DCIT, Patiala V. Sh. Hari Singh S/o Sh. Ram Murti, Patiala

ITA 598/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6827 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: N K GARG SH VIBHOR GARG
• Keywords: Unexplained investment; Search and seizure; Salary income; Reasonable cause; Difference of opinion
• Section: 273B; 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.598/CHD/2017 ASSESSMENT YEAR: 2013-14 DCIT VS. SH. HARI SINGH S/O RAM MURTI CENTRAL CIRCLE PREET NIWAS, KUSHAL VIHAR PATIALA NABHA, DISTT. PATIALA PAN NO. ABMPS0325B CROSS OBJECTION NO. 41/CHD/2017 (IN ITA NO.598/CHD/2017) ASSESSMENT YEAR: 2013-14 SH. HARI SINGH S/O SH. RAM MURTI VS. DCIT PREET NIWAS, KUSHAL VIHAR CENTRAL CIRCLE NABHA, DISTT. PATIALA PATIALA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. N.K. GARG SH. VIBHOR GARG REVENUE BY : SMT. C. CHANDRAKANTA DATE OF HEARING : 13/07/2017 DATE OF PRONOUNCEMENT : 20/09/2017 ORDER PER B.R.R. KUMAR A.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF THE LD. CIT(A)-5, DT. 12/01/2017 AND ASSESSEE HAS F ILED THE CROSS OBJECTION. 2. FIRST WE SHALL DEAL WITH THE APPEAL OF THE REVEN UE IN ITA NO. 598/CHD/2017. 3. IN THE PRESENT APPEAL REVENUE HAS RAISED FOLLOWI NG GROUND: WHETHER THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 32,48,000/- OUT OF THE TOTAL PENALTY OF RS. 49,13,280/- IMPOSED U/S 27 1AAB(1)(C) OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE AS SESSEE HAS FAILED TO FILE THE RETURN OF INCOME WITHIN THE SPECIFIED TIME AS PRESC RIBED IN NOTICE U/S 153A R.W.S 271AAB OF THE INCOME TAX ACT, 1961 AND IN FACT THER E WAS INORDINATE DELAY OF 2 MORE THAN ONE YEAR WHICH CANNOT BE SET TO BE REASON ABLE AND ALSO FAILED TO SUBSTANTIATE THE MANNER OF DERIVING THE INCOME OF R S. 1,60,00,000/- SURRENDERED DURING SEARCH.. 4. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IN COME TAX ACT WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES BELONG ING TO PREET GROUP OF CASES, NABHA, ON 30.01.2013. THE ASSESSEE, UNDER REFERENCE , SHRI HARI SINGH, IS ONE OF THE PERSON RELATED TO PREET GROUP OF CASES, NABHA. THE RESIDENCE OF THE ASSESSEE WAS ALSO COVERED IN THE SAID SEARCH OPERAT ION. ACCORDINGLY, A NOTICE U/S 142(1) R.W.S. 153A OF THE ACT WAS ISSUED, ON 21.08.2013 AND THE SAME WAS DULY SERVED ON THE ASSE SSEE ON 23.08.2013 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME BY 20.09.2013. IN RESPONSE TO SAID NOTICE, THE ASSESSEE E-FILED HIS RETURN OF INC OME FOR THE A.Y. 2013-14 ON 09.11.2014 VIDE ACKNOWLEDGEMENT NO.404488580091114, DECLARING AN INCOME OF RS. 1,94,27,790/-, AND CLAIMING A REFUND OF RS. 21,120/-. THE RETURN OF INCOME WAS DELAYED FROM THE SPECIFIED DATE. THE SOURCE OF INCOME, AS DECLARED IN THE RETURN OF INCOME, ARE AS UNDER:- INCOME FROM SALARY RS. 21,00,000/- INCOME FROM CAPITAL GAIN RS. 2,24,491/- INCOME FROM OTHER SOURCES RS. 1,71,03,299/- GROSS TOTAL INCOME RS. 1,94,27,790/- LESS: DEDUCTION UNDER CHAPTER VIA RS. 1,10,000 /- TOTAL INCOME RS. 1,93,17,790/- AGRICULTURAL INCOME RS. 1,70,000/- 5. PENALTY PROCEEDINGS WITHIN THE MEANINGS OF SECTI ON 271AAB OF THE I.T. ACT 1961, IN RESPECT OF UNDISCLOSED INCOME, WAS INITIAT ED AND A NOTICE U/S 271AAB READ WITH SECTION 274 OF THE I.T. ACT, 1961, ISSUED ON 28.03.2015, FIXING THE DATE OF HEARING FOR 28.04.2015. THIS NOTICE WAS SERVED ON T HE ASSESSEE ON 30.03.2015. HOWEVER, ON THE APPOINTED DATE, NEITHER THE ASSESSE E NOR HIS AUTHORIZED REPRESENTATIVE ATTENDED THE PROCEEDINGS NOR ANY WRI TTEN SUBMISSIONS RECEIVED. 3 6. THE AO HELD THAT IT IS A MATTER OF RECORD THAT T HE SEARCH OPERATION IN THE INSTANT CASE WAS CARRIED OUT ON- 30.01.2013. THE DU E DATE FOR FILING OF THE RETURN OF INCOME OF THE SPECIFIED PREVIOUS YEAR I.E. A.Y. 2013-14 IS 31.07.2013.HOWEVER, NO RETURN OF INCOME RECEIVED BY THE SPECIFIED DATE. CONSEQUENTLY, A NOTICE U/S 142(1) R.W.S. 153A OF THE ACT, CALLING FOR THE RETU RN OF INCOME OF THE SPECIFIED PREVIOUS YEAR I.E. A.Y. 2013-14 WAS ISSUED ON AND T HE SAME WAS SERVED ON THE ASSESSEE ON 23.08.2013. HOWEVER, AS PER FACTS ON RE CORD, THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE SPECIFIED YEAR ON 09.11.20 14 I.E. AFTER THE SPECIFIED DATE. 7. THE ASSESSING OFFICER HELD THAT IT IS A MATTER O F RECORD THAT THE ASSESSEE, AS PER HIS LETTER DATED 21.02.2013, MADE A DISCLOSURE OF RS. L,60,00,000/-AS ADDITIONAL INCOME AND IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE PAID THE TAXES DUE ON THE ADDITIONAL INCOME BEFORE FILING OF THE RETURN O F INCOME. HOWEVER, HE FAILED TO SPECIFY THE MANNER IN WHICH SUCH ADDITIONAL INCO ME HAS BEEN DERIVED AND CONSEQUENTLY FAILED TO SUBSTANTIATE THE SAME I.E. T HE MANNER IN WHICH THE ADDITIONAL INCOME HAS BEEN DERIVED. THEREFORE, IN T HE GIVEN FACTS AND CIRCUMSTANCES, THE PENALTY WITHIN THE MEANINGS OF S ECTION 271AAB(L)(C) OF THE ACT IS LEVIABLE. AND LEVIED PENALTY @ 30% OF THE UN DISCLOSED INCOME OF RS. 1,63,77,598/- BEING THE AMOUNT OF THE DISCLOSURE OF RS. 1,60,00,000/- AND ADDITION MADE ON ACCOUNT OF MAXIMUM INCOME OF RS. 2,40,000/- AND RS. 1,37,598/- THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT. 8. THE LD. CIT(A) HAS MODIFIED THE PENALTY AND REST RICTED THE PENALTY @ 10% ON THE UNDISCLOSED INCOME UNDER SECTION 271AAB(1)(C ) ON THE GROUNDS THAT THERE WAS A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B FOR NOT BEING ABLE TO FILE THE RETURN IN THE TIME SPECIFIED . 4 9. HEARD BOTH THE PARTIES. LD.AR REITERATED THE AR GUMENTS TAKEN BEFORE THE LD.CIT(A) WHERE AS LD.DR RELIED ON THE ORDER OF TH E ASSESSING OFFICER 10. WE HAVE GONE THROUGH THE SUBMISSION MADE BEFOR E US. THE ASSESSEE HAS PAID THE TAXES BY FULLY BY 15-03-2013, BEFORE THE F ILING OF THE RETURN AND ALSO SOUGHT FOR TIME AFTER ALLOWING OF FILING OF INCOME TAX RETURN BEYOND THE DATE WIDE LETTER DATED 20-09-2013 AS HIS FILES WERE MISP LACED. 11. SINCE ASSESSEE HAS PAID TAXES BY 15/03/2013 NO BENEFIT IS ACCRUED BY DELAYING THE RETURN. AND HENCE WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT (A) ON THIS ISSUE. 12. IN THE CROSS OBJECTION THE ASSESSEE HAS TAKEN G ROUND THAT THE LD. CIT(A) HAS NOT GIVEN ANY FINDING REGARDING THE GROUND OF P ENALTY PROCEEDING WERE INITIATED OF ONLY ADDITION OF RS. 1,37,598/-. 13. THE ASSESSING OFFICER MADE ADDITION RS.1,37,598 ON THE ACCOUNT OF INVESTMENT MADE IN THE JEWELLERY AND LEVIED PENAL TY OF RS.41,280 @30% ON THE UNDISCLOSED INCOME. AS THE ASSESSEE HAS NOT DISCLOS ED THE AMOUNT IN EITHER DURING THE SEARCH OR IN THE RETURN FILED THE LD.CIT (A) CONFIRMED THE ADDITION. WE HAVE GONE THROUGH THE RECORDS BEFORE US. THE ASSESS EE HAS PAID TAXES ON THE AMOUNT OF RS.1,93,17,790 WHICH INCLUDES THE SURREND ER MADE DURING THE SEARCH. THE TOTAL AMOUNT OF JEWELLERY VALUED WAS RS.1,25,06 ,769 AND THE DISCLOSURE ON ACCOUNT OF SEARCH WAS RS.1,23,69,171. THE ADDITION OF RS.1,37,598 WAS MADE ON THE DIFFERENCE OF AMOUNT DERIVED ON VALUATION OF JE WELLERY. THE DIFFERENCE IN THE VALUE OF 1.3 LAKS ON VALUATON OF 1.2 CRORES IS NOT UNNATURAL BUT CAN BE SAID TO BE A CASE OF DIFFERENCE OF OPINION. IN THAT CIRCUMSTAN CES IT CANNOT BE HELD TO BE A CASE OF UNDISCLOSED INCOME IMPOSING PENALTY UNDER S ECTION 271AAB(1) OF THE ACT. HENCE THE ORDER OF THE ASSESSING OFFICER DO NOT SAT ISFY THE CONDITIONS LAID DOWN IN THE SECTION 271AAB (1) OF THE ACT. 5 HENCE THE PENALTY UPHELD BY THE LD. CIT(A) @ 30% ON THE AMOUNT OF RS. 1,37,598/- IS HEREBY DELETED. 14. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND CO OF THE ASSESSEE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20/09/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT (A), THE DR