ACIT, CHENNAI V. Dr.V.V.Varadarajan, CHENNAI

ITA 1163/CHNY/2011

• Counselvise Citation: 116321714 RSA 2011
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 20-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: B RAMAKRISHNAN
• Section: 5(2); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI B E F O R E DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER .. ITA NOS.1161 TO 1167(MDS)/2011 ASSESSMENT YEARS: 2000-01 TO 2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE V, CHENNAI. VS. DR. V.V.VARADARAJAN, 20/10, VERGHESE AVENUE, ASHOK NGR.,CHENNAI-600083 PAN AADPV1899B. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEB RENGARAJAN, JR. STANDING COUNSEL RESPONDENT BY: SHRI B.RAMAKRISHNAN, C.A. DATE OF HEARING : 11 TH AUGUST, 2011 DATE OF PRONOUNCEMENT : 11 TH AUGUST, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS IS A BUNCH OF SEVEN APPEALS. ALL THE APPEAL S ARE FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR S 2000-01, - - ITA NOS.1161 TO 1167 OF 2011 2 2001-02, 2002-03, 2003-04, 2004-05, 2005-06 AND 20 06-07. THE APPEALS ARISE OUT OF THE ORDERS LEVYING PENALTI ES UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE RESPONDENT-ASSESSEE IN THE PRESENT CASE IS A RENOWNED PAEDIATRICIAN IN THE CITY. A SEARCH ACTIO N UNDER SECTION 132 WAS CARRIED OUT AT THE RESIDENTIAL PREM ISES OF THE ASSESSEE ON 14-12-2005. IN THE COURSE OF THE SEARC H AND SEIZURE PROCEEDINGS, THE ASSESSEE HAD ADMITTED AN I NCOME OF ` 50 LAKHS. THEREAFTER THE OFFER OF INCOME MADE BY THE ASSESSEE WAS DOCUMENTED BY FILING A NOTARISED AFFIDAVIT BEFO RE THE DEPARTMENT. THEREAFTER RETURNS WERE FILED BY THE A SSESSEE UNDER SECTION 153A IN LINE WITH THE DISCLOSURE MADE BY HI M AND REFLECTED IN THE AFFIDAVIT. THE ASSESSMENTS WERE C OMPLETED AFTER CERTAIN ADDITIONS, SOME OF WHICH WERE ACCEPTED BY T HE ASSESSEE AND THE OTHERS WERE DISPUTED IN APPEALS. 3. IN THE LIGHT OF THE ABOVE BACKGROUND, PENALTY PROCEEDINGS WERE INITIATED BY THE ASSESSING AUTHORI TY AND THE PENALTY ORDERS WERE PASSED SUBSEQUENT TO THE ORDERS OF THE INCOME-TAX APPELLATE TRIBUNAL IN APPEALS. - - ITA NOS.1161 TO 1167 OF 2011 3 4. THE PENALTY ORDERS WERE TAKEN BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) IN FIRST APPEAL . FOR THE ASSESSMENT YEAR 2000-01, PENALTY WAS LEVIED WITH RE FERENCE TO AN AMOUNT OF ` 2,750/-, TREATED AS DONATION MADE BY THE ASSESSEE. THE AMOUNT OF PENALTY IS ` 910/-. THE COMMISSIONER OF INCOME-TAX(APPEALS) CONSIDERED THE ISSUE AND FOU ND THAT THE AMOUNT INVOLVED IS TOO SMALL ESPECIALLY IN THE LIGH T OF THE ADDITIONAL INCOME OFFERED AT ` 50 LAKHS. HE FOUND THAT THE PENALTY IS NOT JUSTIFIED. ACCORDINGLY THE SAME WAS DELETED. WE ALSO AGREE WITH THE COMMISSIONER OF INCOME-TAX(APPE ALS) THAT THE SMALL AMOUNT OF ` 2,750/- PERTAINING TO DONATION IS NOT A SIGNIFICANT CASE OF CONCEALMENT AND, THEREFORE, PEN ALTY IS NOT JUSTIFIED. 5. FOR THE ASSESSMENT YEAR 2001-02, THE PENALTY HA S BEEN LEVIED ON A TOTAL AMOUNT COMPRISING OF HOUSE P ROPERTY INCOME, PERSONAL EXPENSES AND BUILDING UNDER CONSTR UCTION. THE COMMISSIONER OF INCOME-TAX(APPEALS) FOUND THAT THE DETAILS OF HOUSE PROPERTY INCOME, PERSONAL EXPENSES AND BUI LDING UNDER CONSTRUCTION WERE DISCLOSED BY THE ASSESSEE IN THE AFFIDAVIT FILED BEFORE THE DEPARTMENT TO OFFER THE ADDITIONAL INCOM E OF ` 50 - - ITA NOS.1161 TO 1167 OF 2011 4 LAKHS. IT IS ON THE BASIS OF THOSE DETAILS FILED B EFORE THE DEPARTMENT THAT THE ASSESSEE HAD FILED THE RETURN U NDER SECTION 153A. THE LEVY OF PENALTY UNDER SECTION 271(1)(C) IS WITH REFERENCE TO THE RETURN FILED BY THE ASSESSEE AND N OT ALWAYS BASED ON THE PREVIOUS INCIDENCE. THEREFORE, WE FIN D THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN DELETING THE PENALTY PERTAINING TO THESE AMOUNTS. FOR THIS ASSE SSMENT YEAR ALSO THERE IS A CASE OF DONATION OF ` 4,200/-. RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD., THE SAID PENALTY ALSO HAS BEEN DELETED BY THE COMMISSIONER OF INCOME-TAX(APPEALS). WE AGR EE WITH HIM. 6. AS FAR AS THE ASSESSMENT YEAR 2002-03 IS CONCERNED, THE PENALTY HAS BEEN LEVIED WITH REFEREN CE TO HOUSE PROPERTY INCOME AND PERSONAL EXPENSES. ANOTHER AMO UNT OF ` 16,800/- BY WAY OF RENTAL INCOME HAS ALSO BEEN CON SIDERED FOR LEVY OF PENALTY. IN RESPECT OF HOUSE PROPERTY INCO ME AND PERSONAL EXPENSES, AS ALREADY CONSIDERED FOR THE EA RLIER ASSESSMENT YEARS, THE PARTICULARS WERE FURNISHED BY THE ASSESSEE IN THE AFFIDAVIT FILED BEFORE THE DEPARTME NT. THEREFORE, - - ITA NOS.1161 TO 1167 OF 2011 5 THAT PART OF THE PENALTY PERTAINING TO THOSE TWO AM OUNTS HAS BEEN DELETED BY THE COMMISSIONER OF INCOME-TAX(APPEALS). WE CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). BUT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS CON FIRMED THE PENALTY PERTAINING TO THE AMOUNT OF RENTAL INCOME O F ` 16,800/-, WHICH HAS NOT BEEN DISCLOSED EVEN IN THE DETAILS FU RNISHED AT THE TIME OF SEARCH. THAT PART OF THE PENALTY WAS CONFI RMED BY THE COMMISSIONER OF INCOME-TAX(APPEALS). AS IT IS A CL EAR CASE OF CONCEALMENT, MAY BE AN ACCIDENTAL OMISSION, STILL W E AGREE WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) AND CONFIRM THE PARTIAL CONFIRMATION OF THE PENALTY. 7. AS FAR AS THE ASSESSMENT YEAR 2003-04 IS CONCERNED, PENALTY IS LEVIED WITH REFERENCE TO THE PERSONAL EXPENSES OF ` 1,50,000/-. AS HELD BY THE COMMISSIONER OF INCOME-TAX(APPEALS), THIS AMOUNT OF EXPENDITURE HAS ALREADY BEEN DISCLOSED BY THE ASSESSEE IN HIS STATEMENT UND ER SECTION 132(4) AND HENCE COVERED BY EXPLANATION 5(2) TO SEC TION 271(1)(C). THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS, THEREFORE, RIGHTLY DELETED THE PENALTY. - - ITA NOS.1161 TO 1167 OF 2011 6 8. AS FAR AS THE ASSESSMENT YEAR 2004-05 IS CONCERNED, PENALTY WAS LEVIED WITH REFERENCE TO THE CHILDREN EDUCATIONAL EXPENSES, PERSONAL EXPENSES AND CHILDRE N EDUCATION FEES. ALL THE THREE AMOUNTS HAVE ALREADY BEEN DISCLOSED BY THE ASSESSEE IN HIS STATEMENT BEFORE F ILING OF THE RETURN OF INCOME AND THE INCOME WAS DECLARED IN THE RETURN AFTER TAKING INTO CONSIDERATION THE ABOVE AMOUNTS. THERE FORE, LEVY OF PENALTY IS NOT JUSTIFIED. 9. FOR THE ASSESSMENT YEAR 2005-06 ALSO THE PENALT Y HAS BEEN LEVIED WITH REFERENCE TO CHILDREN EDUCATIO N FEES AND PERSONAL EXPENSES. FOR THE REASONS ALREADY STATED, THE PENALTY IS NOT SUSTAINABLE AND THE COMMISSIONER OF INCOME-T AX(APPEALS) IS JUSTIFIED IN DELETING THE SAME. 10. BUT IN RESPECT OF THE PROMISSORY NOTE AND UNACCOUNTED FIXED DEPOSITS, SUCH DETAILS WERE NOT F URNISHED EITHER BEFORE FILING OF THE RETURN OR ALONGWITH THE RETURN AND THEREFORE THE ASSESSEE IS ANSWERABLE FOR THAT CONCE ALMENT. ACCORDINGLY, THE COMMISSIONER OF INCOME-TAX(APPEALS ) IS JUSTIFIED IN CONFIRMING THE PENALTY WITH REFERENCE TO THE AMOUNTS REPRESENTED BY PROMISSORY NOTE AND UNACCOUNTED FIXE D DEPOSITS. - - ITA NOS.1161 TO 1167 OF 2011 7 THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) IS CONFIRMED. FOR THE REASONS ALREADY STATED, WE FIND THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN DELETING THE PENALTY WITH REFERENCE TO PERSONAL AND CHILDREN EDU CATION FEES. 11. IN SHORT, WE HAVE CONSIDERED ALL THE ASSESSMEN T YEARS AND CONFIRMED THE ORDER OF THE COMMISSIONER O F INCOME- TAX(APPEALS) IN TOTAL. 12. IN RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 11 TH DAY OF AUGUST, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 11 TH AUGUST, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.