ITO, New Delhi V. Sh. Surinder Kumar Gupta, Delhi

ITA 4397/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3363 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 17-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Revision of order; Search and seizure; Question of law
• Section: 143(3); 5(2); 153A; 132

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO. 4397/DEL/2012 AY: 2006-07 ITO VS. SURINDER KUMA R GUPTA WARD 35(4), 109, SHRESHTHA VIHAR NEW DELHI. DELHI 110 092 PAN AAPPG1409E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.S. RANA, C IT DR RESPONDENT BY : SHRI ROHIT GARG, CA PER ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ORDER (A) THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 16.5.2012 OF LD. CIT(A) XXVII, NEW DELHI. THE GROUNDS OF APPEAL ARE AS UN DER: 1. THE ORDER OF THE CIT(A) IS BAD IN LAW AND IS AGAIN ST THE FACTS OF THE CASE. 2. THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING TH E PENALTY AMOUNTING TO RS. 2,09,78,600/- MADE BY THE ASSESSING OFFICER UND ER SECTION 271(1)(C) OF THE ACT BY NOT APPRECIATING THE FACT THAT THE DI SCLOSURE OF INCOME WAS THE RESULT OF SEARCH OPERATION ON THE ASSESSEE AND NOT VOLUNTARY. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT PROVISION OF EXPLANATION 5(1 ) & EXPLANATION 5(2) OF THE SECTION 271(1)(C) OF THE ACT ARE NOT APPLICABLE IN THIS CASE. 4. WHETHER THE DISCLOSURE MADE IN RESPONSE OF THE NOTI CE U/S 153A(1)(A) IN RESPECT OF EARLIER ASSESSMENT YEAR I.E. A.Y. 2006-0 7 OVER AND ABOVE ALREADY RETURNED INCOME AFTER THE SEARCH OPERATION HELD ON 11.1.2007 CAN BE SAID VOLUNTARY IN NATURE. 5. THE CIT(A) ERRED IN LAW AND ON FACTS BY IGNORING TH AT IF IN PURSUANT TO SEARCH OPERATION PENALTY IS NOT LEVIED FOR UNEARTHI NG OF ADDITIONAL INCOME ITA NO.4397/DEL/2012 ITO VS. SURINDER KUMAR GUPTA PAGE 2 DETECTED DURING A SEARCH, IT WOULD BE AN OPEN INCEN TIVE TO ALL TO CONCEAL THEIR INCOME TILL SUCH TIME IT IS DETECTED BY THE D EPARTMENT. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY / ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF TH E APPEAL. (B) ORIGINAL RETURN WAS FILED U/S 139(1) OF I.T. AC T (ACT FOR SHORT) ON 15.09.2006 DECLARING INCOME OF RS. 4,46,315. THE ASSESSEE BELO NGS TO M/S. J M ESTATE DEVELOPERS PVT. LTD. GROUP OF CASES AND IS A DIRECTOR IN THE S AID COMPANY. SEARCH AND SEIZURE OPERATION U/S 132(4) OF I.T. ACT WAS CONDUCTED ON 1 1.1.2007 IN THE PREMISES OF M/S. J.M ESTATE DEVELOPERS PVT. LTD. AND ITS DIRECTORS ( INCLUDING THE ASSESSEE). DURING THE SEARCH CASH AMOUNTING TO RS. 5,76,400 (I.E. RS. 4,0 4,500 + RS. 1,71,900) AND JEWELLERY VALUED AT RS. 31,09,165 (I.E. RS. 19,58,357 + RS. 1 1,50,808/-) WERE FOUND FROM THE PREMISES OF THE ASSESSEE; OUT OF WHICH CASH AMOUNTI NG TO RS. 4,50,000 WAS SEIZED WHILE NO JEWELLERY WAS SEIZED. IN A STATEMENT U/S 1 32(4) OF I.T. ACT, BY A DIRECTOR OF THE SAID COMPANY (M/S. J M ESTATE DEVELOPERS PVT. L TD.) A DISCLOSURE OF ADDITIONAL INCOME OF RS. 16 CRORES WAS VOLUNTARILY MADE ON BEH ALF OF THE DIRECTORS OF THE SAID COMPANY AND ON BEHALF OF THE RELATIVES OF THE DIREC TORS. SPECIFICALLY IN THE CASE OF THE ASSESSEE, A TOTAL DISCLOSURE OF ADDITIONAL INCOME A MOUNTING TO RS. 8,27,86,699 WAS MADE INCLUDING RS. 6,23,25,000/- FOR THIS ASSESSMEN T YEAR (I.E. FOR ASSESSMENT. YEAR 2006-07). NOTICE U/S 153A WAS ISSUED TO THE ASSESS EE IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN DECLARING INCOME OF RS. 6,27, 71,315/-WHICH IS THE TOTAL OF AFORESAID RS. 4,46,315 (INCOME AS PER ORIGINAL RETU RN) AND AFORESAID RS. 6,23,25,000/- (DISCLOSURE OF ADDITIONAL INCOME). THE AFORESAID IN COME OF RS. 6,27,71,315 AS PER RETURN U/S 153A OF I.T. ACT WAS ACCEPTED BY THE ASSESSING OFFICER AND INCOME WAS ASSESSED AT RS. 6,27,71,315/- VIDE ASSESSMENT ORDER DATED 31.12 .2008 U/S 153A RWS 143(3) OF I.T. ACT. THUS NO FURTHER ADDITION WAS MADE BY THE ASSES SING OFFICER IN AFORESAID ITA NO.4397/DEL/2012 ITO VS. SURINDER KUMAR GUPTA PAGE 3 ASSESSMENT ORDER DATED 31.12.2008 ; AND RETURNED IN COME OF RS. 6,27,71,315/- WAS ACCEPTED BY HIM. HOWEVER, THE ASSESSING OFFICER IN ITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF I.T. ACT EXPRESSING THE VIEW THAT TH E ASSESSEE HAD CONCEALED INCOME, AS THE DISCLOSURE OF ADDITIONAL INCOME OF AFORESAID RS . 6,23,25,000/- WAS THE CONSEQUENCE OF SEARCH. ORDER DATED 26.6.2009 WAS PASSED U/S 271 (1)(C) OF I.T. ACT WHEREIN PENALTY AMOUNTING TO RS. 2,09,78,595/- WAS LEVIED. AGAINST THIS ORDER DATED 26.6.2009 THE ASSESSEE FILED REVISION PETITION U/S 264 OF I.T. AC T BEFORE COMMISSIONER OF INCOME TAX (CIT FOR SHORT). VIDE ORDER DATED 10.3.2011 OF I. T. ACT, LD. CIT SET ASIDE THE AFORESAID ORDER DATED 26.6.2009 AND THE PROCEEDINGS WERE RES TORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DISPOSE OFF THE MATTER IN ACCORDANCE WITH THE PROVISIONS OF THE I.T. ACT VIZ. A VIZ JUDICIAL PRON OUNCEMENTS ON THE ISSUE, AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE. A FRESH ORDER D ATED 29.9.2011 WAS PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF I.T. ACT WHEREBY ONCE AGAIN PENALTY AMOUNTING TO AFORESAID RS. 2,09,78,595/- WAS LEVIED. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS), (CIT(A) FOR SHORT). VIDE ORDER DATED 16.5.2012, LD. CIT(A) DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. THE PRESENT APPEAL BEFORE US HAS BEEN FILED BY REVENUE AGAINST AFORESAID ORDER DATED 16.5.2012 OF LD. CIT(A). (B.1) IT IS RELEVANT TO NOTE THAT BESIDES THE DISCL OSURE OF ADDITIONAL INCOME MADE ON BEHALF OF THE ASSESSEE AS AFORESAID ; DISCLOSURE OF THE AFORESAID TOTAL AMOUNT OF RS. 16 CRORES ALSO INCLUDED DISCLOSURE OF A TOTAL AMOUNT O F RS. 3,69,11,115/- (INCLUDING RS. 3,13,85,360/- FOR ASSESSMENT YEAR 2006-07) ON BEHAL F OF MR. NEERAJ JINDAL, ANOTHER DIRECTOR OF THE SAID COMPANY (M/S. J M ESTATE DEVEL OPERS PVT. LTD ). IN SIMILAR FACTS AND CIRCUMSTANCES, THE CONCERNED ASSESSING OFFICER HAD LEVIED PENALTY U/S 271(1)(C) OF I.T. ITA NO.4397/DEL/2012 ITO VS. SURINDER KUMAR GUPTA PAGE 4 ACT, WHICH WAS DELETED BY LD. CIT(A). ON APPEAL BY REVENUE, CO-ORDINATE BENCH OF INCOME TAX APPELLATE TRIBUNAL (ITAT) DELHI UPHELD T HE ORDER OF LD. CIT(A) AND DISMISSED THE APPEAL OF REVENUE VIDE ORDER DATED 19 .8.2015 IN THE CASE OF ITO VS. NEERAJ JINDAL IN APPEAL NUMBERS 4400 & 4401/DEL/20 12 FOR ASSESSMENT. YEAR 2005-06 AND 2006-07. ON FURTHER APPEAL BY REVENUE, HON'BLE JURISDICTIONAL HIGH COURT VIDE DECISION REPORTED AT PR. CIT VS. NEERAJ JINDAL (201 7) 79 TAXMANN.COM 96(DELHI) DISMISSED THE APPEAL OF REVENUE AND DECIDED THE MAT TER IN FAVAOUR OF THAT ASSESSEE (I.E. IN FAVOUR OF MR. NEERAJ JINDAL) WHILE UPHOLDI NG THE ORDER OF ITAT. THE QUESTION OF LAW FRAMED FOR DECISION BY THE HON'BLE HIGH COURT IN THE CASE OF PR. CIT VS. NEERAJ JINDAL (SUPRA) WAS AS UNDER :- DID THE ITAT CORRECTLY INTERPRET S. 271 (1)(C) OF INCOME TAX ACT, 1961 READ TOGETHER WITH EXPLANATION 5 IN PROCEEDING TO D ELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER IN THE FIRST INSTA NCE ? (C) IN THE COURSE OF APPELLATE PROCEEDINGS IN ITAT IN THIS APPEAL THE ASSESSEE FILED A PAPER BOOK CONTAINING 52 PAGES AND ALSO FILED WRITT EN SUBMISSIONS TITLED BROAD PROPOSITIONS WHEREIN THE ASSESSEE HAS PLACED RELI ANCE ON MANY CASE LAWS PRONOUNCED IN DECIDED PRECEDENTS. ON THE OTHER HAND THE LD. CIT (DR) APPEARED FOR REVENUE ALSO FILED WRITTEN SUBMISSIONS WHEREIN RELI ANCE WAS PLACED ON CASE LAWS PRONOUNCED IN CERTAIN OTHER DECIDED PRECEDENTS. AT THE TIME OF HEARING BEFORE US THE LD. CIT(DR)SUPPORTED THE ORDER OF THE AO AND REITER ATED THE CONTENTIONS RAISED IN WRITTEN SUBMISSIONS FILED BY HIM. ON THE OTHER HAND THE LD. AR OF THE ASSESSEE PLEADED THAT THE ISSUE WAS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY ORDER OF JURISDICTIONAL ITAT IN THE CASE OF ITO VS. NEERAJ JINDAL (SUPRA) A ND BY ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. NEERAJ JINDAL (SUPRA). THE LD. AR OF ITA NO.4397/DEL/2012 ITO VS. SURINDER KUMAR GUPTA PAGE 5 THE ASSESSEE DREW OUR SPECIAL ATTENTION TO THE FACT THAT FACTS AND CIRCUMSTANCES IN THE CASE OF NEERAJ JINDAL (WHO WAS, LIKE THE ASSESSEE I N THE PRESENT APPEAL, ALSO A DIRECTOR IN M/S. J M ESTATE DEVELOPERS PVT. LTD. AND PROCEED INGS IN THE CASE OF THE PRESENT ASSESSEE AS WELL AS IN THE CASE OF NEERAJ JINDAL HA D ARISEN AS A RESULT OF SEARCH IN THE CASE OF M/S. J M ESTATE DEVELOPERS PVT. LTD. AND GR OUP CASES.) THEREFORE, HE CONTENDED THAT THE ORDERS OF JURISDICTIONAL ITAT AND OF JURIS DICTIONAL HIGH COURT IN THE CASE OF NEERAJ JINDAL SHOULD BE FOLLOWED IN THE CASE OF THE PRESENT ASSESSEE ALSO AS THE FACTS AND CIRCUMSTANCES WERE SIMILAR IN BOTH CASES. THE L D. CIT(DR) APPEARING FOR REVENUE FAILED TO DISTINGUISH THIS CASE FROM THE CASE OF NE ERAJ JINDAL ; THOUGH HE CONTENDED THAT PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) O F I.T. ACT WENT AGAINST THE ASSESSEE. (D) WE HAVE HEARD BOTH SIDES PATIENTLY AND ATTEN TIVELY. WE HAVE ALSO PERUSED THE MATERIALS ON RECORD CAREFULLY. FURTHER WE HAVE CONS IDERED THE PRECEDENTS AND CASE LAWS BROUGHT TO OUR ATTENTION, BY THE TWO SIDES. WE FIND THAT THE ORDER OF THE LD. CIT(A) IS WELL REASONED AND JUDICIOUS ORDER. WE ALSO FIND THA T THE COORDINATE BENCH OF ITAT DELHI IN THE CASE OF ITO VS. NEERAJ JINDAL (SUPRA) HAS DE CIDED THE ISSUE IN FAVOUR OF ASSESSEE IN SIMILAR FACTS AND CIRCUMSTANCES. WE FURTHER FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. NEERAJ JINDAL (SUP RA) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE IN SIMILAR FACTS AND CIRCUMSTANCES. WE MOR EOVER NOTICE THAT THE PRESENT ASSESSEE AND AFORESAID NEERAJ JINDAL ARE DIRECTORS OF THE SAME COMPANY AND THE PROCEEDINGS IN BOTH THE CASES HAS ARISEN AS A RESUL T OF SEARCH U/S 132 OF I.T. ACT IN THE GROUP CASES OF J.M. ESTATE DEVELOPERS PVT. LTD. AND ITS DIRECTORS. THE LD. CIT(DR) APPEARING FOR REVENUE HAS BEEN UNABLE TO DISTINGUIS H THE CASE OF THE ASSESSEE AND THE CASE OF THE AFORESAID NEERAJ JINDAL. THE LD. CIT(DR ) HAS ALSO BEEN UNABLE TO POINT OUT ANY INFIRMITY , ERROR OR MISTAKE IN THE ORDER OF TH E LD. CIT(A) AND HAS NOT MADE OUT THE ITA NO.4397/DEL/2012 ITO VS. SURINDER KUMAR GUPTA PAGE 6 CASE FOR ANY INTERFERENCE WITH THE ORDER OF THE LD. CIT(A). THOUGH THE LD. CIT(DR) ARGUED THAT PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF I.T. ACT WENT AGAINST THE ASSESSEE WE FIND THAT THE HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF CIT VS. NEERAJ JINDAL (SUPRA) HAD SPECIFICALLY CONSIDERED THE APPL ICABILITY OF EXPLANATION 5 TO SECTION 271(1)(C) AND HAD DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE IN SIMILAR FACTS AND CIRCUMSTANCES. IN THESE FACTS AND CIRCUMSTANCES, ; AND RESPECTFULLY FOLLOWING THE PRECEDENTS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. NEERAJ JINDAL (SUPRA) AND THE PRECEDENT OF COORDINATE BENCH OF IT AT, DELHI IN THE CASE OF ITO VS. NEERAJ JINDAL (SUPRA) WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND DECIDE THE ISSUE REGARDING LEVY OF PENALTY U/S 271(1)(C) O F I.T. ACT IN FAVOUR OF THE ASSESSEE. ACCORDINGLY THE ORDER OF LD. CIT(A) IS UPHELD AND T HE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN CO URT ON 27.4.2017. SD/- SD/- (H.S. SIDHU ) ( ANADEE NATH MISSHRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH APRIL, 2017 *VEENA* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR