Dharmendra Bhandari, New Delhi V. ACIT, Faridabad

ITA 5746/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5155 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-08-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 24-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH
• Assessee Lawyers: R S AHUJA
• Keywords: Search and seizure; Salary income; Retrospective amendment
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NOS.-5746/DEL/2014 ( ASSESSMENT YEAR: 2007-08) DHARMENDRA BHANDARI 1/2873, RAM NAGAR EXTN., LONI ROAD, SHADARA, NEW DELHI. AAMPB8964A VS ACIT CENTRAL CIRCLE II, FARIDABAD. ASSESSEE BY SH. R.S. AHUJA, CA REVENUE BY MS. RENU AMITABH, CIT DR ORDER PER SHRI K.N. CHARY, J.M. THIS IS AN APPEAL CHALLENGING THE ORDER DATED 09.0 7.2014 IN APPEAL NO. 148/44/IT/CIT(A)(C)/LDH/GGN/2010-11 PASS ED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)(CENTRA L), GURGAON, WHERE UNDER THE LD. CIT (A) CONFIRMED THE ORDER PAS SED BY THE AO U/S 271(1)(C) READ WITH EXPLANATION 5A. DATE OF HEARING 01.08.2017 DATE OF PRONOUNCEMENT 02.08.2017 2 ITA NO. 5746/DEL/2014 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS TH E DIRECTOR OF A COMPANY AND ENGAGED IN THE BUSINESS OF DEVELOPING R EAL ESTATE AND AS BUILDERS. THERE WAS A SEARCH AND SEIZURE OP ERATION CONDUCTED AT THE PREMISES OF THE BESTECH GROUP ON 0 7.02.2008 AND THE ASSESSEE WAS ALSO COVERED THEREUNDER. SURV EY OPERATIONS U/S 133A(1) OF THE ACT WERE ALSO CONDUCTED SIMULTAN EOUSLY IN THE PREMISES OF SOME OF THE MEMBERS OF THE GROUP. PURS UANT TO THE NOTICE ISSUED U/S 153A THE ASSESSEE FILED HIS RETUR N OF INCOME ON 11.11.2008 DECLARING A TOTAL INCOME OF RS. 3,27,93, 373/- INCLUDING THE SALARY INCOME OF RS. 72 LAKHS RECEIVE D BY HIS WIFE. ASSESSMENT WAS COMPLETE BY ORDER DATED 17.07.2009 A CCEPTING THE RETURNED INCOME, BUT PENALTY PROCEEDINGS WERE I NITIATED AND FINALIZED BY LEVYING OF PENALTY OF RS. 2,36,000/- A T THE MINIMUM RATE OF 100%. SINCE THE APPEAL PREFERRED BY THE AS SESSEE CHALLENGING THE SAME WAS DISMISSED BY THE LD. CIT ( A). ASSESSEE, THEREFORE, IS BEFORE US IN THIS APPEAL ON THE FOLLO WING GROUNDS: (A) THAT ON THE FACTS & CIRCUMSTANCES OF THE CAS E THE LD. ITO & THE CIT (A) ERRED IN: 1. IMPOSING PENALTY U/S 271(1)(C) AMOUNTING TO RS. 2,3 6,000/-. 2. LEVYING PENALTY INSPITE OF THE FACT THAT LAW APPLIC ABLE FOR IMPOSING THE PENALTY U/S 271(1)(C) IS THE LAW IN FO RCE AT THE TIME OF FILING OF ORIGINAL RETURN. THE ORIGINAL RE TURN WAS FILED 3 ITA NO. 5746/DEL/2014 ON 11.11.2008 WHILE THE FINANCE ACT (NO. 2) OF 2009 CAME IN EFFECT FROM 01.04.2009 PASSED IN LOK SABHA ON 27 TH JULY, 2009 AND IN RAJYA SABHA 29 TH JULY 2009 AND ASSENTED ON 19 TH AUGUST 2009 WITH RETROSPECTIVE EFFECT 01.06.2007. 3. IGNORING THE FACT THAT EXPLANATION 5A OF SECTION 27 1(1) WAS INSERTED BY THE FINANCE ACT, 2009, W.E.F. 01.06.200 7 WHICH IS AFTER THE ASSESSMENT YEAR IN QUESTION. (B) THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AME ND THE GROUNDS OF APPEAL AT & BEFORE THE HEARING. 3. IT IS THE ARGUMENT OF THE LD. AR THAT NO PENALTY U/S 271(1)(C) COULD BE LEVIED WHEN THE RETURNED INCOME WAS ACCEPT ED BY THE AO. IT IS SUBMITTED THAT THE PENALTY HAS TO BE LEVIED W ITH REFERENCE TO THE LAW EXISTING ON THE DATE OF FILING OF RETURN, A ND IN THIS MATTER, THE RETURN WAS FILED ON 11.11.2008 AS ON WHICH DATE THE PROVISIONS UNDER EXPLANATION 5A TO SECTION 271(1)(C ) OF THE ACT REMAINED UN-AMENDED. IT IS FURTHER SUBMITTED THAT SUCH PROVISIONS WERE AMENDED BY FINANCE ACT OF 2009 W.E. F. 01.04.2009 BUT WITH RETROSPECTIVE EFFECT FROM 01.06.2007, AND THOUGH THE RETROSPECTIVE EFFECT IS GIVEN TO THE AMENDMENT, STI LL THE LAW AS IT WAS EXISTING BY 11.11.2008 HAS TO GOVERN THE FIELD, IN WHICH CASE THOUGH THE FIRST TWO CONDITIONS I.E. (A) & (B) OF E XPLANATION 5A OF SECTION 271(1) WERE SATISFIED, THE THIRD CONDITION AS TO NOT FILING THE RETURN OF INCOME REMAINED NOT SATISFIED AND PRE CISELY FOR THAT REASON NO PENALTY PROCEEDINGS COULD BE INITIATED. HE PLACED 4 ITA NO. 5746/DEL/2014 RELIANCE ON THE DECISION OF THIS TRIBUNAL IN ITA NO . 5747 & 5749/DEL/2014. LD. DR HEAVILY RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW. 4. IN THIS CASE FACTS ARE ADMITTED. PURSUANT TO TH E NOTICE U/S 153A OF THE ACT, THE ASSESSEE FILED HIS RETURN OF I NCOME ON 11.11.2008 DECLARING A TOTAL INCOME OF RS. 3,27,93, 370/-. A RETURN FILED PURSUANT TO NOTICE U/S 153A HAS TO BE TREATED AS RETURN FILED U/S 139 OF THE ACT AND THE AO ACCEPTED THE RETURNED INCOME. CONCEALMENT/FURNISHING OF INACCURATE PARTI CULARS OF INCOME/UNDISCLOSED INCOME HAS NECESSARILY TO BE TES TED WITH REFERENCE TO THE RETURN FILED BY THE ASSESSEE. IN THIS MATTER SINCE THE INCOME RETURNED BY THE ASSESSEE IS ACCEPTED WIT HOUT ANY OBJECTION THE QUESTION OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME/UNDISCLOSED INCOME DOES NOT A RRANGE AT ALL. 5. WE HAVE CAREFULLY GONE THROUGH THE DECISION IN I TA NO. 5747 & 5749/DEL/2014 RENDERED BY A SINGLE MEMBER OF THIS TRIBUNAL AND WHILE DEALING WITH IDENTICAL ISSUE AND PLACING RELIANCE ON THE FOLLOWING DECISIONS: 1. PREM ARORA VS. DCIT IN (2012) 78 DTR (DEL) (TRIB.) 91; 5 ITA NO. 5746/DEL/2014 2. CIT VS. SAS PHARMACEUTICALS (2011) 335 ITR 259 (DEL ) (HC); 3. CIT VS. T.M. ABDUL HAZEEZ & CO. (2007) 293 ITR 384 (MAD.); 4. CIT VS. SHYAMLAL M. SONI 276 ITR 156; 5. RAJIV GARG 175 TAXMAN 184 (P&H). THE TRIBUNAL REACHED THE CONCLUSION THAT SINCE LAW PREVAILING ON THE DATE OF FILING OF THE RETURN HAS TO GOVERN THE ASPECT OF IMPOSITION OF PENALTY, IN THIS MATTER THE UN-AMENDE D PROVISIONS OF EXPLANATION 5A TO SECTION 271(1) HAVE TO BE CONSIDE RED AND IN THAT EVENT THOUGH CONDITIONS UNDER CLAUSE (A) AND C LAUSE (B) OF EXPLANATION 5A TO SECTION 271(1) ARE SATISFIED, THE THIRD CONDITION IS NOT SATISFIED INASMUCH AS FOR THE PREVIOUS YEAR RELEVANT TO THE AY 2007-08 THE ASSESSEE HAS FILED RETURN OF INCOME U/S 139(1) OF THE ACT. FACTS OF THE CASE ON HAND ARE IDENTICAL T O THE FACTS INVOLVED IN ITA NOS. 5747 AND 5749/DEL/2014. WE, T HEREFORE, WHILE RESPECTFULLY FOLLOWING THE LINE OF DECISIONS AS COULD BE CULLED OUT FROM PARAGRAPH NO. 5.3 OF THE ABOVE DECISION AN D ALSO FOLLOWING THE DECISION IN ITA NOS. 5747 & 5749/DEL/ 2014, RECORD A FINDING THAT THE PENALTY LEVIED U/S 271(1)(C) IN THIS MATTER CANNOT BE SUSTAINED AND ACCORDINGLY THE AO IS DIREC TED TO DELETE THE SAME. 6 ITA NO. 5746/DEL/2014 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.08.2017 SD/- SD/- (B.P. JAIN) (K. NARSIM HA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 02.08.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 01.08.2017 DRAFT PLACED BEFORE AUTHOR 02.08.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 02.08.2017 APPROVED DRAFT COMES TO THE SR.PS/PS 02.08.2017 KEPT FOR PRONOUNCEMENT ON 02.08.2017 FILE SENT TO THE BENCH CLERK 02.08.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.