DCIT, Kanpur V. Shri Paramjit Singh, Kanpur

ITA 337/LKW/2011

• Counselvise Citation: 33723714 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-07-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 13-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S GUPTA
• Keywords: Search and seizure; Retrospective amendment; Tax effect
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 337 & 338/LKW/2011 ASSESSMENT YEAR S : 2000 - 01 & 2003 - 04 DY. CIT CENTRAL CIRCLE - 1 KANP UR V. SHRI. PARAMJEET SINGH 11E, ANAND COTTAGE MOTI VIHAR, KANPUR PAN: ABSPS6577B (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. S.S. GUPTA, FCA DATE OF HEARING: 23 0 7 2014 DATE OF PRONOUNCEMENT: 21 0 8 2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). SINCE C OMMON ISSUES ARE INVOLVED IN THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. WE, HOWEVER, PREFER TO ADJUDICATE THEM ONE AFTER THE OTHER. I.T.A. NO.337/LKW/2011: 2 . IN THIS APPEAL, THE ASSESSING OFFICER HAS LEVIED A PENALTY OF RS.5 LAKHS ON ACCOUNT OF ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE UNDER THE HEAD UNSECURED LOAN AND SUNDRY CREDITORS. 3 . THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, SOME INCRIMINATING MATERIAL WAS FOUND. FROM THE BOOKS OF PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : ACCOUNT, SUNDRY CREDITOR S RETURNED BACK AND UNSECURED LOANS WERE NOTICED BY THE ASSESSING OFFICER. THE ASSESSEE HAS MADE SURRENDER IN THIS REGARD IN ORDER TO BUY PEACE WITH THE DEPARTMENT AND WITH AN ASSURANCE THAT NO PENALTY UN DER SECTION 271(1) (C) OF THE ACT W OULD BE LEVIED. DESPITE VOLUNTARY SURRENDER, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY AT RS.5 LAKHS, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A), WITH THE SUBMISSION THAT AT T HE FIRST INSTANCE ASSESSEE HIMSELF HAS DECLARED SURRENDER ON ACCOUNT OF SUNDRY CREDITORS AND LOANS AND FILED RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. SINCE THE SURRENDER WAS MADE IN ORDER TO BUY PEACE AND WITH AN ASSURANCE THAT NO PENAL TY W OULD BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT, THE IMPUGNED PENALTY DESERVES TO BE DELETED. THE LD. CIT(A), EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE AND HAVING CONVINCED WITH TH E EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE PENALTY. 4 . NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER, WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IT HAS MADE VOLUNTARY SURRENDER AT THE FIRST INSTANCE DURING THE COURSE OF SEARCH AND OFFERED ADDITIONAL INCOME THROUGH RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. SINCE THE ASSESSEE HAS MADE VOLUNTARY SURRENDER IN ORDER TO BUY PE ACE, PENALTY UNDER SECTION 271(1) (C) OF THE ACT SHOULD NOT BE LEVIED. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON VARIOUS JUDICIAL PRONOUNCEMENTS WHICH ARE AS UNDER: - 1 . CIT VS. SUREND RA MITTAL [2001] 119 TAXMAN 433 (SC). 2 . T . ASHOK PAI VS. CIT [2007] 161 TAXMAN 340 (SC). PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : 3 . CIT VS. DIWAN TOURISM LIMITED [2013] 38 TAXMANN.COM 47 (ALL). 4 . PUNJAB RICE MILLS VS. CIT [2011] 16 TAXMANN.COM 284 (ALL). 5 . CIT VS. KM. SONALI JAIN [2012] 21 TAXMANN.COM 494 (ALL). 6 . MEHSON EXPORT VS. INCOME TAX O FFICER [2010] 8 TAXMANN.COM 305 (ALL). 7 . DCIT VS. B.J.D. PAPER PRODUCTS [2012] 17 TAXMANN.COM 11 (LUCK). 8 . SANTOSH NARAIN KAPOOR VS. DCIT [2008] 25 SOT 26 (LUCK). 9 . ACIT VS. SMT. SURINDER KAUR [2009] 31 SOT 23 (LUCK). 10 . CIT VS. MATHURA COMMERCIAL C O. [2014] 45 TAX MANN.COM 515 ( ALL). 11 . MARATHON NEXTGEN REALITY & TEXTILES LTD. VS. DCIT [2013] 36 TAXMANN.COM 3 (MUMBAI) (TRIB) 5 . WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE JUDGMENTS REFERRED TO BY THE ASSESSEE AND WE FIND THAT UNDISPUTEDLY ASSESSEE HAS MADE A VOLUNTARY SURRENDER DURING THE COURSE OF SEARCH AND RETURNED ADDITIONAL INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT AND ACCORDINGLY THE TAX WAS ALSO PAID. SINCE THE REVENUE HAS NOT BROUGHT OUT A CASE TO SHOW THAT THE SURRE NDER WAS MADE WHEN THE ASSESSEE WAS CORNERED BY THE QUERIES RAISED BY THE REVENUE AUTHORITIES. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT IT WAS A VOLUNTARY SURRENDER MADE BY THE ASSESSEE AT THE FIRST INSTANCE, THEREFORE, PENALTY UNDER SECTION 271(1)(C ) OF THE ACT SHOULD NOT BE LEVIED. WE, ACCORDINGLY, UPHOLD THE ORDER OF THE LD. CIT(A) DELETING THE PENALTY. I.T.A. NO.338/LKW/2011: 6 . IN THIS APPEAL, THE REVENUE HAS ASSAILED THE ORDER OF THE LD. CIT(A) DELETING THE PENALTY OF RS.3 LAKHS. IN THIS REGARD, THE LD. COUNSEL FOR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : THE ASSESSEE HAS SUBMITTED THAT SINCE THE TAX EFFECT IS RS.3 LAKHS , THE APP E AL DESERVES TO BE DISMISSED ON THE GROUND OF TAX EFFECT. 7 . THE LD. D.R. CANDIDLY ADMITTED THE LEGAL POSITION. 8 . SINCE THE TAX EFFECT IS ONLY RS.3 LAKH ON ACCOUNT O F PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT, THE APPEAL DESERVES TO BE DISMISSED IN VIEW OF SECTION 268A OF THE ACT , WHICH HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1.4.1999. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: - 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFER ENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSU E IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. ] 9 . IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTION OR DIRECTIONS ISSUED TO THE INCOME - TAX AUTHORITIES ARE BINDING ON THE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THESE APPEALS IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE ACT, SINCE THE TAX EFFECT IN THE INSTANT CASES IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. ACCORDINGLY, THIS APPEAL IS DISMISSED. 10 . IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 21.8.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST AUGUST , 2014 JJ: 0108 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )