Mr. Sunil Nemichand Shah, Pune V. ACIT Central Circle-2(2), Pune

ITA 930/PUN/2007

• Counselvise Citation: 93024514 RSA 2007
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 1995-1996
• Appeal Filed On: 06-07-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H C LEUVA
• Assessee Lawyers: PRAMOD SHINGHATE
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 930 /PN/ 200 7 ( ASSTT. YEAR : 199 5 - 96 ) SUNIL NEMICHAND SHAH GANDHI CHOWK, DAUND, DIST. PUNE 413 801 PAN: NOT AVAILABLE .. APP ELL ANT V. ACIT, CENTRAL CIRCLE 2(2), PUNE . RESPONDENT APP ELLANT BY : SHRI PRAMOD SHINGHATE RESPONDENT BY : SHRI. H.C. LEUVA ORDER PER I.C. SU DHIR, JM TH E ASSESSEE HAS QUESTIONNED FIRST APPELLATE ORDER ON FOLLOWING GROUNDS : 1. ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE CIT (APPEALS) II, PUNE ERRED IN HOLDING THAT THE PENALTY IMPOSED UNDER SECTION 271(1)(C ) BY ORDER DATED 26 TH SEPTEMBER 2006 IS NOT BARRED BY LIMITATION OF TIME PRESCRIBED BY PROVISO TO SEC TION 275 OF THE INCOME TAX ACT, 1961. THE PENALTY IMPOSED U/S 271(1)(C ) IS BARRED BY THE LIMITATION OF TIME. THE APPELLANT REQUEST THAT THE PENALTY ORDER MAY PLEASE BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONOUR ABLE CIT (APPEALS) - II, PUNE ERRED IN CONFIRMING THE PENALTY OF RS.1,56,080/ - LEVIED UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS OF THE CASE. IT IS PRAYED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C ) MAY PLEASE B E DELETED. GROUND NO.1 2. IN SUPPORT OF THE GROUNDS, THE LD. A.R. SUBMITTED THAT ORDER DATED 30 TH DECEMBER 2005 OF THE TRIBUNAL IN QUANTUM APPEAL WAS SERVED UPON THE DEPARTMENT ON 16.2.2006 AND THE REVENUE WAS SUPPOSED TO PASS PENALTY ORDER WITHIN THE PRESCRIBED TIME LIMIT OF 6 ITA . NO 930/PN/2007 SUNIL NEMICHAND SHAH.. A. Y 1995 - 96 PAGE OF 5 2 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE TRIBUNAL WAS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OF INCOME TAX, WHEREAS PENALTY ORDER HAS BEEN PASSED ON 26.9.2006 I.E. AFTER EXPIRY OF THE SAID TIME LIM IT OF 6 MONTHS. THE PENALTY ORDER IS, THEREFORE, BARRED BY TIME LIMITATION. THE LD A.R. SUBMITTED FURTHER THAT EFFECTIVE ORDER IN THE PRESENT CASE IS FIRST APPELLATE ORDER PASSED ON 1 ST JUNE 2003 WHEREBY THE LD CIT(A) HAS REDUCED THE INCOME AND THUS A.O WAS SUPPOSED TO PASS PENALTY ORDER ON THE REDUCED INCOME WITHIN THE PRESCRIBED TIME LIMIT. IN SUPPORT HE CITED FOLLOWING DECISIONS : 1.TARLOCHAN SINGH & SONS (HUF) V/S. ITO (2008, 114 TTJ (ASR) 82. 2. RAYALA CORPORATION (P) LTD. V/S. UIO (2007) 288 ITR 452(M AD) 3. VLCC HEALTH CARE LTD. V/S. ACIT (2010) 3 ITR (TRIB) 51 (DEL) 4. B.N. AMARNATH V/S. CIT (2003) 259 ITR 590 (KAR) 5. R.C. TRADING CO., V/S. ACIT,ITA NO. 1511/PN/05 DT. 29/02/2008 3. THE LD. D.R. ON THE OTHER HAND REFERRED PARA NO. 3.4 OF THE FIRST APPELLATE OR DER WHEREIN IT HAS BEEN MENTIONED THAT AS PER THE A.O, IN THE PENALTY ORDER, THE ORDER OF THE TRIBUNAL WAS RECEIVED IN THE OFFICE OF LD CIT (CENTRAL), PUNE ON 22.3.2006, HENCE PENALTY ORDER PASSED ON 26.9.2006 WELL WITHIN THE PERIOD ALLOWED U/S. 275(1) OF THE ACT. 4. CONSIDERING THE ABOVE SUBMISSIONS, WE DO NOT FIND SUBSTANCE IN THE CONTENTION OF THE LD. A.R. RAISED IN SUPPORT OF GROUND NO. 1 AS SERVICE OF ORDER DATED 30 TH DECEMBER 2005 OF THE TRIBUNAL ON THE LD CIT (CENTRAL), PUNE ON 22 ND MARCH 2006 RECO RDED BY THE A.O IN ITS ITA . NO 930/PN/2007 SUNIL NEMICHAND SHAH.. A. Y 1995 - 96 PAGE OF 5 3 PENALTY ORDER HAS NOT BEEN REBUTTED. IF THE TIME LIMIT IS COMPUTED AS PER THE PROVISIONS U/S. 275(1)(A) OF THE ACT FROM THE END OF THE MONTH IN WHICH ORDER OF THE TRIBUNAL WAS SERVED UPON THE LD CIT, THEN, THE PENALTY ORDER PASSE D ON 26.9.2006 IS WELL WITHIN THE PRESCRIBED TIME LIMIT OF 6 MONTHS. THE PENALTY HAS BEEN INITIATED ONLY AFTER RECEIPT OF THE ORDER OF THE TRIBUNAL, HENCE PRESCRIBED TIME LIMIT OF 6 MONTHS IS TO BE COMPUTED AS PER SECTION 275 (1)(A ) ONLY FROM THE END OF THE MONTH IN WHICH ORDER OF THE TRIBUNAL WAS RECEIVED BY THE LD COMMISSIONER OF INCOME TAX. THE GROUND NO. 1 IS ACCORDINGLY REJECTED. GROUND NO. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONOURABLE CIT (APPEALS) - II, PUNE ERRE D IN CONFIRMING THE PENALTY OF RS.1,56,080/ - LEVIED UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS OF THE CASE. IT IS PRAYED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C ) MAY PLEASE BE DELETED. 5. IN SUPPORT OF T HIS GROUND, THE LD. A.R. SUBMITTED THAT ASSESSEE HAD DISCLOSED ALL THE PARTICULARS IN DETAILS REGARDING THE GIFT IN QUESTION AND THERE IS NO EVIDENCE WITH THE REVENUE THAT THERE WAS CONCEALMENT ON THE PART OF THE ASSESSEE IN THIS REGARD. THE GIFT AMOU NT WAS RECEIVED THROUGH THE BANKING CHANNEL AND IDENTITY OF THE DONOR WAS ALSO ESTABLISHED. THE FACT THAT THE AMOUNT HAS NOT BEEN CONSIDERED AS GIFT IS A DIFFERENT MATTER. IN SUPPORT, HE PLACED RELIANCE ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF CIT V/S. BALBIR SINGH (2008) 304 ITR 125 ( P & H) 6. THE LD. D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE PLACED RELIANCE ON THE PENALTY ORDER. ITA . NO 930/PN/2007 SUNIL NEMICHAND SHAH.. A. Y 1995 - 96 PAGE OF 5 4 7. CONSIDERING THE ABOVE SUBMISSIONS, WE AGREE WITH THE CONTENTION OF THE LD. A.R. THAT MERELY BECAUSE THE AMOUNT HAS NOT BEEN CONSIDERED AS GIFT IS A DIFFERENT MATTER AND UNLESS IT IS ESTABLISHED BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF REGARDING GIFT AMOUNT IN QUESTION, PENALTY U/S. 271(1)(C ) CANNOT BE LEVIED. IN THE PRESENT CASE, THE RELEVANT FACTS ARE THAT ONE SHRI AJAY JAIN HAD MADE A GIFT OF RS. 4 LAKH IN JULY 1994 TO THE ASSESSEE. SHRI JAIN HAD GIFTED THE AMOUNT FROM HIS NRE ACC OUNT. THE A.O DOUBTED THE GENUINENESS OF THE GIFT MERELY ON THE BASIS THAT SHRI AJAY JAIN HAD GIFTED AROUND RS. 1.50 CRORES TO 35 DIFFERENT UNRELATED PERSONS AND THAT GIFTS WERE MADE ON THE SAME DATE WHEN DEPOSITS WERE MADE IN THE ACCOUNT LEAVING A BE AR MINIMUM BALANCE. THE ACTION OF THE A.O HAS ULTIMATELY BEEN UPHELD BY THE TRIBUNAL. DURING THE PENALTY PROCEEDINGS, THE CONTENTION OF THE ASSESSEE REMAINED THAT IDENTITY OF THE OWNER IS PROVED AS COPY OF HIS PASSPORT WAS FURNISHED IN SUPPORT. THE DO NOR IS A RICH PERSON HAVING HIS BUSINESS OF DIAMOND IN HONGKONG, THAILAND AND JAPAN. THE DONOR HAS CONFIRMED THAT HE GAVE THE GIFT OF RS. 4,00,000/ - FROM HIS NRE ACCOUNT . THUS, THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURA TE PARTICULARS ON THE PART OF THE ASSESSEE. HAVING GONE THROUGH THE PENALTY ORDER, WE FIND THAT ADDRESS OF THE DONOR, AND HIS NRE ACCOUNT NO. HAD BEEN FURNISHED ALONG WITH XEROX COPY OF LETTER DATED 27.7.1994 OF THE DONOR PROPOSED TO MAKE A GIFT AS TOKE N OF LOVE AND AFFECTION. A COPY OF AFFIDAVIT OF SHRI AJAY JAIN, THE DONOR SWORN IN BEFORE THE EMBASSY OF INDIA, BANGKOK WAS ALSO FURNISHED STATING THEREIN THAT DEPOSITS IN THE BANK ACCOUNT WAS MADE THROUGH REGULAR BANKING CHANNELS. IN THE CASE OF CIT V/S. BALBIR SINGH (SUPRA), THE HONBLE HIGH COURT OF PUNJAB & HARYANA HAS BEEN PLEASED TO HOLD THAT THE AMOUNT ALLEGEDLY HAVING ITA . NO 930/PN/2007 SUNIL NEMICHAND SHAH.. A. Y 1995 - 96 PAGE OF 5 5 BEEN RECEIVED BY THE ASSESSEE AS GIFT HAVING BEEN DISCLOSED BY THE ASSESSEE, THE SAME HAVING COME THROUGH BANKING CHANNELS AND IDENTITY OF DONOR HAVING BEEN ALSO ESTABLISHED, PENALTY U/S. 271(1)(C ) WAS NOT IMPOSABLE, EVEN THE AMOUNT WAS NOT CONSIDERED AS GIFT. RESPECTFULLY FOLLOWING THIS DECISION OF HONBLE HIGH COURT, WE FIND THAT IT WAS NOT A FIT CASE TO LEVY PENALTY ON THE CLAIMED GIFT ESPECIALLY WHEN THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW DIRECT THE A.O TO DELETE THE PENALTY IN QUESTION. GROUND NO. 2 IS ACCORDINGLY ALLOWED. 8. IN RESULT, APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 13TH MAY 2011. SD/ - SD/ - ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDI CIAL MEMBER PUNE , DATED THE 13TH MAY , 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLA NT 2. THE RESPONDENT 3. THE CIT III , PUNE 4. THE CIT(A) - II, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTAN T REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE