Sh. Balwant Singh, Agra V. ITO, Saharanpur

ITA 4545/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7352 (ITAT-DELHI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 22-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT KHAN
• Keywords: Gift
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-4545/DEL/2014 (ASSESSMENT YEAR-20 10-11) BALWANT SINGH, S/O-SH. DHARMA RAM, HOUSE NO.05A HIG, SHASTRI PURAM (NEAR HINDUSTAN PETROLEUM RESIDENTIAL COMPLEX), SIKANDRA, AGRA PAN-AGUPS4656C (APPELLANT) VS ITO, DEOBAND, SAHARANPUR (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. FARHAT KHAN, SR.DR. ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 29.08.2013 OF CIT(A), XVIII, NEW DELHI PERTAINING TO 2010 11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT THE NOTICE ISSUED U/S 271 (1) (C) AND ORD ER IMPOSING PENALTY OF RS.4,44,440.00 UNDER SAID SECTION ARE ILLEGAL, BAD IN LAW, AND WITHOUT JURISDICTION. 2. THAT THE CIT(A) HAS, IN VIEW OF THE FACTS AND CIRCUMSTANCE OF THE CASE, TAILED TO APPRECIATE THAT THE CLAIM OF THE APPELLAN T WAS BONAFIED AND WAS BASED ON SUPPORTING DOCUMENTS AND NO PENALTY U/S 27 1(L)(C) COULD BE SUSTAINED UNDER SUCH CIRCUMSTANCES. 3. THAT THE CIT(A) ERRED IN LAW AND THE FACTS & CI RCUMSTANCE THAT THE ADDITION IS MADE BY THE AO ON THE BASIS OF THE DIFF ERENCE OF THE OPINION AND ALSO FAILED TO APPRECIATE THE EXPLANATION GIVEN BY THE ASSESSEE 4. THAT THE PENALTY HAS BEEN LEVIED WITHOUT ANY S PECIFIC CHARGE HENCE THE SAME IS ILLEGAL, BAD IN LAW & SAME IS LIABLE TO BE SET ASIDE. 5. 'THAT THE APPELLANT HAS NEITHER CONCEALED ANY INCOME NOR HAS FILED ANY INACCURATE PARTICULARS OF INCOME AND AS SUCH THE PE NALTY IMPOSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW AND THE SAME IS LIABLE TO BE CANCELLED. 6. THAT THE EXPLANATION FILED AND THE MATERIAL AVAI LABLE ON RECORD HAS NOT BEEN PROPERLY CONSIDERED AND ILLEGALLY INTERPRETED. THE PENALTY IMPOSED CANNOT BE JUSTIFIED BY ANY MATERIAL ON RECORD. 7. THAT IN ANY CASE THE PENALTY IMPOSED IS UNJUST, ARBITRARY AND HIGHLY EXCESSIVE. DATE OF HEARING 22.06.2016 DATE OF PRONOUNCEMENT 19.08.2016 I.T.A .NO.-4545/DEL/2014 PAGE 2 OF 5 2. AT THE TIME OF HEARING AN ADJOURNMENT PETITION W AS MOVED BY AN ADVOCATE UNACCOMPANIED BY ANY POWER OF ATTORNEY. NO ONE WAS PRESENT EITHER ON BEHALF OF THE ASSESSEE OR IN SUPPORT OF THE PETITION MOVED. S INCE THE APPEAL COULD BE DECIDED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD TH E ADJOURNMENT PETITION WAS REJECTED. THE REVENUE REPRESENTED BY SR. DR, MR. F ARHAT KHAN WAS HEARD. 3. THE RELEVANT FACTS OF THE CASE AS EMANATING FROM THE RECORD ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS.4,26,630/- FROM S ALARY. IN THE JOINT ACCOUNT OF THE ASSESSEE WHICH HE HELD WITH HIS WIFE SMT. GITA SINGH IN ICICI BANK, SAHARANPUR A/C NO.019101511721 CASH DEPOSITS WERE F OUND TO HAVE BEEN MADE AS A RESULT THE CASE WAS PICKED UP FOR SCRUTINY. A FTER ISSUANCE OF NOTICE U/S 143(2) ETC., THE ASSESSEE WAS REQUIRED TO EXPLAIN THE DEPO SITS OF RS.23,37,785/- AS PER THE BANK STATEMENT OF THE ICICI FOR THE PERIOD 01.04.20 09 TO 31.03.2010. THE ASSESSEE APPEARED IN PERSON AND EXPLAINED THAT THE CASH DEPO SITS IN THE BANK ACCOUNTS WERE MADE ON OBTAINING LOANS FROM FRIENDS AND GIFTS FROM RELATIVES FOR CONSTRUCTION OF HOUSE. THE ASSESSEE WAS REQUIRED TO PRODUCE THO SE PERSONS. ADMITTEDLY THE ASSESSEE COULD PRODUCE EVIDENCE ONLY TO THE EXTENT OF RS.8,75,000/- AS THE PARTIES REFUSED TO APPEAR BEFORE THE AO. AS A RESULT OF THIS, THE REMAINING AMOUNT OF RS.14,62,785/- REMAINED UNEXPLAINED LEADING THE ASS ESSEE TO SURRENDER THE SAME. AS A RESULT OF THIS, PENALTY PROCEEDINGS WERE INITI ATED. THE ASSESSEE CONTESTED THAT THE SURRENDER WAS MADE ON THE UNDERSTANDING THAT TH ERE WOULD BE NO PENAL ACTION U/S 271(1)(C). THIS ASSERTION WAS SUPPORTED BY THE ORDER SHEET ENTRY DATED 09.04.2012 DULY SIGNED BY THE AO AS PER THE EXTRACT AT PAGE 2 OF THE PENALTY ORDER. THE SAME IS REPRODUCED HEREUNDER:- I.T.A .NO.-4545/DEL/2014 PAGE 3 OF 5 SHRI BALWANT SINGH ATTENDED AND FILED HIS WRITTEN REPLY AND SURRENDERED RS.14,62,785/- (RS.FOURTEEN LACS SIXTY TWO THOUSAND & SEVEN HUNDRED EIGHTY FIVE) PROVIDED NO PENAL ACTION U/S 271(1)(C) IS INITIATED AGAINST HIM. CASE DISCUSSED. SD/- (INCOME TAX OFFICER) SURRENDERED RS.14,62,785/- (RS.FOURTEEN LACS SIXTY TWO THOUSAND & SEVEN HUNDRED EIGHTY FIVE) PROVIDED NO PENAL ACTION UNDER SECTION 271(1)(C) IS INITIATED AGAINST ME. (IN THE HAND WRITING OF THE ASSESSEE) SD/- (BALWANT SINGH) 3.1. ACCORDINGLY RELYING UPON VARIOUS DECISIONS IT WAS SUBMITTED UNSUCCESSFULLY BEFORE THE AO THAT THE SURRENDER WAS MADE IN THE PE CULIAR FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ASSESSEE BELIEV ED THAT NO PENALTY WOULD BE IMPOSED. THE ISSUE TRAVELLED IN APPEAL BEFORE THE CIT(A). IN SUPPORT OF ITS CLAIM, DETAILED SUBMISSIONS OF THE ASSESSEE ARE FOUND RECO RDED IN THE IMPUGNED ORDER. AS A RESULT OF DISMISSAL OF HIS APPEAL, THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. THE LD.SR.DR RELIED ON THE ORDERS. 4. ON A PERUSAL OF THE ORDERS OF THE AUTHORITIES BE LOW AND CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE REPRODUCED IN T HE ORDER UNDER CHALLENGE IT IS SEEN THAT THE ASSESSEE HAVING SURRENDERED THE AMOUN T ON THE UNDERSTANDING THAT THERE WOULD BE NO PENAL ACTION AGAINST HIM REMAINED CONFIDENT THAT THE SAID BELIEF HARBOURED BY HIM WOULD BE A SUFFICIENT EXPLANATION . ADMITTEDLY THE SAID BELIEF OF THE ASSESSEE IS CONTRARY TO LAW AS THERE IS NO ESTO PPEL AGAINST LAW. THE AO HAD NO AUTHORITY TO GIVE ANY UNDERTAKING OR CONVEY ANY IMP RESSION THAT THE RIGOUROUS OF LAW WOULD NOT OPERATE TO THE SURRENDER MADE IN GOOD FAITH. ACCORDINGLY, THE ARGUMENTS THAT THE SURRENDER WAS MADE ON THE BASIS OF THE ASSERTIONS OF THE AO IN THE EYES OF LAW IS OF NO HELP. THE LAW IS CLEAR IF THE ACTION IS FOUND TO BE CONTRARY TO THE PROVISIONS OF LAW IT IS THE PROVISION OF LAW WHICH SHALL PREVAIL. THE AO I.T.A .NO.-4545/DEL/2014 PAGE 4 OF 5 ADMITTEDLY HAD NO AUTHORITY WHATSOEVER TO GIVE ANY UNDERTAKING CONTRARY TO THE PROVISIONS OF THE STATUTE AND IF AN ASSESSEE ACTS O N THE SAME THEN HE DOES SO AT HIS PERIL. THE LAW IS WELL SETTLED AND ITS RIGOROU S SHALL NOT BE KEPT IN ABEYANCE BECAUSE THE ASSESSEE BELIEVED THAT THE AO HAD THE A UTHORITY TO STATE THAT PENALTY SHALL NOT BE LEVIED. HAVING ADDRESSED THE LEGAL PO SITION, I FIND THAT IN THE PECULIAR FACTS OF THE PRESENT CASE, THE ASSESSEE HAS REMAINE D MISTAKENLY CONFIDENT THAT HAVING ACTED UPON THE STATEMENT OF THE AO, THE LAW WOULD PROTECT HIM. THUS, HE MAY NOT HAVE PUT ALL NECESSARY FACTS AND EVIDENCES IN SUPPORT OF ITS CLAIM AND MERELY RELIED ON THE WRITTEN SUBMISSIONS. IT IS SE EN THAT THE ASSESSEE ON RECORD HAS CONSISTENTLY PLEADED THAT CONSTRUCTION OF THE H OUSE WAS ASSISTED BY CONTRIBUTION FROM RELATIVES AND FRIENDS WHO HAVE NO T COME FORWARD TO GIVE EVIDENCES IN SUPPORT OF THEIR HELP. THE ASSESSEE S HELTERING UNDER THE BELIEF THAT NO PENAL ACTION WOULD BE IMPOSED MAY HAVE HESITATED I N PLACING THE EVIDENCE IN NAMING AND IDENTIFYING THE PARTIES WHO HAVE GIVEN T HE LOANS. CONSIDERING THE OVERALL FACTUAL MATRIX, I AM OF THE VIEW THAT BEREF T OF APPROPRIATE LEGAL ADVICE THE ASSESSEE MIS-DIRECTED ITS EFFORTS IN RELYING UPON A FACT WHICH IN LAW IS OF NO HELP I.E. THE AO HAD THE AUTHORITY TO ENSURE THAT PENALTY U/S 271(1)(C) WOULD NOT BE IMPOSED. ACCORDINGLY IN THE INTERESTS OF THE SUBST ANTIAL JUSTICE, I FIND THAT THE ASSESSEE MAY NOT HAVE MADE AN ALL OUT EFFORT TO SUP PORT ITS CONSISTENT CLAIM. OPPORTUNITY TO SUBSTANTIATE THE CLAIM IN THE CIRCUM STANCES, I AM OF THE VIEW IS WARRANTED ON FACTS. THE IMPUGNED ORDER IS ACCORDIN GLY SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE AO WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD. LIBERTY IS GIVEN TO THE ASSESSEE TO PRODUCE FULL FACTS AND PARTICULARS IN SUPPORT OF ITS CLAIM. I.T.A .NO.-4545/DEL/2014 PAGE 5 OF 5 IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IS NOT ABUSED BY THE ASSESSEE AND FULL AND PROPER COMPLIANCE IS MADE BEFORE THE AO. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST 2016. SD/- (DIVA SINGH ) JUDICIAL ME MBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI