COMMISSIONER OF INCOME TAX Vs. RAJIV GARG,

JUDGEMENT

(1.) THIS order shall dispose of I.T.A. Nos. 353, 354, 355 and 356 of 2008. The Revenue has filed these four appeals under Section 260A of the Income Tax Act (hereinafter referred to as "the Act") against the common order dated November 24, 2006, passed by the Income Tax Appellate Tribunal, Delhi Bench "I", New Delhi (hereinafter referred to as "the Tribunal") in I. T. A. Nos. 908/Delhi/2005, 909/Delhi/2005, 910/Delhi/2005 and 911/Delhi/2005 in the case of four different assessees for the assessment year 1998 -99. In all these appeals, a common issue regarding imposition of penalty under Section 271(1)(c) of the Act has been raised in the case of the assessees, who are of the same family. The facts and circumstances in all these appeals are identical, therefore, we are taking up the facts from I. T. A. No. 353 of 2008.

(2.) IN this case, the assessee derived income from manufacturing of cotton yarn and cotton waste. The assessee filed a return of income on October 30, 1998, which, inter alia, included long -term capital gain on sale of shares amounting to Rs. 29,74,951. The return of income so filed was processed under Section 143(1)(a) of the Act on March 15, 1999. Subsequently, on the basis of an information received from the Deputy Director of Income Tax (Investigation), Gurgaon, that the sale of shares amounting to Rs. 32,40,385, on which capital gain has been declared at Rs. 29,74,951 by the assessee in the original return, was indeed bogus, a notice under Section 148 of the Act was issued on March 31, 2003, on the ground that certain income chargeable to tax had escaped assessment. In response to the said notice, the assessee filed the return of income, wherein income was declared at Rs. 63,39,640, which, inter alia, included the entire amount of receipts on account of sale proceeds of the shares at Rs. 33,10,380 against long -term capital gain of Rs. 29,74,951 declared in the original return of income. This return of income was accompanied by a note in which the assessee submitted that return of income is being voluntarily revised to include the entire amount of receipt along with other amount to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. Thereafter, the assessment order was framed on December 23, 2003, and the return submitted by the assessee was regularized as it is under Section 148 of the Act. Meanwhile, the Assessing Officer initiated the penalty proceedings against the assessee under Section 271(1)(c) of the Act. The Assessing Officer, after considering the submissions of the assessee, imposed a penalty of Rs. 3,95,930 while holding that the assessee had filed the return on April 30, 2003, after the issuance of notice under Section 148 of the Act. As such, the return was filed after the detection of the concealment of income by the Department and since the assessee had intentionally played fraud to avoid higher rate tax of 30 per cent. as against 20 per cent., applicable on declaration on capital gains, therefore, the assessee was held guilty in terms of Section 271(1)(c) of the Act.

(3.) AGAINST the aforesaid order of the Commissioner of Income Tax (Appeals), the Revenue filed an appeal before the Tribunal, who, vide its order dated November 24, 2006, dismissed the same, while observing as under: