Deputy Commissioner of Income-tax, V. Shri Deepak V. Kunjeer, Pune

ITA 116/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0402 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Depreciation
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 116/PN/2015 %' ( ')( / ASSESSMENT YEAR : 2008-09 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 5, PUNE ....... / APPELLANT ' /VS. SHRI DEEPAK V. KUNJEER, C/O M/S. VASANT RAMCHANDRA KUNJEER, GULTEKDI, MARKET YARD, PUNE-411037 PAN : ABGPK1967M / RESPONDENT ASSESSEE BY : SHRI M.R. BHAGWAT REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 22-11-2016 / DATE OF PRONOUNCEMENT : 30-11-2016 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 17-10 -2014 FOR THE ASSESSMENT YEAR 2008-09. IN APPEAL, THE DEPARTME NT HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) ON ADDITIONAL INCOME ` 51,00,000/- DISCLOSED BY THE ASSESSEE DURING SURVEY ACTION. 2 ITA NO. 116/PN/2015, A.Y. 2008-09 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: A SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT AT THE PRE MISES OF ASSESSEE ON 19-02-2009. DURING THE COURSE OF SURVEY, ASSESSEE D ECLARED ADDITIONAL INCOME OF ` 51,00,000/- TOWARDS CASH PAYMENT OVER AND ABOVE THE AGREED VALUE FOR PURCHASE OF AGRICULTURAL LAND. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-0 9 ON 11-06-2010 DECLARING TOTAL INCOME OF ` 64,30,500/-, INCLUDING ADDITIONAL INCOME DECLARED DURING SURVEY. THE ASSESSING OFFICER DURIN G SCRUTINY ASSESSMENT PROCEEDINGS MADE CERTAIN ADDITIONS/D ISALLOWANCES IN THE INCOME RETURNED AND ASSESSED THE TOTAL INCOME OF ASSESSEE AT ` 82,64,590/-. THE ASSESSING OFFICER INITIATED PENALTY PROCEED INGS U/S. 271(1)(C) OF THE ACT. THE ASSESSING OFFICER VIDE ORDER DATED 30-03-3013 LEVIED PENALTY OF ` 22,15,980/- U/S. 271(1)(C) OF THE ACT INTER ALIA ON ADDITIONAL INCOME OF ` 51,00,000/- DECLARED DURING SURVEY ACTION. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE CONTEN TIONS OF ASSESSEE AND DELETED THE PENALTY. NOW, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI P.L. KUREEL REPRESENTING THE DEPARTMENT SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING T HE PENALTY WITH RESPECT TO ADDITIONAL INCOME ` 51,00,000/- DECLARED BY THE ASSESSEE DURING SURVEY ACTION U/S. 133A OF THE ACT. IF SURVEY WOULD NOT HAVE TAKEN PLACE, THE ASSESSEE WOULD NOT HAVE DISCLO SED THE AMOUNT. THE LD. DR VEHEMENTLY DEFENDED THE LEVY OF PENALT Y U/S. 271(1)(C) AND PRAYED FOR SETTING ASIDE THE ORDER OF COMMISSIO NER OF INCOME TAX (APPEALS). 3 ITA NO. 116/PN/2015, A.Y. 2008-09 4. ON THE OTHER HAND SHRI M.R. BHAGWAT APPEARING ON BEH ALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY DELETED THE PENALTY AS THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE IS MAINTAININ G PROPER BOOKS OF ACCOUNT. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09. THE SURVEY ACTION WAS CARRIE D AT THE PREMISES OF ASSESSEE ON 19-02-2009. THERE WAS STILL TIME LEFT WITH THE ASSESSEE FOR FILING RETURN OF INCOME U/S. 139(4) OF THE ACT UP TO 31-03-2010 FOR ASSESSMENT YEAR 2008-09. THUS, IT CANNO T BE SAID THAT THE ASSESSEE WOULD NOT HAVE DECLARED THE AMOUNT IN RET URN OF INCOME. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE FILED HIS RE TURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 11-06-2010 WHEREIN THE ASSESSEE OFFERED THE AMOUNT ` 51,00,000/- DECLARED DURING THE COURSE OF SURVEY. THUS, THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE RETURN OF INCOME. A BARE READ ING OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT SHOWS THAT PENALTY CAN BE LEVIED ONLY IF THERE IS CONCEALMENT OF INCOME FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SINCE, THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME U/S. 139(1) AND THE ONLY RETURN FILED BY T HE ASSESSEE WAS AFTER SURVEY ACTION WHICH WAS ACCEPTED, IT CANNOT BE A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. AR SUBMITTED THAT THE CASE OF THE ASSESS EE IS SQUARELY COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME TAX VS. SAS PHARMACEUTICALS REPORT ED AS 335 ITR 259 AND THE DECISION OF BANGALORE BENCH OF THE TRIBU NAL IN THE CASE OF SHRI MUNINAGA REDDY VS. THE ASSISTANT COMMISSIONER OF INCOME TAX IN ITA NO. 1488/BANG/2012 FOR ASSESSMENT YE AR 2008-09 DECIDED ON 14-08-2013. 4 ITA NO. 116/PN/2015, A.Y. 2008-09 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH THE LD. AR OF T HE ASSESSEE HAS PLACED RELIANCE. UNDISPUTEDLY, THE ASSESSEE HAD NOT FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 WHEN SURVEY ACTION U/S. 133A OF THE ACT WAS CARRIED OUT IN THE CASE OF ASSESSEE. DUR ING SURVEY, THE ASSESSEE DECLARED ADDITIONAL INCOME OF ` 51,00,000/- ON ACCOUNT OF ON- MONEY PAYMENTS. THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF ` 64,30,500/- INCLUDING ` 51,00,000/- ADMITTED DURING SURVEY ACTION. THE ASSESSING OFFICER LEVIED PENALTY U/S. 271 (1)(C) INTER ALIA ON ADDITIONAL INCOME ` 51,00,000/- DECLARED BY THE ASSESSEE. SECTION 271(1)(C) OF THE ACT CONTEMPLATES TWO SITUATIONS : (I) WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME; OR (II) WHERE THE ASSESSEE HAS FAILED TO FURNISH INACCURATE PARTIC ULARS OF HIS INCOME. BOTH THE SITUATIONS ARISE WHEN THE ASSESSEE HAS FILED HIS RETURN OF INCOME AND THE ASSESSING OFFICER RECORDS HIS SAT ISFACTION DURING ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE, T HE ASSESSEE HAS NOT FILED RETURN OF INCOME UNDER THE PROVISIONS OF SECTION 139(1) OF THE ACT. THE ASSESSEE HAS FILED RETURN OF INCOME ONLY AFTER SURVEY ACTION U/S. 133A OF THE ACT. IN THE RETURN FILED AFTER SURVEY, TH E ASSESSEE HAS DECLARED INCOME OF ` 51,00,000/- ADMITTED AS ADDITIONAL INCOME DURING SURVEY. THE ASSESSING OFFICER ACCEPTED THE SAME. THUS, NONE OF THE CONDITIONS CONTEMPLATED BY SECTION 271(1)(C) FOR LEVY OF PEN ALTY ARE SATISFIED. 6. THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SAS PHARMACEUTICALS (SUPRA) SOMEWHAT UND ER SIMILAR CIRCUMSTANCES DELETED THE PENALTY U/S. 271(1)(C) OF THE ACT . THE RELEVANT EXTRACT OF THE FINDINGS OF HONBLE HIGH COURT ARE AS UNDER : 5 ITA NO. 116/PN/2015, A.Y. 2008-09 12. AFTER CONSIDERING THE RESPECTIVE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE VIEW THAT THE ARGUME NT OF THE LEARNED COUNSEL FOR THE ASSESSEE HAS TO PREVAIL AS IT CARRI ED SUBSTANTIAL WEIGHT. IT IS TO BE KEPT IN MIND THAT S. 271(1)(C) OF THE ACT IS A PENAL PROVISION AND SUCH A PROVISION HAS TO BE STRICTLY CONSTRUED. UNLE SS THE CASE FALLS WITHIN THE FOUR CORNERS OF THE SAID PROVISION, PENALTY CAN NOT BE IMPOSED. SUB-S. (1) OF S. 271 STIPULATES CERTAIN CONTINGENCIES ON T HE HAPPENING WHEREOF THE AO OR THE CIT(A) MAY DIRECT PAYMENT OF PENALTY BY THE ASSESSEE. WE ARE CONCERNED HEREWITH THE FUNDAMENTALITY PROVIDED IN CL. (C) OF S. 271(1) OF THE ACT, WHICH AUTHORIZES IMPOSITION OF PENALTY WHEN THE AO IS SATISFIED THAT THE ASSESSEE HAS EITHER : A) CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . 13. IT IS NOT THE CASE OF FURNISHING INACCURATE PAR TICULARS OF INCOME, AS IN THE IT RETURN, PARTICULARS OF INCOME HAVE BEEN D ULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE IT RETURN. THE QUESTION IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. IT WOULD DEPEND UPON THE ISSUE AS TO WHETHER THIS CONCEALMENT HAS REFERENCE TO THE IT RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FOUND IN THE IT RETURN . 14. WE MAY, FIRST OF ALL, REJECT THE CONTENTION OF THE LEARNED COUNSEL FOR THE REVENUE RELYING UPON THE EXPRESSION IN THE COU RSE OF ANY PROCEEDINGS UNDER THIS ACT OCCURRING IN SUB-S. (1) OF S. 271 OF THE ACT AND CONTENDING THAT EVEN DURING SURVEY WHEN IT WAS FOUN D THAT THE ASSESSEE HAD CONCEALED THE PARTICULAR OF HIS INCOME, IT WOUL D AMOUNT TO CONCEALMENT IN THE COURSE OF ANY PROCEEDINGS. THE WORDS IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT ARE PREFACED BY THE SATISFACTION OF THE AO OR THE CIT(A). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF AO OR THE CIT(A) OR THE CIT DOES NOT ARISE. WE HAVE TO KEEP IN MIND THAT IT IS THE AO WHO INITIATE D THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURVEY. DECIS ION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSMENT ORDER . IT IS, THUS, OBVIOUS THAT THE EXPRESSION IN THE COURSE OF ANY P ROCEEDINGS UNDER THIS ACT CANNOT HAVE THE REFERENCE TO SURVEY PROCEEDING S IN THIS CASE. 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY TH E ASSESSEE HAS TO BE IN THE IT RETURN FILED BY IT. THERE IS SUFFICIENT INDI CATION OF THIS IN THE JUDGMENT OF THIS COURT IN THE CASES OF CIT VS. MOHA N DAS HASSA NAND 6 ITA NO. 116/PN/2015, A.Y. 2008-09 (1983) 34 CTR (DEL) 361 : (1983) 141 ITR 203 (DEL) AND IN RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), THE SUPREME COURT H AS CLINCHED THIS ASPECT, VIZ., THE ASSESSEE CAN FURNISH THE PARTICUL ARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE IT RETU RN FILED BY THE ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLNS. 4 AS WELL AS 5 AND 5A OF S. 271 OF THE ACT AS CONTENDED BY THE LEARNED COUNS EL FOR THE RESPONDENT. 16. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING T HE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WI TH THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTION IS AS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF S. 271(1) (C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CON DITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATI SFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SURVEY, MAY BE, IT WOUL D HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEV ER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSI BILITIES. SEC. 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-DISCLOSURE O F THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON- DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISC LOSURE IN THE IT RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE P URPOSES OF TAX. 17. WE, THUS, ANSWER THE QUESTIONS AS FORMULATED AB OVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FINDING NO FAU LT WITH THE DECISIONS OF THE CIT(A) AS WELL AS THE TRIBUNAL. AS A RESULT, THIS APPEAL IS DISMISSED. 7. THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI MUNINAGA REDDY VS. THE ASSISTANT COMMISSIONER OF INCOME T AX (SUPRA) UNDER SIMILAR CIRCUMSTANCES WHERE THE PENALTY WAS LEVIED IN RESPECT OF DECLARATION MADE DURING SURVEY OPERATION U/S. 133A HELD : AS FAR AS IMPOSITION OF PENALTY ON THE INCOME OFFE RED IN THE RETURN OF INCOME BY THE ASSESSEE IS CONCERNED, WE ARE OF THE VIEW THAT THERE CANNOT BE ANY PENALTY ON INCOME WHICH IS DECLARED I N A RETURN OF INCOME, ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. PENALTY U/S. 271(1)(C) OF THE ACT IS IMPOSED FOR CONCEALING PAR TICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. WHEN AN INCOME WHICH IS ULTIMATELY BROUGHT TO TAX IS DECLARED IN A RETURN O F INCOME, THERE CAN BE NO QUESTION OF TREATING THE ASSESSEE AS HAVING CON CEALED PARTICULARS OF 7 ITA NO. 116/PN/2015, A.Y. 2008-09 INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. THE STARTING POINT OF DETERMINING CONCEALMENT FOR IMPOSING PENALTY IS THE RETURN OF INCOME. IF THE RETURN OF INCOME DECLARES INCOME WHICH IS UL TIMATELY BROUGHT TO TAX THERE CAN BE NO COMPLAINT BY THE REVENUE THAT THE A SSESSEE IS GUILTY OF CONCEALING PARTICULARS OF INCOME OR FURNISHING INA CCURATE PARTICULARS OF INCOME. THUS, IF ADDITIONAL INCOME ADMITTED DURING SURVEY HAS ALREAD Y BEEN DECLARED IN THE RETURN OF INCOME BY ASSESSEE AND T HE SAME HAS BEEN ACCEPTED BY ASSESSING OFFICER WITHOUT FURTHER ADDITION S, NO PENALTY CAN BE LEVIED ON SUCH ADDITIONAL INCOME DECLARED D URING SURVEY. THE CASE OF ASSESSEE DOES NOT FALL WITHIN THE FOUR CORNERS OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. WE FURTHER OBSERVE THAT, THE ASSESSING OFFICER DURING A SSESSMENT PROCEEDINGS HAS NOT RECORDED HIS SATISFACTION WITH RESPEC T TO LEVY OF PENALTY U/S. 271(1)(C) FOR THE ADDITIONS MADE EXCEPT IN RESPE CT OF ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION. THERE A LSO THE ASSESSING OFFICER HAS INITIATED PENALTY U/S. 271(1)(C) FOR FURNISHIN G INACCURATE PARTICULARS OF INCOME. WHEREAS, AT THE TIME OF P ASSING THE PENALTY ORDER, THE ASSESSING OFFICER LEVIED PENALTY U/S. 271( 1)(C) FOR CONCEALMENT OF PARTICULARS OF INCOME. IT APPEARS THAT THE ASSESSING OFFICER HIMSELF WAS NOT CLEAR, WHETHER THE PENALTY IS TO BE LE VIED ON FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT O F INCOME. SINCE, THE PROVISIONS OF SECTION 271(1)(C) ARE PANEL IN NATURE THEY HAVE TO BE CONSTRUED STRICTLY. THE ASSESSING OFFICER HAS TO G IVE SPECIFIC REASONS FOR INITIATING PENALTY AND HAS TO LEVY PENALTY FOR T HE REASONS IN RESPECT OF WHICH SATISFACTION IS RECORDED. THE PENALTY PRO CEEDINGS 8 ITA NO. 116/PN/2015, A.Y. 2008-09 CANNOT BE INITIATED FOR ONE REASON AND THE ORDER LEVYING PENALTY CONCLUDING WITH A DIFFERENT REASON(S). 9. IN VIEW OF THE FACTS OF THE CASE AND VARIOUS DECISIONS DISCUSSED ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIO NER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY. THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS) IS UPHELD AND THE APPE AL OF THE DEPARTMENT IS DISMISSED BEING DEVOID OF ANY MERIT. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF NOVEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 30 TH NOVEMBER, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-2, NASHIK 4. ' / THE CIT-2, NASHIK 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE