ACIT, Faridabad V. Sh. Anil Kumar Gupta, New Delhi

ITA 3857/DEL/2013

• Counselvise Citation: 385720114 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: K C JAIN
• Keywords: Condonation of delay
• Section: 142(1); 132

Judgement Text

ITA NO. 3856-3857/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3856/DEL/2013 A.Y. : 200 9 - 10 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, FARIDABAD VS. SH. SUSHIL KUMAR GUPTA, 21/4672, ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002 (PAN: AAGPG2698L) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) AND AND AND AND I.T.A. NO. 3857/DEL/2013 A.Y. : 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, FARIDABAD VS. SH. ANIL KUMAR GUPTA, 21/4672, ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002 (PAN: AAHPG2966J) DEPARTMENT BY : SMT. A. MISRA, CIT(DR) ASSESSEE BY : SH. KC JAIN, ADV. ORDER ORDER ORDER ORDER PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM THESE APPEALS BY THE REVENUE EMANATES FROM THE RESPECTIVE ORDERS PASSED BY THE LD. CIT(A), (CENT RAL), GURGAON BOTH DATED 20.3.2012 RELEVANT TO ASSESSMENT YEAR 20 09-10. SINCE THE ISSUES ARE COMMON IN BOTH THE APPEALS EXC EPT THE DIFFERENCE IN AMOUNT, HENCE, WE ARE ADJUDICATING TH E APPEAL ITA NO. 3856-3857/DEL/2013 2 WITH REFERENCE TO APPEAL NO. 3856/DEL/2013, FOR TH E SAKE OF CONVENIENCE, BY A CONSOLIDATED ORDER. 2. THE GROUNDS RAISED IN ITA NO. 3856/DEL/2013) REA D AS UNDER:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 50,50,500/- IMPOSED BY THE AO U/S. 271AAA OF THE I.T. ACT, 1961 BY IGNORING THE FACT THE ASSESSEE COULD NOT LEAD ANY EVIDENCE TO ESTABLISH THAT THE CONDITION LAID DOWN IN THE SECTION TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN EARNED REMAINED NOT SATISFIED. (II) THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT TH E TIME OF HEARING. 3. THE GROUNDS RAISED IN ITA NO. 3857/DEL/2013) READ AS UNDER:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 69,00,000/- IMPOSED BY THE AO U/S. ITA NO. 3856-3857/DEL/2013 3 271AAA OF THE I.T. ACT, 1961 BY IGNORING THE FACT THE ASSESSEE COULD NOT LEAD ANY EVIDENCE TO ESTABLISH THAT THE CONDITION LAID DOWN IN THE SECTION TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN EARNED REMAINED NOT SATISFIED. (II) THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT TH E TIME OF HEARING. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE W AS SEARCHED ON 5.3.2009. RETURN OF INCOME IN RESPONS E TO NOTICE U/S. 142(1) AND 143(2) WAS FILED ON 29.9.2009 DECLA RING A TOTAL INCOME OF RS. 7,36,41,640/- WHICH WAS ACCEPTED U/S. 158B(1)(B) R.W.S. 271AAA WAS ISSUED, WHICH CULMINATED INTO PEN ALTY OF RS. 50,50,000/-. 5. AGAINST THE ABOVE, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO IN TURN ELABORATELY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, IMPUGNED PENALTY ORDER, THE ASSESSME NT ORDER AND STATEMENTS RECORDED U/S. 132(4) AND DELETED THE PENALTY OF RS. 50,50,000/-. 6. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEF ORE US. ITA NO. 3856-3857/DEL/2013 4 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. DR RELIED UPON THE PENALTY ORDER OF THE AO. ON THE OTHER HAND, LD. COUNSEL HAS PLEADED TO UPHOLD THE ORDER OF THE LD. CIT(A) AND IN SUPPORT OF HIS ARGUMENTS HE HAS FIL ED A PAPER BOOK VARIOUS DOCUMENTS INCLUDING THE COPIES OF TH E RELEVANT JUDGMENTS OF THE ITAT AND HONBLE SUPREME COURT FR OM PAGES NO. 1 TO 115, WHICH FACTS AND CIRCUMSTANCES ARE S IMILAR AND IDENTICAL WITH THAT OF THE PRESENT ASSESSEE AND A LSO BY WAY OF THESE JUDGMENTS THE ASSESSEES CASE IS ALSO COVERED . FOR THE SAKE OF BREVITY, WE ARE REFERRING HEREWITH SOME OF THE JUDGMENTS AS CITED BY THE ASSESSEE IN HIS PAPER BOO K AND CITING CONCLUSION OF THE CASES AS UNDER:- - ITA NO. 6763/MUM/2011 KANAKIA SPACES P LTD. VS . WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN THE PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAK E ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE , THE ITA NO. 3856-3857/DEL/2013 5 STATEMENT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS CONSIDERING TH E SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED. - ITAT, NAGPUR CONCRETE DEVELOPERS VS. ACIT (ITA NO. 381(NAG.) OF 2012 WHEREIN VARIOUS ITAT DECISION AND HONBLE SUPREME COURT HAVE BEEN DISCUSSED AS UNDER:- DCIT VS. PIONEER MARBLES & INTERIORS P LTD [2012] 50 SOT 571/9 TAXMANN.COM 301, HAS HELD THAT IF THE IMPUGNED TAX IS PAID BEFORE COMPLETION OF ASSESSMENT, THE CONDITION LAID DOWN UNDER SECTION 271AAA SHOULD BE TREATED AS SATISFIED. HONBLE SUPREME COURT DECISION IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI [1987] 167 ITR 471, HAS HELD THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH ITA NO. 3856-3857/DEL/2013 6 OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. THOUGH THESE OBSERVATIONS WERE GIVEN BY THE HONBLE SUPREME COURT IN RESPECT TO CONDONATION OF DELAY IN APPEAL, HOWEVER, THE SUBSTANCE OF THIS JUDGMENT CAN BE SEEN IN THE LIGHT OF THE FACTS OF THE PRESENT CASE. SUPPOSE, THE ASSESSEE TECHNICALLY COULD NOT EXPLAIN THE MANNER OF EARNING OF INCOME AND COULD NOT SUBSTANTIATE THE MANNER OF EARNING OF UNDISCLOSED INCOME BUT THE SUBSTANTIAL JUSTICE SHOULD BE DEFEATED. NOT SUBSTANTIATING THE MANNER AT THE TIME OF SEARCH IS NOTHING BUT A TECHNICAL DEFAULT. THE ASSESSEE HAS DECLARED THAT THIS IS UNDISCLOSED INCOME AND THE SAME IS DISCLOSED UNDER SECTION 132(4), SUBJECT TO TAKING THE CONDITION FOR NOT LEVYING THE ITA NO. 3856-3857/DEL/2013 7 PENALTY UNDER SECTION 271AAA ARE SATISFIED. ITAT, CUTTACK IN THE CASE OF ASHOK KUMAR SHARMA VS. DCIT [2012] 77 DTR 241 (CTK.), ON SIMILAR FACTS, THE PENALTY LEVIED BY THE AO HAS BEEN DELETED BY THE TRIBUNAL. THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAVING DISCLOSED THE CONCEALED INCOME WHILE GIVING STATEMENT UNDER SECTION 132(4) DURING THE COURSE OF SEARCH AND PAID THE TAX THEREON AND THE INCOME FROM BUSINESS WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT, THE PENALTY UNDER SECTION 271AAA IS NOT LEVIABLE. WHILE DOING SO, THE TRIBUNAL HAS FURTHER HELD THAT THE CASE OF THE ASSESSEE FALLS WITHIN THE PURVIEW OF SUB-SECTION (2) OF SECTION 271AAA. ACCORDINGLY, THE PENALTY IS NOT LEVIABLE. 7.1 FROM THE PERUSAL OF THE ABOVE, IT IS CLEARLY ES TABLISHED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE AFORESAI D DECISIONS ITA NO. 3856-3857/DEL/2013 8 AND REVENUE HAS NOT BROUGHT ANY CONTRARY DECISION T HERETO. 7.2 WE ALSO FIND THAT THE LD. CIT(A) HAS CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, THE IMPUGNED PENALTY O RDER, THE ASSESSMENT ORDER AND STATEMENTS RECORDED U/S. 132(4 ). HE FOUND THAT IT IS THE ASSESSEES CONTENTION THAT I N THE COURSE OF STATEMENT U/S 132(4) THE AMOUNT OF RS. 4,65,00,000/ - WAS SURRENDERED WHICH WAS ON BASIS OF A NEVLA SUPARI NO TEBOOK SEIZED AS A-12 PAGES 1-4, WHICH WAS ACCEPTED BY THE AO. AS REGARDS RS. 40,00,000/- COMPRISING OF RS. 20 LACS S URRENDERED ON ACCOUNT OF FURNITURE AND FIXTURES AND RS.20 LAKH S ON ACCOUNT OF MISC. INCOME, THE ASSESSEE SUBMITS THAT THE EXPL ANATIONS OFFERED HAD ALSO BEEN ACCEPTED AS EVIDENT FROM THE ASSESSMENT ORDER. HE ALSO FOUND THAT THE ASSESSEE HAS STRONGLY ARGUED THAT THE AO HAD ACCEPTED THE EXPLAN ATIONS OFFERED. HE DRAWN HIS ATTENTION TO PARAS 10.5 AND 11.3 OF THE ASSESSMENT ORDER, REPRODUCED BELOW FOR FACILITATE R EADY REFERENCE. 10.5 IN THE ABSENCE OF ANY FURTHER CORROBORATIVE ADVERSE MATERIAL, THE CONTENTIONS OF THE ASSESSEE REGARDING THE SAID SURRENDER OF RS. 4,65,00,000/- I S ACCEPTED. ITA NO. 3856-3857/DEL/2013 9 11.3 IN THE ABSENCE OF ANY FURTHER CORROBORATIVE ADVERSE MATERIAL, THE CONTENTIONS OF THE ASSESSEE REGARDING THE SAID SURRENDER OF RS. 40,00,000/- IS ACCEPTED. 7.3 HOWEVER ON THE SAME LINES, AO WRITES AT PARA 10.6 AND 11.4 AS UNDER:- 10.6 HOWEVER, I AM SATISFIED THAT THE ASSESSE IS LIABLE FOR PENAL PROCEEDINGS IN TERMS OF SECTION 271AAA OF THE ACT IN RESPECT OF THE SURRENDER OF RS . 4.65 CRORES, FOR WHICH NOTICE U/S 274 IS BEING ISSU ED SEPARATELY. 11.5 HOWEVER, I AM SATISFIED THAT THE ASSESSE IS LI ABLE FOR PENAL PROCEEDINGS IN TERMS OF SECTION 271AAA OF THE ACT IN RESPECT OF THE SURRENDER OF RS. 40,00,00 0/ CRORES, FOR WHICH NOTICE U/S 274 IS BEING ISSUED SEPARATELY. 7.4 WE ALSO FIND THAT LD. CIT(A) FOUND ON A READIN G OF THE PARAS ABOVE, THERE IS A CLEAR DICHOTOMY. ON ONE HAN D THE AO IN THE ASSESSMENT ORDER HAS ADMITTEDLY ACCEPTED THE CO NTENTIONS OF THE ASSESSEE AND HE HAS ALSO ADMITTEDLY NOT BEEN ABLE TO LAY ITA NO. 3856-3857/DEL/2013 10 HANDS ON ANY OTHER ADDITIONAL MATERIAL WHICH WOULD BE ADVERSE IN NATURE SO AS TO REBUT THE CLAIM OF THE ASSESSEE THAT THE MANNER OF EARNING THE INCOMES HAVE BEEN SUBSTANTIAT ED. NONETHELESS IN THE VERY FOLLOWING PARAGRAPH HE HAS HOWEVER INITIATE PENALTY, RECORDING 'SATISFACTION'. THE AMO UNT OF RS. 4,65,00,000/- HAD BEEN STATED TO HAVE BEEN EARNED F ROM COMMISSION THROUGH TRANSACTION ON VARIOUS LAND AND PROPERTY DEAL AS PER THE SEIZED NEVLA SUPARI NOTEBOOK FROM T HE BEDROOM OF THE ASSESSEE. THIS REPLY HAD BEEN FURNISHED BY T HE ASSESSEE TO THE QUESTION FOR SUBSTANTIATING THE MANNER OF EA RNING THE SAME. THIS REPLY WAS AGAIN REITERATED IN QUESTION N O. 8 WHEN ASKED IF THE ASSESSEE WANTED TO SAY ANYTHING MORE. NO FURTHER QUESTION WAS ASKED BY THE SEARCH PARTY AND DURING A SSESSMENT PROCEEDINGS AS EVIDENT FROM THE PARAS QUOTED ABOVE, THE CONTENTIONS OF THE ASSESSEE WHICH WAS BASED ON THE STATEMENT RECORDED STANDS ACCEPTED BY THE AD. THE ASSESSEE FU RTHER CLARIFIED THAT THE ADVANCES WERE RECEIVED BACK IN C ASH, AHD NOT CHEQUE AS ALLEGED. WE FIND THAT LD. CIT(A) FURTHER OBSERVED THAT THE AO IN THE ASSESSMENT ORDER AT PAGE 2 PARA 6 HAS ALSO RECORDED THE FOLLOWING:- ITA NO. 3856-3857/DEL/2013 11 6. THE REGULAR BOOKS OF ACCOUNTS, VIZ THE CASH BOOK, THE LEDGER, THE BANK ACCOUNT STATEMENTS, WERE PRODUCED BY THE ASSESSEE WHICH WERE VERIFIED AND EXAMINED VIS-A-VIS THE FINDINGS OF THE SEARCH (CASH FOUND, JEWELLERY FOUND, IMMOVABLE PROPERTY FOUND, THE DIARY/ LOOSE SHEETS FOUND AND FACTS EMERGING OUT OF THE STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT) AND THE FINAL FINANCIAL STATEMENT FILED BY THE ASSESSEE WITH THE RETURN OF INCOME. 7.5 AS PER LD. CIT(A)S OBSERVATION, THE AO HAS AC CEPTED THE EXPLANATION AS NO FURTHER CORROBORATIVE ADVERSE MAT ERIAL WAS IN THE POSSESSION OF THE AO. THE BOOKS OF ACCOUNTS STA NDS VETTED. IN OTHER WORDS, THE AO WAS REQUIRED TO FORM AN OPIN ION AND FURTHER IT MUST BE REFLECTED IN SUBSTANCE FOR INITI ATION OF PENALTY PROCEEDINGS. HOWEVER WHEN THE CONTENTIONS OF THE AS SESSEE STANDS ACCEPTED AS IS IN THIS SITUATION, IT IS NOT UNDERSTOOD HOW THE ASSESSEE IS EXPECTED TO FURTHER SUBSTANTIATE TH E MANNER OF DERIVING THE INCOME SURRENDERED. IT IS ALSO NOT A C ASE WHERE SPECIFIC QUESTIONS WERE RAISED ON THE ISSUE WHICH C OULD NOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE. HOWEVER, HE PROCEEDED TO INITIATE PENALTY U/S 271AAA. THE AO AF TER ACCEPTING THE CONTENTIONS/SURRENDER OF THE ASSESSEE HAS THEREFORE ERRED IN INITIATING THE PENALTY AND CONSE QUENTLY LEVYING THE PENALTY U/S 271AAA. THE OVERT ACTION OF THE AO CLEARLY REVEALED THAT THE MANNER OF HAVING EARNED T HE INCOME WAS ACCEPTED. ASSESSEE HAS HONOURED THE SURRENDER M ADE U/S 132(4) AND PAID THE TAXES THEREON BEING PART OF THE TOTAL ITA NO. 3856-3857/DEL/2013 12 SURRENDER, WHICH IS NOT IN DISPUTE. THE POSITION IS ALIKE IN RESPECT OF THE 'SURRENDER ON ACCOUNT OF FURNITURE A ND FIXTURES OF RS.20,00,000/- AND ON ACCOUNT OF MISC. INCOME OF RS.20,00,000/-. WE FIND THAT IN VIEW OF THE DISCUS SION ABOVE, LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO DELETE T HE PENALTY LEVIED OF RS. 50,50,000/-. 7.6 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS RELIED UPON AND RESPECTFULLY FOLLOWING T HE SAME, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DECIDED THE ISSUE AGAINST THE REVENUE. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE S TAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/8/2014. SD/- SD/- [ [[ [G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 14/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES