Smt. Alka Khetrapal,, New Delhi v. ITO, New Delhi

ITSSA 64/DEL/2009 | misc
Pronouncement Date: 25-03-2011 | Result: Allowed

Appeal Details

RSA Number 6420116 RSA 2009
Assessee PAN AAJPK5023A
Bench Delhi
Appeal Number ITSSA 64/DEL/2009
Duration Of Justice 1 year(s) 6 month(s) 14 day(s)
Appellant Smt. Alka Khetrapal,, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-03-2011
Date Of Final Hearing 31-01-2011
Next Hearing Date 31-01-2011
Assessment Year misc
Appeal Filed On 11-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI A.K. GARODIA IT(SS)A NO. 64/DEL/09 BLOCK PERIOD: 1-4-90 TO 17-11-2000 SMT. ALKA KHETRAPAL VS. INCOME-TAX OFFICER B-174 EAST OF KAILASH WARD-22(1) NEW DELHI. NEW DELHI. PAN/ GIR NO. AAJPK5023A ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI ASHWANI TANEJA CA & SH. TAR UN KUMAR RESPONDENT BY : SHRI ASHOK PANDEY CIT DR O R D E R PER R.P. TOLANI J.M : THIS IS ASSESSEES APPEAL PREFERRED AGAINST ORD ER OF THE CIT(A) DATED 20-8-2009 RELATING TO THE BLOCK PERIOD 1-4-90 TO 17-11-2000. VARIOUS ISSUES ARE RAISED ON ONE GROUND WHICH IS AS UNDER: THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD. AO IN ASSUMING JURISDICTION TO IMPOSE PENALTY U/S 158BFA(2) AND HAS FURTHER ERRED IN IMPOSING PENALTY OF RS. 1 32 000/- (I.E. 200%) UNDER THAT SECTION AND HAS E RRED IN HOLDING THAT THE APPELLANT HAD CONCEALED HER INCOME TO THE TUNE OF RS. 1 10 000/-. 2. BRIEF FACTS ARE THAT SEARCH AND SEIZURE OPERATI ONS WERE CONDUCTED ON THE BUSINESS PREMISES OF A FIRM M/S PASHUPATI NATH JEE TOURS & TRAVELS AND THE RESIDENTIAL PREMISES OF PARTNERS AND ASSOCIATES INCLUDING THE ASSESSEE 2 WHO IS WIFE OF SHRI NARESH KUMAR KHETRAPAL WHO IS YOUNGER BROTHER OF SHRI ASHOK KUMAR PARTNER OF THE FIRM. 2.1. BLOCK ASSESSMENT WAS COMPLETED U/S 158BC AT AN INCOME OF RS. 1 10 000/- IN RESPECT OF CASH FOUND IN LOCKER NO. 6 7 OF BANK OF INDIA EAST OF KAILASH BRANCH. PENALTY PROCEEDINGS WERE INITIATED U/S 158BFA(2). ASSESSEE FILED FOLLOWING REPLY: DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT THE FAMILY MEMBERS WERE HAVING CASH BALANCE OF RS. 3 32 200/- APPROXIMATELY AS ON 31-3-2000 AS PER ST ATEMENT OF AFFAIRS FILED ALONG WITH THE RETURN OF INCOME OF TH E FAMILY MEMBERS. THE YEAR WISE SUMMARY SHOWING THE CASH IN HAND AS O N 31-3- 1996 TO 31-3-2000 WAS ALSO FILED DURING THE COURSE OF BLOCK PROCEEDINGS TO SHOW THAT T HE FAMILY MEMBERS WERE H AVING SUFFICIENT BALANCE OF WHICH RS. 1 10 000/- WAS KEPT IN THE LOCKER OF MRS. ALKA KHETERPAL AND RS. 1 50 000/- IN THE LOCKER OF MRS. CHANDERKANTA TO MEET OUT ANY EMERGENCY CONT INGENCY. THERE WAS NO MALA FIDE INTENTION OF THE ASSESSEE FO R NOT DISCLOSING THE INCOME FROM UNDISCLOSED INCOME WHILE FILING THE RETURN OF INCOME FOR BLOCK PERIOD COMPRISING PERIOD FROM 01- 04-1990 TO 17-11-2000. 2.2. AO HOWEVER IMPOSED THE PENALTY HOLDING THAT THE ASSESSEE HAD NOT BROUGHT ON RECORD FRESH EVIDENCE TO SHOW ANY NEXUS WITH THE CASH IN HAND WITH OTHER FAMILY MEMBERS AND THE CASH FOUND IN THE LOCKER BELONGING TO THE ASSESSEE. AO LEVIED PENALTY OF RS. 1 32 000/- U/S 1 58BFA(2) OF THE ACT @ 200% OF THE TAX SOUGHT TO BE EVADED. 2.3. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL BEF ORE THE CIT(A) WHERE ASSESSEES APPEAL WAS DISMISSED. AGGRIEVED ASSESSE E IS BEFORE US. 3 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT I T HAS NOT BEEN DENIED THAT THE ASSESSEE WAS LIVING IN A JOINT FAMILY AND THERE WAS NO MATERIAL AGAINST THE ASSESSEE. PERSONALLY SHE HAD NO BUSINES S CONNECTIONS; THE SEARCH WAS MAINLY ON THE PREMISES OF M/S PASHUPATI NATH JE E TOURS & TRAVELS. ASSESSEE GOT INTO THE SEARCH OPERATIONS ONLY BECAUS E SHE WAS WIFE OF YOUNGER BROTHER OF ONE OF THE PARTNERS OF THE FIRM. NO OTHER INCRIMINATING MATERIAL WHAT SO EVER HAS BEEN FOUND AGAINST OR A DDED IN THE HANDS OF THE ASSESSEE. THE ISSUE OF ADDITION WENT UP TO THE TRIB UNAL AND THE ITAT VIDE ITS ORDER DATED 10-11-2006 IN ITA NO. 21/DEL/04 CONFIRM ED THE ADDITION ONLY ON THE GROUND THAT ASSESSEE COULD NOT SATISFACTORILY D ISCHARGE THE BURDEN OF PROOF OF EXPLAINING THE CASH IN HANDS WHICH LAY ON THE ASSESSEE AND THE ASSESSEE FAILED TO SHOW ANY NEXUS BETWEEN THE CASH IN HAND AND OTHER FAMILY MEMBERS AND THE CASH FOUND IN THE LOCKER OF THE ASS ESSEE. LEARNED COUNSEL THEN RELIED ON THE JUDGMENT HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. UPENDRA V. MITHANI RENDERED IN I.T. APPEAL (L) NO. 1860 OF 2009 DATED 5-8-2009 HOLDING AS UNDER: THE ISSUE INVOLVED IN THE APPEAL REVOLVES AROUND D ELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT. TH E TRIBUNAL HAS CONCURRED WITH THE VIEW TAKEN BY THE COMMISSION ER OF INCOME TAX (A). THE COMMISSIONER OF INCOME TAX (A) HAS RIGHTLY TAKEN A VIEW THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE H YPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LED TO THE REASONABLE AND POSI TIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE. THE VI EW TAKEN BY THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. THE APP EAL IS WITHOUT ANY SUBSTANCE. THE SAME IS DISMISSED IN LIM INE WITH NO ORDER AS TO COSTS. 4 3.1. FURTHER RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NARANG & CO. 98 ITR 4 62 FOR THE PROPOSITION THAT WHERE THE EXPLANATION OFFERED BY ASSESSEE WAS NEITHER FALSE NOR UNREASONABLE THE CONCEALMENT PENALTY CANNOT BE IMP OSED. 3.2. FURTHER RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SIDHARTHA ENTERPRISES RENDERED IN ITA NO. 908 TO 2008 DATED 14-7-2009 HOLDING AS UND ER: 5. WE ARE UNABLE TO ACCEPT THE SUBMISSIONS. THE JU DGMENT OF THE HONBLE SUPREME COURT IN DHARMENDRA TEXTILE (SU PRA) CANNOT BE RED AS LAYING DOWN THAT IN EVERY CASE WHE RE PARTICULARS OF INCOME ARE INACCURATE PENALTY MUST FOLLOW. WHAT HAS BEEN LAID DOWN IS THAT QUALITATIVE DIFFERENCE B ETWEEN CRIMINAL LIABILITY UNDER SECTION 276C AND PENALTY U NDER SECTION 271(1)(C) HAD TO BE KEPT IN MIND AND APPROACH ADOPT ED TO THE TRIAL OF A CRIMINAL CASE NEED NOT BE ADOPTED WHILE CONSIDERING THE LEVY OF PENALTY. EVEN SO CONCEPT OF PENALTY HA S NOT UNDERGONE CHANGE BY VIRTUE OF THE SAID JUDGMENT. PE NALTY IS IMPOSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERA TE DEFAULT AND NOT A MERE MISTAKE. THIS BEING THE POSITION TH E FINDING HAVING BEEN RECORDED ON FACTS THAT THE FURNISHING O F INACCURATE PARTICULARS WAS SIMPLY A MISTAKE AND NOT A DELIBERA TE ATTEMPT TO EVADE TAX THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE HELD TO BE PERVERSE. 3.3. LEARNED COUNSEL CONTENDS THAT THE ASSESSEE A LADY WHO IS DAUGHTER- IN-LAW IN A JOINT FAMILY DOES NOT HAVE ANY BUSINES S CONNECTION. OVER ALL FAMILY CONNECTION HAS BEEN EXPLAINED AND IN ANY CAS E BRIDE OF A JOINT FAMILY HAVING REASONABLE STATUS WILL ALWAYS POSSESS STRI DHAN. THE REPLY GIVEN BY THE ASSESSEE CANNOT BE HELD TO BE CONTRARY TO THE F ACTS ON RECORD INASMUCH AS BOTH THE LOWER AUTHORITIES HAVE NOT DISPUTED THE FA CT THAT ASSESSEE HAD A JOINT FAMILY LIVING AND HAD NO INDEPENDENT BUSINESS CONNE CTION THERE CANNOT BE A 5 PRESUMPTION THAT ASSESSEE HAS EARNED UNDISCLOSED IN COME. THIS FACT DOES NOT ARISE FROM ANY STATEMENT RECORDED DURING THE COURSE OF SEARCH. MERELY BECAUSE A CASH OF RS. 1 10 000/- IS FOUND FROM THE LOCKER OF THE ASSESSEE REJECTING HER EXPLANATION CONCEALMENT PENALTY IN BL OCK ASSESSMENT U/S 158BFA(2) CANNOT BE IMPOSED @ 2000% OF THE TAX SOUG HT TO BE EVADED. THE PENALTY IS UNJUSTIFIED AND ARBITRARY AND DESERV ES TO BE DELETED. 4. LEARNED DR SUPPORTS THE ORDERS OF LOWER AUTHORIT IES. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. THE FACT THAT THE ASS ESSEE IS LIVING IN A JOINT FAMILY ALONG WITH HER HUSBAND AND OTHER FAMILY MEM BERS IS NOT DENIED. SHE HAD NO BUSINESS CONNECTION OR ACTIVITIES IS ALSO NO T IN QUESTION. THE ONLY ASSET FOUND TO BE BELONGING TO THE ASSESSEE WAS AN AMOUNT OF RS. 1 10 000/- LYING IN HER BANK LOCKER. THE EXPLANATION THAT THE CASH WAS JOINTLY EXPLAINED BY THE FAMILY MEMBERS HAVE BEEN TREATED AS GENERAL FOR QUANTUM ADDITION BUT CANNOT BE HELD AS FALSE OR MALA FIDE. IN THE QU ANTUM ORDER ITAT ALSO HAS CONFIRMED THE ADDITION ONLY BECAUSE OF UNSATISFACTO RY DISCHARGE OF BURDEN AND NOT ON ACCOUNT OF WITHHOLDING ANY INFORMATION O R SUPPRESSION OF ANY FACT. THE ASSESSEES EXPLANATION ABOUT JOINT FAMIL Y LIVING AND STRI DHAN CANNOT BE HELD TO BE CONTRARY TO RECORD. THE ISSUE ABOUT CONCEALMENT PENALTY REQUIRES HOLISTIC CONSIDERATION OF FACTS. THE HONB LE SUPREME COURT IN THE CASE OF HINDUSTAN STEELS 83 ITR 26 HAS HELD THAT PE NALTY SHOULD NOT BE LEVIED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE AS SESSEES STATUS THAT SHE HAD NO BUSINESS CONNECTION OR RELEVANT FACTORS ARE TO B E TAKEN INTO CONSIDERATION. FOR ADDITION PURPOSES HER EXPLANATION MAY NOT HAVE BEEN FOUND TO BE FULLY SATISFACTORY IN PENALTY PROCEEDINGS QUANTUM FIND ING CANNOT AUTOMATICALLY 6 LED TO IMPOSITION OF PENALTY. UNDER THESE CIRCUMSTA NCES WE ARE INCLINED TO DELETE THE PENALTY IN QUESTION. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25-3-2011. SD/- SD/- ( A.K. GARODIA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25-3-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR