Income Tax Appellate Tribunal - Chandigarh
Smt. Neelu Garg, Ludhiana vs Ito, W-7(5), Ludhiana on 26 April, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "एकल सद यीय", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH 'SMC' , CHANDIGARH
ी एन. के. सैनी, उपा य
BEFORE SHRI N.K. SAINI, VICE PRESIDENT
आयकर अपील सं./ ITA No.1472/Chd/2018
नधा रण वष / Assessment Year : 2014-15
Smt.Neelu Garg, बनाम The Income Tax Officer,
61-A, Sant Nagar, Ward-7(5),
Civil Lines, Ludhiana. Ludhiana.
थायी लेखा सं./PAN NO: A C Z P G 7 1 5 1 K
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri Ashwani Kumar, CA
राज व क ओर से/ Revenue by : Smt.Zeenia Handa, Sr.DR
सन
ु वाई क तार$ख/Date of Hearing : 02.04.2019
उदघोषणा क तार$ख/Date of Pronouncement: 26.04.2019
आदे श/ORDER
Thi s appeal fi l ed by the assessee is di rected agai nst the order dated 23.10.2018 of the Commi ssi oner of I ncome Ta x ( Appeal s) -3, Ludhi ana ( i n short CI T( A) ) .
2. The onl y gri evan ce of the assessee i n thi s appeal rel ates to sustenance of penal t y of Rs.12,50,630/- l evi ed by the A.O. u/s 271( 1) ( c) of the I ncome Ta x Act, 1961 (herei nafter referred to as 'Act') .
3. The facts of the case, i n bri ef, are that the assessee ori gi nal l y fi l ed return of i ncome on 4.11.2014 through e- fi l i ng modul e, decl ari ng net ta xabl e income of Rs.12,81,720/-. Later on, the case was sel ected for scruti ny under CASS wi th the reason "sus pi ci ous Long Ter m Capi tal 2 ITA No.1472/Chd/2018 A.Y.2014-15 Gai n". The A.O. duri ng the course of assessment proceedi ngs asked the asse ssee to confi rm as to whether she has undertaken any sal e or purchase duri ng the year und er consi derati on and i f yes, to furni sh the fol l o wi ng detai l s:
"( a) De tail s of inco me /l oss der ived f ro m these tr ans ac tions and its tre atme n t in the re turn of inco me. In c ase of inco me, pl e ase in ti mate de tail of its u til iz ation ind ic ating the n ature of inves tme n t, d ate or inves tme n t and mode of inves tme n t of each p ar ty wi th n ame and co mpl e te address wi th PAN.
(b) Co mpl e te de tail s of purchase of shares
ind ic ating
a. N ame & co mpl e te address of co mp an y
b. D ate of purchase
c. Mode of pay men t
d. Mode of tr ans ac tion wh e ther of f l ine or
onl ine tr ans ac tio n ind ic ating the n ame of s tock exch ange.
e. Co mpl e te n ame and address f the broker
f. B as is of inves tme n t in e ach sh ares
( c ). Co mpl e te de tai l s of sal es of shares
ind ic ating: -
a. N ame & co mp l e te address of the
co mp an y ind ic ati ng the d ate of sal e an d
purch ase of shar es.
b. Mode of pay men t
c. Co mpl e te n ame & address of the b roker.
( d) Whe ther you h av e under taken an y tr ans ac tion
such tr ans ac tion s in e arl ier and subsequen t ye ars. "
4. I n r e s p o ns e , t he a s s e s s e e s u b m i tte d a s u n de r :
" D u r in g th e ye ar , s al e s an d p u r c h as e s o f sh ar e s h av e b e e n d o n e b y me an d th e d e tai l s o f in c o me d e r iv e d f r o m th e s e tr an s ac t i o n s i s as p e r an n e x u r e a tt ac h e d . F u r th e r , I wi s h to inf or m yo u r g o o d s e lf th at I h av e s u r r e n d e r ed an a mo u n t of R s . 3 7 , 0 0 , 0 0 0 / - ( e q u iv al e n t to th e L o n g T e r m C ap i t al G ai n o f R s . 3 6 , 2 3, 1 3 4 / - ) o n 1 2 . 1 0. 2 0 15 an d h av e d e p o s i te d an a mo u n t o f R s. 1 2 , 5 5, 8 7 1 / - as in c o me t ax d u e an d in te r e s t th e r e o n . P h o to c o p y o f c h al l an s d e p o s i te d an d r e v i s e d c o mp u ta t i o n c h ar t i s e n c l o s e d. "3 ITA No.1472/Chd/2018
A.Y.2014-15
5. Th e A . O . m a d e th e a d d i t i o n o f Rs . 3 7 l a c s, w h i c h w as already s u r re n de r e d by the assessee, on which tax of R s . 1 2 , 5 5 ,8 7 1 / - was also pa i d . Th e A.O. also i n i t i a t ed p e n a l t y p r oc e e d i n g s u / s 2 7 1 ( 1) ( c) o f t h e A c t , o n th e i s s u e of f u r n i s h i ng o f i n ac c u r a t e pa r t i c ul ar s o f i nc o m e .
6. D u r i n g t h e c our s e o f p e n a l t y p r o c e e d i ng s , t h e A . O . p o i n t e d o u t t h a t a t t h e t i m e o f a s s e s s m e n t p r oc ee d i n g s , a n i n v e s t i g at i o n r ep o r t d a t e d 24 . 2. 2 0 1 6 w a s r ec e i v e d , w h i ch r e v e a l e d t h a t be f o r e th e a ct u a l t r a n s a ct i o n s t ar t s t a ki n g p l a c e , th e r e we re b r o k e r s i n di f fe r e n t t o w n s w ho c o n t a c t ed t h e p r os p e c t i v e c l i e n t s t o t a k e p a p e r bo o k i n g fo r e n t ri e s, t h e c o m m i s si o n t o b e p a i d t o t h e o p e r a t o r s , wa s d e c i d e d a t t h a t s t ag e , ho w ev e r , n o m o n e y wa s p a i d . H e a l s o o b s e r v ed t h a t o n c e t h e b oo k i n g w a s c o m p l e t e d , t h e o p e r ato r s h a d a r e a s o n a b l y g oo d i d e a o f h o w m u ch L o n g Te r m C ap i t a l G a i n was to be p ro v i d e d a l on g w i th with the bre a k - u p of i n d i v i d u al b e n e fi c i a r i e s a nd this data was e s se n t i a l to d e c i d e w h i c h p en n y s t oc k o r c om p a n i e s t o us e f o r t h e j ob a n d w h i c h b e n e fi c i a r i e s t o b u y ho w m a n y sh a r e s . Th e A . O . w a s o f t h e v i e w t h a t a w e l l p l a nn e d t r a n s a c t i o n s h a d b e e n u n d e r t a k en i n o rd e r t o l au n d e r i ng o f m o n e y w i t ho u t p a y i ng t a x e s a n d t h a t th e a s s e s se e h a d n o o p t i o n b u t t o s u r r e n d er t h e a m o u n t o f bo g u s L o n g Te r m C a p i t a l G a i n , cl a i m e d a s exempt i nc o m e u / s 1 0 ( 3 8) of th e Act in the return of i n c o m e . H e a l s o o b s e r v e d t h a t t he a s s e s se e w as w e l l a wa r e of the facts t ha t the t r a n sa c ti o n s of s h a re s had be e n m a n i p u l a te d f o r b o g u s L o n g Te rm C a p i t a l G a i n a n d t h a t at 4 ITA No.1472/Chd/2018 A.Y.2014-15 the time of as s e s s m e n t pr o ce e d i n g s the ma t t e r w as discussed with the a s s e ss e e with regard to th e m o d us o p e r a n d i ad o p t ed f o r g a i n i n g b o gu s L o n g Te r m C ap i t a l G a i n. He a d m i tt e d t ha t the as s e s s ee had p ai d taxes b e f ore i m p o s i t i o n o f t he p e n a l t y bu t w a s o f t h e v i e w t h a t t h e s a me was due to t he d e p a r t m e nt a l ( I nv e s t i ga t i o n Wing) h a rd w o r k , w h i ch u ne a r t h e d t he s a i d m o d u s o p e ra nd i t o e a r n b o g u s L on g Te r m C a p i t al G a i n. Th e A . O . he l d t h a t t h e assessee f ur n i sh e d i n a c c u ra t e p a r t i c u l a rs of income a m o u n t i n g t o R s. 3 7 l a c s a n d ac co r d i n g l y , h e l e v i e d p e n a l t y o f R s . 1 2 ,5 7 , 6 3 0/- u / s 2 7 1( 1 ) ( c ) o f t h e A c t .
6. B e i n g a g gr i e v e d, t h e a s s e ss e e c arr i e d t h e m a t t e r to t h e L d . CI T( A ) a n d f ur n i s h e d t he w r i tte n s u b m i s si o n s , w h i c h h as b e e n i nc o r p o r at ed i n pa r a 4. 1 of t h e i m pu g n e d o rd e r a n d i s r e p r o d u c ed v e r ba t i m , a s u n d e r :
"This is with reference to an appeal filed by Smt. Neelu Garg(herein after referred to as "the appellant'') against the order U/s 271(l)(c)of the Income-Tax Act, 1961 for the above captioned assessment year.
Brief, Facts For the previous year relevant in assessment year 2014-15, the year under consideration, assessee filed its return of income on 04.11.2014 declaring a net taxable income of Rs.12,81,720/-, and, claimed an exempt income of Rs. 36,75,134/- under the head "Income the head Capital Gains ".
An investigation through a letter was conducted by the Pr. Director of Income Tax (Investigation), Aayakar Bhawan (Annex), P-13, Chowringhee Square, Kolkata in respect of entry regarding Long-Term Capital Gains. Investigation report has been received through the office of the Principal Commissioner of Income-Tax-I, Ludhiana.
The appellant, vide a letter dated 12.10.2015[A Copy of Letter Enclosed], submitted a fresh computation of income along with a copy of tax challan for the A.Y. 2014-15, wherein, the appellant had made a revised calculation in respect of 5 ITA No.1472/Chd/2018 A.Y.2014-15 treatment of Long-Term Capital Gains, and, shown Rs. 37,00, 000/- as Income from Other Sources.
The Ld. Assessing Officer vide order dated 28.10.2016 passed U/s 143(3) of the Income-Tax Act, 1961 considered an amount of Rs. 37,00,000/- is undisclosed income, and, accordingly initiated penalty proceedings for furnishing inaccurate particulars of income U/s 271(l)(c) of the Income-Tax Act, 1961. A penalty notice -was issued to show cause as to why an order imposing a penalty should not be made U/s 271(l)(c) of the Income- Tax Act, 1961.
Penalty order was passed U/s 271(l)(c) of the Income-Tax Act, 1961 dated 28.04.2017 levying a penalty of Rs. 12,57,630/-. Aggrieved by the order dated 28. 04.2017, the appellant filed an appeal before Your Honor.
The appellant seeks to place on record, its preliminary Legal Assertions, challenging the Legitimacy of the penalty imposed in the assessment order, as under:
In this connection, it is respectfully submitted that, no penalty would be Leviable, as the appellant had not furnished inaccurate particulars of income.
The appellant surrendered an amount of Rs.37,00,000/- from Long-Term Capital Gains[shown as Income from Other Sources in a revised calculation for computation of income before the Deputy Director of Income-Tax (Investigation)- II, Ludhiana. Moreover, in the instant case, there is no question of levy of penalty, since, the appellant, voluntarily surrendered an amount of Rs 37,00,000/-earned as Long-Term Capital Gains shown under the head "Income from Other Sources" before any further investigation by the Investigation wing.
Referenced drawn to the decision of the Hon'ble High Court of Punjab & Haryanain the case of Rajiv Garg Vs. Commissioner of Income-Tax, Karnal [2009] 313 ITR 256 (Punjab & Haryana), which has held as under:
"The revised return filed by the assessee was accompanied by a note in which he had submitted that he had surrendered the entire amount of sale proceeds of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. During the course of assessment, the aforesaid explanation given by the assessee was neither rejected nor it was held to be mala fide. The Tribunal had recorded a pure finding of fact to the effect that the Assessing Officer had not placed on record any material or evidence to discharge his burden of proving concealment. In the assessment order, no such finding had been recorded. The Assessing Officer had simply rested his conclusion on the act of the assessee of having offered additional income in the revised return filed in response to the notice issued under section 148. The Tribunal had further 6 ITA No.1472/Chd/2018 A.Y.2014-15 held that the additional income so offered by the assessee was done in good faith and to buy peace of mind. The Apex Court, in case of CIT v. Suresh Chandra Mittal[2001] 251 ITR 9/119 Taxman 433, has upheld the decision of the Madhya Pradesh High Court rendered in the case of CIT v. Suresh Chandra Mittal[2000] 241 ITR 124, wherein similar circumstances it was held that the initial burden lies on the revenue to establish that the assessee had concealed the income and had furnished if accurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation -which is found to be false by the Assessing Officer. In the instant case, in pursuance to the notice under section 148, the revised return of income was filed in which the entire income was surrendered with an explanation. The revised assessment was regularized by the revenue. The assessing authority had failed to take any objection that the declaration of income made by the assessee in his revised return and his explanation were not bona fide. Therefore, the impugned order of the Tribunal was justified and deserved to be upheld."
The decision of the said court has, also been followed by the Hon'ble Income-Tax Appellate Tribunal, Chandigarh Bench 'A 'in the case of Ajay Sangari & Co. reported at [2011] 140 TTJ388 (Chandigarh).
Considering the above judgement in the light of the case of the appellant, in the instant case also, the appellant voluntarily surrendered an amount of Rs.37,00,000/- earned as Long- Term Capital Gains in its revised computation of income before the Deputy Director of Income-Tax (Investigation), Ludhiana, and, moreover, the disclosed amount was found to be accepted as such by the Ld. Assessing Officer in its order dated 04.08.2016 passed U/s 143(3) of the Income-Tax Act, 1961. Furthermore, during the course of assessment proceedings for the relevant assessment year under consideration, the explanation furnished by the appellant regarding the calculation of Long-Term Capital Gains was, neither, turned down, nor, was held to be malafide. The Ld. Assessing Officer had failed to point out any discrepancy in the explanation provided by the appellant, and, had proceeded to assess the . income in the hands of the appellant on the basis of surrender made by the appellant. Therefore, there was no merit in levying penalty U/s 271(l)(c) of the Income-Tax Act, 1961. Moreover, it is submitted that the transaction of Purchase and Sale of Equity Shares was a genuine one. The sales of the securities took place through a registered broker on the recognised stock exchange in accordance with the prescribed regulatory procedures, rules and, applicable laws. The transactions were also, in all cases, concluded through regular banking channels. That the transactions were entered into by the Appellant as an investor with a view to earn profit from the appreciation, whether long term/short term, in the price of the underlying shares. There was no evidence to even remotely 7 ITA No.1472/Chd/2018 A.Y.2014-15 suggest that the appellant had taken an accommodation entry of Bogus Long Term Capital Gains. This was done with a view to avoid protected litigation and purchase peace of mind. There was no contumacious conduct on the part of the appellant. It can no way, be said that an additional income was declared after detection by the Revenue.
Attention is also invited to the following judgements of the relevant courts of law, wherein, it has been upheld that, no penalty, would be levied U/s 271(l)(c) of the Income-Tax Act, 1961 on surrender of income, as under:
I. The Hon'ble High Court of Delhi in the case of Commissioner of Income-Tax Vs. SAS Pharmaceuticals reported at [2011] 244 CTR 51 (Delhi) has laid down that:
"No doubt, the assessee had surrendered certain income during the course of survey and discrepancies noticed by the survey team would suggest that the assessee was not maintaining proper accounts in respect to cash, stock and renovation expenses, etc. Therefore, there could be a possibility that but for that survey, the discrepancies brought to the notice of the assessee and physical verification of the stock and other accounts would have gone unnoticed and the assessee might have suppressed in the income-tax return as well. However, fact remained that it had disclosed same in the return filed by it.
In this context, the question would be as to whether the assessee could be imposed penalty under section 27 1(1) (c) - when it had shown that income in income-tax return filed by it and contended that it had voluntarily declared the same in the 'regular return filed for the relevant year'.
Section 271(l)(c) is a penal provision and such a provision has to be strictly construed. Unless the case falls within the four- corners of the said provision, penalty cannot be imposed. Sub-section (1) of section 271 stipulates certain contingencies on the happening whereof the Assessing Officer or the Commissioner (Appeals) may direct payment of penalty by the assessee. Clause (c) of section 271(1) authorizes imposition of penalty when the Assessing Officer is satisfied that the assessee has either • concealed the particulars of his income; or • furnished inaccurate particulars of such income.
It was not the case of furnishing inaccurate particulars of income, as in the income-tax return, particulars of income had been duly furnished and the surrendered amount of income was duly reflected in the income-tax return. The question was whether the particulars of income were concealed by the assessee or not. It would depend upon the issue as to whether concealment had reference to the income-tax return filed by the assessee, viz., whether concealment was to be found in the income-tax return.8 ITA No.1472/Chd/2018
A.Y.2014-15 The revenue relying upon the expression 'in the course of any proceedings under this Act' occurring in sub-section (1) of section 271 contended that even during survey -when it was found that the assessee had concealed the particular of his income, it would amount concealment in the course of 'any proceedings'. Such contention could not be accepted. The words 'in the course of any proceedings under this Act' are prefaced by the satisfaction of the Assessing Officer or the Commissioner (Appeals). When the survey is conducted by a survey team, the question of satisfaction of Assessing Officer or the Commissioner (Appeals) or the Commissioner does not arise. It was the Assessing Officer who initiated the penalty proceedings and directed the payment of penalty. He had not recorded any satisfaction during the course of survey. Decision to initiate penalty proceedings was taken while making assessment order. It was, thus, obvious that the expression 'in the course of any proceedings under this Act' could not have the reference to survey proceedings in the instant case.
It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the income-tax return filed by it. There is sufficient indication of this in the judgment in the case of CIT v. Mohan Das Hassa Nand[1983] 141 ITR 203/ 13 Taxman 328 (Delhi) and in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/ 189 Taxman 322. The Supreme Court has clinched this aspect, viz, the assessee can furnish the particulars of income in his return and everything would depend upon the income tax return filed by the assesses. This view gets supported by to Explanation 4 as well as Explanation 5 and 5A to section 271.
Obviously, no penalty can be imposed unless the conditions stipulated in the said provisions are duly and unambiguously satisfied. Since the assessee was exposed during survey might be, it would have not disclosed the income but for the said survey. However., there cannot be any penalty only on surmises, conjectures and possibilities. Section 271(l)(c) has to be construed strictly. Unless, it is found that there is equally a concealment or non-disclosure of the particulars of income, penalty cannot be imposed. In the instant case, there was no such concealment or non-disclosure as the assessee had made a complete disclosure in the income-tax return and offered the surrendered amount for the purposes of tax.
Therefore, the Tribunal was correct in law in deleting the penalty imposed by the Assessing Officer under section 271(l)(c)."
II. The Hon'ble High Court of Punjab and Haryana in the case a/Commissioner of Income-Tax Vs. Careers Education and Infotech (P.) Ltd. reported at [2011] 336 ITR 257 (Punjab & Haryana) has held as under:
In every case, where surrender is made, inference of concealment of income cannot be drawn under section 58 of Evidence Act.9 ITA No.1472/Chd/2018
A.Y.2014-15 III. The Hon'ble High Court of Punjab and Haryana in the case of Commissioner of Income Tax-II, Ludhiana Vs. Rajnish Nath Aggarwal reported at [2008] 219 CTR 590 (Punjab & Haryana) has laid as under:
"From the judicial pronouncements, it is crystal clear , hat the department has to prove mens rea before levying penalty under section 211(1) (c) and it cannot be made out that the assessee has concealed income or furnished inaccurate particulars merely because he has surrendered certain amounts to avoid litigation and to buy peace of mind. The High Court, in case of CIT v. Suraj Bhan [2007] 159 Taxman 26 (Punjab & Haryana), held that penalty cancan be imposed merely on account of higher income having been,, subsequently, declared. Similarly, the Apex Court, in the case of CIT v. Suresh Chandra Mittal [2001] 251 ITR 9/119 Taxman 433, observed that when an assessee files a revised return showing higher and gives an explanation that he offered higher income to buy peace of mind and to avoid litigation, penalty cannot be imposed merely on account of higher income having been, subsequently, declared.
In the instant case, the assessee was on much better footing because no return of income was revised and the transportation charges were directly made by the suppliers and not V the assessee and, therefore, there was no question of concealment of income or furnishing of inaccurate particulars of income. The penalty could not be levied merely on account of inaccurate particulars by presuming that the payment,, were made by the assessee, whereas the facts were otherwise. Even otherwise, the Tribunal had given a finding of fact that neither there was concealment of income nor furnishing of inaccurate particulars.
Thus, there was no error in the order of the Tribunal and the appeal was to be dismissed."
Considering the entire submissions in entirety, and, the above judicial pronouncements in the light of facts of the case of the appellant, the appellant had nt furnished any inaccurate particulars of income, which, could attract levy, and, therefore, it is prayed that the penalty levied in question, may kindly be deleted, as no such penalty is leviable in the facts and circumstances of the case."
7. Th e L d . C I T( A ) af t e r c o n si d e r i ng submissions of the assessee, o b s erv e d that the ca s e of the as se s s e e w as s e l e c t e d i n s c r uti n y d u e t o t h e r e a s o n t h a t t h e a ss e s s e e h a d b e e n f o u nd t o be i n d u l g ed i n s us p i c i o u s L o n g Te r m C a p i tal Gain of M/s Tu r b o Te c h Engineering L i mi t e d by wayof purchase and sale of shares r e g a r d i ng which the 10 ITA No.1472/Chd/2018 A.Y.2014-15 i n f o r m a ti o n c a me f r o m I nv e s t i ga ti o n W i n g a n d a t t h e t i m e o f a s s e s s m e nt p r o ce e d i n g s a r e p o rt f r o m I nv e s t i gat i o n W i ng w a s r e c ei v e d o n 2 4 . 2 . 2 0 1 6, w h ere i n i t w a s re v e a l e d t h a t t h e I n ve s t i g at i o n W i n g h a d c a r r i e d ou t a c t i o n s i n e ar l i e r y e a r s i n c a s e o f s h el l c o m p a n i e s, w h e re i n t h e i n v o l ve me n t o f th e c o m p a n y ; n a m e l y M / s Tu r b o Te ch E n g i n ee r i n g L i m i t e d h ad a l s o c a m e i nt o l i g h t a n d t h a t th e a s s e s s e e h a d f i l e d r e t u r n o f i n c o m e s ho w i n g t h e L o n g Te rm C a p i t a l G ai n am o u n t i n g t o R s . 3 6 , 7 5 ,1 3 4 / - as e x e m pt u/s 10(38) of t he Act on 4 . 1 1 . 2 0 1 4 a n d th e r e a f t e r t he c a se w a s s e l e c t e d f or s c r u t i n y a n d t h e A . O . i ss u e d i n i t i a l q u es t i o n n a i re a l o n g w i t h n o t i ce u / s 1 4 3 ( 2 ) of t he A c t d a t e d 18 . 9. 2 0 1 5 a n d t he as s e s s e e i n h e r f i r s t re p l y di d n o t s u b mi t an y w r i t t e n s u b mi s s i o n w i th r e g a r d t o t h e ta x a b i l i t y o f t hi s sh a r e t r a ns a c t i on w i t h M /s Tu r b o Te c h E n g i n e e r i n g L i mi t e d , u p o n w h i c h , t he a s s e s s ee h a d c l ai m e d L on g Te r m C a pi t al G a i n a s e x e mp t e d . Th e L d . CI T( A ) also observed that meanwhile t he assessee r e c e i v e d n o ti c e fr o m t h e I n v e s t i ga t i o n W i n g a n d v o l u n t a r i l y s u r r e n d e re d L ong Te r m C a p i ta l G a i n o ri g i n a l l y c l a i m e d a s e x e m p t u / s 1 0 ( 3 8 ) o f t h e A c t , a f t e r h a v i n g t he k n o w l e d g e t h a t t h e D e p ar tm e n t w a s a l r ea dy i n p os s e s s i o n o f t h e d a t a , w h e r e i n i t w a s cl e a r t h a t th e a s s es s e e h a d ta k e n en t r y f r om a penny s t o ck company; na m e l y M/s Tu r b o Te c h E n g i n e e r i n g Li mi t e d t o b r i n g h er u n a c co u n t e d m o n e y i n t o b o o k s o f a c c o u nt a n d t h a t t h e fi r s t n o t i c e u /s 1 4 3 ( 2 ) f or selection of s cr u t i n y had a l r ea d y been s e r v ed on the a s s e s s e e o n 1 9 .9 . 2 0 1 5 . Th e r e a f te r t h e s u r r e n d er w a s m a d e b y t h e a s s e s se e n 1 2 . 1 0 . 2 0 15 b e fo r e t h e I n v e st i g at i o n W i n g . 11 ITA No.1472/Chd/2018
A.Y.2014-15 Th e r e f o r e , t h e a ss e s s e e h a d n o t su r r e n d e r ed t h e L o n g Te r m C a p i t a l G a i n v o l u n t a r i l y , sh e c am e f o r w a r d o n l y w h e n w a s e n q u i r e d b y t h e I n v e s t i g a ti o n D epa r t m e n t , L u d h i an a .
Th e L d . CI T( A ) s us t a i n e d t h e p en al t y l e v i e d b y t h e A . O . u / s 2 7 1 ( 1 ) ( c ) o f t h e A c t a m o u nt i n g t o Rs . 1 2 , 57 , 63 0 / - . Th e r e l e v a n t f i n di n g s h a v e b e e n g i v en i n pa r a s 4 . 4 , 4 .5 a n d 4 . 7 o f t h e i m p u g n e d o r d e r , w hi c h r ead a s u n d er " 4.4 The Assessing Officer in the penalty order has also mentioned, that the investigation carried out in the penny stock companies .revealed that the concerned company M/S Turbo Tech Engineering Limited, had been found to be involved into bogus entry operations underline garb of long term capital gain. In the penalty order Assessing Officer has mentioned that the investigations revealed that the company M/S Turbo Tech Engineering Limited, did not carry out any operations during the period except in that year ending March 2009. In the year ending March 2009 the company had only turnover of Rs. 2 .2 crore. The company had issued 232 lakh shares in the financial year 2010-2011 from 8 lakh shares to 240 lakh shares, but the earning per share remained in negative. The company had no fixed assets no turnover and profitability. The Assessing Officer has also mentioned, the detailed analysis and the financial result of the company from pages 7 to 11 of the assessment order. The Assessing Officer further observed from the balance sheet of M/S Turbo Tech Engineering Limited, that it had no actual financial credentials "o support these share movement patterns. Further the Assessing Officer has mentioned in the order, that in the country wide searches carried out by investigation department the share brokers namely M/s Gateway financial services Ltd, M/s Intellect stock broking Ltd, Sh.Sudhir Kumar Kayan and Co etc, have been found to be indulged in the transaction of these penny stock companies including M/S Turbo Tech Engineering Limited. The Assessing Officer has observed on page 6 of the penalty order, that at the time of assessment proceedings the Assessing Officer came to know from the information received from investigation department ,that the assessee has done these fictitious transactions through M/s LSE securities Private Limited and also M/s Calcutta stock exchange, M/s Gateway financial services Ltd, M/s Intellect stock broking Ltd. which were found to be indulged in the activities of providing bogus long term capital gain/loss. The Assessing Officer has mentioned on page 7 of the penalty order that from the statements of Shri Anil Khemka, Bikash Surekha (member of Calcutta stock exchange), Shri Praveen Kumar Agrawal, Shri Mukesh Aggarwal, Shri Amit Dalmia (designated director of M/s Intellect stock broking Ltd), at the 12 ITA No.1472/Chd/2018 A.Y.2014-15 time of search/ surveys proceedings in their respective cases, they admitted that they have provided accommodation entities of long-term capital gain/loss by prearranging trading in shares. The investigation wing had also enquired M/s Calcutta stock exchange as a broker and as a whole who had pleaded to be involving in such bogus penny stocks which included trading in M/S Turbo Tech Engineering Limited amounting to Rs.1,79,38,678/- Further in the case of M/SGateway financial services Ltd., who had also disclosed Rs. 25 crore on account of trading in such penny stocks also admitted to be trading in M/S Turbo Tech engineering Ltd amounting to Rs. 242,00,37,441/-. Similar was the case with M/S Intellect stock broking Ltd. Accordingly the Assessing Officer has in detail mentioned that during various search/ survey proceedings, against penny stock companies different directors of different companies and brokers had admitted to be providing accommodation entry through various concerns including the M/S Turbo Tech Engineering Limited . in the penalty order, the Assessing Officer has mentioned that in his statement dated 30/03/2015 recorded by the investigation Wing at the time of survey under section 133A, Shri Amit Dalmia designated director of M/S Intellect stock broking Ltd and Shri Bikash Surekha member of Calcutta stock exchange Ltd. had also admitted to provide accommodation entries of long-term capital gain in which M/S Turbo Tech Engineering Limited was also involved. Therefore it was beyond any doubt before the Assessing Officer the company M/S Turbo Tech Engineering Limited, was a penny stock company used for providing bogus long term capital gain.
4 . 5 Assessing Officer has made out a clear case against the assessee, wherein the assessee had been found to be indulged into taking entries of long-term bogus long capital gain from penny stock company M/S Turbo Tech Engineering Limited. The investigation Department carried out enquiries against the assessee thereafter only the assessee on 12/05/2015 surrendered this long capital gain of Rs.37,00,000/- before the investigation wing Ludhiana and paid due taxes, hereafter assessee filed revised income computation dated 12/10/2015 during the course of assessment proceedings, informing that the assessee has already surrendered this long term capital gain on its own. However that is not the case, as the Assessing Officer has clearly mentioned, that the investigation Department Ludhiana was already conducting an enquiry whether the assessee was also called for the statement, thereafter in her statement the assessee surrendered the fictitious long-term capital gain taken by the assessee from M/S Turbo Tech Engineering Limited. Before the Department Dir of income tax investigation II , Ludhiana and filed its revised calculation for assessment year 2014-15 on 12/10/2015. Thus the Assessing Officer has made out a case that this surrendered made by the assessee during the course of assessment proceedings is not voluntarily at all as the assessee had surrendered before the investigation wing Ludhiana, when it came into the knowledge 13 ITA No.1472/Chd/2018 A.Y.2014-15 that the investigation wing was having information with regard to bogus long term capital gain taken by the assessee from M/S Turbo Tech Engineering Limited. The Assessing Officer has mentioned in the penalty order also that the assessee only surrendered the amount already treated as exempted, when her case was selected for scrutiny. Assessee,s claim for voluntary surrender before the investigation wing cannot prevent the assessee from the penalty action as that notice dated 18/09/2015 under section 143(2) for selection of scrutiny had already been served to the assessee on 19/09/2015, thereafter the surrender was made by the assessee on 12/10/2015 before the investigation wing. Therefore it is undoubted fact that the assessee had not surrendered the long term capital gain voluntarily, but when the assessee was enquire by the investigation Department Ludhiana then only the assessee came forward with the surrender. Accordingly this cannot be termed as voluntary surrender. ........................................ ... ... ... ... ... ... ... ... ...... ... ... ... ... ... ... ... ...... ... ... ... ... ... ... . . .................................................................................... 4.7 Accordingly as discussed, Going by the above facts it is evident that going by the duty of probability, the Assessing Officer has rightly relied upon the decisions is of Hon. Apex Court in the cases of Durga Parsad More 82 ITR 540 and CIT Vs. Sumati Dayal 214 ITR 801. It has been held by various High Courts in large number of cases [Vadilal Ichhachand v. CIT 32 ITR 569 (Bom), Calicut Trading Co. v. CIT, 178 ITR 430 (Ker), Special Leave petition dismissed by Supreme Court (180 ITR) (Statute 40) (SC), Bachhumal Uttammal v. CIT 111 Taxation 424 (Raj)], that the subsequent filing of revised return or surrender of income in the revised return, which was not voluntary but was a result of detection by the Assessing Officer, is of no help as far as levy of penalty is concerned [Bilandram Hargandas v. CIT 171 ITR 390 (All)]. It has been held by the Hon'ble KeralaHigh court in the case of Jugal Kishore Hargopaldas 243 ITR 220 that:
"There is no general principle laid down in the said case [ Sir Shadilal Sugar & General Mills Ltd. v. CIT[(1987) 168 ITR 705 (SC)] that whenever addition is made of an amount offered by assessee to be added, there cannot be any levy of penalty, or that the assessee is not required to explain sources. The actual position in law is that merely because the assessee had agreed to the assessment, that cannot automatically bring in levy of penalty. If the assessee offers an explanation, the revenue authorities have to consider the acceptability of the explanation and pass necessary orders. If the explanation is found acceptable, notwithstanding the addition made by treating the amount offered by the assessee as income from undisclosed sources, penalty may not be levied. But if the explanation is found to be vague or fanciful and without any foundation or basis, it is certainly open to the revenue authorities to impose penalty. It would all depend upon the acceptability of the explanation offered by the assessee in the background of the statutory provisions as prevailing at the relevant time."14 ITA No.1472/Chd/2018
A.Y.2014-15 On the issue of levy of penalty in case of surrender of income, the Hon'ble Supreme Court in the case of K.P.Mdhusudan 251 ITR 99 observed that:
"Learned counsel for the assessee then drew our attention to the judgment of this court in Sir Shadilal Sugar and General Mills Ltd v. CIT [1987] 168 ITR 705. He submitted that the assessee had agreed to the additions to his income referred to hereinabove to buy peace and it did not follow therefrom that the amount that was agreed to be added was concealed income. That, it did not follow that the amount agreed to be added was concealed income, is undoubtedly what was laid down by this Court in the case of Sir Shadilal Sugar and General Mills Ltd. [1987] 168 ITR 705 and that, therefore, the Revenue was required to prove the mens rea of a quasi-criminal offence. But it was because of the view taken in this and other judgments that the Explanation to section 271 was added. By reason of the addition of that Explanation, the view taken in this case can no longer be said to be applicable."
Accordingly, in this case, even though the assessee had surrendered the income, levy of penalty was upheld by the Hon'ble Supreme Court.
8. N o w t h e a s s e s se e i s i n a p p e a l . Th e L d . c o u n s e l f o r assessee r e i t era t e d the s u b mi s s i o n s made before th e a u t h o r i t i e s b e l o w a n d f u r t h e r s u b m i t t e d t h a t th e a s s e s s ee s u o m o t o s u r re nd e r e d t h e a m o un t b e f o r e a n y om i s s i o n on t h e p a r t o f t h e as s e s s e e w a s po i nt e d o u t e i t h er b y t h e A . O . or the I n ve s t i ga t i o n Wing. It was s u b m i t t ed that the a s s e s s e e f i l e d r et u r n o f i n c o me o n 4 . 1 1 .2 0 1 4 a nd t h e A. O . i s s u e d n ot i c e u /s 1 4 3 ( 2 ) o f th e A c t o n 18 . 9 . 2 01` 5 b u t no i n f o r m a ti o n w a s c a l l e d f or i n t he s a i d n ot i c e . A s s u c h , n o i n f o r m a ti o n w a s f i l e d b y t he a s s es s e e . H o w ev e r , a P o w e r of A t t o r n e y w a s f i l ed o n 5 . 1 0 . 2 0 1 5 i n c o m p l i a n c e t o t h e n o t i c e i s s u e d o n 1 8 . 9.2 0 1 5 . Th e r e a f t er t h e a s se s s e e he r s e l f vi d e letter d at e d 12 . 1 0 . 2 0 1 5 s u bm i t t e d to the D . D .I . T. , L u d h i a n a , s u r r en d e r e d a s u m of R s . 3 7 l a c s a nd p a i d the d u e t a x e s on t h e s a i d a m o u nt . A r e f e r e n c e w a s ma d e t o p a ge N o . 9 o f t h e as s es s e e ' s c o m pi l a t i on . I t w a s f u rt h e r s u b m i t t e d 15 ITA No.1472/Chd/2018 A.Y.2014-15 t h a t t h e A . O . i ss u e d t h e n o t i c e u / s 1 42 ( 1 ) o f th e A c t o n 8 . 4 . 2 0 1 6 a n d t he a s s e s s ee f i l ed t h e r e p l y t o t he s a i d n o t i c e o n 2 4 . 6 .2 0 1 6 , th e r e a f t e r t h e A .O . p a s s ed a n as s e s s m e n t o r d e r u/ s 14 3 ( 3 ) o f th e Ac t on 28 . 1 0 . 2 0 1 6. Th e re f o r e , i t i s c l e a r t h at t h e as s e s s e e su r r e n de r e d t h e a m o u nt o f R s . 37 l a c s s u o m o t o m u c h b e fo r e t he n o t i c e w a s i s su e d b y th e A . O . u / s 1 4 2 ( 1 ) o f t h e A ct a n d th e a s s e s sm e n t or d e r d a ted 2 8 . 1 0 . 2 0 16 w a s p a s s e d . I t w a s a l s o s t a t e d t hat e v e n t h e I n ve s t i g at i o n W i n g h a d n o t p oi n te d o u t a n y s pe c i f i c a m o u nt a n d o n l y i ss u e d a s u m m on d a te d 5 . 1 0 . 20 1 5 t o t he a s s e ss e e. Th e r e f o r e , i t c an n o t b e s a i d t ha t t h e a s s e s s ee f u r n i s h e d i n a c c u r a te p a r t i c u l a r s o f i n c o m e o r c o n c e a l ed t he i n c o m e, a s s u c h , t h e p e na l t y l e v i e d by t h e A . O . a n d s u s t ai n e d b y t h e L d . CI T( A ) u / s 2 71 ( 1 ) ( c ) o f t h e A ct w a s n o t j u st i f i e d . I t w as c l a r i f i ed t h a t t he a s s e s s ee c o u l d n o t f i l e t h e re v is e d r e t u rn s i n c e o r i g i n al r e t u r n f i l e d b y t he a s s e s s e e w a s b e l a t e d . I t w a s p o i nt e d o ut t h a t i n p a r a 3 o f t h e a ss e s s m e nt o r d e r t he A . O . c l ea r l y m e nt i o n e d th a t th e i n f o r m a t i on w a s re c e i v e d b y h i m f r o m t h e I nv e s t i g a ti o n W i ng o n 2 4 . 2 .2 0 1 6 , w h i l e t he assessee s ur r en d e r e d the am o u n t of R s .37 lacs on 1 2 . 1 0 2 0 1 5 a n d h a d d e p o s i t e d th e i n c o m e t a x a l o n g w i th interest due t he r e o n much b ef o r e the i n f o r ma t i o n w as r e c e i v e d b y t h e A . O . Th e r e f o r e , th e p e n a l t y u / s 27 1 ( 1 ) ( c ) o f t h e A c t l e v i ed by t h e A. O . an d s u s t a i n e d b y t he L d . CI T( A ) w a s n o t j u s t i f i ed . R e l i a n c e w as p l a c e d o n t h e j ud g m e n t of t h e H o n ' b l e P u n ja b & H a r y a n a H i g h C o u r t i n t h e c a s e o f C I T V s . R a ji v Ga r g re p o r t e d a t 31 3 I TR 2 5 6 a n d d e ci s i o n of the I TA T C h a n d i g a r h B e n c h " A " i n th e c a s e o f A ja y S a n g a r i & 16 ITA No.1472/Chd/2018 A.Y.2014-15 C o . V s . A d dl . CI T ( 2 0 1 1 ) 1 6 Ta x m an n . c o m 1 1 5 ( C hd . ) C o p y of t h e s a i d o r d e r wa s f u r n i sh e d , whi c h i s pl a c e d on r e c o r d .
8. I n h er r i v a l s u bm i s s i o n s , th e L d. S r . D R r e i t er a t ed t h e observations ma d e by th e au t h o r i t i es below in t h ei r r e s p e c t i ve o r d e rs a n d f u r t h e r s u b m i t t e d t h a t th e a s s e s s ee h a d n o t f i l e d r ev i s e d r e t ur n a nd t h e i n c om e c ou l d n o t be r e v i s e d b y f i l i n g t h e c o m p u t a t i on . I t wa s a l s o st a t e d t h a t the a s se s s e e su r r e n d e r ed the amount only when t he s u m m o n w a s rec e i v e d b y h er f ro m t h e I n v e st i g at i o n W i n g , s o i t w a s n o t a v o l u n t a r y s u rr e n d e r . A s r e g ar d s t o t he d e c i s i o n r el i e d up o n b y t h e L d . co u n s e l f o r a s se ss e e , i t w a s s u b m i t t e d t h a t i n t h e s a i d c a s e , t h e e n q u i r y m ad e b y t he I n ve s t i g at i o n W i n g w a s n o t c o mm u n i c a t e d t o t he a s s e ss e e b u t i n t h e p r ese n t c a s e i t w as i n t h e k n o w l ed g e o f t h e D e p a r t m e nt t h a t t h e a s s e s s e e ha d n o t d i s c l o s ed t r u e a n d c o r r e c t i nc o m e , s o t h e r e w as c on c e a l m e n t o f t h e i n c o m e by t h e a s s es s e e , t he p e n a l t y w a s r i g h t l y l e v i e d b y th e A . O . u /s 2 7 1 ( 1 ) ( c ) o f t h e A c t a n d t h e L d .C I T( A ) w as f u l l y j u s t i f i ed i n s u s t a i n i ng the same. Reliance was also p l a ce d on t he f o l l o w i ng d e c i s i on :
P r e mp al G an d h i V s . C IT , IT A N o. 33 5 IT R 2 3 ( P & H ).
9. I h a v e c on s i d e red t h e s u b m i s s i on s o f b o t h t h e pa r t i e s a n d p e r us e d t he m a t e r i a l a v a i l a b l e o n r ec o r d . I n th e p r e s en t case, it is no t i c e d that the In v e s t i g a ti o n Wi n g of t he D e p a r t m e nt s u mm o n e d t h e a s s e ss e e u / s 1 3 1 ( 1 A ) o f t h e A c t v i d e s u m m on d at e d 2 9 . 9 . 20 1 5 , th e a s s e s s ee w a s a s k e d to a t t e n d o n 1 2 . 1 0.2 0 1 5 a n d p r o d u ce t h e f ol l o w i ng do c u m e n t s :17 ITA No.1472/Chd/2018
A.Y.2014-15
- Personal appearance.
- Brief Note on business activities carried out by you.
- Photocopies of copies of ITRs, Computation chart and audited balance sheet for the A.Y. 2011-12 to A.Y. 2015- 16.
- Details of all bank accounts in your name alongwith accounts number, branch address and bank account statements for the period 01.04.2010 to 31.03.2015.
- Copy of cash book/ bank book and sale/purchase book for the period 01.04.2010 to 31.03.2015.
10. Th e a s s e s s e e su o m o t o s u rr e nd e r e d Rs . 3 7 l a cs a n d f i l e d t h e r e v i s e d s t a t e m e n t o f ne t a s s e s s a bl e i nc o m e a n d d e p o s i t e d t he d ue t a x o n t h e s a i d s u r r e n d e r o n 1 2. 1 0 . 2 0 1 5 .
Th e A.O. i s su ed the notice u/ s 142(1) of th e Act on 8 . 4 . 2 0 1 6 a n d a sk e d t h e a s s e s s e e t o f u r n i s h v a r i ou s d e t a i l s. A c c o r d i n g t o t h e A . O . th e a ss e s se e c o n c ea l e d t h e i n c o m e t o t h e e x t e n t o f R s. 3 7 l a c s . It is noticed that the assessee f u r n i s h e d v ar i o us d e t a i l s a s k e d by t h e A . O . v i d e l e t t e r d a t e d 3 0 . 4 . 2 0 1 6, c o p y o f w h i c h i s p l a c e d a t pa g e No . 1 6 o f the a s s e s s e e 's P a p e r B o o k a n d i n f or m e d t h a t a n am o u n t of Rs.37 lacs was s u r r e n d e re d ( e q u i v a l e nt to Lo n g Te r m Capital Gain of R s . 3 6, 2 3 , 1 34 / - ) and an amount of R s . 1 2 , 5 5 ,8 7 1 / - as income tax & interest t he r e o n w as d e p o s i t e d o n 1 2. 1 0 . 2 0 1 5 . Th e r e fo r e , f r o m t h e f ac t s o f t h e present c a s e, it is clear that the assessee suo moto s u r r e n d e re d a n a m o u n t o f R s .3 7 l a c s b e f o r e a n y o f t h e a u t h o r i t i e s o f t he I n c om e Ta x p o i n t e d o u t a n y un d i s c l o s ed i n c o m e o f t he a s s e s s e e . I t i s n o t i c e d t ha t t he a s s e s s e e i n f o r m e d t h e D .D .I . ( I n ve s t i g at i on - I I ) , L ud h i a n a v i d e l e t te r d a t e d 1 2. 1 0 . 2 015 ( i n r e s p o ns e to t h e s u m m o n u/ s 1 3 1 ( 1 A ) o f t h e A c t d a t ed 2 9 . 9 . 2 0 1 5) t h a t a r e c o m p u t at i o n o f t a x a b l e i n c o m e w a s fi l ed , w h e re i n an a m o u n t of R s. 37 l a c s w a s 18 ITA No.1472/Chd/2018 A.Y.2014-15 s u r r e n d e re d u n de r t h e h e a d 'm i sc e l l a n e o us i n com e ' , w h i c h i s e v i d e n t f r o m p a g e N o s . 9 t o 11 o f t h e a s s e s se e ' s P a p e r B o o k , w h i c h a r e t h e c o p i es o f t h e r e p l y , c om p u t a ti o n i n c o me and copy of ch a l l a n in r e s pe c t of tax a nd i n t e r e st a m o u n t i n g t o R s. 1 2 , 5 5 , 8 71 / - , d ep o s i t e d o n 12 . 10 . 2 0 1 5 . I t i s n o t i ce d t h at th e A . O . g o t t he I n ve s t i g at i o n Rep o r t f r om t h e P r i n c i p a l CI T- I , L u d h i a n a v i d e l e t t e r da t e d 2 4 . 2 . 2 0 16 t h a t t h e r e w e r e c e r t a i n b r o k e rs i n d i f f e r e n t to w n s , w ho contacted th e prospective c l i en t s and took paper b o ok e n t r i e s , t h i s f ac t h a s b e e n m en t i o n e d a t p a r a 3 o f t h e a s s e s s m e nt o r d er d a t e d 2 8 . 1 0 . 2 01 6 . H o w e v e r , t he a s s e s s ee s u o m o t o s u r r end e r e d a s u m o f R s . 3 7 l ac s m u ch b e f o r e t h e s a i d d a t e . Th e r e fo r e , i t c a n n o t b e s a i d t h a t t h e D e p a r t m e nt p o i n t e d o u t t o th e a s s e s s e e t h at t h e i n c o m e a mo u n t i n g t o R s . 3 7 l a c s ha d e s c a p e d a s s e s sme n t . O n t h e c o nt r a r y , t h e a s s e s s e e h e r s e l f s u r r e n d e re d t h e a m o u n t o f R s . 3 7 l a c s a nd p a i d t h e d u e t a x e s & i n t e r e s t o n t h e s a i d s u r r e n d e r ed i n c o m e o n 1 2 . 1 0. 2 0 1 5 m u ch b e f or e t h e d i s c r e p a nc y , i f a ny, w a s p o i n t e d o u t b y a n y o f t h e d ep a r t m e n t al a u t ho r i t i e s . On a s i m i l a r i s s u e , t h e H o n ' b l e J u r i s d i c t i o n ; H i g h Co u r t i n t he c a s e o f CI T V s . R a j i v G a r g ( 20 0 9) 3 1 3 I TR 2 5 6 ( su p r a ) h e l d as under:
" th at th e T r ib u n al h ad r e c o r d e d a p u r e f in d in g o f f ac t to th e e f f ec t th at th e R e v e n u e h ad n o t p l ac e d o n r e c o r d an y ma te r i al o r e v id e n c e to d is c h ar g e i t s b u r d e n of p r o v in g c o n c e al me n t. N o s u c h f in d in g wa s r e c o r d e d i n th e as s e s s me n t o r d e r . T he T r ib u n al f u r th e r h e l d th at th e ad d i ti o n al i n c o me s o o f f er e d b y th e a s s e s s e e was d o n e in g o o d f ai th an d to b u y p e ac e . T he b u r d en s h if ts to th e as s e s s e e o n l y if h e f ail s to o f f er an y e x p l an a ti o n f or th e u n d is c l o s e d in c o me o r o f f er s an e x p l an at i o n 19 ITA No.1472/Chd/2018 A.Y.2014-15 wh i c h i s f o un d to b e f al s e b y as s e s s in g au th o r i ty . T h e r e v is e d r e tu r n of in c o me wa s f il e d in wh i c h th e e n tir e i n c o me was s u r r e n d e r e d wi th an e x p l an a t io n . T h e r e v is e d r e tu r n was r e g u l ar iz e d b y th e R e v e n u e . T h e as s e s s in g au th o r i ty h ad f ail e d to t ak e an y o b je c ti o n th at th e d e c l ar at i o n o f in c o me mad e b y th e as s e s s e e in h i s r e v is e d r e tu r n an d h i s e x p l an a t io n we r e n o t b o n a f id e . T h e T r ib u n al was ju s tif ie d in u p h o l d in g th e order of th e C o mmi s s i o n e r ( A p p e al s ) d e l e ti n g th e p e n al t y i mp o s e d u n d e r s e c tio n 2 7 1 ( 1 ) ( c ) o f th e A c t. "
11. B y f o l l o w i n g t he a f o r e s a i d j u dg m e n t o f t h e H o n ' b l e J u r i s d i c ti o n a l H i g h C o u r t , t h e I TA T C h a n d i g a r h B e n c h " A"
i n t h e c a s e o f A j a y S a n g a r i & C o. V s . A d d l . CI T ( s u p r a ) h e l d as under:
"10. The AO and the CIT(A) had placed reliance on the ratio laid down in the case of Rajesh Chawla (supra ). On the facts of the case before the Hon'ble Court, the assessee was found to be a member of group known as M/s. Baldav Electricals, Ludhiana against which information was received by the Intelligence Wing that the members of the group were indulging in tax evasion by showing income from other sources as agricultural income. During the course of investigation the persons were asked to produce evidence about agricultural income and in the absence of any documents being produced the said persons offered to disclose income/s subject to no penalty. The Hon'ble High Court held that in such circumstances it could not be held that the assessee had (sic - not) concealed its income and the assessee was held to be liable to levy of penalty under s. 27l(l)(c ) of the Act."
12. In the p r es e n t case a l s o, t he assessee suo moto s u r r e n d e re d a n a m o u n t o f R s .3 7 l a c s a n d p a i d th e d u e t a x a l o n g w i t h i nt e r es t t h e r e o n m u ch b e f o r e t h e I nv e s t i g a ti o n W i n g o r t h e A . O . p o i n t e d o u t a n y d i s c r e p a nc y a b o u t t h e u n d i s c l o se d or concealed i n co m e of the as s e s s e e . I, t h e r e f o r e, c o n s i d e r i n g t h e f a c t s o f t h e p r e se n t c a s e a m of t h e v i e w t h a t t he i m p u g ne d p e na l t y l e vi e d by t he A . O . u /s 2 7 1 ( 1 ) ( c ) o f t h e A c t a n d s u s t ai n ed b y t h e L d . CI T( A ) w a s n o t j u s t i f i ed . A c c o rdi n g l y , t h e s a m e i s d e l e t e d . Th i s fi n d i n g h a s 20 ITA No.1472/Chd/2018 A.Y.2014-15 b e e n g i v e n b y c on s i d e r i n g t he p ec u l i a r f a c t s o f th e p r e s e n t case, t h e re f o r e , it is made clear that it may not be c o n s i d e r ed a s a p r e c e d e n t i n t he o t h e r c a se s .
I n t h e r es u l t , t h e a p p e a l of t h e a ss e s s e e i s a l l o w e d. ( O r d e r pr o n o u n ce d i n t h e O p e n Co u r t o n 26 . 0 4 . 200 9 . ) Sd/-
(N.K.SAINI) VICE PRESIDENT "दनांक /Dated: 26th April, 2019 *रती* आदे श क त*ल+प अ,े+षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आय-
ु त/ CIT
4. आयकर आयु-त (अपील)/ The CIT(A)
5. +वभागीय त न0ध, आयकर अपील$य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar