Income Tax Appellate Tribunal - Chandigarh
Dcit, Patiala vs Sh. Hari Singh S/O Sh. Ram Murti, Patiala on 20 September, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND
SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No.598/Chd/2017
Assessment Year: 2013-14
DCI T Vs. Sh. Hari Singh S/o Ram Murti
Central Circle Preet Niwas, Kushal Vihar
Patiala Nabha, Distt. Patiala
PAN No. ABMPS0325B
Cross Objection No. 41/Chd/2017
(In ITA No.598/Chd/2017)
Assessment Year: 2013-14
Sh. Hari Singh S/o Sh. Ram Murti Vs. DCI T
Preet Niwas, Kushal Vihar Central Circle
Nabha, Distt. Patiala Patiala
(Appellant) (Respondent)
Assessee By : Sh. N.K. Garg
Sh. Vibhor Garg
Revenue By : Sm t. C. Chandrakanta
Date of hearing : 13/07/2017
Date of Pronouncement : 20/09/2017
ORDER
PER B.R.R. KUMAR A.M. The present appeal has been filed by the Revenue against the order of the Ld. CIT(A)-5, dt. 12/01/2017 and Assessee has filed the Cross Objection.
2. First we shall deal with the Appeal of the revenue in ITA No. 598/Chd/2017.
3. In the present appeal Revenue has raised following ground:
" Whether the Ld. CIT(A) has erred in deleting the penalty of Rs. 32,48,000/- out of the total penalty of Rs. 49,13,280/- imposed u/s 271AAB(1)(c) of the Income Tax Act, 1961 without appreciating the fact that the assessee has failed to file the return of income within the specified time as prescribed in notice u/s 153A r.w.s 271AAB of the Income Tax Act, 1961 and in fact there was inordinate delay of 2 more than one year which cannot be set to be reasonable and also failed to substantiate the manner of deriving the income of Rs. 1,60,00,000/- surrendered during search.".
4. A search and seizure operation u/s 132 of the Income Tax Act was carried out at the residential and business premises belonging to Preet Group of cases, Nabha, on 30.01.2013. The assessee, under reference, Shri Hari Singh, is one of the person related to Preet Group of cases, Nabha. The residence of the assessee was also covered in the said search operation.
Accordingly, a notice u/s 142(1) r.w.s. 153A of the Act was issued, on 21.08.2013 and the same was duly served on the assessee on 23.08.2013 requiring the assessee to file the return of income by 20.09.2013. In response to said notice, the assessee e-filed his return of income for the A.Y. 2013-14 on 09.11.2014 vide acknowledgement No.404488580091114, declaring an income of Rs. 1,94,27,790/-, and claiming a refund of Rs. 21,120/-. The return of income was delayed from the specified date. The source of income, as declared in the return of income, are as under:-
Income from Salary Rs. 21,00,000/-
Income from Capital Gain Rs. 2,24,491/-
Income from Other Sources Rs. 1,71,03,299/-
Gross Total Income Rs. 1,94,27,790/-
Less: Deduction under Chapter VIA Rs. 1,10,000/-
Total Income Rs. 1,93,17,790/-
Agricultural Income Rs. 1,70,000/-
5. Penalty proceedings within the meanings of section 271AAB of the I.T. Act 1961, in respect of undisclosed income, was initiated and a notice u/s 271AAB read with section 274 of the I.T. Act, 1961, issued on 28.03.2015, fixing the date of hearing for 28.04.2015. This notice was served on the assessee on 30.03.2015. However, on the appointed date, neither the assessee nor his authorized representative attended the proceedings nor any written submissions received. 3
6. The AO held that it is a matter of record that the search operation in the instant case was carried out on- 30.01.2013. The due date for filing of the return of income of the specified previous year i.e. A.Y. 2013-14 is 31.07.2013.However, no return of income received by the specified date. Consequently, a notice u/s 142(1) r.w.s. 153A of the Act, calling for the return of income of the specified previous year i.e. A.Y. 2013-14 was issued on and the same was served on the assessee on 23.08.2013. However, as per facts on record, the assessee filed his return of income for the specified year on 09.11.2014 i.e. after the specified date.
7. The Assessing Officer held that it is a matter of record that the assessee, as per his letter dated 21.02.2013, made a disclosure of Rs. l,60,00,000/-as additional income and it is also a matter of record that the assessee paid the taxes due on the additional income before filing of the return of income. However, he failed to specify the manner in which such additional income has been derived and consequently failed to substantiate the same i.e. the manner in which the additional income has been derived. Therefore, in the given facts and circumstances, the penalty within the meanings of section 271AAB(l)(c) of the Act is leviable. And levied penalty @ 30% of the undisclosed income of Rs. 1,63,77,598/- being the amount of the disclosure of Rs. 1,60,00,000/- and addition made on account of maximum income of Rs. 2,40,000/- and Rs. 1,37,598/- the addition made on account of unexplained investment.
8. The Ld. CIT(A) has modified the penalty and restricted the penalty @ 10% on the undisclosed income under section 271AAB(1)(c) on the grounds that there was a reasonable cause within the meaning of section 273B for not being able to file the return in the time specified .
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9. Heard both the parties. Ld.AR reiterated the arguments taken before the LD.CIT(A) where as LD.DR relied on the order of the Assessing Officer
10. We have gone through the submission made before us. The assessee has paid the taxes by fully by 15-03-2013, before the filing of the return and also sought for time after allowing of filing of Income Tax Return beyond the date wide letter dated 20-09-2013 as his files were misplaced.
11. Since assessee has paid taxes by 15/03/2013 no benefit is accrued by delaying the return. And hence we find no reason to interfere in the order of the Ld.CIT (A) on this issue.
12. In the Cross Objection the assessee has taken ground that the Ld. CIT(A) has not given any finding regarding the ground of penalty proceeding were initiated of only addition of Rs. 1,37,598/-.
13. The Assessing Officer made addition Rs.1,37,598 on the account of investment made in the jewellery and levied penalty of Rs.41,280 @30% on the undisclosed income. As the assessee has not disclosed the amount in either during the search or in the return filed The Ld.CIT (A) confirmed the addition. We have gone through the records before us. The assessee has paid taxes on the amount of Rs.1,93,17,790 which includes the surrender made during the search. The total amount of jewellery valued was Rs.1,25,06,769 and the disclosure on account of search was Rs.1,23,69,171. The addition of Rs.1,37,598 was made on the difference of amount derived on valuation of jewellery. The difference in the value of 1.3 laks on valuaton of 1.2 crores is not unnatural but can be said to be a case of difference of opinion. In that circumstances it cannot be held to be a case of undisclosed income imposing penalty under section 271AAB(1) of the act. Hence the order of the Assessing Officer do not satisfy the conditions laid down in the section 271AAB (1) of the Act.
5Hence the penalty upheld by the Ld. CIT(A) @ 30% on the amount of Rs. 1,37,598/- is hereby deleted.
14. In the result the appeal of the revenue is dismissed and CO of the assessee allowed.
Order pronounced in the open court.
Sd/- Sd/- (SANJAY GARG) (B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 20/09/2017 AG
Copy to: The Appellant, The Respondent, The CIT, The CIT (A), The DR