Smt. Poonam Lundia, Kanpur V. Dy. Commissioner of Income Tax-1, Kanpur

ITA 359/LKW/2015

• Counselvise Citation: 35923714 RSA 2015
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-09-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice; Question of law; Revised return
• Section: 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.359/LKW/2015 ASSESSMENT YEAR 2000-01 THE DY. COMMISSIONER OF INCOME TAX-1, KANPUR VS SMT. POONAM LUNDIA 57/125, SHATRANJI MOHAL, KANPUR PAN AATPL 9326 K (RESPONDENT) (APPELLANT) SHRI RAKESH GARG , ADVOCATE APPELLANT BY S HRI AMIT NIGAM, DR RESPONDENT BY 09/09/2015 DATE OF HEARING 06/10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT(A)-I, KANPUR DATED 25.03.2015 FOR THE AY 2000-01. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A)-I, KANPUR HAS BEEN WRONG IN LAW ON FACTS AND AGAINST THE PRINCIPL ES OF NATURAL JUSTICE IN CONFIRMING THE PENALTY OF RS.185000/- IM POSED U/S 271(L)(C) OF THE INCOME TAX ACT, 1961. 2. THAT THE PENALTY OF RS.185000/- IMPOSED U/S 271(L)(C) OF THE INCOME TAX ACT, 1961 BY THE LEARNED ASSESSI NG OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (A)-I, KANPUR IS WITHOUT CONSIDERING THE FACTS OF THE CASE AND IS UNJUSTIFIED, ARBITRARY. 2 3. THAT THE ORDER PASSED BY THE LEARNED COMMI SSIONER OF INCOME TAX (A)-I, KANPUR IS BAD IN LAW, ON FACTS AND AGAIN ST THE PRINCIPLES OF NATURAL JUSTICE. 4. THAT THE 'A' CRAVES LEAVE TO AMEND ANY ONE OR MORE OF GROUNDS OF APPEAL STATED AS ABOVE AS AND WHEN NEED OF DOING SO ARISE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE H ON'BLE BENCH. 3. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT ON PAGES 21 TO 28 OF THE PAPER BOOK, THERE IS AN ORDER OF LD. CIT(A) IN THE CASE OF SMT. POONAM LUNDIA FOR THE SAME AY 2000-01. HE ALSO SUBMITTED THAT UNDER S IMILAR FACTS AND SIMILAR DISPUTE, SIMILAR PENALTY WAS DELETED BY THE LD. CIT (A) AND HIS ORDER HAS ATTAINED PENALTY AS NO FURTHER APPEAL WAS FILED BY THE REVEN UE BEFORE THE TRIBUNAL. LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). LD. DR OF THE REVENUE SUPPORTED THE PENALTY ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION. WE FIND THAT IN THE CASE SISTER OF THE PRESENT ASSESSEE SMT. SUMAN LUNDIA, SIMILAR PENALTY OF RS.1.85 LAKH WAS IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT. UNDER SIMILAR F ACTS, THE SAME WAS DELETED BY THE LD. CIT(A) BY MAKING FOLLOWING OBSERVATION AS PER P ARA 7 TO 9 OF HIS ORDER. THESE PARAS FROM THIS ORDER OF LD. CIT(A) ARE REPRODUCED BELOW:- 7. I HAVE CONSIDERED THE ABOVE WRITTEN SUBMISSION OF THE LD. AR AND ALSO THE ORAL ARGUMENTS PUT BEFORE ME BY HIM AS WELL AS I HAVE GONE THROUGH THE FACTS AND CIRCUMSTANCES DISCUSSED IN THE PENALT Y ORDER FOR LEVYING OF PENALTY U/S 271(1)(C). THE FACTS OF THE CASE ARE TH AT ORIGINALLY, A RETURN WAS FILED BY THE ASSESSEE (APPELLANT) ON 14.07.2000 DECLARING A TOTAL INCOME OF RS.2,06,780/- AND SUBSEQUENTLY, ANOTHER R ETURN WAS FILED ON 18.08.2003 DECLARING A HIGHER INCOME OF RS 8,07,607 /- UNDER THE CAPTION 'REVISED' SHOWING AN ADDITIONAL INCOME OF RS.6,00,0 00/- UNDER THE HEAD 'OTHER SOURCES' WITH NARRATION 'CREDIT OF RS.6.00,0 00/- OFFERED FOR TAXATION FOR WONT OF PROPER PROOF. LATER, THE AO REOPENED *H E ASSESSMENT PROCEEDING U/S 147 ON THE BASIS OF INFORMATION RECE IVED FROM THE INVESTIGATION WING THAT GIFT SHOWN TO HAVE BEEN REC EIVED FROM A PERSON, 3 SMT. RIMA SADH IS NOT GENUINE GIFT AND A NOTICE U/S 148 DATED 08.03.2004 WAS ISSUED IN RESPONSE TO WHICH, THE ASSESSEE FILED A REPLY TO CONSIDER THE REVISED RETURN FILED ON 18.03.2003 AS FILED IN COMP LIANCE TO THIS NOTICE. THOUGH THE AO DID NOT ACCEPT THE REVISED RETURN AS VALID, HE CLEARLY MENTIONED IN THE ASSESSMENT ORDER AND PENALTY O RDER THAT IN THE REVISED RETURN, THE ASSESSEE (APPELLANT) SURREN DERED GIFT OF RS.6,00,000/- RECEIVED FROM SMT RIMA SADH. THE AO HAS ALSO MENTIONED THAT DURING THE ASSESSMENT PROCEEDING, HE REQUIRED HE ASSESSEE (APPELLANT) TO ESTABLISH THE GENUINENESS OF THE GIF T BUT SINCE THE ASSESSES HAD ALREADY SURRENDERED THE AMOUNT SHOWN AS GIFT, T HERE WAS NO NEED TO PROVE ITS GENUINENESS. HOWEVER, THE AO HAD NOT DISC USSED ANY EVIDENCE OR DETAILS OF MATERIAL COLLECTED BY THE INVESTIGATI ON WING THAT CAME IN HIS POSSESSION ON THE BASIS OF WHICH, HE ARRIVED TO THE FINDING THAT THE GIFT OF RS.6.00,000/- SHOWN AS RECEIVED FROM SMT. RIMA SADH WAS NOT GENUINE, EXCEPT MENTIONING ABOUT THE SURRENDER MADE BY THE A SSESSEE IN THE REVISED RETURN WHICH WAS FILED BEFORE ANY NOTICE U/ S 148 WAS ISSUED. THEREFORE IT CAN BE VERY WELL SAID THAT THE ALLEGED GIFT OF RS.6,00.000/- WAS DISCLOSED BY THE ASSESSEE BEFORE IT WAS DETECTED BY THE AO AS BEING NOT GENUINE. FROM THE DETAILS AVAILABLE ON RECORD ALSO , THERE IS NO EVIDENCE THAT THE INVESTIGATION WING CARRIED OUT ANY IN VESTIGATION, SPECIFICALLY, IN CASE OF THE ASSESSEE, WHICH FORCED HER TO MAKE SURR ENDER. HENCE, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, THE SURRENDE R MADE BY THE ASSESSEE IS VOLUNTARY. EVEN THE ADDITION OF RS.30,000/- MADE BY THE AO IN THE ASSESSMENT ORDER HOLDING THAT THE ASSESSEE HAD INCU RRED AN EXPENDITURE OF RS.30,000/- BEING 5% OF RS.6,00,000/- FOR PROCUR ING SAID GIFT, HAS BEEN DELETED IN APPEAL. THEREFORE, THE IMPUGNED PENALTY U/S 271(1)(C) WAS LEVIED BY THE AO ONLY ON AN AMOUNT WHICH WAS SURREN DERED BY THE ASSESSEE IN A REVISED RETURN THAT WAS FILED BEFORE ANY DETECTION ;IN THIS REGARD, WAS MADE BY THE AO. EVEN THERE IS NO EVIDEN CE THAT THE INVESTIGATION WING MADE ANY INVESTIGATION SPECIFICA LLY IN CASE OF THE ASSESSEE PROMPTING HER TO SURRENDER THE ALLEGED GIF T AS HER INCOME CONSIDERING THESE FACTS AND CIRCUMSTANCES OF THE CA SE, SUCH SURRENDER MADE BY THE ASSESSEE CAN BE CONSIDERED NOTHING BUT VOLUNTARY SURRENDER. 8. DURING THE HEARING OF APPEAL, IT HAS BEEN BROUGHT TO MY NOTICE THAT EXACTLY UNDER SIMILAR FACTS AND CIRCUMSTANCES AS IT HAS BEEN FOUND IN THE PRESENT CASE, THE CIT(A)-II. KANPUR IN CASE OF ANO THER ASSESSEE I.E. MR. VIVEK KUMAR AGARWAL HAS DELETED THE PENALTY VI DE HIS ORDER A. NO. CIT(A)-M/487/ITO-1(4)/2005-06 DATED 16.11.2010. IN THAT CASE ALSO, IT WAS FOUND THAT THE ASSESSEE DURING A.Y. 2000-01 HAD TAKEN A GIFT' OF RS.- 75,000/- THAT WAS EARLIER NOT DISCLOSED AS HIS INCO ME IN ORIGINAL RETURN BUT THE SAME WAS DECLARED AS HIS INCOME IN THE RETURN F ILED IN RESPONSE TO 4 NOTICE ISSUED U/S 148. IN THAT CASE ALSO N O ENQUIRY WAS CONDUCTED BY THE INVESTIGATION WING AGAINST THE ASSESSEE AND NO MATERIAL WAS BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE G IFT RECEIVED BY THE ASSESSEE WAS BOGUS GIFT. THE GIFT WAS TREATED AS BO GUS MERELY BECAUSE THE APPELLANT HAD SURRENDERED THE SAID GIFT. IT HAS ALSO BEEN BROUGHT ON RECORD BY THE ASSESSEE THAT SIMILAR ISSUE WAS INVOL VED IN HIS CASE FOR A.Y. 2001-02 WHEREIN PENALTY OF RS.75,280/- WAS IMPOSED BY THE AO WHICH IN APPEAL BEFORE THE HON'BLE ITAT, LUCKNOW VIDE O RDER DATED 15.09.2007 WAS CANCELLED AND FURTHER THE DEPARTMENT'S APPEAL A GAINST THE ORDER OF THE HON'BLE ITAT, LUCKNOW WAS DISMISSED BY THE HON'BLE JURISDICTIONAL ALLAHABAD HIGH COURT VIDE ORDER DATED 26.06.2010 ON THE GROUND THAT ORDER OF THE TRIBUNAL WAS FINDING OF FACTS AND NO S UBSTANTIAL QUESTION OF LAW WAS INVOLVED. THEREFORE, IN THE ABOVE CITED CAS E OF SRI VIVEK KUMAR AGARWAL, AFTER FOLLOWING THE ORDER OF HON'BLE ITAT LUCKNOW IN THE OWN CASE OF THAT ASSESSEE, IT HAS BEEN HELD BY THE THEN CIT(A)-LL. KANPUR THAT THE AO HAS NOT BEEN ABLE TO BRING ANY EVIDENCE ON R ECORD TO PROVE THAT THE EXPLANATION GIVEN BY THE APPELLANT IS FALSE EXP LANATION OR THE SAID GIFT WAS FAKE GIFT AND IT HAS ALSO BEEN HELD BY HIM THAT THE AO HAS NOT BEEN ABLE TO ESTABLISH WITHOUT ANY MATERIAL ON RECORD TH AT THE APPELLANT CONCEALED HIS PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME TO JUSTIFY IMPOSITION OF PENAL, U/S 271(1)(C ) OF THE ACT AND THEREFORE, DELETED THE PENALTY IN ABOVE CITED CASE. APART FROM THE ABOVE DECISION, THE LD. AR HAS ALSO CITED SOME OTHER CASE LAWS AS REFERRED IN PARA 5 OF THIS ORDER IN WHICH A LSO, PENALTY IMPOSED U/S 271(1)(C) ON SURRENDER OF GIFT WAS DELETED BY TRIBU NAL /HIGH COURT. RECENTLY IN CASE OF CIT VS. SUNIL CHAND GUPTA REPOR TED IN [2013] 40 TAXMAN.COM 307. THE HON'BLE ALLAHABAD HIGH COURT HA S CONFIRMED THE DECISION OF HONBLE ITAT AGRA DELETING THE PENALTY U/S 271(1)(C) ON SURRENDERING THE INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES' WHICH WAS EARLIER SHOWN UNDER THE HEAD 'CAPITAL GAI N' ON BOGUS SHARE TRANSACTION BECAUSE THE SURRENDER WAS MADE BEFORE I SSUANCE OF NOTICE U/S 143 AND IN THAT CASE ALSO, NO DETECTION WAS MADE BY THE AO DURING THE ASSESSMENT PROCEEDING. 9. AFTER FOLLOWING ALL THE CASE LAWS AS DIS CUSSED ABOVE IN WHICH BOGUS GIFTS / CAPITAL GAIN WAS SURRENDERED BY THE A SSESSES BEFORE ISSUANCE OF NOTICE U/S 148 OR AFTER ISSUANCE OF NOTICE U/S 1 48 WHILE FILING RETURN IN RESPONSE TO THAT NOTICE BUT BEFORE IT WAS DETECTED BY THE AO IN ANY ENQUIRY CONDUCTED BY THE AO IN CASE OF THAT ASSESS EE, IN THIS CASE ALSO AFTER FINDING FIAT THE SURRENDER OF GIFT IS VOLUNTA RY MADE BEFORE ISSUANCE OF 5 NOTICE U/S 148 AND ANY DETECTION MADE BY THE AO DUR ING ANY ENQUIRY / INVESTIGATION CONDUCTED BY HIM IN CASE OF THE ASSES SEE AS I HAVE ALREADY DISCUSSED IN PARA 7 OF THIS ORDER, IMPOSITION OF PE NALTY U/S 271(1)(C) IS ALSO NOT JUSTIFIED. IN THIS CASE ALSO, THE AO HAS NOT BE EN ABLE TO BRING ANY EVIDENCE ON RECORD TO PROVE THAT THE EXPLANATION GI VEN BY THE ASSESSEE (APPELLANT) IS FALSE EXPLANATION OR THE SAID GIFT W AS FAKE GIFT. HIS ONLY OBJECTION TO THE REVISED RETURN FILED BY THE ASSESS EE (APPELLANT) (IN WHICH THE ALLEGED GIFT WAS DECLARED AS HER INCOME) IS THA T THE SAME IS NOT VALID REVISED RETURN BUT QUESTIONING THE VALIDITY OF THE REVISED RETURN WOULD NOT DILUTE THE FACT THAT THE BOGUS NATURE OF GIFT EARLI ER SHOWN BY THE ASSESSEE IN ORIGINAL RETURN WAS NOT DETECTED BY THE AO OR EV EN BY THE INVESTIGATION WING BY CONDUCTING ANY ENQUIRY, SPECIFICALLY IN CAS E OF THE ASSESSEE HERSELF AND THIS GIFT WAS DECLARED BY THE ASSESSEE VOLUNTARILY AS HER INCOME BY FILING A REVISED RETURN BEFORE ANY NOTICE WAS ISSUED BY THE AO. THEREFORE, IN MY CONSIDERED OPINION AND FOLLOWING T HE CASE LAWS AS DISCUSSED IN PARA 8 OF THIS ORDER, THE ASSESSEE (AP PELLANT) CANNOT BE HELD GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF H ER INCOME OR CONCEALING THE PARTICULARS OF HER INCOME AFTER SHE SUO-MOTO WI THOUT ISSUANCE OF ANY NOTICE BY THE AO DECLARED THE GIFT AS HER INCOME IN A REVISED RETURN FILED BY HER ON 18.08.2003 AND HENCE, THE AO IS NOT FOUND JUSTIFIED IN IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT AND THEREFORE, I DELETE THE PENALTY OF RS.1,85,000/- IMPOSED U/S 271(1)(C) VIDE ORDER DATE D 09.03.2007 AND ACCORDINGLY, ALL THE GROUNDS FROM GROUND NOS. 1 TO 4 TAKEN IN THIS APPEAL ARE ALLOWED. 9. IN THE RESULT APPEAL IS ALLOWED. 5. FROM THE ABOVE PARAS, FROM THE ORDER OF LD.CIT(A ) IN THE CASE OF SMT. SUMAN LUNDIA, IT IS SEEN THAT HE HAS REFERRED TO A JUDGME NT OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. SUNIL CHAND G UPTA REPORTED IN 40 TAXMAN.COM 307 WHERE SIMILAR PENALTY WAS DELETED BY AGRA BENCH OF THE TRIBUNAL ON ACCOUNT OF SURRENDERING THE INCOME UNDER THE HEAD CAPITAL GAIN ON ACCOUNT OF BOGUS SHARE TRANSACTION. THE PENALTY WAS DELETED BY THE HONBLE ALLAHABAD HIGH COURT ON THIS BASIS THAT SINCE THE SURRENDER WAS MADE BEFORE ISSU ANCE OF NOTICE U/S 148 AND NO DETECTION WAS MADE BY THE AO DURING ASSESSMENT PROC EEDING, PENALTY WAS NOT JUSTIFIED. IN THE PRESENT CASE ALSO, NOTICE U/S 148 WAS ISSUED BY THE AO ON 19.11.2004 BUT ASSESSEE HAD ALREADY FILED REVISED R ETURN OF INCOME ON 18.08.2003 6 AND IN THIS REVISED RETURN, THE ASSESSEE HAS ALREAD Y INCLUDED AND SURRENDERED THE GIFTS OF RS.6 LAKH RECEIVED FROM SMT. RIMA SADH. IN THE CASE OF SISTER OF THE ASSESSEE SMT. SUMAN LUNDIA ALSO, SIMILAR GIFT OF RS .6,00,000/- WAS RECEIVED BY HER FROM SMT. REEMA SADH. HENCE, THE FACTS IN BOTH CASE S ARE SIMILAR AND THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF SUNIL CHAND GUPTA (SUPRA) ALSO SUPPORTS THE CASE OF THE ASSESSEE BECA USE IN THE PRESENT CASE ALSO, INCOME WAS SURRENDERED BY THE ASSESSEE BEFORE ISSUA NCE OF NOTICE U/S 148 OF THE ACT. HENCE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT, THE PENALTY IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A.K . GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 06/10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGI STRAR