ACIT, New Delhi V. Shri Sanjay Dalima, New Delhi

ITA 38/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58803 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTHY
• Keywords: Wrong claim; Revised return
• Section: 143(3); 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :G : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI TARVINDER SINGH KAPOOR, ACCOUNTANT MEMBER ITA NO.38/DEL/2011 ASSESSMENT YEAR : 2006-07 ACIT, CIRCLE 46 (1), ROOM NO.425A, 4 TH FLOOR, MAYUR BHAWAN, NEW DELHI. VS. SANJAY DALIMA, 2 ND FLOOR, INDRA PRAKASH BUILDING, 21, BARAKHAMBA ROAD, NEW DELHI. PAN : AADPD9438N (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. S. MOHANTHY, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 15 TH OCTOBER, 2010 FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN :- (I) DELETING THE PENALTY AMOUNTING TO RS.4,93,140/- IMPO SED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE IT ACT, 1961 IGNORING THE FACT THAT IN THE INSTANT CASE THERE WAS NO MER E REJECTION OF A CLAIM ON TECHNICAL GROUNDS, BUT IT WAS A WRONG CLAIM OF DEDUCTION BY THE ASSESSEE TO REDUCE TAX LIABIL ITY AS THE ASSESSEE DONATED TO A FOUNDATION WHICH WAS NOT APPROVED FOR THE PURPOSES OF DEDUCTION U/S 80G EVEN THOUGH THE CLAIM OF DEDUCTION WAS MADE IN THE RETURN OF INCOME AND IN THE E VENT OF BEING SCRUTINIZED, SURRENDERED THE SAID CLAIM OF DEDU CTION. (II) IGNORING THE FACT THAT THE ASSESSEE, BEING AWARE OF DONEES APPLICATION FOR REGISTRATION U/S 12AA AND FOR GRANT OF ITA NO.38/DEL/2011 2 EXEMPTION U/S 80G, MUST BE KNOWING THAT AS PER SECTION 12AA(2) OF THE IT ACT, 1961 AND RULE 11AA (6) OF THE I T RULES, 1962 THE DECISION ON THE SAID APPLICATION IS TO BE MADE BY THE CONCERNED COMMISSIONER OF INCOME TAX BEFORE THE EXPI RY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED AND IN THE EVENT OF REJECTION OF DONEES APPL ICATION, HAVING NO MALAFIDE INTENTION, THE ASSESSEE SHOULD HAVE FILED A REVISED RETURN WITHDRAWING SUCH CLAIM OF DEDUCTION WHI CH WAS NOT THE CASE HERE SINCE THE ASSESSEE WAITED FOR MORE THA N TWO YEARS TO WITHDRAW THE SAID CLAIM UNTIL HIS CASE WAS SEL ECTED FOR SCRUTINY. THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND, ADD OR S UBSTITUTE THE GROUNDS OF APPEAL. 2. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28 TH JULY, 2006SHOWING AN INCOME OF RS.2,78,69,992/-. THE IMPUGNED ASSESSMENT HAS BEEN FRAMED AT AN INCOME OF ` 293,36,834/- BY MAKING AN ADDITION OF ` 14,66,842/- ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80G OF THE ACT VIDE ORDER DATED 4 TH NOVEMBER, 2008 PASSED U/S 143(3) OF THE ACT. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80G ON ACCOUNT OF DONATIONS GIVEN BY HIM TO RAMKRISHNA DALMIA FOUNDATIO N. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 11 TH SEPTEMBER, 2008 FOLLOWING SUBMISSIONS WERE MADE BY THE ASSESSEE:- IN THE COMPUTATION OF INCOME THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.14,66,842/- U/S 80G OF THE INCOME TAX ACT, 1961 IN RESPECT OF THE DONATION GIVEN TO RAMKRISHNA DALMIA FOUNDATION PENDING GRANT OF REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961 AND EXEMPTION U/S 80G OF THE INCOME TAX AT, 1961. IT IS UNDERSTOOD THAT THE SAID REGISTRATION AND EXE MPTION HAS SINCE BEEN REJECTED. THE ASSESSEE, THEREFORE, WI THDRAW THE AFORESAID CLAIM FOR DEDUCTION U/S 80G OF THE INCOME T AX ACT, 1961. 3. THE CONCEALMENT PROCEEDINGS WAS INITIATED IN RESPEC T OF THE AFOREMENTIONED ADDITION. THE SUBMISSION OF THE ASSESSEE B EFORE THE ASSESSING OFFICER WITH REGARD TO THE CONCEALMENT PENALT Y WAS AS UNDER:- ITA NO.38/DEL/2011 3 THE ASSESSEE HAD MADE DONATIONS TO RAMKRISHNA DALMI A FOUNDATION AND HAS CLAIMED DEDUCTION U/S 80G OF THE IN COME TAX ACT, 1961 ON THE BASIS THAT THE SAID FOUNDATION HAS A PPLIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 AN D FOR GRANT OF EXEMPTION U/S 80G OF THE INCOME TAX ACT, 1961. THE SAID REGISTRATION WAS DENIED AND TILL THE TIME OF FILING OF THE RETURN THE ASSESSEE DID NOT HAVE KNOWLEDGE OF THE SAID DENIAL. ACCORDINGLY, WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS POSITION HE HAS HIMSELF OFFERED THE AFORESAID AMOUNT O F RS.14,66,842/- FOR TAXATION VIDE ITS LETTER DATED 11.9.20 08 WHICH IS APPARENT FROM THE ASSESSMENT ORDER. 2. IN VIEW OF THE ABOVE, THE ASSESSEES CLAIM FOR DED UCTION U/S 80G OF THE IT ACT, 1961 WAS BONA FIDE. IT HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME. THE DONATION HA S BEEN GIVEN BY THE ASSESSEE AND THE CLAIM HAS BEEN MADE ON THE BASIS THAT THE APPLICATIONS FOR REGISTRATION ETC. FILED BY THE DONEE WILL BE ACCEPTED. 3. IT IS, THEREFORE, REQUESTED THAT THE PROCEEDINGS INITIA TED MAY KINDLY BE DROPPED. 4. THE AFOREMENTIONED SUBMISSIONS OF THE ASSESSEE WERE NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT TH E ASSESSEE HAS WITHDRAWN THE CLAIM ONLY AFTER ISSUANCE OF STATUTORY N OTICE U/S 143(2) OF THE ACT THOUGH IT WAS INCUMBENT ON THE ASSESSEE TO FI LE TRUE AND CORRECT PARTICULARS OF INCOME IN THE ORIGINAL RETURN , WHICH THE ASSESSEE HAS FAILED TO DO. HE REFUTED THE CLAIM OF THE ASSESSEE R EGARDING NOT KNOWING ABOUT THE POSITION AND HIMSELF OFFERING THE SA ID AMOUNT FOR TAXATION ON THE GROUND THAT THE CASE OF THE ASSESSEE HAS ALREADY BEEN PICKED UP FOR SCRUTINY. THEREFORE, THE ASSESSING OFFICE R OBSERVED THAT TO THAT EXTENT THE ASSESSEE HAS FURNISHED INACCURATE PART ICULARS OF HIS INCOME WHICH ENTAILS HIM FOR LEVY OF PENALTY U/S 271( 1)(C). LD. ASSESSING OFFICER ALSO REFERRED TO THE DECISION OF HONBL E SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 (SC) AND, IN THIS MANNER, PENALTY OF ` 4,93,740/- BEING 1 00% OF THE TAX SOUGHT TO BE EVADED HAS BEEN IMPOSED. ITA NO.38/DEL/2011 4 5. THE LEVY OF PENALTY WAS CONTESTED BY THE ASSESSEE BEFO RE THE CIT (A). IN THE STATEMENT OF FACTS, IT WAS SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXT ILE PROCESSORS (SUPRA) HAS WRONGLY BEEN APPLIED TO THE FACTS OF THE C ASE. THE INCOME- TAX LIABILITY EVEN THOUGH BEING A CIVIL LIABILITY, PENALTY CANNOT BE CONSTRUED TO MEAN THAT A PENALTY IS AN AUTOMATIC CONSE QUENCE OF AN ADDITION BEING MADE TO THE INCOME OF THE ASSESSEE AND T O EXAMINE THAT WHETHER OR NOT PENALTY CAN BE VALIDLY LEVIED, THE FACTS AND CIRCUMSTANCES OF EACH CASE HAS TO BE EXAMINED IN THE LI GHT OF THE SCHEME OF THINGS ENVISAGED IN SECTION 271(1)(C) READ A LONG WITH EXPLANATION THERETO. REFERENCE WAS MADE TO THE DECI SION OF PUNE ITAT IN THE CASE KANBAY SOFTWARE (INDIA) PVT. LTD. VS. DCI T 122TTJ 721 (PUNE). IT WAS SUBMITTED THAT THE ASSESSEE DID NOT FURNI SH ANY INACCURATE PARTICULARS OF HIS INCOME BECAUSE THE CLAIM WAS MADE ON THE BASIS OF APPLICATION SUBMITTED BY THE DONEE FOR RE GISTRATION U/S 12AA OF THE ACT AND FOR EXEMPTION U/S 80G OF THE ACT . TILL IT WAS KNOWN THAT THE SAID APPLICATION HAS NOT BEEN APPROVED, THE ASSESSEE WAS FULLY JUSTIFIED AND IT CANNOT BE SAID THAT THE ASSESSEE HAS FURN ISHED INACCURATE PARTICULARS OF HIS INCOME. IT WAS ALSO SUBMI TTED THAT THE ASSESSING OFFICER HAS NOT MADE ANY INDEPENDENT INVESTIGAT ION BEFORE MAKING THE ADDITION NOR A QUERY WAS MADE IN THE COUR SE OF THE ASSESSMENT PROCEEDINGS IN RELATION TO SUCH CLAIM. ACTUA LLY THE CLAIM WAS SURRENDERED IN THE COURSE OF ASSESSMENT AND THE SAME WA S VOLUNTARILY SURRENDERED BEFORE IT WAS DETECTED OR DOU BTED BY THE ASSESSING OFFICER. IN THE SUBMISSIONS MADE BEFORE THE CIT (A) SAME SUBMISSIONS WERE REITERATED. REFERENCE WAS ALSO MADE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ATUL MOHAN BINDAL (2009) 317 ITR 1 (SC) IN WHICH THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (SUPRA) WAS EXPLAINED. THIS DECISION WAS REFERRED TO CONTEND T HAT THE DECISION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS (SUPRA) COU LD NOT BE ITA NO.38/DEL/2011 5 APPLIED TO SECTION 271(1)(C) UNLESS THE CONDITIONS MEN TIONED THEREIN DO NOT EXIST. REFERENCE WAS ALSO MADE TO THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. HA RYANA WAREHOUSING CORPORATION (2009) 314 ITR 215 (P&H) AND IT WAS CONTENDED THAT FOR LEVY OF PENALTY U/S 271(1)(C) THE REVENUE IS NOT JUSTIFIED IN RELYING ON THE JUDGEMENT UNDER A DIFFER ENT LEGISLATIVE ENACTMENT. REFERENCE WAS ALSO MADE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPR ODUCTS LTD. (2010) 322 ITR 158 (SC) IN WHICH IT HAS BEEN HELD TH AT MERE REJECTION OF A CLAIM MADE BY THE ASSESSEE DOES NOT AMOUNT TO CONCE ALMENT AND FURNISHING OF INACCURATE PARTICULARS OF HIS INCOME. E VEN WHERE WILLFUL CONCEALMENT IS CONSIDERED TO BE NOT AN ESSENTIAL INGRED IENT FOR ATTRACTING CIVIL PENALTY, IT CANNOT BE LEVIED WHERE THE ASSESSEE HAD FURNISHED NECESSARY INFORMATION AND HAS PLACED COMPLETE MATERIAL ON RECORD, ONLY FOR THE REASON THAT HIGHER ASSESSMENT HAS BE EN MADE AS COMPARED TO THE RETURNED INCOME. IT WAS SUBMITTED TH AT THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF HIS INC OME AND HIS CLAIM WAS MADE ON THE BASIS OF APPLICATIONS SUBMITTED BY THE DONEE U/S 12AA AND U/S 80G OF THE ACT AND THE ASSESSEE DID NOT KNOW THAT THE SAID APPLICATIONS OF THE DONEE HAVE BEEN REJECTED OR APPROVED. ON THESE SUBMISSIONS OF THE ASSESSEE LEARNED CIT (A) HAS RECORDE D THE FOLLOWING FINDINGS:- 9. I HAVE CONSIDERED THE CONTENTIONS OF THE APPELLANT A ND THE ORDER OF THE A.O. AND THE CASE LAWS CITED BY THE APPELL ANT. THE APPELLANT HAD DISCLOSED ALL DETAILS RELATING TO CLAIMS IN THE RETURN OF INCOME. THE APPELLANT HAD NOT CONCEALED ANY OF THE INCOME OR FILED INACCURATE PARTICULARS OF HIS INCOME. I FIN D SUPPORT FROM THE DECISION OF THE SUPREME COURT IN CIT VS. RELIANCE PETROPRODUCTS LTD. (2010) 322 ITR 158 (SC) WHICH STATES THAT MERE REJECTION OF A CLAIM MADE BY THE ASSESSEE DOES N OT AMOUNT TO CONCEALMENT AND FURNISHING OF INACCURATE PARTI CULARS OF INCOME. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT, I AM OF THE OPINION THAT PENALTY LEVIED B Y THE A.O. IS NOT JUSTIFIED AS THE A.O. HAS NOT FOUND THE EXP LANATION OFFERED BY THE APPELLANT TO BE NOT BONAFIDE AND ALL THE FACTS ITA NO.38/DEL/2011 6 RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAS BEEN DISCLOSED BY HIM. THE CASE OF DHAR MENDRA TEXTILE PROCESSORS LTD. 92008) 306 ITR 0277 (SC) HAD BEEN CONSIDERED BY SUPREME COURT IN THE CASE OF RELIANCE P ETRO PRODUCTS PVT. LTD. (2010) 322 ITR 0158 (SC). AL OTHER SUPREME COURT CASES BEFORE THE ORDER OF RELIANCE PETRO PRODUCTS (SUPRA) HAVE BEEN REVIEWED BY HONBLE SUPREME COURT. ACCORD ING TO THIS IS NOT A CASE FOR IMPOSITION OF PENALTY U/S 271(1) (C). THE PENALTY IMPOSED BY THE A.O. IS THEREFORE DELETED. 6. THE REVENUE IS AGGRIEVED, HENCE, IN APPEAL. 7. ON THE FIXED DATE OF HEARING AN APPLICATION WAS F ILED BY THE LEARNED AR OF THE ASSESSEE. HOWEVER, THE GROUNDS STATED THEREIN WAS CONSIDERED TO BE INSUFFICIENT. THEREFORE, THE REQUEST FOR ADJOURNMENT WAS REJECTED. EARLIER ALSO THIS APPEAL WAS FIXED AND T HE COUNSEL OF THE ASSESSEE HAD OBTAINED ADJOURNMENT. 8. AFTER NARRATING THE FACTS, THE LEARNED DR, RELYIN G UPON THE ASSESSMENT ORDER AS WELL AS ON THE PENALTY ORDER PLEADED THAT THE PENALTY HAS RIGHTLY BEEN IMPOSED. THE ASSESSEE DID NOT F URNISH ACCURATE PARTICULARS OF HIS INCOME. THUS, THE LEARNED ASSESSING OFFICER WAS RIGHT IN LEVYING THE PENALTY AND LEARNED CIT (A) HAS WRONGLY DELETED THE SAME. SHE SUBMITTED THAT THE CLAIM WAS WI THDRAWN BY THE ASSESSEE ONLY AFTER THE START OF THE SCRUTINY PROCEEDINGS. THE CLAIM WAS INTENTIONALLY MADE BY THE ASSESSEE TO REDUCE HIS TAX LIABILITY. THE CLAIM OF THE ASSESSEE WOULD HAVE BEEN APPROVED IF NO SCR UTINY TOOK PLACE. THEREFORE, RELYING UPON THE GROUNDS OF APPEA L, SHE SUBMITTED THAT THE PENALTY HAS WRONGLY BEEN DELETED BY THE LEA RNED CIT (A) AND HIS ORDER SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER SHOULD BE RESTORED. 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE L EARNED DR. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , PENALTY ORDER, THE STATEMENT OF FACTS FILED BEFORE THE CIT (A ), THE SUBMISSIONS ITA NO.38/DEL/2011 7 MADE BEFORE THE CIT (A) AND THE DECISION OF LEARNED CIT (A). IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT SUBMIT ALL THE PARTICULARS RELATING TO HIS CLAIM OF DEDUCTION U/ S 80G. IT IS THE CASE OF THE ASSESSEE THAT CLAIM WAS MADE BY THE ASSESSEE DURING T HE PENDENCY OF APPLICATIONS BY THE DONEE UNDER THE PROV ISIONS OF SECTIONS 12AA AND 80G OF THE ACT. THIS FACT WAS STATED BY THE ASSESSEE EVEN BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DURING THE COURSE OF PENALTY PROCEEDINGS AND DURING THE COURSE OF APPELLATE PROCEEDINGS. AT NONE OF THE STAGE S THIS CLAIM OF THE ASSESSEE HAS BEEN TURNED DOWN BY THE DEPARTMENT THAT THE CLAIM WAS MADE BY THE ASSESSEE DURING THE PENDENCY OF APPLICA TIONS BY THE DONEE BEFORE APPROPRIATE AUTHORITY FOR GRANT OF EXE MPTION U/S 12AA AND 80G OF THE ACT. IF IT IS SO, THEN, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT RIGHT IN MAKING THE CLAIM AND HAS FURNISHED IN ACCURATE PARTICULARS OF HIS INCOME. IMMEDIATELY WHEN ASSESSEE CA ME TO KNOW HE FILED A LETTER WITH THE ASSESSING OFFICER WITHDRAWIN G THE CLAIM. IT HAS ALSO BEEN THE CASE OF THE ASSESSEE THAT BEFORE ANY QUE RY WAS RAISED AGAINST THIS DISALLOWANCE, THE SAID ALLOWANCE WAS WITHDRAWN BY THE ASSESSEE BY VOLUNTARILY FILING A LETTER TO THE ASSESSIN G OFFICER THE CONTENTS OF WHICH ARE REPRODUCED IN THE ASSESSMENT ORDER , PENALTY ORDER AND THE ORDER OF THE CIT (A). LOOKING INTO T HE FACTS OF THE CASE, IT CANNOT BE SAID THAT THE PARTICULARS SUBMITTED BY THE A SSESSEE WERE WRONG. THE NAME OF THE DONEE WAS MENTIONED AND THE A MOUNT OF DONATION WAS ALSO MENTIONED. THE CLAIM WAS MADE DURIN G THE PENDENCY OF THE APPLICATION FOR GRANT OF EXEMPTION AND APPROVAL U/S 12AA AND 80G OF THE ACT. KEEPING IN VIEW ALL THESE FACTS OF THE CASE AND THE CASE LAW RELIED UPON BY THE ASSESSEE BEFORE CIT (A), WHICH HAS BEEN DISCUSSED IN DETAIL IN THE ABOVE PART OF THIS ORDE R, WE ARE OF THE OPINION THAT LEARNED CIT (A) IS RIGHT IN DELETING TH E PENALTY. WE DECLINE TO INTERFERE AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO.38/DEL/2011 8 10. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.02.20 12. SD/- SD/- [TARVINDER SINGH KAPOOR] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 29.02.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.38/DEL/2011 9 DATE OF DICTATION 27.02.2012 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 28.02.2012 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH