Careers Education & Infotech Pvt Ltd, V. ACIT CC,

ITA 1868/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8369 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 21-07-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 13-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Revised return
• Section: 271(1)(c); 133A; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI R.C.SHARMA, A M ITA NO.1868/DEL/2007 ASSESSMENT YEAR : 2003-04 M/S CAREERS EDUCATION & INFOTECH PRIVATE LIMITED, PLOT NO.40A, SHIV PURI, OPPOSITE SECTOR-7, GURGAON 122 001. VS. ASSTT.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI TANEJA, ADVOCATE. RESPONDENT BY : SHRI N.K.CHAND, SR.DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 8.1.2007 FOR THE AY 2003-04, IN THE MATTER OF IMPOS ITION OF PENALTY U/S 271(1)(C) OF THE IT ACT AMOUNTING TO RS.5,51,250/-. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT SURVEY OPERATION U/S 133A WAS CONDUCTED BY THE DEPARTMENT AT ASSESSEES BUSINESS PREMISES, CONSEQUENT UPON WHICH THE ASSESS EE SURRENDERED CERTAIN AMOUNTS, OUT OF WHICH RS.15 LAKHS PERTAINS TO THE Y EAR UNDER CONSIDERATION. WITH RESPECT TO AMOUNT OF RS.15 LAKHS ADDED BY THE AO ON THE BASIS OF STATEMENT RECORDED DURING SURVEY AND CONSEQUENT SURRENDER BY THE ASSESSEE, THE AO ALSO LEVIED PENALTY U/S 271(1)(C) BY OBSERVING THAT ASSE SSEE COMPANY HAD SURRENDERED AN EXTRA INCOME OF RS.15 LAKHS TO COVER UP THE LEAK AGE OF REVENUE DUE TO FALLACIES AND DISCREPANCIES DETECTED DURING THE COURSE OF SUR VEY PROCEEDINGS. THE AO FURTHER NOTED THAT THE ASSESSEE COMPANY HAD FILED R EVISED RETURN ON 1.11.2004 ONLY AFTER DETECTION OF CONCEALMENT OF INCOME DURING THE COURSE OF SURVEY OPERATION ON ITA-1868/D/2007 2 22.9.2004. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT ASSESSEE COMPANYS DIRECTOR HIMSELF DISCLOSED INCOME OF RS.15 LAKHS OVER AND ABOVE WHAT WAS SHOWN IN THE ORIGINAL RETURN FILED. ONCE THE DIRECTOR OF THE COMPANY SURRENDERED THE SUM OF RS.1 5 LAKHS, IT PRECLUDED THE REVENUE AUTHORITIES FROM MAKING FURTHER ENQUIRIES. ACCORDINGLY, THE FACT OF NOT SHOWING TRUE AND FULL INCOME IS DIRECTLY PROVED WHE N THE DIRECTOR OFFERED RS.15 LAKHS OVER AND ABOVE WHAT WAS SHOWN IN THE ORIGINAL RETURN FILED. AGGRIEVED BY THE SAME, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. IT WAS ARGUED BY THE LEARNED AR THAT ADDITION HA S BEEN MADE MERELY ON THE BASIS OF THE STATEMENT AND SURRENDER MADE BY THE AS SESSEE, THERE IS NO FINDING EITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY OR DER THAT THERE WAS ANY CONCEALMENT OF INCOME NOR ANY DEFECTS WERE FOUND IN THE BOOKS OF ACCOUNT OR DISCREPANCIES NOTED DURING SURVEY. HE CONTENDED THA T ASSESSMENT WAS COMPLETED AFTER DETAILED SCRUTINY/ENQUIRY IN RESPECT OF ASSES SEES INCOME/PROFITABILITY ETC. THE AO HAD AMPLE TIME TO MAKE ANY ENQUIRY AS REQUIR ED TO ASSESS INCOME OF THE ASSESSEE. HOWEVER, HAVING BEEN SATISFIED WITH THE INCOME DECLARED IN THE REVISED RETURN, THE ASSESSMENT WAS COMPLETED AT ORIGINAL IN COME AS DECLARED BY THE ASSESSEE ALONGWITH THE ADDITIONAL INCOME AS DISCLOS ED IN ITS REVISED RETURN OF THE ASSESSEE. LEARNED AR ALSO DRAWN OUR ATTENTION TO T HE VARIOUS DECISIONS OF THE HIGH COURT AND THE TRIBUNAL, WHEREIN NO PENALTY WAS HELD TO BE IMPOSABLE UNDER THE FACTS AND CIRCUMSTANCES WHICH ARE IN PARI-MATER IA TO THE ASSESSEE, WHERE ADDITION HAS BEEN MADE ON THE BASIS OF SURRENDER WI THOUT FINDING ANY DISCREPANCY IN THE BOOKS OF ACCOUNT OR DEFECTS IN THE STOCKS BE ING MAINTAINED BY THE ASSESSEE. 4. ON THE OTHER HAND, IT WAS CONTENDED BY THE LEARN ED SR.DR THAT SURRENDER WAS MADE ONLY WHEN DISCREPANCIES ARE FOUND DURING T HE COURSE OF SURVEY OTHERWISE ASSESSEE WAS NOT COMING FORWARD TO DISCLO SE THE TRUE AND CORRECT INCOME IN THE ORIGINAL RETURN FILED BY HIM. THE REVISED R ETURN WAS FILED ONLY AFTER SURVEY OPERATION WHICH CANNOT BE SAID TO BE VOLUNTARY ACT. HE DRAWN OUR ATTENTION TO THE ITA-1868/D/2007 3 STATEMENT OF DIRECTOR SHRI RAJESH KALRA WHERE HE HA S SURRENDERED INCOME OF RS.15 LAKHS OVER AND ABOVE THE INCOME ALREADY OFFERED TO THE DEPARTMENT IN THE REGULAR RETURN. BY REFERRING TO THE VARIOUS JUDGMENTS CITE D BY THE CIT(A), HE CONTENDED THAT LEVY OF PENALTY HAS BEEN JUSTIFIED BY APPLYING THE PROPOSITION OF LAW LAID DOWN THEREIN WITH RESPECT TO THE FACTUAL MATRIX OF THE CASE. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED UPON THE VARIOUS CASE LAWS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE O RDERS, AS WELL AS CITED BY THE LEARNED AR AND LEARNED DR DURING THE COURSE OF HEAR ING BEFORE US WITH REFERENCE TO THE FACTUAL MATRIX OF THE INSTANT CASE BEFORE US . FROM THE RECORD, WE FOUND THAT ADDITION OF RS.15 LAKHS WAS MADE ONLY ON THE BASIS OF SURRENDER MADE DURING THE COURSE OF SURVEY AND BY ACCEPTING THE REVISED RETUR N FILED BY THE ASSESSEE. IN THE ASSESSMENT ORDER, THE AO HAS NOT POINTED OUT EVEN A SINGLE DEFECT EITHER IN THE BOOKS OF ACCOUNTS OR VOUCHERS ETC. MAINTAINED BY T HE ASSESSEE OR IN THE SYSTEM OF ACCOUNTING BEING FOLLOWED FOR DISCLOSING TRUE AND C ORRECT INCOME. NOT ONLY THE SURVEY TEAM BUT DURING THE COURSE OF ASSESSMENT TH E AO HAS ALL THE MATERIALS BEFORE HIM TO FIND OUT IF THERE ARE ANY DISCREPANCI ES WHICH CAN BE CO-RELATED TO THE AMOUNT OF SURRENDER MADE BY THE ASSESSEE. HOWEVER, THE AO HAS NOT UTTERED A SINGLE WORD IN THE ASSESSMENT ORDER TO SAY THAT THE RE WAS ANY CONCEALMENT OF INCOME OF ASSESSEE HAVING NOTICED BY THE SURVEY TEA M OR BY THE AO HIMSELF. THE OFFER OF ADDITIONAL INCOME OF RS.15 LAKHS WAS MADE TO BUY PEACE AT THE TIME OF SURVEY IN ORDER TO AVOID THE HARASSMENT AT THE HAND S OF THE SURVEY TEAM. EVEN AFTER SURRENDER, ALL KINDS OF ENQUIRIES WERE MADE B Y THE SURVEY TEAM AS WELL AS BY THE AO WHILE FRAMING ASSESSMENT ON THE BASIS OF SEI ZED DOCUMENTS, BOOKS OF ACCOUNT, VOUCHERS ETC. MAINTAINED BY THE ASSESSEE, AND AFTER THOROUGH ENQUIRY, THE INCOME OF THE BUSINESS WAS ACCEPTED AT ORIGINAL RET URN INCOME ALONGWITH THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. THE AO HAS IMPOSED THE PENALTY CONSIDERING THE ADDITIONAL INCOME AS INCOME FROM UN DISCLOSED SOURCES AND HAS ALLEGED THAT ASSESSEE HAS FILED REVISED RETURN ONLY AFTER DETECTION OF CONCEALED ITA-1868/D/2007 4 INCOME DURING THE COURSE OF SURVEY. IN CASE THERE WAS ANY DETECTION OF CONCEALED INCOME EITHER BY THE SURVEY TEAM OR BY THE AO, WHY THE SAME HAS NOT BEEN POINTED OUT IN THE ASSESSMENT ORDER. NOT AN IOTA O F EVIDENCE WAS NARRATED TO SUPPORT THE ADDITION MADE EXCEPT THE SURRENDER MADE BY THE ASSESSEE HIMSELF. WHEN NO CONCEALMENT WAS EVER DETECTED BY THE SURVEY TEAM OR BY THE AO, NO PENALTY WAS IMPOSABLE. RECENTLY, HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SIDDHARTH ENTERPRISES, VIDE ORDER DATED 14. 7.2009 HELD AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F DHARMENDRA TEXTILES 306 ITR 277 THAT THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES (SUPRA) CANNOT BE READ AS LAYING DOWN THAT IN EVERY CASE WHERE PARTICULARS OF INCOME ARE INACCURATE, PENALTY MUST FOLLOW. WHA T HAS BEEN LAID DOWN IS THAT QUALITATIVE DIFFERENCE BETWEEN CRIMINAL LIABILITY U /S 276C AND PENALTY U/S 271(1)(C) HAD TO BE KEPT IN MIND AND APPROACH ADOPTED TO THE TRIAL OF A CRIMINAL CASE NEED NOT BE ADOPTED WHILE CONSIDERING THE LEVY OF PENALT Y. EVEN SO, CONCEPT OF PENALTY HAS NOT UNDERGONE CHANGE BY VIRTUE OF THE SAID JUDG MENT. IT WAS CATEGORICALLY OBSERVED THAT PENALTY IS IMPOSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT AND NOT A MERE MISTAKE. THIS BEING THE POS ITION, THE FURNISHING OF INACCURATE PARTICULARS WAS SIMPLY A MISTAKE AND NOT A DELIBERATE ATTEMPT TO EVADE TAX. HON'BLE SUPREME COURT IN THE CASE OF SURESH C HAND MITTAL 251 ITR 9 OBSERVED THAT WHERE ASSESSEE HAS FILED REVISED RETU RN SHOWING HIGHER INCOME AND THE ASSESSEE HAS SURRENDERED THE INCOME AFTER PERSI STENCE QUERIES BY THE AO AND WHERE REVISED RETURN HAS BEEN REGULARIZED BY THE RE VENUE, EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE OF MIND AND TO COME OUT OF WAXED LITIGATION COULD BE TREATED AS BONA-FI DE, ACCORDINGLY LEVY OF PENALTY U/S 271(1)(C) WAS HELD TO BE NOT JUSTIFIED. IN THE INSTANT CASE BEFORE US, AS PER THE SURRENDER MADE BY THE ASSESSEE, A REVISED RETURN WA S FILED AND WHICH HAS BEEN ACCEPTED AS IT IS WITHOUT MAKING ANY ALTERATION THE REIN NOR THERE WAS ANY ADVERSE OBSERVATION IN THE ASSESSMENT ORDER WITH REGARD TO ANY DISCREPANCIES TO CORRELATE THE SAME WITH THE AMOUNT OF SURRENDER. WE ACCORDIN GLY DO NOT FIND ANY MERIT IN ITA-1868/D/2007 5 THE ACTION OF THE LOWER AUTHORITIES FOR IMPOSING PE NALTY U/S 271(1)(C). ON THE FACTS AND CIRCUMSTANCES, THE INSTANT CASE IS NOT A FIT CA SE FOR LEVY OF PENALTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2009. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :31.07.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR