ACIT, Ghaziabad V. Sh. Pankaj gupta, Ghaziabad

ITA 3295/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2206 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 16-12-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 22-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: O P SAPRA; SUSH IL JAIN
• Keywords: Gift; Period of limitation; Time period of passing order; Revised return; Reassessment proceedings; Set aside
• Section: 271(1)(c); 139(5); 143(1); 251; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 3295/DELL/2009 ASSESSMENT YEAR : 2001-02 ACIT, CIRCLE 1, CGO COMPLEX-1, GHAZIABAD. VS. SHRI PANKAJ GUPTA, 7F GOVINDPURI, MODI NAGAR, GHAZIABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA, ADVOCATE & SHRI SUSH IL JAIN REVENUE BY : SHRI H.K. LAL, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 25 TH MAY, 2009 FOR ASSESSMENT YEAR 2001-02. GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE LD. CIT (A) HAS WRONGLY DELETED THE PE NALTY U/S 271(1)(C) AMOUNTING TO RS.5,25,000/- IMPOSED BY THE AO ON 30.05.2007 WITHOUT APPRECIATING THE MATERIAL FACTS AVAILABLE ON RECORD. 2. HENCE ORDER OF THE LD. CIT (A) MAY BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 2. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME SHO WING INCOME OF RS.1,15,600/- IN WHICH IT WAS DECLARED THAT THE ASS ESSEE HAS RECEIVED A GIFT OF RS.15 LAC FROM ONE SHRI SANJAY MOHAN AND TO SUPPORT THAT CONTENTION MEMORANDUM OF GIFT AND THE AFFIDAVIT OF THE DONOR W AS ALSO FILED. IT WAS STATED ITA NO.3295/DEL/2009 2 THAT SHRI SANJAY MOHAN WAS ASSESSED AND HIS PAN WAS ALSO GIVEN. ON 11 TH MARCH, 2005 THE ASSESSEE REVISED HIS RETURN WHEREBY A SUM OF RS.15 LAC WAS INCLUDED IN THE INCOME AND AS STATED BY LD. AR THE RELEVANT TAXES ALONG WITH INTEREST WERE PAID. SUBSEQUENTLY, A FURTHER RETURN WAS FILED ON 18 TH MAY, 2005 TO REMOVE ERRORS IN THE CALCULATION. AFTER RECEIVING THESE RETURNS, THE AO ISSUED NOTICE U/S 148 ON 23 RD MARCH, 2006. IN RESPONSE TO THAT, THE ASSESSEE SU BMITTED VIDE SUBMISSIONS DATED 7 TH APRIL, 2006 THAT RETURNS ALREADY FILED SHOULD BE T REATED TO BE FILED IN RESPONSE TO NOTICE U/S 148. THE ASS ESSMENT WAS COMPLETED U/S 147/143(3) ON THE TOTAL INCOME AS DECLARED IN THE S ECOND REVISED RETURN AND PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE KNOWINGLY AND INTENTIONALLY FURNI SHED INACCURATE PARTICULARS. THEREFORE, IT WAS A CASE WHERE PENALTY CAN BE LEVIE D U/S 271(1)(C). IT IS ALSO STATED IN THE PENALTY ORDER THAT ASSESSEES PETITIO N FOR WAIVER OF PENALTY U/S 273A WAS ALSO REJECTED BY THE CIT (A). THE ASSESSEE DID NOT STATE THE RELATIONSHIP WITH THE DONOR AND THE CASE LAW RELIED UPON BY THE ASSESSEE IN THE CASE OF CIT VS. S.C. MITTAL 251 ITR 9 (SC) IS DISTINGUISHABLE ON FACTS AND, IN THESE CIRCUMSTANCES, PENALTY WAS LEVIED BY THE AO AT A SU M OF RS.5,25,000/-. THE LEVY OF PENALTY WAS CONTESTED BEFORE THE CIT (A). DURIN G THE COURSE OF HEARING OF APPEAL, THE ABOVE CHRONOLOGY OF EVENTS WAS STATED A ND IT WAS SUBMITTED THAT DONOR WAS NOT WILLING TO COOPERATE WITH THE ASSESSE E BEFORE INCOME-TAX AUTHORITIES, THEREFORE, THE ASSESSEE FILED THE REVI SED RETURN VOLUNTARILY AND ON THE BASIS OF THAT REVISED RETURN THE AO ISSUED NOTICE U /S 148. RELIANCE WAS PLACED ON VARIOUS DECISIONS OF THE TRIBUNAL WHERE IN SIMIL AR CIRCUMSTANCES WHERE THE ASSESSEE HAS DISCLOSED INCOME BEFORE ANY DETECTION, THE PENALTY WAS DELETED. LD. CIT (A) AFTER CONSIDERING ALL THE SUBMISSIONS H AS COME TO THE CONCLUSION THAT OFFER MADE BY THE ASSESSEE TO VOLUNTARILY DECLARE T HE INCOME IN THE REVISED RETURN COULD NOT BE USED AGAINST THE ASSESSEE AS PE R DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. S.C. MITTAL (S UPRA) AND, THEREFORE, IT WAS NOT A FIT CASE FOR LEVY OF PENALTY. THE REVENUE IS AGGRIEVED, HENCE, IN APPEAL. ITA NO.3295/DEL/2009 3 3. AFTER NARRATING THE FACTS, IT WAS VEHEMENTLY PLE ADED BY LD. DR THAT THE CIT (A) HAS WRONGLY DELETED THE PENALTY. IT WAS SUBMIT TED THAT THE ASSESSEE COULD NOT SUPPORT THE GIFT AND, THUS, HAD FILED INACCURAT E PARTICULARS OF HIS INCOME, THEREFORE, PENALTY WAS RIGHTLY LEVIED BY THE AO AND THE CIT (A) HAS WRONGLY DELETED THE SAME. 4. ON THE OTHER HAND, RELYING ON THE CHRONOLOGY OF EVENTS AND ALSO VARIOUS DECISIONS OF THE TRIBUNAL WHICH ARE SUBMITTED IN TH E PAPER BOOK, IT WAS SUBMITTED THAT UNDER SIMILAR CIRCUMSTANCES WHERE RETURNS WERE REVISED, THE TRIBUNAL HAS DELETED THE PENALTY. IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE IS BETTER AS THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT ONLY ON DETECTION BY THE DEPARTMENT THE ASSESSEE HAS REVISED HIS RETURN. RE FERENCE WAS MADE TO THE FOLLOWING DECISIONS OF THE TRIBUNAL:- SL.NO. ITA NO. TITLE OF THE CASE ORDER DATED 1. ITA NO.1998/D/06 INCOME-TAX OFFICER VS. SMT. POO NAM BATLAW 31.10.2007 2. ITA NO.1852/D/06 ITO, WARD 1(3), MEERUT VS. SHRI HIMANSHU AGRAWAL 07.09.2007 3. ITA NO.924/DEL/08 INCOME-TAX OFFICER VS. SH. BHI M SEN 12.11.2008 4. ITA NO.4098/D/07 ITO VS. SMT. SUNITA GUPTA 23.05 .2008 5. ITA NO.170/DEL/08 SHRI ADESH GUPTA VS. INCOME TA X OFFICER 15.05.2009 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD. IT HAS BEEN DEMONSTRATE D BY THE ASSESSEE THAT BEFORE ANY DETECTION WAS MADE BY THE DEPARTMENT, TH E ASSESSEE HAD OFFERED THE INCOME IN THE SHAPE OF REVISED RETURN AND THE NOTIC E U/S 148 WAS ISSUED BY THE AO ONLY ON THE BASIS OF REVISED RETURN. TAXES AND INTEREST ARE ALSO STATED TO HAVE BEEN PAID. THE TRIBUNAL HAS BEEN TAKING A CON SISTENT VIEW THAT IN SUCH CIRCUMSTANCES LEVY OF PENALTY IS NOT JUSTIFIED. FO R THE SAKE OF CONVENIENCE THE ITA NO.3295/DEL/2009 4 ORDER OF THE TRIBUNAL UNDER SIMILAR FACTS IN THE CA SE OF ADESH GUPTA (SUPRA) IS REPRODUCED BELOW:- THE ASSESSEE IS IN APPEAL AGAINST HE ORDER DA TED 16.11.2007 PASSED BY THE LD. CIT(A) CONFIRMING THE PENALTY AMO UNTING TO RS. 7,00,000/- LEVIED U/S 271(1)(C) OF THE INCOME TAX A CT, 1961 (THE ACT) BY THE A.O. FOR THE ASSESSMENT YEAR 2001-02. 2. IN THE PENALTY ORDER, THE A.O. HAS STATED THAT T HE ASSESSEE FILED ORIGINAL RETURN ON 29.02.2002 DECLARING TOTAL INCOME AT RS. 1,42,180/-. THE ORIGINAL RETURN WAS PROCESSED U/S 143(1) ON 30.09.2002. THEREAFTER, ON 29.03.2004, THE ASSESSEE FILED A REVISED RETURN SURRENDERING AN INCOME OF RS. 20,00, 000/- IN THE SHAPE OF GIFT ON THE GROUND THAT THE DONOR WAS NOT A COOPERATING WITH THE ASSESSEE IN PROVIDING FURTHER DETAILS. TH E A.O., FURTHER STATED THAT SINCE THE REVISED RETURN SO FILED BY TH E ASSESSEE ON 29.03.2004 WAS BEYOND THE TIME PRESCRIBED U/S 139(5 ) OF THE ACT, THE REVISED RETURN SO FILED WOULD BE TREATED AS RET URN NOT FILED. THE A.O., THEREFORE, HAD TAKEN A VIEW THAT THE INCOME O F RS. 20,00,000/- IN THE SHAPE OF GIFT HAD ESCAPED ASSESSMENT, AND TH E A.O., THEREFORE, INITIATED PROCEEDINGS U/S 147 OF THE ACT AND ISSUED NOTICE U/S 148 ON 02.05.2005 TO THE ASSESSEE. IN RESPONSE TO THE NOTICE ISSUED U/S 148, THE ASSESSEE VIDE LETTER DATED 20.0 6.2005 STATED THAT THE REVISED RETURN FILED BY THE ASSESSEE ON 29 .03.2004 MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE I SSUED U/S 148 OF THE ACT. THE A.O., THEREFORE, COMPLETED THE ASSESSM ENT U/S 143(3)/ 147 OF THE ACT INCLUDING THEREIN THE AMOUNT OF GIFT OF RS. 20,00,000/- ALREADY SURRENDERED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME FILED ON 20.03.2004. THE A.O. INITIATED PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE A.O. STATED THAT THE ASSESSEES REQUEST NOT TO INITIATE ANY PENALTY PROCEEDING CANN OT BE ACCEDED TO, SINCE THE REVISED RETURN FILED BY THE ASSESSEE BEYOND THE LIMITATION PERIOD PRESCRIBED U/S 139(5) OF THE ACT WAS NON-EST AND INVALID IN THE EYES OF LAW. THE A.O., THEREFORE, L EVIED PENALTY AMOUNTING TO RS. 7,00,000/- 3. ON AN APPEAL, LD. CIT(A) CONFIRMED THE A.O.S AC TION FOR THE SIMILAR REASON THAT THE REVISED RETURN FILED BY THE ASSESSEE ON 29.03.2004 DECLARING AN AMOUNT OF RS. 20,00,000/- W AS NOT VALID AND, THUS, THE A.O. HAS RIGHTLY BROUGHT THE SAID AM OUNT TO TAX BY INITIATING PROCEEDINGS U/S 147 OF THE ACT. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 5. ON PERUSAL OF THE A.O.S ORDER AS WELL AS LD. CI T(A)S ORDER, IT IS SEEN THAT ONLY REASON TO IMPOSE THE PENALTY GIVE N BY BOTH THE AUTHORITIES IS THAT THE REVISED RETURN FILED ON 29. 03.2004 WAS BEYOND THE TIME LIMIT SPECIFIED U/S 139(5) OF THE A CT. IT IS PERTINENT ITA NO.3295/DEL/2009 5 TO NOTE HERE THAT THE AMOUNT OF GIFT HAS BEEN SURRE NDERED BY THE ASSESSEE VOLUNTARILY BY FILING THE REVISED RETURN O N 29.03.2004. THE REASON FOR SURRENDERING THE GIFT BY THE ASSESSEE TH AT THE DONOR HAS NOT BEEN COOPERATING WITH THE ASSESSEE IN PRODUCING FURTHER DETAILS IS NOT FOUND TO BE FALSE AND CONCOCTED. NOTHING HAS BEEN BROUGHT ON RECORD BY THE A.O. AS WELL AS BY THE LD. CIT(A) THAT THE AMOUNT OF GIFT DISCLOSED BY THE ASSESSEE IN THE REVISED RE TURN WAS ACTUALLY INCOME OF THE ASSESSEE, WHICH WAS CONCEALED IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE. MOREOVER, NO ENQU IRY HAS BEEN MADE BY THE A.O. TO PROVE AND ESTABLISH THAT THE GI FTS WERE OTHERWISE BOGUS AND FALSE. NO ANY OTHER CASE OR RE ASON HAS BEEN MADE OUT BY THE AUTHORITIES BELOW TO IMPOSE THE PEN ALTY AGAINST THE ASSESSEE. IN THE COURSE OF REASSESSMENT PROCEEDING S, THE A.O. HAS MADE THE ADDITION MERELY ON THE BASIS OF THE RE VISED RETURN FILED BY THE ASSESSEE WHEREIN THE AMOUNT OF RS. 20, 00,000/- IN THE SHAPE OF GIFT WAS OFFERED TO TAX AND NOT ON BASIS O F ANY OTHER INDEPENDENT INCRIMINATING MATERIAL BROUGHT AGAINST THE ASSESSEE. THE ASSESSEES CONDUCT, IN THE PRESENT CASE, IS FOU ND TO BE BONAFIDE AND GENUINE INASMUCH AS ASSESSEE WAS NOT I N A POSITION TO SUBSTANTIATE THE GIFT TO BE GENUINE IF ANY ENQUI RY WOULD BE MADE BY THE DEPARTMENT BECAUSE OF THE REASON THAT THE DO NOR WAS NOT COOPERATING WITH THE ASSESSEE IN PROVIDING FURTHER DETAILS. FURTHER, IT IS NOT THE CASE THAT THE ASSESSEE HAS FILED THE REVISED RETURN ON 29.03.2004 SURRENDERING THE AMOUNT OF RS. 20,00,000 /- ONLY AFTER CERTAIN INCRIMINATING MATERIALS HAS BEEN COLLECTED BY THE DEPARTMENT AGAINST THE ASSESSEE AND AFTER INITIATIN G REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AGAINST THE ASSESSEE ON THE BASIS OF INCRIMINATING MATERIALS COLLECTED BY THE DEPARTMENT TO ESTABLISH THAT THE GIFT RECEIVED BY THE ASSESSEE WAS BOGUS OR NON- GENUINE. 6. IN THE LIGHT OF THE DISCUSSION MADE ABOVE, WE, T HEREFORE, HOLD THAT THERE IS NO CONCEALMENT, WHETHER DELIBERATE OR UNINTENTIONAL, ON THE PART OF THE ASSESSEE IN SURRENDERING VOLUNTA RILY THE AMOUNT OF RS. 20,00,000/- IN THE SHAPE OF GIFT IN THE REVI SED RETURN FILED ON 29.03.2004, AND AS SUCH THE PENALTY U/S 271(1)(C) I S NOT ATTRACTED IN THE PRESENT CASE. WE, THEREFORE, DELETE THE SAME B Y SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 15 TH MAY, 2009. ITA NO.3295/DEL/2009 6 6. IN THE CIRCUMSTANCES, AFTER HEARING BOTH THE PAR TIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF COORDINATE BENCH, WE FIND NO MERIT IN THE DEPARTMENTAL APPEAL AND THE SAME IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. . 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.12. 2009. [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 18.12.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES