Shri Jagdishbhai Loladhar Mehta, Ahmedabad V. The Income tax Officer,Ward-2(2), Baroda

CO 146/AHD/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6067 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-07-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 22-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: ANIL R SHAH
• Keywords: Income from undisclosed sources
• Section: 143(3); 27; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D.AGRAWAL, V.P. & HONBL E SHRI T.K. SHARMA, J.M.) I.T.A. NO. 1885/AHD./2009 : ASSESSMENT YEAR : 1995-1996 ITO, WARD-2(2), BARODA VS- JAGDISHBHAI LILADHAR MEHTA, BARODA (PAN : ACRPM 8222H) (APPELLANT) ( RESPONDENT) C.O. NO.146/AHD/2009 : ASSESSMENT YEAR : 1995-1996 (ARISING OUT OF I.T.A. NO. 1885/AHD./2009) JAGDISHBHAI LILADHAR MEHTA, BARODA -VS- ITO, WARD-2(2), BARODA (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI B.L.YADAV, D. R. ASSESSEE BY : SHRI ANIL R. SH AH, A.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARE AGAINST THE ORDER DATED 22-03-2009 OF LEARNED C OMMISSIONER OF INCOME TAX(APPEALS)-II, BARODA CANCELLING THE PENALTY OF R S.5,75,000/- LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961 FOR T HE ASSESSMENT YEAR 1995-96. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE FILED THE RETURN OF INCOME ON 22.10.1996 SHOWING INCOME OF RS.15,77,758/-. THE AO FRAMED THE ASSESSM ENT ON 23.01.1998 UNDER SECTION 143(3) AT A TOTAL INCOME OF RS.1,10,02,600/ -. IN THE ASSESSMENT ORDER, THE AO ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C). SUBSEQUENTLY, THE AO LEVIED THE PENALTY OF RS.5,75,000/- BEING 100% OF T AX SOUGHT TO BE EVADED IN RESPECT OF RS.15 LAKHS ON THE GROUND THAT THE ASSESSEE FAIL ED TO MAKE A FULL AND TRUE DISCLOSURE OF HIS UNACCOUNTED INCOME, WHILE MAKING A STATEMENT UNDER SECTION 132(4) OF THE ACT, AS WELL AS, WHILE FILING THE RETURN OF INCOME UNDER SECTION 139 OF THE I.T.ACT. ACCORDING TO THE AO, SINCE THE CONDITION OF IMMUNIT Y I.E. SPECIFYING THE MANNER IN ITA NO.1885-AHD-09 & C.O.146-AHD-09 2 WHICH SUCH INCOME HAS BEEN DERIVED HAS NOT BEEN FUL FILLED, SINCE THE ASSESSEE HAS FAILED TO MAKE CORRECT DISCLOSURE IN RESPECT OF SOU RCE OF SUCH UNACCOUNTED INCOME OF RS.15 LAKHS. 3. ON APPEAL BEFORE THE LD. CIT(A), IT WAS CONTENDE D THAT ITAT C BENCH, AHMEDABAD FOR THE ASSESSMENT YEAR 1994-95 CANCELLED THE PENALTY ON THE GROUND FOR THE DETAILED REASONS GIVEN IN PARA 2.3, WHICH READS AS UNDER: 2.3. IN VIEW OF THE ABOVE FACTS, WHAT EMERGES IS T HAT A RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS.15,77,758/-. AFT ER GIVING EFFECT TO THE ITAT'S ORDER THE TOTAL INCOME WORKED OUT TO RS.17,27,754/- . AS PER THE KVSS SCHEME THE ASSESSEE IS ENTITLED TO CLAIM IMMUNITY OF THE P ENALTY ON THE CONFIRMED ADDITION OF RS.1.5 LACS. HENCE WHAT IS LEFT IS THE RETURNED INCOME OF RS.15,77,758/-. A READING OF THE ASSESSMENT ORDER P OINTS TOWARDS THE FACT THAT THE ASSESSING OFFICER HAS ONLY QUESTIONED THE YEAR OF RECEIPT. SINCE THE YEAR OF RECEIPT AS PER THE ASSESSING OFFICER IS 1994-95 AMO UNT DECLARED BY THE APPELLANT IN ASSESSMENT YEAR 1995-96 BECOMES UNEXPL AINED. HOWEVER, THE HON'BLE ITAT HELD THAT THERE IS NO EVIDENCE THAT TH E APPELLANT RECEIVED THIS AMOUNT IN ASSESSMENT YEAR 1994-95. ON THE BASIS OF THIS CONCLUSION THE HON'BLE ITAT DELETED THE ENTIRE ADDITION MADE BY TH E ASSESSING OFFICER. THE ASSESSING OFFICER HAS ACCEPTED THE RECEIPT OF RS.15 LACS AS AMOUNT RECEIVED BY THE APPELLANT FROM SHRI J.K. CHATURVEDI. THE ASSESS ING OFFICER HAS INVOKED THE EXPLANATION TO SECTION 271(L)(C) HOLDING THAT THE C ONDITIONS FOR IMMUNITY I.E. SPECIFYING IN THE STATEMENT THE MANNER IN WHICH SUC H INCOME HAS BEEN DERIVED AND PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME HAS NOT BEEN FULFILLED. HENCE THE APPELLANT IS NOT ENTITLED TO CLAIM IN IMMUNITY FROM SECTION 271(1)(C). THE APPELLANT HAS STATED THE SOU RCE OF HIS RECEIPT THE NATURE OF THE RECEIPT, THE AMOUNT RECEIVED, THE YEAR OF RE CEIPT. WHATEVER ISSUES WERE RAISED BY THE ASSESSING OFFICER HAVE BEEN DEALT WIT H BY THE HON'BLE ITAT IN FAVOUR OF THE APPELLANT. FINALLY WHAT EMERGES IS IN COME OF RS.15,77,758/- DECLARED BY THE ASSESSEE AS THE ASSESSED INCOME APA RT FROM RS.1.5 LACS ON WHICH KVSS SCHEME APPLIES. SINCE THEIR INCOME, ON W HICH THE ASSESSEE HAS SOUGHT TO EVADE TAX THE LEVY OF PENALTY U/S. 271(L) (C) WAS NOT JUSTIFIED AND IS DIRECTED TO BE DELETED. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US WH EREAS THE ASSESSEE HAS COME BEFORE THE TRIBUNAL IN SUPPORT OF THE ORDER OF THE LD. CIT(A). 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. SHRI B.L.YADAV, APPEARING ON BEH ALF OF THE REVENUE, COULD NOT POINT OUT WHY THE DECISION OF THE LD. CIT(A) IS NOT ACCEPTABLE. ON THE OTHER HAND, SHRI RAMESH MALPANI, APPEARING ON BEHALF OF THE ASSESSEE , VEHEMENTLY SUPPORTED THE ITA NO.1885-AHD-09 & C.O.146-AHD-09 3 ORDER OF THE LD. CIT(A). THE LD. COUNSEL POINTED OU T THAT AFTER GIVING APPEAL EFFECT TO THE ORDER OF THE LD. CIT(A), THE ASSESSED INCOME WA S REDUCED TO RS.17,27,754/-. AS AGAINST THIS, THE ASSESSEE HAS DECLARED INCOME OF R S.15,77,758/-. THE LD. CIT(A), IN PARA 2.3 ( SUPRA ), HAS STATED THAT IN RESPECT OF RS.1.5 LAKHS, KVSS SCHEME ALSO APPLIES. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE, WE ARE CONVINCED THAT THE LD. CIT(A) HAS GIVEN COGENT REAS ON FOR CANCELLING THE PENALTY OF RS.5,75,000/- LEVIED BY THE AO UNDER SECTION 271(1) (C) OF THE ACT. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF THE LD. CIT(A). RESU LTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED. 6. THE CROSS-OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. CIT(A). AS WE HAVE UPHELD THE ORDER OF THE LD. CIT( A) IN THE APPEAL FILED BY THE REVENUE, HENCE, THE CROSS-OBJECTION FILED BY THE AS SESSEE BECOMES INFRUCTUOUS. THEREFORE, THE C.O. OF THE ASSESSEE IS DISMISSED BE ING INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A ND THE CROSS-OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.07. 2011 SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 25/07/2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S. ITA NO.1885-AHD-09 & C.O.146-AHD-09 4