Guru Prasad Sharma, Ghaziabad V. ITO, Ghaziabad

ITA 870/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1743 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: RUPESH GUPTA F
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. I.C.SUDHIR, JM ITA NO. 869/DEL/2013 : ASSTT. YEAR : 2009-10 GEETA SHARMA SD-487, SHASTRI NAGAR, GHAZIABAD VS ITO WARD 1(2), GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. BDNPS5808M ITA NO. 870/DEL/2013 : ASSTT. YEAR : 2009-10 GURU PRASAD SHARMA SD-487, SHASTRI NAGAR, GHAZIABAD VS ITO WARD 1(2), GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. BDLPS0506G APPELLANT BY : SH. RUPESH GUPTA, F. C.A & SH. TARUN, ADV. RESPONDENT BY : SH. T. VASANTHAN, SR. DR DATE OF HEARING : 06.08.2015 DATE OF PRONOUNCEMENT: 12 .08.2015 ORDER PER N.K. SAINI, A.M. THESE TWO APPEALS BY THE ASSESSES ARE DIRECTED AGAI NST THE SEPARATE ORDERS EACH DATED 24.12.2012 OF CIT(A), G HAZIABAD. ITA NO869 & 870/DEL/2013 2 2. SINCE THE ISSUE INVOLVED IS COMMON AND THE APPE ALS WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. FIRST WE WILL DEAL WITH THE ITA NO. 869/DEL/20 13 IN THE CASE OF SMT. GEETA SHARMA FOLLOWING GROUNDS HAS BEEN RAISED IN THIS APPEAL :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT DELETING THE PENALTY OF RS. 1,21,68,708/- FULLY AS LEVIED BY LD. AO @ 300% AND HAS FURTHER ERRED IN SUSTAINING T HE PENALTY TO THE EXTENT @ 150% AND THAT TOO WITHOUT A NY BASIS AND WITHOUT CONSIDERING THE SUBMISSIONS OF AS SESSEE AND BY RECORDING INCORRECT FACTS AND FINDINGS. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT QUASHING THE IMPUGNED PENALTY ORDER FRAMED BY LD. A O WITHOUT ESTABLISHING THE CHARGE AS PER LAW AND WITH OUT GIVING ANY COGENT REASONING FOR IMPOSING SUCH A HUG E PENALTY. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT QUASHING THE IMPUGNED PENALTY ORDER FRAMED BY LD. AO BEING CONTRARY TO LAW AS THE ASSES SMENT ORDER FRAMED U/S 143(3) DATED 29-12-2011 WAS ALSO I LLEGAL, BEYOND JURISDICTION AND VOID AB INITIO. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ITA NO869 & 870/DEL/2013 3 ON FACTS IN NOT QUASHING THE IMPUGNED PENALTY ORDER FRAMED BY LD. AO ON THE ESTIMATION OF NET PROFIT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) DATED 2 9-12- 2011 AS THE ADDITION IS ALSO CONTRARY TO LAW AND FA CTS. 5. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTE R, ACTION OF LD. CIT(A) IN NOT DELETING THE PENALTY AN D IN NOT QUASHING THE IMPUGNED PENALTY ORDER FRAMED BY LD. A O IS BAD IN LAW, CONTRARY TO LAW AND FACTS, VOID AB INIT IO, AND BY RECORDING INCORRECT FACTS AND FINDINGS AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. 6. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEA L AT THE TIME OF EHARING AND ALL THE ABOVE GROUNDS ARE WITHO UT PREJUDICE TO EACH OTHER. FROM THE ABOVE GROUNDS IT IS GATHERED TH AT THE GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF PENALTY LEV IED BY THE AO U/S 271(1)(C) OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 30.9.2009 DECLARING AN INCOME O F RS. 5,67,262/- , IT WAS PROCESSED U/S 143(1) OF ACT, LATER ON THE CASE WAS SELECTED FOR SCRUTINY. 5. THE AO DURING THE COURSE OF ASSESSMENT PROC EEDING NOTICED THAT THE PURCHASE VOUCHERS PRODUCED WERE NOT FULLY VERIFIABLE AND MOST OF THE PAYMENTS WERE SHOWN IN CASH. THE AO ALS O OBSERVED THAT THE ASSESSEE HAS SHOWN GROSS PROFIT RATE AT 0.34% O N THE CONSOLIDATED ITA NO869 & 870/DEL/2013 4 TURN OVER OF RS. 65,05,04,705/- . THE AO ESTIMATED THE NET PROFIT AT RS. 1,25,00,000/- WHICH WORKED OUT APPROXIMATELY RO UND 2% OF THE CONSOLIDATED SALES. THE CONTENTION OF THE ASSESSEE WAS THAT THE SAID INCOME WAS OFFERED SUBJECT TO NO PENALTY AND TO AVO ID MULTIPLE LITIGATIONS. THE AO ASSESSED THE INCOME OF THE ASSE SSEE AT RS. 1,25,00,000/- AND ALSO ISSUED NOTICE IF PENALTY U/S 271(1)(C) OF THE ACT. THE AO IN THE PENALTY PROCEEDINGS POINTED OUT THAT THE TAX SOUGHT TO BE EVADED WAS RS. 40,56,236/- AND THE MA XIMUM PENALTY @ 300% ON THE TAX SOUGHT TO BE EVADED CAME TO RS. 1 ,21,68,708/-, THE SAID PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIE D BY THE AO. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATT ER TO THE LD. CIT(A) WHO ALSO CONFIRMED THE PENALTY LEVIED BY THE AO BUT REDUCED THE SAME TO 150% OF THE TAX SOUGHT TO BE EVADED INSTEAD OF 300% LEVIED BY THE AO. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT IN IDENTICAL FACTS, THE SIMILAR PENALTY WAS LEVIED IN THE CASE OF SMT. VINAY SHARMA BELONGING TO THE SAME GROUP TO WHICH T HE ASSESSEE BELONGS. IT WAS FURTHER STATED THAT IN THE SAID CAS E ALSO THE INCOME WAS ESTIMATEDBYTHE AO AND PENALTY WAS LEVIED @ 200% OF THE TAX SOUGHT TO BE EVADED AND THE LD. CIT(A) REDUCED THE PENALTY TO 150% ITA NO869 & 870/DEL/2013 5 AND THE ASSESSEE PREFERRED AN APPEAL TO THE ITAT, D ELHI BENCH H, NEW DELHI IN ITA NO. 871/DEL/2013 FOR THE ASSESSMEN T YEAR 2009-10 WHEREIN VIDE ORDER DATED 30 AUGUST, 2013 THE PENALT Y LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AND CONFIRMED BY THE L D. CIT(A) WAS DELETED. AGAINST THE SAID ORDER OF THE TRIBUNAL THE DEPARTMENT PREFERRED AN APPEAL TO THE HONBLE JURISDICTIONAL H IGH COURT IN ITA NO. 187 OF 2014 WHEREIN VIDE ORDER DATED 2.5.2014 T HE ORDER OF THE TRIBUNAL WAS CONFIRMED. LD. COUNSEL FOR THE ASSESSE E FURNISHED THE COPIES OF THE AFORESAID ORDERS IN THE CASE OF SMT. VINAY SHARMA WHICH ARE PLACED ON RECORD. IN HIS RIVAL SUBMISSION S, THE LD. SR. DR ALTHOUGH SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUN SEL FOR THE ASSESSEE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD, IT IS NOTICED THAT IN IDENTICAL CIRCUMSTANCES, SIMILAR PENALTY U/S 271(1 )(C) OF THE ACT WAS LEVIED IN THE CASE OF SMT VINAY SHARMA (SUPRA) HOW EVER, THE SAID PENALTY WAS DELETED BY THE ITAT, VIDE ORDER DATED 3 0 AUGUST, 2013 IN ITA NO. 871/DEL/2013 FOR THE ASSESSMENT YEAR 200 9-10 BY OBSERVING AS UNDER :- IT IS A SETTLED LAW THAT PENALTY PROCEEDINGS ARE S EPARATE AND INDEPENDENT AND A FINDING IN THE ASSESSMENT ORD ER MAY BE AN EVIDENCE WHICH CAN BE RELIED BUT IT CANNOT BE CONCLUSIVE BY ITSELF FOR IMPOSITION OF PENALTY. BES IDES IN THIS CASE THE FINDING IN ASSESSMENT ORDER IS NOT OF CONC EALED ITA NO869 & 870/DEL/2013 6 INCOME BUT THAT OF A VOLUNTARY SURRENDER AND HENCE CANNOT BE MADE A SOLE BASIS FOR IMPOSING PENALTY. THUS, THE F INDING IN THE ASSESSMENT ORDER ITSELF DOES NOT MILITATE AGAIN ST THE STAND TAKEN BY THE ASSESSEE THAT IT WAS A VOLUNTARY SURRE NDER. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE HAVE N O HESITATION TO HOLD THAT THE ASSESSEE MADE THIS SURR ENDER OFFER VOLUNTARY IN PECULIAR CIRCUMSTANCES OF THIS CASE. A SSESSING OFFICER HIMSELF ACCEPTED IT AS VOLUNTARY OFFER, REP RODUCED THE SAME IN HIS ORDER AND ASSESSED THE INCOME ON EXACTL Y THE SAME AMOUNT. THERE IS NO REFERENCE TO ANY INVESTIGA TION OR ADVERSE MATERIAL. THUS, THE ASSESSEES OFFER IS TO BE HELD AS VOLUNTARY SURRENDER, ACCEPTED BY THE DEPARTMENT ACCORDINGLY. THERE BEING NO ADVERSE MATERIAL AVAILA BLE ON RECORD OR ANY RELIANCE THEREON, THE OBSERVATIONS OF ASSESSING OFFICER AND CIT(A) ABOUT CONCEALMENT OR INACCURATE PARTICULARS ARE NOT BORNE FROM THE RECORD AND THE S AME ARE CONTRADICTORY TO EACH OTHER. IN VIEW THEREOF, WE DE LETE THE PENALTY IMPOSED ON THE ASSESSEE. 9 . AGAINST THE ORDER OF THE TRIBUNAL THE DEPARTMEN T PREFERRED AN APPEAL TO THE HONBLE HIGH COURT IN ITA NO. 187 OF 2014 WHEREIN THEIR LORDSHIP VIDE ORDER DATED 2.5.2014 UPHELD THE ORDER DATED 30.8.2013 PASSED BY THE ITAT FOR DELETING THE PENAL TY U/S 271(1)(C) OF THE ACT, BY OBSERVING IN PARA 8 AS UNDER :- 8. IN THE PRESENT CASE, AS OBSERVED EARLIER, THE TRIBUNAL HAS RELIED UPON RULINGS OF SEVERAL HIGH COURTS WHER E THE VOLUNTARY NATURE OF SURRENDER OF INCOME TO BUY PEAC E AND THE CIRCUMSTANCES IN WHICH THE SURRENDER INCOME COULD B E ACCEPTED LEGITIMATELY, WAS DISCUSSED. IN THE PRESEN T CASE, THE ASSESSEE DID PRODUCE ALL THE RELEVANT MATERIAL IN T HE FORM OF BOOKS OF ACCOUT, BANK STATEMENTS, VOUCHERS, SALE BI LLS ETC. ITA NO869 & 870/DEL/2013 7 DURING THE COURSE OF FURTHER ENQUIRY IN THE ASSESSM ENT PROCEEDINGS. THE ASSESSEE VOLUNTARILY OFFERED A SUM OF 75LACS FOR ASSESSMENT STATING THAT EVEN THOUGH ALL THE MAT ERIAL EXISTED, YET IN ORDER TO BUY PEACE IT WAS OFFERING THE AMOUNT TO TAX. THE FACTS OF THIS CASE ARE CLEARLY SUCH THA T THE DECISION IN MAK DATA (SUPRA), IN THE OPINION OF THIS COURT, CANNOT BE ATTRACTED. THE ASSESSEE AT NO POINT SEEM TO HAVE AC CEPTED THE REVENUES CONTENTIONS THAT SUCH CLAIMED EXPENDITURE WAS BOGUS AND THAT IT WAS NOT ALLOWABLE, HE OFFERED THE AMOUNT ONLY TO BUY PEACE. THERE IS ALSO NO FINDING BY THE AO THAT THE APPELLANT HAD FAILED TO OFFER AN EXPLANATION IN RES PECT OF THE INCOME RETURNED OR HAD FAILED TO DISCLOSE MATERIAL PARTICULARS. 10. SINCE THE FACTS OF THE PRESENT CASE ARE ID ENTICAL TO THE FACTS INVOLVED IN THE CASE OF SMT VINAY SHARMA (SUPRA), S O RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISD ICTIONAL HIGH COURT VIDE ORDER DATED 2.5.2014 IN THE AFORESAID RE FERRED TO CASE, WE DELETE THE PENALTY LEVIED BY THE AO U/S 271(1)(C) O F THE ACT AND CONFIRMED BY THE LD. CIT(A). 11. IN ITA NO. 870/DEL/2013 :- THE FACTS ARE SIMILAR AS WERE INVOLVED IN THE CASE OF SMT. GEETA SHARMA IN ITA NO . 869/DEL/2013 (SUPRA) THEREFORE OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS TO THE CASE OF SH. GAU RI PRASAD SHARMA IN ITA NO. 870/DEL/2013. ITA NO869 & 870/DEL/2013 8 12. IN THE RESULT BOTH THE APPEALS OF THE ASSESSE ES ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12.08.2015 .) SD/- SD/- (I.C.SUDHIR) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12/08/2015 *B.RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO869 & 870/DEL/2013 9 DATE INITIAL 1. DRAFT DICTATED ON 7/8/2015 PS 2. DRAFT PLACED BEFORE AUTHOR 10/8/2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.