Income Tax Appellate Tribunal - Delhi
Smt. Soni Sonu Mirchandani,Delhi vs Acit,Central Circle-5, New Delhi on 4 June, 2025
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'SMC', NEW DELHI
Before Sh. Satbeer Singh Godara, Judicial Member
ITA No. 2325/Del/2025 : Asstt. Year : 2009-10
Smt. Soni Sonu Mirchandani, Vs ACIT,
F-166, Malcha Marg, Anand Central Circle-5,
Niketan, New Delhi-110021 New Delhi-110005
(APPELLANT) (RESPONDENT)
PAN No. AAQPM7786H
Assessee by: None
Revenue by : Sh. Akhilesh Kumar Yadav, Sr. DR
Date of Hearing: 04.06.2025 Date of Pronouncement: 04.06.2025
ORDER
This assessee's appeal for Assessment Year 2009-10, arises against the CIT( A)-24, New Delhi's DIN & order No. ITBA/APL/M/250/2024-25/1073130044(1) dated 11.02.2025, in proceedings u/s 271(1)(c) of the Income Tax Ac t, 1961 (in shor t "the Act").
2. Case called twice . None appears at the assessee's behest.
She is accordingly proceeded ex-parte .
3. Learned departmental representative vehemently argues during the course of hearing that both the lower authorities have rightly held the assessee to have concealed as well as furnished inaccurate par ticulars her taxable income inviting sec tion 271(1)(c) penalty of Rs.10 ,19,700/- levied in the 2 ITA No. 2325/Del/2025 Soni Sonu Mirchandani Assessing Officer's order dated 06.10.2021 a nd upheld in the CIT(A)'s lower appellate discussio n as under:
"4 . I have perus ed the order /s 271(1)(c) of the Act pass ed on 06.10.2021. I have co nsidered t he mater ial av ailabl e on rec or d. In the pres ent appeal , the appellant has rais ed two gr ounds of appeal w hic h hav e be en reproduc ed in para 2.1 above. Ground Nos . 1, 1 .1, 1.2, 1.3, 1.4, 1.5, 2 , 2.1 a nd 2.2 are rela ted to penal ty u/s 271(1)(c) and all are dealt wit h together i n t he foll owi ng para graphs .
4.1 In the cas e the appella nt field re turn of i nc ome on 28.07.2009 declar ing an i nc ome of Rs.92,15,12,886/-. In the retur n of income , the appella nt had s hown L ong ter m capital gai ns of Rs .92,33,99,485/-. Later on t he c as e was selected for s cr utiny and t he assessm ent was c ompl eted u/s 143(3 ) on 11.11.2011 after c ertai n a dditi ons at the as sess ed i ncome of Rs .3,84,18,7 60/-. The details of additi on ma de during the co urse of ass ess ment proc eedi ngs are as under:-
i. Index ed c ost of acquisition for LTC G shown by the as sessee on sa le of sha res was r estricted to Rs.75,75,001/- as a gai nst Rs. 99,80,872/-, Thi s res trictio n was do ne on the gr ound tha t the a pplica bl e cost of i nflati on would be tha t of the first y ea r i n whi ch as sessee became owner of the asset (by way of gift ) a nd not the y ear in whi ch t hat previ ous o wner acqui r ed the ass et as pe r the pr ovisions o f the Expla nati on (iii) to S ec . 48 of the Act.
ii. Rs.45,00,000/- wa s ta xed in the ha nds of the as sessee as L ong term capital gai n u/s 45 of the Act rec eiv ed indirec tly on relinquishment of her ri ght to ma nage Monica El ectronics Ltd a nd O nida Sak a Ltd.
4.2 Aggrieved by t he or der, the appellant preferred appeal before CI T(A), who gave part relief of Rs.24,05,871/- by a llowing indexati on of as s ets (s hares rec eiv ed as gi ft) f rom the date of owners hip by t he previ ous owner i nstead o f from the first y ear i n whic h the appella nt bec ame the owner . The a ddition of Rs.45,00,000/- as LTCG was confirmed by the CI T(A). The appella nt prefer red appeal before the Hon'ble ITA T aga inst t he order of the C IT(A ). The appellant took an additi onal ground bef ore the Hon'ble ITAT as follows :-
"that on the fact s and ci rc ums ta nces of t he c ase a nd in lo w, t he AO/C IT(A ) erred in not holding that the amount 3 ITA No. 2325/Del/2025 Soni Sonu Mirchandani rec eived on r e-alignment of s hareholdi ng pursua nt to family settl eme nt arrangement was not liable to capit al gai ns t ax under sectio n 45 of the Inc ome Tax Act, 1961."
4.3 This additio nal ground was admitted by the Hon'ble ITAT a nd vide its order dated 29.02.20l6, the ca se wa s remanded bac k to the fi le of the A.O. for fr es h adj udication a s per law. Follo wi ng the direc ti on of t he Ho n'bl e ITAT, fresh a ss essme nt was ma de by the Asses si ng Officer v ide order u/s 143(3) of t he Ac t dated 14.12.2016. The inc ome o f the a ppel la nt wa s assess ed at inc ome of Rs.93,84,18,760/- after making bot h the additi ons a fres h mad e i n the ori ginal a ssessm ent order pass ed vide order u/s 143(3) dated 11.11.2011.
4.4 Thereafter, the appella nt prefer red appeal a gai ns t the above ass ess m ent order dated 14.12.2016. The C IT(A ) dismissed t he appeal of t he appel l ant vide or der dated 11.02.2020. The appella nt preferr ed a ppeal be for e the Ho n'bl e ITA T who deleted the addit ion of Rs.24,05,8 71/- in fav our o f the appell ant a nd confirmed the additio n of Rs.45,00,000/- i n favo ur of rev enue vide order i n ITA No. 1286/Del/2020 dated 28.09.2020.
4.5 As per the order , penalt y of Rs.10,19,700/- was impos ed vi de order u/s 271(1)(c ) dat ed 19.03.2015 fo r the a dditi on of Rs.45,00,000/- whi ch was c onfirmed by the CIT(A). However , the penalty was c ancelled by the CIT(A) vide order dat ed 02.06.2016 stati ng t hat s i nc e the as sessment or der has been set a side by the Hon'bl e ITA T to be done afres h, the penalty do es not s urv ive for considera tio n. However the AO would be at libert y t o rei nitiate t he penalty proc eedi ngs in ac cord a nce with law whil e c ompl eti ng the ass es sment in purs uanc e to the directio n of t he ITAT i n quant um appeal ."
4.6 In the ass ess ment ord er dated i4.12.2016 pa ssed in purs uance to the order of the Hon'ble ITAT, penalty proc eedi ngs u/s 2 71(1)(c) of t he Act was initiate d by the A.O. and notice u/s 274 r .w. s. 271 of the Act dated 14.12.2016 was issued along with asses sment order . On rec eipt of the order of t he Ho n'bl e ITAT, a s how c aus e notice u/s 274 r.w.s. 271(1)(c) dat ed 12.06.2021 was issued by the A ssessi ng Office r to the appellant. In res ponse, t he appella nt did not fur ni sh any reply.
4.7 Furt her, Ass essing Officer held t hat t he app ella nt had concealed pa rticulars of i ncome of Rs.45,00,000/- by stati ng tha t mone y was giv en t o her for equalization of inte rests i n fami ly property and thus was 'owe lty'. Ho wever, a fter due cons idera tion of t he ass es sment order 4 ITA No. 2325/Del/2025 Soni Sonu Mirchandani and a ppellate orders , Ass essi ng Officer obs erved t hat the appella nt had conc ealed pa rtic ul ars of i nco me of Rs.45,00,000/- whi c h wa s rec eived by her as sa l e considera tio n of her assets (shares) whic h was a cqui red by her from father a nd s on a s gift and Assessi ng Officer was clear that c orrect particular of i nc ome wa s not furnished by the a ppellant which lea d to the c onc eal ment of income f or the AY 2009-10 a s provided i n the se ction 271(1)(c) o f the Act. The Appella te A uthori ty had als o confirmed the addition of Rs.45,00,000/- made by the Asses si ng Of ficer on account of L ong Term C apital Gain. Ther efore, the As sessi ng Officer was not c onvi nc ed wit h the reply of t he appellant i n cours e of penalty proc eedi ngs and t her eafter impos ed penalt y u/s 271(1)(c ) of the Act to the tune of Rs . 10,19,700/- o n the a ppel lant.
4.8 It is perti nent to refer to the order dated 28.09.2020 of the Hon'bl e ITA T vide which it has dismissed the a ppeal of the appellant. The r elevant part of t he order is reproduc ed as follo ws for r eady r eference:
"11. Cons idering the facts of t he cas e, e videnc es on rec ord and t he Judgments re pr oduced ab ove, it i s clea r tha t as s essee did not pr oduc e a ny evidence of pri or, present or li kelihood of any futur e fa mily di spute on rec ord to j ustify t he exec ution of t he Memorandum o f Fa mily S ettle ment. The cla uses of the Memorandum o f Fa mily Settl ement clearly esta blish that it was a simpl e tr ansa ction of sal e a nd purc hase of shares , s ubjec t to considera tio n r ece ived by t he ass es see fr om Shri G ol u L. Mirchanda ni . Shri Gol u L . Mir ehandani have been desc ribed as purchaser of t he shares a nd ass ess ee as seller i n t he Memor andum of Family Settl ement whic h could never be r egarded as Family Settl ement Deed. The ass es see did not hav e any antecedent, title of any fa mily proper ty bec ause what ever s hares /as s et as sessee has possess ed as owne r have been s old Subject to considera tion bec a use the ass ess ee has ac quired the shares of two Co mpa ni es by way of gi ft from her father and s ons . Thus, i t was not a family prop erty which could hav e been di vi ded bet ween the as sessee and S hri Gol u L. Mircha nda ni. The ass ess ee did not r eceiv e any sha re fr om the fa mil y of he r husband The fac ts also c learly established that ther e is n0 equitable partition or distributi on of family s har es / as sets . The chart reproduced above s hows t hat it was mer ely s ale trans action of shar es which c ould not b e considered as Fa mily Settl ement. Thus , it c annot b e said that the impugned a mount was given to a ss ess ee for equalization of int erest i n the family pr operty and thus , it was no t an owel ty as i s c laimed by the as sessee. I t is also clear as per t he terms of the Fa mily 5 ITA No. 2325/Del/2025 Soni Sonu Mirchandani Settlement that e ntire share s of the ass es see in GOVISO a nd I WAI wer e s old t o Siri G ol u L . Mirc ha ndani for impugned co nsiderati on a nd the ass es see did not get any other s har e or a ss et i n reciproc ation and henc e, the money rec eived was not on a cc ount of r e- alignment of s hares a nd thus, i t co uld not be considered as owelty received by the as se ss ee. The husband of the assessee di d not tra ns fer a ny share/pr operty , so, where is the questi on of distribution of asset between t he fa mily of her husb and a nd his property ? No owelty paid on alleged Fa mily Settlement. No other tr ans fer of family as set took place bet ween the parties t o the Fa mil y Settl ement. It is a sale trans acti on bet ween the two parties only i.e. as sessee a nd S hri Gol u L . Mirchanda ni. The authoriti es bel ow did not ac cept the ge nui ne Family Settlement becaus e the authoriti es belo w hav e held it to be a simple tr ans acti on of sal e a nd purc hase of s ha res, subject t o consider ati on. In other group co mpa nies no rea sons explai ned to s urr end er t he ri ght or ca r etc . The as sessee rec eiv ed market price f or sale of s har es a nd surrendered/reli nquis hed her right in vari ous compa ni es, s ubject to impugne d c onsid era ti on. In the present cas e, the a ssesse e ha s rec eived impugne d money as sale c onsideratio n fo r sal e of sha res a nd not as Owel ty for equalization of i nte res t i n the fa mily prop erty. Si nc e s hares were the pers onal property of the assess ee, therefore, when s ame we re tra nsferre d to Shri Gol L. Mirchandani , it woul d am ount to sale. It is an admitted fact t hat ass essee ini tially admitted the tr ansa ctions to be s al e and purc ha se tra nsacti on subject to considerati on. The assess ee wa s not able t o prov e by a ny evi denc e t o justify ret rac tion from the earlier admission on di sclosing the sale trans acti on i n the ori gi nal ret ur n of i ncome disclosi ng c apital gai ns. Ho wever, the as sessee by cl aiming now it to be Fa mily Settlement tried to defr aud t he Re venue t o r educ e the taxabl e r etur ned income. As rega rds the amount of Rs.45 lakhs , it may be noted that ass essee has rec eiv ed t hi s a mount for r elinquishi ng her ri ghts t o ma nage t he t wo c ompa nies i.e., the c onsider ati on fo r her ass et. S he has not received this amount as owel ty as ther e were no division of ass ets. She had to forego her ass ets for a considera tion a nd she did not receiv e a ny as se t/ri ght in reciprocation nor was the money paid for equal izati on of t he i nterest . Thus, the money rec eiv ed by her though i ndir ect ly w ere the sal e considera tio n of tra ns fer of her ri ghts a nd not owel ty. Rs.45 la khs was paid in settli ng t he lia bi lity of t he as sessee in the matter o f Excise pros ecution whi c h woul d a mount to trans fer. T hus, it is cl ear that as sessee rec eiv ed t he impugned amount on sale o f the 6 ITA No. 2325/Del/2025 Soni Sonu Mirchandani shares . Therefore, it would be tr ansfer o f capital ass et withi n t he mea ni ng of Section 2 (47) of the I.T. Ac t, 1961, so as to at trac t the provisions of c apital gains whic h as sessee ha s ri ghtly disclosed i n t he ret urn of income and paid the tax there on. There is no quarr el with rega rd t o legal propositi on ca nvass ed by the Learned Co unsel for t he Assess ee wi th rega rd to Family Settlement, however , the Judgments relied upon by the Learned C ouns el for the As sessee abov e are not applicabl e t o t he fa cts a nd circumsta nces of the ca se. We, therefore, do not find a ny justifica tion to interfer e with t he ord ers of t he authori ties below. In t he res ul t, Gro und Nos. 1, 2, 3 and 5 of the appeal of ass ess ee are dismi ssed."
4.9 From t he above, it ca n be se en tha t appella nt has indir ectly r eceive d the said amo unt but has delibera tely not offered the sam e f or ta xa tion in t he na me o f family settlement. As already mentioned by e rstwhile C ITI(A )- 24, New D el hi that "The a ppellant is an i nt ell igent and well to do pers on who is duly assist ed by c ouns el i n fil ing her r etur n of i nc ome. She c annot claim ignora nc e of l a w bei ng a well to do citizen capable of ha ving best counsels." C onsid eri ng also t his fact, it is diffic ult t o belie ve that appe llant has determi ned its tot al taxable inc ome wi tho ut due applicatio n of mind. There is no justificati on wi th the appellant for not i ncl udi ng thi s amo unt in her ta xable i ncome.
4.10 Eve n afte r t wo r ounds of verific ation by the Asses si ng Offic er, appella nt could not file a ny j us tific at ion or docum entar y evidence i n s upport of her c laim. Ther efore, it is a clear cut case of co ncea lment of inc ome on the par t of the appella nt .
4.11 I n vi ew of the above, the or der of the As ses s ing Officer levyi ng penalty amounti ng t o Rs .20,56,850/- u/s 271(1)(c) of Income Tax Act is upheld. Acc ordingl y, Gro und Nos. 1 to 5 of appeal a re dismissed."
4. I have given my thoughtful consideration to the assessee's pleadings all along and the Revenue's foregoing vehement contentio ns . I find no reason to sustain the impugned penalty.
It is made clear that at the best; the assessee claims to have invoked "owelty" principle to contend before the learned lower authorities that amo unt re ce ived herein o f Rs.45 ,0 0,000/- does 7 ITA No. 2325/Del/2025 Soni Sonu Mirchandani not represe nt her taxable income which has been rejec ted all alo ng, in quantum proceedings.
5. That being the case, the tribunal hereby quotes CIT vs. Reliance Petroproducts (P) Ltd. ( 2010) 322 ITR 158 (SC) that it is not each and every disallowance/addition which automatically results of the impugned penalty as both the se proceedings are paralle l in nature, to delete the impugned penalty of Rs.10,19,700/- levied by the learned lower autho rities in very terms. Ordered accordingly .
6. This assessee's appeal is allowed.
Order Pronounced in the Open Court o n 04/06/2025.
Sd/-
(Satbeer Singh Godara) Judicial Member Dated: 04/06/2025 *Subodh Kumar, Sr. PS* Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT ASSISTANT REGISTRAR