ITO, Meerut v. Shri Rakesh Kumar Gupta, Meerut

ITA 2690/DEL/2009 | 2005-2006
Pronouncement Date: 24-02-2012 | Result: Dismissed

Appeal Details

RSA Number 269020114 RSA 2009
Assessee PAN AFMPG0567M
Bench Delhi
Appeal Number ITA 2690/DEL/2009
Duration Of Justice 2 year(s) 8 month(s) 23 day(s)
Appellant ITO, Meerut
Respondent Shri Rakesh Kumar Gupta, Meerut
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 24-02-2012
Date Of Final Hearing 08-02-2012
Next Hearing Date 08-02-2012
Assessment Year 2005-2006
Appeal Filed On 01-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `I : NEW DELHI) BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI S.V. MEHROTRA ACCOUNTANT MEMBER ITA NO.2690/DEL./2009 (ASSESSMENT YEAR : 2005-06) ITO WARD 2(2) VS. SH. RAKESH KUMAR GUPTA NEW DELHI. S/O SHRI KESHO RAM 152 CHIPPI WARA MEERUT. (PAN/GIR NO.AFMPG0567M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NEERAJ JAIN ADV. REVENUE BY : SMT. RENUKA JAIN GUPTA SR. DR ORDER PER U.B.S. BEDI J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- MEERUT DATED 24.03.2009 RELEVANT TO ASSESSMENT YEA R 2005-06 WHEREBY DELETION OF ADDITION OF PENALTY OF RS.5 08 557/- IMPOSED U/S 27 1(1)(C) OF THE I.T. ACT 1961 HAS BEEN CHALLENGED. 2. THE FACTS OF THE CASE INDICATE THAT DURING THE A SSESSMENT PROCEEDINGS THE ASSESSEE SURRENDERED AN AMOUNT OF RS.16 95 190/- UNDER THE H EAD SUNDRY CREDITORS BEING DIFFERENCE IN THE SUNDRY CREDITORS LIST SUBMITTED BY THE ASSESSEE AND THAT RECEIVED FROM SUNDRY CREDITORS. THIS AMOUNT WAS SURRENDERED TO A VOID FURTHER LITIGATION THOUGH THE PAYMENT WAS NOT MADE TO THE PARTIES. THE ASSESSING OFFICER IMPOSED PENALTY ON THE CONCEALMENT OF INCOME AMOUNTING TO RS.5 08 557/- BY OBSERVING THAT SURRENDER WAS AFTER ISSUE OF A NOTICE U/S 133(6) OF THE ACT. I.T.A. NO.2690/DEL./2009 (A.Y. : 2005-2006) 2 3. ACTION OF THE ASSESSING OFFICER WAS CHALLENGED I N APPEAL BEFORE FIRST APPELLATE AUTHORITY AND IT WAS CONTENDED THAT SURRENDER WAS M ADE PRIOR TO DETECTION BY THE ASSESSING OFFICER. IT WAS VOLUNTARILY AND MOREOVER ASSESSING OFFICER DID NOT HAVE ANY INCRIMINATORY MATERIAL IN HIS POSSESSION BEFORE SUR RENDER OF INCOME AND TO SUPPORT THE CONTENTION LD.AR OF THE ASSESSEE RELIED UPON ON T HE FOLLOWING DECISIONS: 59 ITD 377 VARIETY CLOTH CENTRE VS. ITO 91 ITD (TM) ITO VS. PATIL AUTOMOBILES 93 ITD 1(TM) DCIT VS. RAJAN H. SHINDE 265 I.T.R. (AT) 57 KUMAR AGENCIES (INDIA) VS. ACIT 270 I.T.R. 296 (BOM.) DR. SUDHA KANKARIAY VS. CIT 246 I.T.R. 216 CIT VS. SARAN KHANDSARI SUGAR WORKS 278 272 I.T.R. MRS. USHA A. KALWANI VS. S.N. SONI & OTH ERS 270 I.T.R. 381 CIT VS. KOHINOOR IMPEX (P) LTD. 265 I.T.R.562 K.C. BUILDERS VS. DCIT 272 I.T.R. CIT VS. SMT. SHASHI AGARWAL & OTHERS 278 I.T.R. 599 BHARAT RICE MILLS VS. CIT 281 I.T.R. 166 CHEAP CYCLE STORE VS. CIT 285 I.T.R. 185 CWT VS. SOMESHWAR SARAN 290 I.T.R. 168 CIT VS. M.M. GUJAMGADI 291 I.T.R. 519 DILIP N. SHROFF VS. JCIT 300 I.T.R. 40 V.N. PROJECTS VS. DCIT 308 I.T.R. (AT) 33 STAR INTERNATIONAL P. LTD. I.T.A. NO.2690/DEL./2009 (A.Y. : 2005-2006) 3 4. BEFORE CIT(A) IT WAAS FURTHER SUBMITTED THAT AS SESSEE GAVE A BONA FIDE EXPLANATION AND UNDESERVEDLY GAVE ALL THE DOCUMENTS AND INFORMATION WITHOUT HOLDING ANY INFORMATION RELATING TO THE COMPUTATION OF ASSE SSEES TOTAL INCOME THE ASSESSEE EXPLANATION UNLESS FOUND TO BE FALSE WOULD DESERVE ACCEPTANCE FOR PURPOSE OF PENALTY IMPOSABLE U/S 271(1)(C) OF THE ACT SO NO PENALTY S HOULD BE EXIGIBLE. IN OTHER WORDS IF ANY ASSESSEE OFFERS AN EXPLANATION WHICH IS NOT F OUND TO BE FALSE HE CAN SAVE HIMSELF OF PENALTY EVEN IF HE WERE NOT ABLE TO SUBSTANTIATE H IS CASE AS LONG AS HE PLACES ALL THE RELEVANT MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME IRRESPECTIVE OF FACT THAT SAME EXPLANATION WAS NOT ACCEPTED FOR THE PURPOSE OF ASS ESSMENT. THE ASSESSEE RELIED UPON FURTHER DECISIONS: 1 ACIT VS. MANGARMAN CHAUDHARY 308 I.T.R.(AT)83 2 ACIT VS. MALHOTRA MUKESH SATPAL 115 ITD 467 3 DILIP N. SHROFF VS. JCIT 291 I.T.R. 519 4 AVR PRASAD VS. ITO 971 ITD 325. 5. CIT(A) WHILE CONSIDERING ACCEPTING THE PLEA OF THE ASSESSEE AND RELYING UPON FEW DECISIONS HAS CONCLUDED TO DELETE THE IMPUGNED PENALTY AS PER PARA.4 OF HIS ORDER WHICH IS REPRODUCED AS UNDER: I HAVE GONE THROUGH THE FACTS OF THE CASE AND SUBM ISSIONS OF THE APPELLANT. THERE IS FORCE IN THE SUBMISSIONS OF THE APPELLANT IN WHI CH INTER-ALIA THE JUDGMENTS OF JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT HAVE BEEN RIGHTLY QUOTED. AS SUBMITTED BY THE APPELLANT IN THE FOLLOWING CASE S OF JURISDICTIONAL COURTS IT HAS BEEN HELD THAT WHEN THERE IS CONDITIONAL SURRENDER (AS TO THAT NO PENALTY U/S 271(1)(C) WILL BE IMPOSED) NO PENALTY U/S 271(1)(C) BE LEVIED. I) CIT VS. S.C. MITTAL (2001) 251 I.T.R.9 (SC) II) CIT VS. SARAN KHANDSARI (2001) 246 I.T.R. 216 ( ALL.) III) CIT VS. MANSA RAM & SONS (1977) 106 I.T.R.301( ALL.) I.T.A. NO.2690/DEL./2009 (A.Y. : 2005-2006) 4 6. AGGRIEVED BY THIS ORDER OF CIT(A) DEPARTMENT HA S COME UP IN APPEAL AND WHILE RELYING UPON THE BASIS AND REASONING GIVEN BY THE A SSESSING OFFICER IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF CIT(A) AND RESTORING THA T OF THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT ONLY ON HAVING SCRUTINIZED T HE ASSESSMENT OF THE ASSESSEE WHEN ASSESSEE WAS UNABLE TO SUBSTANTIATE ITS CLAIM OF SU NDRY CREDITORS HE CAME FORWARD TO SURRENDER THE AMOUNT. SO IT WAS NOT HIS VOLUNTARY ACTION. THEREFORE PENALTY WAS ATTRACTED WHICH HAS RIGHTLY BEEN IMPOSED BY THE ASS ESSING OFFICER. RELIANCE WAS PLACED ON AHMEDABAD BENCH DECISION AS REPORTED IN KAILASHB HAI AMBALAL SHAH VS. ITO 129 ITD 135 CIT VS. PRODUCIN (P.) LTD. 191 TAXMAN 79 AND IT WAS PRAYED FOR REVERSAL OF THE ORDER OF THE CIT(A). 7. LD.COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDE R OF CIT(A) AND PLEADED FOR ITS CONFIRMATION. HE HAS PLACED RELIANCE ON THE CASE L AWS AS CITED BEFORE CIT(A) AND INCORPORATED IN THE FIRST APPELLATE ORDER AND ALSO FURTHER CASE LAWS AS REPORTED IN CIT VS. SARAN KHANDSARI 246 I.T.R. 216(ALL.) CIT VS. MAN SA RAM & SONS 106 I.T.R.301(ALL.) AND 336 I.T.R. 257 (P&H) TO PLEAD FOR CONFIRMATION OF THE IMPUGNED ORDER. 8. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS CASE LAWS CITED BY RIVAL SIDES. FROM THE MATERIAL AVAIL ABLE ON RECORD WE FIND THAT SURRENDER WAS MADE SUBJECT TO NO PENALTY VIDE LETTER OF THE A SSESSEE DATED 17.2.2009 FILED BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS WH ICH CLEARLY INDICATE THAT SURRENDER WAS BEING MADE WITH A CONDITION THAT NO PENAL ACTIO N WILL BE MADE AND TO AVOID FURTHER LITIGATION AND TO BUY PEACE AND JURISDICTIONAL HIGH COURT DECISIONS IN THE CASE OF CIT VS. SARAN KHANDSARI 246 I.T.R. 216 (ALL.) AND CIT VS. MANSA RAM & SONS 106 I.T.R. 301(ALL.) ARE IN FAVOUR OF THE ASSESSEE IN WHICH I T IS HELD AS UNDER: I.T.A. NO.2690/DEL./2009 (A.Y. : 2005-2006) 5 THE PENALTY IN QUESTION WAS DELETED BY THE AAC. T HE TRIBUNAL DISMISSED THE REVENUES APPEAL BY OBSERVING AS UNDE R : '2. THE AAC DELETED THE PENALTY FOR THE FOLLOWING R EASONS : AS HELD BY THE ALLAHABAD HIGH COURT IN THE CASE O F CIT VS. MANSA RAM & SONS (1975) CTR (ALL) 163 : (1977) 106 ITR 307 (A LL) TC 50R.625 A CONDITIONAL SURRENDER OF CASH CREDITS OR AGREEMENT TO CERTAIN ASSESSMENT DOES NOT ATTRACT PENALTY PROCEEDINGS. ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE PRESENT CASE IT APPEARS TO BE OBVIOUS THAT THE INCOME ASSE SSED BY THE ITO WAS AGREED TO BY THE APPELLANT AS A MEASURE OF CO-OPERATION AND W ITH A VIEW TO ESCAPING PENAL CONSEQUENCES I FIND FROM THE ASSESSMENT ORDER THAT NO BASIS IS GIVEN FOR ESTIMATING THE INCOME AT RS.35 000. IT THEREFORE APPEARS THAT THE AGREEMENT WAS CONDITIONAL. IN SUCH CIRCUMSTANCES PENALTY CANNOT BE IMPOSED. FROM ANOTHER ANGLE ALSO THE FACT AS NOTICED IN THE ASSESSMENT O RDER DO NOT INDICATE ANY CONCEALMENT AT ALL. THE INCOME WAS MERELY ESTIMATED WITHOUT FINDING ANY CONCEALMENT AS SUCH. FROM THIS ANGLE ALSO. THEREFOR E PENALTY IS NOT ATTRACTED. THE PENALTY ORDER IS THEREFORE CANCELLED. THE REVENUE IS IN APPEAL. SRI B.D. SAINIA APPEARING FOR THE REVENUE SUPPORTED THE ORDER OF T HE ITO. FOR THE ASSESSEE RELIANCE WAS PLACED ON THE AACS ORDER. AFTER HEAR ING THE PARTIES WE FIND OURSELVES IN AGREEMENT WITH THE REASONING AND CONCL USION OF THE AAC ON THE FACTS OF THE CASE WE DECLINE TO INTERFERE.' WE HAVE HEARD SRI A.N. MAHAJAN LEARNED COUNSEL FOR THE CIT. NO ONE HAS APPEARED FOR THE RE SPONDENT. THE FINDING THAT THE ASSESSEE HAD AGREED TO A HIGHER ASSESSMENT ON THE C ONDITION THAT NO PENALTY WOULD BE IMPOSED IS A FINDING OF FACT. SIMILARLY THE FI NDING THAT NO ACTUAL CONCEALMENT WAS ESTIMATED IS ALSO A FINDING OF FACT AND THEREF ORE THE ASSESSEE WOULD BE HELD TO HAVE DISCHARGED THE ONUS UNDER THE EXPLANATION T O S. 271(1)(C) OF THE ACT. WE THEREFORE ANSWER ALL THE QUESTIONS IN THE AFFI RMATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AND CIT(A) HAS FOLLOWED THESE DECISIONS WHILE DELET ING THE IMPUGNED PENALTY. MOREOVER DEPARTMENT HAS NOT BEEN ABLE TO BRING ON RECORD ANY CONTRARY SUPERIOR COURTS DECISIONS IN THIS REGARD. THEREFORE WE DO NOT FI ND ANY VALID GROUND TO INTERFERE IN THE ORDER PASSED BY THE CIT(A) WHICH IS UPHELD AND APP EAL OF THE DEPARTMENT IS DISMISSED BEING DE VOID OF ANY MERIT. I.T.A. NO.2690/DEL./2009 (A.Y. : 2005-2006) 6 9. AS A RESULT THE APPEAL OF THE DEPARTMENT IS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 24.02.2012. SD/- SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : FEBRUARY 24 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) MEERUT. 5. CIT(ITAT) DEPUTY REGISTRAR ITAT