Sumanglam Sewa Aivam Educational Samiti, Ghaziabad V. Addl. CIT, Ghaziabad

ITA 3467/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97730 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 20-10-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TARUN RASTOGI
• Keywords: Unexplained investment
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH G NEW DELHI BEFORE : SHRI C.M. GARG, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 3466 & 3467 /DEL./2013 ASSTT. YEAR : 2003 - 04 & 2004 - 05 SUMANGLAM SEWA AVAM EDUCATIONAL SAMITI, VS. ADDL. C.I.T., RANGE - 2, PLOT NO. 11,SECTOR - 6, NEAR WATER TANK, GHAZIABAD. GHAZIABAD. [PAN: AAETS1949Q] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TARUN RASTOGI, C.A. RESPONDENT BY : SHRI SUJI T KUMAR, SR. D.R. DATE OF HEARING : 20.10.2015 DATE OF PRONOUNCEMENT : 10 .11.2015 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: TH ESE APPEAL S BY THE ASSESSEE EMANATE FROM THE ORDER S DATED 11.03.2013 PASSED BY THE LD. CIT(A), GHAZIABAD FOR THE ASSESSMENT YEAR 2003 - 04 AND 2004 - 05 . SINCE THE GROUNDS RAISED IN BOTH THE APPEALS ARE COMMON, THEREFORE, IN ORDER TO AVOID UNNECESSARY REPETITION, WE DEEM IT PROPER TO REPRODUCE THE GROUNDS RAI SED IN A.Y. 2003 - 04 AS UNDER : 1. THAT IN ABSENCE OF A REASONABLE OPPORTUNITY OF HEARING BY THE LEARNED AO, THE PENALTY ORDER IS VOID AB INITIO. ITA NO. 3466 & 3467 /DEL./2013 2 1.1. THAT THE FINDING OF LEARNED CIT(A) THAT THE ASSESSING OFFICER HAS GIVEN PROPER OPPORTUNITY OF BEING HEA RD TO THE APPELLANT SOCIETY IS CONTRARY TO THE MATERIAL ON RECORD. 1.2 WHETHER THE OPPORTUNITY GIVEN BY THE CIT(A) TO MAKE SUBMISSIONS CAN SUBSTITUTE THE OPPORTUNITY TO BE GIVEN BY THE LEARNED ASSESSING OFFICER IN TERMS OF SECTION 274(1) OF THE ACT? 1.3 THAT THE LEANED AO/CIT(A) IGNORED THE REPLY DATED 29.01.2009 OF THE APPELLANT SOCIETY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) WAS NOT JUSTIFIED IN AFFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF RS.20,80,000/ - . 3. T HAT IN THE VIEW OF THE FACTS, MATERIAL ON RECORD, A PROTECTIVE ASSESSMENT HAVING BEEN MADE ON THE EX - SECRETARY OF THE SOCIETY IN RESPECT OF THE AMOUNTS ASSESSED ON THE SOCIETY CAN IT BE SAID THAT THERE IS CONCEALMENT OR FU R NISHING OF INACCURATE PARTICULARS WITHIN THE MEANING THE SECTION 271(1)(C) OF THE ACT. 4. THAT WHETHER MERE AFFIRMATION OF THE ASSESSMENT ORDER BY CIT(A) CAN RESULT IN LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT? 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A ) WAS NOT JUSTIFIED IN HOLDING THAT THE EXPLANATIONS OF THE APPELLANT SOCIETY ARE FALSE, NOT BONAFIDE & NEED TO BE REJECTED. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE LEVY OF PENALTY U/S. 271(1 )(C) IN ABSENCE OF ANY SATISFACTION RECORDED IN THE ASSESSMENT MADE U/S 143(3). 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE PENALTY @ 150% INSTEAD OF MINIMUM OF 100%. 8. THAT THE LEARNED CIT(A) HAS MADE UNSUBSTANTIATED REMARKS AND ALLEGATIONS WITHOUT ANY MATERIAL ON RECORD THAT THE ASSESSEE SOCIETY HS ENGAGED IN LAUNDERING OF UNACCOUNTED MONEY/EVADED TAXES.' ITA NO. 3466 & 3467 /DEL./2013 3 2. THE BRIEF FACTS OF THE CASE PERTAINING TO A.Y. 2002 - 03 ARE THAT THE RETURN OF INCOME WAS FILED BY ASSESSEE ON 3 0 .12.2003 AND THE SAME WAS PROCESSED U/S 143(1) OF THE I NCOME TAX ACT, 1961 ON 26.03.2006 AT THE RETURNED INCOME. MEANWHILE A SURVEY WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE ON 17.02.2006 WHEREIN DURING THE COURSE OF SURVEY, A LOOSE PAPER (MARKED AS PAGE NO 89 OF ANNEXURE D - 3) WAS FOUND WHICH SHOWED THAT CERTAIN PAYMENTS HAD BEEN MADE BY ONE SHRI VIJAY GUPTA AND ANOTHER SHRI J . K GULATI TO SHRI SATISH KUMAR, SECRETARY OF THE A SSESSEE SOCIETY. THE A MOUNT PERTAINING TO AY 2003 - 04 WAS RS. 33, 66 ,100/ - WHICH ACCORDING TO AO WAS THE UNDISCLOSED INCOME OF ASSESSEE HAVING ESCAPED ASSESSMENT U/S 147 R.W.S. 148 OF THE INCOME TAX ACT, 1961. ACCORDINGLY, N OTICE U/S 148 WAS ISSUED ON 26.03.2007 AND WAS SERVED UPON THE ASSESSEE THROUGH AFFIXTURE ON 16.04.2007. THE ASSESSMENT U/S. 147 WAS COMPLETED ON 30.12.2008 THEREBY MAKING ADDITION OF RS.33,66,100/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT AND OF RS.9,00,000/ - ON ACCOUNT OF UNSECURED LOAN. SIMILARLY, IN A.Y. 200 4 - 05, ON THE BASIS OF SAME SURVEY, AN ADDITION OF RS.1,35,70,367/ - WAS MADE BY THE AO VIDE ORDER 31.12.2008 U/S. 147 OF THE ACT. IN APPEAL S FILED AGAINST TH E S E ASSESSMENT ORDER S , THE LD. CIT(A) SUSTAINED THE IMPUGNED ADDITIONS . THE ASSESSING OFFICER SUBSEQ UENTLY INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND ON THE BASIS OF ABOVE ADDITIONS AND FINDING THE REPLY OF ASSESSEE UNSATISFACTORY ITA NO. 3466 & 3467 /DEL./2013 4 AND KEEPING IN VIEW THE SUSTENANCE OF ADDITIONS BY THE LD. CIT(A), IMPOSED A PENALTY OF RS.20,80,000/ - , FOR A.Y. 2003 - 04 AND OF RS.46,00,000/ - FOR A.Y. 2004 - 05 . THE ASSESSEE CHALLENGED THE PENALTY ORDER S IN APPEAL S BEFORE THE LD. CIT(A), WHICH STOOD DISMISSED VIDE THE IMPUGNED ORDER S , IRKED BY WHICH THE ASSESSEE HAS COME UP IN TH ESE APPEAL S BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE, BESIDES MAKING ELABORATE ARGUMENTS ON VARIOUS ASPECTS OF THE CASE S , CONTENDED AT THE OUTSET THAT THE CONCLUSIONS ARRIVED AT BY THE AUTHORITIES BELOW FOR IMPOSING AND SUSTAINING PENALTY, ARE BASED ON THE F ACT THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS U/S. 147 , STOOD CONFIRMED BY THE LD. CIT(A) IN QUANTUM APPEAL S . SUCH CONCLUSION HAS NOW NO LEGS TO STAND IN VIEW OF THE DECISION RENDERED BY THE ITAT, DELHI BENCH IN ASSESSE E S QUANTUM APPEAL S NO S . 1467 & 1468 /DEL./2011 AGAINST THE ORDER S OF LD. CIT(A) WHEREBY THE ASSESSMENT ORDER S U/S. 147 OF THE ACT HA VE BEEN QUASHED VIDE ORDER DATED 13.10.2015, THEREBY DELETING THE CONSEQUENTIAL ADDITIONS, WHICH LED THE ASSESSING OFFICER TO IMPOSE PENALTY AGAINST THE ASSESSEE. HE, THEREFORE, URGED TO ALLOW THE APPEAL S OF THE ASSESSEE. ON THE OTHER HAND, THE LD. DR OPPOSI NG THE CONTENTIONS OF THE ASSESSEE, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 3466 & 3467 /DEL./2013 5 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED T HE MATERIAL AVAILABLE BEFORE US AND WE FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE ASSESSEE. ONCE THE ADD ITIONS WHICH LED THE ASSESSING OFFICER TO IMPOSE PENALTY, HAVE BEEN DELETED BY ITAT THEREBY QUASHING THE REASSESSMENT ORDER PASSED U/S. 147, THE VERY BASIS OF IMPOSITION OF PENALTY STOOD COLLAPSED. THEREFORE, IN VIEW OF DECISION OF ITAT IN THE QUANTUM PROC EEDINGS, AS NOTED ABOVE, THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) DOES NOT SURVIVE. THE LD. DR HAS NOT BEEN ABLE TO ADDUCE ANY MATERIAL ON RECORD TO REBUT THE CONTENTIONS OF THE ASSESSEE OR TO TAKE A CONTRARY VIEW. ACCO RDINGLY, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE AND THE PENALTY IMPOSED AGAINST THE ASSESSEE HAS TO BE CANCELLED IN BOTH THE CASES . 5. IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.11.2015 . SD/ - SD/ - ( C.M. GARG ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.11.2015 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI