Sh. Virender Kumar Pardesi, New Delhi V. ACIT, New Delhi

ITA 1861/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91368 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 09-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - I , NEW DELHI BEFORE SH. N. K. SAINI, AM ITA NO. 1859 /DEL/201 4 : ASSTT. YEAR : 200 1 - 02 ITA NO. 1860/DEL/2014 : ASSTT. YEAR : 200 2 - 03 ITA NO. 1861/DEL/2014 : ASSTT. YEAR : 200 3 - 0 4 SH. VIRENDER KUMAR PARDESI, A - 103, ASHOKA APPARTMENT, SECTOR - 9, ROHINI, NEW DELHI - 110085 VS ACIT, CENTRAL CIRCLE - 21, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AHPP5601M ASSESSEE BY : SHASHWAT BAJPAI , ADV. REVENUE BY : SH. BHIM SINGH, SR. DR DATE OF HEARING : 10 .0 7 .2015 DATE OF PRONOUNCEMENT : 10 .07 .2015 ORDER PER N. K. SAINI, AM: THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S EACH DATED 27.01.2014 OF LD. CIT (A) - XII, NEW DELHI . 2 . SINCE THE ISSUE INVOLVED IS COMMON IN ALL THESE APPEALS WHICH WAS HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NOS. 1859, 1860 & 1861 /DEL /2014 VIRENDER KUMAR PARDESI 2 3 . FIRST I WILL DEAL WITH THE APPEAL IN ITA NO. 1859/DEL/2014. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE SUSTENANCE OF PENALTY AMOUNTING TO RS. 88,816/ - LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4 . FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH & SEIZURE OPERATIO N U/S 132 OF THE ACT AT THE RESIDENCE OF THE ASSESSEE AT 103, ASHOKA APARTMENT, SECTOR - 9, ROHINI, DELHI AND SURVEY U/S 133A OF THE ACT AT THE BUSINESS PREMISES C - 2/37, SECTOR - 11, ROHINI, DELHI , WAS CONDUCTED . THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 1 53A/143(3) OF THE ACT ON 31.12.2008 DETERMINING THE TOTAL TAXABLE INCOME OF RS. 5,34,260/ - AS AGAINST DECLARED INCOME OF RS. 1,34,260/ - . THE AO WHILE MAKING THE ADDITIONS OBSERVED THAT THE ASSESSEE WAS DEALING ON COMMISSION BASIS BUT HAD NOT FILED DETAILS OF HIS UNACCOUNTED COMMISSION INCOME EARNED DESPITE ASSURING TO FILE THE SAME. THE AO ESTIMATED THE SUPPRESSED COMMISSION INCOME FOR THE YEAR UNDER CONSIDERATION AT RS. 4 LACS AND MADE THE ADDITION. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO ALL OWED THE RELIEF OF RS. 1,42,000/ - VIDE ORDER DATED 31.10.2011 AND SUSTAINED THE ADDITION OF RS. 2,58,000/ - . ACCORDINGLY, T HE AO LEVIED THE PENALTY OF RS. 88 ,816/ - U/S 271(1)(C) OF THE ACT BY CONSIDERING RS. 2,58,000/ - AS CONCEALED INCOME . 5 . BEING AGGRIEV ED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO CONFIRM ED THE PENALTY LEVIED BY THE AO BY OBSERVING THAT THE ITA NOS. 1859, 1860 & 1861 /DEL /2014 VIRENDER KUMAR PARDESI 3 ASSESSEE FAILED TO OFFER ANY EXPLANATION FOR THE CONCEALED INCOME, SO IT WAS COVERED BY EXPLANATION 1 TO SECTION 271 AND CLAUSE (B) OF THE ACT WHICH PROVIDES THAT IF THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE THAN THE AMOUNT ADDED TO THE TOTAL INCOME SHALL BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WHICH PARTICULARS HAD BEEN CONC EALED. ACCORDINGLY, THE PENALTY LEVIED BY THE AO WAS SUSTAINED. 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL OF THE ASSESSEE WAS PENDING BEFORE THE ITAT WHEN THE PENALTY ORDER WAS PASSED BY THE AO. IT WAS F URTHER SUBMITTED THAT THE ITAT VIDE ORDER DATED 14.06.2013 DELETED THE ADDITION SUSTAINED BY THE LD. CIT(A) BY OBSERVING THAT FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 IT WOULD BE REASONABLE TO DISTRIBUTE THE SURRENDER ED AMOUNT OF RS. 10 LACS EQUALLY IN THE SIX ASSESSMENT YEARS. OUR ATTENTION WAS DRAWN TOWARDS PAGE NO. 11 OF THE AFORESAID ORDER DATED 14.6.2013 PASSED IN ITA NOS. 5356 TO 5362/DEL/2011 FOR THE ASSESSMENT YEARS 2001 - 02 TO 2007 - 08. IT WAS FURTHER SUBMITTED THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS PURELY ON ESTIMATE BASIS AND EVEN THE ITAT ACCEPTED THE SURRENDERED INCOME OF THE ASSESSEE AMOUNTING TO RS. 10 LACS FOR SIX ASSESSMENT YEARS WHICH WAS OFFERED ONLY ON ESTIMATE BASIS. IT WAS ACCORDINGLY SUBMITTED THAT SINCE THE SURRENDER/ ADDITION WAS ON ESTIMATE BASIS, THE PENALTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIABLE. ITA NOS. 1859, 1860 & 1861 /DEL /2014 VIRENDER KUMAR PARDESI 4 7. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSEE CONCEALED TH E INCOME WHICH WAS LATER ON S URRENDERED BY HIM . THEREFORE, PENALTY U/S 271(1)(C) OF THE ACT WAS RIGHTLY LEVIED BY THE AO AND THE LD. CIT(A) WAS JUSTIFIED IN SUSTAINING THE SAME. 8 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH PARTIES AND CAREFULLY GONE THROU GH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT WHEN THE PENALTY WAS LEVIED BY THE AO, THE APPEAL OF THE ASSESSEE ON QUANTUM WAS PENDING BEFORE THE ITAT WHER EIN VIDE ORDER DATED 14.06.2013, T HE INCOME SURRENDERED B Y THE ASSESSEE AMOUNTING TO RS. 10 LACS FOR THE ASSESSMENT YEARS 2001 - 02 TO 2007 - 08 HAD BEEN ACCEPTED AS AGAINST THE ADDITION SUSTAINED BY THE LD. CIT(A). THE SAID SURRENDER BY THE ASSESSEE WAS ON ESTIMATE BASIS. IT IS ALSO NOTICED THAT THE LD. CIT(A) WHIL E PASSING THE IMPUGN ED ORDER HAD NOT TAKEN THE NOTE OF T HE AFORESAID REFERRED TO ORDER DATED 14.06.2013 PASSED BY THE ITAT , AND CONFIRMED THE PENALTY LEVIED BY THE AO. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT THE AO MADE THE ADDITION NOT ON THE BAS IS OF ANY DOCUMENTS /MATERIAL FOUND DURING THE COURSE OF SEARCH HE ONLY ESTIMATED THE COMMISSION INCOME AND MADE THE ADDITION. THE LD. CIT(A) ALSO SUSTAINED THE ADDITION ON ESTIMATE BASIS AND SIMILARLY THE ASSESSEE SURRENDERED AN ESTIMATED FIGURES OF RS. 10 LACS WHICH IS ALSO CLEAR FROM THE OBSERVATIONS OF THE ITAT IN PARA 8 OF THE ORDER DATED 14.06.2013. THEREFORE, IT CAN BE SAID THAT IN THE PRESENT CASE, NOTHING ITA NOS. 1859, 1860 & 1861 /DEL /2014 VIRENDER KUMAR PARDESI 5 WAS FOUND DURING THE COURSE OF SEARCH TO SUBSTANTIATE THAT A PARTICULAR AMOUNT OF COMMISSION WA S EARNED BY THE ASSESSEE WHICH WAS NOT DISCLOSED IN THE INCOME. ON THE OTHER HAND, THE ESTIMATION OF THE INCOME BY THE AO AS WELL AS BY THE LD. CIT(A) WAS ON ESTIMATE BASIS. SIMILARLY, THE ASSESSEE ALSO SURRENDERED A SUM OF RS. 10 LACS AN D OFFERED THE SAME FOR TAXATION, T HE SAID AMOUNT OF RS. 10 LACS FOR SIX ASSESSMENT YEARS RUNNING FROM 2001 - 02 TO 2007 - 08 WAS ONLY ON ESTIMATE BASIS. THE SAID SURRENDER AMOUNT MAY BE RELEVANT TO MAKE THE ADDITION BUT NOT A CONCLUSIVE PROOF OF CONCE ALED INCOME BY THE ASSESSEE . I AM THEREFORE , OF THE VIEW THAT THE PENALTY U/S 271(1)(C) OF THE ACT LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 9. FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04 THE FACTS ARE SIMILAR AS WERE INV OLVED IN ASSESSMENT YEAR 2001 - 02, THEREFORE, THE AFORESAID FINDINGS GIVEN IN RESPECT OF THE ASSESSMENT YEAR 2001 - 02 SHALL BE APPLICABLE WITH THE SAME FORCE FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04. 10 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 10 /07 /2015 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DATED: 10 /07 /2015 *SUBODH*