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Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU, JM The Revenue has filed the present appeal against the impugned order dated 18/11/2013 passed by the Ld. Commissioner of Income Tax (Appeals)-XXVII, New Delhi on the following grounds:-
On the facts and in the circumstances of the case, the order
of the Ld. CIT(A) is bad in law and not in consonance with facts of the case.
2. On the facts and in the circumstances of the case, the Ld.
CIT(A) erred in deleting penalty of Rs. 14,84,400/- imposed by AO u/s. 271(1)(c) on account of addition of Rs.
30,00,000/- being business income offered by the appellant during the course of survey operation.
3. On the facts and in the circumstances of the case, the Ld.
CIT(A) erred in considering appellant submissions that Appellant submission that appellant had surrendered Rs.
30,00,000/- under pressure during the survey.
On the facts and in the circumstances of the case, the Ld.
CIT(A) erred in passing the order without considering the order passed by the AO.
5. On the facts and in the circumstances of the case, the appellant craves leave to add, allow or amend any all the ground of appeal before or during the course of hearing of the appeal.
The facts in brief are that the Assessee filed return of income on 23.10.2007 declaring total income of Rs. 13,98,780/-. The return was processed u/s. 143(1) of the I.T. Act, 1961 (hereinafter referred as the Act). The case was selected under compulsory scrutiny and Survey u/s. 133A of the Act was carried out on the business premises of the assessee on 12.2.2007. AO issued notice u/s. 143(2) of the Act on 02.9.2008 which was served upon the assessee. Subsequently, notice u/s. 143(2) of the Act was issued on 19.1.2009 for producing the necessary details alongwith the Audit Report u/s. 44AB of the Act. In response to the notice, the AR of the assesee appeared from time to time and filed the reply and also produced books of accounts.
2.1 The Assessee is engaged in the business of manufacturing of pressure cooker and related appliances. As the Survey was carried on the business premises of the assessee on 12.2.2007 and assessee voluntary surrendered Rs. 30 lacs for taxation vide its letter dated 13.3.2007 addressed to the AO. Thereafter, the AO perused the computation of income, profit and loss account, balance sheet, return of income at the time of completion of assessment and found that assessee has not offered Rs. 30 lacs in the return of income for taxation. Neither any mention has been made nowhere in the return of income or the accounts explaining the return.
Therefore, vide the order entry dated 10.8.2009 the AO asked the assessee why the amount of Rs. 30 lacs should not be included in the current year on account of surrendered income during survey u/s. 133A of the Act plus average of 2 years income from business and profession of the assessee. In response to the aforesaid order entry dated 10.8.2009, the assessee filed a reply stating that since no discrepancy was found in the books of accounts and the assessee has offered Rs. 30 lacs only to buy the peace. During the Survey assessee offered that we have no objection if assessment for the financial years is made by considering the taxable profit of Rs. 30 lacs which was surrendered during the survey proceedings plus average taxable profit of the last two preceding years, subject to penalty u/s. 271(1)© of the Act read with Explanation 4 or under any section of the Income Tax Act would be initiated against the assessee.
2.2 After considering the explanation given by the assessee and the documentary evidences as mentioned above, the AO has completed the assessment by adding the income from business and profession at average of 2 preceding years i.e. Rs. 4,88,158/- plus surrendered amount of Rs. 30 lacs thus totaling to Rs. 34,88,158/- alongwith other small additions mentioned in the assessment order dated 23.11.2009 passed u/s. 143(3) of the I.T. Act, 1961.
Aggrieved by the assessment order dated 23.11.2009, assessee filed appeal before the Ld. First Appellate Authority who has upheld the order of the AO by giving small relief of Rs. 25,000/- as mentioned in the statement of facts by the assessee.
4. Keeping in view of the facts and circumstances as explained above, the AO initiated the penalty proceedings in the case of the assessee vide notice u/s. 274/271 of the Act to the assessee for levying the penalty u/s. 271(1)© of the I.T. Act, 1961 on 23.11.2009 fixing the case for 12.1.2010 which was duly served upon the assessee. In response to the notice issued by the AO, assessee filed its reply by stating that the assessee surrendered Rs. 30 lacs just to buy the pace of mind; the survey team could not have found any discrepancy in the records, which was unexplainable. Also on unrecorded assets/ documents were found/ seized at the business premises and the additions were made by the AO on adhoc basis for that penalty is not leviable. AO has considered the explanation given by the assessee and held that assessee is in default in furnishing inaccurate particulars of his income. Accordingly, the minimum penalty @100% u/s. 271(1)© of the Act amounting to Rs. 14,84,400/- was imposed on the assessee on the addition of Rs. 45,76,654/- vide order dated 30.3.2012 passed u/s. 271(1)© of the Act.
Aggrieved by the penalty order, assessee filed appeal before the Ld. First Appellate Authority who vide his impugned order dated 18.11.2013 allowed the appeal filed by the Assessee by deleting the penalty of Rs. 14,64,400/- imposed by the AO by holding that the penalty in dispute is not leviable merely for not including the surrendered income in the return of income filed subsequently by the assessee. Secondly, the Ld. First Appellate Authority has also held that the AO has not specifically stated that as to how the assessee has filed inaccurate particulars or details and as why surrendered income is correct income of the assessee for the relevant assessment year and the assessment year as well as the penalty order is also silent about any specific discrepancy found at the time of survey on 12.2.2007.
Aggrieved with the impugned order dated 18.11.2013 passed by the Ld. CIT(A), Revenue is in appeal before the Tribunal.
In this case Notice of hearing was issued to the assessee on the address as per record for 03.2.2016 by RPAD and in response to the same, neither the assessee nor his AR appeared nor filed any application for adjournment and accordingly, the Bench adjourned the case for 12.5.2015 and on 12.5.2016 the Bench was not functioned and notice was issued by RPAD for hearing on 22.9.2016, but again on 22.9.2016 neither the Assessee appeared nor filed any application for adjournment and again Bench adjourned the case for 10.1.2017 and the office issued notice by RPAD for 10.1.2017, but again on 10.1.2017 none appeared on behalf of the assessee nor filed any application for adjournment.
The Bench again adjourned the case for 01.5.2017 and Notice for hearing on 01.5.2017 was sent by RPAD, but again none appeared on behalf of the Assessee, nor filed any application for adjournment and notice sent for 01.5.2017 was never received back unserved.
Therefore, keeping in view facts and circumstances as explained above, we are of the view that assessee is not interested to prosecute the matter in dispute and no useful purpose would be served to issue notice again and again to the assessee. Therefore, we are deciding the Revenue’s Appeal exparate qua assessee, after hearing the Ld. DR and perusing the records.
At the time of hearing Ld. DR relied upon the order passed by the AO and the contentions raised by the Department in the grounds of appeal.
We have heard the Ld. DR and perused the orders of the authorities below and we are of the view that the assessee has surrendered Rs. 30 lacs vide its letter dated 13.3.2007 addressed to the AO, after survey u/s. 133A of the Act carried out on the business premises of the assessee on 12.2.2007, as per record available with us. We have not seen that assessee has any retraction from its surrender of Rs. 30 lacs made vide his letter dated 13.3.2007 by mentioning any plausible reasons. More seriously, the assesse has not shown the amount of Rs. 30 lacs on account of surrender in the return of income and offer for taxation, neither any mention has been made nowhere in the return of income or accounts explaining the return. Only the AO has noticed this mistake committed by the assessee in the return of income. AO asked the assessee vide his Order sheet entry dated 10.8.2009 and assessee filed its reply to the same vide his letter dated 31.8.2009 by stating that we have no objection if the assessment for the financial year 2006-07 is made considering the taxable profit at Rs. 30 lacs (surrendered during survey) plus average taxable profit for the last two preceding financial years. As per the penalty order the assessee has written a letter dated 13.3.2007 offering the surrender amount of Rs. 30 lacs on account of discrepancy in the stocks, purchases and expenses etc. and other documents. We are of the view that Ld. CIT(A) has not considered these aspects in the impugned order while deleting the penalty in dispute and passed a non-speaking order. Therefore, the impugned order is not sustainable in the eyes of law and the same is set aside. Keeping in view of the facts and circumstances of the present case and in the interest of justice, we are of the view that matter requires thorough investigation as mentioned above, at the level of the Ld. CIT(A) and therefore, we direct the Ld. CIT(A) to consider the issues in dispute afresh and pass a speaking order, after hearing the parties, as per law.
In the result, the appeal of the Revenue is allowed for statistical purposes.
Order pronounced in the Open Court on 05/05/2017.