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TMI Blog2017 (11) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, being in judicial custody, could not file the necessary evidence and made surrender to buy peace with the Department and paid taxed thereupon, therefore, at least, the penalty u/s 271(1)(c) will not survive. Thus, this appeal of the assessee is allowed. - ITA NOs.4978 And 4979/Mum/2014 - - - Dated:- 13-9-2017 - Shri JOGINDER SINGH, Judicial Member And Shri G. MANJUNATHA, Accountant Member For The Assessee : Shri Prakash G. Jhunjhunwala For The Revenue : Shri V. Justin-DR ORDER Per Joginder Singh (Judicial Member) Both these appeals are by the assessee, aggrieved by the impugned orders both dated 27/03/2014 of the Ld. First Appellate Authority, Mumbai. First, we shall take up ITA No.4978/Mum/2014, wherein, the only ground raised by the assessee pertains to disallowing a sum of ₹ 2,32,249/- i.e. 5% of the travelling, advertisement, staff welfare, office, repair and maintenance expenses on ad-hoc basis and disallowing salaries and wages of ₹ 55 lakhs on ad-hoc basis. During hearing, the ld. counsel for the assessee, Shri Prakash G. Jhunjhunwala, did not press the appeal and the ground raised therein. The Ld. DR, Shri V. Justin, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a vested right in injustice being done because of a nondeliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If sufficient cause is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression sufficient cause is adequately elastic to enable the courts to apply law in a meaningful manner, which sub-serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. The Hon ble Apex Court in Vedabhai vs Santaram 253 ITR 798 observed that inordinate delay calls of cautious approach. This means that there should be no malafide or dilatory tactics. Sufficient cause should receive liberal construction to advance substantial justice. The Hon ble Apex Court in 167 ITR 471 observed as under:- 3. The legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Department as the assessee was in custody and the assessee during custody period, was asked to substantiate the claim, which could not be done. The crux of the argument is that the surrender was made to buy peace with the Department, therefore, the penalty may be deleted. On the other hand, the Ld. DR contended that penalty can be levied even on a estimate basis for which reliance was placed upon the decision in CIT vs Smt. Chandrakanta, 205 ITR 607 (MP), CIT vs S. Krishnaswamy Sons, 219 ITR 157, A.M. Shah Co. vs CIT, 238 ITR 415 (Guj.) and CIT vs Mohammad Warasat Hussain, 177 ITR 405 (Pat.). 3.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a partnership firm, declared income of ₹ 6,24,135/- in its return filed on 30/09/2009. A survey action was carried out u/s 133A of the Act at the premises of the assessee on 15/01/2009. The Ld. Assessing Officer while framing the assessment u/s 143(3) of the Act made disallowance of ₹ 55 lakh towards salary and wages on adhoc basis and further Rs. 2,32,249/- i.e. 5% of the travelling, advertisement, staff welfare, office, repair an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment could be drawn comes to the rescue of the assessee. The Hon'ble jurisdictional High Court in CIT vs Hira Lal Doshi, (ITA No.2331 of 2013) order dated 09/02/2016 on the issue when the assessee made the surrender buy peace with the Department decided in favour of the assessee. The relevant portion from the aforesaid order is reproduced hereunder:- This Appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961( the Act ) assailing the order dated 1st May, 2013 passed by the Income Tax Appellate Tribunal (Tribunal). The impugned order dated 1st May, 2013 deleted the penalty imposed under Section 271(1)(c) of the Act relating to Assessment Year 2006-2007. 2. The Revenue has urged the following question of law for our consideration:- Whether on the facts and circumstances of the case and in law, the ITAT is justified in deleting the penalty u/s.271(1)(c) of the I. T. Act,1961 on the income which was offered for taxation during survey and return of income was revised after detection by department 3 The Respondent-assessee had originally filed a return of income on 31st October, 2006 declaring a total income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclude that the amount of ₹ 1.62 Crores appears to be attributable to Long Term Capital Gain. 7. On further appeal by the Revenue, the Tribunal by the impugned order dated 1st May, 2013 upheld the findings of the CIT(A) holding the same to be reasonable. In particular, the impugned order records the fact that the Respondent assessee had disclosed its income of ₹ 1.62 Crores but had claimed the same to be a capital gain which is exempt. The impugned order further holds that as the particulars of income had been disclosed in the return of income, the levy of penalty under Section 271(1)(c) of the Act was not justified. In support it places reliance upon the decision of the Apex Court in Commissioner of Income Tax v/s Reliance Petroleum Products Private Limited reported in 322 ITR 158. Further it holds that mere change in head of income by the Assessing Officer from that claimed, would not attract penalty. In support, reliance was placed upon the decision of this Court in Commissioner of Income Tax v/s M/s. Bennett Coleman and Co.Ltd (Income Tax Appeal(L)No.2117 of 2012 rendered on 26th February, 2013. The impugned order also records the fact that the amount claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal. This submission on behalf of the Revenue requires determination of facts which have to be determined by the Tribunal. It is not open at this stage in an appeal under Section 260A of the Act to go into facts which were not disputed at any prior stage. 10. The reliance by the Revenue upon the decision of the Apex Court in Mak Data P. Ltd(supra) to contend that the justification of having deleted and accepted the amount of ₹ 1.62 Crores as business income, to buy peace is not available. We find that the facts in that case are completely distinguishable and the observations made therein would not be universally applicable. In that case, a sum of ₹ 40.74 lakhs had never been disclosed to the Revenue. During the course of survey, the assessee therein had surrendered that amount with a covering letter that this surrender has been made to avoid litigation and buy peace with the Revenue. In the aforesaid circumstances, the Apex Court held that the words like to avoid litigation and buy peace is not sufficient explanation of an assessee's conduct. It held that the assessee had to offer an explanation for the concealment of income and/or furnishing of inac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me could be regarded as long term capital gain. Once the aforesaid conclusion has been reached coupled with two further facts viz. the authorities have rendered a finding of fact that the Respondent-assessee had not concealed its income nor filed inaccurate particulars attributable to capital gains in its regular return of income, the view taken to delete the penalty is a possible view. 13 In the present fact, the view taken by the CIT(A) as well as the Tribunal is a reasonable and possible view. Nothing has been shown to us to hold that the findings of the CIT(A) and Tribunal was perverse and/or arbitrary warranting any interference by this Court. It may be pointed out that even in the Memo of Appeal, it is not urged by the Revenue that the finding of the CIT(A) and Tribunal are in any manner perverse. 14 In the above view, we see no reason to entertain the question as proposed, as it does not give rise to any substantial question of law. Accordingly, the Appeal is dismissed. No order as to costs. 3.3. Though the ld. DR has sighted various decisions as mentioned above, but following the decision from Hon'ble jurisdictional High Court in Hira Lal Doshi (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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