ACIT, New Delhi V. Shri Jagdish Chander, New Delhi

ITA 6300/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7440 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: R K GULATI
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D : NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 6300/DEL /2013 ASSESSMENT YEAR: 2008 - 09 THE A.C.I.T. VS. SHRI JAGDI SH CHANDER CIRCLE - 38(1) C - 217, PHASE I, NEW DELHI VIVEK VIHAR, NEW DELHI [APPELLANT] [RESPONDENT] DATE OF HEARING : 30.12.2015 DATE OF PRONOUNCEMENT: 06 .01.2016 APPELLANT BY : SHRI K.K. JAISWAL, SR. DR RESPONDENT BY : SHRI R.K. GULATI, ADV ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - XXVIII, NEW DELHI, DATED 24/09/2013 FOR A.Y 2008 - 0 9 RESTRICTING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT] TO 100% OF THE TAX SOUGHT TO BE EVADED. 2 2. BRIEFLY STATED, THE FACTS AS EMANATING FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE CASE OF THE ASSESSEE WAS ORIGINALLY ASSESSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 [FOR SHORT, THE ACT] BY THE THEN ASSESSING OFFICER CIRCLE38( 1 ), NEW DELHI, VIDE HER ASSESSMENT ORDER DATED 22 - 11 - 2010. D URING THE COURSE ASSESSMENT PROCEEDINGS, IT WAS POINTED OUT BY THE ASSESSING OFFICER THAT AS PER ITS DETAILS AVAILABLE WITH THE DEPARTMENT, THE ASSESSEE HAS SOLD TWO IMMOVABLE PROPERTIES, I.E. ONE ON 16 - 02 - 2008 FOR RS. 34,08,000 / - AND ANOTHER ON 11 - 03 - 2008 FOR RS.52,90,000 / - AND THE ASSESSEE WAS ASKED TO FILE THE DETA ILS AND DOCUMENTS OF THE ABOVE SAID IMMOVABLE PROPERTIES. TH E ASSESSEE, AFTER GOING THROUGH HIS RECORDS OF THE SAID PERIOD FOUND THAT HE HAS NOT SOLD THE IMMOVABLE PROPERTIES MENTIONED IN PARA NO. 1, AS POINTED OUT BY THE ASSESSING OFFICER AND ACCORDINGLY DENIED THE CONTENTS OF THE SAID ITS AVAILABLE WITH THE DEPARTMENT. THE ASSESSING OFFICER , WHO IN TURN , ASKED THE ASSESSEE TO FILE AN AFFIDAVIT IN THIS REGARD AND THE ASSESSEE FILED HIS AFFIDAVIT DATED 16 - 11 - 2010, COPIES OF THE SAID ITS DETAILS AND THE SAID AFFIDAVIT ARE FURNISHED ON RECORD. D URING THE ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAD ACTUALLY SOLD TWO IMMOVABLE PROPERTIES NAMELY ONE ON 16 - 02 - 2008 BEARI NG PROPERTY NO. II/1 10, GYAN KHAND, INDRAPURAM, GHAZIABAD (U.P.) FOR RS.32,50,000 / - AND ANOTHER ON 11 - 03 - 2008 BEARING PROPERTY NO. 2 ND 3 FLOOR, 37, KAUSHAMBI, GHAZIABAD (U.P.) FOR RS. 5,00,000., AND NOT THE SO CALLED IMMOVABLE PROPERTIES MENTIONED EARLIER, WHICH WERE MENTIONED IN THE AIR AVAILABLE WITH THE DEPARTMENT. A FTER RECEIVING THE FURTHER INFORM ATION IN THE PRESENT CASE, NOTICE UNDER S ECTION 148 OF THE ACT WAS ISSUED AND THE ASSESSEE WAS RE - ASSESSED UNDER SECTION 147 R.W.S. 143(3) OF THE ACT VIDE ASSESSMENT ORDER DATED 21 - 10 - 2011. THE ASSESSEE RESPONDENT APPEARED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME AND FILED THE DETAILS AND DOCUMENTS OF TWO IMMOVABLE PROPERTIES ACTUALLY SOLD BY THE ASSESSEE ALONGWITH THE PURCHASE AND SALE DEEDS OF THE IMMOVABLE PROPERTIES, THE CALCULATIONS OF LONG TERM CAPITAL GAIN EARNED FROM THE SAID IMMOVABLE PROPERT IES ALONGWITH THE BANK STATEMENT IN WHICH THE SALES PROCEEDS OF PROPERTIES ACTUALLY SOLD WERE CREDITED. A FTER COMPLETING THE RE - ASSESSMENT PROCEEDINGS IN THIS CASE , THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1) (C) OF THE ACT AGAINST THE ASSESSEE AND VIDE HER PENALTY ORDERS DATED 27 - 04 - 2012, PASSED UNDER SECTION 271 (1) (C) READ WITH SECTION 274 OF THE ACT IMPOSED THE PENALTY @ 200% AMOUNTING TO RS. 25,33,380 / - . IN APPEAL, THE LD. CIT(A) REDUCED THE QUANTUM OF PENALTY TO 100%, A GAINST WHICH THE DEPARTMENT IS IN APPEAL. 3. T HE LD. DR RELIED ON THE ORDERS OF THE ASSESSING AUTHORITY AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF TO THE 4 ASSESSEE. HE FURTHER SUBMITTED THAT THE LD. CIT(A) ERRED IN NOT APPRECIATIN G THE NATURE AND EXTENT OF CONCEALMENT AND THAT THE AO HAD IMPOSED PENALTY U/S 271(1)(C) OF THE ACT OF THE TAX SOUGHT TO BE EVADED WELL WITHIN THE PRESCRIBED LIMITS. 4. BEFORE US ALSO, THE LD. AR REITERATED THE SUBMISSIONS MADE IN THE WRITTEN SUBMISSIONS AND CONTENDED THAT THE ASSESSEE DID NOT PREFER ANY APPE AL AGAINST THE ASSESSMENT ORDER DATED 21 - 10 - 2011 PASSED UNDER S ECTION 147 R.W.S. 143(3) OF THE ACT. THE LD. AR RELIED ON THE DECISION OF T HE HON BLE SUPREME COURT IN THE CASE OF SIR SHADI LAI SUGAR MIL LS (168 ITR 7051) WHEREIN IT HAS BEEN HELD THAT THERE MAY BE HUNDRED AND ONE REASONS FOR NO T PREFERRING AND AGREEING TO ADDITIONS BUT THAT DOES NOT FOLLOW TO THE CONCLUSION THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME. LIKEWISE THE HON BLE KAMAT KA HIGH COURT IN THE C A SE OF CIT VS, MANJUNATH COTTON & GINNING FACTORY (2013 35 TAXMAN COM.250), HELD THAT THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. EVEN IF THE ASSESSEE HAS NOT CHALLENGED THE ORDER OF ASSESSMENT LEV Y ING TAX AND INTEREST AND HAS PAID TH E SAME, THAT BY ITSELF WOULD NOT BE SUFFICIENT FOR THE AUTHORITIES EITHER TO INITIATE PENALTY PROCEEDINGS OR IMPOSE PENALTY. T HE ASSESSEE CONTENTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE WAS A SENIOR CITIZEN, HAS FULLY 5 CO - OPERATED WITH THE ASSESSIN G OFFICER DURING THE ASSESSMENT PROCEEDINGS, DEPOSITED THE ASSESSED TAX AND INTEREST, HAS NOT PREFERRED ANY APPEAL AGAINST THE ASSESSMENT ORDERS AND BEING A PEACE LOVING PERSON D ID NOT WANT ANY TYPE OF CONFRONTATION WITH THE DEPARTMENT, THE PENALTY PROCEED INGS SO INITIATED AGAINST THE PENALTY MAY BE DROPPED. IN THE PENALTY ORDER DATED 27 - 04 - 2012, PASSED UNDER SECTION 271 (1) (C) OF THE ACT, IT HAS BEEN ALLEGED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, HAS FILED WRONG AFFI DAVIT. IN THIS REGARD IT WA S SUBMITTED THAT THE RESPONDENT FILED THE TRUE AND CORRECT AFFIDAVIT WHEREIN THE ASSESSEE HAS RIGHTLY DENIED HAVING SOLD THE TWO IMMOVABLE PROPERTIES MENTIONED IN THE ITS DETAILS A VAILABLE WITH THE DEPARTMENT. THE ASSESSEE ACTUAL LY SOLD TWO IMMOVABLE PROPERTIES BUT NOT THE IMMOVABLE PROPERTIES SO MENTIONED IN THE ITS DETAILS AVAILABLE WITH THE DEPARTME NT FOR THE SAID ASSESSMENT YEAR. T HEREFORE , THE LD. AR PRAYED THAT IT WA S INCORRECT TO SAY THAT THE ASSESSEE FILED FALSE/MISLEADING AFFIDAVIT DURING THE COURSE OF O ORIGINAL ASSESSMENT PROCEEDINGS. 5. TH E LD. AR FURTHER SUBMITTED THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER WAS ARBITRA RY , UNWARRANTED AND EXCESSIVE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. IN THIS REGARD THE L D. AR INVITED OUR 6 ATTENTION TO THE DECISION OF INCOME TAX TRIBUNAL, AHMADABAD A BENCH IN THE CASE OF LMP PRECISION ENGINEERING CO. LTD. VS DEPUTY COMMISSIONER OF INCOME TAX AS REPORTED IN (1997) 58 TTJ (AHD.) 704 : 64 ITD 42 WHEREI N IT HAS BEEN HELD THAT A PENALTY OF 100% OF TAX WHICH THE APPELLANT HAS TRIED TO AVOID, WILL MEET THE END OF JUSTICE IN SUCH CASES. IN THE ABOVE MENTIONED CASE THE ASSESSEE HAD PAID THE TAX ONLY AFTER TWO SURVEYS WERE CONDUCTED AND NOTICE U/S 148 OF THE ACT WAS SERVED TO THE ASS ESSEE. A GAINST THE PENALTY ORDERS DATED 27 - 04 - 2012, THE ASSESSEE PREFERRED AN A PPEAL WITH THE LD. CIT(A) - XXVIII, WHO WAS JUSTIFIED IN REDUCING THE QUANTUM OF PENALTY TO 100% AMOUNTING TO RS. 12,66,690, VIDE HER ORDERS DATED 24 - 09 - 2013. THE ASSESSEE HAS FU LLY ACCEPTED THE OBSE RVATIONS MADE BY THE LD. CIT(A) - XXVIII, HER SAID ORDERS. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS ALREADY HONORED THE ORDERS OF THE LD. CIT(A) - XXVIII, AND HAS DEPOSITED THE 100% PENALTY AMOUNTING TO RS. 12,66,690 / - , PROOF T HEREOF HAS BEEN FURNISHED ON RECORD. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES , THE LD. AR PRAYED THAT THE ASSESSEE HAS ALREADY DEPOSITED THE TAX, INTEREST AND PENALTY ON THE CONCEALED INCOME MAY BE DELETED. 7 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE LD. AR HAS ALREADY DEPOSITED THE TAX, INTEREST AND PENALTY ON THE CONCEALED INCOME . THE LD. CIT(A) HAS ARRIVED AT HIS CONCLUSION BY RELYING ON THE ORDER OF THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT VS. MAK DATA LTD DATED 22.1.2015 IN ITA NO. 415/2012 AND HELD THE AO TO BE RIGHT IN CHARGING THE ASSESSEE COMPANY WITH CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS. HOWEVER, KEEPING IN VIEW THE FACTS AND CIRCUMSTAN CES OF THE CASE HE HAS REDUCED THE QUANTUM PENALTY TO 100%. WE FIND THE PENALTY IMPOSED BY THE AO @ 200% IS ARBITRARY AND EXCESSIVE. WE FIND SUBSTANCE IN THE ORDER RELIED UPON BY THE ASSESSEE IN THE CASE OF LMP PRECISION ENGINEERING CO. LTD [SUPRA] WHERE IN IT HAS BEEN HELD THAT A PENALTY OF 100% OF TAX WHICH THE APPELLANT HAS TRI DOT AVOID WILL MEET THE END OF JUSTICE IN SUCH CASES. ALSO IN VIEW OF THE FACT THAT THE ASSESSEE HAS ALREADY DEPOSITED THE TAX, INTEREST AND PENALTY, WE DECLINE TO INTERFERE WITH THE ORDER OF THE FIRST APPELLATE AUTHORITY. THUS THE GROUND OF APPEAL RAISED BY THE DEPARTMENT IS DISMISSED. 8 7 . IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 06 .01.2016. S D/ - SD/ - (S.V. MEHROTRA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06 TH JANUARY, 2016 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, N EW DELHI