Shri Krishna Jewels Pvt. Ltd., New Delhi V. DCIT, Central Circle- 25, New Delhi

ITA 6758/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5266 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 09-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H K CHAUDHARY
• Keywords: Peak credit; Initiation of penalty proceedings; Accommodation entries
• Section: 271(1)(c); 133A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER & SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.6758/DEL/2017 ASSESSMENT YEAR : 2013-14 M/S SHRI KRISHNA JEWELS PVT. LTD. C/O-ANIL JAIN DD & CO. 611, SURYA KIRAN BUILDING, 19, KG MARG, NEW DELHI-110001 VS DCIT, CENTRAL CIRLE-25, JHANDEWALAN, NEW DELHI PAN-AAECV1010E APPELLANT RESPONDENT APPELLANT BY SH. ANIL JAIN, CA RESPONDENT BY SH. H. K. CHAUDHARY, CIT - DR DATE OF HEARING 2 1 .09.2021 DATE OF PRONOUNCEMENT 24 .09.2021 ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 04.09.2017 OF THE LEARNED CIT(A)-29, NEW DELHI , ARISING FROM THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOR THE ASSESSMEN T YEAR 2013- 14. ITA NO. 6758/DEL/2017 2 | P A GE 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 BY THE LD. ASSESSING OFFICER IS ILLEGAL AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE INITIATION OF PROCEEDINGS U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW AND CONSEQUENTL Y PENALTY ORDER PASSED IS ALSO ILLEGAL AND BAD IN LAW . 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF THE LAW, THE LD. CIT(A) HAS ERRED IN SUSTAINING PENALTY OF RS.16,41,194/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. GROUND NO.1 AND 2 ARE REGARDING THE VALIDITY OF THE INITIATION OF PENALTY PROCEEDINGS FOR WANT OF SPECIF IC CHARGE IN THE SHOW-CAUSE NOTICE AS WELL AS IN THE PENALTY ORD ER. 4. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT T HE ASSESSING OFFICER WHILE ISSUING THE SHOW-CAUSE NOTIC E HAS NOT SPECIFIED WHETHER THE PENALTY IS PROPOSED TO BE LEVY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR F OR CONCEALMENT OF PARTICULARS OF INCOME. HE HAS REFER RED TO SHOW- CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER DATED 30.03.2016 AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT SP ECIFIED THE ITA NO. 6758/DEL/2017 3 | P A GE CHARGE FOR WHICH THE PENALTY WAS PROPOSED TO BE LEVIE D. THE AR HAS FURTHER SUBMITTED THAT EVEN THE PENALTY WAS IMPO SED BY THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 271(1) (C) OF THE ACT FOR BOTH THE CHARGES I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THUS, THE ASSESSI NG OFFICER WAS NOT CERTAIN EVEN AT THE TIME OF LEVYING THE PENA LTY AS WHAT DEFAULT THE ASSESSEE HAS COMMITTED FOR WHICH THE PEN ALTY WAS IMPOSED. THE LD. AR HAS SUBMITTED THAT THE INITIAT ION OF THE PENALTY PROCEEDINGS U/S 271(1)(C) IS ILLEGAL AND BA D IN LAW, CONSEQUENTLY, THE PENALTY ORDER U/S 271(1)(C) OF TH E ACT IS LIABLE TO BE QUASHED. IN SUPPORT OF HIS CONTENTION, HE HA S RELIED UPON THE THIRD MEMBER DECISION OF THE AMRITSAR BENCHES O F THE TRIBUNAL IN THE CASE OF M/S HPCL MITTAL ENERGY LTD. VS ADDL. CIT IN ITA NOS.554 & 555/ASR/2014, REPORTED IN 81 TAXMANN.COM 224 (AMR. TRIB.)(TM) AND SUBMITTED THAT THE MOOT QUESTION BEFORE THE THIRD MEMBER WAS THAT WHAT SHOULD BE THE NATURE OF SPECIFICATION OF THE CHARGE BY THE ASSESS ING OFFICER AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS AND AT THE TIME OF PASSING THE PENALTY ORDER. THE TRIBUNAL HAS HELD T HAT EVEN IF THE ASSESSING OFFICER IS NOT CERTAIN AT THE TIME OF INITIATION OF ITA NO. 6758/DEL/2017 4 | P A GE PENALTY PROCEEDINGS WHETHER IT WAS A CASE OF FURNISHI NG OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME, THE ASSESSING OFFICER IS REQUIRED TO LEVY T HE PENALTY ON DEFINITE CHARGE, WHICH SHOULD BE REFLECTED IN THE P ENALTY ORDER AS TO WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF PARTICULAR OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENAL TY MUST NECESSARILY BE SUBSTITUTED WITH CONCLUSIVE DEFAULT A T THE TIME OF PASSING OF THE PENALTY ORDER. THE LD. AR HAS THUS S UBMITTED THAT IN THE IMPUGNED PENALTY ORDER, THE ASSESSING O FFICER WAS NOT CERTAIN AS HE HAS LEVIED THE PENALTY WITHOUT GIV ING A CONCLUSIVE DEFAULT. HE HAS REFERRED TO THE PENALT Y ORDER AND SUBMITTED THAT THE ASSESSING OFFICER HAS FINALLY LE VIED THE PENALTY ON CONCEALMENT OF PARTICULAR OF INCOME/FURN ISHING OF INACCURATE PARTICULARS OF INCOME, THEREFORE, THE PE NALTY ORDER PASSED BY THE ASSESSING OFFICER NOT BASED ON A DEFI NITE CHARGE OR DEFAULT AS IT WAS AT THE TIME OF INITIATION OF THE PENALTY PROCEEDINGS THEN THE IMPUGNED ORDER PASSED BY THE A SSESSING OFFICER IS NOT VALID AND LIABLE TO BE QUASHED. HE H AS ALSO RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF ITA NO. 6758/DEL/2017 5 | P A GE CIT VS SURESH CHANDRA MITTAL, REPORTED IN 170 CTR 1 82. THUS, THE LD. AR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN A CONCLUSIVE FINDING ON THE POINT OF DEFAULT FOR WHICH THE PENALTY WAS LEVIED THEN THE INITIATION OF PENALTY AS WELL AS THE PENALTY ORDER IS NOT VALID AND LIABLE TO BE QUASHED . HE HAS REFERRED TO THE DECISION OF THE HONBLE KARNATAKA H IGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNING FACT ORY, REPORTED IN 359 ITR 565 (KARN.) AS WELL AS THE DECI SION OF THE HONBLE SUPREME COURT I THE CASE OF CIT VS M/S SSA S EMERALD MEADOWS REPORTED IN 242 TAXMAN 180 (SC). 5. ON THE OTHER HAND, LD. CIT-DR HAS SUBMITTED THA T THE ASSESSING OFFICER HAS INITIATED PENALTY ON DEFI NITE CHARGE. HE HAS REFERRED TO THE ASSESSMENT ORDER AND SUBMITT ED THAT THE ASSESSING OFFICER HAS MADE TWO ADDITIONS WHILE FRAMI NG THE ASSESSMENT AND INITIATED THE PENALTY PROCEEDINGS U/ S 271(1)(C) OF THE ACT FOR EACH ADDITION FOR SPECIFIC CHARGE OF CONCEALMENT. IN SUPPORT OF HIS CONTENTION HE HAS REFERRED TO PAR A 11 AND 12 OF THE ASSESSMENT ORDER. HE HAS FURTHER SUBMITTED THA T THE LD. CIT(A) HAS CONFIRMED THE PENALTY LEVIED U/S 271(1)( C) OF THE ACT BY HOLDING THAT THE ASSESSEE HAS CONCEALED THE PART ICULARS OF ITS ITA NO. 6758/DEL/2017 6 | P A GE INCOME. HE HAS REFERRED TO PARA 5.3 OF THE LD. CIT (A) AND SUBMITTED THAT THE ONCE THE ORDER OF THE ASSESSING OFFICER PASSED U/S 271(1)(C) IS MERGED WITH THE ORDER OF TH E LD. CIT(A), THEN THE FINDING OF THE LD. CIT(A) HOLDING THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME SATISFY THE REQ UIREMENT OF LEVY OF PENALTY FOR A DEFINITE CHARGE. 6. IN REJOINDER OF THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT LD. CIT(A) CANNOT SUBSTITUTE THE ORD ER OF THE ASSESSING OFFICER SO FAR AS THE CHARGE FOR WHICH THE PENALTY WAS LEVIED U/S 271(1)(C) OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS C HALLENGED THE VALIDITY OF INITIATION OF PENALTY PROCEEDINGS AS WE LL AS CONSEQUENTIAL PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT SPECI FIED WHETHER THE PENALTY IS PROPOSED TO BE LEVIED FOR CONCEALMEN T OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN SUPPORT OF HIS CONTENTION, HE HAS RELIE D UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS ITA NO. 6758/DEL/2017 7 | P A GE SSAS EMERAL MEADOWS (SUPRA) AND THE DECISION OF TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNAT HA COTTON & GINNING FACTORY (SUPRA), WHICH WAS RELIED UPON BY T HE HONBLE HIGH COURT AND THE SLP AGAINST WHICH WAS DISMISSED BY THE HONBLE SUPREME COURT. IT IS PERTINENT TO NOTE TH AT THE HONBLE HIGH COURT AS WELL AS THE HONBLE SUPREME COURT IN THE CASE OF M/S SSAS EMERALD MEADOWS AND THE IN THE CASE OF DHA RMENDRA TEXTILE HAS HELD THAT PROCEEDINGS U/S 271(1)(C) OF THE ACT IS FOR CIVIL LIABILITY AND THESE ARE NOT FOR CRIMINAL PROC EEDINGS. THEREFORE, MENS REA IS NOT AN ESSENTIAL ELEMENT OF IMPOSING THE PENALTY FOR BREACH OF THE CIVIL OBLIGATION OR LIABI LITY. IT IS ALSO A SETTLED PROPOSITION OF LAW THAT THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IS NOT AUTOMATIC ON ANY DISALLOWANCE OR ADD ITION MADE BY THE ASSESSING OFFICER BUT THE CONDITIONS PRESCRI BED U/S 271(1)(C) ARE REQUIRED TO BE SATISFIED FOR INITIATI ON OF PENALTY PROCEEDINGS AS WELL AS LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. IN THE NORMAL COURSE, IF THE ASSESSING OFFICER HAS EIT HER DISALLOWED THE CLAIM OF EXPENDITURE OR MADE ANY ADDITION BY RE JECTING THE CLAIM OF THE ASSESSEE THEN, THE ASSESSING OFFICER I S UNDER STATUTORY OBLIGATION TO SPECIFY THE DEFAULT/CHARGE FOR WHICH THE ITA NO. 6758/DEL/2017 8 | P A GE PENALTY PROCEEDINGS ARE INITIATED AND PENALTY IS PR OPOSED TO BE LEVIED U/S 271(1)(C) OF THE ACT. FAILURE ON THE PAR T OF THE ASSESSING OFFICER TO SPECIFY THE DEFAULT OF ASSESSE E AS WELL AS CHARGE WHETHER THE ASSESSEE HAS CONCEALED THE PARTIC ULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E WOULD RENDER THE INITIATION OF THE PENALTY PROCEEDINGS AS WELL AS THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IS INVALID AND CONSEQUENTIAL ORDER PASSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE QUASHED. IT IS A SETTLED PROPOSITION OF LAW THAT IF THE PENALTY IS INITIATED ON ONE LIMB I.E. CONCEALMENT OF PARTICULA RS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THE FINDING IN THE PENALTY ORDER FOR LEVYING THE PENALTY ON THE OT HER LIMB IS ALSO BAD IN LAW. THEREFORE, THE ASSESSING OFFICER HAS TO GIVE A DEFINITE FINDING ABOUT THE DEFAULT/GUILTY OF THE ASSESSEE AT TRACTING THE PENALTY U/S 271(1)(C) OF THE ACT WHILE PASSING THE PENALTY ORDER. 8. IN THE CASE, IN HAND, THE ASSESSEE FILED THE RE TURN OF INCOME ON 28.09.2013 DECLARING TOTAL INCOME OF RS.4 8,66,590/-. THEREAFTER, A SURVEY OPERATION U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 19. 12.2013 BY THE INVESTIGATION WING-1(1) OF THE DEPARTMENT. A S URVEY WAS ITA NO. 6758/DEL/2017 9 | P A GE ALSO CONDUCTED IN CASE OF 3 OTHER COMPANIES OF THIS GROUP INCLUDING THE ASSESSEE COMPANY. DURING THE POST SU RVEY PROCEEDINGS, THE ASSESSEE IN ITS STATEMENT DATED 27 .12.2013 SURRENDERED AN INCOME OF RS.50 LAKHS FOR THE ASSESS MENT YEAR UNDER CONSIDERATION. THIS INCOME WAS SURRENDERED BY THE ASSESSEE ON ACCOUNT OF PEAK CREDIT ON SHARE APPLICA TION MONEY RECEIVED AS ACCOMMODATION ENTRIES FOR THIS YEAR. T HE ASSESSING OFFICER PROPOSED TO MAKE ADDITION OF RS.50 LAKHS TO WHICH THE ASSESSEE HAS AGREED. CONSEQUENTLY, THE ASSESSING OF FICER MADE THE ADDITION OF RS.50 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. APART FROM THE ADDITION OF RS.50 LAKHS AS RESULT OF THE SURVEY CONDUCTED U/S 133A OF THE ACT, THE ASSESSING OFFICE R HAS ALSO MADE DISALLOWANCE OF RS.3,11,306/- ON ACCOUNT OF PRO PERTY TAX ON THE GROUND THAT THE ASSESSEE HAS NOT SHOWN ANY FI XED ASSETS IN THE BALANCE SHEET. THE ASSESSING OFFICER HAS ALS O RECORDED HIS SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) FOR BOTH THESE ADDITIONS IN PARA 11 AND 12 AS UNDER:- 11. IN VIEW OF THE ABOVE DISCUSSION AND AFTER CAREFUL EXAMINATION OF THE INFORMATION/DOCUMENTS FILED BY THE ASSESSEE, AN ADDITION OF RS.50 LAKH IS HEREBY MADE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 6758/DEL/2017 10 | P A GE RS.50,00,000/- IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE ASSES SEE COMPANY HAS CONCEALED THE PARTICULARS OF INCOME, HENCE PENALTY PROCEEDINGS U/S 271(1)(C) IS INITIATE D. 12. FROM THE PERUSAL OF PROFIT AND LOSS ACCOUNT, IT HAS BEEN NOTICED THAT THE ASSESSEE HAS DEBITED A N AMOUNT OF RS.3,11,306/- ON ACCOUNT OF PROPERTY TAX AND SHOP RENT OF RS.12,00,000/-. HOWEVER, ON PERUSAL OF SCHEDULE OF FIXED ASSETS IN THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION, NO PROPERTY HAS BEEN FOUND. BEING CONFRONTED TO THIS FACT, THE ASSESSEE FAILED TO REPLY SATISFACTORILY. HENCE, DISALLOWANCE OF RS.3,11,306/- UNDER THE HEAD OF PROPERTY TAX IS HEREBY MADE. RS.3,11,306/- IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE ASSES SEE COMPANY HAS CONCEALED THE PARTICULARS OF ITS INCOME , HENCE PENALTY PROCEEDINGS U/S 271(1)(C) IS INITIATE D. 9. FROM THE SATISFACTION RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, IT IS CLEAR THAT T HE ASSESSING OFFICER PROPOSED TO INITIATE THE PENALTY PROCEEDING S ON THE CHARGE OF THE CONCEALMENT OF PARTICULARS OF INCOME. IT IS PERTINENT TO NOTE THAT THE AMOUNT OF RS.50 LAKHS AS ADDED BY THE ASSESSING OFFICER IS NOT AN OUTCOME OF AN ENQUI RY CONDUCTED DURING THE ASSESSMENT PROCEEDING OR ANY DECISION TA KEN BY THE ASSESSING OFFICER TO HOLD THE SAME AS UNDISCLOSED I NCOME OF THE ASSESSEE BUT THE SAID ADDITION IS MADE BY THE ASSES SING OFFICER ITA NO. 6758/DEL/2017 11 | P A GE ON THE BASIS OF STATEMENT OF THE ASSESSEE RECORDED IN POST SURVEY ENQUIRY. THEREFORE, THE ADDITION WAS MADE ON THE BA SIS OF THE SURRENDERED MADE BY THE ASSESSEE AND HENCE THIS ADD ITION AND THE NATURE OF THE ADDITION WAS VERY MUCH KNOWN TO TH E ASSESSEE RIGHT FROM THE TIME WHEN THE ASSESSEE SURRENDERED TH IS AMOUNT IN THE STATEMENT RECORDED DURING THE POST SEARCH EN QUIRY. THEREFORE, THIS ADDITION DOES NOT FALL IN THE CATEG ORY WHERE THE ASSESSING OFFICER HAS MADE ADDITION BASED ON SOME E NQUIRY OR HIS DECISION BUT THIS ADDITION WAS MADE ON THE BASIS OF SURRENDERED MADE BY THE ASSESSEE. ACCORDINGLY, THE DEFAULT AND THE CHARGE FOR WHICH THE PENALTY WAS PROPOSED TO BE LEVIED WAS VERY MUCH IN THE KNOWLEDGE OF THE ASSESSEE BEING THE SURRENDERED MADE BY THE ASSESSEE. FURTHER, THE ASSE SSING OFFICER HAS VERY MUCH RECORDED THE SATISFACTION IN THE ASSESSMENT ORDER AND STATED THAT THE PENALTY PROCEE DINGS U/S 271(1)(C) OF THE ACT ARE INITIATED AS THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THEREFORE, TO THE EXTENT OF INITIATING PENALTY PROCEEDINGS AS WELL AS LEVY OF PENALTY PROC EEDINGS U/S 271(1)(C) OF THE ACT AGAINST ADDITION OF RS.50 LAKH S BASED ON THE SURRENDERED OF THE INCOME BY THE ASSESSEE BEING ACC OMMODATION ITA NO. 6758/DEL/2017 12 | P A GE ENTRIES OF SHARE APPLICATION MONEY THERE IS NO FAI LURE ON THE PART OF THE ASSESSING OFFICER TO MAKE ASSESSEE KNOWN ABOUT THE DEFAULT OF THE ASSESSEE AND CHARGE FOR WHICH THE PEN ALTY WAS PROPOSED TO BE LEVIED. ACCORDINGLY, TO THE EXTENT OF THE LEVY OF PENALTY AGAINST THE ADDITION OF RS.50 LAKHS, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDERS OF THE A SSESSING OFFICER AND THE LD. CIT(A). 10. AS REGARDS, THE PENALTY LEVIED AGAINST THE ADD ITION OF RS.3,11,306/- BY DISALLOWING THE CLAIM OF PROPERTY T AX, IT IS PERTINENT TO NOTE THAT THIS WAS ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWING THE CLAIM OF EXPENDITURE AND THEREFORE THIS ADDITION DOES NOT FALL IN THE CATEGORY OF CONCEALME NT OF THE PARTICULARS OF INCOME. THE ASSESSEE IS HAVING SHOW ROOM ON LEASE AND FOR WHICH THE ASSESSEE IS PAYING RENT OF R S.1 LAKHS PER MONTH AS WELL AS THE PROPERTY TAX. THEREFORE, EVEN IF THE CLAIM OF THE PROPERTY TAX IS DISALLOWED BY THE ASSESSING OFF ICER, THE SAME CANNOT BE HELD TO BE THE CONCEALMENT OF PARTICULARS OF INCOME BUT AT THE MOST IT CAN BE REGARDED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, INITIATION OF PEN ALTY BY THE ASSESSING OFFICER ON THE CHARGE OF CONCEALMENT OF P ARTICULARS OF ITA NO. 6758/DEL/2017 13 | P A GE INCOME IN RESPECT OF ADDITION OF PROPERTY TAX IS IN CORRECT CHARGE. IT WOULD RENDERED THE INITIATION OF PENALTY PROCEED INGS TO LEVY THE PENALTY AGAINST THE ADDITION OF RS.3,11,306/- A S INVALID. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFI CER IN RESPECT OF RS.3,11,306/- IS NOT SUSTAINABLE AND LIABLE TO B E DELETED. 11. GROUND NO.3 IS REGARDING THE MERITS OF LEVY OF PENALTY OF RS.16,41,194/- U/S 271(1)(C) OF THE ACT,. 12. ON MERITS, THE LD. AR OF THE ASSESSEE HAS SUBM ITTED THAT THE ADDITION SO MADE BY THE ASSESSING OFFICER ON THE BASIS OF SURRENDER WHICH IS NOT VOLUNTARILY SURRENDERED BU T UNDER THE COMPULSION. THE LD. AR HAS SUBMITTED THAT THE ASSE SSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO S HOW THAT THE ASSESSEE HAD A CRIMINAL INTENT FOR SHOWING THE SHARE APPLICATION MONEY. THEREFORE, THE LEVY OF PENALTY IS NOT AUTOM ATIC AND ONCE, THE ASSESSEE HAS FURNISHED THE EXPLANATION WHICH IS BONA-FIDE, THE PENALTY LEVIED U/S 271(1)(C) IS NOT JUSTIFIED. HE HAS SUBMITTED THAT THE HONBLE SUPREME COURT IN THE CAS E OF CIT VS SURESH CHANDRA MITTAL 177 CTR 182(SC) HELD THAT WHER E THE ASSESSEE HAS SURRENDERED THE INCOME AFTER PERSISTEN T QUERIES BY ITA NO. 6758/DEL/2017 14 | P A GE THE ASSESSING OFFICER, THE EXPLANATION OF THE ASSES SEE THAT HE HAS DECLARED INCOME TO BUY PEACE OF MIND AND TO COM E OUT OF WAXED LITIGATION COULD BE TREATED AS BONA-FIDE AND P ENALTY LEVIED U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED. THE LD. AR HAS THUS SUBMITTED THAT THE SURRENDER WAS MADE BY THE ASSESSE E JUST TO BUY PEACE OF MIND AND TO AVOID THE LITIGATION, THE SAME WOULD NOT ATTRACT THE PENALTY PROCEEDINGS U/S 271(1)(C) O F THE ACT. 13. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT BUT FOR THE SURVEY PROCEEDINGS, THE ASSESSEE WOULD NOT HAVE SURR ENDERED THIS INCOME OF RS.50 LAKHS FOR THE YEAR UNDER CONSI DERATION. THEREFORE, IT IS NOT VOLUNTARILY SURRENDER MADE BY THE ASSESSEE BUT THE SURRENDER WAS MADE BECAUSE OF THE ENQUIRY CO NDUCTED BY THE INVESTIGATION WING DURING SURVEY PROCEEDINGS . 14. WE HAVE CONSIDERED THE RIVAL SUBMISSION AS WEL L AS THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS NOT DISPUTED THE FACT THAT A SURVEY WAS CONDUCTED POST FILING OF RETURN OF INCOME AND DURING THE ENQUIRY CONDUCTED BY THE INVE STIGATION WING, THE ASSESSEE SURRENDERED THE INCOME ON ACCOUN T OF SHARE ITA NO. 6758/DEL/2017 15 | P A GE APPLICATION MONEY BEING ACCOMMODATION ENTRIES OUT O F WHICH RS.50 LAKHS WAS SURRENDERED FOR THE YEAR UNDER CONSI DERATION. THE SAID ADDITION OF RS.50 LAKHS MADE BY THE ASSESS ING OFFICER OUT OF THE SURRENDERED MADE BY THE ASSESSEE HAS ATT AINED FINALITY. THE ASSESSEE HAS NOWHERE DISPUTED THE SAI D SURRENDER BEING MADE UNDER COERCIVE CIRCUMSTANCES OR UNDER CO MPULSION. EVEN OTHERWISE, THE SURRENDER IS NOT WITHOUT ANY BASI S BUT THE ENTRY OF SHARE APPLICATION MONEY IS VERY MUCH IN EX ISTENCE WHICH WAS ACCEPTED BY THE ASSESSEE AS ACCOMMODATION E NTRIES. THEREFORE, THERE IS NO SUBSTANCE OR MERIT IN THE CO NTENTION OF THE LD. AR THAT SURRENDER WAS MADE BY THE ASSESSEE TO BU Y PEACE OF MIND. HENCE, THE APPEAL OF THE ASSESSEE IS DEVOID O F ANY MERIT OR SUBSTANCE SO FAR AS THE LEVY OF PENALTY AGAINST THE ADDITION OF RS.50 LAKHS. 15. SINCE, THE LEVY OF PENALTY AGAINST THE DISALLO WANCE OF PROPERTY TAX OF RS.3,11,306/- IS DELETED ON THE LEG AL ISSUE, THEREFORE, WE DO NOT PROPOSED TO TAKE UP THIS ISSUE ON MERIT. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ITA NO. 6758/DEL/2017 16 | P A GE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COU RT ON 24.09.2021. SD/- SD/- (R.K.PANDA) (VIJAY PAL RA O) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI/DATE 24.09.2021 F{X~{T F{X~{T F{X~{T F{X~{T COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI