Raghuvansh Kumar, v. ITO, New Delhi

ITA 1007/DEL/2009 | 2003-2004
Pronouncement Date: 14-05-2010 | Result: Allowed

Appeal Details

RSA Number 100720114 RSA 2009
Assessee PAN ADQPK7966E
Bench Delhi
Appeal Number ITA 1007/DEL/2009
Duration Of Justice 1 year(s) 1 month(s) 27 day(s)
Appellant Raghuvansh Kumar,
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 14-05-2010
Date Of Final Hearing 06-05-2010
Next Hearing Date 06-05-2010
Assessment Year 2003-2004
Appeal Filed On 18-03-2009
Judgment Text
ITA NO. 1007/DEL/2009 A..Y. 2003-04 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1007/DEL/2009 (A.Y. 2003-04) RAGHUVANSH KUMAR VS. ITO WARD-2(2) CGO COMPLEX C/O AKHILESH KUMAR ADVOCATE HAPUR CHUNGI GHAZIABA D CHAMBER NO. 206-207 ANSAL SATYAM RDC GHAZIABAD. (PAN: ADQPK7966E) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. AKHILESH KUMAR ADVCOATE DEPARTMENT BY : SH. H.K. LAL SR. DR PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.11.20 08 AND PERTAINS TO ASSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1 81 310/- I MPOSED U/S 271(1)(C) OF THE IT ACT. ITA NO. 1007/DEL/2009 A..Y. 2003-04 2 3. IN THIS CASE THE ASSESSING OFFICER OBSERVED THA T DURING THE YEAR THE ASSESSEE HAS RECEIVED GIFT OF RS. 1 50 000/- EACH FROM TWO PERSONS. IN CONFIRMATION THEREOF THE ASSESSEE HAS SUBMITTED MEM ORANDUM OF GIFT AFFIDAVIT OF THE DONORS AND COPY OF SARAL FORM OF BOTH THE DONORS. ASSESSEE HAD ALSO DISCLOSED THE BANK STATEMENT OF THE DONORS. IN TH E SAID STATEMENT THE ASSESSING OFFICER FOUND THAT AMOUNTS EQUIVALENT TO GIFTS HAD BEEN DEPOSITED AND CHEQUES ISSUED WITHIN SHORT TIME. THE ASSESSING OFFICER AS KED FOR PRODUCTION OF DONORS BUT THE SAME WERE NOT PRODUCED. SINCE THE ASSESSE E FAILED TO PRODUCE THE DONORS ASSESSING OFFICER MADE THE ADDITION OF GI FT OF RS. 3 00 000/- AS THE UNDISCLOSED INCOME OF THE ASSESSEE AND PENALTY PROC EEDINGS U/S 271(1)(C) WAS ALSO INITIATED ON THIS ACCOUNT. IN THE PENALTY PROC EEDINGS THE ASSESSEE CLAIMED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS T HE ASSESSING OFFICER HAS ASSURED THAT NO PENALTY BEING IMPOSED AND HENCE TH E ASSESSEE HAS DEPOSITED THE DEMAND ARISING OUT OF THE ASSESSMENT ORDER ALSO . HOWEVER ASSESSING OFFICER DID NOT FIND THE RESPONSE CONVINCING AND IMPOSED T HE PENALTY. 4. ASSESSING OFFICER HELD IN THE PENALTY ORDER THA T MINIMUM AND MAXIMUM PENALTY U/S 271(1)(C) WORKED OUT TO RS. 90656/- AN D RS. 271968/-. ASSESSING OFFICER PROCEEDED TO LEVY PENALTY OF RS. 1 81 310/ - WHICH WAS 200% OF THE TAX SOUGHT TO BE EVADED. 5. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOM E TAX (APPEALS) CONFIRMED THE PENALTY. 6. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL B EFORE US. ITA NO. 1007/DEL/2009 A..Y. 2003-04 3 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND IN THIS CASE THE ASSESSEE HAS SHOWN GIFT RECEIPT OF RS. 1.5 0 LACS EACH FROM TWO PERSONS. THE NAME ADDRESS CONFIRMATION INCOME TAX RETURN AND BANK STATEMENT WERE ALL SUBMITTED BEFORE THE ASSESSING OFFICER. ASSESSING OFFICER HAS LEVIED THE PENALTY ON THE GROUND THAT CREDITWORTHINESS IS NOT ESTABLIS HED AS THE DONORS WERE NOT PRODUCED BEFORE HIM. WE FIND THAT IT IS NOT THE CASE THAT ASSESSING OFFICER HAS ISSUED TO ANY SUMMON TO THE SAID DONORS. ASSESSEE HAD SUBMITTED ALL THE NECESSARY DETAILS AND IT WAS MERE A FAILURE OF THE ASSESSEE TO PRODUCE THE DONORS THAT LED TO ADDITION OF RS. 3 LACS AS UNDISCLOSED INCOME. ASSESSEE HAS ALSO CLAIMED THAT ASSESSING OFFICER HAS ASSURED NO PENA LTY WILL BE LEVIED AND ASSESSEE HAS PAID ALL THE TAXES ARISING OUT OF THE DEMAND. U NDER THESE CIRCUMSTANCES WE HAVE TO EXAMINE WHETHER THE ASSESSEE IS HELD GUILTY FOR LEVY OF PENALTY U/S 271(1)(C) OF THE IT ACT. 7.1 WE FIND THAT SECTION 271(1(C) OF THE ACT POSTUL ATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALME NT OF INCOME. IN THIS CASE WE FIND THAT ASSESSEE HAS SUBMITTED ALL THE DOCUMENTA RY EVIDENCE IN SUPPORT OF CLAIM OF GIFT WHICH INCLUDED NAME ADDRESS CONFIRM ATION GIFT DEED AND BANK STATEMENT AND INCOME TAX RETURNS OF THE DONORS. IT IS ALSO NOT THE CASE THAT ASSESSING OFFICER HAS ISSUED SUMMONS TO THE CONCER NED DONORS. UNDER THESE CIRCUMSTANCES IN OUR CONSIDERED OPINION ASSESSEE C ANNOT BE HELD TO BE GUILTY OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULA RS. 7.2 IN THIS REGARD WE PLACE RELIANCE FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSH IPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING ITA NO. 1007/DEL/2009 A..Y. 2003-04 4 PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGA TION IS THE RESULT OF A QUASI- CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARI LY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LA W OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDIC IALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENA LTY IS PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE P ROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OF FENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 7.3 WE WOULD ALSO LIKE TO REFER TO THE HONBLE AP EX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD T HAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANI NG OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WH AT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILI P SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PE NALTY U/S 271(1)(C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTEN TION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CL AIM IS NOT ACCEPTED BY THE AO ITA NO. 1007/DEL/2009 A..Y. 2003-04 5 FOR ANY REASON THE ASSESSEE WILL INVITE THE PENAL TY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 9. IN THE RESULT THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/05/2010. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 14/05/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES