Sh. Baldev Singh, Sangrur V. CIT (Appeals), Patiala

ITA 653/CHANDI/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8409 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 02-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Bonafide belief
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.653/CHD/2015 (ASSESSMENT YEAR :2009-10) SH.BALDEV SINGH S/O SH.PIARA SINGH, VS. THE CIT(APPEALS), VILLAGE MAURAN, DISTT. SANGRUR. PATIALA. PAN: BECPS0857J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 02.01.2017 DATE OF PRONOUNCEMENT : 10.01.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF COMMISSIONER OF INCOME TAX (APPEAL S), PATIALA DATED 30.3.2015 PERTAINING TO ASSESSMENT YE AR 2009-10, CHALLENGING THE LEVY OF PENALTY UNDER SECT ION 271(1)(C) AMOUNTING TO RS.43,254/-. 2. BRIEFLY STATED, THE FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLAR ING INCOME OF RS.1,22,680/- FOR THE IMPUGNED ASSESSMENT YEAR. THE RETURN WAS PROCESSED UNDER SECTION 143( 1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). T HEREAFTER 2 THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS WITH THE DIRECTION TO EXAMINE THE SOURCE OF EXPENDITURE/INVESTMENT INCLUDING INFORMATION FROM A IR AND ALSO IT WAS DIRECTED TO EXAMINE THE SOURCE OF C ASH DEPOSITS ABOVE THE THRESHOLD LIMIT IN THE SAVING BA NK ACCOUNT. ACCORDINGLY, STATUTORY NOTICES WERE ISSUE D TO THE ASSESSEE ALONGWITH DETAILED QUESTIONNAIRE. THE ASS ESSEE DID NOT ATTEND THE HEARING, NOR DID HE FILE ANY REP LY AND, THEREFORE, THE ASSESSING OFFICER FRAMED ASSESSMENT UNDER SECTION 144 OF THE ACT TREATING THE ENTIRE CASH DEP OSITS IN BANK AMOUNTING TO RS.59,32,250/- AS UNEXPLAINED AND MADE ADDITION OF THE SAME TO THE RETURNED INCOME OF THE ASSESSEE. 3. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT (APPEALS) WHERE THE ASSESSEE FILED DOCUMENTS EXPLAINING THE SOURCE OF CASH DEPOSITS. THE MATTE R WAS REMANDED TO THE ASSESSING OFFICER TO EXAMINE THE DOCUMENTS AND FOR HIS COMMENTS. AFTER OBTAINING RE MAND REPORT THE LD. CIT (APPEALS) HELD THAT THE SOURCE O F CASH DEPOSITS INTRODUCED STOOD EXPLAINED AND, THEREFORE, NO ADDITION COULD BE MADE IN THIS REGARD. HOWEVER, HE STATED THAT IT WAS FOUND BY THE ASSESSING OFFICER IN REMAN D PROCEEDINGS THAT THE ASSESSEE HAD EARNED SHORT TERM CAPITAL GAIN OF RS.2,18,287/- AS WELL AS BANK INTER EST OF RS.18,511/- BESIDES AGRICULTURAL INCOME OF RS.1,45, 740/- WHICH WAS NOT DECLARED IN THE ORIGINAL RETURN. THE LD. 3 CIT (APPEALS), THEREFORE, ISSUED ENHANCEMENT NOTICE TO THE ASSESSEE, IN RESPONSE TO WHICH THE ASSESSEE VOLUNTA RILY OFFERED THE ENTIRE INCOME TO TAX. THUS, THE LD. CI T (APPEALS) DELETED THE ADDITION MADE ON ACCOUNT OF C ASH DEPOSITS BUT ENHANCED THE SAME BY SHORT TERM CAPITA L GAIN AND INTEREST INCOME AND AGRICULTURAL INCOME FOR RAT E PURPOSES. THEREAFTER PENALTY PROCEEDINGS WERE INIT IATED BY THE LD. CIT (APPEALS), DURING THE COURSE OF WHIC H THE ASSESSEE SUBMITTED THAT PENALTY WAS NOT LEVIABLE SI NCE HE WAS UNDER BONAFIDE IMPRESSION THAT THE CAPITAL GAIN EARNED FROM SALE OF LAND WAS EXEMPT, BUT WHEN HE WA S TOLD ABOUT HIS MISTAKE HE SURRENDERED THE SAME AND PAID TAXES ON THE SAME. THE LD. CIT (APPEALS) REJECTED THE ASSESSEES CONTENTION AND HELD THAT IT WAS NOT A CA SE OF INCOME OFFERED VOLUNTARILY BUT WAS OFFERED ONLY ON DETECTION BY THE ASSESSING OFFICER DURING THE COURS E OF FURTHER EXAMINATION. HE, THEREFORE, LEVIED PENALTY ON THE TAX SOUGHT TO BE EVADED ON THE SHORT TERM CAPITAL G AIN AND INTEREST INCOME TO THE EXTENT OF 100%, AMOUNTING TO RS.43,254/-. 4. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. DURING THE COURSE OF HEARI NG BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERA TED SUBMISSIONS MADE BEFORE THE LD. CIT (APPEALS) AND S TATED THAT THE CAPITAL GAIN WAS NOT DECLARED IN THE RETUR N SINCE THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE SA ME WAS 4 EXEMPT AND ON BEING TOLD OF HIS MISTAKE HE HAD PAID TAXES ON THE SAME. 5. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE CIT (APPEALS)S ORDER AND STATED THAT THE SURRENDER OF THE ASSESSEE WAS NOT VOLUNTARY BUT WAS MADE ONLY WHEN CONFRONTED WITH THE SAME DURING THE ASSESSMENT PROCEEDINGS. THE LD. DR STATED THAT IT WAS A FIT C ASE FOR LEVY OF PENALTY AND RELIED UPON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF MAK DATA P . LTD . V. CIT (2013) 358 ITR 593 (SC). 6. WE HAVE HEARD BOTH THE PARTIES. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (APPEALS) LEV YING THE PENALTY. IT IS NOT DENIED THAT THE ASSESSEE HAD NO T DISCLOSED THE INCOME ON ACCOUNT OF CAPITAL GAIN AND INTEREST OR FOR THAT MATTER EVEN PARTICULARS AND DE TAILS PERTAINING TO IT IN THE ORIGINAL RETURN OF INCOME F ILED. EVEN DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, WH ICH WERE INITIATED ON THE BASIS OF INFORMATION FROM AIR RELATING TO CASH DEPOSITS IN THE BANK, THE ASSESSEE FOR REASONS BEST KNOWN TO HIM, CHOSE NOT TO PARTICIPATE AND COOPERATE AND FILED NO REPLY TO THE SPECIFIC QUERIE S RAISED RELATING TO CASH DEPOSITS IN BANK. IT WAS ONLY DUR ING APPELLATE PROCEEDINGS, WHILE EXPLAINING THE SOURCE OF CASH DEPOSITED IN BANK AS BEING ON ACCOUNT OF LAND SOLD BY IT, THAT THE ASSESSEE PRODUCED ALL DOCUMENTS AND DETAIL S 5 PERTAINING TO THE TRANSACTIONS OF CAPITAL GAIN AND EVEN THEN DID NOT SURRENDER THE CAPITAL GAIN AND INTERES T INCOME EARNED. IT WAS ONLY WHEN CONCEALMENT WAS NO TED DURING THE REMAND PROCEEDINGS AND CONFRONTED TO THE ASSESSEE BY THE LD. CIT (APPEALS) THAT HE SURRENDER ED THE SAME. IN VIEW OF THE SAME, WE HOLD THAT THE LD. CI T (APPEALS) HAS CORRECTLY HELD THAT IT IS NOT A CASE OF VOLUNTARY SURRENDER BUT A SURRENDER PURSUANT TO DET ECTION OF CONCEALMENT AND THUS A FIT CASE FOR LEVY OF PENA LTY. WE FIND ABSOLUTELY NO SUBSTANCE IN THE ARGUMENTS OF TH E LD. COUNSEL FOR THE ASSESSEE THAT HE WAS UNDER BONAFIDE IMPRESSION THAT THE GAINS WERE EXEMPT. THE LD. COU NSEL FOR THE ASSESSEE, EXCEPT FOR MAKING SUCH A BALD STA TEMENT, HAS NOT DEMONSTRATED HOW THE BONAFIDE BELIEF WAS HARBOURED BY THE ASSESSEE AND WHAT CIRCUMSTANCES LE D HIM TO BELIEVE THAT THE GAIN AND INTEREST WERE EXEM PT FROM TAX. EVEN BEFORE US, THE LD. COUNSEL FOR THE ASSES SEE HAS NOT DEMONSTRATED WHAT LED THE ASSESSEE TO HARBOUR S UCH A BELIEF. IT IS NOT THE CASE OF LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE WAS OF THE BELIEF THAT THE LAND W AS RURAL AGRICULTURAL LAND NOR IS IT THE CASE THAT THE ASSES SEE IS AN UNEDUCATED RURAL AGRICULTURIST TOTALLY UNAWARE OF I NCOME TAX PROCEEDINGS AND IT DOES NOT APPEAR TO BE SO ALS O SINCE THE ASSESSEE HAD FILED RETURN DECLARING INCOME OF RS.1,22,680/- AND IT IS NOT ONLY CAPITAL GAINS BUT EVEN AGRICULTURAL INCOME AND INTEREST WHICH HAD BEEN CONCEALED BY THE ASSESSEE. IN VIEW OF THE SAME, W E HOLD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCO ME 6 RELATING TO CAPITAL GAINS AND INTEREST AND UPHOLD T HE ORDER OF THE LD. CIT (APPEALS) LEVYING THE PENALTY AMOUNT ING TO RS.43,254/-. THE GROUND OF APPEAL RAISED BY THE AS SESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH JANUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH