SHIV KUMAR NAYYAR,NEW DELHI V. ADDL. CIT, CENTRAL RANGE-5, NEW DELHI

BMA 2/DEL/2023

AI Insights

The case involves four appeals by Shri Shiv Kumar Nayyar and Neetu Nayyar against the orders of the Commissioner of Income Tax (Appeals) which upheld the penalties imposed under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The penalties were related to undisclosed foreign income and assets for the Assessment Year 2018-19. The Tribunal's decision was influenced by a previous reduction in additions made in quantum appeals for the same assessment year. The Tribunal directed a re-computation of penalties in two of the appeals and quashed the penalties in the other two due to procedural oversights in the assessment orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474955 (ITAT-DELHI)
• Appeal Type: Black Money Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2018-2019
• Laws Referred To: Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROHIT GARG
• Assessee Lawyers: ANIL JAIN
• Keywords: Initiation of penalty proceedings
• Section: 43; 13

Judgement Text

" 1 BMA Nos. 1 to 4/Del/2023 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘H’ NEW DELHI ] BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER B.M.A. No. 1/DEL/2023 (A.Y. 2018-19) Shri Shiv Kumar Nayyar, 2B/12, Road No.12, East Punjabi Bagh, New Delhi. C/o Anil Jain DD & Co., 611, Surya Kiran Building, 19 K.G. Marg, New Delhi. PAN No.AAFPN7499D (APPELLANT) Vs. Addl. CIT, Central Rane-5, Jhandewalan Extension, New Delhi. (RESPONDENT) B.M.A. No. 2/DEL/2023 (A.Y. 2018-19) Shri Shiv Kumar Nayyar, 2B/12, Road No.12, East Punjabi Bagh, New Delhi. C/o Anil Jain DD & Co., 611, Surya Kiran Building, 19 K.G. Marg, New Delhi. PAN No.AAFPN7499D (APPELLANT) Vs. Addl. CIT, Central Rane-5, Jhandewalan Extension, New Delhi. (RESPONDENT) 2 BMA Nos. 1 to 4/Del/2023 B.M.A. No. 3 & 4/DEL/2023 (A.Y. 2018-19) Neetu Nayyar, C/o Anil Jain DD & Co., 611, Surya Kiran Building, 19 K.G. Marg, New Delhi. PAN No.AAFPN7484A (APPELLANT) Vs. Addl. CIT, Central Rane-5, Jhandewalan Extension, New Delhi. (RESPONDENT) ORDER PER BENCH The captioned Assessees have preferred the above appeals challenging the orders dated 15/11/2022 passed by the Commissioner of Income Tax (Appeals)-31, 2nd Floor, ARA Centre, Jhandewalan Extension, New Delhi. Since the appeals are belong to same Assessees, having identical issues, the four appeals are heard and decided in this common order. Assessee by : Shri Anil Jain, CA Department by: Shri RohitGarg, CIT DR Date of Hearing 27.03.2025 Date of Pronouncement 28.03.2025 3 BMA Nos. 1 to 4/Del/2023 BMA No.1/Del/2023 & 2/Del/2023 2. Ld. Counsel for the Assessee submitted that the Assessees have challenged the order of the CIT(A) wherein the Ld. CIT(A) upheld the order of penalty imposed u/s 41 of the Black Money (Undisclosed Foreign Income and Assets)and imposition of Tax Act, 2015. Further submitted that the coordinate bench of the Tribunal in the quantum appealsfiled by the Assessees in BMA Nos. 1 to 4/Del/2022,has reduced the addition, therefore, the penalty imposed on the Appellants deserves to be computed accordingly. 3. Per contra, the Ld. DR has also agreed to the submission of the Ld. AR and sought for deciding the appeal accordingly. 4. We have heard the parties and perused the material. In the quantum appeal, in BMA No.1/Del/2022 for AY 2018-19 the coordinate bench of the Tribunal while deciding the appeal filed by the Appellant, vide order dated 06/09/2024 held as under: “16. Hence, we are in agreement with the para 5.3.2 of the Ld. CIT(A) and hence, the order of the Ld. CIT(A) is affirmed. With regard to the determination of the commission, the seized material itself which was mentioned at page 28 of the Ld. CIT(A)’s order, the computation of the commission is clearly reflected. Since, the entire issue is based on the 4 BMA Nos. 1 to 4/Del/2023 seized material and the commission has been duly reflected on the seized material on page no.17 & 7 of the Annexure A- 28 seized during the search and page no.7 reflecting 9060 USD (4410 + 4650) and page no.17 Annexure A-28 reflecting commission of USD 6532 totaling to USD 15592. The seized material is also part of the paper book at page no. 67 & 68. The commission amount has to be equally apportioned between Sh. Shiva Kumar Nayyaran Smt. NeetruNayyar. 17. In the result, the order of the Ld. CIT(A) is affirmed to the extent of determining the commission and the commission is computed based on the seized material itself. 18. In the result, the appeals of the assessees are partly allowed and the appeals of the Revenue are dismissed.” 5. Considering the fact that the addition sustained by the CIT(A) have been reduced by the Tribunal in both the cases, the penalty is also required to be computedas per Section 41 of the Black Money (Undisclosed Foreign Income and Assets)and imposition of Tax Act, 2015 in so far as the additions sustained by the Tribunal. Therefore, we direct the Assessing Officer (“AO”) to re-compute the amount of penalty and pass order accordingly in accordance with law. 6. In the result, appeal of the Assessee in BMA No.1 & 2/Del/2023 is partly allowed for statistical purpose. 5 BMA Nos. 1 to 4/Del/2023 BMA No. 3 & 4/Del/2023 7. In the above appeals the Appellants have challenged the order of the CIT(A) sustaining the order of penalty of Rs.10 lakhs each imposed u/s 43 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as the Assessee has failed to furnish the information of Foreign Income/Assets held by him in his ITR filed for the year under consideration. The Ld. Counsel submitted that the penalty has been imposed for AY 2018-19, whereas no satisfaction has been recorded in the assessment order for the year under consideration i.e. Assessment Year 2018-19. Further by taking our attention to the assessment orders, sought for deletion of order of the penalty. 8. Per contra, the Ld. DR submitted that the assessment orders has been passed for AY 2018-19 by making the addition and also recorded the satisfaction in the assessment order. However, in the operative portion of the assessment order, the Ld. AO mentioned all the assessment years i.e. Assessment Year 2012-13 to 2017-18, however, erroneously not mentioned the AY 2018-19. Therefore, 6 BMA Nos. 1 to 4/Del/2023 submitted that the penalty imposed by the AO, which has been confirmed by the CIT(A) required to be sustained. 9. We have heard the parties, perused the material. As could be seen from the assessment order for AY 2018-19 in both the cases, the penalty proceedings are initiated u/s 43 of the Black Money Act as the Assessee has failed to furnish the information of Foreign Income/Assets held by him in the ITR filed for ‘AY 2012- 13 to 2017-18’, however, the Assessment Year 2018-19 has been omitted. The relevant portion of the assessment order in the case of Neetu Nayyar regarding initiation of penalty is reproduced as under and similar satisfaction is also recorded in the case of Shiv Kumar Nayyar: “Further, the penalty proceedings are also initiated u/s 43 of the Black Money Act as the assessee has failed to furnished the information of foreign income/assets held by him in his ITR filed for the AY 2012-13 to 2017-18 and kept on stating that he has no foreign account/income/assets when repeatedly asked by Investigation wing, New Delhi and also during the proceedings under Black Money Act. Notice for initiating the penalty proceedings as mentioned above is being issued separately as per the provisions of Section 46 of the Black Money Act.” 7 BMA Nos. 1 to 4/Del/2023 10. From the above, it is observed that the AO has recorded the satisfaction for initiation of penalty proceedings u/s 43 of the Black Money Act only for AY 2012-13 to 2017-18 and no satisfaction has been recorded by the AO for the year under consideration i.e. Assessment Year 2018-19. 11. Considering the fact that no satisfaction has been recorded by the AO in the assessment order for Assessment Year 2018-19, the imposition of the penalty for the year under consideration cannot be sustained. Accordingly, the impugned orders of the CIT(A) confirming the orders of penalty imposed by the AO are hereby quashed. 12. In the result, appeal of the Assessees in BMA No. 3 & 4/Del/2023 are allowed. Order pronounced in the open court on: 28/03/2025 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28/03/2025 *Kavita, Sr. PS 8 BMA Nos. 1 to 4/Del/2023 Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "