Smt. Darshan Khanna, New Delhi V. ITO, New Delhi

ITA 91/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1268 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 06-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Keywords: Gift; Revised return
• Section: 80C; 234B; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.91/DEL./2012 (ASSESSMENT YEAR : 2002-03) DARSHAN KHANNA, VS. ITO, WARD 26(3), C-1/183, JANAKPURI, NEW DELHI. NEW DELHI. (PAN/GIR NO.AAEPK8184B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIREN MEHTA, CA REVENUE BY : SHRI K.V.K. SINGH, SR.DR ORDER PER U.B.S. BEDI, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT (A)- XVII, NEW DELHI, DATED 30.11.2011, RELEVANT TO ASSE SSMENT YEAR 2002-03, WHEREBY SUSTENANCE OF PENALTY OF RS.3,68,817/- IMPOSED BY T HE ASSESSING OFFICER U/S 271(1)(C) HAS BEEN CHALLENGED. 2. FACTS INDICATE THAT ORIGINAL RETURN OF INCOME FO R A.Y. 2002-03 WAS FILED ON 26.08.2002, WHICH WAS ACCOMPANIED BY STATEMENT OF T AXABLE INCOME, ACCOMPANYING NOTES AND COPY OF PERSONAL BALANCE SHEET. IN THE PE RSONAL BALANCE SHEET TWO ENTRIES REGARDING RECEIPT OF GIFTS FROM MR. RAMESH KUMAR AN D MRS. KANTA DEVI OF RS. 10 LACS EACH WERE REFLECTED. A NOTICE U/S 148 DATED 29.03.2 007 WAS ISSUED TO THE ASSESSEE REQUIRING TO DELIVER RETURN IN THE PRESCRIBED FORM WITHIN 30 DAYS. THE ACTION U/S 148 WAS I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 2 BASED UPON INFORMATION RECEIVED FROM INVESTIGATION WING REGARDING RECEIPT OF BOGUS GIFT FROM SMT. KANTA DEVI. THE RETURN IN RESPONSE TO NOT ICE WAS FILED ON 26.06.2007. IN THE SAID RETURN GIFTS OF RS.10 LACS EACH RECEIVED FROM MR. RAMESH KUMAR AND MRS. KANTA DEVI WERE DECLARED AS INCOME. IN THE FOOT NOTE IT W AS EXPLAINED THAT THE SAID GIFTS WERE BEING OFFERED FOR TAXATION IN ORDER TO AVOID PROTRA CTED LITIGATION AND IN ORDER TO BUY PEACE. RESULTANTLY, RETURN DECLARING TOTAL INCOME OF RS. 2 3,09,494/- WAS FILED ON 21.06.2007. SUBSEQUENTLY ORDER U/S 148/143(3) WAS PASSED ACCEPT ING THE RETURNED INCOME OF RS. 23.09 LACS. PENALTY PROCEEDINGS U/S 271 (1 )(C) WER E INITIATED IN THE SAID ORDER. APPEAL FILED BY THE ASSESSEE BEFORE CIT(A) RAISING CERTAIN NON-SUBSTANTIVE ISSUES WERE DISMISSED VIDE ORDER DT. 22.02.2008. 2.1 IN THE PENALTY PROCEEDINGS WRITTEN SUBMISSIONS WERE FILED VIDE LETTER DT. 18.03.2009 CONTENDING THAT PENALTY FOR CONCEALMENT WAS NOT LEVIABLE. THE ONLY BASIS ON WHICH PENALTY OF RS. 3,68,817/- HAS BEEN IMPOSED IS THAT THE ASSESSEE SURRENDERED GIFTS OF RS. 10 LACS EACH FROM MR. RAMESH KUMAR & MRS. KANTA DEVI WHICH WERE NOT INCLUDED AS INCOME IN THE ORIGINAL RETURN. HAD NOTICE U/S 14 8 NOT BEEN ISSUED, BASED UPON INFORMATION RECEIVED FROM THE INVESTIGATION WING, T HE ASSESSEE WOULD HAVE SUCCEEDED IN CONCEALING THE SAID AMOUNTS. PERTINENTLY, IN PARA. 6B OF THE PENALTY ORDER, IT HAS BEEN OBSERVED THAT THERE IS NO NEED TO ADDUCE FURTHER IN DEPENDENT EVIDENCE FOR LEVY OF PENALTY. APART FROM THE ABOVE, NO FURTHER EVIDENCE HAS BEEN BROUGHT ON RECORD FOR LEVY OF PENALTY. 2.2 THE CIT(A) VIDE ITS ORDER DT. 30.11.2011 HAS CO NFIRMED THE LEVY OF PENALTY. IN PARA 4.3 OF APPELLATE ORDER IT HAS BEEN HELD THAT A FTER SURRENDERING CONCEALED INCOME BY FILING RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE I.T. ACT, 1961, THE ASSESSEE CANNOT I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 3 TAKE THE PLEA THAT THERE WAS NO CONCEALMENT OF INCO ME OR TAKE PLEA THAT THE INCOME WAS OFFERED VOLUNTARILY. IT IS A FACT THAT BUT FOR THE DETECTION BY THE INVESTIGATION WING AND THE SUBSEQUENT NOTICE U/S 148 ISSUED BY THE DEPARTMENT, THE ASSESSEE WOULD NOT HAVE OFFERED THE GIFTS AS INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT, 3. STILL AGGRIEVED, ASSESSEE HAS COME UP IN FURTHER APPEAL BEFORE THIS BENCH AND IT WAS SUBMITTED THAT NOTHING WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT AMOUNT OF GIFT BELONGS TO ASSESSEE HERSELF, MERE SU RRENDER OF AMOUNT OF GIFT BY THE ASSESSEE WAS NOT SUFFICIENT FOR LEVY OF THE IMPUGNE D PENALTY. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS: 1. ACIT VS. VISHAN NARAYAN KHANNA, 171 TAXMAN 136 (DEL.). 2. PUNEET SEHGAL VS. ITO, 123 TTJ 566 (DEL.) 3. SMT. SANDHYA VERMA VS. ITO, 30 SOT 29 (DEL.) 4. ALKA LUTHRA VS. ACIT, 37 SOT 282 (DEL.) 4. IT WAS FURTHER SUBMITTED THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOT HESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS WITH THE HYPOTHESIS T HAT IT DOES AND FURTHER PLACED RELIANCE ON THE FOLLOWING DECISIONS: 1. NATIONAL TEXTILES VS. CIT 249 I.T.R. 125 (GUJ.) 2. GIRI RAJ GUPTA VS. ITO, 162 TAXMAN 81 (DEL.) 3. CIT VS. AGGARWAL PIPE CO., 240 I.T.R. 880 (DEL.) 5. IT WAS STRONGLY PLEADED THAT PENALTY IS NOT ATTR ACTED IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, ACTION OF TH E AUTHORITIES BELOW IS NOT PROPER AND I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 4 JUSTIFIABLE. IT WAS THUS PLEADED FOR DELETION OF I MPUGNED PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). 6. LD.DR, ON THE OTHER HAND, SUBMITTED THAT SINCE A SSESSEE HAS NOT DISCLOSED HER TRUE INCOME IN THE RETURN OF INCOME ORIGINALLY FILED AND ONLY ON RECEIPT OF NOTICE U/S 148 OF THE ACT, ASSESSEE FILED ANOTHER RETURN IN RESPONSE THERETO AND SURRENDERED RS.20 LAKHS ON ACCOUNT OF TWO GIFTS OF RS.10 LAKHS EACH IN SUCH RE TURN AND IN THE NOTE ENCLOSED WITH THE STATEMENT OF INCOME FILED, ASSESSEE JUST PLEADED TH AT DECLARATION ABOUT SUCH GIFTS WERE DULY MADE IN THE COMPANY DOCUMENTS ENCLOSED WITH TH E ORIGINAL RETURN AND THE AMOUNT OF RS.20 LAKHS WITH RESPECT TO TWO GIFTS WERE ALSO DIS CLOSED IN THE BALANCE SHEET AND OTHER SUPPORTING DOCUMENTS WERE ALSO THERE, BUT IN ORDER TO BUY PEACE WITH THE DEPARTMENT AND ASSESSEE NOT GOING INTO LITIGATION HAS OFFERED CONC EALED AMOUNT OF RS.20/- LAKHS FOR TAXATION. BUT, SINCE IN THE ORIGINAL RETURN, SUCH AMOUNT WAS NOT OFFERED FOR TAXATION, THEREFORE, PENALTY IS ATTRACTED WHICH HAS RIGHTLY B EEN IMPOSED BY THE ASSESSING OFFICER AND JUSTIFIABLY BEEN CONFIRMED BY THE CIT(A), WHOSE ACTION, NEEDS TO BE FURTHER CONFIRMED AS LD.CIT(A) HAS RIGHTLY APPLIED DECISIO N IN THE CASE OF P.C. JOSEPH & BROTHERS VS. CIT, 243 I.T.R. 818 WHICH IS .FULLY A PPEALABLE TO THE FACTS OF THIS CASE. 6.1 LD.COUNSEL IN ORDER TO COUNTER THE SUBMISSIONS OF LD.DR HAS SUBMITTED THAT THOUGH, REVISED RETURN HAS NOT BEEN FILED IN THIS C ASE BUT RETURN WAS FILED IN RESPONSE TO THE NOTICE U/S 148 IN WHICH ADDITIONAL INCOME WAS O FFERED FOR TAXATION WHEN RECEIPTS OF AMOUNTS, THROUGH GIFTS WAS DULY DISCLOSED IN THE OR IGINAL RETURN FILED SO RATIO OF THE DECISION OF P.C. JOSEPH & BROTHERS (SUPRA) IS NOT A PPLICABLE. 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS THE CASE LAWS CITED BY THE LD.COUNSEL FOR THE ASSESSEE. IT IS NOT IN DISPUTE THAT ASSESSEE I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 5 INCORPORATED DETAILS OF THE TWO GIFTS OF RS.10 LAKH S EACH, WHICH WAS DISCLOSED IN THE BALANCE SHEET FILED ALONG WITH THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE . IT IS ALSO FOUND FROM THE RECORD THAT DEPARTMENT WAS IN P OSSESSION OF INFORMATION ABOUT ONE GIFT OF RS.10 LAKHS ONLY WHEREAS ASSESSEE INCLUDED AMOUNT OF BOTH THE GIFTS OF RS. TEN LAKHS EACH AGGREGATING TO RS.20/ LAKHS IN ITS RETU RN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT, AND IN THE STATEMENT ENCLOSED WITH THE RET URN ASSESSEE HAS SPECIFICALLY MENTIONED ABOUT DISCLOSURE OF SUCH AMOUNTS IN BALANCE SHEET F ILED WITH ORIGINAL RETURN FILED. FURTHER, IT HAS BEEN STATED THAT IN ORDER TO BUY PE ACE WITH THE DEPARTMENT AND BEING NOT INTERESTED IN GOING INTO LITIGATION, HAS OFFERED T HE AMOUNT OF GIFTS FOR TAXATION. SO, IT IS THE MAIN CONTENTION OF THE ASSESSEE THAT SHE HAS OF FERED EXPLANATION DURING THE PENALTY PROCEEDINGS WHICH WAS BONAFIDE AND WOULD APPEAL TO THE CONCERNED AUTHORITIES BECAUSE BEING LONG GAP IN MAKING OF GIFTS AND STARTING OF P ROCEEDINGS, IT WAS RATHER DIFFICULT TO CONTACT AND PRODUCE SUCH DONORS, SO IT WAS THOUGHT APPROPRIATE TO OFFER SUCH AMOUNT AS INCOME WHEN IT WAS NOT THE INCOME OF THE ASSESSEE A ND NOTHING IN THIS REGARD WAS ESTABLISHED EITHER, WHEREAS LD.DR RELIES ON THE ORD ERS OF LD.CIT(A) AS WELL AS ON ASSESSING OFFICERS ORDER. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND ALSO LOOKED INTO THE RECORD AVAILABLE IN THE APPEAL FILE AND FIND THAT C ONSEQUENT UPON ISSUE OF NOTICE U/S 148 OF THE ACT, ASSESSEE FILED RETURN OF INCOME WHICH WAS ACCEPTED, BUT CREDIT OF CERTAIN TAX PAYMENT WAS NOT GIVEN TO THE ASSESSEE, SO ASSESSEE FILED APPLICATION U/S 154 OF THE ACT, WHICH WAS CONSIDERED AND ACCEPTED AND ACCORDINGLY O RDER WAS RECTIFIED AND INCOME-TAX COMPUTATION FORM IN ITNS 150 WAS ISSUED ON 28.09.20 10 CONTAINING FOLLOWING CALCULATIONS: I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 6 (I) ASSESSED INCOME RS.23,09,497/- (II) TAX RS.6,66,847/- LESS : U/S 80C (-) RS.5,000 RS.6,61,847/- SURCHARGE RS. 13,237 RS.6,75,084/- INTEREST U/S 234B RS.3,97,590/- C RS. 2,231/- TOTAL TAX RS.10,74,905/- TAX PAID (-) RS.7,06,088/- BALANCE TAX PAYABLE (-) RS.3,68,817/- 9. FROM ORDER OF PENALTY DATED 30.03.2009, IT IS FO UND THAT PENALTY OF RS.3,68,817/- HAS BEEN IMPOSED WHICH IS EQUIVALENT TO INTEREST PA YABLE. THERE IS NO PROVISION OF LAW CONTAINED IN INCOME-TAX WHICH AUTHORIZES ASSESSING OFFICER OR CIT(A) TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT EQUIVALENT TO THE AMOUNT O F INTEREST PAYABLE WHICH HAS BEEN DONE IN THIS CASE. THEREFORE, THE ORDER OF ASSESSING OF FICER CANNOT BE SAID TO BE LEGALLY SUSTAINABLE. AS SUCH WHILE ACCEPTING THE APPEAL OF THE ASSESSEE, WE DELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY T HE CIT(A). 10. AS A RESULT THE APPEAL OF THE ASSESSEE GETS AC CEPTED. ORDER PRONOUNCED IN OPEN COURT ON 14.01.2013. SD/- SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : JAN. 14, 2013 SKB I.T.A. NO.91/DEL./2012 (A.Y. : 2002-03) 7 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XVII, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT