Ms. Meeta Gutgutia, New Delhi V. ACIT, New Delhi

ITA 327/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6191 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: RIDHI KARAN AGGARWAL
• Keywords: Reopening of assessment; Business income; Revised return
• Section: 143(3); 147; 148

Judgement Text

I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 327/DEL/2014 AY: 20 08-09 MEETA GUTGUTIA, VS ACIT, J-238, SAINIK FARMS, CENTRAL CIRLE-10, NEW DELHI. NEW DELHI. (PAN: AFDPG2774B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RIDHI KARAN AGGARWAL RESPONDENT BY : SHRI P.DAMKANUNJNA, SR. DR DATE OF HEARING : 07.01.2016 DATE OF PRONOUNCEMENT : 31.03.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 24.10.2013 PASSED BY THE LD. CIT(A)-XXXII, NEW DELH I FOR ASSESSMENT YEAR 2008-09. 2. FACTS OF THE CASE IN BRIEF ARE THAT ON THE BASIS OF THE INFORMATION IN POSSESSION OF THE ASSESSING OFFICER THAT THE ASSESSEES INCOME TO THE EXTENT OF RS.26,89,149/- H AD ESCAPED ASSESSMENT, ACTION U/S 147 OF THE I.T. ACT, 1961 WA S INITIATED AND ACCORDINGLY, A NOTICE U/S 148 WAS ISSUED. THE I NFORMATION WHICH WAS IN POSSESSION OF THE ASSESSING OFFICER WA S FORM NO. I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 2 26AS FILED BY THE DEDUCTOR WITH THE DEPARTMENT, WHI CH SHOWED THAT FOR THE FINANCIAL YEAR 2007-08, RELEVANT TO AS SESSMENT YEAR 2008-09, THE ASSESSEE HAD RECEIVED A TOTAL AMOUNT O F RS.26,98,149/- FROM VARIOUS PARTIES ON WHICH TDS OF RS.74,719/- WAS DEDUCTED BY THE DEDUCTORS. APART FR OM THIS INFORMATION, IT ALSO CAME TO THE KNOWLEDGE OF THE A SSESSING OFFICER THAT THE ASSESSEE DERIVED INCOME FROM HER P ROPRIETORSHIP CONCERN NAMELY M/S. FERN N PETALS. IN RESPONSE TO SAID NOTICE U/S 148 DATED 29.09.2010, THE ASSESSEE FILED A RETU RN ON 16.12.2010 DECLARING A TOTAL INCOME OF RS.51,53,610 /- WHICH COMPRISED BUSINESS INCOME FROM TWO CONCERNS NAMELY M/S FERN N PETALS- E COMMERCE AND M/S. FERN N PETALS. AF TER EXAMINING THE DETAILS/INFORMATION ON RECORD, THE AS SESSING OFFICER COMPLETED THE ASSESSMENT IN TERMS OF ORDER U/S 148/143(3) DATED 30.12.2011 AT A TOTAL INCOME OF RS .51,53,610/- AS DECLARED BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT, 1961. 2.1 SINCE NO RETURN OF INCOME FOR THE ASSESSMENT YE AR UNDER CONSIDERATION U/S 139(1) OR 139(4) OF THE I.T. ACT, 1961 WAS FILED BY THE APPELLANT, THE INCOME DECLARED AND ASSESSED AT I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 3 RS.51,53,610/- IN THE RETURN OF INCOME FILED IN RES PONSE TO NOTICE U/S 148 WAS TREATED BY THE ASSESSING OFFICER AS CON CEALED INCOME AND ACCORDINGLY PENALTY PROCEEDINGS U/S 271( 1)(C) WERE INITIATED FOR CONCEALMENT OF INCOME. 3. THE ORDER IMPOSING PENALTY WAS PASSED ON 29.06.2 012 WHEREIN A PENALTY OF RS.21,121,454/- WAS IMPOSED BE ING 125% OF THE TAX ALLEGEDLY SOUGHT TO BE EVADED. THE RELE VANT PORTION OF THE ASSESSING OFFICERS ORDER IS PARA 5 WHICH IS BE ING REPRODUCED HERE IN UNDER:- 5. IN THE CASE OF THE ASSESSEE, SHE HAD TAXABLE IN COME FOR A.Y. 2008-09 FOR WHICH SHE WAS LIABLE TO FURNIS H HER RETURN OF INCOME BEFORE THE DUE DATE OF THE RELEVAN T YEAR OR AT THE MOST BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. ONLY UPTO 31/03/2 010. WHEREAS, THE ASSESSEE HAS FILED HER RETURN OF INCOM E ON 16.12.2010 I.E. ONLY AFTER ISSUE OF NOTICE U/S 148 OF THE I.T. ACT, ON 29.09.2010. THE INTENTION OF THE ASSESSEE T O CONCEAL HER PARTICULARS OF INCOME PROVES FROM THE F ACT, THAT WHEN SHE WAS HAVING TAXABLE INCOME FOR THE YEAR UND ER CONSIDERATION AS HIMSELF HAS ADMITTED IN HER REPLY FILED ON 31.01.2012, THAT THE ACCOUNTS WERE GOT AUDITED FOR THE YEAR UNDER CONSIDERATION, WHY NOT THE RETURN OF INC OME WAS FILED ON OR BEFORE THE DUE DATE AND WHY NOT THE TAX ON THE SAID INCOME WAS DEPOSITED. THE ASSESSEE HAS COM E FORWARD ONLY AFTER ISSUE OF NOTICE U/S 148 OF THE A CT ON 29.09.2010 AND HAS DEPOSITED THE SELF ASSESSMENT TA X OF RS.16,15,240/- ON 16.12.2010 FOR THE TAXABLE INCOME SHOWN IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148. THEREFORE, IT IS ONLY IN PURSUANCE OF THE DEPARTMENT, THAT THE ASSESSEE HAS DISCLOSED HER TAX ABLE INCOME FOR THE A.Y. 2008-09 AND HAS PAID THE TAXES. I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 4 4. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE LD. CIT (A) CONFIRMED THE IMPOSITION OF PENALTY BUT REDUCED THE QUANTUM TO 100% OF THE TAX ALLEGEDLY SOUGHT TO BE EVADED. 5. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 5.1 THE LD. AR SUBMITTED THAT INCOME RETURNED IN RE SPONSE TO NOTICE U/S 148 OF RS. 51,53,610/- WAS ACCEPTED & AS SESSED AS IT FILED I.E. WITHOUT ANY ADDITION . HE FURTHER SUBMIT TED THAT THE ACCOUNTS WERE DULY AUDITED U/S 44AB AND TAX AUDIT R EPORT WAS OBTAINED WITHIN DUE DATE I.E. ON 28-AUG-2008 AND TH E AO HAD ACCEPTED THE ITR U/S 147 AS PER BOOKS AUDITED U/S 4 4AB OF THE INCOME TAX ACT, 1961. IT WAS SUBMITTED THAT THE TDS DEDUCTED BY THE PARTIES WAS DULY REFLECTED IN FORM 26AS OF T HE APPELLANT AND THERE WAS NO INFORMATION AVAILABLE WITH THE DEP ARTMENT AS TO ANY CONCEALMENT HAVING BEEN MADE BY THE ASSESSEE . IT WAS URGED BY THE LD. AR THAT THE ASSESSEE IS REGULARLY ASSESSED U/S 143(3) WITH CENTRAL CIRCLE-19 (ERSTWHILE CC- 10) FO R PREVIOUS AYS AND THE RETURN U/S 139(1) NOT FILED FOR THE YEAR C OULD NOT BE FILED DUE TO THE FOLLOWING REASONS : (A) DUE TO FINANCIAL PAUCITY BALANCE TAX DUE COULD NOT BE PAID BY THE DUE DATE, AND (B) PRIOR TO AMENDMENT IN SECTION 139(9) INSERTED B Y THE FINANCE ACT 2013, W.E.F. 1-6-2013, ANY RETURN FILED WITHOUT I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 5 PAYMENT OF TAX DUE WAS INVALID. 5.2 THE LD. AR EMPHASIZED THAT IT IS NEITHER A CASE OF CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 271 (1)(C ) OF THE ACT . IT WAS URGED TH AT PENALTY PROCEEDINGS U/S 271(1)(C) WERE NOT LEGALLY SUSTAINA BLE. HE DREW OUR ATTENTION TO A CHART SHOWING THE RELEVANT DATES AS UNDER: 5.3 THE LD. AR SUBMITTED THAT FROM A CONJOINT READI NG OF THE PROVISIONS OF SECTION 153(1) AS WELL AS THE FACTUAL MATRIX OF SIGNIFICANT DATES IT WAS CLEAR THAT NOT ONLY DID THE ASSESSMENT PROCEEDINGS START BEFORE THE EXPIRY OF DUE DATE U/S 153(1) BUT RETURN WAS ALSO SUBMITTED IN COMPLIANCE THEREOF BEF ORE THE EXPIRY OF THE PRESCRIBED TIME LIMIT U/S 153(1). THE LD. AR ALSO SUBMITTED THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS 335 ITR 259 (DEL) IN PARA 15 AN D 16 HAS HELD THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF AY - 2008 - 09 EVENT DATE TIME LIMIT U/S 153(1) 31 - 12 - 2010 CONCERNED AY 2008 - 09 ENDING 31 - 03 - 2009 DATE OF NOTICE U/S 148 29 - 09 - 2010 DATE OF FILING ROI 16 - 12 - 2010 I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 6 INACCURATE PARTICULAR OF INCOME BY THE ASSESSEE HAS TO BE IN THE INCOME-TAX RETURN FILED BY IT . SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. HE SUBMITTED THAT UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-DISCLOSURE O F THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. T HE LD. AR EMPHASIZED THAT THERE IS NO SUCH CONCEALMENT OR NON - DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISC LOSURE IN THE INCOME-TAX RETURN AND OFFERED THE ENTIRE INCOME FOR THE PURPOSES OF TAX. HE SUBMITTED THAT THE RETURNED INC OME WAS ACCEPTED BY THE AO AND NO ADDITION WAS MADE AND HEN CE THE PENALTY U/S 271(1)(C ) WAS NOT IMPOSABLE. HE ALSO S UBMITTED THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE FINDINGS OF THE ITAT BANGALORE BENCH IN THE CASE OF MUNINAGA RE DDY VS. ACIT ITA 1488/BANG/2012 FOR THE PREPOSITION THAT WH EN AN INCOME WHICH IS ULTIMATELY BROUGHT TO TAX IS DECLAR ED IN A RETURN OF INCOME, THERE CAN BE NO QUESTION OF TREATING THE ASSESSEE AS HAVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. HE SUBM ITTED THAT THE STARTING POINT OF DETERMINING CONCEALMENT FOR I MPOSING PENALTY IS THE RETURN OF INCOME. IF THE RETURN OF I NCOME DECLARES INCOME WHICH IS ULTIMATELY BROUGHT TO TAX THERE CAN BE NO I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 7 COMPLAINT BY THE REVENUE THAT THE ASSESSEE IS GUILT Y OF CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. HE SUBMITTED THAT IN LIGHT O F THE FACTS OF THE CASE AND THE SETTLED JUDICIAL PRONOUNCEMENTS TH E PENALTY OUGHT TO BE DELETED. 5.4 THE LD. DR RELIED ON THE ORDER OF THE LD. CIT ( A) AND SUBMITTED THAT THE PENALTY EVADED OUGHT TO BE SUSTA INED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE RETURNED INCOME HAS BEEN ACCEPTED, THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER THAT ASSESSEE HAD CONCEALED I NCOME WITH REFERENCE TO RETURN OF INCOME FILED BY HIM IN RESPO NSE TO NOTICE U/S 148. HONBLE SUPREME COURT IN VARKEY CHACKO V. CIT [1993] 203 ITR 885 HAS HELD THAT A PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME CAN BE IMPOSED ONLY WHEN THE ASSESSING AUTHO RITY IS SATISFIED THAT THERE HAS BEEN SUCH CONCEALMENT OR F URNISHING OF INACCURATE PARTICULARS. A PENALTY PROCEEDING, THERE FORE, CAN BE INITIATED ONLY AFTER AN ASSESSMENT ORDER HAS BEEN M ADE WHICH FINDS SUCH CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 8 THE PENALTY WAS PERMISSIBLE UNDER THE LAW ON THE DA TE ON WHICH THE OFFENCE OF CONCEALMENT OF INCOME WAS COMMITTED, THAT IS TO SAY, ON THE DATE OF THE OFFENDING RETURN. HONBLE M ADRAS HIGH COURT IN THE CASE OF CIT V. K.R. CHINNI KRISHNA CHE TTY [2000] 246 ITR 121 HAS HELD THAT UNDER SECTION 271(1)(C) O F THE ACT THE AUTHORITY IS GIVEN THE DISCRETION TO LEVY A PENALTY IF THERE IS CONCEALMENT OF PARTICULARS OF INCOME AND EVEN AS RE GARDS THE QUANTUM OF THE PENALTY THERE IS A DISCRETION. OF GR EATER IMPORTANCE IS THE NECESSITY FOR A DEFINITE FINDING THAT THERE IS CONCEALMENT, AS WITHOUT SUCH A FINDING OF CONCEALME NT, THERE CAN BE NO QUESTION OF IMPOSING ANY PENALTY. IN THE ASSESSEES CASE, THE AO HAS NOT GIVEN ANY FINDING IN ASSESSMEN T ORDER THAT THE ASSESSEE HAD CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE HAD SIMPLY ACCEPTED THE RETURNED INCOME U/S 148. HENCE ASSESSEES CASE IS COVERED BY THE DECISIONS REFERRED TO ABOVE AND PENALTY U/S 271(1)( C) WILL NOT BE IMPOSABLE. IN CIT V. SURESH CHANDRA MITTAL [2001] 2 51 ITR 963 (SC) THE ASSESSEE FILED REVISED RETURNS SHOWING HIG HER INCOME AFTER SEARCH AND NOTICE FOR REOPENING OF ASSESSMENT , TO PURCHASE PEACE AND AVOID LITIGATION AND DEPARTMENT SIMPLY RE STED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE B Y THE I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 9 ASSESSEE IN GOOD FAITH, HIGH COURT WAS JUSTIFIED IN HOLDING THAT NO PENALTY COULD BE LEVIED. THE ASSESSEES CASE IS ON MORE STRONG FOOTING AS THAT OF SURESH CHAND MITTAL (SUPRA) DECI DED BY HONBLE SUPREME COURT. AS HELD IN EARLIER PARAGRAPH S THERE SHOULD BE VARIATION IN ASSESSED AND RETURNED INCOME AND SUCH VARIATION SHOULD BE AS A RESULT OF CONCEALMENT. IT IS NOT THE CASE OF ASSESSING OFFICER THAT PENALTY U/S 271(1)(C) HAS BEEN IMPOSED ON CERTAIN ADDITIONS MADE TO THE RETURNED INCOME. H ONBLE DELHI HIGH COURT IN THE CASE OF M/S S.A.S. PHARMACEUTICALS ( SUPRA ) WHILE DECIDING THE ISSUE LEVY OF PENALTY U/S 271(1) (C) IN PARAGRAPH 15 HAS HELD AS UNDER: 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE IN THE INCOME TAX RETURN FILED BY IT. THERE IS SUFFICIENT INDICATION OF THIS COURT IN THE JUDGMENT IN THE CASE OF COMMISSIONER OF INCOME TAX, DELHI-I VS MOHAN DAS HASSA NAND 141 ITR 203 AND IN RELIANCE PETRO PRODUCTS PVT. LTD (SUPRA), THE SUPREME COURT HAS CLINCHED THIS ASPECT, VIZ., THE ASSESSEE CAN FURNIS H THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY THE ASSESSEE. 7. THEREFORE, IN VIEW OF THE FACTS OF THE CASE WE A RE OF THE OPINION THAT NO PENALTY WAS IMPOSABLE U/S 271(1)(C) OF THE ACT I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 10 AND WE ACCORDINGLY DIRECT THE AO TO DELETE THE PENA LTY. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OF MARCH, 2016. SD/- SD/- (J.S. REDDY) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 31ST OF MARCH, 2016 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR I.T.A. NO. 327/DEL/2014 ASSESSMENT YEAR 2008-09 11