THE DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. - 322 ITR 158 (SC). 8. IN LIEU OF THE ABOVE DISCUSSIONS, THE FADS OF MY CASE & PROVISIONS OF LAW, I HUMBLY SUBMIT THAT PE NALTY PROCEEDINGS U/S 271(L)(C) MAY PLEASE BE DROPPED FOR WHICH I SHALL REMAIN EVER OBLIGED. 9 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS GOT ACCOMMODATION ENTRIES FROM HAWALA OPERATORS WITH AN IN TENTION TO SUPPRESS HIS INCOME, FURTHER HE OBSERVED THAT THE PRIMARY ONUS IS ON THE ASSESSEE TO SUBSTANTIATE THE ALLEGED PURCHASES MADE FROM THE PARTIES IDENTIFIE D AS HAWALA OPERATOR AS GENUINE SINCE ASSESSEE HAS FAILED TO PROVE AND CIRCUMSTANCES REASON ABL Y POINT TO THAT THE ASSESSEE HAS CONSCIOUSLY CONCEALED THE PARTICULARS OF INCOME OR HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND LEVIED THE PENALTY OF RS. 9,37, 365/ - . 6. AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED AN APPEAL BEFORE CIT(A) AND CIT(A) CONFIRMED THE PENALTY. EVEN THOUGH T HE ASSESSEE HAS OBJECTED BEFORE HIM THAT ASSESSEE HAS BROUGHT ON RECORD THAT CO NCERN PURCHASES WERE GENUINE AND SUPPORTED BY ADEQUATE EVIDENCES AND FURTHER ASSESSEE OBJECTED TO THE FACT THAT ASSESSING OFFICER HAS NOT SPECIFIED AS TO WHICH SPECIFIC LIMB OF SECTION 271(1) (C) OF THE ACT UNDER WHICH THE ALLEGED OFFENCE HELD TO HAVE BEEN COMMITTED. 10 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 7. AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED APPEAL BEFORE US RAISING FOLLOWING GROUNDS OF APPEAL: 1. THE HON. CIT (A) ERRED IN CONFIRMING THE PENALTY OF RS. 9,37,365/ - LEVIED U/S 271 (1 )(C) NOT APPRECIATING THAT THE PENALTY WAS L EVIED FOR THE REASON THAT THE APPELLANT HELD CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, THEREBY NOT SPECIFYING THE SPECIFIC LIMB OF SECTION 271(L)(C) UNDER WHICH THE ALLEGED OFFENCE IS HELD TO HAVE BEEN COMMITTED, RESULTING IN THE LEVY OF PENALTY BEING BAD IN LAW AND VOID - AB - INITIO. 2. THE HON. CIT (A) ERRED IN CONFIRMING PENALTY OF RS. 9,37,365 / - LEVIED U/S 271(1 )(C) R.W.S 274 OF THE I. TAX ACT 1961, IN RESPECT OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PURCHASES FROM ONE PARTY, M/S. CORAL TRADING CO. NOT APPRECIATING THAT THE SAID PURCHASES WERE GENUINE PURCHASES, DULY SUPPORTED BY SUBSTANTIAL EVIDENCES AND THAT THE MATERIAL PURCHASED WAS CONSUMED BY THE APPELLANT IN CIVIL CONSTRUCTION WORK AND COULD NOT BE DEEMED TO BE T HE CONCEALED INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE APPELLANT. THE PENALTY OF RS. 9,37,365/ - LEVIED U/S 271( 1 )(C) OF THE I.T. ACT BEING NOT WARRANTED BY FACTS AND IN LAW MAY PLEASE BE CANCELLED. 11 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 3. THE APPELLANT CRAVES LEAVE T O ADD, ALTER, AMEND AND/OR VARY THE GROUND OF APPEAL/RELIEF CLAIMED AT ANY TIME BEFORE THE DECISION OF THE APPEAL. 8. BEFORE US , LD. AR SUBMITTED THAT IN PARA 6 OF THE PENALTY ORDER, ASSESSING OFFICER LEVIED THE PENALTY WITH THE OBSERVATION , HE HAS SATISFI ED THAT THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULAR OF SUCH PENALTY. HE SUBMITTED THAT ASSESSING OFFICER HAS LEVIED THE PENALTY WITHOUT SATISFYING HIMSELF IN WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, HE IS LEVYING THE PENALTY . HE SUBMITTED THAT PENALTY WAS CHARGED ON BOTH ISSUES , IT IS AGAINST THE PROVISION OF THE LAW . H E SUBMITTED THAT ASSESSING OFFICER HAS NOT INVESTIGATED OR PROVED THAT THE ALLEGED PURCHASES WERE NOT GENUINE AND MERELY CHARGED A PENALTY , IN THAT PROCESS , LD . AR RELIED IN THE CASE LAW HPCL MITTAL ENERGY LTD VS ACIT (2018) 97 TAXMANN. COM 3 (AMRITSAR) , IN WHICH THE H ONOURABLE THIRD MEMBER OBSERVED AS BELOW: 21. APART FROM THE ABOVE THREE SITUATIONS IN WHICH THE AO HAS CLEAR - CUT SATISFACTION, THERE CAN BE ANOTHE R FOURTH SITUATION AS WELL. IT MAY BE WHEN IT IS DEFINITELY A CASE OF UNDER - REPORTING OF INCOME BY THE ASSESSEE FOR WHICH AN ADDITION/DISALLOWANCE HAS BEEN MADE, BUT THE 12 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD AO IS NOT SURE AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS OF THE PRECISE CHARGE AS TO `CONCEALMENT OF PARTICULARS OF INCOME OR `FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN SUCH CIRCUMSTANCES, HE MAY USE SLASH BETWEEN THE TWO EXPRESSIONS AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS. HOWEVER, DURING THE PENALTY PROCEEDINGS , HE MUST GET DECISIVE, WHICH SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE ASSESSEE IS GUILTY OF `CONCEALMENT OF PARTICULARS OF INCOME OR `FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. UNCERTAIN CHARGE AT THE TIME OF INITIATION OF P ENALTY, MUST NECESSARILY BE SUBSTITUTED WITH A CONCLUSIVE DEFAULT AT THE TIME OF PASSING THE PENALTY ORDER. IF THE PENALTY IS INITIATED WITH DOUBT AND ALSO CONCLUDED WITH A DOUBT AS TO THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS OF SUCH INCOME ETC., THE PENALTY ORDER IS VITIATED. IF ON THE OTHER HAND, IF THE PENALTY IS INITIATED WITH AN UNCERTAIN CHARGE OF `CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME ETC., BUT THE ASSESSEE IS ULTI MATELY FOUND TO BE GUILTY OF A SPECIFIC CHARGE OF EITHER `CONCEALMENT OF PARTICULARS OF INCOME OR `FURNISHING OF INACCURATE PARTICULARS OF INCOME, THEN NO FAULT CAN BE FOUND IN THE PENALTY ORDER. 13 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 27. IN VIEW OF THE FOREGOING DISCUSSION, I AM SATISFIED TH AT THE PENALTY WAS WRONGLY IMPOSED AND CONFIRMED IN ALL THE FOUR APPEALS UNDER CONSIDERATION. I, ERGO, AGREE WITH THE LD. JM. IN STRIKING DOWN ALL THE PENALTY ORDERS. THE QUESTION POSED IS, THEREFORE, ANSWERED IN AFFIRMATIVE TO THE EFFECT THAT WHERE THE SA TISFACTION OF THE AO WHILE INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 IS WITH REGARD TO ALLEGED CONCEALMENT OF INCOME BY THE ASSESSEE, WHEREAS THE IMPOSITION OF THE PENALTY IS FOR CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME, THE LEVY OF PENALTY IS NOT SUSTAINABLE. 9. FURTHER, LD. AR PRAYED THAT THE PENALTY LEVIED BY ASSESSING OFFICER IS NOT JUSTIFIED AND UNLAWFUL . FURTHER, HE SUBMITTED THAT WITH REGARD TO PENALTY IN ASSESSMENT YEAR 2010 - 11 AND 20 11 - 12, IT IS NOT O N JURISDICTIONAL ISSUE , BUT HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ESTABLISHED THAT ASSESSEE HAS CONCE ALED ANY INCOME BEFORE LEVYING PENALTY . I N THIS REGARD , HE RELIED IN THE FOLLOWING CASE LAW: I) CIT VRS SHRI SAMSON PERINCHERY (ITA NO. 1154 OF 2 014) & II) CIT & ANR. VRS. MANJUNATHA COTTON & GINNING FACTORY 92012) 83 CCH 0282 KAR HC. 14 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 10. O N THE OTHER HAND , LD. DR FILED A WRITTEN SUBMISSION IN SUPPORT OF HIS ARGUMENT, WHICH IS REPRODUCED BELOW: WITH REGARD TO THE IMPOSITION OF PENALTY THE ASSESSING OFFICER HAS RIGHTLY IMPOSED THE PENALTY AND THE LD. COMMISSIONER OF INCOME AX (APPEAL) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. I, THEREFORE, RELY THE ORDER OF THE LD.CIT (A) AND THE ASSESSING OFFICER AND THE FINDINGS THEREON. HOWEVER, IN THIS CASE, IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED WITH REGARD TO LEVY OF PENALTY U/S 271(1)(C) OF I.T. ACT. 1. UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [(2007) 295 ITR 2441 WHERE HON'BLE SUPREME COURT HELD THA T PENALTY UNDER SECTION 271(1)(C) IS A CIVIL LIABILITY FOR WHICH WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING THE CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROCEEDINGS UNDER SECTION 276C 2. R L TRADERS VS ITO (2017 - T1OL - 2583 - HC - DEL - IT) WHERE HON'BLE DELHI HIGH COURT HELD THAT CITING OF PAST INSTANCE OR LACK OF ABSENCE OF CROSS - EXAMINATION, 15 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD CANNOT VITIATE THE INITIATION AND CULMINATION OF PENALTY PROCEEDINGS IN CASE OF ACCOMMODATION ENTRY 3. GIT VS ZOOM COMMUNICATION (P.) LTD. M91 TAXMAN 179 (DELHI VF201 01 327 ITR 510 (DELHI)/ [2010] 233 CTR 465] WHERE HON'BLE DELHI HIGH COURT HELD THAT IF ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW, BUT IS ALSO WHOLLY WITHOUT ANY BASIS AND EXPLANATION FURNISHED BY HIM FOR MAKING SUC H A CLAIM IS NOT FOUND TO BE BONA FIDE, EXPLANATION 1 TO SECTION 271(1)(C) WOULD COME INTO PLAY AND ASSESSEE WILL BE LIABLE TO PENALTY 4. CIT VS MOSER BAER INDIA LTD. (184 TAXMAN 8 (SCVF.20091 315 ITR 460 (SC)/[2009] 222 CTR 213) WHERE HON'BLE SUPREME COUR T CONFIRMED PENALTY UNDER SECTION 271 (1 )(C) FOR WRONG ADJUSTMENT OF UNABSORBED DEPRECIATION. 5. CIT VS GOLD COIN HEALTH FOOD (P.) LTD (172 TAXMAN 386 (SC)/[2008] 304 ITR 308 (SC)/[2008] 218 CTR 359) WHERE HON'BLE DELHI SUPREME COURT HELD THAT AMENDMENT M ADE IN EXPLANATION 4 TO SECTION 271(1)(C)(III) WITH EFFECT FROM 1 - 4 - 2003 IS CLARIFICATORY 16 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD AND, THEREFORE, WILL HAVE RETROSPECTIVE EFFECT. PENALTY U/S 271(1)(C) COULD BE LEVIED IN CASE OF LOSS RETURN 6. MAK DATA P. LTD VS. CIT F38 TAXMANN.COM 448 (SC)/[2 013] 358 ITR 593 (SC)/[2013]263 CTR11 WHERE HON'BLE SUPREME COURT HELD THAT UNDER EXPLANATION 1 TO S. 271(1)(C), VOLUNTARY DISCLOSURE OF CONCEALED INCOME DOES NOT ABSOLVE ASSESSEE OF S. 271(1)(C) PENALTY IF THE ASSESSEE FAILS TO OFFER AN EXPLANATION WHICH IS BONA FIDE AND PROVES THAT ALL THE MATERIAL FACTS HAVE BEEN DISCLOSED '9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CO NDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK ST ATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 17 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSESS EE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WA S SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961.' 7. B.A. BALASUBRAMANIAM & BROS. CO VS CIT [116 TAXMAN 842, 236 ITR 977, 1 57 CTR 556] WHERE HON'BLE SUPREME COURT HELD THAT DIFFERENCE BETWEEN INCOME ASSESSED AND INCOME RETURNED BEING MORE THAN 20 PER CENT, EXPLANATION TO SECTION 271(1)(C) BECAME APPLICABLE AND ASSESSEE HAVING FAILED TO DISCHARGE ONUS BEING CAST ON ASSESSEE BY VIRTUE OF SAID EXPLANATION, ASSESSING OFFICER WAS JUSTIFIED IN IMPOSING PENALTY 18 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 8. CIT VS GATES FOAM & RUBBER CO [91 ITR 467] CIT VS INDIA SEAFOOD [105 ITR 708] WHERE HON'BLE KERALA HIGH COURT HELD THAT CLAIMING EXCESSIVE DEDUCTION ALSO AMOUNTS TO CONCEAL MENT OF INCOME 9. STEEL INGOTS LTD VS. CIT [296 ITR 228] WHERE HON'BLE MADHYA PRADESH HIGH COURT HELD THAT IN CASE OF CONCEALMENT OF TRUE INCOME CHARGEABLE TO TAX BY MAKING BOGUS CLAIM, LEVY OF PENALTY U/S 271(1)(C) READ WITH EXPLANATION 1 IS JUSTIFIED 10. CIT VS ESCORTS FINANCE LTD [183 TAXMAN 453 (DELHI)/[2010] 328 ITR 44 (DELHI)/[2009] 226 CTR 105] WHERE HON'BLE DELHI HIGH COURT HELD THAT IF CLAIM MADE IN RETURN OF INCOME APPEARS TO BE EX FACIE BOGUS, IT WOULD BE TREATED AS A CASE OF CONCEALMENT OR FURNI SHING OF INACCURATE PARTICULARS AND PENALTY PROCEEDING WOULD BE JUSTIFIED 11. CIT VS R.M.P. PLASTO (P.) LTD [184 TAXMAN 372 (SC)/[2009] 313 ITR 397 (SC)/[2009] 227 CTR 635] WHERE HON'BLE SUPREME COURT HELD THAT CONFIRMED PENALTY UPON ASSESSEE FOR CONCEALME NT OF INCOME UNDER SECTION 271(1)(C) BECAUSE POSITIVE INCOME OF 19 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD ASSESSEE WAS REDUCED TO NIL AFTER ALLOWING SET - OFF OF CARRIED FORWARD LOSSES OF EARLIER YEARS 12.K.P. MADHUSUDHANAN VS CIT [[2001] 118 TAXMAN 324 (SC)/[2001] 251 ITR 99 (SC)/[200T] 169 CTR 489 (SC)] WHERE HON'BLE SUPREME COURT HELD THAT WHERE ASSESSEE WAS UNABLE TO FURNISH EVIDENCE FOR LOANS AND IT OFFERED AMOUNT OF TRANSACTION AS ADDITIONAL INCOME, ASSESSING OFFICER WAS JUSTIFIED IN IMPOSING PENALTY U/S 271(1)(C) AFTER FINDING THE EXPLANATION TO BE UNACCEPTABLE AND APPLYING EXPLANATION 1(B) OF THE SECTION. 13. EARTHMOVING EQUIPMENT SERVICE CORPORATION VS DCIT 22(2) MUMBAI THE HON'BLE ITAT MUMBAI (2017)84 TAXMANN.COM 51 (MUMBAI TRIB.) 2017 /166ITD 113 (MUMBAI - TRIB.)2017 /187 TTJ233 (MUMBAI TRIBU NAL) AT PARA 6 PAGE 4 HAS DISCUSSES THE TECHNICAL GROUND AND REJECTED THE SAME ON THE DEFECT IN THE FIRST NOTICE, THE RELEVANT CLAUSE HAS NOT BEEN TICKED OFF AND SECOND NOTICE IS SIMPLY A SHOW CAUSE NOTICE THE HON'BLE ITAT OBSERVED THAT THE PENALTY COULD N OT BE DELETED MERELY ON THE BASIS OF DEFECT POINTED BY THE LD.AR IN THE NOTICE AND HAS REJECTED THE LEGAL GROUND RAISED . 20 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 14.DILIP N.SHROFF V/S JCIT (2007) 291 ITR 519 (SC) 15. GIT V/S RELIANCE PETROPRODUCTS PVT LTD (2010)322ITR0158(SC) 16.UOI V/S RAIASTHA N SPINNING & WEAVING MILLS (2010)1GSTR 66(SC) 17 CIT V/S ATUL MOHAN BINDAL (2009) 317 ITR 1 (SC) 18. PRICE WATER HOUSE COOPERS PVT. LTD.V/S CIT (2012)348 ITR 306(SC) 19. CIT V/S SOMAMREVERGREEN KNITS LTD (2013)352ITR592(BOM.) 20. CIT V/S SMT KAUSHALYA (199 4)75 TAXMAN 549 (BOMBAY) 21.MAHARAI GARAGE & CO. V/S CIT NAQPUR 85 TAXMANN.COMSG (BOMBAY 22. (1970) 77 ITR 107(SC1 JAIN BROTHERS VS UNION OF INDIA REGARDING LIMBS OF NOTICE 23. KARNATAKA HIGH COURT JUDGMENT IN M/S MANIUNATHA COTTON GINNING FACTORY ON PENAL TY FOR CONCELAMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME U/S 271(1)(C) | 29 - 08 - 2015). THE FINDINGS RECORDED IN THE ASSESSMENT PROCEEDINGS IN SO FAR AS 'CONCEALMENT OF INCOME' AND 'FURNISHING OF INCORRECT 21 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD PARTICULARS' WOULD NOT OPERATE AS RES JUDIC ATA IN THE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE SAID PROCEEDINGS ON MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PENALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE ASSESSMENT OR REASSESSMENT CANNOT BE DECLARED AS INVALID IN THE PENALTY PROCEEDINGS. 11. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. WE NOTICE THAT ASSESSING OFFICER RECEIVED CERTAIN INFORMATION FROM SALES TAX DEPARTMENT RELATING TO ACCOMMODAT ION ENTRIES PROVIDED BY CERTAIN PARTIES AND HE NOTICE D THAT ONE OF THE PARTY (CORAL TRADING CO.) ISSUED PURCHASE BILLS TO THE ASSESSEE AND ACCORDINGLY , THE ASSESSMENT WAS REOPENED. SINCE THE ASSESSEE HAS SUBMITTED THE BILLS AND VOUCHERS IN SUPPORT OF HIS P URCHASE TRANSACTION WITH THE ABOVE PARTY . H OWEVER , ASSESSEE HAS SUBMITTED BEFORE US THAT ASSESSEE IS VOLUNTARILY AGREED FORTHE ADDITION BEFORE ASSESSING OFFICER IN ORDER TO BUY PEACE , ACCORDINGLY , INCLUDED THE ABOVE ADDITIONAL INCOME IN ITS RETURN OF INCOM E AND PAID THE TAXES. HOWEVER WE NOTICE FROM THE PENALTY ORDER THAT ASSESSING OFFICER ACKNOWLEDGED THAT ASSESSEE HAS PURCHASED FROM THE PROVIDER OF ACCOMMODATION ENTRY BUT HE HAS 22 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD SATISFIED HIMSELF THAT THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INA CCURATE PARTICULARS. SINCE ASSESSING OFFICER HAS LEVIED THE PENALTY IN BOTH LIMBS OF THE SECTION 271( 1)(C) OF THE ACT, NOW ASSESSEE IS OBJECTING TO THE ABOVE ACTION OF THE ASSESSING OFFICER. IN THE SIMILAR FACTS , TH E COORDINATE B ENCH IN THE THIRD MEMBER CA SE HAS HELD AS UNDER: 27. IN VIEW OF THE FOREGOING DISCUSSION, I AM SATISFIED THAT THE PENALTY WAS WRONGLY IMPOSED AND CONFIRMED IN ALL THE FOUR APPEALS UNDER CONSIDERATION. I, ERGO, AGREE WITH THE LD. JM. IN STRIKING DOWN ALL THE PENALTY ORDERS. THE QUEST ION POSED IS, THEREFORE, ANSWERED IN AFFIRMATIVE TO THE EFFECT THAT WHERE THE SATISFACTION OF THE AO WHILE INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 IS WITH REGARD TO ALLEGED CONCEALMENT OF INCOME BY THE ASSESSEE, WHEREAS THE IMPOSITION OF THE PENALTY IS FOR CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME, THE LEVY OF PENALTY IS NOT SUSTAINABLE. 12. RESPECTFUL LY FOLLOWING THE ABOVE DECISION , WE ARE INCLINED TO DELETE THE PENA LTY FOR THE ASSESSMENT YEAR 200 9 - 10 FOR BO TH THE ASSESSES I.E. SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD . 23 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD 13. WITH REGARD TO OTHER ASSESSMENT YEARS, WE NOTICE THAT ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT ESTABLISHING OR WITHOUT MAKING ANY INVESTIGATION ON BOGUS PURCHASES. HE MADE THE ADDITION MERELY BECAUSE IT IS NOT ESTABLISHED BY ASSESSEE AND OBSERVED THAT AS THE ONUS ON ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES. IT MAY BE ACCEPTABLE TO MAKE ADDITION IN THE RETURN OF INCOME BUT WHEN IT COMES TO PENALTY, HE HAS TO ESTABLISH THAT THE P URCHASES WERE MADE IN ORDER TO CONCEAL THE INCOME. FURTHER WE NOTICE THAT ASSESSEE HAS ACCEPTED THE ADDITION IN ORDER TO BUY PEACE. WE OBSERVE THAT THE AO HAS NOT ESTABLISHED THAT THE ABOVE PURCHASES ARE NOT GENUINE, THE ADDITION WAS MADE MERELY BECAUSE AS SESSEE ACCEPTED THE SAME AS SO. IN THE SIMILAR CIRCUMSTANCES, THE COORDINATE BENCH HELD AS BELOW: 4. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERR ED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY LD. DR & AR DURING THE COURSE OF HEARING BEFORE US. FROM THE RECORD WE FOUND THAT AT THE VERY FIRST INSTANCE SHARE APPLICATION MONEY 24 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD WAS SURRENDERED BY ASSESSEE WITH A REQUEST NOT T O INITIATE ANY PENALTY PROCEEDINGS. THE AO PASSED ORDER U/S.143(3) ADDING SURRENDERED AMOUNT U/S.69A ON THE PLEA THAT ASSESSEE HAS SURRENDERED AMOUNT ONLY AFTER ISSUE OF NOTICE. IT IS NOT DISPUTED BY THE DEPARTMENT THAT SUM WHICH WAS ADDED U/S.69A WAS ONE WHICH WAS SURRENDERED BY THE ASSESSEE ITSELF. NEITHER THERE WAS ANY DETECTION NOR THERE WAS ANY INFORMATION IN THE POSSESSION OF THE DEPARTMENT EXCEPT FOR THE AMOUNT SURRENDERED BY THE ASSESSEE AND IN THESE CIRCUMSTANCES IT CANNOT BE SAID THAT THERE WAS AN Y CONCEALMENT. IN CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9 (SC), HONBLE SUPREME COURT OBSERVED THAT IF THE ASSESSEE HAS OFFERED THE ADDITIONAL INCOME TO BUY PEACE OF MIND AND TO AVOID LITIGATION PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE LEVIED. IN THE INSTANT CASE, THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE ASSESSEE AND THE AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THERE WAS CONCEALMENT OF INCOME. AT THE TIME OF SURRENDER ITSELF CONTENTION OF NOT INITIATING ANY PENALTY 25 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD PROCEED INGS WAS THERE. NO ADDITIONAL MATTER WAS DISCOVERED TO PROVE THAT THERE WAS CONCEALMENT OF INCOME. THE AO HAS INCLUDED THE AMOUNT OF SHARE CAPITAL IN THE TOTAL INCOME OF ASSESSEE MERELY ON THE BASIS OF ASSESSEES DECLARATION/SURRENDER. THE AO DID NOT POINT OUT OR REFER ANY EVIDENCE OR MATERIAL TO SHOW THAT THE AMOUNT OF SHARE CAPITAL RECEIVED BY THE ASSESSEE WAS BOGUS. IT IS ALSO NOT THE CASE OF THE REVENUE THAT MATERIAL WAS FOUND AT THE ASSESSEES PREMISES TO INDICATE THAT SHARE APPLICATION MONEY RECEIVED WAS AN ARRANGED AFFAIR TO ACCOMMODATE ASSESSEES UNACCOUNTED MONEY. THUS THERE WAS NO DETECTION BY THE AO THAT SHARE CAPITAL WAS NOT GENUINE. THE SURRENDER OF SHARE CAPITAL AFTER ISSUE OF THE NOTICE U/S.143(2) COULD NOT LEAD TO ANY INFERENCE THAT IT WAS NO T VOLUNTARY. ADMITTEDLY THE ASSESSEE HAS OFFERED THE AMOUNT OF SHARE CAPITAL FOR TAXATION VOLUNTARILY AND IT WAS NOT THE CASE OF REVENUE THAT THE SAME WAS DONE AFTER ITS DETECTION BY THE DEPARTMENT. IT IS QUITE CLEAR FROM THE RECORD THAT THIS ENTIRE TRANSA CTION WAS NOT 26 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD DETECTION OF THE AO THAT THE SHARE CAPITAL WAS NOT GENUINE AND THAT THE ASSESSEE HAD OFFERED THE AMOUNT WITHOUT ANY SPECIFIC QUERY. EVEN SURRENDER OF AMOUNT BY THE ASSESSEE AFTER RECEIPT OF QUESTIONNAIRE COULD NOT BE LEAD TO ANY INFERENCE THA T IT WAS NOT VOLUNTARY, IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SUGGEST THAT IT WAS BOGUS OR UNTRUE. THE CONTENTION THAT IN EVERY CASE WHERE SURRENDER IS MADE INFERENCE OF CONCEALMENT OF INCOME MUST BE DRAWN UNDER S.58 OF EVIDENCE ACT, CANNOT BE ACCEPT ED IN VIEW OF THE DECISION OF PUNJAN & HARYANA HIGH COURT IN THE CASE OF CAREERS EDUCATION & INFOTECH (P) LTD., (2011) 336 ITR 257 (P&H). NOT AN IOTA OF EVIDENCE WAS NARRATED TO SUPPORT THE ADDITION MADE EXCEPT THE SURRENDER MADE BY THE ASSESSEE ITSELF. WH EN NO CONCEALMENT WAS EVER DETECTED BY THE AO, NO PENALTY WAS IMPOSSIBLE. RECENTLY, HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SIDDHARTH ENTERPRISES VIDE ORDER DT. 14TH JULY, 2009 HELD AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA & ORS. VS. 27 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD DHARAMENDRA TEXTILE PROCESSORS & ORS. (2008) 306 ITR (SC) 277 THAT THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES (SUPRA) CANNOT BE READ AS LAYING DOWN THAT IN EVERY CASE WHERE PARTICULARS OF INCO ME ARE INACCURATE, PENALTY MUST FOLLOW. WHAT HAS BEEN LAID DOWN IS THAT QUALITATIVE DIFFERENCE BETWEEN CRIMINAL LIABILITY UNDER S. 276C AND PENALTY UNDER S. 271(1)(C) HAD TO BE KEPT IN MIND AND APPROACH ADOPTED TO THE TRIAL OF A CRIMINAL CASE NEED NOT BE A DOPTED WHILE CONSIDERING THE LEVY OF PENALTY. EVEN SO, CONCEPT OF PENALTY HAS NOT UNDERGONE CHANGE BY VIRTUE OF THE SAID JUDGMENT. IT WAS CATEGORICALLY OBSERVED THAT PENALTY SHOULD BE IMPOSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT AND NOT A MERE MISTAKE. THIS BEING THE POSITION, THE FURNISHING OF INACCURATE PARTICULARS WAS SIMPLY A MISTAKE AND NOT A DELIBERATE ATTEMPT TO EVADE TAX. HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9 (SC) OBSERVED THAT WHERE ASSESSEE H AS SURRENDERED THE INCOME AFTER PERSISTENCE QUERIES BY THE 28 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD AO AND WHERE REVISED RETURN HAS BEEN REGULARIZED BY THE REVENUE, EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACH OF MIND AND TO COME OUT OF WAXED LITIGATION COULD BE TREATED AS BONA FIDE, ACCORDINGLY LEVY OF PENALTY UNDER S. 271(1)(C) WAS HELD TO BE NOT JUSTIFIED. 14. RESPECTFULLY FOLLOWING THE SAME AND ALSO RELYING ON CASE LAW OF SURESH CHANDRA MITTAL (SUPRA) AND WITH REGARD TO CASE LAW RELIED BY LD. DR, THE FACTS AR E DISTINGUISHABLE TO THE FACTS OF THE PRESENT CASE, HENCE NOT CONSIDERED. THEREFORE, WE ARE DELETING THE PENALTY CHARGED. 1 5 . IN THE NET RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCT 20 19 . SD/ - SD/ - ( RAM LAL NEGI ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 31 . 10 .201 9 SR.PS . DHANANJAY 29 I.T.A. NO. 1617 TO 1620 / MUM/ 2018 SANDEEP BHIMRAO LAD & SUNNY ASHOK LAD / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDEN T 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MU MBAI