Vinay Kumar Sharma, New Delhi V. ACIT Circle-32 (1), New Delhi

ITA 2953/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8069 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-05-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 19-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S REHMAN
• Assessee Lawyers: SANJEEV RAI MEHRA
• Section: 271(1)(c); 143(1); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI A.D. JAIN ITA NO.2953/DEL./2008 (ASSESSMENT YEAR : 2003-04) VINAY KUMAR SHARMA, VS. ACIT, CIRCLE 12(1), A-45, NIZAMUDDIN EAST, NEW DELHI. NEW DELHI. (PAN/GIR NO.AKMPS7866A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJEEV RAI MEHRA, CA REVENUE BY : SHRI S. REHMAN, DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR THE ASSESSMENT YEAR 200 3-04 IN CONFIRMING THE PENALTY OF RS.4,72,500 IMPOSED BY THE ASSESSING OFFICER U/S 27 1(1)(C) OF THE I.T. ACT. 2. A RETURN OF INCOME WAS FILED DECLARING INCOME OF RS.23,13,450 ON 24.10.03. THE CASE OF THE ASSESSEE WAS PROCESSED U/S 143(1) BY TH E ASSESSING OFFICER. THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY. THE ASSESSIN G OFFICER ASKED TO EXPLAIN THE SOURCE OF INCOME OF THE SAID AMOUNT. THE ASSESSEE COULD NO T EXPLAIN THE SAME AND VOLUNTARILY OFFERED THE SUM OF RS.15,00,000 FOR TAX. THE ASSES SING OFFICER ADDED THE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES. THE ASSESSI NG OFFICER DID NOT ACCEPT THE EXPLANATION FURNISHED BY THE ASSESSEE AND INITIATED PENALTY PROCEEDINGS SEPARATELY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS THEREOF. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) CONFIR MED THE PENALTY IMPOSED BY THE ASSESSING OFFICER BY OBSERVING IN HIS ORDER AS UNDER: ITA NO.2953/DEL./2008 (A.Y. : 2003-04) 2 IT IS SEEN THAT THERE WAS CASH DEPOSITS IN THE APP ELLANTS BANK ACCOUNTS WHICH APPARENTLY HE COULD NOT EXPLAIN AT THE TIME OF ASSE SSMENT PROCEEDINGS. IF THE CONTENTION OF THE APPELLANT THAT HE HAD AMPLE FUNDS AVAILABLE AND HIS ARGUMENT THAT THE CASH DEPOSITS COULD BE ADEQUATELY EXPLAINE D, WAS CORRECT, HE WOULD NOT HAVE AGREED TO A DISCLOSURE OF RS.15 LACS. TO MY M IND THE ONLY REASON WHY THE APPELLANT AGREED FOR THE TIME BEING TO AN ADDITION OF RS.15 LACS BEFORE THE ASSESSING OFFICER WAS THAT HE COULD NOT HAVE EXPLAI NED THE SAME. IT IS A VERY CLEAR FACT THAT THE APPELLANT CAME FORWARD FOR A DI SCLOSURE/SURRENDER BEFORE THE ASSESSING OFFICER ONLY SUBSEQUENTLY TO A VERY SPECI FIC QUERY WITH REGARD TO SOURCES OF CASH DEPOSIT OF RS.15 LACS WAS PUT TO HI M. UNDER THE CIRCUMSTANCES, IT IS CLEAR THAT THE APPELLANT WAS CORNERED WHEN THE A SSESSING OFFICER ASKED FOR AN EXPLANATION OF THE SOURCE OF CASH DEPOSIT. SINCE N O EXPLANATION WAS FILED BY THE APPELLANT THE ONUS WAS NOT APPARENTLY DISCHARGED. FURTHER, IT IS SEEN THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS CONFIRMED THE ADDITION VIDE ORDER DATED 27.12.2006. HENCE IT IS HELD THAT HE ASSESSI NG OFFICER WAS CORRECT IN IMPOSING PENALTY U/S 271(1)(C). THE PENALTY IS UPH ELD. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED ON RECORD. THE ASSESSEE MADE A CONDITIONAL OFFER OF A N ADDITION OF RS.15,00,000 SUBJECT TO NO PENALTIES TO BUY PEACE. THE LETTER DATED 28.02. 2006 IN THIS REGARDS READS AS UNDER: WITH REGARD TO THE ABOVE PROCEEDINGS AND IN PARTIC ULAR WITHDRAWAL OF CASH MADE IN DECEMBER, 2002, WE SUBMIT THAT THE BUSINESS OF T HE ASSESSEE IS CARRIED ON FROM FOUR DIFFERENT PREMISES AND THE CASHIER DISBURSES C ASH AND DRAWS CASH FROM BANK BASED ON FUNDS AVAILABLE WITH HIM. SINCE THE EARLI ER SURPLUS CASH HAS BEEN TRANSFERRED TO THE MAIN CASH CHEST WITH THE PROPRIE TOR HE IS NOT AWARE HOW MUCH CASH IS AVAILABLE WITH THE PROPRIETOR AND HENCE WIT HDRAWAL WERE MADE DESPITE LARGE SUMS AVAILABLE WITH THE PROPRIETOR. HOWEVER, WITH A VIEW TO BUY PEACE AND END ANY LITIG ATION AND CONSEQUENTIAL PENALTIES THE ASSESSEE IS WILLING TO OFFER A SUM OF RS.15,00,000 AS ADDITION TO BUSINESS PROFITS AND WE ENCLOSE HEREWIT H A REVISED STATEMENT OF ASSESSABLE INCOME AND A REVISED CLAIM U/S 80HHC. 5. IT IS CLEAR FORM THE ABOVE THAT THE ASSESSEE HAS SURRENDERED THE AMOUNT VOLUNTARILY AND HAS PAID THE TAX THEREON. THIS IS NOT A FIT C ASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND FURNISHING OF PAR TICULARS THEREOF. IN VIEW OF JUDGMENTS IN THE CASE OF CIT VS. MECON BUILDERS & E NGINEERS, 248 ITR 159(DEL.) AND CIT VS. MOOL CHAND SIRI KIHSAN DASS, 248 ITR 463(DE L.) AND ALSO ON 277 ITR 429 (DEL.), NO PENALTY NEED BE LEVIED. ON THE FACTS AN D CIRCUMSTANCES OF THE CASE, WE ARE SATISFIED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) DESERVES TO BE DELETED, AND WE DO SO. ITA NO.2953/DEL./2008 (A.Y. : 2003-04) 3 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 7. ORDER PRONOUNCED IN OPEN COURT ON 30.06.2009. (A.D. JAIN) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JUNE 30, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XXII, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT