TMI Blog2015 (5) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A) of deleting the penalty made u/s. 158BFA(2) and dismiss the appeal of the Revenue. - Decided in favour of assessee. - I.T.(SS)A. No. 11/DEL/2013 - - - Dated:- 20-4-2015 - Shri H.S. Sidhu And Shri T.S. Kapoor JJ. For the Appellant : Sh. Gunjan Prashad, CIT(DR) For the Respondent : S h. Rohit Jain, Adv. Ms. Deepashree Rao, CA ORDER Per H.S. Sidhu, JM Revenue has filed this appeal against the Order dated 1.2.2013 passed by the Ld. Commissioner of Income Tax (Appeals)-III, New Delhi pertaining to Block Period 1.4.1989 to 13.1.2000. 2. The grounds raised by the Revenue read as under:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in cancelling the penalty of ₹ 12,93,085/- imposed by the Assessing Officer in view of the provisions of section 158BFA(2) of the Income Tax Act, 1961. 2. The order of the CIT(A) is erroneous and is not tenable on facts in law. 3. The assesseecraves lave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are that a search and seizure action u/s. 132 of the I.T. Act wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against the Ld. CIT(A) s order dated 14.3.2002, assessee filed an appeal before the Tribunal. The Tribunal vide common order in the cases of M/s A.T. Invofin India Pvt. Ltd, M/s Intell Invofin India (P) Ltd. and Mehra Invofin India Pvt. Ltd. in ITA No. IT(SS) No. 69/Del/2003, IT(SS) No. 70/Del/2003 and ITA (SS) No. 72/Del/2003 respectively, by relying on the decision of the Hon ble Delhi High Court in the case of Mrs. Kumkum Kohli (2005) 276 ITR 589 (Del) had allowed the appeal of the assessee. Aggrieved with the ITAT order, Revenue has filed the appeal before the Hon ble High Court u/s. 260A of the I.T. Act, 1961 and the Hon ble High Court has vide common order for the five assesses of the group on similar issue has allowed the appeal of the Revenue and set aside the order of the ITAT. In view of the above order of the Hon ble High Court, the penalty proceedings u/s. 158BFA(2) of the I.T. Act, 1961 was initiated vide order dated 10.6.2002 and penalty of ₹ 12,93,095/- i.e. @100% of tax on undisclosed income on the assessee company. 5. Aggrieved by the aforesaid penalty order dated 10.6.2012, assessee appealed before the Ld. CIT(A), who vide impugned order dated 1.2.2013 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-filing of return of income for the assessment year 1999-2000 before the due date as prescribed in section 139(1) of the Act, income arising on transfer of shares amounting to ₹ 19,59,220 was treated as undisclosed income in the block assessment completed vide order dated 4th March, 2002. On further appeal, the addition made was confirmed by the CIT(A) vide order dated 14th November, 2002. It is however, of utmost importance to note that on further appeal preferred by the assessee, the Tribunal vide consolidated order dated 24th October, 2006 passed in the case of the assessee and other companies of the group deleted the addition made by the assessing officer. On further appeal preferred by the Revenue, the order of the Tribunal was, however, reversed by the Hon'ble Delhi High Court vide order dated 29th November, 2010. The High Court, after admitting the substantial question of law raised by the Revenue, held that on account of nonfiling of return before the due date prescribed in section 139(1) of the Act, gainsarising on transfer of shares has to be regarded as undisclosed income . In the aforesaid facts, the assessing officer vide order dated 19th May, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had undisclosed income which he was concealing or likely to conceal. The levy of penalty under section 158BFA(2) is not an automatic action, the words may direct mentioned in section 15 8BF A(2) has to be given its normal meaning. The word may cannot be read as shall . 4.5 Looking into the facts of the appellant's case, it is quite likely that the assesseemight be waiting for the requisite details of shares sold and this may be the genuine reason for not been able to file the return of income by due date i.e. 31.12.1999, but the fact remains that he did file the return within the time allowed under section 139(4). Further, while invoking the penal provision apart from above the AO cannot overlook this fact, that the financial statements (found during the search) did record the transaction relating to shares on which capital gain is earned and duly been declared in the return of income file on 31.03.2000. 4.6 Here I would like to rely on the decision of ITAT, Chennai Bench dated 07.06.2011 in the case of K. Ramakrishnan (HUF) vs. DCIT (IT(SS) No. 7 of 2011), where on the similar facts the ITAT has held penalty under section 158BF A(2) is not leviable if the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not filed by due date, the capital gain in question has to be treated as undisclosed income , further even against the said order of High Court the assesseehas filed an SLP before the Apex Court on 01.03.2011. Therefore in such an event as per the spirit of decision of Delhi High Court in the recent case of CIT vs. Sarla Fabrics P. Ltd. (ITA 788/2011) dated 20.07.2012) the Hon'ble Court by relying on their own decision in the case of ClT-IV Delhi vs. IP India P. Ltd. (20-4 Taxman 368) (2012) have held that: Where there is a difference of opinion either between different Benches of Tribunal or the High Courts, which is finally settled by the pending judgment of the Supreme Court and all necessary facts have been disclosed by the assesses in its return, the penalty is not warranted. 4.9 Thus in view of the above discussions, I am of the considered view that in the facts of the appellant's case, the imposition of penalty under section 158BFA2) is not on automatic fall out or mandatory, hence the penalty levied by the AO, 8is deleted. (emphasis supplied) It is respectfully submitted that the aforesaid issue is squarely covered by the decision of the Delhi Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares and resulting capital gains. 7.2 Further, whether long term capital gains can be treated as undisclosed income is debatable issue. The assessee had succeeded in the quantum assessment before the Tribunal. On further appeal by the Revenue u/s 260A of the Act the Hon'ble High Court reversed the Tribunal's order. It has been brought to our notice that SLP has been filed before the Hon'ble Supreme Court (SLP No. 9018-022/2011) and notice has been issued on the same and the matter continues to be sub-judice before the Honble Supreme Court. The Hon'ble jurisdiction High Court has held in the case of CIT Vs. HB. Leasing and Finance Co. Ltd. (334ITR 367) that the issue can be said to be debatable when substantial question of law has been admitted and when quantum proceeding is debatable, the penalty cannot be imposed. The relevant finding of the Hon 'ble High Court read as follows: In the facts of this case, we are of the opinion that This issue is debatable. We say so because of the reason that not only in the quantum proceedings the Commissioner of lncome-tax (Appeals) had deleted the additions, even when the Tribunal reversed the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to be followed for the leving the penalty as laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff vs. CIT (2007) (291 ITR 519 (Se) and T. Ashoke Pai vs. CIT (2007) (292 ITR 11) (SC). i.e. (i) Both the expressions concealment of income and furnishing of inaccurate particulars indicate some deliberation on the part of the assessee, though the word deliberately and the word willfully are no longer part of the statue. (ii) Mere omission or negligence would not constitute a deliberate act of suppressiio veri or suggestio falsi. (iii) Primary burden a/proof is on the revenue. The statute requires satisfaction on the part of the Assessing Officer. He is required to arrive at a satisfaction so as to show that there is primary evidence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the department. (iv) The Assessing officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He should not begin with the presumption that the assessee is guilty. (v) Though penalty proceedings under the income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall . 9.4 We find that the Ld. CIT(A) has rightly observed that assessee might be waiting for the requisite details of shares sold and this may be the genuine reason for not been able to file the return of income by due date i.e. 31.12.1999, but the fact remains that he did file the return within the time allowed under section 139(4). Further, while invoking the penal provision apart from above the AO cannot overlook this fact, that the financial statements (found during the search) did record the transaction relating to shares on which capital gain is earned and duly been declared in the return of income file on 31.03.2000. 9.5 We further find that Ld. CIT(A) has rightly relied on the decision of ITAT Chennai Bench dated 07.06.2011 in the case of K. Ramakrishnan (HUF) vs. DClT (IT(SS) No. 7 of 2011), where on the similar facts the ITAT has held that penalty under section 158BFA(2) is not leviable if the return of income is not filed by the due date, but the income be assessed as undisclosed income within the meaning of section 158BB(1)(c) of the I.T. Act, 1961. 9.6 We are of the view that the Ld. CIT(A) has rightly take the strength from the decision dated 12.11.2008 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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