The Asstt.Commissioner of Income-tax, Hoshiarpur V. Smt. Bhupinder Kaur, Hoshiarpur

ITA 2/ASR/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80602 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SACHIN MALHOTRA
• Keywords: Reasonable cause; Revised return
• Section: 143(3); 142(1); 147; 27; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.02(ASR)/2014 ASSESSMENT YEAR:2007-08 PAN :ABEPK7760J ASSTT. COMMR. OF INCOME TAX, VS. SMT. BHUPINDER KAU R, HOSHIARPUR CIRCLE, C/O M/S. BEDI AUTOMOBILES, HOSHIARPUR. PIPLAWALA, HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:SH. SACHIN MALHOTRA, ADVOCATE DATE OF HEARING: 04/08/2014 DATE OF PRONOUNCEMENT:25/08/2014 ORDER PER B.P.JAIN, AM ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), JALANDHAR DATED 29.10.2013 FOR THE ASSESSMENT YEAR 2007-08. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE PENALTY OF RS.8,44,050/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX AC T, 1961. ITA NO.02(ASR)/2014 2 2. THAT, IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. 3. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AN D DISPOSED OFF. 2. THE BRIEF FACTS OF THE CASE ARE THAT HE REASONS FOR REOPENING THE CASE U/S 147 OF THE I.T. ACT, 1961 ARE AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S BEDI AUTOMOBILES, JALANDHAR ROAD, HOSHIARPUR FO R THE ASSESSMENT YEAR 2007-08, IT WAS NOTICED THAT SMT. B HUPINDER KAUR, PARTNER OF THE SAID FIRM HAD MADE/INTRODUCED CAPITA L ADDITION OF RS. 37,00,000/- IN HER CAPITAL ACCOUNT. SOURCES OF THE SAID CAPITAL ADDITION WERE EXPLAINED TO BE OUT OF SALE OF 13 KAN ALS, 12 MARLAS AGRICULTURAL LAND WHICH WAS SOLD @ RS. 4,00,000/- P ER ACRE (FOR TOTAL CONSIDERATION OF RS. 11,90,000/-) AS PER SALE DEED DATED 08.08.2007 WHEREAS, THE LAND WAS STATED TO BE SOLD @ 23,00,000/- PER ACRE TO PROVE THE INVESTMENT OF RS. 37,00,000/- . PERUSAL OF THE COPY OF THE SAID SALE AGREEMENT REVEALS THAT IT DOE S NOT PROVE TO BE A GENUINE AGREEMENT DUE TO THE FOLLOWING: THE AGREEMENT FOR SALE OF LAND WAS EXECUTED BETWEEN SMT. BHUPINDER KAUR W/O SH. MANINDER PAL SINGH (SELLER) AND SH. SURJIT SINGH S/O- SH. BIR SINGH, (PURCHASER) R/ O- MEHLI GATE, PHAGWARA. THE SAID AGREEMENT HAS NOT BEEN SIG NED BY THE PURCHASER PARTY I.E. SH. SURJIT SINGH, S/O- SHRI BIR SINGH, BUT IT WAS SIGNED BY ONE SHRI MOHAN SINGH O N BEHALF OF SH. SURJIT SINGH. MOREOVER, SHRI MOHAN SI NGH WAS NOT HAVING ANY POWER OF ATTORNEY FROM THE SAID SHRI SURJIT SINGH TO SIGN ON HIS BEHALF OF THE SAID AGRE EMENT. MORESO, AS PER SALE DEED THE PROPERTY WAS SOLD TO S H. JAI DEV SINGH S/O- SHRI SHIV SINGH R/O- VILLAGE RAMPUR SUNRA, TEHSIR PHAGWARA, DISTT. KAPURTHALA. AS SUCH, THE AGREEMTN WAS NOT A GENUINE AGREEMENT IN THE EYES OF LAW. ITA NO.02(ASR)/2014 3 2.1 KEEPING IN VIEW AFORESAID FACTS THE AO OBSERVED THA T IT IS ESTABLISHED THAT THE ASSESSEE HAS ACTUALLY SOLD THE SAID AGRICU LTURE LAND FOR RS. 11.90 LACS ONLY AS PER ACTUALLY SALE DEED AND NOT @ RS. 23 LAC S PER ACRE AS PER THE AFORESAID AGREEMENT WHICH IS NOT GENUINE AGREEMENT. AS SUCH, THE ASSESSEE HAS FAILED TO PROVE THE INVESTMENT OF RS. 25.10(37. 00 (-) 11.90) LACS MADE AS ADDITION IN HER CAPITAL ACCOUNT IN THE SAID FIRM M/ S BEDI AUTOMOBILES. THEREFORE, IT IS CRYSTAL CLEAR THAT THE ASSESSEE HA S FURNISHED INACCURATE PARTICULARS WITH REGARD TO THE INVESTMENT IN FIRM W HICH IS TREATED AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 3. THE ASSESSEE FILED THE RETURN OF INCOME ON 18.02 .2010 FOR THE YEAR UNDER CONSIDERATION AND ASSESSMENT WAS MADE U/S 143 (3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) VIDE ORDER DATED 14.09.2010 AT THE TOTAL INCOME. THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. THE ASSESSEE SUBMITTED T HE EXPLANATION DATED 04.03.2010 IN PENALTY PROCEEDINGS, WHICH IS REPRODU CED FOR THE SAKE OF CONVENIENCE AS UNDER: 2. NOTICE U/S 148 I. TAX WAS ISSUED TO THE ASSESS EE ON 18.02.2010. ITA NO.02(ASR)/2014 4 3. YOUR GOODSELF HAS INITIATED PENALTY PROCEEDINGS U/S271(1)(C) OF THE T. TAX BECAUSE THE RETURN HAS B EEN FILED AFTER THE ISSUE OF NOTICE U/S 148. 4. I HAVE NOT CONCEALED MY PARTICULARS OF MY INCOM E IN THE INCOME TAX RETURN. I COULD NOT FILE MY INCOME TAX R ETURN BEFORE 31.10.2007, RETURN WAS FILED U/S 139(4) INCO ME TAX ACT, THOUGH INCOME TAX RETURN WAS FILED AFTER 31.03.2008 . DELAY IN FILING MY INCOME TAX RETURN WAS DUE TO THE FACT THAT, I WAS UNDER THIS IMPRESSION THAT MY INCOME IS BELOW THE TAXABLE AMOUNT OF RS. 1,50,000/- EXCLUDING THE CAPI TAL GAIN ACCRUED ON SALE OF AGRICULTURAL LAND SITUATED OUTSI DE MUNICIPAL LIMIT, SALE CONSIDERATION SHOWN IN THE AGREEMENT, T O SELL WAS RECEIVED BY ME. HOWEVER SINCE THE REGISTRATION THE SALE WAS AT LOWER THAN THAT SHOWN IN AGREEMENT ON ADVICE FROM M Y COUNSEL. I MADE UP MY MIND TO DECLARE THE DIFFERENCE OF RS. 25,76,380/- AS INCOME FROM OTHER SOURCES THOUGH INCOME ACCRUED ON SALE OF AGRICULTURAL LAND NOT LIABLE TO INCOME TAX. TAXABLE INCOME THEN WAS WORKED OUT AT RS. 26,85,903/- TAX PAYABLE THEREON AFTER PAYMENT OF ADVANCE TAX WAS RS. 12,89,333/- AN D I WAS SHORT OF FINANCES I COULD MAKE DEPOSIT OF SELF ASSE SSMENT RS. 2,25,000/- ON 03.02.2010 MUCH BEFORE THE RECEIPT OF NOTICE U/S 148 I. TAX ACT. IT IS NOT A CASE WHERE I HAVE SHOWN LESSER INCOME I N RETURN FILED U/S 139(1) OR U/S 139/148 THEREAFTER I FILED THE INCOME TAX RETURN U/S 148 TAX ACT. SHOWING THE ESCA PED INCOME AS TAXABLE INCOME. IT IS A CASE WHERE RETURN IS FILED LATE, NOT WITHIN STIPULATED TIME U/S 139(1) OR 139(4) I. TAX ACT. CA USE FOR THE DELAY IS BONA FIDE BELIEF THAT INCOME IS NOT LIABLE TO EXCEED THE TAXABLE LIMIT EXCLUDING THE INCOME ARISES FROM SALE OF AGRICULTURAL LAND SITUATED OUTSIDE MUNICIPAL LIMIT. THEREAFTER ITA NO.02(ASR)/2014 5 FINANCIAL SHORTAGE CAUSES DELAY IN SUBMITTING THE I NCOME TAX RETURN. YOUR KIND ATTENTION IS INVITED TO THE PROVISIONS OF SEC. 271(1)(C) INCOME TAX ACT. PENALTY CANNOT BE IMPOSED IN FOLLOWING CIRCUMSTANCES:- WHERE ASSESSES HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS. I HAVE NOT CONCEALED ANY INCOME IN MY INCOME TAX RETURN FILED IN RESPONSE TO NOTICE U/S 148/TAX. I H AVE NOT FURNISHED ANY INACCURATE PARTICULARS IN MY INCOME. I HAVE NOT FURNISHED ANY EXPLANATION IN MY INCOME T AX RETURN AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH IS FOUND TO BE FALSE. INCOME DECLARED IS ACCEPTED AS DECLARED IN INCOME TAX RETURN. FROM FACTS OF THE CASE THERE IS NO CONCEALM ENT, WHICH ATTRACT PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT . MY INTENTIONS ARE VERY CLEAR FROM THE DAY, I DEPOS ITED RS. 45,000/- AS ADVANCE TAX, PAYMENT OF RS. 2,25,00 0/- ON 03.02.2010 ALSO PROVES THAT I WAS HONESTLY MAKING P AYMENT OF TAX. DELAYED SUBMISSION OF INCOME TAX RETURN FOR WA NT OF FINANCE CANNOT BE EQUATED WITH CONCEALMENT OF INCOM E. ON FACTS & MERITS OF THE CASE, IT IS PRAYED THAT P ENALTY PROCEEDINGS U/S 271(1)(C) MAY PLEASE BE DROPPED. 3. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASS ESSEE AND LEVIED PENALTY @ 100% AND THE RELEVANT OBSERVATIONS GIVEN IN PARA 5, 6 & 7 ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: ITA NO.02(ASR)/2014 6 5. THE EXPLANATION FILED BY THE ASSESSEE HAS BEEN CAR EFULLY CONSIDERED WITH IS NOT ACCOMPANIED WITH PROPER EVID ENCE. IT IS CLEAR THAT THE ASSESSEE HAS NOTHING TO SAY IN THE M ATTER BUT SIMPLY SHE HAS SAID THAT SHE HAD FILED RETURN U/S 139(4) O F THE ACT. BUT THE ASSESSEE HAS FILED THE RETURN ON 18.02.2010 I.E. AF TER A GAP OF ALMOST THREE YEARS FROM THE START OF FINANCIAL YEAR AND THAT TOO AFTER EXPIRY OF PERIOD ALLOWED UNDER THE ACT TO FIL E RETURN FOR THE ASSTT. YEAR 2007-08 I.E. UPTO 31.03.2009. THE VERSI ON/CONTENTION OF THE ASSESSEE THAT SHE HAS FILED THE RETURN U/S 139( 4) IS TOTALLY BASELESS. 6. THE EXPLANATION FILED BY THE ASSESSEE IS BEING DISTINGUISHED ON THE BASIS OF FOLLOWING JUDGMENTS. 6.1 RELIANCE IS PLACED ON THE FOLLOWING. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. LAL CHAND TIRATH RAM (P&H) 225 ITR 675 IN W HICH IS HELD THAT MERE OFFERING EXPLANATION IS NOT SUFFICIE NT- EXPLANATION TO BE SUBSTANTIATED BY COGENT AND RELIABLE EVIDENCE . HONBLE KERALA HIGH COURT IN THE CASE OF P.C. JOSEP H & BROS. VS. CIT (KER) 240 ITR 818 IN WHICH HELD THAT SIMPL Y BECAUSE ASSESSEE AGREED TO ADDITION OF CONCEALED INCOME AFT ER DETECTION THEREOF AND FILED RETURN IN RESPONSE TO NOTICE U/S 148 OFFERING ADDITIONAL INCOME ASSESSEE CANNOT ESCAPE FROM PEN ALTY U/S 271(1)(C) HONBLE ITAT, CALCUTTA BENCH CITED AS 8 TTJ (CAL) 3 66 IN THE CASE OF KHETSIDES UDAYCHAND VS. INCOME TAX OFFICER IN WHICH HELD THAT PENALTY UNDER U/S 271(1)(C) CONCEALMENT ORIGIN AL ASSESSMENT COMPLETED SEARCH AT ASSESSEES PREMISE S DISCLOSURE THAT INCOME FROM A FIRM K WAS ASSESSEES INCOME WHI CH WAS NOT INCLUDED NOTICE UNDER SECTION 148- ASSESSEE NOW I NCLUDING ITA NO.02(ASR)/2014 7 INCOME OF K- IMPOSITION OF PENALTY- SUSTAINED TO TH E EXTENT OF MINIMUM IMPOSABLE BY AAC AACS ORDER UPHELD. IN THE LIGHT OF THE ABOVE STATED FACTS WHEN THE AS SESSEE ITSELF FILED REVISED RETURNS IT OWNED THE AMOUNTS OF CONCE ALED INCOME AS ITS OWN INCOME AND THE FACT THAT THE REVISED RETURN S WERE FILED ONLY AFTER THE ISSUANCE OF NOTICE UNDER SECTION 148, AND THAT TOO, WHEN THE I. T. DEPARTMENT WAS ABLE TO LAY HANDS ON EVIDE NCE AND DOCUMENTS INCRIMINATING TO THE ASSESSEE FROM WHERE EXTRA INCOME COULD BE PROVED, CONSIDERING THE MATERIAL ON RECORD AND THE ENTIRETY OF THE CIRCUMSTANCES AND THE FACT THAT THE RE WAS A DIFFERENCE OF INCOME BETWEEN THE ORIGINAL RETURNED INCOME AND THE REVISED RETURNED INCOME AND NO PARTICULAR OF ITEM O F INCOME HAD BEEN POINTED OUT TO EXPLAIN THAT THE REVISED RETURN S WERE MERELY THE RESULT OF INADVERTENT MISTAKE OR OMISSION, COUP LED WITH THE STATEMENTS OF THE PARTNERS OF THE ASSESSEE FIRM AS ALSO THE SUBMISSIONS MADE BY THE LEARNED AUTHORIZED REPRESEN TATIVE BEFORE THE AAC THERE IS NO ESCAPE BUT TO HOLD THAT THE ASS ESSEE HAD CONCEALED THE PARTICULARS OF INCOME BY FILING ORIGI NAL RETURNS AND THAT THE IMPOSITION OF PENALTIES IN THE CASE OF THE ASSESSEE WAS CALLED FOR AND THE PENALTIES SUSTAINED BY THE AAC W ERE RIGHTLY IMPOSED UNDER THE LAW. 7. AS SUCH, THE ASSESSEE IS TREATED AS TO HAVE CON CEALED THE PARTICULARS OF INCOME TO THE EXTENT OF RS. 26,85,90 0/-, THUS MAKING IT LIABLE FOR IMPOSITION OF PENALTY U/S 271(1)(C) O F THE I.T. ACT, 1961. HOWEVER, KEEPING IN VIEW THE TOTALITY OF FACT S AND CIRCUMSTANCES OF THE CASE THE PENALTY U/S 271(1)(C) IS IMPOSED @ OF 100% OF THE TAX SOUGHT TO BE EVADED. 4. BEFORE, THE LD. CIT(A), THE ASSESSEE MADE SUBMIS SIONS, WHICH WERE FORWARDED TO THE AO FOR COMMENTS. AFTER TAKING COMM ENTS FROM THE A.O., COUNTER COMMENTS WERE TAKEN FROM THE ASSESSEE. AFT ER CONSIDERING ITA NO.02(ASR)/2014 8 COMMENTS OF THE A.O. AND THAT OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION VIDE PARA 6.5 TO 7 WHICH FOR THE SAKE OF C ONVENIENCE IS REPRODUCED AS UNDER: 6.5 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE IN THE ASSESSMENT ORDER, PENALTY OR DER AS WELL AS IN THE REMAND REPORT. I HAVE ALSO CONSIDERED THE WR ITTEN SUBMISSIONS FILED BY THE ASSESSEE VIDE VARIOUS LETT ERS AS WELL AS HER COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFF ICER. I HAVE ALSO CONSIDERED THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS BY THE ASSESSE E. 6.6 ON CAREFUL CONSIDERATION OF THE OBSERVATIONS O F THE ASSESSING OFFICER AS MADE IN THE ASSESSMENT ORDER A S WELL AS THE PENALTY ORDER, IT HAS BEEN NOTICED THAT THE ASSESSI NG OFFICER HAS LEVIED THE PENALTY ON THE FOLLOWING GROUNDS: (I) THE ASSESSEE HAS FILED RETURN IN RESPONSE TO S ECTION 148 OF THE INCOME TAX ACT, 1961 WHICH WAS ISSUED ON 15.02.2010 AND SERVED ON THE ASSESSEE ON 18.02.2010. (II) THE RETURN FILED BY THE ASSESSEE ON 18.02.2010 (ON THE DATE OF SERVICE OF NOTICE U/S 148 OF THE INCOME TAX ACT, 19 61) IS A REVISED RETURN AND HAS BEEN FILED IN RESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. (III) ALTHOUGH EXPLANATION 3 TO SECTION 271(1)(C) O F THE INCOME TAX ACT, 1961 HAS NOT BEEN INVOKED SPECIFICALLY BUT THE CASE OF THE ASSESSEE AS PER OPINION OF THE ASSESSING OFFICER FA LLS UNDER THE PROVISIONS OF THIS EXPLANATION. (IV) THE AGREEMENT TO SELL IN RESPECT OF AGRICULTU RAL LAND PRODUCED BY THE ASSESSEE IS NOT FOUND TO BE GENUINE BY THE ASSESSING OFFICER. ITA NO.02(ASR)/2014 9 (V) THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND ALSO FILED INACCURATE PARTICULARS OF INCOME. (VI) THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE INCOME DISCLOSED IN THE RETURN UNDER THE HEAD INCOME FROM OTHER SOURCES IS UNDISCLOSED INCOME OF THE ASSESSEE FROM THE SALE OF LAND. 6.7 ON THE OTHER HAND THE ASSESSEE HAS SUBMITTED D URING THE COURSE OF ASSESSMENT AND PENALTY PROCEEDINGS THAT T HE ASSESSEE HAS DISCLOSED THIS INCOME (RS. 25,10,000/-) TO BE P EACE OF MIND AS INCOME FROM OTHER SOURCES. THE ASSESSEE THROUGHOUT THE ASSESSMENT AND PENALTY PROCEEDINGS HAS TAKEN THE ST AND THAT THE INCOME OF RS. 25,10,000/- HAS BEEN EARNED FROM THE SALE OF AGRICULTURAL LAND AND WAS NOT TAXABLE AS PER PROVIS IONS OF INCOME TAX ACT, 1961 BUT TO BY PEACE OF MIND, THE INCOME E ARNED APART FROM MENTIONED IN THE SALE DEED OF THE AGRICULTURAL LAND HAS BEEN OFFERED FOR TAX AS INCOME FROM OTHER SOURCES. ACCOR DING TO THE ASSESSEE AS THE PARTICULARS OF LAND MENTIONED IN TH E AGREEMENT TO SELL AND IN THE SALE DEED ARE SAME, IT CANNOT BE SA ID THAT THE ASSESSEE HAS EARNED INCOME FROM ANY OTHER SOURCE AP ART FROM SALE OF AGRICULTURAL LAND UNLESS AND UNTIL IT IS PROVED BEYOND DOUBT. TO SUBSTANTIATE HIS CLAIM, THE ASSESSEE HAS ALSO PRODU CED THE COPY OF AGREEMENT TO SELL AS EVIDENCE WHICH HAS NOT BEEN AC CEPTED AS GENUINE BY THE ASSESSING OFFICER IN WHICH SALE CONS IDERATION OF THE LAND WAS MENTIONED AT RS. 37,00,000/-. THE ASSESSEE HAS ALSO TAKEN THE PLEA THAT SHE HAS NOT REVISED ANY RETURN OF INC OME BUT THE RETURN FOR THE YEAR UNDER CONSIDERATION HAS BEEN FI LED VOLUNTARILY ON 18.02.2010 EVEN BEFORE THE RECEIPT OF THE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 UNDER THE PROVISIONS OF SECTIO N 139(4) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS ALSO PLEADED THAT SHE HAD NO INTENTION TO EVADE ANY TAX AS SHE HAD PAID ADVAN CE TAX OF RS. 45,000/- AND SELF ASSESSMENT OF RS. 2,25,000/- EVEN BEFORE THE RECEIPT OF NOTICE U/S 148 OF THE INCOME TAX ACT, 19 61. IT HAS FURTHER BEEN PLEADED THAT THE RETURN WAS NOT FILED WITHIN T IME AS THE ASSESSEE WAS NOT HAVING FINANCIAL RESOURCES TO PAY TAXES. IT HAS ITA NO.02(ASR)/2014 10 ALSO BEEN STATED THAT NO SEPARATE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER AS THE RETURNED INCOME HAS BEEN A CCEPTED BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT IN TH E CASE OF THE ASSESSEE U/S 143(3) READ WITH SECTION 147 OF THE IN COME TAX ACT, 1961. IN VIEW OF THE ABOVE STATED FACTS, THE ASSESS EE HAS PLEADED THAT NEITHER SHE CONCEALED THE PARTICULARS OF ANY I NCOME NOR SHE HAS FILED ANY INACCURATE PARTICULARS OF INCOME. 6.8 AFTER CAREFUL CONSIDERATION OF THE MATERIAL BR OUGHT ON RECORD, I AM OF THE OPINION THAT THE RETURN FILED B Y THE ASSESSEE ON 18.02.2010 CANNOT BE SAID TO HAVE BEEN FILED U/S 13 9(4) OF THE INCOME TAX ACT, 1961 AS THE PRESCRIBED PERIOD HAS A LREADY EXPIRED ON 31.03.2009. IT ALSO CANNOT BE SAID THAT THE ASSE SSEE WAS NOT HAVING ANY TAXABLE INCOME AS THE INCOME DISCLOSED I N THE RETURN FILED ON 18.02.2010 IS MUCH HIGHER THAN THE NON-TAX ABLE INCOME. NOT ONLY THIS, THE ASSESSEE HERSELF HAS ADMITTED TO HAVE PAID PART OF THE TAXES BY WAY OF ADVANCE TAX AND SELF ASSESSMENT TAX EVEN BEFORE FILING THE RETURN OF INCOME ON 18.02.2010. A LTHOUGH IT CANNOT BE SAID WITH CERTAINTY THAT AS TO WHETHER TH E RETURN FILED BY THE ASSESSEE IS VOLUNTARY RETURN OR IT HAS BEEN FIL ED IN RESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 AS THE D ATE OF SERVICE OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (18.02.2 010) AND DATE OF FILING THE RETURN (18.02.2010) ARE SAME BUT BENE FIT OF DOUBT SHOULD GO IN FAVOUR OF THE ASSESSEE IN ALL PROBABIL ITY. LET US PRESUME FOR THE ARGUMENT SAKE THAT THE RETURN HAS B EEN FILED IN RESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT, 1 961. AFTER THIS PRESUMPTION, WE HAVE NOW FIND THAT UNDER WHAT PROVI SIONS OF THE INCOME TAX ACT, 1961, THE ASSESSEE HAS CONCEALED OR DEEMED TO HAVE CONCEALED OR FILED INACCURATE PARTICULARS OR D EEMED TO HAVE FILED INACCURATE PARTICULARS OF INCOME. CERTAINLY, THE CASE OF THE ASSESSEE DOES NOT FALL UNDER THE PROVISIONS OF EXPLANATION 1 & EXPLANATION 2 TO SEC TION 271(1)(C) OF THE INCOME TAX ACT, 1961 AS THE RETURNED INCOME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT/REASSESSMENT AND NO SEPARATE ADDITION/DI SALLOWANCE ITA NO.02(ASR)/2014 11 HAS BEEN MADE. ALTHOUGH THE ASSESSING OFFICER HAS N OT INVOKED THE PROVISIONS OF EXPLANATION 3 TO SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 SPECIFICALLY BUT IT APPEARS THAT HE LEVIE D PENALTY IN THE CASE OF THE ASSESSEE BY INVOKING THE PROVISIONS OF THIS EXPLANATION WHICH READS AS UNDER:- EXPLANATION 3: WHERE ANY PERSON FAILS, WITHOUT REASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1) OF S ECTION 153 A RETURN OF HIS INCOME WHICH HE IS REQUIRED TO FURNIS H UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING OR OF AFTER THE LAST 1 ST DAY OF APRIL, 1989 AND UNTIL THE EXPIRY OF THE PER IOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER C LAUSE (I) OF SUB- SECTION (1) OF SECTION 142 OR SECTION 148 AND THE A SSESSING OFFICER OR THE COMMISSIONER (APPEALS) IS SATISFIED THAT IN THE RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXATION INCOM E, THEN, SUCH PERSON SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THI S SUB SECTION BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHED A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SEC TION 148.] 6.8 IN MY OPINION THE CASE OF THE ASSESSEE DOES NO T FALL EVEN UNDER THE PROVISIONS OF EXPLANATION 3 TO SECTION 27 1(1)(C) OF THE INCOME TAX ACT, 1961 AS THE CONDITIONS LAID DOWN IN THE EXPLANATIONS ARE NOT FULFILLED. FOR THE APPLICABILI TY OF THE PROVISIONS OF EXPLANATION 3, THE ASSESSEE SHOULD NO T HAVE FILED RETURN OF INCOME BEFORE THE EXPIRY OF PERIOD PRESCR IBED UNDER SUB- SECTION (1) OF SECTION 153 OF THE INCOME TAX ACT, 1 961 AND NO NOTICE UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTI ON 142 OR SECTION 148 OF THE INCOME TAX ACT, 1961 SHOULD HAVE ALSO BE EN ISSUED TO THE ASSESSEE BEFORE THE EXPIRY OF PERIOD AS SPECIFI ED IN SUB-SECTION (1) OF SECTION 153 OF THE INCOME TAX ACT, 1961 I.E. BEFORE ITA NO.02(ASR)/2014 12 31.03.2010. AS THE ASSESSEE IN THIS CASE HAS FILED RETURN OF HER INCOME BEFORE THE EXPIRY OF THE SPECIFIED PERIOD AN D THE ASSESSING OFFICER HAS ALSO ISSUED THE NOTICE TO THE ASSESSEE U/S 148 OF THE INCOME TAX ACT, 1961 BEFORE THE EXPIRY OF PERIOD SP ECIFIED IN SUB- SECTION (1) OF SECTION 153 OF THE INCOME TAX ACT, 1 961 ON 15.02.2010, THE PROVISIONS OF EXPLANATION 3 ARE NOT ATTRACTED IN THE CASE OF THE ASSESSEE. THIS VIEW IS FURTHER SUPP ORTED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CHHAGANLAL SUTERIYA VS. INCOME TAX OFFICER & ANR. R EPORTED AT (2011) 337 ITR 350 (GUJ.). THE RELEVANT PARAS OF TH E DECISION ARE REPRODUCED AS UNDER:- 14. IN THE PRESENT CASE ADMITTEDLY THE PETITIONER HAD NOT BEEN PREVIOUSLY ASSESSED UNDER THE PROVISIONS OF THE ACT , HENCE THE FIRST REQUIREMENT OF EXPLN. 3 IS DULY SATISFIED . T HE PETITIONER HAS NOT FILED HIS RETURN OF INCOME WITHIN THE PERIO D SPECIFIED UNDER SUB-SECTION (1) OF S. 153 OF THE ACT AND AS S UCH, ETH SECOND CONDITION IS ALSO SATISFIED. HOWEVER, AS NOT ICED EARLIER, IN THE PRESENT CASE A NOTICE HAD BEEN ISSUED TO THE PETITIONER UNDER SECTION 148 OF THE ACT ON 10 TH MARCH, 1997 WHICH WAS WITHIN ETH PERIOD SPECIFIED UNDER S. 153(1) OF THE ACT. IN THE CIRCUMSTANCES, THE THIRD CONDITION NAMELY, THAT NO NOTICE UNDER S. 142(1) OR S. 148 OF THE ACT SHOULD HAVE BEEN ISS UED WITHIN THE PERIOD SPECIFIED UNDER SUB-S (1) OF S. 153 OF THE ACT IS CLEARLY NOT SATISFIED. AS DISCUSSED EARLIER, THE CONDITIONS FOR APPLICABILITY OF EXPLN. 3 TO S. 271(1) ARE COMMUTAT IVE AND EACH OF THE CONDITIONS HAS TO BE ESTABLISHED FOR THE PUR POSE OF INVOKING THE SAID PROVISION. IN THE PRESENT CASE, A LL THE CONDITIONS ARE NOT CUMULATIVELY SATISFIED THE FAIL URE ON THE PART OF THE PETITIONER TO FURNISH THE RETURN OF INCOME W ITHIN THE SPECIFIED PERIOD, THEREFORE, CANNOT BE DEEMED TO BE CONCEALMENT WITHIN THE MEANING OF THE EXTN. 3 TO S. 271(1)(C) OF THE ACT. 15. IN THE LIGHT OF THE AFORESAID, IT IS APPARENT THAT THE CASE OF THE PETITIONER, DOES NOT FALL WITHIN THE AMBIT OF E XPL. TO S. ITA NO.02(ASR)/2014 13 271(1) OF THE ACT AND AS SUCH, NO PENALTY COULD BE LEVIED ON THE PETITIONER UNDER S. 271(1)(C) OF THE ACT FOR CONCEA LMENT OF PARTICULARS OF HIS INCOME ON THE GROUND THAT THE PE TITIONER HAD FAILED TO FURNISH RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION. 6.9 IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT T HE CASE OF THE ASSESSEE DOES NOT FALL UNDER ANY OF THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 AND THE PENAL TY HAS BEEN LEVIED WITHOUT TAKING INTO CONSIDERATION THE RELEVA NT PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE PENALTY LEVIED BY THE ASSESSING OFFICER IN THIS CASE AT RS. 8,44,0 50/- IS HELD TO BE NOT JUSTIFIED AND, THEREFORE, DIRECTED TO BE DELETE D. IN THE RESULT, GROUND OF APPEAL NO. 2 TAKEN BY THE ASSESSEE IS, TH EREFORE, ALLOWED. 6.10 I DO NOT FIND IT NECESSARY TO CONSIDER OTHER SUBMISSIONS OF THE ASSESSEE AS THE PENALTY LEVIED BY THE ASSESSING OFFICER HAS BEEN HELD TO BE UNJUSTIFIED. 7. THE APPEAL FILED BY THE ASSESSEE IS, THEREFORE , ALLOWED. 5. THE LD. DR, MR. TARSEM LAL, ARGUED THAT THE PRES ENT CASE RELATES TO ASSESSMENT YEAR 2007-08 AND THE RETURN IN THE PRESE NT CASE HAS BEEN FILED ON 18.02.2010, WHERE EVEN BELATED RETURN U/S 139(4) S HOULD HAVE BEEN FILED UP TO 31.03.2009. THE LD. DR INVITED OUR ATTENTION TO THE VARIOUS PARAS OF THE PENALTY ORDER THAT THE ASSESSEE IS CLAIMED TO HAVE FILED THE RETURN OF INCOME U/S 139(4) OF THE ACT ON ONE HAND VIDE REPLY DATED 04.03.2011 AND ON THE OTHER HAND CLAIMED TO HAVE FILED RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ITA NO.02(ASR)/2014 14 ACT. LD. DR ARGUED IT IS A NON-EST RETURN SINCE TH E SAME HAS NOT BEEN FILED U/S 139(1) OR 139(4) OF THE ACT. IN CASE, IT IS A R ETURN U/S 148, RETURN HAS NOT BEEN FILED VOLUNTARILY ON FIRST COUNT AND THE ASSES SEE, IN FACT, FILED THE RETURN OF INCOME ONLY WHEN THE CASE OF THE FIRM WHERE THE ASSESSEE IS A PARTNER WAS A SUBJECT TO THE INCOME TAX SCRUTINY AND THIS POINT WAS IN THE NOTICE OF THE FIRM AS WELL AS ASSESSEE-PARTNER AND THEN AND O NLY THEN THE ASSESSEE PROCEEDED TO FILE THE INCOME TAX RETURN AFTER DETEC TION OF THE CONCEALED INCOME BY THE DEPARTMENT ON ACCOUNT OF ASSESSMENT I N THE HANDS OF M/S. BEDI AUTOMOBILES, IN WHICH THE ASSESSEE IS A PARTNE R AND ON THE SAID DETECTION, REASONS HAVE BEEN RECORDED IN ASSESSEES CASE IS A MATTER OF RECORD. HAD THE DEPARTMENT NOT TAKEN ANY ACTION, NO DECLARATION OF THE SAID INCOME WOULD HAVE BEEN MADE IN THE RETURN OF INCOM E FILED BY THE ASSESSEE. THE ASSESSEE WAS VERY MUCH AWARE OF THE FACT THAT THE ASSESSMENT IN THE CASE OF M/S. BEDI AUTOMOBILES HAD BEEN MADE THAT I S WHY THEY DEPOSITED RS.2.25 LACS BEING PART PAYMENT ON 03.02.2010 AND DEPOSITING SUCH TAX BEFORE ISSUANCE OF NOTICE U/S 148 AND PLEADING THA T CONSIDERATION RECEIVED ON SALE OF AGRICULTURAL LAND WAS EXEMPT UNDER INCOM E TAX ACT, CANNOT HELP THE ASSESSEE TO PLEAD THAT THE RETURN HAS BEEN FIL ED VOLUNTARILY. THIS ACT OF THE ASSESSEE BY DEPOSITING TAX ON 3.2.2010 OF RS.2. 25 LACS MAKES IT EVIDENT THAT IT WAS IN THE KNOWLEDGE OF THE ASSESSEE THAT H E HAS CONCEALED THE INCOME ITA NO.02(ASR)/2014 15 AND THAT IS THE REASON THAT HE HAS FILED THE RETUR N OF INCOME ON 18.02.2010. IN ANY CASE, THE LD. DR ARGUED THAT IT IS NOT A VO LUNTARILY RETURN AND THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN CANC ELING THE PENALTY. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE, RELIED UPON THE ORDER OF THE LD. CIT(A) AND THE DECISION OF THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAJIV GARG & ORS , REPORTED IN (2009) 323 ITR 256. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN THE PRESENT CASE, THE MAIN ISSUE IS WHETHER THE RETURN FILED BY THE ASSESSEE IS A RETURN U/S 139(4) OR IN RESPONSE TO NOTICE U/S 148 OF THE ACT AND SECOND ISSUE RELATED TO THE FIRST ISSUE WITH RESPECT TO TH E LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, IS WHETHER RETURN FILED IS VO LUNTARILY RETURN OR NOT. IN THIS REGARD, THERE IS NO DISPUTE TO THE FACT THAT T HE ASSESSMENT IN THE CASE OF M/S. BEDI AUTOMOBILES IN WHICH THE ASSESSEE IS A PA RTNER WAS MADE MUCH BEFORE THE ISSUANCE OF NOTICE U/S 148 TO THE ASSESS EE. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE PARTNER SMT. MOHINDER KAUR W AS NOT AWARE OF SUCH FACT, AS RECORDED IN THE REASONS RECORDED BY THE A. O. THE ASSESSEE PROCEEDED TO DEPOSIT TAX ON 03.02.2010 AMOUNTING TO RS.2.25 L ACS WHICH IS A PART PAYMENT AGAINST TAX PAYABLE AFTER PAYMENT OF ADVANC E TAX OF RS.12,89,333/-, ITA NO.02(ASR)/2014 16 AS CLAIMED BY THE ASSESSEE IN THE SUBMISSION DATED 04.03.2011. THE RETURN U/S 139(4) SHOULD HAVE BEEN FILED UP TO 31.03.2009 FOR THE ASSESSMENT YEAR 2007-08, WHICH IN FACT, HAS BEEN FILED ON 18.02.201 0. THEREFORE, THE RETURN OF INCOME FILED BY THE ASSESSEE ON 18.02.2010 IS A NON EST RETURN AND THEREFORE, THE CLAIM OF THE ASSESSEE IN PARA 4 TO E XPLANATION/REPLY DATED 04.03.2011 REPRODUCED HEREINABOVE IS AGAINST THE FA CTS OF THE CASE AND IS NOT A RETURN U/S 139(4) OF THE ACT. ON THIS COUNT, THE RETURN FILED BY THE ASSESSEE IS A NON EST RETURN. 7.1. THE ASSESSEE IN THE SAME EXPLANATION HAD CLAIM ED THE RETURN TO HAVE BEEN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT . THE FACT THAT NOTICE IN THE PRESENT CASE HAS BEEN ISSUED ON 15.02.2010 AND SERV ED ON THE ASSESSEE ON 18.02.2010 AND THE ASSESSEE FILED THE RETURN ON 18. 02.2010. IF THE RETURN IS TREATED TO HAVE BEEN FILED AFTER SERVICE OF NOTICE U/S 148 OF THE ACT, THEN THE FACT THAT THE RETURN HAS BEEN FILED WHEN THE INCOME TAX DEPARTMENT DETECTED THE CONCEALMENT OF INCOME. NO COGENT EXPLANATION HA S BEEN SUBMITTED BY THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF NOT FILI NG THE RETURN VOLUNTARILY. THE ASSESSEE WAS SHORT OF FINANCES AND THEREFORE, DID N OT DEPOSIT THE TAX WITH THE INCOME TAX DEPARTMENT, CANNOT BE A SUFFICIENT EXPLA NATION. THE ISSUANCE OF NOTICE U/S 148 AND IN THE FACTS AND CIRCUMSTANCES O F THE PRESENT CASE, AS ITA NO.02(ASR)/2014 17 MENTIONED HEREINABOVE, THE ASSESSEE WAS AWARE OF TH E FACT IN THE ASSESSMENT OF THE FIRM M/S. BEDI AUTOMOBILES BY VIRTUE OF ISSU ANCE OF NOTICE U/S 148 AND IN THE FACTS AND CIRCUMSTANCES SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE P ARTICULARS OF THEREOF AND THE ASSESSEE IS LIABLE TO PENALTY U/S 271(1)(C) OF THE ACT. 7.2. THE LD. CIT(A) HAS OBSERVED THAT IT CANNOT BE SAID IN CERTAINTY THAT AS TO WHETHER THE RETURN FILED BY THE ASSESSEE IS A VO LUNTARILY RETURN OR IT HAS BEEN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT AND THE BENEFIT OF DOUBT SHOULD GO IN FAVOUR OF THE ASSESSEE IN ALL PROBAB ILITY. THE LD. CIT(A) CANNOT BLOW HOT AND COLD IN THE SAME BREATH. THI S FINDING OF THE LD. CIT(A) CANNOT HOLD GOOD FOR THE REASONS THAT THE RETURN FILED BY THE ASSESSEE IS A NON EST RETURN, AS HAS BEEN HELD HERE INABOVE BY US. THE RETURN CANNOT BE SAID TO BE VOLUNTARY RETURN AS PER OUR FINDINGS HEREINABOVE. THE ASSESSEE FALLS UNDER THE MAIN SECTION 271(1)( C) OF THE ACT AND REFERENCE TO EXPLANATION 3 TO SECTION 271(1)(C) BY THE LD. CIT(A) FOR CANCELING THE PENALTY IS NOT A CORRECT APPROACH. F URTHER, THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IN THE CAS E OF CIT VS. RAJIV GARG & ORS. (SUPRA) DOES NOT HELP THE ASSESSEE. THEREFORE, THE PENALTY SO CANCELLED BY THE LD. CIT(A) IS AGAINST THE FACTS AND CIRCUMST ANCES OF THE CASE AND ITA NO.02(ASR)/2014 18 ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSE D AND THAT OF THE A.O. IS RESTORED. THUS, ALL THE GROUNDS OF THE REVENUE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.02(ASR)/2014 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH AUGUST, 2014. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25TH AUGUST, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. BHUPINDER KAUR, HOSHIARPUR. 2. THE ACIT, HOSHIARPUR. 3. THE CIT(A), JLR. 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR