Asstt. Commissioner Of Income Tax, Central Circle-3, New Delhi vs Sh. Charu Shekhar Gupta

PER M. BALAGANESH, A. M.:

This appeal of the Revenue arises out of the order passed by the Commissioner of Income Tax (Appeals)-23, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 1157/Del/2017 for A.Y. 2012-13 dated 14.12.2016 which in turn arises out of the order passed by the Assessing Officer, ACIT, Circle-3, New Delhi (hereinafter referred to as ‘ld. AO’) passed u/s 271(1)(C) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 05.03.2015.

The only issue to be decided in this appeal is as to whether the Learned CITA was justified in deleting the levy of penalty under section 271(1)(c) of the Act in the sum of Rs 1,16,693 in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. At the outset, we find that the penalty has been deleted by the Learned CITA on the ground that the quantum additions were deleted by the learned CITA. The Learned DR before us stated that the quantum additions had been contested before this Tribunal. We find that the assessee is a Managing Director in M/s CSG International Private Limited which is engaged in the business of providing consultancy for export of handicraft and textile goods for which it receives commission. The assessee follows up the orders given to Indian exporters by foreign buyers. It includes sampling, quality control and shipping on commission basis. The assessee is getting salary from M/s CSG International Private Limited. The return of income for the assessment year 2012-13 was filed by the assessee on 3-12-2012 declaring taxable income of Rs 7,16,650. As per the information available with the investigation wing of the department, the assessee was having an account with HSBC bank Geneva which was stated to be created on 24-06-2005. Based on this information, a search and seizure operation was conducted by the investigation wing on the assessee on 13-01-2012. The information revealed that the maximum outstanding balance in the said bank account was USD 170,747 in November 2006 and the last available information about that account was as of February 2007 where the balance was USD 167,854.11. During the course of search operation, statement of assessee was recorded and he was asked to furnish the details of foreign bank accounts. The assessee accepted on oath that the personal details mentioned in the said information pertain to him and his father Late S C Gupta and that his late father might have opened HSBC bank account in Geneva. However, he did not admit having opened any bank account in HSBC Geneva on his own volition. During the post search proceedings, again the statement of the assessee was recorded under section 131 of the Act on 21-03-2012 and he reiterated the same contentions as were told in the statement under section 132(4) of the Act.

Further, a reference in this case was made to the appropriate authority for exchange of information through FT and TR with respect to the foreign bank account of the assessee. The first of such reference was made on 26-06-2012. The revenue before us was not able to bring any cogent evidence on record with regard to the status of such FT & TR reference as to whether any information was received from the competent authority of the other country and whether such information is adverse/ favourable to the assessee herein. The assessee during the course of assessment proceedings maintained the same stand that he does not have any bank account with HSBC Geneva and hence he could not produce the copy of the said bank account. The Learned AO, however, did not agree to the contentions of the assessee and observed that the details of account holder like name, address, nationality and date of birth as appearing in the said information duly matched with that of the assessee and the same has been acknowledged by the assessee also in the statements recorded under section 132(4) lof the Act and again later under section 131 of the Act. The assessee merely denied that the existence of such bank account was not known to him as the said bank account might have been opened by his late father, S.C. Gupta. The Learned AO noted that the assessee being a resident individual, the global income would become taxable in India and accordingly brought to tax the interest amount estimated at 4% per annum on the balance of USD lying in the account and converted the same into Indian currency and made addition on account of interest income in the sum of Rs 3,77,648 in the assessment framed under section 143(3) of the Act dated 5-3-2015.

Penalty under section 271(1)(c ) of the Act was levied by the Learned AO in the sum of Rs 1,16,693 on concealment of income. Since the quantum additions were deleted by the Learned CITA, the penalty under section 271(1)(c ) of the Act was also deleted by the Learned CITA. The Learned DR merely stated that against the order of the Learned CITA, deleting the quantum additions, the revenue had preferred appeals before this tribunal. However, the status of such appeal was not made available by the Learned DR. Either way, we find that the concealment penalty had been deleted by the Learned CITA and even if the matter had travelled to this tribunal, it goes to prove that the issue on which penalty has been levied is purely a debatable issue and it is trite law that concealment penalty cannot be levied on an issue which is debatable in nature. Hence, on this ground itself, penalty levied under section 271(1)(c ) of the Act is hereby directed to be deleted. Further we find that the learned CITA had deleted the penalty on the ground that quantum addition is already deleted by him. Hence we do not find any infirmity in the said order of the learned CITA. Accordingly, the grounds raised by the revenue are dismissed.

In the result, the appeal of the revenue is dismissed.