C.I.T.CENTRAL,JAIPUR vs. SHANTI LAL

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ITA/73/2012HC RajasthanRJHC01032408201223 January 20182 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT was justified in deleting the penalty. The Tribunal had relied on the decision of the High Court in Commissioner of Income Tax vs. Gebilal Kanhaialal (HUF) reported in 270 ITR 523 (Raj.), which was subsequently affirmed by the Supreme Court in 348 ITR 561. This precedent suggests that the circumstances under which the assessee offered the investment for tax, possibly after disclosure during search/survey, did not warrant the imposition of penalty under Section 271(1)(c). The High Court answered the substantial question of law in favour of the assessee and against the department.

What were the facts?

The assessee, Shri Shantilal Jain, a property dealer, filed his return of income for Assessment Year 2005-06 on October 31, 2005, declaring an income of Rs. 15,37,240. A search under Section 132 was conducted at the assessee's premises on November 14, 2006. During a survey under Section 133A at the assessee's shop, papers (Annexure-A23) detailing land investments and names of individuals were found. While no amounts were noted, the assessee, in a statement, accepted that these papers pertained to his land investments and estimated the amounts, offering them for tax. The Revenue levied a penalty of Rs. 35,07,610 under Section 271(1)(c). The Income Tax Appellate Tribunal (ITAT) allowed the assessee's appeal, deleting the penalty.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in deleting the penalty of Rs. 35,07,610 levied under Section 271(1)(c) of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record specific arguments made by the assessee before the High Court. However, the ITAT's decision, which was upheld by the High Court, implies that the assessee likely argued that the penalty was not leviable. Revenue's Contention: The Revenue, as the appellant, argued that the ITAT was not justified in deleting the penalty. The Revenue likely contended that the assessee's admission during the survey and the subsequent offer of investment for tax constituted concealment of income, warranting the penalty.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 271(1)(c),Section 139(1)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 73 / 2012 Commissioner of Income Tax-Central, Jaipur. ----Appellant Versus Shri Shanti lal Jain s/o Late Shri Gamer lal Jain, Prop. of M/s Meenakshi Property Dealer, 1, Reti Stand, Central Area, Udaipur (Raj.). ----Respondent _____________________________________________________ For Appellant(s) : Mr.KK Bissa. For Respondent(s) : Mr.Anjay Kothari. _____________________________________________________ HON'BLE MR. JUSTICE K. S. JHAVERI HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI Judgment / Order 23/01/2018 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the assessee 2. While admitting the appeal, this Court framed following substantial question of law :- "Whether on the facts and in the circumstances of the case, the ITAT has been justified in deleting the penalty to the tune of Rs.35,07,610/- levied under Section 271(1)(c) of the Income Tax Act, 1961 ?" 3. Facts of the case are that the assessee is a property dealer and also has income from share from partnership firm, income from house property and income from other sources. He filed return of income u/s 139(1) on 31.10.2005 declaring income of Rs. 15.37.240/-. Search u/s 132 was carried out on 14.11.2006 at

(2 of 2)

the premises of the assessee. During survey u/s 133A conducted at the shop of the assessee certain papers relating to investment in purchase of land were found recorded on the paper marked Annexure-A 23. On these pages detail of land area and name of certain persons are mentioned. No amount is noted on these papers. The assessee in his statement recorded at the shop in reply to question no. 2, 7 and 16 accepted that, on these papers the detail of lands in which he has made investment is noted for which he stated the estimated amount and offered such investment for tax. 4. The Tribunal allowed the appeal of the assessee relying upon the decision of this Court in 270 ITR 523 (Raj.) (Gebilal Kanhaialal (HUF) vs. ACIT) which has been affirmed by the Supreme Court in the judgment reported in 348 ITR 561. 5. In that view of the matter, the issue is answered in favour of the assessee and against the department. 6. In view of the above, the appeal is dismissed.

(DR. PUSHPENDRA SINGH BHATI)J. (K. S. JHAVERI)J. S.Phophaliya/-54

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