M/s. Shri Shrishti Construction Pvt. Ltd., Indore V. The ACIT CENTRAL-2, Indore

CO 30/Ind/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4037 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V J BORICHA
• Section: 271(1)(c); 143(3); 142(1); 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NO.435/IND/2017 ASSESSMENT YEAR: 2012-13 ACIT-2 INDORE / VS. M/S. SHRI SHRISHTI CONSTRUCTION PVT. LTD. KHASRA NO.379/4, BIJALPUR, OPP. PHAL BAG A.B. ROAD, INDORE ( REVENUE ) (RE SPONDENT) PAN: AAJCS2398P C.O.NO.30/IND/2018 (ARISING OUT OF IT(SS)A NO.435/IND/2017) ASSESSMENT YEAR: 2012-13 M/S. SHRI SHRISHTI CONSTRUCTION PVT. LTD. KHASRA NO.379/4, BIJALPUR, OPP. PHAL BAG A.B. ROAD, INDORE / VS. ACIT-2 INDORE ( REVENUE ) ( RE SPONDENT ) PAN: AAJCS2398P REVENUE BY SHRI V.J. BORICHA, SR. DR RESPONDENT BY SHRI PRAKASH JAIN & SHREYA JAIN, CAS DATE OF HEARING: 21.01.2019 DATE OF PRONOUNCEMENT: 06. 02.2019 SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 2 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL BY REVENUE AND CROSS OBJECTION BY THE A SSESSEE PERTAINING TO A.Y. 2012-13 ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-III INDORE, (IN SHORT CIT(A)), DATED 31.01.2017 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 29.09.2015 BY ACIT, (CENTRAL)-2) INDORE. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CITYA) ERRED IN DELETING THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT, WHEREAS THE AO HAS GIVEN CLEAR FINDING DURING ASSESSMENT PROCEEDING & PENALTY PROCEEDING THAT THE ASSESSEE H AS CONCEALED ITS INCOME. THE ASSESASEE HAS RAISED FOLLOWING GROUNDS IN C.O. NO.30/IND/2018: THE LD. CIT(A) ERRED IN NOT DECIDING THE FOLLOWING GROUNDS OF APPEAL ON MERITS: 1. THE ORDER U/S 271(1)(C) IS BAD IN LAW AND ILLEGA L AND HENCE BE ANNULLED. 1.1 THERE IS NO SATISFACTION OF THE LD. AO ABOUT TH E CONCEALMENT AND THE PROCEEDINGS WERE INITIATED U/S 271AAB AND A S SUCH PENALTY U/S 271(1)(C) CANNOT BE INVOKED AND LEVIED. 1.2 THERE CANNOT BE TYPOGRAPHICAL MISTAKE TO MENTIO NING THE SECTION AND THE PROVISIONS OF SECTION 292B ARE NOT APPLICABLE. 2. FROM PERUSAL OF THE GROUNDS RAISED BY THE REVENU E IN ITS APPEAL AND IN THE CROSS OBJECTION BY THE ASSESSEE, THE ISS UES REVOLVES AROUND THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.1,30,01,827/-, AGAINST WHICH THE REVENUE IS IN A PPEAL ON MERITS SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 3 AND THE ASSESSEE THOUGH SUPPORTING THE ORDER OF LD. CIT(A) HAS RAISED LEGAL GROUND IN THE CROSS OBJECTION CHALLENG ING THE VALIDITY OF THE ASSESSMENT PROCEEDINGS FOR NON-SATISFACTION OF THE ASSESSING OFFICER IN THE PENALTY NOTICE ISSUED U/S 274 R.W.S 271AAB OF THE ACT. FIRST WE TAKE UP REVENUES APPEAL IN IT(SS)ANO.435/ IND/2017 3. BRIEF FACTS AS CALLED OUT FROM THE RECORDS ARE T HAT ASSESSEE IS A PRIVATE LIMITED COMPANY. A SURVEY U/S 133A OF THE A CT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 18.11.2011. RETURN OF INCOME FILED ON 30.09.2012, DECLARING TOT AL INCOME OF RS.4,01,90,100/- WHICH INTER ALIA INCLUDED THE ADDITIONAL INCOME OF RS.4,00,67,605/- ADMITTED BY THE ASSESSEE DURING TH E SURVEY PROCEEDINGS ON ACCOUNT OF CESSATION OF UNPAID LIABI LITIES. SUBSEQUENTLY, NOTICES U/S 143(2) & 142(1) OF THE AC T WERE DULY SERVED UPON THE ASSESSEE AND LD. ASSESSING OFFICER AFTER EXAMINING THE RECORDS AND SATISFIED WITH THE SUBMISSIONS OF T HE ASSESSEE, RETURNED INCOME OF RS.4,01,90,100/- WAS ASSESSED AS TOTAL INCOME OF THE ASSESSEE U/S 143(3) OF THE ACT VIDE ORDER DA TED 23.03.2015. WHILE FRAMING THE ASSESSMENT ORDER LD. AO ISSUED PE NALTY NOTICE U/S 271AAB OF THE ACT. 4. SUBSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED BY ISSUANCE OF NOTICE U/S 274 R.W.S. 271AAB OF THE ACT BUT LD. AO WHILE FRAMING THE PENALTY ORDER ACCEPTED THAT A TYPOGRAPHICAL ERR OR HAS BEEN COMMITTED IN MENTIONING THE WRONG SECTION OF 271AAB OF THE ACT IN PLACE OF 271(1)(C) OF THE ACT AND HE ACCORDINGLY LE VIED PENALTY OF SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 4 RS.1,30,01,827/- BEING 30% OF TAX SOUGHT TO BE EVAD ED ON THE INCOME OF RS.4,00,67,605/- FOR CONCEALING THE PARTI CULARS OF INCOME. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE AC T AND SUCCEEDED. 6. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 7. LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF ASSESSING OFFICER. 8. LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE FINDI NG OF LD. CIT(A) AND ALSO CHALLENGED THE VALIDITY OF NOTICE ISSUED U /S 274 R.W.S 271(1)(C) OF THE ACT. 9. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RECORD PLACED BEFORE US. THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED BY THE ASSESSING OFFICER ON THE INCOME OF RS.4,00,67,605/- ADMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY ON 18.11.2 011 WHICH WAS SUBSEQUENTLY OFFERED TO TAX IN THE REGULAR RETU RN OF INCOME FILED POST SURVEY ON 30.09.2012. RETURNED INCOME WA S ACCEPTED AS ASSESSED INCOME BY LD. AO. THE PENALTY SO LEVIED U/S 271(1)(C) OF THE ACT WAS DELETED BY THE LD. CIT(A) RELYING ON THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (2011) 335 ITR 259 OBSERVING AS FOL LOWS: 4.1 THE ASSESSING OFFICER HAS IMPOSED THE PENALTY U/S 271(1)(C) STATING THAT HAD THE SURVEY NOT BEEN CONDUCTED THE ASSESSEE WOULD NOT HAVE OFFERED . T HIS AMOUNT FOR TAXATION. IT IS A' FACT THAT THE DISCREP ANCIES WERE NOTICED DURING THE SURVEY ACTION U/S 133A ON ACCOUNT OF UNPAID LIABILITIES DUE TO WHICH THE APPE LLANT HAS OFFERED ADDITIONAL INCOME OF RS. 4,00,67,605/- IN SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 5 THE RETURN OF INCOME FILED FOR A.Y. 2012-13. HOWEVE R, FOR ATTRACTING PENALTY U/S 271(1)(C) THE MOOT POINT IS WHETHER THE PARTICULARS OF INCOME HAVE BEEN CONCEAL ED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN OFFER ED IN THE RETURN OF INCOME. THE APPELLANT HAS MADE COMPLETE DISCLOSURE OF THE ADDITIONAL INCOME DETECT ED DURING THE SURVEY IN THE RETURN OF INCOME AND HAS OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX AND THEREFORE THERE IS NO CONCEALMENT OR NON- DISCLOSURE OF THE PARTICULARS OF INCOME. 4.2 THE ISSUE IS SQUARELY COVERED BY THE DECISION O F HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (2011) 335 ITR 259 WHERE IN IT IS H ELD THAT WHERE INCOME DECLARED BY THE ASSESSEE DURING SURVEY HAS BEEN REFLECTED IN THE REGULAR RETURN OF INCOME FILED WITHIN TIME, NO PENALTY COULD BE IMPOSED UNDE R SECTION 271(1)(C). IT WAS ALSO HELD IN THIS CASE BY THE HON'BLE DELHI HIGH COURT THAT EXPRESSION 'IN THE CO URSE OF ANY PROCEEDINGS UNDER THIS ACT' COULD NOT HAVE T HE REFERENCE TO SURVEY PROCEEDINGS. FURTHER, THERE COU LD NOT BE A SATISFACTION OF AO. DURING SURVEY FOR INITIATI NG PENALTY PROCEEDINGS. THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME BY THE ASSESSEE HAS TO BE IN THE INCOME-TAX RETURN FILED BY IT. 4.3 THE HON'BLE ITAT, INDORE IN THE CASE OF ACIT-2( 1), BHOPAL VS. RITESH AGRAWAL (2014) 50 TAXMANN.COM 93 (INDORE-TRIB.) RELYING UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICA LS HAS ALSO HELD THAT PENALTY U/S 271(1)(C) IS NOT IMP OSABLE WHEN THE EXCESS STOCK DECLARE DURING THE COURSE OF SURVEY WAS SURRENDERED AND INCOME DECLARED IN THE RETURN WAS ACCEPTED BY THE DEPARTMENT. THE DECISION OF THE HON'BLE DELHI HIGH COURT HAS ALSO BEEN FOLLOWED BY HON'BLE ITAT, BANGALORE IN THE CASE OF MUNINAGA RED DY VS. ACIT, CIRCLE-6(1), BANGALORE (2013) 37 TAXMANN. COM 440 (BANG-TRIB.) AND HORI'BLE ITAT, AHMADABAD IN TH E SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 6 CASE OF ACIT VS. JUPITER DISTILLER (2012) 23 TAXMAN N.COM 303 (AHMD-TRIB.) I) 10. THE ABOVE FINDING OF FACT HAS NOT BEEN REBUTTED BY THE LD. DR AS LD. CIT(A) HAS RIGHTLY APPLIED THE JUDGME NTS OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (SUPRA) WHEREIN IT HAS BEEN HELD TH AT IF THE INCOME DECLARED BY THE ASSESSEE DURING SURVEY U/S 1 33A OF THE ACT HAS BEEN REFLECTED IN THE REGULAR RETURN OF INCOME FILED WITHIN TIME, NO PENALTY COULD BE IMPOSED U/S 271(1)(C) OF THE ACT. IT IS ALSO AN UNDISPUTED FACT THAT THE ALLEGED AMOUNT ON WHICH THE PENALTY HAS BEEN LEVIED WAS NOT UNEARTHED BY THE REVENUE AUTHORITIES NOR IT WAS DEC LARED BY THE ASSESSEE AS UNDISCLOSED INCOME BUT WAS RATHER O FFERED U/S 41(1) OF THE ACT FOR THE CESSATION OF LIABILITY TOWARDS UNPAID LIABILITY TO CERTAIN CREDITORS AND THE SAME WAS DISCLOSED IN THE INCOME TAX RETURN FILED U/S 139(1) OF THE ACT. 11. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTA NCES OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDGMENTS R EFERRED BY THE LD. CIT(A), FIND NO REASON TO INTERFERE IN H IS FINDING DELETING PENALTY OF RS.1,30,01,827/- LEVIED U/S 271 (1)(C) OF THE ACT. 12. IN THE RESULT, GROUNDS RAISED BY THE REVENUE ST ANDS DISMISSED. 13. AS REGARDS CROSS OBJECTION RAISED BY THE ASSESS EE, AS WE HAVE ALREADY CONFIRMED THE VIEW TAKEN BY THE LD. CIT(A) SHRISHTI CONSTRUCTION P. LTD. IT(SS)ANO.435/IND/2017 & C O NO.30/IND/2018 7 DELETING THE PENALTY U/S 271(1)(C) OF THE ACT, IT W ILL BE MERELY ACADEMIC IN NATURE TO DEAL WITH THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION AND THEREFOR E, FIND NO REASON TO DEAL WITH THE SAME. THEREFORE CROSS OB JECTION RAISED BY THE ASSESSEE STANDS DISMISSED BEING ACADE MIC IN NATURE. 14 . IN THE RESULT, ALL GROUND RAISED IN THE APPEAL OF THE REVENUE AND CROSS OBJECTION BY ASSESSEE STANDS DISMISS ED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 06 .02. 2019. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 06/02/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR