M/s. Vivek Gyan Uday Foundation, New Delhi V. ADIT(E), New Delhi

ITA 530/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2704 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 20-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Maximum Marginal Rate; Reasonable cause; Wrong claim
• Section: 133(6); 12A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC -1, NEW DELHI BEFORE SRI S.V.MEHROTRA, AM ITA NO. 530/DEL./2014 : A SSTT. YEAR : 2008-09 VIVEK GYAN UDAY FOUNDATION 10/4, EAST PUNJABI BAGH NEW DELHI VS ADIT(E) TRUST WARD-IV NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAATV6458P APPELLANT BY : SH. RAMESH G OYAL, CA RESPONDENT BY : SH. S.K. JAI N, SR. DR DATE OF HEARING : 07.10.2015 DATE OF PRONOUNCEMENT : 05.01.2016 ORDER PER S.V.MEHROTRA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 23.10.2013 OF THE LD. CIT(A)-XXI, NEW DELHI. 2. AS PER THE REPORT OF REGISTRY, THIS APPEAL I S TIME BARRED BY 32 DAYS. THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DE LAY WHEREIN IT IS STATED AS UNDER : THE OFFICE PREMISES OF THE SOCIETY AT 10/4, EAST P UNJABI BAGH, NEW DELHI-110026 BELONG TO MR. NAND KISHORE GARG, PRESI DENT OF THE SOCIETY WHO ALSO CONDUCTS HIS PERSONAL ACTIVITIES F ROM THAT OFFICE PREMISES. ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 2 DURING THE PERIOD OF LAST WEEK OF OCTOBER, 2013, WH EN THE ORDER WAS SENT BY THE OFFICE OF CIT(A), VERY HECTIC ACTIVITIE S WERE GOING ON AT THE OFFICE AND LOT MANY PEOPLE WERE GATHERING AT THAT P LACE AS MR. NAND KISHORE GARG WAS ONE OF THE CANDIDATES CONTESTING E LECTIONS TO DELHI ASSEMBLY HELD IN DECEMBER, 2013. DURING THAT TIME, THE ORDER SENT BY THE OFFICE OF C IT(A) THROUGH REGISTERED POST/SPEED POST WAS RECEIVED BY SOME UNC ONCERNED PERSON WHO COULD NOT BRING IT TO THE NOTICE OF MR. GARG AT THAT TIME. THE ENVELOPE GOT MIXED UP WITH ELECTION MATERIAL. WHEN THE NOTICE FOR RECOVERY OF DUES WAS RECEIVED F ROM THE DEPARTMENT IN SECOND WEEK OF JANUARY 2014, ENQUIRY WAS MADE BY THE SOCIETY AT THE OFFICE OF CIT(A) AND AT THAT POINT O F TIME IT LEARNT ABOUT THE SAID ORDER. THEREFORE THE ENVELOPE CONTAINING T HE ORDER WAS SEARCHED AT THE OFFICE AND GOT LOCATED. 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT IN VIEW OF THE REASONS STATED IN THE PETITION, REPRODUCED ABOVE, T HE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM FILING THE APPEAL WITHIN TIME AND, THEREFORE, WE CONDONE THE DELAY IN FILING THE APPEAL AND PROCEED TO DECID E THE APPEAL ON MERITS. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL -: 1. THE LEARNED C.I.T.(A) ERRED ON FACTS AND UNDER THE LAW IN SUSTAINING THE ACTION OF A.O. IN IMPOSING PENALTY O F RS. 1,85,400/- U/S 271(1)(C) OF THE INCOME TAX ACT, 196 1. VARIOUS OBSERVATIONS MADE BY THE LEARNED C.I.T.(A) WHILE SU STAINING THE PENALTY IMPOSED ARE ARBITRARY, UNJUST AND ARE NOT L EGALLY ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 3 TENABLE. THE FACTS CIRCUMSTANCES AND LEGAL POSITION AS SUBMITTED WERE NOT PROPERLY APPRECIATED. 2. THE LEARNED C.I.T.(A) ERRED ON FACTS AND UNDER THE LAW IN SUSTAINING THE ACTION OF A.O. IN IMPOSING SAID PENA LTY U/S 271(1)(C) AND NOT PROPERLY APPRECIATING THE SURREND ER OF CORPUS DONATION MADE BYTHE ASSESSEE DURING ASSESSMENT TO B UY PEACE AND TO AVOID LITIGATION. THE SURRENDER WAS MADE AS THE ASSESSEE WAS NOT ABLE TO SUBMIT THE DOCUMENTS FROM THE CONCE RNED DONOR AND ALSO COULD NOT ENSURE HIS PERSONAL ATTENDANCE D URING ASSESSMENT PROCEEDINGS. VARIOUS OBSERVATIONS MADE B Y THE LEARNED C.I.T.(A) WHILE SUSTAINING THE PENALTY IMPO SED ARE ARBITRARY, UNJUST AND ARE NOT LEGALLY TENABLE. THE FACTS, CIRCUMSTANCES AND LEGAL POSITION AS SUBMITTED WERE NOT CORRECTLY APPRECIATED. 4 . BRIEF FACTS APROPOS THIS ISSUE ARE THAT ASSESSEE, R EGISTERED U/S 12A OF THE ACT VIDE ORDER DATED 26 OCTOBER, 2004 NO. DIT(E)/20 04-05/V-596/04/980 FILED ITS RETURN SHOWING NIL INCOME ACCOMPANIED WITH AUDI T REPORT IN FORM NO. 10B AND FORM NO. 10 FOR ACCUMULATION U/S 11(2) OF IT A CT, 1961. THE ASSESSING OFFICER EXAMINED THE CLAIM OF CORPUS DONATION / LAN D AND BUILDING FUND AGGREGATING TO RS. 46,58,000/- AND CORPUS FUND RECE IPT DURING THE YEAR OF RS. 22,000/-. THE ASSESSEE SUBMITTED LIST OF CORPUS DO NORS OF RS. 46,58,000/- AND ALSO SUBMITTED THE EVIDENCE FOR IT BEING CORPUS DON ATIONS. HOWEVER, AS REGARDS THE CORPUS DONATION FROM MR. RAJINDER SINGH, NO CON FIRMATION WAS FILED IN COURSE OF ASSESSMENT PROCEEDINGS. AS NO CONFIRMATIO N WAS FILED, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE MR. RAJIND ER SINGH BY 21 ST DECEMBER, ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 4 2010. ON 21 ST DECEMBER, 2010 THE ASSESSEE APPEARED AND FILED FOL LOWING REPLY : FURTHER TO OUR LETTER DATED 15.12.2010. THE ASSESS EE HAS MADE AND IS STILL MAKING ALL POSSIBLE EFFORTS TO GET THE REQUIRED INFORMATION FROM MR. RAJINDER SINGH AND TO ENSURE H IS PERSONAL ATTENDANCE. THE ASSESSMENT PROCEEDINGS ARE PRESENTL Y AT THE FAG END AND NOT MUCH TIME IS LEFT FOR ITS STATUTORY COM PLETION WHICH IS 31.12.2010. IT IS SEEMING UNLIKELY THAT THE INFORMA TION AND PERSONAL ATTENDANCE OF MR. RAJINDER SINGH COULD BE ARRANGED WITH IN THE LEFT OVER TIME. MORE SO, TO AVOID ANY L EGAL CONFRONTATION AND TO BY PEACE AND HARMONY, THE ASSE SSEE WISH TO SURRENDER THE AMOUNT OF CORPUS DONATION OF RS. 6,00 ,000/- RECEIVED FROM MR. RAJINDER SINGH. PLEASE ACCEPT THE SAME. 5. THE ASSESSING OFFICER CONCLUDED THAT THE ASSES SEE WAS NOT ABLE TO PROVE THE IDENTITY OF INDIVIDUAL FROM WHOM RS. 6,00,000/- HAD BEEN CREDITED TO THE ACCOUNT OF THE ASSESSEE AS NO CONFIRMATION HAD BEEN FILED FOR THE SAME. HE FURTHER OBSERVED THAT SINCE NO CONFIRMATION OF RS. 22,000/- FOR CORPUS FUND HAD BEEN FILED, THEREFORE, IT WAS NOT POSSIBLE TO ESTAB LISH THE IDENTITY OF CONTRIBUTORS OF RS. 22,000/-. HE, ACCORDINGLY, INVOKED SECTION 115BBC AND TAXED THE SUM OF RS. 6,22,000/- AT MAXIMUM MARGINAL RATE. THE ASS ESSING OFFICER INITIATED PENALTY PROCEEDINGS AND, AFTER CONSIDERING VARIOUS CASE LAWS ON THE ISSUE OF ONUS BEING ON ASSESSEE TO SUBSTANTIATE ITS CLAIM, L EVIED THE PENALTY OF RS. 1,85,400/- FOR FURNISHING INACCURATE PARTICULARS OF ITS INCOME. LD. CIT(A) CONFIRMED THE PENALTY. ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 5 6. LD. COUNSEL SUBMITTED THAT THE CORPUS FUND D ONATION WAS RECEIVED THROUGH ACCOUNT PAYEE CHEQUE AND ALL DETAILS WERE SUBMITTED BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT INSPITE OF BEST EFFORTS OF ASSESSEE, THE CONFIRMATION COULD NOT BE FILED AS DONOR WAS NOT AVAILABLE AT TH E GIVEN ADDRESS. HE POINTED OUT THAT ASSESSEE HAD GIVEN ADDRESS BEFORE THE AO V IDE ITS LETTER DATED 15.12.2010 CONTAINED AT PAGE NO. 18 OF PAPER BOOK, AND FURTHER, VIDE LETTER DATED 21.12.2010, CONTAINED AT PAGE NO. 17 OF PAPE R BOOK, SURRENDERED THE AMOUNT TO AVOID ANY LEGAL CONFRONTATION AND TO BUY PEACE AND HARMONY. THIS WAS ACCEPTED BY AO LD. COUNSEL RELIED ON FOLLOWING DECISIONS IN SUPPORT OF ITS CONTENTION THAT WHEN ASSESSEE HAD FURNISHED ALL THE NECESSARY DETAILS BEFORE AO AND EXPLANATION OFFERED BY ASSESSEE WAS BONA FID E, THEN NO PENALTY IS LEVIABLE (A) CIT VS. S. DHANABAL [2009] 309 ITR 26 8 (DELHI) (B) CIT VS. SHAHABAD CO-OP. SUGAR MILLS LTD. [2010] 322 ITR 73 (P&H) (C) CIT VS. ASHIM KUMAR AGARWAL & ANOTHER, 275 ITR 48 (JHARKHAN D) (D) CIT VS. S D RICE MILLS 275 ITR 206 (P&H) (E) K C BUILDERS VS. A SSTT. CIT 265 ITR 562 (SC) (F) SPS STEEL & POWER LTD. ITA NO. 1391 & 1414 /KOL/2011. 6. LD. DR RELIED ON THE ORDER OF CIT(A). 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND HAVE PERUSED THE RECORD OF THE APPEAL. THE FACTS ARE NOT DISPUTED. THE ONLY ISSUE FOR CONSIDERATION IS WHETHER THE ASSESSEES CLAIM WAS B ONA FIDE OR NOT. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFICER HAD CA LLED FOR THE DETAILS OF CORPUS DONATIONS AGGREGATING TO RS. 46,58,000/- OUT OF WHI CH THE DISPUTE CENTERED ONLY TO RS. 6,00,000/-. ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 6 8. AS REGARDS THE SUM OF RS. 6,00,000/- RECEIV ED BY ASSESSEE, THE ASSESSEE HAD GIVEN THE DETAILS OF RAJINDER SINGH VIDE LETTER DATED 15.12.2010 ( PAGE 18 OF PAPER BOOK) ON RECORD AND HAD FAIRLY ADMITTED VI DE LETTER DATED 21.12.2010 (PAGE 17 OF PAPER BOOK ) THAT ASSESSEE WAS NOT IN A POSITION TO OBTAIN THE CONFIRMATION AS THE ASSESSMENT PROCEEDINGS WERE AT THE FAG END AND NOT MUCH TIME WAS LEFT FOR COMPLETION OF ASSESSMENT BY 31.12 .2010. AFTER GETTING DETAILS THE ASSESSING OFFICER COULD OBTAIN INFORMATION U/S 133(6) BUT THAT WAS NOT DONE, PROBABLY BECAUSE VERY SHORT TIME WAS LEFT FOR COMPL ETION OF ASSESSMENT AND, ADVERSE CONCLUSION WAS DRAWN BY HIM THAT ASSESSEE H AD FURNISHED INACCURATE PARTICULARS OF INCOME. CONSIDERING THE SHORTAGE OF TIME LEFT WITH THE ASSESSEE, THE BONA FIDE OF ASSESSEE IN CONCEDING THE CORPUS D ONATION AS GENERAL DONATION CANNOT BE DOUBTED. THE ASSESSEES EXPLANATION WAS N OT FOUND FALSE BY ASSESSING OFFICER. THE ASSESSEE HAD FURNISHED ALL NECESSARY D ETAILS IN REGARD TO THE INDIVIDUAL. IT IS NOT DISPUTED THAT AMOUNT WAS RECE IVED BY ACCOUNT PAYEE CHEQUE AND, THEREFORE, AO COULD CALL FOR INFORMATIO N FROM BANK ALSO. 9. UNDER SUCH CIRCUMSTANCES, THE OBSERVATIONS OF LD. CIT(A) THAT ASSESSEE MADE A FALSE CLAIM CANNOT BE SUSTAINED. I, THEREFO RE, SET ASIDE THE ORDER OF LD. CIT(A) SUSTAINING THE PENALTY. 10. IN THE RESULT THE ASSESSEES APPEAL IS ALL OWED. (ORDER PRONOUNCED IN THE COURT ON 05/01/201 6). SD/- (S.V.MEHROTRA) ACCOUNTANT MEMBER DATED: 05 / 01/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT ITA NO. 530/DEL/2014 VIVEK GYAN UDAY FOUNDATION 7 3. CIT 4. CIT(APPEALS) 5. DR: ITAT DATE INITIAL 1. DRAFT DICTATED ON 05.01.2016 2. DRAFT PLACED BEFORE AUTHOR 05.01.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.