IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `D', NEW DELHI
Before Sh. George George K., JM And Sh. B. C. Meena, AM
ITA No. 1542/Del/2013 : Asstt. Year : 2009-10
Income Tax Offier, Ward 44(3), Vs Shri Laxman Giri,
New Delhi 96-E, Pocket-I, Mayur Vihar,
Phase-I,
Delhi-91
(APPELLANT) (RESPONDENT)
PAN No. ABZPG8738P
Assessee by : Sh. R. B. Arora, Adv.
Revenue by : Sh. S. N. Bhatia, DR
Date of Hearing : 24.7.2014 Date of Pronouncement : 25.7.2014
ORDER
Per George George K., JM:
This appeal at the instance of the Revenue is directed against
CIT(A) order dated 18.12.2012. The order of the CIT(A) emanates from
the order passed u/s 271(1)(c) of the Act, imposing a penalty of Rs.
4,94,425/-. The relevant assessment year is 2009-10.
2. Facts in brief are as follows:-
The assessee, an individual, is a salaried employee working with
MMTC. The return of income for the concerned assessment year was
filed on 28.7.2009 declaring taxable income under the head "salaries"
amounting to Rs. 2,67,680/-. The assessment was selected for scrutiny
through CASS on the basis of A.I.R information. Scrutiny assessment
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Laxman Giri
u/s 143(3) of the Act was completed on 26.12.2011 making an addition
of Rs. 21,76,717/- (bank interest of Rs. 275 + Long Term Capital Gains
of Rs. 21,76,442/-). Penalty proceedings u/s 271(1)(c) of the Act was
initiated and penalty of Rs. 4,94,425/- was imposed vide order dated
25.6.2012.
3. Aggrieved, the assessee filed an appeal before the CIT(A). The
CIT(A) allowed the appeal of the assessee. The relevant findings of the
CIT(A) reads as follows:
"I have gone through the penalty order, the written submissions and paper
book filed during the course of appellate proceedings. Appellant has cited
various judicial pronouncements in support of his claim that penalty for
concealment of income is not leviable for voluntary disclosure of income
even during assessment proceedings. As per Delhi High Court's recent
decision in 30/10/2011, in the case of CIT Vs Harnari, no penalty can be
imposed, if appellant surrenders his income voluntarity even after receipt
of questionare, in the absence of detection or information in the position
of revenue. This is confirmed by A.O in his penalty order page no. 1/Para-
2. Therefore, the penalty of such a big amount to a salaried employee will
be harsh."
4. The Revenue being aggrieved is an appeal before us. The ld. DR
supported the order of the Income Tax Officer, Ward 44(3), New Delhi,
imposing penalty u/s 271(1)(c) of the Act. The ld. Authorized
Representative on the other hand, reiterated the submissions made
before the Income Tax authorities and relied on the findings of the
CIT(A).
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Laxman Giri
5. We have heard rival submissions and perused the relevant material
on record. During the previous year relevant to the concerned
assessment year the assessee had sold a residential house, in Ghaziabad.
The said house was purchased in the year 1996. Against the sale of the
said residential house, the assessee had purchased another residential
house for Rs. 12,72,000/-. With the documented price received by the
assessee on the sale of subject property, the calculation of capital gains
was `nil' and on this belief transaction was not disclosed in assessee's
return of income. Thereafter in view of proceedings u/s 50C of the Act,
the assessee became liable for capital gain and he offered the same for
taxation. The revised computation of capital gain was accepted by the
Revenue and exemption u/s 54 was duly granted to the assessee. The
capital gains liability arose on account of application of sec. 50C of the
Act. The stamp duty value of the subject property was taken as the
consideration deemed to have been received by the assessee. In view of
the deeming provision u/s 50C, the assessee has made liable for capital
gains tax. There has been no concealment or deliberate Act on the part
of the assessee in furnishing inaccurate particulars of income, warranting
imposing of penalty u/s 271(1)(c) of the Act.
5.1 In this context the Hon'ble Jurisdictional High Court in the case of
CIT Vs Harnarain in ITA No. 2072/2010 dated 31.10.2011 and held that
no penalty can be imposed, if the assessee surrenders his income
voluntarily even after receipts of questionnaire, in absence of detection
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Laxman Giri
or information of concealment by the Revenue. The relevant findings of
the Hon'ble Jurisdictional High Court in the case of CIT Vs Harnarain
(supra) reads as follows:-
"9. In K. C. Builders Vs ACIT, (2004) 265 ITR 562, the Hon'ble Supreme
Court observed that word `concealment' requires there to be a deliberate
act on the part of the assessee, and the concealment inherently carries
with it the element of mens rea. It was further observed that a mere
omission from return of any item of receipt does neither amount to
concealment nor deliberate furnishing of inaccurate particulars of income
unless and until there is some evidence to show or some circumstance
found from which it can be gathered that the omission was attributable to
an intention or desire on the part of the assessee to hide or conceal the
income so as to avoid imposition of tax thereupon. It was also held by the
Supreme Court that before a penalty under Section 271(1)(c) is imposed it
has to be established that the assessee had consciously made the
concealment or furnished inaccurate particulars of income.
10. It is also observed that the CIT(A) had relied on the decision of the
Madhya Pradesh High Court and the Jharkhand High Court in the case of
CIT Vs S. V. Electricals P. Ltd. (155 Taxman 158) and CIT Vs Ashim
Kumar Agarwal (153 Taxman 226) respectively where it was held that
where the assessee surrenders his full income, though at a later state,
there was no question of any concealment on his part and consequently no
penalty under Section 271(1)(c) was leviable, and that a omission form
return of income did not amount to concealment.
11. In view of the discussion above and the cited decisions, surrender of
the amount by the Assessee after receipt of the questionnaire could not led
to an inference that it was not voluntary, in the absence of any material on
record to suggest that it was bogus or untrue. It is further evident that
there was neither any detection nor any information in the possession of
the Revenue which might lead to a conclusion that there was a detection
by the Revenue of concealment. Accordingly, the question of law framed is
answered against the Revenue and in favour of the Assessee. The appeal is
dismissed. No costs."
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5.2 In view of the aforesaid reasoning and the judgment of the Hon'ble
Jurisdictional High Court cited (supra), we uphold the order of the
CIT(A) has correct and in accordance with law and no interference is
called for law. It is order accordingly.
6. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on 25/7/2014
Sd/- Sd/-
(B. C. Meena) (George George K.)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 25/7/2014
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5.DR: ITAT
ASSISTANT REGISTRAR
Date Initial
1. Draft dictated on 24.7.2014 PS
2. Draft placed before author 25.7.2014 PS
3. Draft proposed & placed before the JM/AM
second member
4. Draft discussed/approved by Second JM/AM
Member.
5. Approved Draft comes to the Sr.PS/PS PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk PS
8. Date on which file goes to the AR
9. Date on which file goes to the Head Clerk.
10. Date of dispatch of Order.
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