Surinder Kumar Arora, New Delhi V. ACIT, New Delhi

ITA 839/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2920 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 31-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Keywords: Document seized; Retraction; Documents seized
• Section: 271(1)(c); 153A; 274; 132

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI , !' $% . & , ( ) ! BEFORE MS. SUSHMA CHOWLA, V.P. & DR. B.R.R. KUMAR, AM * / ITA NO.839 & 840/DEL/2014 + , , / ASSESSMENT YEARS 2008-09 & 2009-10 SURINDER KUMAR ARORA, UNIT NO.134, 1 ST FLOOR, RECTANGLE 1, SAKET DISTRICT CENTER, SAKET, NEW DELHI-110017. PAN-AELPA3150N .......... -. /APPELLANT VS THE ACIT, CENTRAL CIRCLE-19, NEW DELHI. . /0-. / RESPONDENT -.12 / APPELLANT BY : SH. SANAT KAPOOR, ADV. /0-.12 / RESPONDENT BY : SH. SARAS KUMAR, SR.DR 13( / DATE OF HEARING : 09.01.2020 45 13( / DATE OF PRONOUNCEMENT: 28 .02.2020 6 / ORDER PER SUSHMA CHOWLA, V.P. THE PRESENT TWO APPEALS FILED BY ASSESSEE ARE AGAIN ST ORDER OF CIT(A)-XXXIII, NEW DELHI DATED 10.10.2013 RELATING TO ASSESSMENT YEARS 2008-09 & 2009-10 AGAINST THE PENALTY LEVIED UNDER SECTION 271(1)(C) & 271AAA OF THE INCOME-TAX ACT, 1961 (IN SHORT THE A CT) RESPECTIVELY. ITA NO.839 /DEL/2014 ASSESSMENT YEAR 2008-09 2. THE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS W HICH READ AS UNDER:- ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 2 10. THAT THE NOTICE ISSUED AND THE PENALTY ORDER P ASSED U/S 271(1)(C) ARE ILLEGAL, BAD IN LAW AND WITHOUT JURIS DICTIONAL AS SEARCH HAS TAKEN PLACE AFTER 01.06.2007 AND AS PER PROVISI ON OF SECTION 271AAA SUB-SECTION 3 NO PENALTY U/S 271(1)(C) CAN B E IMPOSED IN RESPECT OF THE ALLEGED UNDISCLOSED INCOME. 11. THAT THE NOTICE ISSUED UNDER SECTION 271(1)(C)/ 274 OF THE ACT, AND THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 12. THAT NO SATISFACTION HAS BEEN RECORDED WHILE CO MPLETING THE ASSESSMENT PROCEEDINGS, HENCE THE NOTICE ISSUED UND ER SECTION 274 OF THE ACT, AND THE ORDER PASSED UNDER SECTION 271(1)( C) OF THE ACT ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 13. THAT THE PENALTY HAS BEEN INITIATED VIDE NOTICE UNDER SECTION 271(1)(C)/274 OF THE ACT DATED WITHOUT ANY SPECIFIC CHARGE, HENCE, THE SAID NOTICE AND THE ORDER PASSED UNDER SECTION 271( 1)(C) OF THE ACT ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 3. THE ADDITIONAL GROUNDS OF APPEAL DO NOT REQUIRE ANY INVESTIGATION INTO THE FACTS. HENCE, THE SAME ARE ADMITTED FOR A DJUDICATION. 4. THE ISSUE RAISED BY WAY OF ADDITIONAL GROUND OF APPEAL IS AGAINST THE NON-SATISFACTION OF THE ASSESSING OFFICER WHILE INI TIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND ALSO NOT SPECIFYING THE CHARGE IN THE NOTICE ISSUED U/S 274 R.W.S. 271 OF THE ACT. 5. ON THE PERUSAL OF RECORD, WE FIND THAT THE PENAL TY PROCEEDINGS IN THE CASE HAS BEEN INITIATED WITH THE REMARK PENA LTY PROCEEDINGS U/S 271(1)(C) OF I.T.ACT READ WITH EXPLANATION 5A F OR CONCEALMENT OF PARTICULARS OF INCOME ARE BEING INITIATED SEPARATEL Y. HOWEVER, FROM THE COPY OF THE NOTICE ISSUED U/S 274 R.W.S. 271 OF THE ACT, WE FIND THAT THE ASSESSING OFFICER HAS FAILED TO STRIKE OFF IRRELEVA NT PORTION OF THE NOTICE NOT APPLICABLE. ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 3 6. WE FIND THAT THE SAID ISSUE STANDS COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF HONBLE DELHI HIGH COURT IN PR. CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. IN ITA NO.475/2019 JUDGEMENT DATED 02.08.2019. APPLYING THE RATIO LAID DOWN BY THE HO NBLE DELHI HIGH COURT TO THE PRESENT CASE, WE HOLD THAT WHERE THE ASSESSI NG OFFICER HAS FAILED TO STRIKE OFF THE IRRELEVANT PORTION NOT APPLICABLE TO THE ASSESSEE, THERE IS NO MERIT IN THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT. THE SAME IS HELD TO BE BAD AND INVALID IN LAW. ACCORDINGLY, W E DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. SINCE WE HAVE ADJ UDICATED THE ISSUE ON PRELIMINARY GROUND, WE DO NOT ADJUDICATE THE ISSUE ON MERIT. ITA NO.840/DEL/2014 ASSESSMENT YEARS 2009-10 7. THE ISSUE RAISED IS AGAINST THE LEVY OF PENALTY U/S 271AAA OF THE ACT. 8. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE HA D ORIGINALLY FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.45,66 ,220/-. SEARCH U/S 132 OF THE ACT WAS CARRIED OUT ON 10.02.2009 IN DAW AT GROUP OF CASES INCLUDING THE ASSESSEE. THEREAFTER, THE ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS.56,68,720/-. PENALTY PROCEEDING S U/S 271AAA OF THE ACT WERE INITIATED AGAINST THE ASSESSEE. THE REASO NS FOR THE ASSESSMENT AGAINST THE ASSESSEE AT HIGHER FIGURE WAS THAT DURI NG THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FILE THE DET AILS OF INCOME FROM TRADING BUSINESS, WHICH WAS SHOWN UNDER THE HEAD O THER INCOME TO THE EXTENT OF RS.5,31,076/- IN THE COMPUTATION OF INCOM E FILED WITH HIS RETURN ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 4 OF INCOME. HE WAS ALSO ASKED TO SPECIFY THE NATURE OF BUSINESS CARRIED OUT BY HIM, THE BASIS OF COMPUTING SUCH INCOME AND TO I DENTIFY THE PARTIES WITH WHOM SUCH BUSINESS WAS CONDUCTED. THE ASSESSE E WAS ASKED TO EXPLAIN UNRECORDED TRANSACTIONS IN THE SEIZED DOCUM ENTS, IN RESPONSE TO WHICH THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS .13,02,500/-, OVER AND ABOVE, THE INCOME RETURNED IN RETURN OF INCOME FILE D IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THE ASSESSEE HAD DECLARED UND ISCLOSED INCOME TO THE TUNE OF RS.17 CRORES ON THE BASIS OF SEIZED DOCUMEN TS FOR THE GROUP. BUT LATER ON, THE SAME WAS RETRACTED AND THE ADDITIONAL INCOME WAS OFFERED TO THE EXTENT OF RS.1.60 CRORES (APPROX.) FOR ASSESSME NT YEAR 2008-09 & RS.2.12 CRORES (APPROX.) FOR ASSESSMENT YEAR 2009-1 0 FOR THE GROUP. THE ASSESSEES SHARE IN THE UNDISCLOSED INCOME WAS RS.4 ,00,314/- AND RS.5,31,076/- WHICH WAS SHOWN IN THE RETURN OF INCO ME FOR ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY. THE ASSESSI NG OFFICER NOTES THAT WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE O F UNDISCLOSED INCOME, HE OFFERED THE ADDITIONAL INCOME OF RS.13,02,500/-. THE ASSESSEE TOOK SHELTER OF SUB-SECTION (2) OF SECTION 271AAA OF THE ACT AND POINTED OUT THAT NO PENALTY WAS LEVIABLE. THE ASSESSING OFFICER NOT ED THAT THE DAWAT GROUP TO WHICH THE ASSESSEE BELONGED, HAD OFFERED ONLY PA RT OF THE ADDITIONAL INCOME ORIGINALLY OFFERED, HENCE, THE ASSESSEE WAS HELD TO BE IN DEFAULT AND PENALTY U/S 271AAA OF THE ACT WAS LEVIED AT RS. 1,83,357/-. 9. BEFORE THE CIT(A), THE PLEA WAS THAT THE ADDITIO NAL INCOME WAS OFFERED WHILE SEARCH PROCEDURE WAS GOING ON, WHERE THE SEARCH STARTED ON 17.02.2009 AND WAS COMPLETED ON 27.03.2009. THE CI T(A) HOWEVER, ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 5 UPHELD THE ORDER OF THE ASSESSING OFFICER CONFIRMIN G THE LEVY OF PENALTY U/S 271AAA OF THE ACT AT RS.1,83,357/-. 10. THE LD.AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF TRIBUNAL IN THE CASE OF SHRI ASHWANI KUMAR ARORA VS ACIT IN ITA NO.6615/ DEL/2013, ORDER DATED 16.08.2017 RELATING TO ASSESSMENT YEAR 2009-1 0. 11. THE LD.DR FOR THE REVENUE PLACED RELIANCE ON TH E ORDERS OF THE AUTHORITIES BELOW. 12. WE FIND THAT SIMILAR ISSUE RAISED AGAINST THE L EVY OF PENALTY U/S 271AAA OF THE ACT AROSE IN THE CASE OF OTHER MEMBER S OF THE DAWAT GROUP OF CASES, WHEREIN SEARCH WAS CARRIED OUT ON 10.02. 2009. ON SAME FACTS WHEREIN THE ADDITIONAL INCOME WAS ALLEGED TO BE OFF ERED TO TAX DURING ASSESSMENT WAS BRUSHED ASIDE BY THE TRIBUNAL OBSERV ING AS UNDER:- 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THE SEARCH WAS INITIATED ON 10.02.2009 ON THE DAWAT GROUP OF CASES. THE SEARCH WAS CONDUCTED AT VARIOUS PLACE S INCLUDING THE FACTORY PREMISES, REGISTERED OFFICES, RESIDENCES, L OCKERS ETC. DIFFERENT PANACHNAMAS WERE MADE AT DIFFERENT PREMISES ON DIFF ERENT DATES. ADMITTEDLY THE LAST PANCHNAMAS OF THE GROUP WERE MA DE ON 23.03.2009, 25.03.2009 AND 27.03.2009. THE LETTER D ATED 17.03.2009 SURRENDERING THE AMOUNT OF RS 17 CRORES WAS ALSO FILED IN RESPECT OF DAWAT GROUP AND IT COVERED ALL THE GROUP COMPANIES, DIRECTORS AND INDIVIDUAL FAMILY MEMBERS OF THE GROU P. HENCE WE ARE OF THE VIEW THAT THE LETTER DATED 17.03.2009 CANNOT BE SAID THAT IT WAS NOT FILED DURING THE COURSE OF SEARCH. 11. THE ASSESSEE HAD FILED LETTERS DATED 21.01.2010 AND 28.12.2010 IN CONTINUATION AND IN REFERENCE TO LETTER DATED 17 .03.2009 DECLARING THE EXACT INCOME BELONGING TO HIM BASED ON THE SEIZ ED DOCUMENTS. ACCORDING TO THE ASSESSEE HE MODIFIED THE SURRENDER MADE IN RESPECT OF INCOME BELONGING TO HIM BASED ON THE SEIZED DOCU MENTS. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSING OFFICE R ASSESSED THE SAME INCOME AS DECLARED OR SURRENDERED BY THE ASSES SEE. THE AO HAS ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 6 NOT ASSESSED THE INCOME OF RS 17 CRORES BUT HAS ASS ESSED THE INCOME AT THE SAME AMOUNT DECLARED OR SURRENDERED BY THE A SSESSEE ON THE BASIS OF THE SEIZED DOCUMENTS. 12. IT IS NOT THE CASE OF THE REVENUE THAT THE INCO ME BELONGING TO THE ASSESSEE WAS MORE THAN WHAT IS SURRENDERED BY HIM. THE ASSESSEE HAS MODIFIED THE SURRENDER MADE DURING THE COURSE O F SEARCH ON 17.03.2009 AND AS SUCH IT CANNOT BE THAT IT IS A CA SE OF RETRACTION BECAUSE THE INCOME DECLARED BY THE ASSESSEE WHICH I S ASSESSED BY THE AO. THE LETTER DATED 17.03.2009 WAS FILED BEFOR E THE DIRECTOR OF INCOME TAX (INVESTIGATIONS) I NEW DELHI WHO WAS THE IN CHARGE OF THE SEARCH AND IT IS ALSO STATED IN THE SAID LETTER THI S SURRENDER IS FOR THE WHOLE GROUP AND THE TAXES SHALL BE PAID IN RESPECTI VE HANDS/ PERSONS AFTER GOING THROUGH THE SEIZED MATERIAL. IT IS CLEA R THAT WHEN THIS LETTER WAS FILED THE SEIZED MATERIAL WAS NOT WITH THE ASSE SSEE. THE SUBSEQUENT LETTERS MODIFYING THE SURRENDERED AMOUNT ARE BASED ON THE INCOME BELONGING TO THE ASSESSEE ON SEIZED MATE RIAL. 13. THE LD DR HAS POINTED OUT THAT THE MANNER OF EA RNING OF THE SURRENDERED INCOME HAS NOT BEEN DISCLOSED BY THE AS SESSEE WHEREAS THE ASSESSEE BY LETTER DATED 21.01.2010 HAS DISCLOS ED THE MANNER OF EARNING THE SAID INCOME BY WAY OF TRADING IN COMMOD ITIES AND REAL ESTATE AND ALSO STATED THIS FACT IS SUBSTANTIATED F ROM THE SEIZED MATERIAL. MOREOVER THIS FACTUAL POSITION IS NOT DEN IED BY THE AO AND THIS IS NOT THE BASIS FOR IMPOSING THE PENALTY. IN THAT VIEW OF THE MATTER AND IN VIEW OF SUCH FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO AND ACCORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY IMPOSED UNDER SECTION 271AAA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 13. WE ALSO FIND IN THE CASE OF OTHER MEMBERS OF TH E DAWAT GROUP RELYING ON THE DECISION IN THE CASE OF SHRI ASHWANI KUMAR ARORA VS ACIT (SUPRA), SIMILAR PENALTY HAS BEEN DELETED U/S 271AA A OF THE ACT. IN THE CASE OF ASHOK KUMAR ARORA VS ACIT IN ITA NO.842/DEL /2014, ORDER DATED 07.11.2017 AND IN THE CASE OF VIJAY KUMAR ARORA VS ACIT IN ITA NO.6614/DEL/2013, ORDER DATED 18.07.2018 WHEREIN SI MILAR PENALTY HAS ALSO BEEN DELETED U/S 271AAA OF THE ACT. FOLLOWING THE SAME PARITY OF REASONING, WE DELETE THE PENALTY LEVIED U/S 271AAA OF THE ACT. ITA NOS.839 & 840/DEL/2014 ASSESSMENT YEARS 2008-09 & 2009-10 7 14. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2020. SD/- SD/- (B.R.R.KUMAR) (SUSH MA CHOWLA) () /ACCOUNTANT MEMBER ! /VICE PRESIDENT / DATED : 28 TH FEBRUARY, 2020 * AMIT KUMAR * 61/+378983: COPY OF THE ORDER IS FORWARDED TO : 1. -. / THE APPELLANT 2. /0-. / THE RESPONDENT 3. ;3 < = / THE CIT(A) 4. > ;3 / THE PR. CIT 5. 6. 8?@/+3+ A A / DR, ITAT, DELHI @$,B: GUARD FILE. 6 / BY ORDER , 083/+3 // TRUE COPY // C D)E , A ASSISTANT REGISTRAR, ITAT, DELHI