Income Tax Appellate Tribunal - Delhi
Sh. Pankaj Bajaj, New Delhi vs Acit, Noida on 1 February, 2018
In the Income-Tax Appellate Tribunal,
Delhi Bench 'F', New Delhi
Before : Shri Bhavnesh Saini, Judicial Member And
Shri L.P. Sahu, Accountant Member
ITA No. 3442/Del./2016
Assessment Year: 2012-13
Shri Pankaj Bajaj, A-2, vs. ACIT, Central Circle,
Greater Kailash, Part-I, New Delhi Noida.
PAN- AANPB6577C
(Appellant) (Respondent)
Appellant by Sh. Gaurav Jain, Advocate &
Ms. Manisha Sharma, Advocate
Respondent by Sh. Atice Ahmad, Sr. DR
Date of Hearing 29.01.2018
Date of Pronouncement 01.02.2018
ORDER
Per Bhavnesh Saini, J.M. :
This appeal by the assessee has been directed against the order of ld. CIT(A)-I, Noida dated 31.03.2016 for the assessment year 2012-13, challenging the levy of penalty imposed u/s. 271(1)(c) of the IT Act.
2. Briefly, the facts of the case are that a search was conducted on 28.03.2012 u/s. 132(4) of the IT Act. The Assessing Officer noted that the assessee was asked to explain the gold kept in locker No. 329/2 with HDFC Bank, Safdarjang Development Area, New Delhi because the assessee admitted before the CBI in statement recorded on 22.09.2012 u/s. 161 CrPC that the ITA No. 3442/Del./2016 2 assessee had removed certain gold items from this locker during the course of search on 21.05.2012. The assessee filed reply and accepted that he had removed gold items weighing 150 gms. He further contended that the removed items are part of the disclosed jewellery shown under the Wealth Tax Act. He contended that the total weight of jewellery found during the course of search at residence and locker was weighing 11,967.49 gms. whereas he and his wife, Smt. Bandana Kohli own jewellery having gross weight of 12,225.26 gms and as such this jewellery is part of the declared jewellery. The details of the jewellery declared under the Wealth-tax Act were filed and placed on record. The Assessing Officer further noted that since the assessee accepted that the jewellery of gold weighing 150 gms was removed, therefore, the addition of Rs.4,27,500/- was made to the income of the assessee. The Assessing Officer on the basis of same addition levied penalty u/s. 271(1)(c) of the IT Act, which is confirmed by the ld. CIT(A).
3. The ld. Counsel for the assessee reiterated the submissions made before the Assessing Officer and referred to PB-5, which is details of gold jewellery held and declared in the Wealth-tax Return supported by reply filed before the ld. CIT(A) dated 23.10.2015 and PB-52, which is reply filed before the Assessing Officer dated 25.09.2014 on the penalty matter. The ld. Counsel for ITA No. 3442/Del./2016 3 the assessee contended that since the assessee and his wife declared more gold jewellery in the Wealth-tax Return as against the jewellery found during the course of search, therefore, even if the addition was not challenged in the quantum proceedings, it is not a fit case to impose penalty.
4. The ld. DR, however, relied on the orders of the authorities below.
5. After considering the rival submissions, we are of the view that the matter requires reconsideration at the level of the Assessing Officer. It is an admitted fact that the assessee did not challenge the addition in quantum proceedings. Therefore, the addition of Rs.4,27,500/- became final in quantum proceedings. The Assessing Officer on this addition levied penalty u/s. 271(1)(c) of the IT Act. The Assessing Officer in the assessment order referred to the statement recorded of the assessee on 22.09.2012 u/s. 161 CrPC before the CBI, in which he has admitted to have removed gold items from the locker in question during the course of search on 21.05.2012. The statements u/s. 161 CrPC are recorded of the witnesses, but how it is connected with the penalty matter in the case of the assessee is not explained. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings and during the course of penalty proceedings, the assessee can ITA No. 3442/Del./2016 4 explain that it is not a fit case for penalty even if the addition is not challenged in quantum proceedings. Once the statements were recorded u/s. 161 CrPC of the witnesses, therefore, how it is relevant to levy penalty should have been examined by the Assessing Officer. Further, since beginning, the assessee has explained that he and his wife have declared more jewellery in Wealth-tax return. This explanation should also be examined by the authorities below giving their findings thereon in the penalty orders. Further, the assessee referred to the reply dated 25.09.2014 (PB-52) filed before the Assessing Officer, but the Assessing Officer has referred to another reply dated 23.09.2014 in the penalty order. The assessee filed another reply before the ld. CIT(A) dated 23.10.2015 (PB-42), but the reply of the assessee has not been considered by the ld. CIT(A) in the appellate order. In this view of the matter, we are of the view that the matter requires reconsideration at the level of the Assessing Officer. We, accordingly, set aside the orders of the authorities below and restore the penalty matter to the file of Assessing Officer with the direction to re-decide penalty matter in accordance with law by giving reasonable and sufficient opportunity of being heard to the assessee. The Assessing Officer shall pass a speaking order with regard to the relevance of statements u/s. 161 CrPC with the penalty matter in the case of the assessee and also with respect to the explanation of the assessee that he and ITA No. 3442/Del./2016 5 his wife have declared more jewellery in the Wealth-tax return. The assessee is directed to adduce sufficient evidence before the Assessing Officer for finalization of the matter. Accordingly, the appeal of the assessee is allowed for statistical purposes.
6. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court.
Sd/- Sd/-
(L.P. Sahu) (Bhavnesh Saini)
Accountant Member Judicial member
*aks*
Copy of order forwarded to:
(1) The appellant (2) The respondent
(3) Commissioner (4) CIT(A)
(5) Departmental Representative (6) Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Delhi Benches, New Delhi