Ismail Ahmed, Hyderabad V. ITO, Hyderabad

CO 21/HYD/2008

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5949 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 27-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R BALA NAIK
• Keywords: Business income; Agreed addition; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO. & C.O. NO. THEREIN ASST YEAR APPELLANT IN APPEAL RESPONDENT IN APPEAL/CROSS OBJECTOR 1338/HYD/2008 & CO 21/HYD/2008 2003-04 INCOME-TAX OFFICER, WARD-7(3), HYDERABAD SHRI ISMAIL AHMED, HYDERABAD. (PAN AAAPI 8687 F) 1339/HYD/2008 & CO 22/HYD/2008 2003-04 INCOME-TAX OFFICER, WARD-7(3), HYDERABAD SHRI IRFAN AHMED, HYDEDRABAD (PAN AAKPA 8617 K) 1340/HYD/2008 & CO 23/HYD/2008 2003-04 INCOME-TAX OFFICER, WARD-7(3), HYDERABAD SHRI MOHD. SULTAN AHMED, HYDERABAD (PAN AAKPA 8599 A) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R.BALA NAIK O R D E R PER G.C.GUPTA, VICE PRESIDENT: THESE APPEALS BY THE REVENUE AND CROSS-OBJECTIONS BY THE ASSESSEES FOR THE ASSESSMENT YEAR 2003-04 ARE DIRE CTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS). SINCE IDENTICAL ISSUE IS INVOLVED IN ALL THESE APPEALS AND CROSS-OB JECTIONS, THEY ARE BEING DISPOSED OFF WITH THIS CONSOLIDATED ORDER. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE HAS WIT HDRAWN HIS VAKALAT-NAMA. HE HAS GIVEN HIS REQUEST IN THIS BEH ALF IN WRITING BEFORE THE BENCH, INTIMATING HIS WITHDRAWAL OF THE VAKALAT -NAMA AND EXPRESSING HIS INABILITY TO REPRESENT THE ASSESSEES IN THESE MATTERS. ITA NO.1338/HYD/08 AND OTHERS SHRI ISMAIL AHMED, HYDERABAD AND TWO OTHERS 2 IN THESE FACTS, WE HAVE NO ALTERNATIVE BUT TO DISPO SE OFF THE APPEALS OF THE REVENUE AND CROSS-OBJECTIONS OF THE ASSESSEE EX-PARTE QUA THE ASSESSEES ON MERITS, AFTER HEARING THE LEARNED DEPA RTMENTAL REPRESENTATIVE. REVENUES APPEALS: 3. IDENTICAL GROUNDS OF APPEAL OF THE REVENUE IN A LL ITS APPEALS ARE AS UNDER- 1. THE CIT(A) ERRED IN FACTS AND IN LAW IN DELETIN G THE PENALTY UNDER SECTION 271(1)( C) LEVIED BY THE ASSE SSING OFFICER. 2. THE CIT(A) ERRED IN FACTS AND IN LAW IN APPLYIN G THE DECISION OF THE SUPREME COURT REPORTED IN THE CASE OF SRI S.C.MITTAL (P.9, 251 ITR) TO THE PRESENT CASE, WHIC H WAS SUPERSEDED BY A SUBSEQUENT SUPREME COURT DECISION I N THE CASE OF SRI K.P.MADHUSUDHANAN (PP.99 251 ITRR), WHEREIN THE SUPREME CORUT HELD THAT IN VIEW OF EXPLANATION TO SECTION 271(1)(C), THE PLEA OF BUYIN G PEACE WOULD NO LONGER BE TENABEL AGAINST LEVY OF PENALTY. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED T HAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF S.C.MITTAL (251 ITR 9) WAS SUPERSEDED BY THE SUBSEQUENT DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF K.P.MADHUSUDHANAN (251 ITR 91) AND T HEREFORE, THE CIT(A) HAS ERRED IN PLACING RELIANCE ON THE DECISIO N OF THE HONBLE APEX COURT IN THE CASE OF S.C.MITTAL (SUPRA). HE S UBMITTED THAT THE PLEA OF BUYING PEACE WITH THE DEPARTMENT WOULD NOT BE TENABLE AGAINST THE LEVY OF PENALTY UNDER S.271(1)(C) OF TH E ACT. HE SUBMITTED THAT THE EXPLANATION TO S.271(1) (C) OF THE ACT IS CLEARLY APPLICABLE TO THE FACTS OF THE PRESENT CASES OF THE ASSESSEES. HE RELIED ON SERIES OF DECISIONS IN SUPPORT OF THE CASE OF THE REVENUE, WH ICH ARE AS UNDER- ITA NO.1338/HYD/08 AND OTHERS SHRI ISMAIL AHMED, HYDERABAD AND TWO OTHERS 3 (A) CIT V/S. C.ANANTHAN CHETTIAR ( 273 ITR 401)- MAD (B) CIT V/S. K.A.SAMPATH REDDY (197 ITR 232)- KAR) (C) BILAND RAM HARGAN DAS V/S. CIT(171 ITR 390)-ALL (D) CIT V/S. A. SRINIVASA PAI (242 ITR 29)-KER. (E) K.L.SWAMY V/S. CIT(239 ITR 386)-KAR (F) BHAIRAV LAL VERMA V/S. UNION OF INDIA (230 ITR 855 )-ALL (G) M.SAJJANRAJ NAHAR & ORS V/S. CIT (283 ITR 230)-MAD (H) H.V.VENUGOPAL CHETTIAR V/S. CIT(153 ITR 376)-MAD. (I) DDIT V/S. CHIRAG METAL ROLLING MILLS LTD. (305 ITR 29)-MP (J) P.C.JOSEPH & BROS. V/S. CIT(240 ITR 818)-KER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARN ED DEPARTMENTAL REPRESENTATIVE AND HAVE PERUSED THE PE NALTY ORDERS PASSED BY THE ASSESSING OFFICER AND THE APPELLATE O RDERS OF THE CIT(A). WE FIND THAT THE ASSESSEES ARE TRADERS IN BEEDI LEA VES. THEY HAVE FILED RETURNS ADMITTING CERTAIN INCOMES FROM BUSINESS, BE SIDES AGRICULTURAL INCOME. THERE WAS A SURVEY ACTION UNDER S.133A OF THE ACT ON THE BUSINESS PREMISES OF THE ASSESSEES ON 10.2.2004. ASSESSEES THEREAFTER FILED REVISED RETURNS OF INCOME ON 12.2. 2004, ADMITTING ADDITIONAL INCOMES AND THE ASSESSING OFFICER COMPLE TED THE ASSESSMENT PROCEEDINGS ACCEPTING THE INCOMES ADMITTED IN THE R EVISED RETURNS OF INCOME. THE ASSESSING OFFICER DID NOT MAKE ANY FURT HER ADDITIONS TO THE FIGURES OF INCOME DISCLOSED BY THE ASSESSEES IN TH E REVISED RETURNS FIELD BY THEM. PENALTIES UNDER S.271(1)(C) OF THE A CT WERE LEVIED ON THE ASSESSEES DUE TO THE ADDITIONAL INCOMES DECLARE D BY THE ASSESSEES IN THE REVISED RETURNS OF INCOME FILED BY THEM AFTE R THE CONDUCT OF SURVEY BY THE DEPARTMENT. HOWEVER, WE FIND THAT TH E ASSESSING OFFICER HAS NOT STATED AS TO WHAT WAS THE INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SURVEY, WHICH FORCED THE ASSES SEES TO ADMIT THE ADDITIONAL INCOMES IN THE REVISED RETURNS OF INCOME FILED BY THEM. WE ITA NO.1338/HYD/08 AND OTHERS SHRI ISMAIL AHMED, HYDERABAD AND TWO OTHERS 4 HAVE PERUSED THE ASSESSMENT ORDERS PASSED UNDER S.1 43(3) OF THE ACT. THERE ALSO, THERE IS NO DISCUSSION WHATSOEVER ON THIS ASPECT. MERELY BECAUSE THE ASSESSEES HAVE FILED THE REVISED RETURNS ADMITTING ADDITIONAL BUSINESS INCOME AFTER THE CONDUCT OF THE SURVEY ACTION BY THE DEPARTMENT IN THEIR BUSINESS PREMISES, IT CANNO T BE SAID THAT THE ASSESSEES ARE GUILTY OF CONCEALMENT OF INCOME OR FI LING INACCURATE PARTICULARS OF INCOME. WE FIND THAT THERE IS NO NEX US PROVED BY THE REVENUE BETWEEN THE INCRIMINATING MATERIAL, IF ANY, FOUND AT THE TIME OF SURVEY ACTION AND THE REVISED RETURNS FILED BY T HE ASSESSEES. THERE IS NO MATERIAL BROUGHT ON RECORD ON BEHALF OF THE R EVENUE TO SUGGEST THAT REVISED RETURNS WERE FILED BY THE ASSESSEES AF TER THE CONCLUSION OF THE SURVEY ACTION, WERE NOT VOLUNTARY. THE CIT(A) IN PARA 9 OF HIS APPELLATE ORDERS HAS RECORDED THAT THE ASSESSING OF FICER IN THE ASSESSMENT ORDERS DID NOT EVEN MENTION THE KIND OF INCRIMINATING MATERIAL, WHICH LED TO THE FILING OF THE REVISED RE TURNS DISCLOSING ADDITIONAL INCOMES BY THE ASSESSEES. THE CIT(A) HA S CONCLUDED THAT IT IS ONLY A PRESUMPTION OF THE ASSESSING OFFICER THAT THE OFFERING OF ADDITIONAL INCOMES BY THE ASSESSEES AFTER SURVEY AM OUNTED TO CONCEALMENT OF INCOME AND THAT HE DID NOT ESTABLISH WITH REFERENCE TO ANY EVIDENCE THAT THE ASSESSEES FURNISHED INACCURAT E PARTICULARS OR CONCEALED THEIR INCOMES. WE FIND THAT IT IS NOT COR RECT TO SUGGEST THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT V/S. SURSHCHANDRA MITTAL (SUPRA) WAS SUPERSEDED BY THE L ATER DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF K.P.MADHUD HANAN V/S. CIT (SUPRA). IN FACT, THE DECISION OF THE HON'BLE APEX COURT IN SURESH CHANDRA MITTAL CASE (SUPRA) STILL HOLDS GOOD. THE RATIO OF THE DECISION OF THE HONBLE APEX COURT IN CIT V/S. SURESH CHANDR A MITTAL (SUPRA) IS APPLICABLE TO THE FACTS OF THE PRESENT CASES OF THE ASSESSEES, AS THE ACT OF ADMITTING ADDITIONAL INCOMES IN THE REVISED RETU RNS OF INCOMES FILED BY THE ASSESSEES SEEMS TO BE VOLUNTARY AND MADE IN GOOD FAITH. IN ITA NO.1338/HYD/08 AND OTHERS SHRI ISMAIL AHMED, HYDERABAD AND TWO OTHERS 5 THESE FACTS OF THE CASE, WE HOLD THAT THERE IS NO M ISTAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ASSESSING OFFICER WA S NOT ABLE TO SUBSTANTIATE WITH REFERENCE TO SPECIFIC EVIDENCE TH AT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AND HAS CONCEALED THEIR INCOME. ACCORDINGLY, WE CONFIRM THE ORDERS OF THE CIT(A) AN D REJECT THE GROUNDS OF THE REVENUE IN THESE APPEALS. CROSS OBJECTIONS OF THE ASSESSEES: 6. IDENTICAL GROUNDS OF CROSS-OBJECTIONS OF THE AS SESSEES ARE AS UNDER- I. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APP EALS) IS REASONABLE ON FACTS AND IN LAW. II. THE FACTS OF THE RESPONDENTS CASE ARE DISTINGU ISHABLE FROM THE FACTS IN THE CASE OF K.P.MADHUSUDHANAN VS. CIT(2001)251 ITR 99(SC) RELIED ON BY THE DEPARTMENT IN AS MUCH AS INCOME RETURNED WAS ACCEPTED IN THIS CAS E AND ADDITIONS WERE MADE TO THE INCOM E RETURNED IN THAT CASE, LEADING TO LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. III. THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P.MADHUSUDHANAN VS. CIT HAS SUPERSEDED ITS OWN DECISION IN THE CASE OF SIR SHADILAL SUGAR & GENERA L MILLS LTD. & ANR. VS. CIT(1981) 168 ITR 705(SC) WHEREIN AGREED ADDITIONS MADE TO THE INCOME RETURNED WERE TREATED AS INCOM E CONCEALED BY REASON OF ADDITION OF EXPLANATION TO SECTION 271 REMOVING THE BURDEN OF PROVING MENSREA BY THE DEPARTMENT AND NOT THE DECIS ION IN THE SPL. LEAVE PETITION RELIED UPON BY THE CIT(A ) VIZ. CIT VS. SURESCHAND MITTAL. IV. THE REVISED RETURN WAS FILED OFFERING ADDITIONA L INCOME BEFORE DETECTION OF ANY CONCEALMENT BY THE DEPARTME NT ON THE CONDITION THAT NO PENALTY WOULD BE LEVIED. T HE INCOM E RETURNED WAS ACCEPTED. 7. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT THE CROSS-OBJECTIONS PREFERRED BY THE ASSESSEES MERELY SUPPORT THE ORDERS OF THE CIT(A) AND AS SUCH, THEY NEED NO SEPARATE ADJUDICATION. THEY ARE ACCORDINGLY REJECTED. ITA NO.1338/HYD/08 AND OTHERS SHRI ISMAIL AHMED, HYDERABAD AND TWO OTHERS 6 8. IN THE RESULT, ALL THE THREE APPEALS PREFERRED BY THE REVENUE AS WELL AS THE CROSS-OBJECTIONS FILED BY TH E ASSESSEES THEREIN ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 8.4.2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 8 TH APRIL, 2011 COPY FORWARDED TO: 1. SHRI ISMAIL AHMED, 6 - 2 - 1 /167 , B - 45, VIEW TOWERS, 4 TH FLOOR, LAKDKAPOOL, HYDERABAD. 2. SHRI IRFANL AHMED, 6 - 2 - 1 /1 , B - 45, VIEW TOWERS, 4 TH FLOOR, LAKDKAPOOL, HYDERABAD. 3. SHRI MOHD. SULTAN AHMED, 6-2-1/1, B-45, VIEW TO WERS, 4 TH FLOOR, LAKDKAPOOL, HYDERABAD. 4 . INCOME - TAX OFFICER, WARD - 7(3) , HYDERABAD . 5. COMMISSIONER OF INCOME-TAX(APPEALS), VI, HYDERAB AD. 6 . COMMISSIONER OF INCOME - TAX V I HYDERABAD 7 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.