Commissioner Of Income-Tax, Bathinda v. M/S G.s. Arora & Sons

ITA No. 256 of 2003 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-Tax, Bathinda Versus M/s G.S. Arora & Sons ITA No. 256 of 2003 Date of Decision: 30.8.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Savita Saxena, Advocate for the appellant. Mr. Ram Lal Gupta, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This order shall dispose of ITA Nos. 256 and 257 of 2003as the same are against one assessee and arise out of the same order.The facts are being taken from ITA No. 256 of 2003. 2.ITA No. 256 of 2003 has been filed by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 30.6.2003 passed by the Income Tax AppellateTribunal, Amritsar Bench, Amritsar (hereinafter referred to as “theTribunal”) in ITA No. 175 (ASR)/1997 for the assessment year 1988-89proposing the following substantial question of law:- “Whether in the facts and circumstances of the case,the Income-tax Appellate Tribunal is justified in law in deleting the penalty on account of that the AssessingOfficer has not detected any concealment of incomebefore filing of the revised return ignoring the fact thatthe Assessing Officer, detected the concealedincome vide order under section 143(3) dated28.12.1989?” 3.Put shortly, the facts of the case as narrated in the appealare that the assessee is dealing in sale of Refrigerators, Stabilizers,Gramophone, Records Cassettes, Radio, Fans etc. and filed its returnon 5.8.1988 declaring an income of Rs.97,250/-. Order under Section143 (1) was passed on 14.12.1988 (Annexure P-1). The Income TaxOfficer (Survey), Jalandhar vide his letter dated 10.5.1989 intimated thatsome drafts purchased from the banks had been entered in the booksof accounts on the dates subsequent to the dates of purchase when thecash was available with the assessee. During the pendency of theinquiries, the assessee filed second return on 16.6.1989 declaringincome at Rs.1,37,260/- adding back the peak cash investment atRs.40,000/-. The assessment was completed under Section 143 (3) ofthe Act on 28.12.1989 by the Assessing Officer and the surrenderdisclosed in the revised return on account of peak cash investment wasaccepted and treated as income of the assessee from undisclosedsources for which particulars were concealed by the assessee.Accordingly, penalty proceedings under Section 271(1)(c) of the Actwere also initiated. The Assessing Officer imposed penalties ofRs.30,000/-. Against the order of the Assessing Officer, the assesseefiled an appeal before the Commissioner of Income Tax (Appeals) [in ITA No. 256 of 2003-3- short “the CIT (A)], who vide order dated 12.12.1996 deleted thepenalty. Against the deletion of penalty, the revenue preferred anappeal before the Tribunal. The Tribunal vide order dated 30.6.2003upheld the order of the CIT (A) and dismissed the appeal of therevenue. Hence, the present appeal. 4.We have heard learned counsel for the parties and perusedthe record with their assistance. 5.Learned counsel for the revenue submitted that theTribunal had erroneously deleted the penalty levied under Section 271(1)(c) of the Act. The revenue had detected the concealment and thefiling of the revised return by the assessee was as a consequence ofsuch detection and, therefore, penalty was exigible. The finding to thecontrary is legally unsustainable. 6.Controverting the submission of learned counsel of therevenue, learned counsel for the assessee submitted that notice underSection 148 of the Act was issued in September, 1989 whereas therevised return was filed prior thereto on 16.6.1989 and, therefore, filingof revised return before detection of concealment would not attractpenalty for concealment and the Tribunal was right in deleting thepenalty. 5.Learned counsel for the revenue submitted that theTribunal had erroneously deleted the penalty levied under Section 271(1)(c) of the Act. The revenue had detected the concealment and thefiling of the revised return by the assessee was as a consequence ofsuch detection and, therefore, penalty was exigible. The finding to thecontrary is legally unsustainable. 6.Controverting the submission of learned counsel of therevenue, learned counsel for the assessee submitted that notice underSection 148 of the Act was issued in September, 1989 whereas therevised return was filed prior thereto on 16.6.1989 and, therefore, filingof revised return before detection of concealment would not attractpenalty for concealment and the Tribunal was right in deleting thepenalty. 7.We have given our thoughtful consideration to therespective submissions of learned counsel for the parties. We expressour inability to agree with the learned counsel for the revenue. TheTribunal while deleting the penalty recorded that the assesseeadmittedly had filed revised return on 16.6.1989 for both the years priorto issuance of notice under Section 148 of the Act, on the basis of which the assessment was completed on 28.12.1989. Notices under Section148 of the Act were issued after completion of three months and 22days for the assessment year 1987-88 and three months eight days for1988-89 after the receipt of report of the ADI. On the basis of theaforesaid conclusion, the Tribunal had drawn an inference that therewas no wilful concealment on the part of the assessee or that theAssessing Officer had detected the concealment of income on the basisof which revised returns were filed. The relevant observations recordedby the Tribunal would be advantageous to refer to, which read asunder:- “It is true that in the instant case, the assessee filedvoluntary return on 16.6.1989 for both theassessment years under consideration on the basisof which the AO completed the assessment on28.12.1989. It is noticed that the AO had not initiatedpenalty proceeding while processing the originalreturns under section 143(1) of the Act. The noticesunder section 148 were also issued after thecompletion of three months and 22 days for theassessment year 1987-88 and three months and 8days for the assessment year 1988-89 from thereceipt of the report of the ADI and in the meanwhile,the AO had already made thorough enquiries fromthe banks regarding the purchase of drafts by theassessee, which clearly shows that at that time whenthe report of the ADI was received, the AO was not definite as to whether any concealment had takenplace or not. We may point out here that the basisfor issuance of notices under section 148 wasnothing but the disclosure of the income by theassessee on 16.6.1989 by filing voluntary returns forboth the years under consideration. In our view, theAO has not brought out any material on record toshow that the Department had detected theconcealment of income before filing of the revisedreturns by the assessee. In our view, if the A.O. wasmaking some inquiries that would not ifso factoamount to detection of concealment. In other words,the A.O. has not detected any concealment ofincome before filing of the revised returns. In thatview of the matter, we do not see any infirmity in thefindings of the CIT (A).” 8.The findings recorded by the Tribunal have not been shownto be perverse in any manner. Consequently, deletion of penalty upheldby the Tribunal cannot be faulted. 9.In view of the above, no substantial question of law arisesin these appeals. The appeals are accordingly dismissed. (AJAY KUMAR MITTAL) JUDGE August 30, 2010gbs (ADARSH KUMAR GOEL)JUDGE ITA No. 256 of 2003 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-Tax, Bathinda Versus M/s G.S. Arora & Sons ITA No. 257 of 2003 Date of Decision: 30.8.2010 ....Appellant. ...Respondent. 8.The findings recorded by the Tribunal have not been shownto be perverse in any manner. Consequently, deletion of penalty upheldby the Tribunal cannot be faulted. 9.In view of the above, no substantial question of law arisesin these appeals. The appeals are accordingly dismissed. (AJAY KUMAR MITTAL) JUDGE August 30, 2010gbs (ADARSH KUMAR GOEL)JUDGE ITA No. 256 of 2003 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-Tax, Bathinda Versus M/s G.S. Arora & Sons ITA No. 257 of 2003 Date of Decision: 30.8.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Savita Saxena, Advocate for the appellant. Mr. Ram Lal Gupta, Advocate for the respondent. AJAY KUMAR MITTAL, J. This appeal is dismissed. For orders, see ITA No. 256 of 2003 (Commissioner of Income-Tax, Bathinda v. M/s G.S. Arora & Sons). (AJAY KUMAR MITTAL) JUDGE August 30, 2010gbs (ADARSH KUMAR GOEL) JUDGE