ACIT, New Delhi V. Sh. Suresh Aggarwal, Delhi

ITA 698/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3300 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 01-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Retraction
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 698 /DEL/201 4 A.Y. : 20 0 7 - 0 8 ACIT, CIRCLE 34(1), ROOM NO. D-9, D-BLOCK, VIKASH BHAWAN, NEW DELHI VS. SH. SURESH AGGARWAL, PROP. ROYAL APPLIANCE, 603/9, G.T. ROAD, SHAHDARA DELHI 110 032 (PAN: ABZPA1042J) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. N.K. BANSAL, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU, JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 18/11/2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVII, NEW DEL HI ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE O RDER OF THE LD. CIT(A) IS BAD IN LAW AND NOT IN CONSONAN CE WITH FACTS OF THE CASE. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING PENALTY OF RS. 14,84,400/- IMPOSED BY AO U/S. 271(1)(C) ON ACCOUNT OF ADDITION OF RS. 30,00,000/- BEING BUSINESS INCOME OFFERED BY THE APP ELLANT DURING THE COURSE OF SURVEY OPERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONSIDERING APPELLANT SUBMISSIONS THA T APPELLANT SUBMISSION THAT APPELLANT HAD SURRENDERED R S. 30,00,000/- UNDER PRESSURE DURING THE SURVEY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN PASSING THE ORDER WITHOUT CONSIDERIN G THE ORDER PASSED BY THE AO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE APPELLANT CRAVES LEAVE TO ADD, ALLOW OR AMEND ANY ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEA RING OF THE APPEAL. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RET URN OF INCOME ON 23.10.2007 DECLARING TOTAL INCOME OF RS. 13,98,780/- . THE RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT, 1961 (H EREINAFTER REFERRED AS THE ACT). THE CASE WAS SELECTED UNDER C OMPULSORY SCRUTINY AND SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT ON THE BUSINESS PREMISES OF THE ASSESSEE ON 12.2.2007. AO ISSUED NOTICE 3 U/S. 143(2) OF THE ACT ON 02.9.2008 WHICH WAS SERVED UPON THE ASSESSEE. SUBSEQUENTLY, NOTICE U/S. 143(2) OF THE AC T WAS ISSUED ON 19.1.2009 FOR PRODUCING THE NECESSARY DETAILS ALO NGWITH THE AUDIT REPORT U/S. 44AB OF THE ACT. IN RESPONSE TO THE N OTICE, THE AR OF THE ASSESEE APPEARED FROM TIME TO TIME AND FILED THE REPLY AND ALSO PRODUCED BOOKS OF ACCOUNTS. 2.1 THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MAN UFACTURING OF PRESSURE COOKER AND RELATED APPLIANCES. AS THE SURV EY WAS CARRIED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 12.2.200 7 AND ASSESSEE VOLUNTARY SURRENDERED RS. 30 LACS FOR TAXATI ON VIDE ITS LETTER DATED 13.3.2007 ADDRESSED TO THE AO. THEREAFTER, THE AO PERUSED THE COMPUTATION OF INCOME, PROFIT AND LOSS AC COUNT, BALANCE SHEET, RETURN OF INCOME AT THE TIME OF COMPLETION OF AS SESSMENT AND FOUND THAT ASSESSEE HAS NOT OFFERED RS. 30 LACS IN THE RETURN OF INCOME FOR TAXATION. NEITHER ANY MENTION HAS BEEN M ADE NOWHERE IN THE RETURN OF INCOME OR THE ACCOUNTS EXPLAINING TH E RETURN. THEREFORE, VIDE THE ORDER ENTRY DATED 10.8.2009 THE A O ASKED THE ASSESSEE WHY THE AMOUNT OF RS. 30 LACS SHOULD NOT BE INCLUDED IN THE CURRENT YEAR ON ACCOUNT OF SURRENDERED INCOME DUR ING SURVEY U/S. 133A OF THE ACT PLUS AVERAGE OF 2 YEARS INCOME FROM BUSINESS AND PROFESSION OF THE ASSESSEE. IN RESPONSE TO TH E AFORESAID ORDER ENTRY DATED 10.8.2009, THE ASSESSEE FILED A REPLY ST ATING THAT SINCE 4 NO DISCREPANCY WAS FOUND IN THE BOOKS OF ACCOUNTS AND THE ASSESSEE HAS OFFERED RS. 30 LACS ONLY TO BUY THE PEACE. DUR ING THE SURVEY ASSESSEE OFFERED THAT WE HAVE NO OBJECTION IF ASSESS MENT FOR THE FINANCIAL YEARS IS MADE BY CONSIDERING THE TAXABLE P ROFIT OF RS. 30 LACS WHICH WAS SURRENDERED DURING THE SURVEY PROCEED INGS PLUS AVERAGE TAXABLE PROFIT OF THE LAST TWO PRECEDING Y EARS, SUBJECT TO PENALTY U/S. 271(1) OF THE ACT READ WITH EXPLANATIO N 4 OR UNDER ANY SECTION OF THE INCOME TAX ACT WOULD BE INITIATED AG AINST THE ASSESSEE. 2.2 AFTER CONSIDERING THE EXPLANATION GIVEN BY THE A SSESSEE AND THE DOCUMENTARY EVIDENCES AS MENTIONED ABOVE, THE AO HA S COMPLETED THE ASSESSMENT BY ADDING THE INCOME FROM BU SINESS AND PROFESSION AT AVERAGE OF 2 PRECEDING YEARS I.E. RS. 4,88,158/- PLUS SURRENDERED AMOUNT OF RS. 30 LACS THUS TOTALING TO RS . 34,88,158/- ALONGWITH OTHER SMALL ADDITIONS MENTIONED IN THE ASS ESSMENT ORDER DATED 23.11.2009 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23.11.20 09, ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE A UTHORITY WHO HAS UPHELD THE ORDER OF THE AO BY GIVING SMALL RELI EF OF RS. 25,000/- AS MENTIONED IN THE STATEMENT OF FACTS BY THE ASSESSEE. 5 4. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS EXPLAINED ABOVE, THE AO INITIATED THE PENALTY PROCEEDINGS IN THE CASE OF THE ASSESSEE VIDE NOTICE U/S. 274/271 OF THE ACT TO THE AS SESSEE FOR LEVYING THE PENALTY U/S. 271(1) OF THE I.T. ACT, 19 61 ON 23.11.2009 FIXING THE CASE FOR 12.1.2010 WHICH WAS D ULY SERVED UPON THE ASSESSEE. IN RESPONSE TO THE NOTICE ISSUED BY THE AO, ASSESSEE FILED ITS REPLY BY STATING THAT THE ASSESSEE SU RRENDERED RS. 30 LACS JUST TO BUY THE PACE OF MIND; THE SURVEY TEAM COULD NOT HAVE FOUND ANY DISCREPANCY IN THE RECORDS, WHICH WAS UNEXPLAINABLE. ALSO ON UNRECORDED ASSETS/ DOCUMEN TS WERE FOUND/ SEIZED AT THE BUSINESS PREMISES AND THE ADDITIONS WERE MADE BY THE AO ON ADHOC BASIS FOR THAT PENALTY IS NOT LEVIABLE . AO HAS CONSIDERED THE EXPLANATION GIVEN BY THE ASSESSEE AND HELD THAT ASSESSEE IS IN DEFAULT IN FURNISHING INACCURATE PARTI CULARS OF HIS INCOME. ACCORDINGLY, THE MINIMUM PENALTY @100% U/S. 271(1) OF THE ACT AMOUNTING TO RS. 14,84,400/- WAS IMPOSED ON THE ASSESSEE ON THE ADDITION OF RS. 45,76,654/- VIDE ORDER DATED 30.3.2012 PASSED U/S. 271(1) OF THE ACT. 5. AGGRIEVED BY THE PENALTY ORDER, ASSESSEE FILED AP PEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE HIS IMPUGNED ORDER DATED 18.11.2013 ALLOWED THE APPEAL FILED BY THE ASSESSEE BY DELETING THE PENALTY OF RS. 14,64,400/- IMPOSED BY THE AO BY HO LDING THAT 6 THE PENALTY IN DISPUTE IS NOT LEVIABLE MERELY FOR NOT INCLUDING THE SURRENDERED INCOME IN THE RETURN OF INCOME FILED S UBSEQUENTLY BY THE ASSESSEE. SECONDLY, THE LD. FIRST APPELLATE AUT HORITY HAS ALSO HELD THAT THE AO HAS NOT SPECIFICALLY STATED THAT AS TO H OW THE ASSESSEE HAS FILED INACCURATE PARTICULARS OR DETAILS AND AS WHY SURRENDERED INCOME IS CORRECT INCOME OF THE ASSESSE E FOR THE RELEVANT ASSESSMENT YEAR AND THE ASSESSMENT YEAR AS WEL L AS THE PENALTY ORDER IS ALSO SILENT ABOUT ANY SPECIFIC DISC REPANCY FOUND AT THE TIME OF SURVEY ON 12.2.2007. 6. AGGRIEVED WITH THE IMPUGNED ORDER DATED 18.11.201 3 PASSED BY THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE T RIBUNAL. 7. IN THIS CASE NOTICE OF HEARING WAS ISSUED TO THE A SSESSEE ON THE ADDRESS AS PER RECORD FOR 03.2.2016 BY RPAD AND IN RESPONSE TO THE SAME, NEITHER THE ASSESSEE NOR HIS AR APPEAR ED NOR FILED ANY APPLICATION FOR ADJOURNMENT AND ACCORDINGLY, THE BENCH ADJOURNED THE CASE FOR 12.5.2015 AND ON 12.5.2016 TH E BENCH WAS NOT FUNCTIONED AND NOTICE WAS ISSUED BY RPAD FOR HEAR ING ON 22.9.2016, BUT AGAIN ON 22.9.2016 NEITHER THE ASSES SEE APPEARED NOR FILED ANY APPLICATION FOR ADJOURNMENT AND AGAIN BENCH ADJOURNED THE CASE FOR 10.1.2017 AND THE OFFICE ISSU ED NOTICE BY RPAD FOR 10.1.2017, BUT AGAIN ON 10.1.2017 NONE APP EARED ON 7 BEHALF OF THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT. THE BENCH AGAIN ADJOURNED THE CASE FOR 01.5.2017 AND NOTICE FOR HEARING ON 01.5.2017 WAS SENT BY RPAD, BUT AGAIN NONE APPEARED ON BEHALF OF THE ASSESSEE, NOR FILED ANY APPLICATION FOR ADJOURNMENT AND NOTICE SENT FOR 01.5.2017 WAS NEVER RECEIVED BACK UNSERVED. THEREFORE, KEEPING IN VIEW FACTS AND CIRCUMSTANCES A S EXPLAINED ABOVE, WE ARE OF THE VIEW THAT ASSESSEE IS NOT INTERES TED TO PROSECUTE THE MATTER IN DISPUTE AND NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSE E. THEREFORE, WE ARE DECIDING THE REVENUES APPEAL EXPARATE QUA AS SESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 8. AT THE TIME OF HEARING LD. DR RELIED UPON THE ORDER PASSED BY THE AO AND THE CONTENTIONS RAISED BY THE DEPARTMENT IN T HE GROUNDS OF APPEAL. 9. WE HAVE HEARD THE LD. DR AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WE ARE OF THE VIEW THAT THE ASSESS EE HAS SURRENDERED RS. 30 LACS VIDE ITS LETTER DATED 13.3.20 07 ADDRESSED TO THE AO, AFTER SURVEY U/S. 133A OF THE ACT CARRIED OUT O N THE BUSINESS PREMISES OF THE ASSESSEE ON 12.2.2007, AS PER RECORD AVAILABLE WITH US. WE HAVE NOT SEEN THAT ASSESSEE HAS ANY RETRACTION FROM ITS SURRENDER OF RS. 30 LACS MADE VID E HIS LETTER 8 DATED 13.3.2007 BY MENTIONING ANY PLAUSIBLE REASONS. MORE SERIOUSLY, THE ASSESSE HAS NOT SHOWN THE AMOUNT OF RS . 30 LACS ON ACCOUNT OF SURRENDER IN THE RETURN OF INCOME AND OF FER FOR TAXATION, NEITHER ANY MENTION HAS BEEN MADE NOWHERE IN THE RETURN OF INCOME OR ACCOUNTS EXPLAINING THE RETURN. ONLY THE AO HAS NOTICED THIS MISTAKE COMMITTED BY THE ASSESSEE IN THE RETURN OF INCOME. AO ASKED THE ASSESSEE VIDE HIS ORDER SHEET ENTRY DATED 10.8.2009 AND ASSESSEE FILED ITS REPLY TO THE SAME VIDE HIS LETTER DATED 31.8.2009 BY STATING THAT WE HAVE NO OBJECTION IF THE ASSESSMENT F OR THE FINANCIAL YEAR 2006-07 IS MADE CONSIDERING THE TAXAB LE PROFIT AT RS. 30 LACS (SURRENDERED DURING SURVEY) PLUS AVERAGE T AXABLE PROFIT FOR THE LAST TWO PRECEDING FINANCIAL YEARS. AS PER THE PEN ALTY ORDER THE ASSESSEE HAS WRITTEN A LETTER DATED 13.3.2007 OFFERING THE SURRENDER AMOUNT OF RS. 30 LACS ON ACCOUNT OF DISCREPANCY IN THE STOCKS, PURCHASES AND EXPENSES ETC. AND OTHER DOCUMENTS. WE ARE OF THE VIEW THAT LD. CIT(A) HAS NOT CONSIDERED THESE ASPECTS I N THE IMPUGNED ORDER WHILE DELETING THE PENALTY IN DISPUTE A ND PASSED A NON-SPEAKING ORDER. THEREFORE, THE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME IS SET AS IDE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CA SE AND IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT MATTER REQUI RES THOROUGH INVESTIGATION AS MENTIONED ABOVE, AT THE LEVEL OF THE LD. CIT(A) AND 9 THEREFORE, WE DIRECT THE LD. CIT(A) TO CONSIDER THE IS SUES IN DISPUTE AFRESH AND PASS A SPEAKING ORDER, AFTER HEARING THE PARTIES, AS PER LAW. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05/05/2017. SD/- SD/- (PRASHANT MAHARISHI) [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 05/05/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES