Smt. Anu Bhatia, Kanpur V. Dy. Commissioner of Income Tax, Kanpur

ITA 198/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4725 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 09-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift; Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 198/LKW/2015 ASSESSMENT YEAR: 2002 - 03 SMT. ANU BHATIA 8/2, KRISHNA NAGAR KANPUR V. DY. CIT RANGE I KANPUR T AN /PAN : AFLPB6226R (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI. AMIT NIGAM, D.R. DATE OF HEARING: 03 02 201 6 DATE OF PRONOUNCEMENT: 10 02 201 6 O R D E R PER SUNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE AO (ASSESSING OFFICER) IMPOSING PENALTY IS BARRED BY LIMITATION AND HENCE LIABLE TO BE QUASHED. 2 . BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE AO (ASSESSING OFFICER) IMPOSING PENALTY IS BAD IN LAW SINCE NO REQUISITE SATISFACTION AS CONTEMPLATED UNDER SECTION 271(1) CAN BE R ECORDED WHEN THERE WAS NO ADDITION SUSTAINED AS PER THE REVISED RETURN FILED BY THE ASSESSEE SINCE THE ADDITION OF ALLEGED COMMISSION PAID TO PURCHASE THE ALLEGED GIFTS HAVE BEEN : - 2 - : DISAPPROVED BY THE COMMISSIONER (APPEALS) AND NO APPEAL AGAINST SUCH ORDER HA S BEEN PREFERRED. 3 . BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS PAID TAXES ON THE SURRENDERED AMOUNT PRIOR TO THE ISSUANCE OF NOTICE UNDER SECTION 148 AND AS SUCH THE OFFER FOR TAXA TION WAS PRIOR TO ANY DETECTION BY DEPARTMENT AND PURELY VOLUNTARY. 4 . BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF PENALTY HAS BEEN PASSED IN VIOLATION OF SECTION 274(1) SINCE NO PROPER OPPORTUNITY OF HEARING HAS BEEN GRANTED TO THE ASSESSEE AS PER PARAGRAPH 4.2 OF THE ORDER PENALTY. 5 . BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICERS AS WELL AS CIT (APPEAL) DID NOT INDEPENDENTLY APPRECIATE THE EVIDENCE LED BY THE ASSESSEE IN THE MATTER AND DID NOT APPREC IATE THE CONTROVERSY THAT WAS DISBELIEVED BY THE ASSESSING OFFICER. 6 . THAT THE ORDER PASSED BY THE CIT (A) SUFFERS FROM ILLEGALITY, IS CONTRARY TO FACTS, IS BAD IN LAW AND DESERVES TO BE QUASHED. 2 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSE E HAS OPTED NOT TO PRESS THE LEGAL GROUND RAISED IN THIS APPEAL. HE, HOWEVER, HAS ARGUED THAT THE ASSESSEE HAS MADE PAYMENT OF TAX ON THE SURRENDERED AMOUNT EVEN BEFORE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED I N SHORT THE ACT'). THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER WITH THE SUBMISSION THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 4.9.2002, IN WHICH SHE HAS NOT INCLUDED RECEIPT OF GIFT OF : - 3 - : RS.4.50 LAKHS. LATER ON, SHE REALIZED AND OFFERED RECEIPT OF GIFT OF RS.4.50 LAKHS AND PAID TAX THEREON. LATER ON, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT AND FINALLY ASSESSED RECEIPT OF GIFT AS PART OF TOTAL INCOME OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE COPY OF CHALLAN , THROUGH WHICH TAX ON THE AMOUNT OF INCOME ON ACCOUNT OF GIFT OF RS.4.50 LAKHS WAS PAID AND CHALLAN BEARS THE DATE OF 4.9.2003 AND N OTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 8.3.2004. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT SINCE THE ASSESSEE HAS OFFERED RECEIPT OF GIFT TO TAX EVEN BEFORE IT WAS DETECTED BY THE DEPARTMENT, THE ASSESSEE SHOULD NOT BE FASTENED WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3 . THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 4 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 4.9.2002 AND NOTICE UNDER SECTION 148 OF THE ACT FOR REOPENING OF ASSESSMENT ON THE GROUND THAT THE ASSESSEE HAS NOT DISCLOSED RECEIPT OF GIFT OF RS.4.50 LAKHS , WAS ISSUED ON 8.3.2004, BUT BEFORE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE HAS ALREADY MADE PAYMENT OF TAXES ON THIS RECEIPT OF GIFT THROUGH CHALLAN DATED 4.9.2003, MEANING THEREBY , BEFORE DETECTION OF THE SO CALLED CONCEALED INCOME BY THE DEPARTMENT, THE ASSESSEE HAS OFFERED RECEIPT OF GIFT T O TAX WHEN HE REALIZED THAT HE WOULD NOT BE ABLE TO JUSTIFY RECEIPT OF GIFT. UNDER THESE CIRCUMSTANCES, IT CANNOT BE HELD THAT THE ASSESSEE HAS EITHER CONCEALED THE INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME FOR LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. KEEPING IN VIEW THE BONA FIDE ACT OF THE ASSESSEE FOR PAYMENT OF TAX ON RECEIPT OF GIFT, WE ARE OF THE VIEW THAT : - 4 - : PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND D ELETE THE PENALTY. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION ED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH 1 . APPELLANT FEBR UARY, 2016 JJ: 0302 COPY FORWARDED TO: 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR