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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DELHI
BEFORE SH. N.K.SAINI, ACCOUNTANT MEMBER AND SH.K.N.CHARY, JUDICIAL MEMBER (ASSESSMENT YEAR: 2009-10) Narendra Kumar Agarwal, vs DCIT, 5, Central Avenue, Central Circle-12, 1st Floor, Maharani Bagh, New Delhi-110055. New Delhi-110065. PAN-ADEPA3716G (Appellant) (Respondent) (ASSESSMENT YEAR: 2009-10) Kishore Kumar Agarwal, vs DCIT, B-308, New Friends Colony, Central Circle-12, New Delhi-110065. New Delhi-110055. PAN-AFIPA5132Q (Appellant) (Respondent) ITA No. 4109/Del/2014 (ASSESSMENT YEAR: 2009-10) Hemant Kumar Agarwal, vs DCIT, 70, Nehru Nagar, Agra. Central Circle-12, PAN-ABHPA9867D New Delhi-110055. (Appellant) (Respondent) Appellant by Sh. Pankaj Garg, Adv. Respondent by M/s. Shefali Swroop, CIT DR Date of Hearing 14.09.2017 Date of Pronouncement .09.2017 ORDER PER K.N.CHARY, JUDICIAL MEMBER All these three appeals relating to AY 2009-10 are filed challenging the orders dated 19.05.2014 in the cases of three different assessees covered by the search operations carried out in Rajdarbar Group of cases on 31.07.2008. Facts are ITA No.4107- 4109/Del/2015 identical, as such we proceed to dispose of all these three appeals by way of a common order.
Briefly stated facts are that pursuant to the search and seizure operation carried out in Rajdarbar Group of cases on 31.07.2008 all the three assessees involved in these cases filed their return of income and they have surrendered a sum of Rs.15 lacs each. Ld. AO accepted the same but proceeded u/s 271AAA of the Income Tax Act, 1961 (in short “Act”) to levy the penalty. The assessees preferred appeals before the Ld. Commissioner of Income Tax (Appeal) [in short “CIT(A)”] and by way of impugned order, Ld.CIT(A) dismissed the appeals. Hence, the assessees are before us in these appeals praying to delete the penalty.
It is the argument of the Ld.AR that the assessees made surrender only to buy peace of mind even though no incriminatory material was ever found during the search and according to him, the assessees were assured at the time of surrender that such surrender will not be visited with penalty. Further, according to the Ld. AR, the jewellery shown in the surrender was not the jewellery found during the search but as a matter of fact though there was no need of surrender of income, they disclosed the income only to buy peace. The assessee paid tax on the amount surrendered as such the penalty cannot be levied. Ld.AR further argued that no queries have been raised as to the manner in which the surrendered amount was earned by the assessee and the authorities below did not strain their nerve to know whether really there was any undisclosed income as surrendered by the assessee, or only to avoid the procedural battles and to gain mental peace, the assessee made such surrender.
pg. 2
ITA No.4107- 4109/Del/2015
Per contra, it is the submission of the Ld. DR that as recorded by the Ld. CIT(A) vide paragraph No.3.4 of his order, when called upon to explain the manner in which the undisclosed income was derived, the assessee simply submitted a letter dated 14.12.2010 whereby merely giving the breakup figures, the assessee surrendered Rs.15,00,000/-. It is pleaded that the assessee is estopped from changing the stand and since he himself included Rs.15,00,000/- in the return of income, he cannot take a different plea. For these reasons, Ld. DR prays to dismiss the appeal.
Facts borne out of record are admitted. The search took place on 31.07.2008 and the assessee submitted letters dated 14.12.2010 offering Rs.15,00,000/- to tax.
Records does not speak that the authorities ever questioned the assessee as to how the surrendered income was derived by the respective assessee. The surrender through letter dated 14.12.2010 was accepted by the AO as it is.
Reliance is placed on the decision of the Co-ordinate Bench of this Tribunal reported in the decision of Devi Dass Garg vs DCIT, Central Circle-12, New Delhi in vide order dated 11.04.2016 which is also a case relating to the assessee covered by the search operation conducted in Rajdarbar Group of cases wherein the penalty was deleted on the ground that when the assessee filed return of income in terms of the surrender made and was accepted by the AO without raising any queries, penalty u/s 271AAA is not justified. Further, reliance was placed on CIT vs Sudhir Jain [2014] 41 Taxmann.com 234 (Delhi High COurt); Neerat SInghal vs ACIT, Central Circle, New Delhi [2013] 37 Taxmann.com 189 (ITAT, Delhi); Pramod Kumar Jain vs DCIT [2013] 33 Taxmann.com 651 (ITAT, Cuttack); ACIT, Central Circle vs Munish Kumar Goyal [2014] 45 Taxmann.com 563 (ITAT,
pg. 3
ITA No.4107- 4109/Del/2015 Chandigarh); and ACIT vs A.N.Annamalaisamy (HUF) [2013] 38 Taxmann.com 440 (ITAT, Chennai) for the principle that where the assessee having surrender certain income in the course of search filed return wherein the said amount was duly disclosed and the taxes were paid accordingly. Facts of the cases on hand being similar, the principle laid down in the above decisions is applicable and while respectfully following the same, we hold the penalty in this matter u/s 271AAA of the Act cannot be sustained. We, therefore, direct the AO to delete the penalty.
In the result, the appeals filed by the assessees are allowed.
The order is pronounced in the open court on 09th October, 2017.