Dharam Pal Gupta, Haryana V. ITO, Panipat

ITA 3356/DEL/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7088 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 28-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 3356/DEL/11 ASSTT. YR: 2001-02 DHARAM PAL GUPTA VS. INCOME-TAX OFFICER, S/0 SH. TELU RAM GUPTA, WARD-2, PANIPAT. HOUSE NO. 313, SECTOR-11, HUDA, PANIPAT. PAN/GIR NO. AAZPG9364J APPELLANT BY : SH. VED JAIN CA & MS. RANO JAIN RESPONDENT BY: SHRI ROHIT GARG. SR. DR DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER DATED 18-3-2011 RELATING TO A.Y. 2001-02, CHALLENGING THE IMPOSITIO N OF PENALTY OF RS. 35,220/- U/S 271(1)(C) OF THE I.T. ACT, 1961. 2. BRIEF FACTS ARE THAT THE ASSESSEE HAD FILED ORIG INAL RETURN OF INCOME AT RS. 3,00,896/- WHICH WAS PROCESSED U/S 143(1). THE STATEMENT INCLUDED WITH THE RETURN CONTAINED DETAILS ABOUT GIFT OF RS. 1 LA C RECEIVED BY THE ASSESSEE. SUBSEQUENTLY, AO ISSUED NOTICE U/S 148, ASSESSEE FI LED A RETURN OF INCOME IN PURSUANCE THEREOF RETURNING TAXABLE INCOME AT RS. 4 ,00,896/- AS AGAINST RS. 3,00,896/- OF THE ORIGINAL RETURN. THE ASSESSEE THU S SURRENDERED THE AMOUNT OF RS. 1,00,000/-, RECEIVED AS GIFT. THE ASSESSEE I S CLAIMED TO HAVE OFFERED THE AMOUNT TO BUY PEACE OF MIND AND TO AVOID UNNECE SSARY LITIGATION AND PAID TAX THEREON. THE AO ACCEPTED THE RETURN FILED U/S 148 AND FURTHER ADDED AN AMOUNT OF RS. 10,200/- ESTIMATING THE SAME AS CO MMISSION, WHICH MAY 2 HAVE BEEN PAID BY THE ASSESSEE FOR PROCURING THE G IFT OF RS. 1 LAC. ASSESSEE CONTESTED THE ADDITIONS. ITAT VIDE ORDER DATED 15-5 -09 DELETED THE ADDITION OF RS. 10,200/- AND CONFIRMED THE GIFT AMOUNT OF RS . 1 LAC. PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C). THE ASSES SEE FILED ABOVE EXPLANATION WHICH WAS REJECTED BY AO AND PENALTY OF RS. 35,220/- WAS IMPOSED ON ASSESSEE. 2.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL BEF ORE THE CIT(A), WHERE THE PENALTY WAS CONFIRMED. NOW THE ASSESSEE IS BEFO RE US IN SECOND APPEAL. 3. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND CONTENDS THAT IT IS NEITHER A CASE OF CONCEALMENT OF INCOME NOR F URNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN THE ORIGINAL RETURN OF INCOME, THE STATEMENTS FILED CONTAINED DETAILS ABOUT GIFT RECEIVED BY THE ASSESSEE WHICH WAS CONFIRMED BY THE GIFT DEED. BESIDES, THE PRESUMPTI ON OF LOWER AUTHORITIES THAT THE ASSESSEE OFFERED THE GIFT ON THE KNOWLEDGE WHEN 148 NOTICE WAS ISSUED TO TAX THIS GIFT, IS NOT A PROPER PRESUMPTI ON AS ASSESSEE FILED RETURN CONSEQUENT TO NOTICE U/S 148 ON 30-4-08 WHEREAS THE FIRST NOTICE OF HEARING U/S 143(2)/148 WAS ISSUED ON 8-7-2008. IT CANNOT B E HELD THAT THE ASSESSEE FILED RETURN U/S 148 OFFERING THE AMOUNT OF GIFT OF RS. 1,00,000/- TO INCOME AFTER THE INQUIRIES WERE CONDUCTED, AS THE NOTICE U /S 148 DOES NOT CONTAIN REASONS. THE ASSESSEE IN THE NOTE HAD CLAIMED THAT THE GIFT THOUGH GENUINE, THE AMOUNT WAS BEING OFFERED FOR TAXATION TO AVOID LITIGATION AND TO BUY PEACE OF MIND. THE ASSESSEES EXPLANATION IS PROPER AND BASED ON ABOVE FACTS, WHICH HAS NOT BEEN REFUTED. 3 3.1. APROPOS COMMISSION, THE LEARNED COUNSEL CONTEN DS THAT THE ITAT VIDE ITS ORDER DATED 15-5-09, IN QUANTUM APPEAL, DELETE D THIS ADDITION AS BEING MADE ON PRESUMPTION. IT IS PLEADED THAT THE PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE ASSESSEE HAVING FURNISHED A PROPER EXPLANATION AND NOT HAVING CONCEALED ANY PARTICULAR S THE ABOVE PENALTY BE DELETED. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF AUTHORITIES BELOW. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE FACTS MENTIONED A BOVE HAVE NOT BEEN DISPUTED BY THE LEARNED DR, WHO CONTENDS THAT THE P ENALTY BEING A CIVIL LIABILITY, THE SAME HAS BEEN RIGHTLY LEVIED ON THE ASSESSEE. 5.1. THOUGH, THE PENALTY IS A CIVIL LIABILITY, IT I S TO BE ASCERTAINED THAT WHETHER THE PARTICULARS WERE CONCEALED, INACCURATE PARTICULARS WERE FURNISHED OR WHETHER THE EXPLANATION OF THE ASSESSE E WAS FALSE. PENALTY U/S 271(1)(C) CANNOT BE IMPOSED AUTOMATICALLY. THE ASS ESSEES ORIGINAL RETURN CONTAINED DETAILS ABOUT GIFT WHICH WAS ACCEPTED BY THE DEPARTMENT U/S 143(1). THEREAFTER, IN RESPONSE TO NOTICE U/S 148 A SSESSEE FILED THE SAME VOLUNTARILY, OFFERING THE AMOUNT TO TAX. THE INFERE NCE BY LOWER AUTHORITIES THAT THE ASSESSEE OFFERED THE AMOUNT AFTER IT WAS D ETECTED, DOES NOT EMERGE FROM THE RECORD INASMUCH AS THE FIRST NOTICE OF HEA RING WAS ISSUED 3 MONTHS AFTER FILING OF RETURN BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE DID NOT CONCEAL OR FURNI SHED ANY INACCURATE PARTICULARS. ANY SUBSEQUENT CHANGE IN ASSESSEES MI ND BEFORE ISSUE OF NOTICE 4 OF INQUIRY OF ASSESSMENT GENERALLY CANNOT BE HELD A GAINST ASSESSEE SO AS TO FASTEN PENALTY U/S 271(1)(C). IN VIEW OF ABOVE FACT S AND THE ASSESSEES EXPLANATION BEING NOT FOUND TO BE FALSE, WE SEE N O JUSTIFICATION IN IMPOSING PENALTY U/S 271(1)(C) AND THE SAME IS DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 29-08-2011. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29-08-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 5