ACIT, Faridabad V. M/s. Crazy Developers (P) Ltd., New Delhi

ITA 4250/DEL/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1787 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHIRPA
• Keywords: Reopening of assessment; Search and seizure; Validity of assessment; Revised return
• Section: 27; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B, NEW DELHI) BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NO.4250 /DEL/2011 ASSESSMENT YEAR : 2007-08 ACIT, CIRCLE I, VS. M/S. CARZY DEVELOPERS P. LTD ., FARIDABAD C-3/260, JANAK PURI, NEW DELHI GIR / PAN:AACCC6556G (APPELLANT) (RESPONDENT) APPELLANT BY : MS. KESANG Y. SHIRPA, SR. DR RESPONDENT BY : SH. ASHISH GOEL, CA SH. PRANJAL SRIVASTAVA, AV. DATE OF HEARING : 28.10.2015 DATE OF PRONOUNCEMENT : 30.11.2015 ORDER PER KULDIP SINGH, JM: THE APPELLANT, ACIT, CENTRAL CIRCLE I, FARIDABAD ( HEREINAFTER REFERRED AS REVENUE), BY FILING THE PRESENT APPEAL, SOUGHT TO ASIDE THE IMPUGNED ORDER DATED 04.07.2011 PASSED BY LD. CIT(A) I, LUDH IANA QUA THE ASSESSMENT YEAR 2007-08, ON THE GROUNDS INTER ALIA THAT: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW, IN CANCE LLING THE PENALTY OF RS.13,46,400/- LEVIED U/S 271(1) (C) BY THE A.O. EV EN WHEN THE ASSESSEE DELIBERATELY CONCEALED ITS INCOME BY NOT D ISCLOSING HIS INCOME VOLUNTARILY PRIOR TO THE DATE OF SEARCH. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW, IN CANCELLING T HE PENALTY BY ITA NO.4250/DEL/2011 2 IGNORING THE PROVISIONS OF EXPLANATION SA OF SECTIO N 271(1)(C) OF I. T. ACT, 1961 WHICH ARE SQUARELY APPLICABLE TO THIS CAS E AND WHERE IT IS CLEARLY MENTIONED THAT INCOME DECLARED IN ANY RETUR N OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, ASSESSEE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME FOR THE PURPOSES OF IMPO SITION OF PENALTY UNDER CLAUSE (C) OF SUB - SECTION (L) OF SECTION 27 1. 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE CORPORATE/ADMINISTRA TIVE OFFICE PREMISES AS WELL AS OTHER BUSINESS PREMISES OF THE COMPANY ORRI S GROUP AT HOUSE NO.C- 3/260, JANAKPURI, NEW DELHI, AND A SURVEY U/S 133 O F THE ACT WAS ALSO CONDUCTED. THE ASSESSEE FILED RETURN OF INCOME ON 24.03.2008 DECLARING NIL INCOME AND CONSEQUENTLY NOTICE U/S 153C WAS S ERVED UPON THE ASSESSEE AND IN RESPONSE THERETO, HE HAS FILED RETURN DECLAR ING INCOME OF RS.39,76,600/- ON 05.11.2009. 3. DURING SEARCH AND SEIZURE OPERATION, IT HAS COME ON RECORD THAT BY VIRTUE OF ONE AGREEMENT TO SELL, THE ASSESSEES GRO UP HAS RECEIVED A CASH OF RS.1,15,00,000/- AGAINST SALE OF SOME LAND AT REWAR I. ON CALLING UPON HIS EXPLANATION, THE ASSESSEE SURRENDERED THE CASH OF R S.1,15,00,000/- AS UNDISCLOSED INCOME IN THE HANDS OF AFORESAID THREE COMPANIES OF ORRIS GROUP. 4. DURING ASSESSMENT PROCEEDINGS, ASSESSEE WAS CALL ED UPON TO FURNISH NECESSARY DETAILS AND TO EXPLAIN IN RESPECT OF AFOR ESAID TRANSACTION AND HAS FILED REPLY AND CLAIMED THAT AFORESAID COMPANIES HA VE SOLD THE AFORESAID LAND IN SEPTEMBER 2006 AND HAVE TAKEN THE INCOME AT RS.4 0,00,000/- IN M/S. CRAZY DEVELOPERS PVT. LTD. ON 15.03.2008 SHOWING IN THE BOOKS OF ACCOUNT AS ON 31.03.2008 AS MISCELLANEOUS INCOME WITH PROPE R NOTE IN THE BOOKS OF ACCOUNTS AND FILED ITS RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2007-08. ITA NO.4250/DEL/2011 3 FROM THE REPORT, IT HAS COME ON RECORD THAT ASSESSE E HAS NOT VOLUNTARILY SURRENDERED THE AMOUNT OF RS.40,00,000/- BUT ONLY A FTER HE WAS CORNERED BY THE SEARCH TEAM DURING SEARCH OPERATION. CONSEQUEN TLY, NOTICE U/S 271(1)(C) OF THE ACT WAS SERVED ON THE ASSESSEE WHO HAS FILED REPLY AFTER AVAILING NUMEROUS OPPORTUNITIES. PENALTY OFFICER ON THE BAS IS OF RECORD AND REPLY FURNISHED BY THE ASSESSEE, CAME TO THE CONCLUSION T HAT THE ASSESSEE HAS NO EXPLANATION FOR CONCEALING THE INCOME/FURNISHING IN ACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.40,00,000/- AND SUBSEQUE NTLY, IMPOSED MINIMUM PENALTY OF RS.13,46,400/- I.E. 100% OF THE TAX EVAD ED. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE LD. CIT(A) WHO HAS ALLOWED THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. LD. D.R. CHALLENGING THE IMPUGNED ORDER, CONTEND ED THAT SINCE THE QUANTUM IN THIS CASE HAS ALREADY BEEN CONFIRMED, HA VING NOT BEEN CHALLENGED BY THE ASSESSEE, THE REVENUE IS JUSTIFIE D IN IMPOSING THE PENALTY AND RELIED UPON THE PENALTY ORDER. 6. ON THE OTHER HAND, LD. A.R. TO REPEL THE ARGUMEN T ADDRESSED BY THE LD. D.R. RELIED UPON THE ORDER PASSED BY LD. CIT(A) AND CONTENDED INTER ALIA THAT THERE IS NO CONCEALMENT OF INCOME RATHER ASSESSEE SURRENDERED THE INCOME TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION; THAT SINCE THE SURRENDERED AMOUNT ITSELF IS NOT BEING ELIGIBLE TO TAX, THERE CANNOT BE ANY QUESTION OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND RELIED UPON THE JUDGEMENT CITED AS CIT VS SURESH CHANDRA MITTAL, 251 ITR 09 (S.C.) AND CIT VS HARH TALWAR (2011), 33 5 ITR 200 (DEL.) AND CIT VS SAS PHARMACEUTICALS (2011) 335 ITR 259 ( DEL.). ITA NO.4250/DEL/2011 4 7. THE SOLE QUESTION ARISES FOR DETERMINATION IS, AS TO WHETHER LD. CIT(A) HAS ERRED IN QUASHING THE PENALTY OF RS.13,4 6,400/- IMPOSED BY THE A.O. U/S 271(1)(C) OF THE ACT . 8. WE HAVE HEARD AUTHORIZED REPRESENTATIVES OF THE PARTIES, GONE THROUGH THE MATERIAL PLACED ON RECORD IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE AND ORDERS OF TAX AUTHORITIES BELOW. 9. UNDISPUTEDLY, DURING THE SEARCH AND SEIZURE OPER ATION CONDUCTED BY THE REVENUE ON 30.03.2008 AT THE PREMISES OF ORRIS GROUP COMPANIES AN AMOUNT OF RS.1,15,00,000/- WAS FOUND TO HAVE BEEN R ECEIVED IN CASH BY THE COMPANY OF THE ASSESSEE BY VIRTUE OF AGREEMENT TO S ELL OUT OF WHICH, ASSESSEE HAS SURRENDERED AN AMOUNT OF RS.40,00,000/ - WHICH WAS ADDED TO HIS TAXABLE INCOME; THAT IN PURSUANCE TO NOTICE U/S 153C, THE ASSESSEE FILED RETURN DECLARING INCOME OF RS.39,76,600/- ON 05.11. 2009. 10. LD. CIT(A) IN PARA 6 & 7 OF THE IMPUGNED ORDER CAME TO THE CONCLUSION THAT SINCE THE SURRENDERED AMOUNT OF RS. 40,00,000/- WAS RECEIVED BY THE ASSESSEE COMPANY IN THE FORM OF FORFEITURE O F ADVANCE AMOUNT AS SALE HAS NOT BEEN CULMINATED AND ADVANCE RECEIVED AGAINS T THE SALE OF LAND, TREATED AS FORFEITURE IN ASSESSMENT YEAR 2008-09, I T WOULD NOT CONSTITUTE TAXABLE INCOME AND, THEREFORE, THE DISCLOSURE OF T HE SAME IS MERELY AN ACT IN GOOD FAITH AND NO CONCEALMENT COULD BE ESTABLISHED . LD. CIT(A) HAS ALSO ARRIVED AT THE CONCLUSION THAT THE IMPUGNED AMOUNT OF CASH HAS BECOME INCOME ONLY ON THE BASIS OF THE STATEMENT MADE BY T HE DIRECTOR OF THE ASSESSEE COMPANY AND AN INDEPENDENT FACTUAL /LEGAL APPRECIATION OF THE FACTS OF THE CASE LEAD ONLY TO THE LOGICAL CONCLUSION THA T THERE WAS NO INCOME ON ACCOUNT OF CASH RECEIVED IN PURSUANCE OF AGREEMENT TO SELL FOR FINANCIAL YEAR ITA NO.4250/DEL/2011 5 2006-07 AND AS SUCH, THERE CANNOT BE ANY CONCEALMEN T OF THE SAME. LD. CIT(A) IN THE IMPUGNED ORDER, HAS CONCLUDED AS UNDE R: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE B ASIS UPON WHICH THE AO PROCEEDED TO IMPOSE PENALTY U/S 271(:L!)(C) AND ALSO THE ARGUMENTS OF THE AR ON THE ISSUE. IT IS APPARENT TH AT THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME FOR THE A/Y 2007-08 DECLARING NIL INCOME ON 24.03.2008 AND THE AMOUNT DISCLOSED D URING THE COURSE OF SEARCH OPERATION HAD BEEN RETURNED IN A RETURN O F INCOME FILED IN RESPONSE TO NOTICE ISSUED BY THE AO U/S 1S3C AND TH EREFORE, THE PROVISIONS OF EXPLANATION SA READ WITH S.271(1)(C) DO SEEM TO APPLY TO THE FACTS OF THE CASE. HOWEVER, THE AR OF THE AP PELLANT HAS TAKEN THE ARGUMENTS THAT THE RECEIPT OF CASH IN PURSUANCE OF AN AGREEMENT TO SELL THE LAND OF THE ASSESSEE COMPANY DID NOT AMOUN T TO GENERATION OF INCOME FOR THE A/Y 2007-08 IT HAS BEEN CLAIMED THAT WHAT WAS RECEIVED WAS MERELY 'AN ADVANCE AND THE TRANSACTION S OF SALE OF LAND TO THE BUYER DID NOT TAKE PLACE TILL DATE. THE AR H AS FILED COPIES OF ACCOUNT OF THE BALANCE SHEET, WHEREIN, THE IMPUGNED PIECE OF LAND STANDS REFLECTED IN THE STOCK-IN-TRADE OF THE COMPA NY. THIS ONLY MEANS THAT FIRST IT NEEDS TO BE DELIBERATED UPON A S TO WHETHER THE RECEIPT OF CASH IN PURSUANCE OF AGREEMENT TO SELL W OULD AMOUNT TO INCOME OR NOT. DURING THE COURSE OF APPELLATE PROCE EDINGS, THE AR WAS ASKED TO EXPLAIN AS TO HOW THE AGREEMENT TO SEL L DID NOT CULMINATE INTO TRANSACTION OF SALE FOR SO MANY YEARS AND THE AMOUNT RECEIVED AS ADVANCE ALSO REMAINED WITH THE ASSESSEE. IT WAS APP ARENT THAT THE IMPUGNED ADVANCE RECEIVED BY THE ASSESSEE COMPANY I N FACT BELONGED TO THE ASSESSEE COMPANY IN THE FORM OF FORFEITURE O F THE SAME. IT WAS ALSO SUGGESTED THAT SINCE NO EVIDENCE OF FORFEITURE OF THE SAID AMOUNT IN THE F/Y 2009-10 HAD BEEN FILED IT COULD BE EASIL Y CONCLUDED THAT THE SAID FORFEITURE ACTUALLY HAPPENED IN F/Y 2006-07 AN D SAME WAS IN THE KNOWLEDGE OF SHRI VIJAY GUPTA AND THAT IS WHY HE AG REED TO DISCLOSE THE SAME AS INCOME FOR THE F/Y 2006-07 AS ON THE DA TE OF SEARCH I.E. 13TH MARCH, 2008. THE AR IN RESPONSE TO THIS SUBMIT TED HIS ARGUMENTS THAT NEITHER THE RECEIPT OF ADVANCE NOR ITS FORFEIT URE CONSTITUTED TAXABLE INCOME AS THE RECEIPT OF ADVANCE ON ACCOUNT OF PROPOSED SALE WOULD REMAIN THE LIABILITY OF THE ASSESSEE TILL THE TRANSACTION OF SALE ACTUALLY TAKES PLACE. IT WAS SUBMITTED THAT IN THE EVENT OF FORFEITURE IN THE A/Y 2007-08 ITSELF, THE AMOUNT OF ADVANCE RECE IVED WOULD LEAD TO REDUCTION IN THE WORK-IN-PROGRESS AND AT THE TIME O F ACTUAL SALE ONLY ITA NO.4250/DEL/2011 6 THE AMOUNT OF ADVANCE RECEIVED WOULD AUTOMATICALLY BECOME THE PROFIT AND HENCE INCOME ARID THEREFORE, THE TIMING OF FORFEITURE DID NOT MATERIALLY EFFECT THE TAXABLE INCOME. THE AR PLACED RELIANCE UPON THE PROVISIONS OF 5.51 OF THE LT. ACT IN SUPPORT OF HIS ARGUMENTS. THE AR THEREFORE CONCLUDED HIS ARGUMENT THAT SINCE NO SALE ACTUALLY TOOK PLACE THEREFORE, THE ADVANCE RECEIVED IN TERMS OF A GREEMENT TO SELL DID NOT CONSTITUTE TAXABLE INCOME AND THEREFORE DISCLOS URE OF SAME DURING SEARCH OPERATION WAS ONLY MEANT TO BUY PEACE AND TH EREFORE CAN ONLY BE DESCRIBED AS VOLUNTARILY IN NATURE. 7. I AM IN AGREEMENT WITH THE ARGUMENTS OF THE AR THAT THE ADVANCE RECEIVED AGAINST SALE OF LAND EVEN IF TREAT ED AS FORFEITURE IN A/Y 2007-08 WOULD NOT CONSTITUTE TAXABLE INCOME AND THEREFORE, THE DISCLOSURE OF THE SAME IS MERELY AN ACT IN GOOD FAI TH AND NO CONCEALMENT COULD BE ESTABLISHED AS THE INCOME RETU RNED BY THE ASSESSEE COMPANY IS PURELY AN ACT TO SETTLE THE ISS UES. THE IMPUGNED AMOUNT OF CASH HAS BECOME INCOME ONLY' ON THE BASIS OF A STATEMENT MADE BY THE DIRECTOR OF THE ASSESSEE COMPANY AND AN INDEPENDENT FACTUAL/LEGAL APPRECIATION OF THE FACTS OF THE CASE LEAD ONLY TO ONE LOGICAL CONCLUSION THAT THERE WAS NO INCOME ON ACCO UNT OF CASH RECEIVED IN PURSUANCE OF AGREEMENT TO SELL FOR F/Y 2006-07 AND THEREFORE, THERE CANNOT BE ANY CONCEALMENT OF SAME. IT NEEDS TO BE UNDERSTOOD THAT TO PROVE CONCEALMENT OF INCOME FIRS TLY THE EXISTENCE OF TAXABLE INCOME WILL HAVE TO BE ESTABLISHED. IT I S CLEAR THAT THERE WAS NO INCOME ON THE BASIS OF THE FACTS OF THE CASE AND THE AMOUNT RETURNED BY THE APPELLATE COMPANY IN ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C IS ONLY INTENDED TO HONOR THE DI SCLOSURE MADE DURING THE COURSE OF SEARCH OPERATION EVEN IF THE S AME WAS NOT WARRANTED AS PER THE FACTS OF THE CASE. THE HON'BLE SUPREME COURT IN THE CASE OF ABRAHAM (C.A.) VS LT.O. (1961) 41 LT.R. 425 (SC) HAS HELD THAT PENALTY PROCEEDINGS IS PART OF MACHINERY FOR ASSESSMENT AND PENALTY PARTAKES CHARACTER OF ADDITIONAL TAX. IT SH OULD BE POSSIBLE FOR THE TAXPAYER TO QUESTION THE VALIDITY OF ASSESSMENT / RE-ASSESSMENT ON MERITS, BUT LIMITING THE CLAIM FOR RELIEF TO CANCEL LATION OF PENALTY, SINCE A VALID ASSESSMENT/RE-ASSESSMENT IS FOUNDATIO N FOR A VALID PENALTY. IN THE PRESENT CASE THE MOUNT DECLARED/ SURRENDERED FOR TAXATION BY THE ASSESSEE COMPANY IS NOT AT ALL TAXA BLE. THE SAID AMOUNT WAS TREATED AS TAXABLE INCOME BY THE ASSESS ING OFFICER JUST DUE TO THE REASON THAT THE SAME WAS DECLARED A S INCOME BY THE ITA NO.4250/DEL/2011 7 ASSESSEE COMPANY IN ITS RETURN OF INCOME FILED IN R ESPONSE TO NOTICE U/S 153C OF THE LT. ACT 1961. THE ASSESSING OFFICER HAS FAILED TO NOTICE AND BRING ON RECORD THE FACT THAT THE SAME I S NOT TAXABLE AND ACCORDINGLY IT CANNOT FORM THE BASIS FOR INITIATING / LEVYING PENALTY U/S 271 (1) (C ) OF THE LT. ACT, 1961. 8. IT WOULD ALSO BE RELEVANT TO REFER TO THE JUDGEM ENT OF HON'BLE APEX COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9(SC), WHEREIN, THE ASSESSEE HAD ORIGINALLY FILED RETURNS SHOWING MEAGER INCOME. AFTER SEARCH U/S 132 AND NOTICE FOR RE-OPEN ING, REVISED RETURNS WERE FILED SHOWING HIGHER INCOME. IN PENALT Y PROCEEDINGS UNDER SECTION 271, ASSESSEE CLAIMED THAT HE HAD OFF ERED ADDITIONAL INCOME TO PURCHASE PEACE AND AVOID LITIGATION. PENA LTY ORDERS WERE PASSED AND COMMISSIONER (APPEALS) CONFIRMED THE ORD ERS. THE TRIBUNAL HELD THAT THE DEPARTMENT HAD NOT DISCHARGE D ITS BURDEN OF PROVING CONCEALMENT AND NO PENALTY CAN BE LEVIED. T HE HIGH COURT HELD THAT NO PENALTY COULD BE LEVIED FOR CONCEALMEN T ON THE FACTS FOUND BY THE TRIBUNAL. ON FURTHER APPEAL THE SUPREM E COURT DISMISSED THE APPEALS BY THE DEPARTMENT. THE FACTS OF THE CASE CLEARLY SHOWS THAT THE ASSESS EE AGREED FOR INCLUSION OF AN ITEM AS INCOME AND THERE IS NO MATE RIAL BESIDES THE FACTUM OF DISCLOSURE BY THE ASSESSEE TO SHOW THAT T HE AMOUNT IN QUESTION CONSTITUTED INCOME MUCH LESS UNDISCLOSED I NCOME. THE ADMISSION ON PART OF THE ASSESSEE THAT THE AMOUNT R ECEIVED BELONGS TO HIM DID NOT MEAN THAT IT WAS HIS INCOME FOR THE REL EVANT YEAR. AS SUCH, I DON'T CONSIDER THIS CASE TO BE FIT FOR IMPOSITION OF PENALTY U/S 271(1)(C) AND THE SAME IS DELETED. 11. LD. CIT(A) RELIED UPON THE JUDGEMENT IN THE CAS E OF CIT VS SURESH CHANDRA MITTAL (SUPRA). HONBLE APEX COURT HAS DEC IDED THE IDENTICAL ISSUE IN THE CASE CITED AS CIT VS SURESH CHANDRA MITTAL ( SUPRA), THE OPERATIVE PART OF WHICH IS REPRODUCED AS UNDER: PENALTY CNCEALMENT OF INCOME-ASSESSEE INITIALLY FILING RETURNS WITH MEAGRE INCOME- FILING REVISED RTURNS SHOWING HIGHER INCOME AFTER SEARCH AND NOTICE FOR REOPENING ASSESSMENT, TO PURCHASE PEACE ITA NO.4250/DEL/2011 8 AND AVOID LITIGATION APPELLATE TRIBUNAL HOLDING THAT BURDEN OF PROVING CONCEALMENT NOT DISCHARGED AND PENALTY CANNOT BE LEVIEED- PROPER- INCOME TAX ACT, 1961, SS.132, 271. THE ASSESSEE HAD ORIGINALLY FILED RETURNS SHOWING MEAGER INCOME. WHEN, AFTER ACTION UNDER SECTION 132 OF TH E INCOME TAX ACT, 1961, A NOTICE UNDER SECTION 148 WAS SERVED ON HIM, HE FILED REVISED RETURNS SHOWING HIGHER INCOME. EVENTUALLY, ASSESSM ENT ORDERS WERE PASSED AND THE RETURNS SUBMITTED REGULARIZED UNDER SECTION 148. IN PENALTY PROCEEDINGS UNDER SECTION 271, THE ASSESSEE CLAIMED THAT HE HAD OFFERED ADDITIONAL INCOME TO BUY PEACE OF MIND AND AVOID LITIGATION. PENALTY ORDERS WERE PASSED AND THE COM MISSIONER (APPEALS) CONFIRMED THE ORDERS. BUT THE APPELLATE TRIBUNAL HELD THAT THE DEPARTMENT HAD NOT DISCHARGED ITS BURDEN OF PRO VING CONCEALMENT AND HAD SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH, AND THAT PENALT Y COULD NOT BE LEVIED. ON A REFERENCE, THE HIGH COURT HELD THAT N O PENALTY COULD BE LEVIED FOR CONCEALMENT (SEE (2000) 241 ITR 124). T HE DEPARTMENT PREFERRED APPEALS TO THE SUPREME COURT. THE SUPREM E COURT DISMISSED THE APPEALS HOLDING THAT NO INTERFERENCE WITH THE ORDER OF THE HIGH COURT WAS CALLED FOR. 12. THE RATIO OF JUDGEMENT CITED AS CIT VS HARISH T ALWAR (SUPRA) AND CIT VS SAS PHARMACEUTICALS (SUPRA) DELIVERED BY HONBLE JURISDICTIONAL HIGH COURT IS THAT, TO PROCEED WITH THE IMPOSITION OF PENALTY U/S 271(1 )(C), THE A.O. HAS TO PROVE THAT THERE WAS CONCEALMENT OF PAR TICULARS OF INCOME OR ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF SU CH INCOME . 13. UNDISPUTEDLY, PENALTY PROCEEDINGS AS WELL AS AS SESSMENT PROCEEDINGS ARE TO BE DECIDED INDEPENDENTLY AND THE PENALTY PRO CEEDINGS ARE NOT TO BE INFLUENCED BY THE ASSESSMENT PROCEEDINGS. IN THE IN STANT CASE, NO DOUBT, ASSESSEE HAS SURRENDERED THE INCOME OF RS.40,00,000 /- DURING SEARCH AND SEIZURE OPERATION BUT HONBLE APEX COURT IN THE JUD GEMENT CIT VS SURESH CHANDRA MITTAL (SUPRA) HELD THAT IN THIS CASE, THE ASSESSEE INITIALLY FILED ITA NO.4250/DEL/2011 9 RETURN WITH MEAGER INCOME AND SUBSEQUENTLY FILED RE VISED RETURN SHOWING HIGHER INCOME AFTER SEARCH AND SEIZURE OPERATION, F OR REOPENING OF ASSESSMENT, IN ORDER TO BUY PEACE OF MIND AND TO AV OID PROTRACTED LITIGATION, THE APPELLATE TRIBUNAL HAS RIGHTLY HELD THAT BURDEN OF PROVING CONCEALMENT INTO DISCHARGE, THE PENALTY CANNOT BE LEVIED . BUT IN THE INSTANT CASE, LD. CIT(A) HAS GONE A STEP FURTHER BY HOLDING THAT SURR ENDER OF INCOME OF RS.40,00,000/- DURING THE ASSESSMENT YEAR 2007-08 W AS IN FACT NOT GENERATED DURING THE YEAR UNDER ASSESSMENT RATHER IT BEING A FORFEITURE OF SALE AMOUNT AS INCOME FOR THE ASSESSMENT YEAR 2006-07, ASSESSEE HAS BONA FIDELY SURRENDERED THE SAME. 14. SO, AS A SEQUEL TO THE DISCUSSION MADE IN THE P RECEDING PARAGRAPHS, WE ARE OF THE CONSIDERED VIEW THAT THE A.O. HAS FAILED TO MAKE OUT THE CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME BY THE ASSESSEE, RATHER, IT WAS A CA SE OF VOLUNTARY SURRENDER OF INCOME OF RS.40,00,000/- FOR TAX PURPOSE IN ORDE R TO BUY PEACE OF MIND AND TO AVOID VEXED LITIGATION AND LD. CIT(A) HAS LE GALLY AND RIGHTLY PASSED THE IMPUGNED ORDER. FINDING NO ILLEGALITY OR PERVE RSITY IN THE IMPUGNED ORDER, WE HEREBY DISMISS THE PRESENT APPEAL FILED B Y THE REVENUE. 16. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOV., 2015. SD./- SD./- ( N. K. SAINI) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:30.11. 2015 SP ITA NO.4250/DEL/2011 10 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 26/11 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 27,27/11 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 30/11/2015 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 30/11 SR. PS/PS 7 FILE SENT TO BENCH CLERK 30/11 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER