SHIRISH CHANDRAKANT SHAH, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 2(2), MUMBAI

ITA 1170/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 3987 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 1991-1992
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Principle of natural justice; Peak credit; Question of law; Reasonable cause; Set aside
• Section: 271(1)(c); 143(3); 142(1); 201; 274; 158BC; 48; 13; 22; 147; 148; 132

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAM LAL NEGI, JM ./ I.T.A. NO . 1170 , 1172 , 1173 & 1174 / MUM/ 2018 ( / ASSESSMENT YEAR: 1991 - 92 TO 1994 - 95 ) SHIRISH CHANDRAKANT SHAH FLAT NO. 21, MEGHDOOT MARINE DRIVE, MUMBAI - 400 002 / VS. D CIT C C 2(2) , ROOM NO. 802, PRATISTHA BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. ACFPS 7005 L ( / APPELLANT ) : ( / RESPONDENT ) / APPELLAN T BY : SHRI NEERAJ MANGLA , AR / RESPONDENTBY : SHRI V. VINOD KUMAR , DR / DATE OF HEARING : 25.09 .201 9 / DATE OF PRONOUNCEMENT : 27.11.2019 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT FOUR APPEA L S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 48 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 14.12 .17 2 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH AND 03.10.17 FOR A SSESSMENT YEAR (IN SHORT A Y ) : 1991 - 92 TO 1994 - 95 RESPECTIVELY. 2 . ALL THE APP EALS ARE HEARD TOGETHER AND ALL THE FACTS IN THESE APPEALS ARE SIMILAR, FOR THE SAKE OF CONVENIENCE , IT IS DISPOSED OF F BY THIS COMMON ORDER. TO DISPOSE OF F THESE APPEALS, WE HAVE TAKEN FACTS FROM AY 1991 - 92 BEARING ITA NO. 1170 /MUM/18 . 3. THE BRIEF FACTS OF THE CASE ARE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR TH E YEAR UNDER CONSIDERATION ON 31 ST AUG, 1991 DE CLARING TOTAL INCOME AT RS. 42,301/ - / - . THERE WERE CERTAIN PROCEEDINGS CONDUCTED U/S 132 OF THE ACT AT THE RESIDENCE AND OFFICE OF ASSESSEE. ACCOR DINGLY, THE CASE WAS REOPENED U/S 147 AND THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT DECLARING TOTAL INCOME OF RS. 68,301/ - . THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT ON 22.03.1995 ASSESSING THE TOTAL INCOME AT RS. 2,43,200/ - . THE ABOVE ASSESSMENT WAS SET ASIDE BY LD. CIT(A) VIDE ORDER DATED 17 TH NOV 1995. IN THE MEANWHILE, ASS ESSEE FILED APPLICATION U/S 245C(1) WITH THE INCOME TAX SETTLEMENT COMMISSION(ITSC), WHICH WAS ADMITTED AND SET ASIDE THE ASSESSMENT PROCEEDINGS 3 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH STANDS ABATED W.E.F. 12 TH FEB 1996. SUBSEQUENTLY, ITSC REJECTED THE APPLICATION U/S 245C(1) VIDE LETTER DATED 11 TH JULY 2014. THEREFORE, NOTICE U/S 142(1) OF THE ACT WAS ISSUED AND INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 2,43, 200/ - AND PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT WAS INITIATED SEPARATELY FOR CONCEALMENT OF INCOME. IN THE PENALTY PROCEEDINGS INITIATED BY THE AO, ASSESSEE SUBMITTED LETTER DATED 05.10.15 IN WHICH ASSESSEE ENCLOSED A COPY OF ORDER DROPPING PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT BY THE THEN AO VIDE OR D ER DATED 07.12.95 AND REQUESTED THAT THIS PENALTY PROCEEDING MAY ALSO BE DROPPED. FURTHER ITSC, MUMBAI HAS ALREADY PASSED AN ORDER FOR BLOCK OF 10 YEARS I.E. 1986 TO 1996. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, AO REJECTED THE ASSESSEES EXPLANATION WHICH IS GIVEN BELOW FOR THE SAKE OF BREVITY OF THE CASE: - THE CIT(A) SET ASIDE THE ASSESSMENT VIDE ORDER DATED 17 TH NOVEMBER 1995. SINCE THE ASSESSMENT WAS SET ASIDE, THE PENALTY PROCEED INGS INITIATED IN THE ASSESSMENT ORDER DOES NOT SURVIVE. THEREFORE THE ORDER DROPPING THE PENALTY 4 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH PROCEEDINGS U/S 271(1)(C) WAS RELATED TO ORIGINAL ASSESSMENT ORDER WHICH WAS SET ASIDE BY THE CIT(A). THE ASSESSEE IN THIS CASE FILED ORIGINAL RETURN OF INCOM E WHEREIN 42301/ - WAS DECLARED. WHEN THE PROCEEDINGS U/S 147 WAS INITIATED PURSUANT TO THE SEARCH, HE FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS 68301/ - . DURING THE COURSE OF FIRST SEARCH 51 ACCOUNTS OF THE ASSESSEE WERE DETECTED WHICH WERE NOT DE CLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSMENT WAS COMPLET ED AT TOTAL INCOME OF RS 243200/ - WHICH WAS SET ASIDE BY THE CIT(A) . THE ASSESSEE AT THIS STAGE MOVED THE INCOME TAX SETTLEMENT COMMISSION, MUMBAI WHEREIN IT OFFERED FURTHER INCOME OF RS 20 LACS. T HERE WAS ANOTHER SEARCH U/S 132 OF THE INCOME TAX ACT 1961 ON 10,06,1996 WHEREIN IT WAS DETECTED THAT THE ASSESSEE DID NOT DECLARE ALL THE BANK ACCOUNT DURING FIRST SEARCH. FURTHER ALL THE INCOME WAS NOT OFFERED FOR TAX BY T HE ASSESSEE IN HIS FIRST INCOME TAX SETTLEMENT COMMISSION, MUMBAI. THEREFORE , THE ASSESSEE'S FIRST APPLICATION BEFORE INCOME TAX SETTLEMENT COMMISSION, MUMBAI WAS REJECTED. 5 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH FROM THE ABOVE FACTS IT IS AMPLE CLEAR THAT THE ASSESSEE CONCEALED HIS INCOME IN ORIGINAL RETURN OF INCOME. WHEN HE FILED HIS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 AFTER SEARCH, HE DID NOT DECLARE TRUE AND CORRECT INCOME IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148. WHEN HE MOVED APPLICATION BEFORE THE INCOME TAX SETTLEMENT COMMISSION, MUMBAI, HE DID NOT DECLARE HIS TRUE AND CORRECT INCOME. HENCE IT IS AMPLE CLEAR THAT THE ASSESSEE CONCEALED HIS INCOME AT EVERY POSSIBLE STAGE . 5. WITH THE ABOVE REASONS, AO OPINED THAT ASSESSEE HAS CONCEALED HIS INCOME WITHOUT ANY REASONABLE CAUSE AND ACCORDING LY PENALTY WAS DETERMINED AT RS. 1,01,584/ - . 6. AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED AN APPEAL BEFORE CIT(A) AND CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE CONFIRMED THE PENALTY WITH THE FOLLOWING OBSERVATIONS: - 6 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 6. I MMUNITY FROM PENALTY FOR 1.40 CRORES ONLY : - IT IS CLEAR FROM THE ORDER OF ITSC AND CALCULATIONS DONE BY ITSC THAT THE IM MUNITY GRANTED BY ITSC WAS WITH REFERENCE TO F INALLY ASSESSED INCOME OF RS 1.40 C RORES ONLY. TO QUOTE FROM PARA 18.1 (LAST 8 LINES): - 'THEREFORE, NO PENALTY WOULD BE LEVIABLE IN SPITE OF THE FACT THAT FINALLY INCOME IS ESTIMATED AT RS. 1.40 CRORES AS AGAINST THE INCOME DECLARED OF RS. 7.9 LAK H S IN THE SECOND APPLIC ATION TOGETHER WITH CERTAIN INCO ME OFFERED AND DECLARED DURING THE PROCEDURE OF FILING FIRST APPLICATION. WE ARE SATISFIED THAT THERE HAS BEEN NO ATTEMPT TO CONCEAL ANY MATERIAL FACTS. THE DIFFERENCE BETWEEN THE ADDITIONAL I NCOME OFFE RE D IN THE SOI AND THAT FINALLY DETERMINED IS DUE TO THE AMOUNTS OFFERED IN A SPIRIT OF SETTLEMENT TO PUT A Q UIETUS TO THE ISSUES.' FOLLOWING INFERENCES ARE DRAWN FROM ABOVE: - 1) THUS, IMMUNITY FROM PENALTY GRANTED IS ONLY TO THE INCOME OF 1,40 CRORES FINALLY ASSESSED BY ITSC. 2) AS PER PARA 15.1 OF THE ITSC ORDER, THE DEDUCTION OF RS. 21,90, 594/ - AND RS. 20,00,0 00/ - WAS GRANTED BY ITSC ON ACCOUNT OF INCOME DECLARED U/S 148 IN POST SEARCH PERIOD FOR AY 1991 - 92 TO 1994 - 95 AND 7 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH ADDITIONAL INCOME DECLARED IN THE 1 ST APPLICATION (WHICH WAS REJECTED BY ITSC). ITSC ALSO FURTHER ALLOWED 7.90LAKHS WHICH WAS DECLARED BY ASSE SSEE AS ADDITIONAL INCOME IN BLOCK PERIOD OF 2 ND APPLICATION. THEREFORE, TOTAL SET OFF, OF RS. 49.80 L AKH WAS ALLOWED. THUS UNDISCLOSED INCOME OF 1.26,71,906/ - WAS CALCULATED BY ITSC; WHICH WAS ROUNDED OF TO 1 40CRORES TO TAKE CARE OF ANY OMISSION /ERROR ET C. 3) IT IS OBVIOUS, THAT IMMUNITY GRANTED BY ITSC UNDER SECTION 245H IS LIMITED TO INCOME FINALLY SETTLED AT 1 . 40 CRORES , IMMUNITY OF ITSC CANNOT TRAVEL BEYOND THE INCOME SETTLED AMOUNT OF ITSC ORDER. 4) FIRST APPLICATION OF ASSESSEE DATED 18/09/1995 IS R EJECTED BY ITSC AS PER PARA 13.2 OF ITS ORDER DATED 11/07/2014. 5) ADDITION IN ORDER SEC 143/ 251/ 254D(4) OF AO DATED 14/09/2015 OF RS. 2.43.200/ - IS BASED ON ORDER U/S 143(3) R.W.S 147 DATED 22/03/1995, WHEREIN ALL ADDITIONS WERE RELATED TO VARIOUS UNDIS CLOSED INCOMES, WHICH ARE NOT PART OF COMMISSION INCOME AT @ .15% AS COMPUTED BY ITSC 6) THUS INCOME ASSESSMENT BY AO ON WHICH PENALTY WAS LEVIED U/S 271(1)(C) IN IMPUGNED ORDER DID NOT RELATE TO COMMISSION INCOME COMPUTED BY ITSC AND 8 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH HENCE ITSC ORDER HAS NO BEARING ON OTHER INCOME ASSESSED BY AO. IN ANY CASE, AS MENTIONED ABOVE, COMPUTATION OF UNDISCLOSED FINAL SETTLED INCOME BY ITSC IS ONLY 1.40CRORES. 7) ASSESSEE HAS NOT OFFERED ANY EXPLANATION DURING PENALTY PROCEEDINGS AND IN APPEAL PROCEEDINGS ON ISSU ES OF THE ADDITION MADE IN THE ORDER U/S 143(3)/ 251/ 245D(4) DATED 14/09/2015 EXCEPT FOR STATING THAT IT IS COVERED BY ITSC IMMUNITY. THUS ON MERITS THE ARGUMENTS OF ASSESSEE FAIL AND ON FACTS OF THE CASE, IT IS FULLY ESTABLISHED THAT ORDER OF ITSC DOES N OT GRANT IMMUNITY TO THE ASSESSEE ON THE INCOME FORMING PART OF THIS ASSESSMENT ORDER DATED 14/09/2015. DEFECT IN 274 NOTICE: - ANOTHER ARGUMENT TAKEN BY ASSESSEE IN APPEAL IS THAT THERE IS DEFECT IN 274 NOTICE AS IT DOES NOT SPECIFY AS TO WHETHER IT WAS FO R CONCEALMENT OR FOR INACCURATE PARTICULARS ASSESSEE WHO RELIED ON CIT VS SSA'S EMERALD OF KARNATAKA B.C. AND SLP BEING REJECTED BY SC AND OTHER CASES. THE PLEA OF ASSESSEE IS WITHOUT ANY MERITS IN VIEW OF FOLLOWING: - 1) IN THE ASSESSMENT ORDER, PENALTY WA S CLEARLY INITIATED FOR CONCEALING THE INCOME. 9 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 2) IN ANY CASE, EXPRESSION 'INACCURATE PARTICULARS' AND 'CONCEALMENT OF INCOME' ARE INTERRELATED IN THE SENSE THAT 'CONCEALMENT' RESULTS IN 'INACCURATE' PARTICULARS. HAD THERE BEEN 'NO CONCEALMENT', THE PARTIC ULARS OF INCOME WOULD HAVE BEEN 'ACCURATE'. ALSO 'INACCURATE' PARTICULARS RESULT IN CONCEALMENT. IN CASE 'INACCURACY' DOES NOT RESULT IN CONCEALMENT SUCH INACCURACY IS OF NO HARM. THE PENALTY IS ATTRACTED ONLY WHEN 'INACCURACY' RESULTS IN CONCEALMENT AND T HUS NOT FULL AND TRUE INCOME BEING FILED/DISCLOSED BY ASSESSEE. RELIANCE ON SMT. KAUSHALYA 216 ITR 660 - (BOMBAY H.C): - IN THIS CASE ON THE SIMILAR FACTS, NOTICE WAS HELD AS VALID BY HON'BLE BOMBAY H.C, THE JURISDICTIONAL HIGH COURT. DISTINGUISHING SSA'S E MERALD MEADOWS: - IN KARNATAKA H.C. DECISION, THE SLP OF REVENUE WAS DISMISSED AS ON THE FACT THAT DECISION OF THIS H.C. WAS BASED ON EARLIER ORDER OF SAME H.C, NO QUESTION OF LAW WAS HELD TO BE ARISING. THUS SUCH DISMISSAL OF SLP IS OF LIMITED APPLICABILIT Y AND IS LIMITED TO THE FACT OF THAT PARTICULAR CASE ONLY. DISTINGUISHING CIT VS S AMSON PERICHERRY OF BOMBAY H.C. I TA 4625 TO 4630/MUM - 2013): - 10 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 3. A READING OF SAMSON PERINCHERRY CASE CLEARLY SHOWS THAT IT WAS DECIDED BY HON'BLE HC ON THE BASIS OF RATIO OF JUDGEMENT IN CIT VS. MANJUNATH COTTON & GINNING FACTORY, KARNATAKA HIGH COURT (359 ITR 655). 4. IN PARA - 7, PG.4 OF HON'BLE BOMBAY HIGH COURT'S DECISION IN THE CASE OF SAMSON PERINCHERRY, THE FOLLOWING OBSERVATION IS MADE BY THE COURT: THEREFORE, THE ISSUE HEREIN STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT - ASSESSEE BY THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). NOTHING HAS BEEN SHOWN TO US IN THE PRESENT FACTS WHICH WOULD WARRANT OUR TAKI NG A VIEW DI FFERENT FROM THE KARN ATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON AND GINNING FACTORY (SUPRA). 5 THEREFORE, IT IS ABSOLUTELY CLEAR THAT WHILE DECIDING THE APPEAL IN CASE OF SAMSON PARINCHERRY, THE ORDER OF BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALY A WAS NOT BROUGHT TO THE NOTICE OF HON'BLE HIGH COURT. 6 IN VIEW OF CLEAR RIDER INCORPORATED IN THE ORDER OF SAMSON PERINCHERRY AT PARA - 7, PG, 4, IT IS HELD THAT THIS ORDER DOES NOT HAVE THE FORCE OF BINDING NATURE ON THE AUTHORITIES BELOW, ONCE CASE OF CI T VS SMT. KAUSHALYA (216 ITR 660) IS ALSO PRESENT. SPECIALLY IN 11 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH VIEW OF THE FACT THAT JURISDICTIONAL HIGH COURT'S DECISION IN THE CASE OF SMT. KAUSHALYA ON THE SAME ISSUE IS IN FAVOUR OF REVENUE AND WAS NOT BROUGHT TO THE NOTICE OF HON'BLE HIGH COURT WHILE DECIDING THE ISSUE IN CASE OF SAMSON PERINCHERRY. IN VIEW OF ABOVE DISCUSSION THE ASSESSEE'S GROUNDS 1,2 AND 3 FAIL AND ARE DISMISSED. 7. AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED APPEAL BEFORE US RAISING FOLLOWING GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLATE ORDER PASSED BY THE LD. CIT (A) IS ILLEGAL BEING AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND AGAINST THE PROVISIONS OF IT ACT, 1961. 2. THAT THE LD. CIT(A) GROSSLY ERRED IN LAW IN WITHHOLDING THE PENALT Y U/S 271(L)(C) OF THE ACT DESPITE THE AMBIGUITY IN THE NOTICE ISSUED U/S 274 REGARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. THAT THE LD. AO AND THE LD. CIT(A) GROSSLY ERRED IN LAW AS WELL AS IN FACTS OF THE CASE IN A SSUMING JURISDICTION OVER THE CASE OF THE ASSESSEE DESPITE THE FACT THAT THE HON'BLE ITSC HAD GRANTED IMMUNITY FROM THE PENALTY. 12 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 4. THE LD. AO AND THE LD. CIT(A) GROSSLY ERRED IN LAW AND TO THE FACTS OF THE CASE IN LEVYING PENALTY U/S 271(L)(C) ON ESTIMATE D INCOME DESPITE THE FACT THAT THE HON'BLE ITSC HAS COMPUTED LOWER TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION AND ALLOWED IMMUNITY FROM PENALTY THEREUPON. 5. THAT THE LD. AO GROSSLY ERRED IN LAW IN PRESUMING THAT THE HON'BLE ITSC HAS SETTLED ONLY THE AD DITIONAL INCOME AND GRANTED IMMUNITY THEREUPON DESPITE THE SETTLED LAW THE HON'BLE ITSC SETTLES TOTAL INCOME AND GRANTS IMMUNITY THEREUPON AND CERTAIN DEDUCTIONS ONLY FOR COMPUTATION OF TAX LIABILITIES. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY A ND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. 8. BEFORE US , LD. AR SUBMITTED THAT A SEARCH PROCEEDING WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 30.03.94 AND ASSESSEE HAS GONE BEFORE ITSC AND ITSC HAS DISMISSED THE APPL ICATION FILED BY THE ASSESSEE AND THERE WAS ANOTHER SEARCH CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 10.06.96, AGAIN ASSESSEE FILED APPLICATION BEFORE SETTLEMENT COMMISSION AND SETTLEMENT COMMISSION PASSED AN ORDER DATED 11.07.14 WHICH 13 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH COVERS BLOCK PERI OD OF 10 YEARS. HE BROUGHT TO OUR NOTICE THE ORDER OF SETTLEMENT COMMISSION WHICH IS PART OF THE PAP ER BOOK AT PAGE NO. 1 TO 34, IN WHICH COMMISSION HAS GRANTED IMMUNITY FROM PENALTY AND PROSECUTION AS PER WHICH COMMISSION HAS CAT EGORICALLY BROUGHT IN THE ORDER, IN WHICH HE BROUGHT TO OUR NOTICE FOLLOWING FINDING OF THE COMMISSION, WHICH IS REPRODUCED BELOW: - 18.1 THE APPLICANT HAS ALSO MADE A PRAYER FOR GRANTING IMMUNITY FROM PENALTY AND PROSECUTION PROCEED INGS . ON PERUSAL OF THE COMPOSITE FACTS IN THIS CA SE WE OBSERVED THAT IN THE FIRST 'APPLI CATION (SINCE DECLARED ABATED BY THIS ORDER) THE APPLICANT DI D NOT DISCLOSE CERTAIN B UNK ACCOUNTS WHICH WERE IN HIS KNOWLEDGE AT THE TIME OF FILING OF THE APPLICATION BUT SUBSEQUENTLY UNEARTHED BY THE DEPARTMENT AT TH E TIME OF SECOND SEARCH. THE APPLICANT HAD THEREFOR E SUBMITTED ANOTHER APPLICATION, POST SECOND SEAR CH, ADMITTING THOSE BANK ACCOUNTS AND FURTHER REVEALING MANY MORE ACCOUNTS WHICH COULD NOT BE DETECTED BY THE DEPARTMENT IN SPITE OF SECOND SEARCH. THE DEPA RTMENT COULD IDEN TIFY ONLY ABOVE 125 BANK ACCOUNTS WHEREAS THE APPLICANT HAD DECLARED 147 BANK ACCOUNTS. THIS S HOWS THAT THE APPLICANT WAS WILL ING TO 14 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH COME FORWARD AND ADMIT AND DISCLOSE F ULL FACTS. AGAIN THE F ACTS OF THE CASE REVEALED THAT DUE TO CERTAIN R EASONS NEITHER THE APPLICANT NOR THE DEPARTMENT C OULD LAY HANDS ON THE COMPLETE B ANK STATEMENTS OF ALL THE BANK ACCOUNT. IT IS ALSO A MATTER ON RECORD IN THE FIRST TWO SEARCHES THE APPLICANT WAS NOT FOUND TO HAVE POSSESSED OR OWNED SUBSTANTIAL ASSETS. HE H IMSELF LIVING IN A RENTED ACCOMMODATION. EVEN INVESTMENT IN SHARES AND DEBENTURES WERE NOT VERY SIGNIFICANT. FURTHER EUE CAN BE TAKEN THAT EVEN AT THE TIME OF THIRD SEARCH IN 2012 THE APPLICANT WAS NOT FOUND TO HAVE OWNED ANY SUBSTANTIAL IMMOVABLE OR MOVAB LE ASSETS. THIS WOULD SIGNIFY THAT THE APPLICANT HAD NOT EARNED SUBSTANTIAL AMOUNTS IN VARIOUS ASSESSMENT YEARS WHICH COULD HAVE BEEN CONVERTED OR GENERATED INTO ASSETS. HOWEVER, THE RECORD SHOWS THAT THE APPLICANT WAS NOT KEEPING PROPER ACCOUNTS OF HIS TR ANSACTIONS IN SHARES AND DEBENTURES EITHER AS OWNER/INVESTOR OR AS A SUB - BROKER. EVEN THE PEAK CREDIT BALANCES AS DRAWN BY THE DEPARTMENT DURING THE COURSE OF 158BC ORDER THE DEP ARTMENT HAD NOT GIVEN SET OFF FOR MULTIPLE ENTRIES OR INTEREST CREDITS AND DEB ITS IN VARIOUS BANK ACCOUNTS. BECAUSE OF THESE ISSUES THE INCOME FINALLY HAD TO BE ESTIMATED AFTER TAKING COGNIZANCE OF FACTS BEFORE US. 'THEREFORE IN VIEW OF THESE FACTS WE DO NOT FIND ANY REASON WHICH COULD JUSTIFY THAT THE APPLICANT HAD 15 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH CONSCIOUSLY OR W ILLINGLY SUPPRESSED CERTAIN FACTS FROM THE COMMISSION WHILE MAKING THE APPLICATION UNDER REFERENCE. THEREFORE NO PENALTY WOULD BE LEVIABLE IN SPITE OF THE FACT THAT FINALLY INCOME IS ESTIMATED AT RS.1.40 CRORES AS AGAINST THE INCOME DECLARED OF RS.7.9 LACS IN, THE SECOND APPLICATION TOGETHER WITH CERTAIN INCOME OFFERED AND DECLARED DURING THE PROCEDURE OF FILING FIRST APPLICATION. WE ARE SATISFIED THAT THERE HAS BEEN NO ATTEMPT TO CONCEAL ANY MATERIAL FACTS. THE DIFFERENCE BETWEEN THE ADDITIONAL INCOME OFFE RED IN THE SOI AND THAT FINALLY DETERMINED IS DUE TO THE AMOUNTS OFFERED IN A SPIRIT OF SETTLEMENT TO PUT A QUIETUS TO THE ISSUES. 18.2 THE APPLICANT HAS ALSO FU LLY COOPERATED IN THE PROCEEDINGS BEFORE US. AS SUC H, THE PROVISIONS OF SECTION 24 511 ARE APP LICABLE AND THE APPLICANT IS ENTITLED FOR GRA NT OF IM MUNITY. WE, T HEREFORE, GRANT IMMUNITY FROM PENALTY UNDER THE AFORESAID SE CTION. FOR SIMILAR REASONS, WE GRANT IMMUNITY FROM PROSECUTION UNDER THE APPLICABLE SECTIONS OF THE INCOME - TAX ACT. THE IMMUNITY G RANTED TO THE APPLICANT WOULD BE IN RESPECT OF OFFENCES UNDER INCOME TAX ACT ONLY. 18.3 THE IMMUNITY GRANTED TO THE APPLICANT VIDE THIS ORDER MAY BE WITHDRAWN, IF THEY FAIL TO PAY THE APPLICABLE TAX DEMANDED WITHIN TIME, AND IN THE 16 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH MANNER SPECIFIED BY THIS ORDER, OR FAIL TO COMPLY WITH OTHER CONDITIONS STATED IN THE ORDER. 9. FURTHER, HE BROUGHT TO OUR NOTICE THE DETAILS OF RETURN OF INCOME FILED BY THE ASSESSEE AND THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE BEFORE ITSC, WHICH IS REPRODUCED BELOW: - A.Y. RETURNED INCOME U/S 139/ 148 ADDITIONAL INCOME DECLARED TOTAL 1991 - 92 68,301 25,000 93,301 1992 - 93 101,133 50,000 151,133 1993 - 94 1,500,400 75,000 1,575,400 1994 - 95 520,760 1,850,000 2,370,760 TOTAL 2,190,594 2,000,000 4,190,594 10 FURTHER, HE SUBMITTED THAT ASSESSEE HAS DECLARED ADDITIONAL INCOME FOR THE SAME PERIOD FROM 1991 - 92 TO 1997 - 98, WHICH IS REPRODUCED BELOW: - A.Y, ADDITIONAL INCOME DECLARED 1991 - 92 2,920 1992 - 93 7,580 1993 - 94 1,08, 630 17 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 1994 - 95 5,21,260 1995 - 96 1,40,810 1996 - 97 8,800 1997 - 98 0 TOTAL 7,90,000 11. AND FURTHER HE BROUGHT TO OUR NOTICE AT PAGE NO. 55 OF THE PAPER BOOK IN WHICH THE TOTAL DEPOSITS MADE BY THE ASSESSEE IN THE BANK ACCOUNT AND THE INCOME DETERMINED BY THE SETTLEMENT COMMIS SION, WHICH IS GIVEN BELOW: - A.Y. DEPOSITS IN BANK INCOME @ 1.5% 1991 - 92 65,00,000 97,500 1992 - 93 4,10,00,000 6,15,000 1993 - 94 17,50,00,000 26,25,000 1 994 - 95 29,50,00, 00 0 44,25,000 1995 - 96 25,00,00, 000 37,50,000 1996 - 97 38,50,00,000 57,75,000 1997 - 98 2 ,5 0,00,000 3,75,000 TOTAL 1,17,75,00,000 1,76,62,500 18 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 12. HE FURTHER SUBMITTED THAT ASSESSEE HAD ALREADY PAID THE TAXES ON THE INCOME OF RS. 41.9 LAKHS AS DECLARED BY THE ASSESSEE BEFORE FIRST A PPLICA TION BEFORE SETTLEMENT C OMMISSION AND RS. 7,90,000/ - AT THE SECOND APPLICATION BEFORE SETTLEMENT COMMISSION AND THE ORDERS UNDER SECTION 245D(1 ) OF THE ACT WERE ALSO PASSED AND TAXES ON THE DECLARED INCOME WAS ALSO PAID. HE BROUGHT TO OUR NOTICE AT PARA 15.1 AT PAGE NO. 55 OF THE PAPER BOOK OF THE SETTLEMENT COMMISSIONS ORDER, WHICH IS REPRODUCED BELOW: - 15.1 OUT OF T HIS INCOME THE APPLICANT IS ENTITLED TO GET SET OFF OF THE INCOME ALREADY DECLARED BY HIM IN RETURNS FILED U/S 148 IN THE POST SEARCH PERIOD FOR A. Y. 1991 - 92 TO 1994 - 95 AT RS . 21,90 , 594/ - . THE APPLICANT IS AL SO ENTITLED TO GET SET - OFF OF RS . 20 LACS WHICH HE HAD DECLARED AS ADDITIONAL INCOME IN THESE 4 YEARS IN HIS FIRST APPLICATION. THE APPLICANT FURTHER WOULD GET SET OFF OF RS. 7,90 ,000/ - WHICH WAS DECLARED BY H I M AS ADDITIONAL INCOME IN THE BLOCK PERIOD IN THE SECOND APPLICATION. THUS, OUT OF THE NET TOTAL INCOME OF RS. 1,76,62,500/ - ARRIVED AT IN THE BL OCK PERIOD A S ABOVE, THE APPLICANT WOULD GET A SET OFF OF RS. 49,80,594/ - . AFTER SUCH SET - OFF, FURTHER ADDITIO NS THE UNDISCLOSED 19 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH I NCOME FOR THE BLOCK PERIOD COMES TO RS . 1,26,7 1, 906/ . 13. HE FURTHER SUBMITTED THAT THE SETTLEMENT COMMISSION GAVE THE IMMUNITY IN THE SECOND SETTLEMENT APPLICATION CONSIDERING THE TOTAL INCOME DECLARED BY THE ASSESSEE WHICH INCLUDES THE INCOME DECLARED IN THE FIRST SETTLEMENT APPLICATION ALSO. FURTHER, HE SUBMITTED THAT THE IMMUNITY GRANTED BY THE SETTLEMENT COMMISSION FOR THE TOTAL INCOME DECLARED IN THE SETTLEMENT APPLICATION. THEREFORE, ASSESSEE HAS IMMUNITY FROM THE PENALTY AND PR OSECUTION FOR THE TOTAL INCOME DECLARED BEFORE SETTLEMENT COMMISSION AND AO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR THESE 4 YEARS FOR WHICH SETTLEMENT COMMISSION HAS GRANTED IMMUNITY. HE RELIED UPON THE CASE OF MOHANLAL S. DOPPA VRS CIT, IT REF. NO. 59 & 60 OF 1988 (2002) 172 CTR 0001 (GUJ) AND SUBMITTED THAT THE CONCLUSION DRAWN BY LD. CIT(A) IS WRONG AND PRAYED THAT THE PENALTY MAY BE DELETED. 14 . O N THE OTHER HAND , LD. DR BROUGHT TO OUR NOTICE AT PARA NO. 6 OF THE ORDER OF LD. CIT(A) AND SUBM ITTED THAT LD. CIT(A) HAS COVERED THE FACTS OF THE CASE AND BROUGHT ON RECORD HIS 20 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH FINDINGS CLEARLY THAT ASSESSEE HAS CONCEALED THE INCOME FROM REVENUE. ACCORDINGLY, HE RELIED UPON THE ORDER PASSED BY LD. CIT(A). 1 5 . CONSIDERING THE RIVAL SUBMISSIONS AND MA TERIAL PLACED ON RECORD , WE NOTICE THAT THE ASSESSEE HAS FILED THE APPLICATION BEFORE SETTLEMENT COMMISSION FOR SETTLEMENT AFTER FIRST SEARCH OPERATION. THE SETTLEMENT COMMISSION REJECTED THE APPLICATION. SUBSEQUENTLY TO THE SECOND ROUND OF SEARCH OPERATIO N, ASSESSEE FILED SECOND APPLICATION BEFORE SETTLEMENT COMMISSION. THIS TIME ASSESSEE HAS DECLARED ALL THE BANK DETAILS AND DEPOSITS CLEARLY AND PAID THE DUE TAX. THE SETTLEMENT COMMISSION HAS ACCEPTED THE SECOND APPLICATION AND GRANTED IMMUNITY FROM PENAL TY AND PROSECUTION. NOW BEFORE US, THE AO HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT IN THE 4 YEARS INVOLVING THE SUPPRESSION OF INCOME. THE FACT REMAINS THAT THE ASSESSEE HAS FILED AND DECLARED THE PROPER INCOME INVOLVING THE ABOVE 4 ASSESSMENT YEA RS AND PAID THE DUE TAX. THE IMMUNITY GRANTED BY THE SETTLEMENT COMMISSION SUBSEQUENT TO THE SECOND APPLICATION FROM THE ASSESSEE INVOLVING THE ABOVE 4 AYS. THE IMMUNITY 21 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH GRANTED TO ASSESSEE FOR THE WHOLE INCOME INVOLVING IN THE ABOVE AYS. NOW, THE TAX AU THORI TIES CANNOT SPLIT THE IMMUNITY BETWEEN TWO APPLICATIONS AND FIND THE DIFFERENCE AS CONCEALMENT OR RESTRICT THE IMMUNITY ONLY TO THE EXTENT OF INCOME DETERMINED BY THE SETTLEMENT COMMISSION. IT IS FACT FROM THE RECORD THAT THE COMMISSION HAS GIVEN CRED IT FOR THE AMOUNT DECLARED BY THE ASSESSEE IN THE FIRST ROUND OF APPLICATION, IT SHOWS THAT THE COMMISSION HAS CONSIDERED THE TOTAL DEPOSITS AND DETERMINED THE TOTAL INCOME FOR THE BLOCK PERIOD. THE LAST ORDER PASSED BY SETTLEMENT COMMISSION, WHO HAD GRANT ED IMMUNITY FROM PENALTY AND PROSECUTION FOR THE RESPECTIVE INCOME, WHICH THE ASSESSEE HAS DECLARED AND ASSESSED. 16. THEREFORE, IN OUR CONSIDERED VIEW, THE IMMUNITY GRANTED BY THE SETTLEMENT COMMISSION TO THE ASSESSEE IS FOR THE FINAL INCOME DECLARED BY THE ASSESSEE FOR THE ABOVE SAID AYS ARE APPLICABLE TO THE WHOLE INCOME DECLARED BY THE ASSESSEE. IT CANNOT SPLIT THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION AND FIND FAULTS BETWEEN TWO APPLICATIONS FOR SETTLEMENT. THE LAST APPLICATION SUBMITTED BEFOR E SETTLEMENT COMMISSION REACHES 22 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH FINALITY AND IMMUNITY GRANTED TO THE ASSESSEE APPLICABLE TO THE WHOLE INCOME DECLARED BY THE ASSESSEE. THE COMMISSION HAS ACCEPTED THE TOTAL INCOME AND HAS NOT GRANTED IMMUNITY FOR PARTIAL DECLARATION. THEREFORE, IN OUR VIEW , THE PLEA OF THE ASSESSEE IS ALLOWABLE AND ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 17. THE OTHER APPEALS FILED BY THE ASSESSEE ARE SIMILAR TO THE ABOVE APPEAL FILED BY THE ASSESSEE FOR AY 1991 - 92, THEREFORE THE GROUNDS RAISED IN OTHER AP PEALS ARE ALSO ALLOWED. 18 . IN THE NET RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOV 20 19 . SD/ - SD/ - ( RAM LAL NEGI ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 27 . 11. 201 9 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 23 I.T.A. NO. 1170, 1172, 1173 & 1174/MUM/2018 SHIRISH CHANDRAKANT SHAH 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUM BAI