Shveta Nanda v. Commissioner Of Income Tax,Chandigarh And Others

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 810 of 2008Date of decision: 18.4.2011 Shveta Nanda --- Appellant Versus Commissioner of Income Tax,Chandigarh and others --- Respondents CORAM:HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present:Mr. Vishal Gupta, Advocatefor the appellant-assessee. Ms. Urvashi Dhugga, Senior Standing Counsel for the respondent-Revenue. --- AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-Tax Act, 1961(for short “the Act”) has been filed by the assessee against the orderdated 26.11.2007, passed by the Income Tax Appellate TribunalChandigarh Bench ‘A’, Chandigarh (in short “the Tribunal”) in ITA No.191/CHD/2007, relating to the assessment year 2003-04. 2.The following substantial question of law has been claimed fordetermination of this Court: “Whether on the facts and in the circumstances of the case,the learned ITAT was right in law in setting aside the order ofthe CIT (Appeals), and restoring the order of the Assessing Officer whereby penalty of Rs. 78,750/- has been imposed by the A.O. in spite of the fact that no concealment has beenfound by the A.O. at the time of survey as well as scrutiny andfurther the said amount has been voluntarily declared by theAssessee.” 3.The facts, in brief, necessary for adjudication as narrated inthe appeal, are that during a survey under Section 133A of the Act carriedout at the business premises of M/s. Cossets Marketing (P) Ltd, on28.2.2003, some discrepancies were detected in the record and someincriminating documents were found. From the documents, it was foundthat the aforesaid Company had been paying a handsome commissionand incentives to its Directors and family members. Rohit Khanna, theManaging Director of the Company, who is the husband of the assessee,on being asked to explain the above discrepancies, gave an undertakingin writing on 12.3.2003 to get an additional amount of Rs. 90,00,000/-surrendered from 14 persons, including Rs. 2,50,000/- from his wife, i.e.the present assessee, subject to the condition that no penal action wouldbe initiated against them. 4. The case of the assessee was later on selected for compulsoryscrutiny under Section 143(3) of the Act. During the course of assessmentproceedings, it was noticed that the assessee had not declared anyadditional amount in the return of her income for the assessment year2003-04. The assessee, however, agreed to pay income tax on theamount of additional income, along with interest under Section 234B ofthe Act, subject to no penal action against her. The assessing officer didnot agree with the submissions made on behalf of the assessee andmade addition of an amount of Rs. 2,70,000/- vide order dated 8.3.2006, besides ordering for charging interest thereon, under Section 234B andinitiating penalty proceedings under Section 271(1)(c) of the Act. 5. During the course of penalty proceedings, it was observedthat the surrender of the additional income by the assessee was notvoluntary and in good faith rather she was compelled by thecircumstances to do so. It was further observed that the assessee hadnot even declared any additional amount of income surrendered duringthe course of survey. The assessing officer, after considering variousjudicial enunciations cited before him held by his order dated 28.9.2006that the assessee was liable to pay penalty under Section 271(1)(c) of theAct for furnishing inaccurate particulars of her income of Rs. 2,50,000/-.The assessing officer imposed penalty at the rate of 100% of the taxsought to be evaded, which worked out to Rs. 78,750/-. 5. During the course of penalty proceedings, it was observedthat the surrender of the additional income by the assessee was notvoluntary and in good faith rather she was compelled by thecircumstances to do so. It was further observed that the assessee hadnot even declared any additional amount of income surrendered duringthe course of survey. The assessing officer, after considering variousjudicial enunciations cited before him held by his order dated 28.9.2006that the assessee was liable to pay penalty under Section 271(1)(c) of theAct for furnishing inaccurate particulars of her income of Rs. 2,50,000/-.The assessing officer imposed penalty at the rate of 100% of the taxsought to be evaded, which worked out to Rs. 78,750/-. 6.The Commissioner of Income-tax (Appeals) [in short “CIT(A)”]accepted the appeal of the assessee and deleted the penalty vide orderdated 15.12.2006. The CIT(A) was of the view that the burden was on theDepartment to prove that any particular amount was a revenue receiptand the assessee had consciously concealed the particulars of herincome or had deliberately furnished inaccurate particulars of income. 7.The Tribunal accepted the appeal of the Revenue and vide theorder under appeal, set aside the order of the CIT(A) and restored that ofthe assessing officer, and this is how the assessee is in appeal before us. 8.We have heard learned counsel for the parties and perusedthe record. 9.The solitary issue that arises in this appeal is, whether theassessee was liable for penalty under Section 271(1)(c) of the Act. 10Learned counsel for the assessee submitted that thesurrender was made by the assessee subject to the condition of ‘nopenalty’ and in spite of the same the authorities have decided the issueagainst her. The counsel further submitted that the onus was upon therevenue to establish concealment and on the strength of a judgment ofthe Calcutta High Court in Commissioner of Income-tax, West Bengal-IIvs. Amalendu Paul, 145 ITR 439 and judgment of this Court inCommissioner of Income Tax vs. Suraj Bhan, (2007) 294 ITR 481 and anorder, dated 31.5.2007, of the Income Tax Appellate Tribunal, ChandigarhBench (B), in Income Tax Appeal No. 192/Chd/07 (Income Tax Officer,Chandigarh vs. Rohit Nanda), relating to the assessment year 2003-2004argued that the penalty was not exigible on the assessee. Learnedcounsel for the Revenue, on the other hand, supported the order passedby the Tribunal. 11.We have given our thoughtful consideration to thesubmissions made by learned counsel for the appellant and find no merittherein. The Tribunal, in para No.9 of its order has recorded as under:“9. We have considered the rival submissions and perused thematerial available on the record. In the instant case, thelearned CIT(A) while deleting the penalty wrongly held that theA.O. failed to prove concealment independent of thedisclosure made by the assessee. It is noticed that the A.O.while levying the penalty, categorically stated that the actionon the part of the assessee was not voluntary and in goodfaith, assessee was compelled by the circumstances of thecase to surrender additional income. He accordingly held thatthe assessee had furnished inaccurate particulars of his income. It is noticed that the assessee in the return of income income. It is noticed that the assessee in the return of income had not declared any additional amount of incomesurrendered during the course of survey, therefore, non-disclosure of income which has already been surrenderedtantamounts to concealment, as such the A.O. was justified inlevying the penalty under Section 271(1)(c) of the Income TaxAct, 1961 and the learned CIT(A) wrongly deleted the same.As regards the contention of the assessee in the writtensubmission that in the similar circumstance penalty has beendeleted in the case of Sh. Rohit Nanda, in ITA No.192/Chd/07, vide order dated 31.5.2007 is concerned, in thatcase the amount surrendered was shown in the return ofincome. So the facts of the present case are different fromthe facts of the above referred case by the assessee. The Hon’ble Jurisdictional High Court in the case ofRajesh Chawla vs. CIT (supra) has held that in every casemere surrender would not foreclose the action forconcealment of income. In the instant case, since theassessee did not truly disclosed his income which wassurrendered, so it was a case of concealment, liable to thepenalty under Section 271(1)(c) of the Income Tax Act, 1961.We, therefore, set aside the impugned order of the learnedCIT(A) and restore that of the assessing officer.” 12. Further, the judgments of the High Courts and the order of theTribunal on which reliance has been placed by the learned counsel for theassessee do not help the assessee’s cause, inasmuch as those caseswere decided on individual fact situation involved therein where a finding came to be recorded that there was no concealment or furnishing ofinaccurate particulars on the part of the assessee therein. Here, thelearned counsel for the assessee was unable to point out that theassessee had disclosed the surrendered amount in the return of incomefiled by her or that there was no concealment or that full particulars hadbeen disclosed by the assessee. In the absence of this, the findingsrecorded by the Tribunal in the context aforesaid, cannot be faulted withand no error of law could be found therein. 13.In view of the above, the substantial question of law isanswered against the assessee and accordingly, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE April 18, 2011*rkmalik* (ADARSH KUMAR GOEL) JUDGE