DCIT, Ludhiana V. Sh. Sanjeev Kumar, Ludhiana

ITA 29/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2590 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO.29/CHD/2015 ASSESSMENT YEAR:2009-10 THE DCIT, VS. SH SANJEEV KUMAR CENTRAL CIRCLE II PROP.M/S JINDAL TEXTILES LUDHIANA RAM NAGAR, SAMRALA ROAD LUDHIANA PAN NO. ACJPK8426H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUSHIL KUMAR RESPONDENT BY : NONE DATE OF HEARING : 30/11/2015 DATE OF PRONOUNCEMENT : 19/01/2016 ORDER PER ANNAPURNA MEHROTRA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-1 LUDHIANA DT. 28/10/2014 REDUCING THE PENALTY LEVIED U/S 221(1) OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF LD. CIT(A) TO REDUCE THE PENALTY IS CORRECT. 2. WHETHER THE DECISION OF CIT(A) REDUCING THE PENALTY , BY HOLDING THAT THE ENTIRE TAX LIABILITY SHOULD HAVE BEEN TREATED AS PAID IF THE SEIZED CASH OF RS. 10 LACS HAD BEEN ADJUSTED AGAINST THE EXISTING LIABILITY OUT OF SELF ASSESSMENT TAX IS CORRECT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS. 6 3,75,290/- ON 28/09/2009 ON WHICH TAX AND INTEREST OF RS. 22,21,173/- WAS PAYABLE WHI LE TAX PAID WAS TO THE TUNE OF RS. 5,20,000/- LEAVING OUTSTANDING TAX DEMAND OF RS. 17 ,01,170/-. A SHOW CAUSE NOTICE U/S 221(1) WAS ISSUED TO THE ASSESSEE WHICH WAS NOT COM PLIED WITH. THEREAFTER THE AO AFTER 2 BRINGING ON RECORD THE PROVISIONS OF SECTION 140A(1 ) AND 140A(3) LEVIED PENALTY OF RS. 17,01,170/- BEING 100% OF THE OUTSTANDING TAX DEMAN D. 4. BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT NO TAX WAS OUTSTANDING FOR PAYMENT BY THE ASSESSEE AS THE ENTIRE AMOUNT OF RS. 17,01,170/- HAD BEEN PAID BY WAY OF ADJUSTMENT OF CASH SEIZED DURING SEARCH AMOUNTIN G TO RS. 10,00,000/- AND FURTHER BY WAY OF PAYMENT OF RS. 7,01,170/- AS SELF ASSESSMENT TAX. LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSION REDUCED THE PENALTY LEVIED TO THE EXTENT OF 10% OF THE TAX DEMAND ARISING ON ACCOUNT OF INTEREST IMPOSABLE U/S 234B/C FOR NON ADJUSTMENT OF CASH SEIZED OF RS. 10,00,000/- TILL ONE MONTH AFTER THE DATE OF FILING OF RETURN OF INCOME BY HOLDING AS FOLLOWS: 4. I HAVE CONSIDERED THE BASIS OF ADDITION MADE B Y THE ASSESSING OFFICER AND THE ARGUMENTS OF THE AR ON THE ISSUE DURING PENALTY PRO CEEDINGS AS WELL AS APPELLATE PROCEEDINGS. IT IS SEEN THAT THE ASSESSEE HAD CLAIM ED CREDIT OF FOLLOWING PREPAID TAXES AT THE TIME OF FILING OF RETURN OF INCOME:- I) ADVANCE TAX OF RS. 490000/- PAID ON 16/03/2009 II) ADVANCE TAX OF RS. 20000/- PAID ON 11/09/2008 III) ADVANCE TAX OF RS. 10000/- PAID ON 15/12/2008 FURTHER, CASH OF RS. 10,00,000/- SEIZED ON 14/10/20 08 HAD BEEN REQUESTED FOR ADJUSTMENT AGAINST ADVANCE TAX VIDE LETTER DATED 16/03/2009. T HE FACT OF ASSESSEE HAVING FILED SAID LETTER FOR ADJUSTMENT OF SEIZED CASH AGAINST ADVANC E TAX LIABILITY WAS CONFIRMED FROM THE OFFICE OF THE ASSESSING OFFICER. HOWEVER, SINCE THE LETTER WAS FILED AFTER 15 TH MARCH, IT CANNOT BE ACCEPTED THAT SAME COULD HAVE BEEN ADJUST ED AGAINST ANY TAX LIABILITY TAKES SOME TIME AT THE LEVEL OF CONCERNED COMMISSIONER OF INCOME TAX IN WHOSE PD ACCOUNT THE SAID CASH IS DEPOSITED. THEREFORE, THE CHARGEAB ILITY OF INTEREST TILL 31/03/2009 ON THE ADVANCE TAX HAS TO BE ON THE ASSESSEE AND NO FAULT OF DEPARTMENT CAN BE POINTED OUT. IT IS FURTHER SEEN THAT ASSESSEE HAD PAID SELF ASSESSM ENT TAX OF RS. 3,00,000/- ON 26/10/2009 AND RS. 4,01,170/- ON 24/01/2011 I.E. ONE MONTH AND FIVE MONTHS AFTER FILING OF RETURN OF INCOME. THE ASSESSEE HAD RECEIVED INTIMATION UNDER SECTION 143(1) ON 12/11/2010 AGAINST WHICH RECTIFICATION LETTER DATED 07/02/2011 HAD BEE N FILED REQUESTING THE ASSESSING OFFICER TO REDUCE THE LIABILITY TO NIL ON ACCOUNT OF ADJUST MENT OF SEIZED CASH OF RS. 10,00,000/- AND CREDIT OF SELF ASSESSMENT TAX OF RS. 7,01,170/-. IN VIEW OF THESE FACTS THERE IS NOT CASE FOR THE ASSESSING OFFICER TO TREAT THE ASSESSEE AS ASSESSEE IN DEFAULT TO THE TUNE OF RS. 17,01,170/- ON 31/12/2013 WHEN THE ENTIRE TAX SHOULD HAVE BEEN TREATED AS PAID IF THE SEIZED CASH OF RS. 10,00,000/- HAD BEEN ADJUSTED AGAINST THE EXIST ING LIABILITY ARISING OUT OF SELF ASSESSMENT TAX DUE ON FILING OF RETURN OF INCOME. THE ASSESSE, HOWEVER, IS LIABLE TO EXPLAIN AS TO WHY PENALTY UNDER SECTION 221(1) SHOULD NOT HAVE BEEN I MPOSED WITH REFERENCE TO DELAY IN PAYING SELF ASSESSMENT TAX OF RS. 17,01,170/-. THE ASSESSING OFFICER IN THE CIRCUMSTANCES IS DIRECTED TO REWORK THE PENALTY IMPOSABLE ONLY WITH REFERENCE TO THE DEMAND RISING OUT OF THE INTEREST UNDER SECTION 234B/C IMPOSABLE BECAUSE OF NON ADJUSTMENT OF SEIZED CASH OF RS. 10,00,000/- TILL ONE MONTH AFTER DATE OF FILING OF RETURN OF INCOME. THE PENALTY IMPOSED IS ALSO DIRECTED TO BE IMPOSED @ 10% IN VIEW OF THE BO NAFIDE OF THE APPELLANT HAVING DEPOSITED ENTIRE OUTSTANDING DEMAND WITHIN REASONAB LE PERIOD OF TIME. 5. AGGRIEVED BY THE SAME THE REVENUE FILED THE PRES ENT APPEAL BEFORE US. 6. BEFORE US LD. AR RELIED UPON THE ORDER OF THE LD . CIT(A). ON THE OTHER HAND LD. DR PLACED RELIANCE ON THE ORDER OF THE AO. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. 3 8. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO LEVY OF PENALTY U/S 221 FOR NON PAYMENT OF TAX OF RS. 17,01,170/-. 9. WE FIND THAT THE LD. CIT(A) HAS GIVEN A CLEAR FI NDING OF FACT THAT THE ENTIRE AMOUNT HAD BEEN PAID BY THE ASSESEE. LD. CIT(A) HAS GIVEN A FINDING THAT RS. 10,00,000/- WAS PAID BY WAY OF CASH SEIZED AT THE T IME OF SEARCH, WHICH WAS REQUESTED BY THE ASESSEE TO BE ADJUSTED AGAINST THE ADVANCE T AX LIABILITY. LD. CIT(A) CONFIRMED THE FILING OF THIS REQUEST BY THE ASSESSEE, FROM TH E OFFICE OF THE AO. THIS FACT HAS NOT BEEN CONTROVERTED BY THE LD. DR. FURTHER THE PAYMEN T OF SELF ASSESSMENT TAX OF RS. 3,00,000/- ON 26/10/2009 AND 4,01,170/- ON 24/01/20 11 HAS ALSO NOT BEEN CONTROVERTED BY THE LD. DR. THEREFORE UNDENIABLY THE ENTIRE AMOU NT OF RS. 17,01,170/- HAD BEEN PAID BY THE ASSESSEE AND THERE WAS NO REASON TO HOLD THE ASSESSEE AS ASSESSEE IN DEFAULT WITH RESPECT TO THIS AMOUNT AND LEVY PENALTY THEREO N U/S 221. WE FURTHER CONCUR WITH THE FINDINGS OF THE LD. CIT(A) THAT SINCE THE IMPUG NED AMOUNTS WERE PAID LATE, PENALTY U/S 221(1) SHOULD BE IMPOSED WITH RESPECT TO THE IN TEREST PAYABLE U/S 234B/C ON THE AFORESTATED AMOUNT. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) REDUCING THE PENALTY LEVIABLE U/S 221(1)TO 10% ON THE AMOUNT OF DEMAND ARISING OU T OF INTEREST IMPOSABLE U/S 234B/C ON ACCOUNT OF NON-ADJUSTMENT OF SEIZED CASH OF RS. 10,00,000/- TILL ONE MONTH AFTER DATE OF FILING OF RETURN OF INCOME. 10. THE APPEAL OF THE REVENUE IS THEREFORE DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19/01/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR