Shailesh Mahadev Joshi, Pune V. Deputy Commissioner of Income-tax,

ITA 108/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9041 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-03-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 22-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Invalid notice; Search and seizure
• Section: 143(3); 153A; 147; 148; 132; 10; 2; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO S . 107 & 108 /P U N/201 6 / ASSESSMENT YEAR S : 20 09 - 10 & 2010 - 11 SHAILESH MAHADEV JOSHI, JOSHI WADEWALE, 1175, SHIVAJINAGAR, NEAR BALGANDHARV RANG MANDIR, PUNE 411005 . / APPELLANT PAN: ACAPJ8680J VS. THE DY. CO MMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT . / ITA NO S . 9 1 & 9 2 /P U N/201 6 / ASSESSMENT YEAR S : 20 0 9 - 1 0 & 2010 - 11 JOSHI WADEWALE SHIVAPUR , AT POST VELU, PUNE SATARA ROAD, TAL BHOR, PU NE 41 2205 . / APPELLANT PAN: AA HFA1888M VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 2 . / ITA NO S . 93 & 94 /P U N/201 6 / ASSESSMENT YEAR S : 20 09 - 10 & 2010 - 1 1 JOSHI WADEWALE DAGADUSHETH GANAPATI , 237, OPP DAGDUSHETH GANPATI TEMPLE, BUDHWAR PETH, PUNE 4110 0 2 . / APPELLANT PAN: AA EFJ860 2M VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT . / ITA NO S . 9 7 & 98 /P U N/201 6 / ASSESSMENT YEAR S : 20 09 - 10 & 2010 - 11 JOSHI WADEWALE BHAIROBANALA , SR.NO.9, HIMALAYA SOCIETY, FATIMA NAGAR, HADAPSAR, PUNE 41 1028 . / APPELLANT PAN: AA FFJ7839R VS. THE DY. COMMISSIO NER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT . / ITA NO. 10 1 /P U N/201 6 / ASSESSMENT YEAR : 20 09 - 10 JOSHI WADEWALE VISHRANTWADI , SHOP NO.1, CHANDRANEEL APARTMENTS, PUNE - ALANDI ROAD, VISHRANTWADI, P UNE 41100 6 . / APPELLANT PAN: AA DFJ3816A VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 3 . / ITA NO S . 103 & 104 /P U N/201 6 / ASSESSMENT YEAR S : 20 09 - 10 & 2010 - 11 JOSHI WADEWALE WAKAD, 1, NEAR INDIRA COLLEGE, MUMBAI - BANGALORE HIGHWAY, TATHAWADE, PUNE 411033 . / APPELLANT PAN: AADFJ4399N VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE . / RESPONDENT / APPELLANT BY : S/SHRI NIKHIL PATHAK / CHANDRASEKHAR L S / RESPONDENT BY : SHRI AJAY MODI / DATE OF HEARING : 28 .0 3 . 201 8 / DATE OF PRONOUNCEMENT: 2 8 . 0 3 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH IS BUNCH OF ELEVEN APPEAL S FILED BY DIFFERENT ASSESSEE ARE AGAINST RESPECTIVE ORDER S OF CIT (A) - 13 , PUNE , ALL DATED 2 3 . 1 0 .201 5 RELATING TO RESPECTIVE ASSESSMENT YEAR S 200 9 - 1 0 & 2010 - 11 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE IN COME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THIS BUNCH OF APPEALS OF RELATED ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 4 3. THE ISSUE RAISED IN ALL THE APPEALS IS AGAINS T LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE BUNCH OF APPEALS STANDS COVERED BY THE ORDER OF TRIBUNAL IN RELATED PERSONS IN ITA NOS.95 & 96/PUN/201 6 IN THE CASE OF MRS. VASUNDHARA SHAILESH JOSHI VS. DCIT, ITA NOS.105 & 106/PUN/2016 IN THE CASE OF JOSHI WADEWALA HADAPSAR VS. DCIT, ITA NOS.99 & 100/PUN/2016 IN THE CASE OF JOSHI WADEWALE SHEWALWADI, RELATING TO ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 AND I TA NO. 102/PUN/2016 RELAT ING TO ASSESSMENT YEAR 2010 - 11 , ORDER DATED 27.03.2018 . 5. FIRST, WE SHALL TAKE UP THE APPEALS OF ASSESSEE IN ITA NOS.107 & 108/PUN/2016, RELATING TO ASSESSMENT YEARS 2009 - 10 & 2010 - 11. IN ORDER TO ADJUDICATE THE ISSUE, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.107/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10. 6. THE ASSESSEE IN ITA NO.107/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.5,83,779/ - U/S. 271(1)(C) OF THE ACT. 2. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE WAS BASED ON ESTIMATES AND THERE WAS NO CONCRETE EVIDENCE FOUND DURING THE COURSE OF SEARCH THAT THE ASSESSE E HAD GENERATED THE UNDISCLOSED INCOME DECLARED DURING THE COURSE OF SEARCH AND HENCE, THE LEVY OF PENALTY ON THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE WAS NOT JUSTIFIED AT ALL. 3. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ADDITIONAL INCOME W AS DECLARED BY THE ASSESSEE IN ORDER TO CO - OPERATE AND BUY PEACE WITH THE DEPT. AND THEREFORE, NO PENALTY WAS LEVIABLE IN RESPECT OF THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE WHICH WAS BASED ON ESTIMATIONS AND SURMISES. ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 5 4. THE ORDER OF LD. CIT(APPEAL S) PASSED U/S 250 OF THE INCOME TAX ACT, 1961 IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, AND FACT AND CIRCUMSTANCES IN THE APPELLANT CASE. 5 THE ORDER OF PENALTY I S BAD IN LAW FOR THE REASON THAT THE NOTICE FOR INITIATION OF P ENALTY AS TO WHETHER I T IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS DISCERNABLE FROM THE NOTICE ISSUED AND CONSEQUENTLY THE ORDER OF PENALTY PASSED U / S 271(1)(C) OF THE ACT ON INVALID NOTICE DOES NOT HAVE ANY LEGS TO STAND AND PENALTY LEVIED U/S 271(1)(C) OF THE ACT DESERVES TO BE DELETED UNDER THE FACTS AND CIRCUMSTANCE OF THE CASE. 6. THE ID CIT (APPEALS) WAS NOT JUSTIFIED IN IGNORING THE ACTION OF ASSESSING OFFICER WHO IN ASSESSMENT ORDER HAS STATED THAT ASSESS EE HAS CONCEALS THE PARTICULARS OF INCOME HOWEVER NO TI CE WERE ISSUED FOR CONCEALMENT OF INCOME AND FURNISHING THE PARTICULARS OF INCOME THE NOTICE ISSUED IS AMBIGUOUS ON THE CHARGE AND HENCE BAD IN LAW. 7 . THE LD CIT(APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT HAS NEITHER CONCEALED THE PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME TO WARRANT LEVY OF PENALTY AND THEREFORE PENALTY LEVIED U/S 271(1)( C) OF THE ACT, REQUIRES TO BE CANCELLED. 7 . IN ITA NOS.107 & 108/PUN/2016, WHICH RELATE TO SHRI SHAILESH MAHADEV JOSHI, AGAINST WHOM SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT UNDER SECTION 132 OF THE ACT. THE RESIDENCES OF ASSESSEE AND HIS WIFE MRS. VASUNDHARA SHAILESH JOSHI WERE SEARCHED AND INCRIMINATING DOCUMENTS WERE FOUND. THE ASSESSEE WAS THE SOLE PROPRIETOR OF CERTAIN CONCERNS AND WAS PARTNER IN OTHER PARTNERSHIP FIRMS ALONG WITH HIS WIFE. THE INCOME WHICH HAS BEEN ASSESSED IN THE HANDS OF ASSESSEE IS VIDE ORDER PASSED UNDER SECTION 153A R.W.S. 143( 3) OF THE ACT. THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH WAS OFFERED TO TAXATION AND WAS ASSESSED IN THE HANDS OF ASSESSEE, ON WHICH THE ASSESSING OFFICER HELD THE ASSESSEE LIABLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 8 . SIMILAR ISSUE AROSE IN THE CASE OF MRS. VASUNDHARA SHAILESH JOSHI (SUPRA). IT MAY BE POINTED OUT HEREIN ITSELF THAT THE ADDITIONAL INCOME YEAR - WISE ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 6 WAS OFFERED BY SHRI SHAILESH MAHADEV JOSHI ON BEHALF OF HIMSELF, HIS WIFE AND OTHER PARTN ERSHIP FIRMS ON THE BASIS OF DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH AT HIS RESIDENCE. THE FIRST SET OF DOCUMENTS RELATE TO UNACCOUNTED SALES OF WADA PAV AND OTHERS AT DIFFERENT OUTLETS. ANOTHER SET OF DOCUMENTS WHICH WERE FOUND ON ACCOUNT OF UNDISCLOSED INVESTMENTS IN JEWELLERY, DEPOSITS WITH PAT SANSTHAS, FIXED DEPOSITS, ETC. 9 . WE HAVE ALREADY ADJUDICATED SIMILAR ISSUE IN THE CASE OF MRS. VASUNDHARA SHAILESH JOSHI (SUPRA), WHEREIN ALSO THE ASSESSMENT WAS COMPLETED UNDER SECTION 153A R.W .S. 143(3) OF THE ACT. WHILE DECIDING THE ISSUE OF LEVY OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT, THE TRIBUNAL VIDE PARAS 16 TO 19 HELD THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WERE CLEARLY ATTRACTED AND THE PENALT Y LEVIED UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN UPHELD. WE ARE REFERRING TO THE SAID DECISION BUT THE SAME IS NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 10 . THE ISSUE IN THE PRESENT TWO APPEALS OF SHRI SHAILESH MAHADEV JOSHI IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN MRS. VASUNDHARA SHAILESH JOSHI (SUPRA) AND APPLYING THE SAME PARITY OF REASONING, WE UPHOLD THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN BOTH THE YEARS UNDER APPEAL I.E. ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, DISMISSED. 11. THE FACTS AND ISSUES IN ITA NO.108/PUN/2016 ARE SIMILAR TO THE FACTS AND ISSUES IN ITA NO.107/PUN/2016 AND OUR DECISION IN ITA NO.107/PUN/2016 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.108/PUN/ 2016. ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 7 1 2. NOW, COMING TO THE BALANCE APPEALS IN THE BUNCH, WHEREIN THE APPEALS HAVE BEEN FILED BY DIFFERENT PARTNERSHIP FIRMS FOR DIFFERENT ASSESSMENT YEARS . THE INDIVIDUAL ASSESSEE HAVE RAISED ADDITIONAL GROUNDS OF APPEAL IN EACH OF THE APPEALS WHICH RE AD AS UNDER: - 1] THE ASSESSEE SUBMITS THAT THE LEARNED A.O. HAD NO JURISDICTION TO ISSUE NOTICE U/S. 148 TO THE ASSESSEE AND ACCO RDINGLY, THE ASSESSMENT ORDER PASSED U/S. 147 WAS INVALID IN LAW AND THEREFORE, THE PENALTY LEVIED U/S. 271(1)(C) ON THE BASIS OF AN INVALID ASSESSMENT ORDER WAS NULL AND VOID. 2] THE ASSESSEE SUBMITS THAT IN THE COURSE OF SEARCH ON SHRI SHAILESH JOSHI AN D SMT. VASUNDHARA JOSHI, INCRIMINATING DOCUMENTS BELONGING TO THE ASSESSEE FIRM WERE FOUND AND THEREFORE, THE LEARNED A.O. OUGHT TO HAVE ISSUED NOTICE U/S. 153C FOR ASSESSING THE UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE FIRM AS AGAINST NOTICE U/S. 1 48 ISSUED BY HIM AND THEREFORE, THE ASSESSMENT ORDER PASSED U/S. 147 IS BAD IN LAW AND ACCORDINGLY, THE PENALTY LEVIED U/S. 271(1)(C) ON THE BASIS OF AN INVALID ASSESSMENT ORDER WAS NU L L AND VOID. 13. THE TRIBUNAL IN EARLIER ORDER HAD ALSO DECIDED THE LE VY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE CASE OF PARTNERSHIP FIRMS WITH LEAD ORDER IN 105 & 106/PUN/2016 IN THE CASE OF JOSHI WADEWALA HADAPSAR VS. DCIT (SUPRA) . THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN DELETED AFTER A DJUDICATING THE ISSUE IN PARAS 20 TO 36 OF THE ORDER DATED 27.03.2018. WE ARE REFERRING TO THE SAID DECISION BUT THE SAME IS NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 14. THE ISSUE ARISING IN THE BUNCH OF APPEALS EXCEPT IN ITA NOS.107/PUN/2016 & 108/ PUN/2016, STANDS COVERED AND ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. CONSEQUENTLY, THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE AFORESAID APPEALS ARE ALLOWED. ITA NO S . 107 & 108 /P U N/20 1 6 & ORS. SHAILESH MAHADEV JOSHI & ORS 8 15 . IN THE RESULT, APPEALS IN THE CASE OF SHAILESH MAHADEV JOSHI ARE DISMISSED AND APPEALS IN THE CASE OF DIFFERENT ASSESSEE BEING PARTNERSHIP FIRMS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 2 8 TH DAY OF MARCH , 201 8 . SD/ - SD/ - ( ANIL CHATURVEDI ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 28 TH MARCH , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPE LLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 13 , PUNE ; 4. THE PR. CIT (CENTRAL), PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE