Sh. Rakesh Gupta, New Delhi V. ITO, New Delhi

ITA 6784/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4301 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Gift; Wrong claim
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.D. AGRAWAL , PRESIDENT AND BEFORE SHRI C.M. GARG, JUDICIAL MEMBER ITA NO. 6784 / DEL /20 1 4 ASSESSMENT Y EAR 2010 - 11 RAKESH GUPTA 74B, POCKET - A, MAYUR VIHAR, PHASE - II, NEW DELHI PAN - AAJPG6874B VS. ITO, WARD - 36 ( 4 ) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAKESH GUPTA, ADVOCATE RESPONDENT BY : SH. ATIQ AHMAD, SR. DR / DATE OF HEARING : 11 / 1 2 / 201 7 / DATE OF PRONOUNCEMENT: 02 /01 / 201 7 ORDER PER C.M. GARG , J .M. THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - XXVII, NEW DELHI DATED 29.9.2014 FOR AY 2010 - 11 BY WHICH PENALTY ORDER PASSED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) HAS BEEN UPHELD. THE SOLE GROUND RAISED BY THE ASSESSEE READS AS FOLLOWS: I . NO INCRIMINATING EVIDENCES FOUND AT THE TIME OF ASSESSMENT TO IMPEACH OR DISCREDIT GENUINENESS AGAINST THE SOURCES OF FUNDS SUBMITTED IN OUR REPLIES TO THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT, WE HAVE SURRENDERED VOLUNTARILY TO PURCHASE PEACE OF MIND AND AVOID MENTAL PRESSURE & HARASSMENT AND ON THE CONDITION THAT NON - LEVY OF PENALTY. ITA NO. 6784 /DEL/201 4 2 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD PLACED BEFORE THE TRIBUNAL . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO INCRIMINATING EVIDENCE WAS FOUND DURING ASSE SSMENT PROCEEDINGS TO IMPEACH OR DISCREDIT GENUINENESS AGAINST THE SOURCES OF FUNDS AS PER SUBMISSIONS OF THE ASSESSEE BEFORE THE AO AND THE ASSESSEE SURRENDERED THE AMOUNT VOLUNTARILY TO BUY PIECE OF MIND AND AVOID MENTAL HARASSMENT ON THE CONDITION THAT NO PENALTY SHALL BE LEVIED ON THE ASSESSEE. THE LEARNED COUNSEL POINTED OUT THAT THE LD. CIT(A) FOR CONFIRMING PENALTY HAS PLACED RELIANCE ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF Z OOM COMMUNICATION PRIVATE LTD. REPORTED AS 191 TAXMANN 179 (DEL) WHICH IS NOT APPLICABLE TO THE PRESENT CASE AS THAT WAS THE CASE OF FALSE CLAIM WITH MALAFIDE INTENTION TO EVADE TAXES AND IN THE PRESENT CASE THE ASSESSEE VOLUNTARILY SURRENDERED THE AMOUNT ON ACCOUNT OF EX PENDITURE INCURRED ON THE OCCASION OF MARRIAGE OF HIS DAUGHTER. THE LEARNED COUNSEL VEHEMENTLY POINTED OUT THAT PENALTY IMPOSED BY THE AO WRONGLY CONFIRMED BY THE LEARNED CIT(A) HENCE THE PENALTY MAY KINDLY BE CANCELLED. 3. REPLYING TO THE ABOVE, THE LEARNED SR. DR STRONGLY SUPPORTED THE ACTION OF THE AO AND FIRST APPELLATE AUTHORITY AND SUBMITTED THAT WHEN THE DEPARTMENT HAD DETECTED CONCEALMENT DURING ASSESSMENT PROCEEDINGS BASED ON TAX EVASION PETITION THEN PENALTY HAS TO BE LEVIED ON THE ASSESSEE. 4. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS AND PERUSAL OF RELEVANT RECORD FROM THE PENALTY ORDER, WE OBSERVE THAT THE ASSESSING OFFICER IMPOSED PENALTY BY OBSERVING THAT THE ASSESSEE DELIBERATELY CONCEALED PARTICULARS OF HIS INCOME HENCE THE PENALTY HAS TO BE LEVIED. THE LEARNED CIT(A) CONFIRMED THE PENALTY BY PLACING RELIANCE ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF Z OOM COMMUNICATION PRIVATE LTD,. (SUPRA) . ITA NO. 6784 /DEL/201 4 3 5. FROM THE ORDERS OF THE AUTHORITIES BELOW IN QUANTUM AND PENALTY PROCEEDING S THE UNDISPUTED FACTS IS THAT THE ASSESSEE FILED RETURN DECLARING INCOME OF RS. 1,70,950/ - AND HIS CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AT TOTAL INCOME OF RS. 7,20,950/ - BY MAKING AN ADDITION OF RS. 5,50,000/ - ON ACCOUNT OF EXPENDITURE ON THE MARRIAGE OF DAUGHTER OF THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SURRENDERED SAID AMOUNT BEFORE THE AO VIDE LETTER DATED 9.1.2013 STATING THAT IN CONNECTION OF ABOVE SAID PROCEEDINGS TO HAVE PEACE IN MIND AND TO AVOID FURTHER LITIGATIONS I SURRENDER THE AMOUNT OF CASH RECEIVED BY ME FROM MY RELATIVES AS GIFT ON THE OCCASION OF MARRIAGE OF MY DAUGHTER. ADMITTEDLY ASSESSEE DID NOT FILE ANY APPEAL BEFORE THE LEARNED CIT(A) AGAINST THE ABOVE ASSESSMENT OR DER AND SUBSEQUENTLY PENALTY WAS LEVIED ON THE ASSESSEE ON THIS SURRENDERED AMOUNT. 6. AT THE VERY OUTSET, ON RESPECTFUL PERUSAL OF THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF JOOM COMMUNICATION PRIVATE LTD. (SUPRA), WE OBSERVE THAT THE HON BLE DELHI HIGH COURT CONFIRMED THE PENALTY BY OBSERVING THAT PERSON WHO MAKE CLAIMS OF UNACCEPTABLE NATURE, ACTUATED BY A MALAFIDE INTENTION TO EVADE TAX WHICH IS OTHERWISE PAYABLE BY HIM ATTRACTS P ENALTY. HENCE , IT WAS A CASE OF BOGUS AND MALAFIDE CLAIM. IN THE PRESENT CASE, PENALTY HAS BEEN LEVIED ON ACCOUNT OF EXPENDITURE INCURRED BY THE ASSESSEE ON THE OCCASION OF HIS DAUGHTER S MARRIAGE. DURING THE ASSESSMENT PROCEEDINGS WHEN THE ASSESSEE SURRENDERED THE SAID AMOUNT HE CATEGORICALLY STATED THAT TO HAVE PEACE IN MIND AND TO AVOID FURTHER LITIGATIONS HE SURRENDERED AN AMOUNT OF CASH RECEIVED BY HIM FROM HIS RELATIVES AS GIFT ON THE OCCASION OF MARRIAGE OF HIS DAUGHTER. THE STATEMENT OF SURRENDERED DOES NOT SHOW ANY ACT OF CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. PER CONTRA, FROM THE SURRENDER LETTER IT ITA NO. 6784 /DEL/201 4 4 IS CLEAR THAT THE ASSESSEE SURRENDERED THE AMOUNT OF CASH RECEIVED BY HIM ON THE OCCASION OF MAR RIAGE OF HIS DAUGHTER TO BUY PEA CE OF MIND AND TO TERMINATE LIT IGATION AND THUS HE DID NOT FILE ANY APPEAL BEFORE ANY HIGHER FORUM AGAINST THE ADDITION. WE, THEREFORE, ARE OF THE RESPECTFUL OPINION THAT THE BENEFIT OF THE RATIO OF THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF Z OOM COMMUNICATION (SUPRA) IS NOT APPLICABLE TO THE PRESENT CASE NOT BEING A CASE OF MALAFIDE UNSUSTAINABLE CLAIM HENCE BENEFIT OF THE RATIO OF THIS DECISION IS NOT AVAILABLE FOR THE REVENUE IN THE PRESENT CASE AND LEARNED FIRST APPELLATE AUTHORITY WAS NOT CORRECT IN TAKING SUPPORT OF THE RATIO OF THIS JUDGMENT. 7. IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND MERELY BECAUSE THE CLAIM OF ASSESSEE , THAT HE INCURRED EXPENDIT URE ON THE OCCASAION OF MARRIAGE OF HIS DAUGHTER OUT OF CASH GIFTS RECEIVED FROM HIS RELATIVES , WAS NOT ACCEPTED OR WAS NOT FOUND TO BE ACCEPTABLE BY THE REVENUE AUTHORITIES DOES NOT AUTOMATIC ALLY ATTRACTS PENALTY PROVISION OF SECTION 271(1)(C) OF THE ACT . IN OUR HUMBLE OPINION PENALTY IN THE PRESENT CASE IS NOT LEVIABLE IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PRIVATE LTD., AND HENCE WE DIRECT THE AO TO CANCEL THE PENALTY. ACCORDINGLY , THE SOLE GROUND O F THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 . 01.2018 SD/ - SD/ - (G.D. AGRWAL) ( C.M. GARG ) PRESIDENT JUDICIAL MEMBER DATED: 02 / 1 2 /201 7 SH ITA NO. 6784 /DEL/201 4 5 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSTT. R EGISTRAR, ITAT, NEW DELHI ITA NO. 6784 /DEL/201 4 6 SL. NO. PARTICULARS DATE 1. DATE OF DICTATION 2. DATE ON WHICH THE DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR. PS/PS 5. KEPT FOR PRONOUNCEMENT ON 6. FINAL ORDER RECEIVED AFTER PRONOUNCEMENT 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILES GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR 10. DATE OF DISPATCH OF ORDER ITA NO. 6784 /DEL/201 4 7