M/s Business Park Construction Co. Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3331/DEL/2012

• Counselvise Citation: 333120114 RSA 2012
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Assessee Lawyers: V S RASTOGI; MANEESH UPNEJA CAS
• Keywords: Reopening of assessment; Gift; Search and seizure; Loose papers; Document seized; Revised return; Documents seized
• Section: 142(1); 153A; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A NEW DELHI BEFORE SHRI AD JAIN, JM AND SHRI J.SUDHAKAR REDDY, AM ITA NO.3331/DEL/2012 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. VS. DCIT, C.C. 23 M 11, MIDDLE CIRCLE, C.P. NEW DELHI NEW DELHI PAN: AABCB 1758 N (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.VS RASTOGI & SH.MANEESH UPNEJA, CAS RESPONDENT BY:- SH.PIRTHI LAL, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE CIT(A) DT. 2.9.2011 FOR THE A.Y. 2006-07, WHER EIN THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT BY THE A.O. 2. FACTS IN BRIEF:- A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON BPTP GROUP ON 15.11.2007 WHICH INCLUDED THE ASSESSE E COMPANY. CONSEQUENT TO SEARCH, NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 03.09.2008. THE ASSESSEE FILED ITS RETURN OF INCOME ON 19.01.2009 DECLARING LOSS OF RS.35,540/-. SUBSEQ UENTLY NOTICES WERE ISSUED U/S. 142(1) AND 143(2) OF THE INCOME TAX ACT , 1961 ALONG WITH THE QUESTIONNAIRE ON 29.06.2009. ITA NO. 3331/DEL/2012 PAGE 2 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. 3. DURING THE COURSE OF SEARCH AND SEIZURE CERTAIN SEIZED DOCUMENTS WERE FOUND. ON EXAMINATION OF THESE SEIZED DOCUMEN TS IT WAS NOTICED THAT PAGES 30-31 OF ANNEXURE A-1, PARTY BO-III AND AT PAGES 1-9 OF ANNEXURE A-25/PARTY BO-III ARE THE EXPENSE SHEETS CONTAINING DETAILS OF SOME EXPENDITURE INCURRED DURING THE FY 06-07 AN D 07-08. IT IS ALSO NOTICED FROM THE EXAMINATION OF PAGE 23 OF THE SEIZ ED DOCUMENT OF ANNEXURE A-3/PARTY BO-III THAT IT ALSO CONTAINS TH E DETAILS OF SOME EXPENSES INCURRED BY MR.RAJIV GUPTA DURING THE FY 2 006-07. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, M/S BPTP LTD. WAS ISSUED A DETAILED QUESTIONNAIRE ON 21.8.2009 AND WAS ASKED TO EXPLAIN THE TRANSACTIONS RECORDED ON THE AFORESAID PAGES 30-31 OF ANNEXURE A -1, PAGE 23 OF ANNEXURE A-3 AND PAGES 1-9 OF ANNEXURE A 25 AND ALS O TO PRODUCE EVIDENCE AS TO WHETHER THE TRANSACTIONS CONTAINED I N THE ABOVE DOCUMENTS ARE ACCOUNTED FOR IN ITS BOOKS OF ACCOUNT S. 4. IN RESPONSE M/S.BPTP LTD. VIDE SUBMISSIONS DATED 17/12/2009 EXPLAINED THESE DOCUMENTS, THE SUMMARY OF WHICH APP EARS IN PAGES 2 AND 3 OF THE ASSESSEMENT ORDER. THE SUMMARY OF THE REPLY IS AS FOLLOWS:- (A) NO SUCH EXPENDITURE AS JOTTED IN PAGES 30,31 OF ANN EXURE A-I WAS INCURRED BY US; (B) THE PAGES DO NOT SHOW THAT ANY PERSON ACKNOWLEDGED THE RECEIPT OF PAYMENTS MENTIONED; (C) THERE IS NO AUTHORIZATION FOR THE PAYMENTS BY BPTP LTD.; (D) THERE IS NO INDEPENDENT EVIDENCE TO CORROBORATE TH E ALLEGED PAYMENTS; (E) THERE IS NO ELEMENT LEADING TO TAXATION; (F) THEY ARE MERELY DUMB DOCUMENTS. ITA NO. 3331/DEL/2012 PAGE 3 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. BPTP RELIED ON CERTAIN CASE LAWS IN SUPPORT OF THEI R CASE. THE AO REJECTED THE SUBMISSIONS OF BPTP AND HELD THAT HE WAS OF THE VIEW THAT THE ASSESSEE HAS NOT FURNISHED CORROBORATIVE EVIDENCE. SUBSEQUEN TLY BPTP FILED ANOTHER LETTER DTD.22/12/2009 THE SUMMARY OF WHICH IS BROUG HT OUT AT PARAS 3.4/3.5 OF THE ASSESSEMENT ORDER WHICH IS REPRODUCE D FOR READY REFERENCE. 1. IN CONTINUATION OF OUR EARLIER SUBMISSION, WE MAKE FURTHER SUBMISSIONS AS UNDER IN COMPLIANCE TO LETTER NO. DCIT/CC-23/Q 2 009-10 DT. 21.8.2009 REQUIRING US TO FURNISH OUR EXPLANATION IN RESPECT OF THE DOCUMENTS SEIZED AT B-1, A-5, MOHAN COOPERATIVE INDUSTRIAL AREA, NEW DE LHI. ANNEXURE A-1, PAGES 30-31, ANNEXURE A-3, PAGE 23 AN D ANNEXURE A-25, PAGES 1-9 2. THE EXPLANATION IN RESPECT OF THE AFORESAID ANNE XURE IS BEING FURNISHED COLLECTIVELY. THE JOTTINGS MADE ON THESE PAGES DO N OT GIVE THE NAME OF THE COMPANY IN RESPECT OF WHICH THESE DOCUMENTS PERTAIN . 3. SINCE THESE DOCUMENTS DO NOT RELATE TO M/S BPTP LTD., IT IS SUBMITTED THAT THEY MAY KINDLY BE EXCLUDED FROM CONSIDERATION FOR THE ASSESSMENT OF BPTP LTD. UNDER SECTION 153A. 4. IN THE SPIRIT OF COOPERATION, WE ARE FILING CONT EMPORANEOUSLY A REPLY FROM M/S BUSINESS PARK CONSTRUCTION PVT. LTD. WITH REGAR D TO THESE DOCUMENTS, A COPY IS ENCLOSED. 3.5 ALONG WITH THE AFORESAID REPLY DT. 24.12.2009, M/S BPTP LTD. ATTACHED A COPY OF LETTER FROM THE ASSESSEE BUSINESS PARK CO NSTRUCTION COMPANY PVT. LTD., STATING AS UNDER: WE ARE UNABLE TO EXPLAIN THESE DOCUMENTS AT PRESEN T. SINCE THE ASSESSMENT IS GETTING TIME BARRED ON 31.12.2009 , WE WILL HAVE NO GRIEVANCE IF ADDITION IS MADE ON ACCOUNT OF THESE IN OUR CASE SUBJECT TO THE CONDITION THAT NO PENALTY P ROCEEDINGS ARE INITIATED AND IN THAT EVENT WE WILL NOT FILE AN Y APPEAL ON THIS ACCOUNT AND WILL PAY TAX DUE IMMEDIATELY. 5. THEREAFTER THE AO OBSERVED AS FOLLOWS:- 3.6 THEREAFTER, A LETTER DT. 24.12.2009 FROM THE A SSESSEE COMPANY WHEREBY IT SURRENDERED AN AMOUNT OF RS. 80,72,320/- AND ANOTHER AMOUNT OF RS. 56,57,400/- FOR THE ASSESSMENT YEAR 2 007-08 AND ITA NO. 3331/DEL/2012 PAGE 4 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. ASSESSMENT YEAR 2008-09 RESPECTIVELY ON ACCOUNT OF THE UNEXPLAINED TRANSACTIONS RECORDED ON THE ABOVE MENT IONED SEIZED DOCUMENTS AND ALSO SUBMITTED COPIES OF TAX CHALLANS FOR RS. 32,14,446/- AND RS. 29,19,689/- BOTH DATED 24.12.20 09 FOR THE AYS 2007-08 AND 2008-09 RESPECTIVELY. COPY OF THE L ETTER OF THE ASSESSEE DT. 24.12.2009 COMPRISING OF 3 PAGES IS MA DE PART OF THIS ORDER AND IS ATTACHED AS ANNEXURE-BPC TO THIS ORDER. 6. THEREAFTER THE AO REJECTED THE CONTENTION OF THE ASSESSEE IN THE ABOVE EXTRACTED LETTER DT.24/12/2009 THAT NO PENALT Y PROCEEDINGS BE INITIATED. HE LEVIED PENALTY U/S271(1)(C) VIDE ORDE R DT.25/06/2010 AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE. HE OB SERVED THAT IN THE PRESENT CASE THE ASSESSEE SURRENDERED A SUM OF RS.8 0,72,320/- ONLY AFTER BEING CONFRONTED WITH SEIZED DOCUMENTS WHICH REMAINED UNEXPLAINED INSPITE OF SUFFICIENT OPPORTUNITIES PRO VIDED TO THE ASSESSEE. WHILE ADMITTING THAT THE ASSESSEE IN HIS INITIAL RE PLY DT.07/12/2009 DENIED HAVING INCURRED EXPENDITURE, HE NOTED THAT SUBSEQUENTLY THE ASSESSEE CHANGED ITS STAND AND OFFERED THE SAME AS INCOME. HE ALSO OBSERVED THAT THE ASSESEE HAS NOT FILED REVISED RET URN OF INCOME. HENCE HE CONCLUDED THAT THE ASSESSEE NOT ONLY FURNISHED I NACCURATE PARTICULARS OF INCOME BUT HAS ALSO CONCEALED ITS INCOME. 7. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APP EAL. THE CIT(A) FIRST EXTRACTED THE 271(1)(C) ORDER FROM PAGES1-10. THEREAFTER HE EXTRACTED THE WRITTEN SUBMISSIONS FROM PAGES 11-14 . THEREAFTER HE CONCLUDED AT PARA 4.6 AS FOLLOWS:- 4.6. I AM ALSO GUIDED BY THE DECISION OF HONBLE S UPREME COURT OF INDIA IN THE CASE OF DHARMENDER TEXTILES R EPORTED AT 306 ITA NO. 3331/DEL/2012 PAGE 5 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. ITR 277 HOLDING THAT PENALTY UNDER SECTION 271(1)(C ) IS A CIVIL LIABILITY, THAT THE SAID SECTION HAS BEEN ENACTED T O PROVIDE FOR A REMEDY FOR LOSS OF REVENUE AND THAT WILLFUL CONCEAL MENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY . THE APPELLANT HAS FAILED TO DISCLOSE INCOME OF RS.80,72,320/- IN THE ORIGINAL RETURN, AS WELL AS THE RETURN FILED IN RESPONSE TO NOTICE U NDER SECTION 153A. IT WAS ONLY AFTER CONFRONTATION WITH SEIZED DOCUMENTS BY THE DEPARTMENT THAT THE APPELLANT OFFERED INCOME OF RS.80,72,320/-. IN VIEW OF THE FACTS AND CIRCUMSTA NCES OF THIS CASE AND THE JUDICIAL PRONOUNCEMENTS CITED SUPRA, I FIND NO REASON TO INTERFERE IN THE ASSESSING OFFICERS ORDE R IMPOSING PENALTY OF RS.27,17,143/- UNDER SECTION 271(1)(C). THE ASSESSING OFFICERS ORDER IS THEREFORE CONFIRMED AN D GROUND NO.1 OF THE APPEAL IS DISMISSED. 8. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF LD.CIT(A)-XXXIII, NEW DELHI CONFIRMING PENALTY L EVIED UNDER SECTION 271(1)(C) OF RS.27,17,143/- IS BAD IN LAW AND NEEDS TO BE QUASHED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF LD.CIT(A)-XXXIII, NEW DELHI CONFIRMING ORDER LEVYIN G PENALTY OF RS.27,17,143/- UNDER SECTION 271(1)(C) DESPITE THE FACT THAT INCOME IN RESPECT OF WHICH PENALTY WAS LEVIED WAS SURRENDERED SUO MOTO AND VOLUNTARILY WITHOUT THE ASSESSING OFFICER HAVING MA DE ANY ENQUIRIES AND WITHOUT CONFRONTING THE RELEVANT DOCUMENTS TO THE A PPELLANT AND THE SURRENDER WAS MADE IN THE SPIRIT OF COOPERATION AND IN CONSULTATION WITH THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT. 3. THAT THE LD.CIT(A)-XXXIII, NEW DELHI ERRED IN CONFIRMING THE PENALTY LEVIED OF RS.27,17,143/- UNDER SECTION 271(1)(C) WI THOUT TAKING COGNIZANCE OF THE FACT THAT THE DECLARATION OF INCOME MADE BY THE APPELLANT AND HIS EXPLANATION THAT HE HAD DONE SO TO BUY PEACE WITH T HE DEPARTMENT AND TO COME OUT OF THE VEXED LITIGATION OUGHT TO BE TREATE D AS BONAFIDE ON THE FACTS AND CIRCUMSTANCES , WITHIN THE PROVISIONS OF EXPLAN ATION TO S.271(1)(C) OF THE INCOME TAX ACT, 1961. 9. THE LD.COUNSEL FOR THE ASSESSEE MR. V.S.RASTOGI REITERATED THE CONTENTIONS RAISED BEFORE THE CIT(A) AND SUBMITTED THAT THE ASSESSEE IN THIS CASE NOT ONLY EXPLAINED THE SEIZED DOCUMENTS B UT BEFORE BEING ITA NO. 3331/DEL/2012 PAGE 6 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. CONFRONTED WITH THE SEIZED RECORD, THE INCOME WAS OFFERED FOR TAXATION, IN VIEW OF THE TIME BARRING PROVISIONS AND WITH A VIEW TO END PROTRACTED LITIGATIONS. HE SUBMITTED THAT THE OFFER WAS GIVEN IN A SPIRIT OF COOPERATION WITH THE DEPARTMENT AND TO BUY PEACE AN D TO AVOID LITIGATION. HE RELIED HEAVILY ON THE JUDGMENT OF THE SUPREME CO URT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL, 251 ITR 9 (SC). TH E ORDER OF CIT(A) WAS CHALLENGED ON THE FOLLOWING COUNTS:- * THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) IS TOTALLY BARREN OF ANY MENTION/DISCUSSION ON THE SUPREME COURT JUDG EMENT IN THE CASE OF SURESH CHAND MITTAL. AS EMPHASIZED ;SUPRA ALMOST T HE ENTIRE THRUST OF THE APPELLANT IS BASED ON THE RATIO LAID DOWN BY THE SU PREME COURT IN THE AFORESAID CASE. HE REITERATE THE SUBMISSIONS IN TH IS REGARD. * THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REC ORDED THE FACTS WRONGLY WHEN IN PARA 4.6 HE STATES TO QUOTE IT WAS ONLY AFTER CONFRONTATION WITH SEIZED DOCUMENTS BY THE DEPT. TH AT THE APPELLANT OFFERED INCOME OF RS.80,72,320/-. THE FACT CLEARL Y EMERGES FROM RECORD THAT ALTHOUGH M/S BPTP LTD. WAS CONFRONTED WITH THE SEIZED DOCUMENTS, THE APPELLANT WAS NOT SO CONFRONTED. THE FACT IS T HAT THE APPELLANT OFFERED THE INCOME VOLUNTARILY, IN GOOD FAITH, AND TO AVOID VEXED LITIGATION AND THE MATTER WAS COVERED BY THE JUDGEMENT IN THE CASE OF AFORESAID SC JUDGEMENT. * INSTEAD OF DEALING WITH THE DECISION OF SUPREME C OURT IN SURESH CHAND MITTAL (SUPRA) THE COMMISSIONER OF INCOME TAX (APPE ALS) CITED VARIOUS JUDGEMENTS OF THE HIGH COURTS IN PARAS 4.4 AND 4.5. THESE JUDGEMENTS ARE NOT RELEVANT FOR MORE THAN ONE REASONS VIZ., A) NONE OF THESE JUDGEMENTS IS OF THE SUPREME COUR T. PLAINLY A HIGH COURT JUDGEMENT CANNOT OVERRULE THE JUDGEMENT OF THE SUPR EME COURT PARTICULARLY IF IT IS RENDERED BEFORE THE SUPREME C OURT JUDGEMENT. B) SOME OF THE JUDGEMENTS CITED RELATE TO PRE 1976 AMENDMENT WHEN THE LAW WAS DIFFERENT. EXPLANATION TO S.271(1)(C) PRIO R TO 1876 WAS DIFFERENT FROM EXPLANATION 1. THE PRESENT CASE IS TO BE DECI DED ON THE EXPLANATION 1 AS IT STOOD AFTER 1.4.76 AS WAS ALSO THE POSITION IN THE CASE OF SURESH CHAND MITTAL. ITA NO. 3331/DEL/2012 PAGE 7 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. C) IN MANY OF THESE CASES THE FACTS ARE DISTINGUISH ABLE IN AS MUCH AS ONLY AFTER PERSISTENT QUESTIONING THE ASSESSES SURRENDER ED INCOME WHILE IN THE PRESENT CASE THE ASSESSEE VOLUNTARILY OFFERED THE I NCOME BEFORE BEING QUESTIONED BY THE DEPARTMENT. 10. THEREAFTER HE DISTINGUISHED THE CASE LAWS RELIE D UPON BY THE LD.CIT(A). HE RELIED ON THE FOLLOWING CASE LAWS:- I. CIT VS. M.S.BINDRA & SONS P.LTD. (2011) 336 ITR 125 (DELHI) II. CIT-IV VS. DHARAMPAL PREMCHAND LTD. (2011) 329 ITR 572 (DELHI) III. CIT VS. SHAYAM TEX INTERNATIONAL LTD. (2011) 198 TAXMAN 200 (DELHI) IV. SIDHARTHA ENTERPRISES VS CIT 1(2010) 322 ITR 80 (P&H) 11. HE REITERATED HIS CONTENTION THAT THE CASE ON H AND IS COVERED BY THE JUDGEMENT OF THE HONBLE SUPREME COURT IN CIT V S. SURESH CHANDRA MITTAL, 251 ITR 9 (S.C.). 12. THE LD.D.R.MR.PIRTHILAL ON THE OTHER HAND VEHEM ENTLY CONTRADICTED THE SUBMISSIONS OF THE ASSESSEES COUN SEL AND SUBMITTED THAT THIS IS A CASE WHERE CERTAIN DOCUMENTS WERE SE IZED DURING THE COURSE OF THE SEARCH AND WHEN CONFRONTED THE ASSESS EE HAS NOT GIVEN ANY EXPLANATION. HE SUBMITTED THAT THE ASSESSEE MAINLY BANKED ON THE PROPOSITION THAT THIS IS A VOLUNTARY OFFER AND IN SUCH CIRCUMSTANCES NO PENALTY CAN BE LEVIED. HE ARGUED THAT SUCH A PROPO SITION CANNOT BE ENTERTAINED ON THE FACTS OF THIS CASE. 13. HE RELIED ON THE DECISION OF THE MUMBAI SPECIA L BENCH OF THE TRIBUNAL IN THE CASE OF HARISH P MASROWALA VS ACIT ITAT SPECIAL BENCH MUMBAI 9 ITR (TRIB) 572 FOR THE PROPOSITION THAT P ENALTY IS IMPOSABLE UNDER THE MAIN PROVISIONS OF S.271(1)(C) AND THAT T HERE IS NO NEED TO ITA NO. 3331/DEL/2012 PAGE 8 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. REFER TO ANY EXPLANATION, AS THE EXPLANATIONS ARE O NLY TO EXPLAIN THE AMBIGUITY IN THE PROVISIONS RELATING TO IMPOSITION OF PENALTY. 14. THAT PENALTY CAN BE LEVIED WHEN ASSESSEE DOES N OT FURNISH ANY EXPLANATION. HE RELIED ON CIT VS CHANCHAL (ALL) 1 73 TAXMAN 71, 225 ITR 675 (P&H) FOR THE PROPOSITION THAT MERE OFFERING OF AN EXPLANATION IS NOT SUFFICIENT AND THAT AN EXPLANATION IS TO BE SUBSTA NTIATED BY COGENT AND RELIABLE EVIDENCE. HE RELIED ON THE JUDGEMENT IN THE CASE OF RAVI & CO . 271 ITR 296 FOR THE PROPOSITION THAT THAT PENALTY CAN BE LEVIED ON INCO ME DISCLOSED/ADMITTED AFTER DETECTION. HE RELIED ON THE DECISION OF CIT VS. C.ANANTHAN CHE TTIAR, 273 ITR 401 MAD) FOR THE PROPOSITION THAT, ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE SUBSEQUENT TO THE SEARCH, WITHOUT OFFERING EXPLANATION FOR NOT HAVING DISCLOSED INCOME EARLIER, THOUGH, TO BUY PE ACE WITH THE DEPARTMENT, PENALTY IS LEVIABLE HE RELIED ON THE DECISION OF ANAND LIQUORS VS. CIT (KER) 232 ITR 35 FOR THE PROPOSITION THAT THERE CANNOT BE AN AGREEMENT F OR NON LEVY OF PENALTY. THE LD.COUNSEL FOR THE ASSESSEE REPLIED BY DISTINGU ISHING THE CASE LAWS CITED BY THE REVENUE AND REITERATING THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA) HAS T O BE GIVEN PRECEDENCE ITA NO. 3331/DEL/2012 PAGE 9 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. TO THE VARIOUS DECISIONS OF THE TRIBUNALS AND HIGH COURTS CITED BY THE LD.D.R. 15. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDER ATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PERUSAL OF TH E PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOLLOWS:- A PLAIN LOOK AT THE COPIES OF THE SEIZED MATERIAL, WHICH IS FI LED ALONG WITH THE PAPER BOOK DISCLOSES THAT RECORDINGS WERE MADE IN A SYSTE MATIC MANNER IN A TABULAR FORM AS FAR AS PAGES 7 TO 12 AND 15 TO 17 A RE CONCERNED. THE OTHER PAPERS WHEN PERUSED DISCLOSE THAT THEY ARE EN TRIES MADE ON PLAIN PAPER WITH CALCULATIONS, INITIALS AND SIGNATURES. WHEN CONFRONTED WITH THESE PAGES A GROUP COMPANY OF THE ASSESSEE M/S BPT P LTD. SUBMITTED THAT THE EXPENDITURE DOES NOT PERTAIN TO IT. IT FU RTHER ARGUED THAT THERE IS NO QUESTION OF BOOKING THE SAME IN ITS BOOKS OF AC COUNTS . THERE AFTER M/S BUSINESS PARK CONSTRUCTION CO.LTD. THE ASSESSEE COMPANY STATED ON 24.12.2009 THAT THEY ARE UNABLE TO EXPLAIN THESE DO CUMENTS. IT FURTHER STATED THAT, IT HAS NO GRIEVANCE IF ADDITION IS MA DE ON ACCOUNT OF THESE PAPERS SUBJECT TO NO PENALTY BEING LEVIED. THUS ON FACTS, THE ASSESSEE COMPANY FAILED TO EXPLAIN THESE SEIZED PAPERS AND O FFERED THE AMOUNTS MENTIONED THEREIN TO TAX WITH A CONDITION THAT NO P ENALTY SHOULD BE LEVIED. ON THESE FACTS WE ARE OF THE CONSIDERED O PINION THAT THE PENALTY WAS RIGHTLY LEVIED AND UPHELD BY THE LD.CIT(A) FOR THE FOLLOWING REASONS:- ITA NO. 3331/DEL/2012 PAGE 10 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. A) THE ASSESSEE M/S BUSINESS PARK CONSTRUCTION CO.L TD. HAS AT NO STAGE ATTEMPTED TO EXPLAIN THE SEIZED DOCUMENTS. THE EXP LANATION GIVEN BY M/S BPTP LTD. OF THE SEIZED DOCUMENTS, DOES NOT COME TO THE RESCUE OF THE ASSESSEE. THE ASSESSEE IN THIS CASE HAS NOT ST ATED THAT THE DOCUMENTS IN QUESTION DOES NOT BELONG TO IT. IT IS NOT THE CASE OF THE ASSESSEE THAT ENTRIES RECORDED IN THESE DOCUMENTS A RE NOT EXPENDITURE INCURRED BY IT OR THAT THEY ARE DUMB DOCUMENTS. AL L THAT THE ASSSESSEE STATED IS THAT, IT IS UNABLE TO EXPLAIN THE DOCUME NTS. B) IT IS WELL SETTLED THAT THERE IS NO ESTOPPEL AGA INST LAW. THERE IS NO AGREEMENT POSSIBLE FOR NON LEVY OF PENALTY. HAD TH E ASSESSEE FURNISHED AN EXPLANATION AS REGARDS THE SEIZED DOCUMENTS, THE QUESTION OF CONSIDERING WHETHER SUCH EXPLANATION IS BONAFIDE OR NOT WOULD ARISE. IN THIS CASE THE ASSESSEE HAS NOT ATTEMPTED TO EXPLAIN ANY OF THE SEIZED DOCUMENTS, EVEN DURING THE COURSE OF PENALTY PROCE EDINGS. C) HEAVY RELIANCE HAS BEEN PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (SUPRA). THE HONBLE SUPREME COURT HAS UPHELD THE JUDGMENT OF THE HONB LE M.P. HIGH COURT ON THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THIS CASE IN OUR VIEW IS DISTINGUISHABLE FROM THE FACTS OF THE CASE ON HA ND, IN THE CASE OF M/S SURESH CHANDRA MITTAL (SUPRA) THE ASSESSEE HAD FIR ST FILED ITS RETURNS FOR THE AYS 1983-84, 1984-85, 1985-86 AND 1986-87 SHOWI NG INCOME RANGING BETWEEN RS.10,000/- AND RS.12,000/-. LATER ACTION UNDER ITA NO. 3331/DEL/2012 PAGE 11 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. SECTION 132 OF THE INCOME TAX ACT, 1961 WAS TAKEN A GAINST HIM WHICH LED TO REOPENING OF ASSESSMENT. A NOTICE UNDER SEC TION 148 OF THE INCOME TAX ACT, 1961 WAS SERVED ON HIM AND PURSUANT THERETO HE FILED A REVISED RETURN OF INCOME FOR THESE AYS SHOWING HIGH ER INCOME. EVENTUALLY THE ASSESSMENT ORDERS WERE PASSED AND RE TURNS SUBMITTED REGULARIZED UNDER SECTION 148 OF THE INCOME TAX ACT , 1961. IN THE CASE ON HAND THE ASSESSEES RETURN OF INCOME FILED SUBSEQUENT TO SEARCH DOES NOT DISCLOSE THE INCOME IN QUESTION. IT IS NOT A CASE WERE REVISED RETURN WAS REGULARIZED BY THE REVENUE WITHO UT TAKING ANY OBJECTION. THUS IN OUR CONSIDERED OPINION THE DECIS ION DOES NOT APPLY TO THE FACTS OF THE CASE. D) COMING TO THE DECISION IN THE CASE OF CIT VS. R AJ KUMAR&OTHERS, 313 ITR256, THE HON`BLE P&H HIGH COURT WAS CONSIDERING THE CASE WHEREIN ADDITIONAL INCOME WAS OFFERED IN RETURN OF INCOME F ILED PURSUANT TO THE NOTICE U/S 148 OF THE ACT. THIS OFFER WAS ACCOMPANI ED BY A NOTE WHICH WAS NOT REJECTED BY THE REVENUE. IN SUCH CIRCUMSTAN CES IT WAS HELD THAT ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE IN GO OD FAITH AND TO BUY PEACE. IN THE CASE ON HAND THE REVENUE FOUND DOCUME NTS WHICH DISCLOSE EXPENDITURE NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE SHOULD HAVE OFFERED THIS INCOME WHILE FILING RETURN IN RES PONSE TO NOTICE. THUS THIS CASE DOES NOT APPLY. ITA NO. 3331/DEL/2012 PAGE 12 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. E) IN THE CASE OF CIT VS. SAROF INDUSTRIES (1976) CTR (DELHI) 182 THE HON`BLE DELHI HIGH COURT WAS CONSIDERING A CASE WH ERE THERE WAS DISALLOWANCE OF INTEREST AND PENALTY WAS LEVIED ON THE SAME. IT WAS OBSERVED THAT THE ASSESSEE HAS CLAIMED INTEREST ON THE SAME BASIS ON SIMILAR FACTS FOR THE PAST 15 TO 20 YEARS AND THE D EPARTMENT WAS ALLOWING THE SAME. THE ITO HAS SUDDENLY CHANGED HIS DECISION AND DISALLOWED THE INTEREST. NO SUCH CIRCUMSTANCES EXIST IN THIS CASE. IN THE CASE OF ACIT VS. PREM CHAND GARG (2009) 123 TTJ (DEL) TM THE DELHI D BENCH OF THE TRIBUNAL (TM) WAS CONSIDERING A CASE OF VOLUNTARY S URRENDER OF AN NRI GIFT AS INCOME, IN RESPONSE TO A QUERY. THE TRIBUNA L WAS CONSIDERING A CASE WERE THERE WAS NEITHER DETECTION NOR ANY INFOR MATION IN POSSESSION OF THE REVENUE. THE OFFER WAS MADE IN THAT CASE, TO AVOID HARASSMENT TO THE ASSESSEE AS THE DONORS WHO WERE NONRESIDENT P ERSONS. IN THE CASE ON HAND THE AO DETECTED CERTAIN EXPENDITURE AND HAD CERTAIN EVIDENCES, WHICH THE ASSESSEE DID NOT EXPLAIN. 16. A NUMBER OF DECISIONS HAVE BEEN RELIED UPON BY BOTH THE PARTIES. THE BROAD PROPOSITIONS LAID DOWN BY ALL THESE DECIS IONS ARE WELL KNOWN. WE HAVE GONE THROUGH EACH OF THESE CASES CITED AND FOR THE SAKE OF BREVITY, WE DO NOT DEAL WITH EACH ONE OF THESE. WH AT HAS TO BE SEEN IS WHETHER ON THE FACTS AND CIRCUMSTANCES OF THIS CAS E, THE PENALTY HAS TO BE LEVIED OR NOT. IN OUR OPINION ON THE FACTS AND C IRCUMSTANCES OF THE CASE, AS THE AO HAD DETECTED UNRECORDED EXPENDITURE AND AS THE EVIDENCE REMAINED UNCONTROVERTED AND AS THE ASSESSE E FAILED TO EXPLAIN ITA NO. 3331/DEL/2012 PAGE 13 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. THE SEIZED DOCUMENTS, MERE SURRENDER DOES NOT ABSOL VE IT FROM PENAL CONSEQUENCES. THUS WE UPHOLD THE ORDER OF THE CIT( A) AND DISMISS THE APPEAL OF THE ASSESSEE. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER,2012. SD/- SD/- (A.D. JAIN) (J.SU DHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 31 ST OCTOBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR ITA NO. 3331/DEL/2012 PAGE 14 OF 14 ASSESSMENT YEAR 2007-08 BUSINESS PARK CONSTRUCTION CO.P.LTD. 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :