Delhi H.C : This appeal by the Revenue under s. 260A of the Income-tax Act, 1961 (for short ‘the Act’), is directed against order dt. 28th Dec., 2001, passed by the Tribunal, New Delhi in IA No. 6468/Del/1995 pertaining to the asst. yr. 1992-93, affirming the order passed by the CIT(A), New Delhi. The CIT(A) has deleted the penalty levied on the assessee under s. 271(1)(c) of the Act.

High Court Of Delhi

CIT vs. Chhabra Emporium

Sections 260A, 271(1)(c), Expln. 5

Asst. Year 1992-93

D.K. Jain & A.K. Sikri, JJ.

IT Appeal No. 219 of 2002

16th January, 2003

Counsel Appeared

R.D. Jolly with Ms. Rashmi Chopra, for the Appellant : None, for the Respondent

ORDER

BY THE COURT :

This appeal by the Revenue under s. 260A of the Income-tax Act, 1961 (for short ‘the Act’), is directed against order dt. 28th Dec., 2001, passed by the Tribunal, New Delhi in IA No. 6468/Del/1995 pertaining to the asst. yr. 1992-93, affirming the order passed by the CIT(A), New Delhi. The CIT(A) has deleted the penalty levied on the assessee under s. 271(1)(c) of the Act.

Briefly stating the background, facts are that a search under s. 132 of the Act was conducted at the residential premises of Sudesh Chhabra, one of the partners of the respondent/assessee. During the course of this search, a diary was found and seized. In his statement, recorded under s. 132(4) of the Act, the said Sudesh Chhabra stated that the diary reflected unaccounted transaction in respect of M/s Chhabra Emporium, the respondent herein, M/s Chhabra Trading Co., M/s Chhabra Saree Sadan & M/s Chhabra Silk & Saree, for the asst. yr. 1991-92. He accordingly made a disclosure of Rs. 30,00,000 on account of unexplained stocks in different firms. An amount of Rs. 8,00,000 was disclosed in respect of the present assessee.

The return of the income for the relevant assessment year furnished on 5th Nov., 1993, declaring an income of Rs. 5,04,380 was revised by including the aforenoted amount of Rs. 8,00,000, surrendered during the course of search. On 22nd July, 1992, assessment was completed on the basis of the revised return, which included the aforenoted amount of Rs. 8,00,000. Since the AO was of the view that the assessee had concealed the particulars of its income for the relevant assessment year, penalty proceedings under s. 271(1)(c) of the Act was initiated and after affording an opportunity to the assessee, penalty of Rs. 1,71,299, which was the minimum penalty impossible at the rate of 100 per cent of the amount alleged to have been concealed, was imposed on the assessee.

Aggrieved, the assessee preferred appeal to the CIT(A) who, as noticed, had deleted the same, inter alia, on the ground that the case of the assessee was covered under the provisions of s. 271 (1)(c) r/w Expln. 5 in sub-cl. (2). The Revenue carried the matter in future appeal to the Tribunal. By means of the impugned order, CIT(A) order has been affirmed. Hence, the present appeal.

We have heard Mr. R.D. Jolly, learned senior standing counsel for the Revenue. Strenuously urged by Mr. Jolly that (sic–the effect of) alleged surrender by the assessee during the course of search on 22nd July, 1992, cannot be that the assessee is not (sic) entitled to claim the benefit of the afore-noted Explanation inasmuch as the surrender on behalf of the assessee of the aforenoted amount was after the detection of concealed income by the search party.

We are unable to persuade ourselves to agree with learned senior counsel for the Revenue. A bare reading of sub- cl. (2) to Expln. 5 makes it clear that if, during the course of search, a statement of the assessee is recorded under sub-s. (4) of s. 132 in respect of any amount, cash, stock, jewellery or other valuable article or thing which is found in his possession or control and the assessee admits in his statement that such income was acquired income or was acquired within the undisclosed income and pays the tax, together with interest, if any, on the said amount, he is granted an immunity from levy of penalty under s. 271(1)(c).

The Tribunal while affirming the order of the CIT(A) has recorded in no uncertain terms that the surrender of the aforenoted amount of Rs. 8,00,000 was made on the date of the search itself and such a surrender falls within immunity of Expln. 5 to s. 271(1)(c) of the Act. From the order of the AO levying penalty, it is clear that there is no dispute that the statement of the assessee was recorded on the very first day. It is pertinent to note that in respect of other two assessees namely, M/s Chhabra Saree Sadan and M/s Chhabra Trading Co., similar penalty levied by the AO, was deleted by the CIT(A) and the said order was accepted by the Revenue inasmuch as it was not taken in further appeal in the Tribunal.

In this view of the matter, no fault can be found with the impugned order. In our opinion, no question of law, much less a substantial question of law, arises from the order of the Tribunal.

We accordingly decline to entertain the appeal. The appeal is dismissed.

[Citation : 264 ITR 249]

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