ITO, Meerut V. Shri Avinash Chander Juneja, Meerut

ITA 5205/DEL/2010

• Counselvise Citation: 520520114 RSA 2010
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-10-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 23-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Assessee Lawyers: O P SAPRA; SANDEEP SAPRA S
• Keywords: Gift; Initiation of penalty proceedings; Revised return; Reason to believe
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.5205/DEL/2010 ASSESSMENT YEAR : 1999-2000 ITO, WARD 1 (1), MEERUT. VS. AVINASH CHANDER JUNEJA, 177-E, ABU LANE, MEERUT. PAN : ACJPJ3916F (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI O.P. SAPRA & SANDEEP SAPRA, ADVOCATES REVENUE BY : SHRI PIRTHI LAL, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSESSMENT YEAR 1999-2000 AGAINST THE ORDER DATED 25.08.2010 PASSED BY THE LD. CIT (A), MEERUT, DELETING THE PENALTY OF ` 4,13,000/- IMPOSED ON THE ASSESSEE U/S 271(1)(C) OF THE IT ACT. 2. THE FACTS LEADING TO THE PRESENT APPEAL, AS PER THE CO NCERNED ORDERS, ARE THAT THE ASSESSEE FILED ITS ORIGINAL RETURN O F INCOME ON 31.12.1999, DECLARING A TOTAL INCOME OF ` 3,27,950/-. THEREAFTER, ON 29.07.2004, THE ASSESSEE REVISED ITS RETURN SHOWING TOTAL INCOME OF ` 7,86,980/-. THEREIN, THE ASSESSEE SURRENDERED AN AMOUNT OF ` 4,50,000/- ON ACCOUNT OF GIFT RECEIVED ON 18.02.199 9 FROM ONE SHRI SANJAY MOHAN AGARWAL, OF PAHAR GANJ, DELHI. IN THE ORDER PASSED UNDER SECTIONS 143 (3)/148 OF THE IT ACT, THE ASSESSING OFFICE R OBSERVED THAT ITA NO.5205/DEL/2010 2 SINCE THE ASSESSEE HAD NOT DISCLOSED THE AMOUNT OF GIFT AT THE TIME OF FILING OF THE ORIGINAL RETURN OF INCOME, HE (THE ASSE SSING OFFICER) HAD REASON TO BELIEVE THAT THE ASSESSEE HAD FAILED TO DISCLOS E FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR HIS ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, DUE TO WHICH, THE ASSESSEES INCOME TO TH E TUNE OF ` 4,50,000/- HAD ESCAPED ASSESSMENT; THAT IN RESPONSE TO THE RE-OPENING NOTICE, THE ASSESSEE HAD STATED THAT THE REVISED RETURN H AD ALREADY BEEN FILED BY HIM ON 29.07.2005, WHICH BE TREATED A S A RETURN HAVING BEEN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE AC T; THAT IN RESPONSE TO NOTICES UNDER SECTIONS 143 (2) AND 142 (1) OF THE ACT, THE ASSESSEE HAD SUBMITTED THAT THE CASE HAD BEEN WRONGLY SELECTED FOR SCRUTINY BECAUSE THE ASSESSEE HAD FILED THE REVISED RETURN VOLUNTA RILY BEFORE THE ISSUANCE OF NOTICE U/S 148 OF THE ACT; AND THAT TH E ASSESSEE WAS INTIMATED THAT THE REVISED RETURN DISCLOSING SURRENDER OF THE GIFT COULD NOT BE TREATED AS A VOLUNTARY RETURN FILED BY THE ASSE SSEE. THE RE- ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF ` 7,86,980/-, VIDE ORDER DATED 08.11.2005. 3. IN THE PENALTY ORDER, THE ASSESSING OFFICER OBSERVED, INTER ALIA, THAT ON THE DATE FIXED FOR HEARING I.E., 26.12.2005 , NEITHER ANYBODY ATTENDED THE PROCEEDINGS, NOR WAS ANY WRITTEN REPLY F ILED AND SO, IT WAS IMPLIED THAT THE ASSESSEE DID NOT HAVE ANYTHING TO SA Y IN THE MATTER. IT WAS HELD THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME AND HAD FURNISHED INACCURATE PARTICULARS TH EREOF. 4. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) CANCELLED THE PENALTY LEVIED ON THE ASSESSEE. 5. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE US. ITA NO.5205/DEL/2010 3 6. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS CO NTENDED THAT THE LD. CIT (A) HAS ERRED IN CANCELLING THE PENALTY RIGHTLY IMPOSED ON THE ASSESSEE BY THE ASSESSING OFFICER; AND THAT IN DOING SO, THE LD. CIT (A) HAS IGNORED THE FACT THAT THE ASSESSEE HAD NOT DISCLO SED THE FULL FACTS IN THE ORIGINAL RETURN OF INCOME. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS STRONGLY RELIED ON THE IMPUGNED ORDER. A SYNOPSIS HAS ALSO BEEN FILED. IT HAS BEEN CONTENDED THAT THE ASSESSEE HAD FILED ITS REVISED R ETURN OF INCOME ON 29.07.2004, WHEREIN, THE AMOUNT OF ` 4,50,000/- HAD BEEN VOLUNTARILY SURRENDERED; THAT THE ADMITTED TAX LIABI LITY OF ` 2,53,670/- HAD ALSO BEEN DEPOSITED ON 28.07.2004 AS ALSO MENTIONED BY THE ASSESSING OFFICER HIMSELF IN THE RE-ASSESSMENT ORDER; THAT SINCE THE SURRENDER MADE BY THE ASSESSEE WAS UNDOUBTEDLY VOLUNTARY, THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO ANY CONCEALMEN T PENALTY; AND THAT THE LD. CIT (A) HAS CORRECTLY CANCELLED TH E PENALTY WRONGLY IMPOSED BY THE ASSESSING OFFICER. 8. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED TH E MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE FILED HIS REVISED R ETURN OF INCOME ON 29.07.2004, AT AN INCOME OF ` 7,86,980/-. COPY OF THE ACKNOWLEDGEMENT OF SUCH RETURN HAVING BEEN DULY FILE D, HAS BEEN PLACED AT PAGE 25 OF THE ASSESSEES PAPER BOOK. THE ASSESSE E HAS ALSO PLACED BEFORE US A COPY OF HIS REVISED STATEMENT O F ASSESSABLE INCOME, AT PAGES 26-27 OF THE PAPER BOOK. THE SURREN DER OF ` 4,50,000/- WAS MADE THEREIN, WITH THE FOLLOWING NARR ATION:- AMOUNT VOLUNTARILY SURRENDERED ON ACCOUNT OF GIFT FRO M SHRI SANJAY MOHAN AGARWAL IN THE NAME OF MINOR SONS VIZ., MASTER KANISHK JUNEJA ( ` 2.50 LAKH) AND MASTER AKSHAY JUNEJA ( ` 2 LAC) THOUGH NOT DECLARED IN ORIGINAL RETURN AND TO AVOID MU LTIPLICITY OF PROCEEDINGS AND TO BUY PEACE OF MIND. ITA NO.5205/DEL/2010 4 9. THE ASSESSEE HAD ALSO DEPOSITED THE ADMITTED TAX LIABI LITY OF ` 2,53,670/- ON 28.07.2004. THIS FACT HAS BEEN MENTION ED BY THE ASSESSING OFFICER HIMSELF IN THE RE-ASSESSMENT ORDER DATED 0 8.11.2005. IT WAS ON 03.06.2005 THAT THE NOTICE U/S 148 OF THE A CT WAS ISSUED TO THE ASSESSEE. THEREFORE, IT CANNOT BE DENIED THAT THE ASSESSEE HAD FILED THE REVISED RETURN OF INCOME VOLUNTARILY BEFO RE THE ISSUANCE OF THE NOTICE U/S 148 OF THE ACT. THIS FACT HAS RIGHTLY BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT (A) WHILE CANCELLING TH E PENALTY. THE LD. CIT (A) HAS ALSO CORRECTLY OBSERVED THAT THE ASSESSING OFF ICER DID NOT BRING ANYTHING ON RECORD TO SUBSTANTIATE THAT THE GIF T WAS A BOGUS GIFT. 10. BEFORE US, THE DEPARTMENT HAS NOT BEEN ABLE TO SHO W AS TO HOW THE OBSERVATIONS MADE BY THE LD. CIT (A) WHILE CANCE LLING THE PENALTY IMPOSED ON THE ASSESSEE, ARE WRONG, EITHER ON FACT, OR IN LAW. 11. IT WOULD BE APPROPRIATE TO REPRODUCE HEREUNDER, THE RELEVANT PORTION OF THE IMPUGNED ORDER:- 5. DECISION AND REASONS THEREFOR: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE AR CAREFULLY. ON THE FACTS OF THE C ASE AND IN THE LIGHT OF THE JUDGEMENTS RELIED UPON BY THE AR, THE PE NALTY UNDER SECTION 271(1)(C) IN THE CASE WAS NOT IMPOSABLE . THE RETURN OF INCOME WAS REVISED BEFORE THE ISSUANCE OF A NOTICE UNDER SECTION 148. THE A.O. HAS NOT BROUGHT ANYTHING O N RECORD TO SUBSTANTIATE THAT THE GIFT WAS A BOGUS GIFT AT ALL. THE A SSESSEE HAS OFFERED THE INCOME IN THE SHAPE OF A REVISED RETUR N AND THE NOTICE UNDER SECTION 148 WAS ISSUED BY THE A.O. ON THE BASIS OF REVISED RETURN. THE EXPLANATION THAT REVISED RETURN WAS FILED TO BUY PEACE AS THE DONOR WAS NOT COOPERATING APPEARS TO B E A BONA FIDE EXPLANATION. IT IS A COVERED ISSUE IN THE L IGHT OF JUDGEMENT OF THE HONBLE ITAT, F BENCH, DELHI IN THE CASE OF ACIT, CIRCLE 1, GHAZIABAD VS. PANKAJ GUPTA IN ITA NO.3295/DEL/2009 DATED 18.12.2009. IN FACT, THE VERY INITIATION OF PENALTY PROCEEDINGS IN THE ORDER UNDER SECTION 143 (3)/148 APPEARS TO BE WRONG, PARTICULARLY IN VIEW OF VARIOUS COURTS DECISIONS CITED BY THE AR REGARDING RECORDING OF SATI SFACTION ITA NO.5205/DEL/2010 5 BEFORE INITIATION OF PENALTY PROCEEDINGS. IN VIEW OF THE TOTALITY OF FACTS PENALTY ORDER UNDER SECTION 271 (1)(C) IS CANCE LLED. 6. IN THE RESULT, THE APPEAL IS ALLOWED. 12. IN VIEW OF THE ABOVE, FINDING NOTHING WHATSOEVER TO BE WRONG IN THE ORDER PASSED BY THE LD. CIT (A), WE HEREBY CONFIR M THE SAME. 13. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.20 12. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 12.10.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES