Gurwinder Singh, New Delhi V. ITO, New Delhi

ITA 4124/DEL/2011

• Counselvise Citation: 412420114 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 12-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI G.D. AGARWAL, HONBLE VICE PRESIDENT & SHRI C.L. SETHI, JUDICIAL MEMBER ITA NO.4124/DEL/2011 ASSESSMENT YEAR: 2005-06 GURWINDER SINGH, VS. ITO, B-363, RISHI NAGAR, WARD 44(4), SHAKUR BASTI, NEW DELHI. NEW DELHI. AIBPB7943A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJ KUMAR GUPTA, CA RESPONDENT BY : MS. Y.S. KAKKAR, SR. DR ORDER PER C.L. SETHI, J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 08.08.11 PASSED BY THE LD. CIT(A) CONFIRMING THE PE NALTY OF RS. 20,910/- LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961 (THE ACT) BY THE AO FOR THE A.Y. 2005-06. 2. THE ASSESSEE HAS RAISED A GROUND THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 20,910/- LEV IED U/S 271(1)(C) BY THE AO. 3. IN THIS CASE, AN EX-PARTE ASSESSMENT U/S 144 OF THE ACT WAS MADE ON A TOTAL INCOME OF RS. 1,55,000/-, BEING THE ITA NO. 4124/D/11 2 AMOUNT INVESTED BY THE ASSESSEE IN SHARES OF NTPC. THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ASSESS MENT ORDER. THE TAX DEMANDED HAS BEEN PAID BY THE ASSES SEE. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO INITIA TED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND VI DE ORDER DATED 26.06.08, THE AO LEVIED THE PENALTY OF RS. 20 ,910/- U/S 271(1)(C) OF THE ACT. IN THE PENALTY ORDER, THE AO HAS NOT TAKEN INTO ACCOUNT THE ASSESSEES SUBMISSION SUBMIT TED ON 6.05.08 BY OBSERVING THAT THE SAID REPLY WAS SIGNED BY ONE CHARTERED ACCOUNTANT SH. RAJ KUMAR WITHOUT FILING A NY LETTER OF AUTHORIZATION FROM THE ASSESSEE IN HIS FAVOUR. SINCE THE ASSESSE HAD PAID THE ASSESSED TAX AND THERE WAS NO APPEAL FILED AGAINST THE ASSESSMENT ORDER, THE AO HAD TAKE N A VIEW THAT ASSESSEE HAS FAILED TO DECLARE HIS INCOME IN R ESPONSE TO A NOTICE ISSUED U/S 142(1) OF THE ACT AND HAS DELIB ERATELY COMMITTED DEFAULT U/S 271(1)(C) OF THE ACT. THE AO , THEREFORE, LEVIED PENALTY OF RS. 20,910/- U/S 271(1)(C) OF THE ACT. 4. ON AN APPEAL, THE LD. CIT(A) CONFIRMED THE PENAL TY BY OBSERVING AS UNDER: - 16. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND PENALTY ORDER U/S 271(1)(C) OF THE AO AND WRITTEN SUBMISSIONS OF THE ITA NO. 4124/D/11 3 APPELLANT. AN EX-PARTE ORDER WAS PASSED U/S 144 MAKING AN ADDITION OF RS. 1,55,000/- FOR MAKING INVESTMENT IN THE PUBLIC ISSUE OF NTPC. 17. AGAINST THE EX-PARTE ORDER THE APPELLANT HAS NOT PREFERRED ANY APPEAL AND THE ORDER ATTAINED FINALITY. THE TOTAL AMOUNT OF TAX DUE FROM THE APPELLANT HAS ALSO BEEN PAID. NOW IN THIS APPEAL A PLEA HAS BEEN TAKEN THAT THE INVESTMENT WAS MADE OUT OF INCOME OF THE APPELLANT AND HIS WIFE. HOWEVER, THE WIFE IS ALSO NOT ASSESSED TO TAX AND NEVER FILED HER RETURN OF INCOME. AS THE ADDITION MADE HAS BEEN ACCEPTED, THE PENALTY FOR CONCEALMENT U/S 271(1)(C) HAS RIGHTLY BEEN INITIATED BY THE ASSESSING OFFICER. A SATISFACTION TO THAT EFFECT WAS ALSO RECORDED IN THE ASSESSMENT ORDER ITSELF. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE I SUSTAIN THE PENALTY IMPOSED TO THE TUNE OF RS. 20,910/-. 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. 6. ON PERUSAL OF LD. CIT(A)S ORDER, WE FIND THAT A SSESSEES SUBMISSION WERE NARRATED BY THE LD. CIT(A) IN PARA 14 & 15 OF ITA NO. 4124/D/11 4 HIS ORDER. IN THE SUBMISSION OF THE ASSESSEE, THE ASSESSEE STATED THAT SUM OF RS. 1,55,000/- WAS INVESTED OUT OF THE PERSONAL INCOME OF RS. 75,000/- OF HIS WIFE AND INC OME OF RS. 80,000/- OF THE ASSESSEE HIMSELF. THE ASSESSEE FUR THER EXPLAINS THAT SINCE TOTAL INCOME OF THE ASSESSEE AS WELL AS HIS WIFE WAS BELOW TAXABLE LIMIT, NO RETURN WAS FILED. HE FURTHER SUBMITTED THAT NO APPEAL WAS FILED AS THE ASSESSEE WAS NOT HAVING ANY KNOWLEDGE ABOUT FILING ANY APPEAL AGAINS T THE ASSESSMENT ORDER. HE FURTHER STATED THAT ASSESSEE HAS ALREADY DEPOSITED THE ENTIRE AMOUNT OF TAX DEMANDED BY THE AO. HOWEVER, THE LD. CIT(A) HAS CONFIRMED THE PENA LTY FOR THE REASON THAT NO APPEAL WAS PREFERRED BY THE ASSESSEE AGAINST EX-PARTE ORDER AND TOTAL AMOUNT OF TAX HAS ALSO BEE N PAID BY THE ASSESSEE. THE CIT(A) FURTHER OBSERVED THAT AS ADDITION MADE HAS BEEN ACCEPTED, THE PENALTY OF CONCEALMENT HAS BEEN RIGHTLY LEVIED BY THE AO. IN THIS CASE, THE A SSESSEE MADE AN EXPLANATION THAT SUM OF RS. 1,25,000/- WAS INVESTED BY HIM AND HIS WIFE TO THE EXTENT OF RS. 80,000/- A ND RS. 75,000/- RESPECTIVELY. IT IS NOT IN DISPUTE THAT T HE INCOME OF RS. 75,000/- AND RS. 80,000/- IS NOT TAXABLE AMOUNT . THEREFORE, MERE BECAUSE HIS WIFE WAS NOT ASSESSED T O TAX AND NEVER FILED THE RETURN OF INCOME CANNOT BY ITSE LF BE A ITA NO. 4124/D/11 5 GROUND TO SAY THAT THE ASSESSEES EXPLANATION WAS N OT BONA FIDE. THE LD. CIT(A) IN HIS ORDER HAS NOWHERE STAT ED THAT THE EXPLANATION OFFERED BY THE ASSESSEE IN THE PENALTY PROCEEDINGS IS NOT BONA FIDE. IT IS WELL SETTLED T HAT MERE BECAUSE ADDITION HAS BEEN ACCEPTED THAT BY ITSELF C ANNOT BE A GROUND TO LEVY A PENALTY U/S 271(1)(C) IF THE ASSES SEE OFFERS A BONA FIDE EXPLANATION. IN THE PRESENT CASE, WE FIN D THAT ASSESSEE IS A LAYMAN AND HAS GIVEN A BONA FIDE EXPL ANATION FOR NOT FILING RETURN OF INCOME BY HIM. WE, THEREF ORE, HOLD THAT IT IS NOT THE FIT CASE FOR LEVYING PENALTY U/S 271( 1)(C) OF THE ACT. WE ACCORDINGLY DELETE THE PENALTY AFTER SETTING ASI DE THE ORDERS OF THE AUTHORITIES BELOW. THUS, THE PENALTY LEVIED BY THE AO STANDS CANCELLED. 7. IN THE RESULT, THE APPEAL FIELD BY THE ASSESSEE IS ALLOWED. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFTER THE HEARING WAS OVER ON 14.11.201 1 . SD/- SD/- (G.D. AGARWAL) (C.L. SETHI) VICE PRESIDENT JUDICIAL ME MBER DATED: 14.11.11 *KAVITA ITA NO. 4124/D/11 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR ITA NO. 4124/D/11 7