ACIT, CHENNAI V. A.N.Radhakrishnan, CHENNAI

ITA 1076/CHNY/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8781 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-06-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHADEVAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Agreed addition
• Section: 153A; 69; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.684, 685 & 686/MDS/2013 ( )( / ASSESSMENT YEARS : 2004-05, 2005-06 & 2007-08 SHRI A.N. RADHAKRISHNAN, NO.931, 11 TH SECTOR, 69 TH STREET, K.K. NAGAR, CHENNAI - 600 078. PAN : AACPR 5498 M V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(1), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NOS.650, 1076 & 1077/MDS/2013 ( )( / ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 600 034. V. SHRI A.N. RADHAKRISHNAN, NO.931, 11 TH SECTOR, 69 TH STREET, K.K. NAGAR, CHENNAI - 600 078. (+,/ APPELLANT) (-.+,/ RESPONDENT) (/0 1 2 /ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE 3 1 2 /REVENUE BY : SHRI SAHADEVAN, JCIT 4 1 0% / DATE OF HEARING : 07.06.2016 5') 1 0% / DATE OF PRONOUNCEMENT : 05.08.2016 2 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS) CONFIRMING THE PENALTY LEVIED BY THE ASSE SSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS A SEARCH OPERATION IN THE PREMISES O F THE ASSESSEE ON 29.09.2008. CONSEQUENT TO THE SEARCH OPERATION, NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED FOR ALL THE ASSE SSMENTS UNDER CONSIDERATION. ACCORDING TO THE LD. COUNSEL, THE A SSESSING OFFICER FOUND THAT THE PENALTY CAN BE LEVIED EVEN ON AGREED ADDITION. MOREOVER, THERE WAS A DIFFERENCE OF ` 40,00,000/- OFFERED BY THE ASSESSEE. THE SOURCE WAS STATED TO BE LOAN ADVANCE D AND PERSONAL SOURCE. IN RESPECT OF OTHER ASSESSMENT YE ARS ALSO, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER FOUND THAT THERE WAS DIFFERENCE BETWEEN ASSESSED INCOME AND RETURNED INCOME. CONSEQUENTLY, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS 3 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 CONCEALED THE INCOME OF THE ASSESSEE, ACCORDINGLY, HE LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN UNION OF INDIA V. DHARMEN DRA TEXTILE PROCESSORS (2008) 306 ITR 277. ACCORDING TO THE LD . COUNSEL, THERE WAS NO CONCEALMENT OF INCOME NOR THE ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS. THE ASSESSEE HAS FURNISHED THE INCOME AND OFFERED FOR TAXATION WHICH WAS ACCEP TED BY THE ASSESSING OFFICER WITHOUT ANY FURTHER ADDITION. WH EN THE INCOME WAS ACCEPTED WITHOUT ANY FURTHER ADDITION, ACCORDIN G TO THE LD. COUNSEL, THERE CANNOT BE ANY LEVY OF PENALTY. THER EFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER IS NOT JU STIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3. THE LD.COUNSEL FURTHER SUBMITTED THAT FOR THE AS SESSMENT YEAR 2003-04, THE CIT(APPEALS) DELETED THE PENALTY. HOWEVER, FOR THE ASSESSMENT YEAR 2004-05, THE CIT(APPEALS) PARTL Y DELETED THE PENALTY. FOR THE ASSESSMENT YEAR 2005-06, THE CIT( APPEALS) DELETED THE PENALTY PARTIALLY. ACCORDING TO THE LD . COUNSEL, WHEN THERE WAS NO CONCEALMENT, THE CIT(APPEALS) OUGHT TO HAVE DELETED THE ENTIRE PENALTY LEVIED BY THE ASSESSING OFFICER. 4 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 4. ON THE CONTRARY, SHRI SAHADEVAN, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS NOT DISCLOSED ENTIRE INCOME IN THE ORIGINAL RETURN. INCRIMINATIN G MATERIALS WERE FOUND DURING THE COURSE OF SEARCH OPERATION ON 29.0 9.2008. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE COOPERATED WITH THE DEPARTMENT DURING ASSESSMENT AND ENQUIRY A ND OFFERED THE AMOUNT VOLUNTARILY FOR TAXATION, THEREFORE, IT IS A N AGREED ADDITION, HENCE, THERE CANNOT BE ANY PENALTY. ACCORDING TO T HE LD. D.R., MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION THA T CANNOT BE THE REASON FOR NOT LEVYING PENALTY. THE FACT THAT THE ASSESSEE DID NOT DISCLOSE ENTIRE INCOME IS NOT IN DISPUTE. WHEN THE ASSESSEE HAS NOT FURNISHED ENTIRE SOURCE OF INCOME AND FURNISHED INACCURATE PARTICULARS, ACCORDING TO THE LD. D.R., PENALTY HAS TO BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT NOT HAVE DELETED THE PENALTY LEVIED. ACCORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT T O HAVE CONFIRMED THE ENTIRE PENALTY LEVIED BY THE ASSESSIN G OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. CONSEQUENT TO THE SEARCH OPERATION CARRIED ON IN THE PREMISES OF THE ASSESSEE ON 5 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 29.09.2008, THE ASSESSING OFFICER FOUND THAT THERE WAS CONCEALMENT OF INCOME, THEREFORE, HE LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT, FOR ALL THE ASSESSMENT YEARS. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER IS EMP OWERED TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN CASE THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED ANY PART OF INCOME. THE PARLIAMENT, BY AMENDMENT, INTRODUCED P ROVISIONS OF SECTION 271AAA OF THE ACT WITH EFFECT FROM 01.04.20 07 BY FINANCE ACT, 2007. ON OR AFTER 01.06.2007, THE PENALTY FOR THE UNDISCLOSED INCOME COMPUTED AS A RESULT OF SEARCH OPERATION HAS TO BE LEVIED UNDER SECTION 271AAA(1) OF THE ACT. BY WAY OF SUB- SECTION (3) OF SECTION 271AAA OF THE ACT, THE PARLIAMENT CLARIFIED THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHALL BE IMPOSED ON THE ASSESSEE IN RESPECT OF UNDISCLOSED INCOME REFERRED TO IN SUB- SECTION (1) OF SECTION 271AAA OF THE ACT. 7. IN THE CASE BEFORE US, THE SEARCH TOOK PLACE ON 29.09.2008 AND THE UNDISCLOSED INCOME COMPUTED FALLS UNDER SEC TION 271AAA(1) OF THE ACT. THEREFORE, PENALTY, IF ANY, HAS TO BE LEVIED 6 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 ONLY UNDER SECTION 271AAA(1) OF THE ACT. THERE IS A PROHIBITION UNDER SECTION 271AAA(3) OF THE ACT FOR LEVYING PENA LTY UNDER SECTION 271(1)(C) OF THE ACT IN RESPECT OF INCOME W HICH FALLS UNDER SECTION 271AAA(1) OF THE ACT. IN VIEW OF SECTION 2 71AAA(3) OF THE ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THA T THERE CANNOT BE ANY PENALTY UNDER SECTION 271(1)(C) OF THE ACT WHEN THE UNDISCLOSED INCOME WAS COMPUTED UNDER SECTION 153A OF THE ACT, ON THE BASIS OF SEARCH OPERATION CARRIED ON 29.09.2 008. IN THE CASE BEFORE US, NO PENALTY WAS LEVIED UNDER SECTION 271A AA OF THE ACT AND THE PENALTY WAS LEVIED ONLY UNDER SECTION 271(1 )(C) OF THE ACT. IN VIEW OF THE MANDATE OF THE LEGISLATURE UNDER SEC TION 271AAA(3) OF THE ACT, THE ASSESSING OFFICER CANNOT LEVY ANY P ENALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, THIS TRIB UNAL IS UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITY. ACCORDIN GLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE PENALTY IS DELETED FOR ALL THE ASSESSMENT YEARS. 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 7 I.T.A. NOS.684 TO 686/MDS/13 I.T.A. NOS.650, 1076 & 1077/ MDS/13 ORDER PRONOUNCED ON 5 TH AUGUST, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 5 TH AUGUST, 2016. KRI. 1 -089 :9)0 /COPY TO: 1. (/0 /ASSESSEE 2. ASSESSING OFFICER 3. 4 ;0 () /CIT(A)-II, CHENNAI 4. 4 ;0 /CIT, CENTRAL-II, CHENNAI 5. 9< -0 /DR 6. =( > /GF.