Shri Ajmal Khan Haji Habibullah Khan, Jalgaon V. ACIT, Jalgaon

ITA 1165/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2633 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-02-2016
• Assessment Year: misc
• Appeal Filed On: 04-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTUAMA
• Keywords: Search and seizure; Block assessment
• Section: 143(3); 132

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1165/PN/2012 BLOCK PERIOD : 01.04.1988 TO 07.01.1999 (A.YRS. : 1989-90 TO 1999-2000) SHRI AJMAL KHAN HAJI HABIBULLA KHAN, PROP. OF SAMEER COMMUNICATION, AT SAVDA, TAL. RAVER, DIST. JALGAON, PAN : BINPP9257L . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2, JALGAON. . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : MS. ANN KAPTUAMA / DATE OF HEARING : 09.02.2016 / DATE OF PRONOUNCEMENT: 26.02.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS AGA INST THE ORDER OF CIT(A)-II, NASHIK DATED 24.04.2012 RELATING TO BLOC K PERIOD 01.04.1988 TO 07.01.1999 (ASSESSMENT YEARS 1989-90 TO 1999-2000) PASSED UNDER SECTION 158BFA(2) OF THE INCOME-TAX ACT, 1961 (IN SHORT TH E ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL :- 1] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCE S OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED U/S.158BFA(2) OF RS.1,67,450/-, ON THE ESTIMATED INCOME FROM STD/PCO BOOTH FOR THE BLOCK PERIOD 01.04.1988 TO 07.01.1999, AND HENCE PENALTY MAY PLEASE BE DELETED . 2] APPELLANT MAY PLEASE BE PERMITTED TO SUBMIT THE SUPPORTING INFORMATION/CONFIRMATION AND EVIDENCE, IF REQUIRES, DURING THE COURSE OF APPELLATE PROCEEDINGS. 2 ITA NO.1165/PN/2012 3] THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEN D, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF THE APPEAL , IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 3. IN THE PRESENT APPEAL, THE ASSESSEE HAS CHALLENG ED THE ACTION OF THE CIT(A) IN SUSTAINING THE PENALTY IMPOSED BY THE ASS ESSING OFFICER BY INVOKING SECTION 158BFA(2) OF THE ACT IN RELATION T O BLOCK PERIOD COMMENCING FROM 01.04.1988 TO 07.01.1999 (ASSESSMEN T YEARS 1989-99 TO 1999-2000). 4. THE RELEVANT FACTS CONCERNING THE ISSUE, IN BRIE F, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM RUNNING OF ST D/PCO BOOTH IN THE NAME OF SAMEER COMMUNICATION AT SAVDA, TAL. RAVER, DIS T. JALGAON, MAHARASHTRA. THE ASSESSEE WAS NOT ASSESSED TO TAX SINCE HIS INCO ME FROM THE ABOVE ACTIVITY WAS STATED TO BE BELOW THE TAXABLE LIMIT. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT AT THE BUSIN ESS PREMISES AS WELL AS RESIDENTIAL PREMISES OF THE FATHER OF THE ASSESSEE AND A SURVEY ACTION WAS CARRIED OUT AT THE BUSINESS PLACE OF THE ASSESSEE O N 07.01.1999. FOR THE BLOCK PERIOD 01.04.1988 TO 07.01.1999 (ASSESSMENT YEARS 1 989-90 TO 1999-2000), THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME. D URING THE COURSE OF SURVEY ACTION A STATEMENT OF THE ASSESSEE WAS RECORDED ON 08.01.1999. THE ASSESSING OFFICER HAS FINALIZED THE ASSESSMENT UNDER SECTION 158BC R.W.S. 143(3) OF THE ACT ON 23.01.2001, DETERMINING THE TOTAL INCOME OF RS.3,35,080/- EVEN THOUGH NO RETURN OF INCOME WAS FILED FOR THE SAID BLOCK PE RIOD BY THE ASSESSEE. THE ASSESSING OFFICER HAS MADE THE ADDITIONS AFTER TAKI NG INTO CONSIDERATION THE NOTE BOOK/DIARIES FOUND DURING SEARCH/SURVEY FOR TH E BLOCK PERIOD AS PER THE DETAILS GIVEN BELOW :- A.Y. AMOUNT INITIAL INVESTMENT 1994-95 RS.20,571/- RS.56,000/- 1995-96 RS.31,000/- 1996-97 RS.43,105/- 1997-98 RS.55,390/- 1998-99 RS.59,927/- 1999-2000 RS.68,263/- RS.2,79,076/- RS.56,000/- 3 ITA NO.1165/PN/2012 5. THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECT ION 158BFA(2) OF THE ACT QUANTIFIED AT RS.1,67,448/- ON UNDISCLOSED INCO ME SO DERIVED FROM STD/PCO BOOTH. 6. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AGAI NST THE AFORESAID PENALTY ORDER. IT WAS THE CASE OF THE ASSESSEE BEF ORE THE CIT(A) THAT INCOME OF THE ASSESSEE OF RS.2,79,076/- WAS ESTIMATED BY THE ASSESSING OFFICER IN THE QUANTUM PROCEEDINGS FOR THE BLOCK PERIOD AND PENALT Y WAS LEVIED. HE CONTENDED THAT THE CASE OF THE ASSESSEE WAS COVERED BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF RELAN GIRISH S ANTOSHKUMAR OF DHULE VS. ITO IN ITA NO.744/PN/2005, ORDER DATED 31.07.2007, WHEREIN IT HAS BEEN HELD THAT NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT IS LEVIABLE ON MERE ESTIMATIONS. HE THEREAFTER SUBMITTED BEFORE THE CI T(A) THAT THE INCOME ESTIMATED IS PURELY ON GUESSWORK AND ON THE BASIS O F SURMISES, CONJECTURES AND ASSUMPTIONS ONLY. BESIDES, THE ENTIRE ADDITION IS BASED ON THE ESTIMATED FIGURES. HE THEREAFTER PLEADED THAT PENALTY UNDER SECTION 158BFA(2) OF THE ACT IS NOT MANDATORY AND NOT AN AUTOMATIC CONSEQUEN CE WHEN THERE IS A DIFFERENCE BETWEEN THE ASSESSED INCOME AND RETURNED INCOME. THE CIT(A) HOWEVER WAS NOT IMPRESSED BY THE SUBMISSIONS OF THE ASSESSEE. IT WAS OBSERVED BY THE CIT(A) THAT THE ASSESSEE DID NOT FI LE RETURN OF INCOME FOR ANY ASSESSMENT YEAR DESPITE THE FACT HE WAS RUNNING PCO /STD BOOTH. IT IS NOT DISPUTED THAT ONLY AFTER SEARCH AT HIS FATHERS PLA CE AND SURVEY AT ASSESSEES PLACE THAT AN UNDISCLOSED INCOME WAS DETECTED WHICH WAS DETERMINED AT RS.2,76,076/- BY THE ASSESSING OFFICER. THE DIARIE S AND NOTE BOOKS FOUND DURING THE SURVEY FORMED BASIS FOR DETERMINATION OF UNDISCLOSED INCOME. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER HAD COMPUTED TOTAL COMMISSION AT RS.4,61,602/- AND ALLOWED EXPENSES TH EREON TO THE EXTENT OF 39% TO ARRIVE AT A NET INCOME OF RS.2,79,076/-. TH EREFORE, THE CONTENTION OF THE ASSESSEE THAT THE CALCULATION OF INCOME WAS PUR ELY A GUESSWORK AND ENTIRELY ON ESTIMATED BASIS IS NOT CORRECT. HE DISTINGUISHE D THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF RATILAL G. SOL ANKI VS. ACIT IN ITA NO.18/PN/2010, ORDER DATED 30.06.2011 ON THE GROUND THAT THE ASSESSEE DID NOT 4 ITA NO.1165/PN/2012 FILE THE RETURN OF INCOME FOR THE BLOCK PERIOD AT A LL. THE CIT(A) NEXT OBSERVED THAT FROM THE READING OF THE ASSESSMENT ORDER, IT I S CLEARLY DISCERNIBLE THAT DESPITE REPEATED OPPORTUNITIES, THE ASSESSEE DID NO T FILE RETURN OF HIS UNDISCLOSED INCOME. HE FILED INCOMPLETE DOCUMENTS AS EVIDENT FROM PROFIT & LOSS ACCOUNT FILED WHICH PERTAIN ONLY TO 2 YEARS IN STEAD OF THE ENTIRE BLOCK PERIOD. IT WAS NOTED THAT THE ASSESSING OFFICER WO RKED OUT TOTAL RECEIPT OF RS.30,77,361/- ON THE BASIS OF DIARIES AND NOTE BOO KS. THE ASSESSING OFFICER DETERMINED A NET INCOME OF RS.2,79,076/- FOR THE BL OCK PERIOD ON THE BASIS OF COGENT MATERIAL AVAILABLE. THE CIT(A) FINALLY HELD THAT THE ASSESSEE DID NOT DISCLOSE HIS UNDISCLOSED INCOME AND FAILED TO FURNI SH PARTICULARS OF HIS UNDISCLOSED INCOME FOR BLOCK ASSESSMENT WITH INTENT ION TO EVADE PAYMENT OF TAXES ON HIS INCOME AND THEREFORE PENALTY UNDER SEC TION 158BFA(2) OF THE ACT IS EXIGIBLE. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS FILED APPEAL BEFORE THE TRIBUNAL. 8. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE APPOINTED DATE OF HEARING. THE MATTER WAS FIRST FIXED FOR HEARING ON 19.03.2015. THE LD. AUTHORIZED REPRESENTATIVE ON BEHALF OF THE ASSESSEE SMT. DEEPA KHARE WAS INFORMED ABOUT THE ADJOURNMENT TO 07.07.2015. ON T HIS APPOINTED DATE OF HEARING, NONE APPEARED AND THE MATTER WAS AGAIN RE- FIXED FOR HEARING ON 09.07.2015. AT THE REQUEST OF THE LD. AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE SMT. DEEPA KHARE, THE MATTER WAS AGAIN ADJ OURNED TO 12.10.2015. ON THIS DATE NONE APPEARED FOR THE ASSESSEE AND THE MA TTER WAS AGAIN RE-FIXED FOR HEARING ON 09.02.2016. AS NONE APPEARED FOR THE AS SESSEE ON THIS DATE ALSO, THE MATTER WAS PROCEEDED EX PARTE IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. 9. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT IT IS A FIT CASE FOR IMPOSITION OF PENALTY 5 ITA NO.1165/PN/2012 SINCE THE ASSESSEE HAS FAILED TO OFFER THE UNDISCLO SED INCOME BY WAY OF RETURN OF INCOME FOR THE BLOCK PERIOD. 10. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. IN ORDER TO ADJUDICA TE THE CORRECTNESS OF IMPOSITION OF PENALTY UNDER SECTION 158BFA(2) OF TH E ACT, WE NOTICE THAT THE ASSESSING OFFICER IS STATED TO HAVE COMPUTED THE UN DISCLOSED INCOME ON THE BASIS OF DIARIES AND NOTE BOOKS FOUND DURING THE SE ARCH ACTION AND DETERMINED UNDISCLOSED INCOME AT RS.2,79,076/-. EVIDENTLY, TH E ASSESSING OFFICER DETERMINED THE UNDISCLOSED INCOME ON THE BASIS OF C OGENT MATERIAL UNEARTHED DURING SURVEY. THEREFORE, WE DO NOT FIND ANY SUBST ANCE IN THE ARGUMENT ON BEHALF OF THE ASSESSEE BEFORE THE CIT(A) THAT THE U NDISCLOSED INCOME SO DETERMINED IS BEREFT OF ANY BASIS IN THE FORM OF TA NGIBLE MATERIAL AND IS BASED SOLELY ON GUESSWORK AND SURMISES. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS FAILED TO FILE THE RETURN OF INCOME FOR THE BLOCK P ERIOD. THUS, THE ASSESSEE HAS NEITHER FURNISHED THE RETURN OF INCOME NOR PAID ANY TAXES ON THE UNDISCLOSED INCOME VOLUNTARILY. IN THIS SCENARIO, WE FIND NO R EASON TO INTERFERE WITH THE ORDER OF THE CIT(A) IN SUSTAINING THE ACTION OF THE ASSESSING OFFICER OF IMPOSING ONLY MINIMUM PENALTY AS PROVIDED UNDER SEC TION 158BFA(2) OF THE ACT AT RS.1,67,450/- BEING 100% OF THE TAX SOUGHT T O BE EVADED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 26 TH FEBRUARY, 2016. 6 ITA NO.1165/PN/2012 % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE