Sharad Sharma, New Delhi V. DCIT Circle-35 (1), New Delhi

ITA 2750/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8397 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-06-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA SENIOR
• Keywords: Revised return
• Section: 271(1)(c); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE HON'BLE SENIOR VICE PRESIDENT, SHRI R.P. GAR G AND HON'BLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.2750/DEL./2008 (ASSESSMENT YEAR : 2005-06) SHRI SHARAD SHARMA, VS. DCIT, CIRCLE 35 (1), 40, PUSHPANJALI, VIKAS MARG EXTN., NEW DELHI. DELHI 110 092. (PAN : AATPS6182N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY SOOD, CA REVENUE BY : MS. ANUSHA KHURANA, SENIOR DR O R D E R GARG, SENIOR VP : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (APPEALS) FOR ASSESSMENT YEAR 2005 -06 CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF RS.1,43,575/- . 2. ASSESSEES SOURCE OF INCOME IS SALARY, SOME DIVI DEND AND INTEREST. DURING THE YEAR UNDER CONSIDERATION, HE HAS ALSO SH OWN CAPITAL GAIN ON SALE OF SHARE AND CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE ACT OF RS.21,35,206/-. THE ASSESSING OFFICER REQUIRED THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 21.2.2007 TO FURNISH THE INFORMATION (I) COP OF DEMAT ACCOUNT; AND (II) SOURCE OF INVESTMENT/ACQUISITION IN THE SH ARES IN RESPECT OF WHICH LTCG HAS BEEN CLAIMED AS EXEMPTION, WITH NECESSARY DOCUMENTARY EVIDENCE. 2 ITA NO.2750/DEL./2008 ON RECEIPT OF THE DEMAT ACCOUNT AND ON EXAMINATION BY THE COUNSEL OF THE ASSESSEE, HE BECAME AWARE THAT THOUGH THE SHARES WE RE ALL BONUS SHARES, SOME OF THESE HAD BEEN RECEIVED IN A BONUS ISSUE LESS TH AN A YEAR AGO AND, THEREFORE, REVISED RETURN WAS FILED BY REDUCING THE CLAIM UNDE R SECTION 10(38) OF RS.8,55,572/- AS AGAINST RS.21,35,206/- IN THE ORIG INAL RETURN. HIS REVISED RETURN WAS ACCEPTED BY THE ASSESSING OFFICER. HE, HOWEVER, INITIATED THE PENALTY PROCEEDINGS AND TREATED THE ASSESSEE TO HAV E CONCEALED INCOME BY OBSERVING THAT THE ASSESSEE HAD ENOUGH TIME TO DECL ARE THE INCOME VOLUNTARILY AS THE FIRST NOTICE UNDER SECTION 143(2) WAS ISSUED ON 28.7.2006 BUT THE ASSESSEE DECLARED HIS INCOME ON 28.3.2007 IN HIS RE VISED RETURN AFTER A SPECIFIC INQUIRY WAS RAISED VIDE ORDER SHEET ENTRY DATED 21.2.2007. THIS, ACCORDING TO HIM, SHOWED THAT THE ASSESSEE HAD DELI BERATELY AND WITH MALAFIDE INTENTION CONCEALED HIS INCOME AND SHOULD BE TREATE D AS DEFAULT UNDER SECTION 271(1)(C). HE ACCORDINGLY LEVIED A PENALTY OF RS.1 ,43,575/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. THE CIT (APPEALS) CONFIRMED THE ORDER OF THE ASS ESSING OFFICER. THE ASSESSEE IS IN APPEAL. 4. WE HAVE HEARD THE PARTIES AND CONSIDERED THE RIV AL SUBMISSIONS. IT IS TRUE THAT THE REVISED RETURN WAS FILED AFTER A QUER Y WAS RAISED VIDE ORDER SHEET 3 ITA NO.2750/DEL./2008 ENTRY DATED 21.2.2007. HOWEVER, AFTER PERUSAL OF THE AFORESAID INQUIRY, IT IS NOTICED THAT WHAT THE ASSESSING OFFICER REQUIRED WA S A COPY OF DEMAT ACCOUNT AND THE SOURCE OF ACQUISITION OF THE SHARES . THIS IS A GENERAL INQUIRY AND ON RECEIPT OF INFORMATION FROM THE DEMAT ACCOUN T AND ON EXAMINATION OF THE SAME, THE COUNSEL OF THE ASSESSEE REALIZED HIS MISTAKE AND REVISED THE CLAIM OF CAPITAL GAIN IN RESPECT OF SHARES, WHICH W ERE ACQUIRED MORE THAN A YEAR AGO. IN THESE CIRCUMSTANCES, IT IS A MERE OMI SSION AND MISUNDERSTANDING OF THE CORRECT FACTS AT THE TIME OF FILING OF ORIGI NAL RETURN WHICH WAS SUBSEQUENTLY RECTIFIED THOUGH AFTER THE QUERY RAISE D BY THE ASSESSING OFFICER ON 21.2.2007 BUT BEFORE ANY CONCEALMENT WAS DETECTE D BY THE ASSESSING OFFICER. AS TO WHAT AMOUNTS TO CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS THEREOF IS ESSENTIALLY A QUE STION OF FACT AND TO FIND OUT THAT OR TO DECIDE WHICH, ALL THE ATTENDING CIRCUMST ANCES HAVE TO BE TAKEN INTO ACCOUNT. THE QUESTION IS AT WHAT POINT OF TIME THI S MATERIAL FEET IS TO BE FOUND OUT. GENERALLY IT IS WITH REFERENCE TO THE RETURN OF INCOME AND AT THAT TIME IT IS TO BE SEEN WHETHER THERE WAS CONCEALMENT OF INCOME FROM OR FURNISHING OF INACCURATE PARTICULARS THEREOF IN THE RETURN OF INC OME CHARGEABLE TO TAX. BUT THERE MAY BE CASES, WHERE AN INCOME IS NOT DECLARED IN THE RETURN OR THE PARTICULARS OF INCOME SHOWN INACCURATELY IN THE RET URN BUT ASSESSEE ON REALIZATION OF MISTAKE, OMISSION OR MISDEED RECTIFI ES THE MISTAKE AND CORRECT HIMSELF AND CLEANS HIS BREAST AND CANNOT BE ACCUSED OF CONCEALMENT EVEN 4 ITA NO.2750/DEL./2008 THOUGH THERE WAS AN OMISSION IN THE RETURN FILED OR IGINALLY. BY THE TIME THE ASSESSING OFFICER TAKES UP THE ISSUE AND COMES ACRO SS THE INFORMATION IN HIS POSSESSION, IF THE ASSESSEE MAKES UP THE DEFICIENCY AND OFFERS THE INCOME OR FURNISHES ACCURATE PARTICULARS AND OFFERED THE INCO ME TO TAX, IN THESE CIRCUMSTANCES, IN OUR OPINION, IT IS NOT A CASE OF CONCEALMENT MUCH LESS A DELIBERATE OR MALAFIDE CLAIM BY THE ASSESSEE. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT IT IS N OT A FIT CASE FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) AND ACCORDINGLY, WE DELETE THE SAME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JULY 2009. SD/- SD/- (RAJPAL YADAV ) (R.P. GARG) JUDICIAL MEMBER SENIOR VICE PRESIDENT DATED THE 31 ST DAY OF JULY, 2009 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXVII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.