Shri D.Prabhu, CHENNAI V. ITO, Coimbatore

ITA 1177/CHNY/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7606 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Income from undisclosed sources; Assessment record
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , #'$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 1177/MDS/2012 # % &% / ASSESSMENT YEAR : 2008-2009 SHRI. D. PRABHU, C/O. S. SRIDHAR, ADVOCATE NEW NO.14, OLD NO.62, FLAT NO.5, IST AVENUE, INDIRA NAGAR, ADYAR CHENNAI 600 020. VS. THE INCOME TAX OFFICER, WARD II(1) COIMBATORE [PAN AGXPP 3507K ] ( / APPELLANT) ( /RESPONDENT) '( ) * / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE +,'( ) * /RESPONDENT BY : SHRI. R. DURAIPANDIAN, IRS, JCIT. ! ) - / DATE OF HEARING : 21-01-2016 ./& ) - / DATE OF PRONOUNCEMENT : 24-03-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIM BATORE IN APPEAL NO.55/11-12, DT 03.04.2012 FOR THE ASSESSMENT YEAR 2008-2009 ITA NO.1177/MDS/2012. :- 2 -: PASSED U/S.271(1)(C) AND 250 OF THE INCOME TAX AC T, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAS RAISED SUBSTANTIVE GROUND THAT COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED PENA LTY LEVIED BY THE ASSESSING OFFICER WITHOUT APPRECIATING REVISED STATEMENT FILED BY THE ASSESSEE AND ALSO NO PROPER REASONS ASSIGNED IN CONFIRMING THE PENALTY. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN A RCHITECT INDIVIDUAL AND PROPRIETOR OF M/S. PRABHU ASSOCIATES AND FILED RETURN OF INCOME ON 30.09.2008 AND WAS PROCESSED U/S.143(1) O F THE ACT. DUE TO SURVEY U/S.133A OF THE ACT ON 07.08.2009, REVENU E FOUND COPIES OF DOCUMENTS OF INVESTMENT IN IMMOVABLE PROPERTY IN TH E FINANCIAL YEAR 2007-08. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED DETAILS AND ASSESSEE AD MITTED ADDITIONAL INCOME OF :55,56,000/-. THE ASSESSEE WAS HAVING TW O PAN NUMBERS AND ONE PAN WAS DEACTIVATED AND DIRECTED BY THE ASS ESSING OFFICER TO USE ONLY ABOVE REFERRED PAN NUMBER. THE ASSESSEE F ILED REVISED STATEMENT IN THE ASSESSMENT PROCEEDINGS ON 26.08.20 10 WITH TOTAL INCOME OF :59,90,072/- AND THE ASSESSING OFFICER AC CEPTED AND ASSESSED THE TOTAL INCOME AND RAISED DEMAND. SUBS EQUENTLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS BY LETTER DATED ITA NO.1177/MDS/2012. :- 3 -: 28.12.2010. IN COMPLIANCE TO THE PENALTY NOTICE, THE ASSESSEE FILED SUBMISSIONS AND EXPLAINED THAT THE INVESTMENT ARE SUPPORTED BY SOURCE. SINCE SURVEY OPERATION ARE CONDUCTED TILL EVENING ON 07.08.2009 AND BECAUSE OF CONFUSED AND DISTURBED MIND, THE ASSESSEE HAS OFFERED INCOME TO BUY PEACE WITH THE D EPARTMENT. THE SOURCES FOR PURCHASE OF IMMOVABLE PROPERTY ARE THRO UGH PROPER BANK CHANNEL, LOANS FROM FINANCIAL INSTITUTIONS, SHARE OF PROFIT FROM THE PARTNERSHIP FIRM AND PROFESSIONAL INCOME. FURTHER N O MATERIAL WAS SEIZED OR IMPOUNDED IN SURVEY OPERATIONS BY THE DEP ARTMENT. THE ASSESSEE DEMONSTRATED THE BONAFIDES BY VOLUNTARY F ILING REVISED STATEMENT ON 26.08.2010 AND PAID TAXES AS PER ASSES SMENT ORDER U/S.143(3) OF THE ACT DATED 28.12.2010. THE ASSESS EE EMPHASIZED THAT HE HAS CO-OPERATED IN SURVEY AND ASSESSMENT PR OCEEDINGS AND PAID THE ENTIRE TAX AND INTEREST ON THE ADMITTED IN COME AND DISCLOSED COMPLETE INCOME DETAILS. BUT THE LD. ASSESSING OFF ICER HAS NOT ACCEPTED THE EXPLANATIONS DUE TO SURVEY OPERATIONS BY THE DEPARTMENT, UNDISCLOSED INCOME WAS TRACED. THE ASS ESSEE COULD NOT EXPLAIN THE INVESTMENTS IN IMMOVABLE PROPERTY AT TH E TIME OF FILING OF RETURN OF INCOME AND CONSIDERED THE EXPLANATIONS A RE NOT SATISFACTORY AND NEITHER PRODUCED ANY EVIDENCE FOR SOURCES FOR INVESTMENTS IN THE SURVEY OR IN ASSESSMENT PROCEEDINGS, AND LEVIED A MINIMUM PENALTY ITA NO.1177/MDS/2012. :- 4 -: OF :15,63,020/- U/S.271(1) (C) OF THE ACT DATED 30. 03.2011. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE REITERATED THE SUBMISSIONS MADE IN T HE ASSESSMENT PROCEEDINGS AND IN PENALTY PROCEEDINGS. THE ASSESS EE HAS CO- OPERATED AND PAID TAXES AND TO SUBSTANTIATE THE BO NADIFES THE LD. AUTHORISED REPRESENTATIVE ARGUED THE GROUNDS OF AP PEAL AND PRAYED FOR DELETION OF PENALTY. BUT THE COMMISSIONER OF IN COME TAX (APPEALS) ON PERUSAL OF THE SURVEY AND ASSESSMENT RECORDS FO UND CERTAIN INVESTMENTS ARE MADE IN IMPUGNED IMMOVABLE PROPERT IES THOUGH THE ASSESSEE HAS OFFERED ADDITIONAL INCOME VOLUNTARILY IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEE TO SUBSTANTIATE HIS CO-O PERATION HAS PAID THE TAXES INCLUDING INTEREST AND NOT FILED QUANTUM APPEAL AGAINST THE ORDER U/S.143(3) OF THE ACT. THOUGH THE COMMISSION ER OF INCOME TAX (APPEALS) CONSIDERED THE BONAFIDES AND COOPERATION BUT FOR SURVEY THE UNACCOUNTED INCOME COULD NOT HAVE COME TO LIGHT AND ASSESSEE HAS NOT EXPLAINED IN ORIGINAL RETURN OF INCOME. THE CO MMISSIONER OF INCOME TAX (APPEALS) OBSERVED AND CONFIRMED THE ORD ER OF THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE C OMMISSIONER OF ITA NO.1177/MDS/2012. :- 5 -: INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPE AL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE REITER ATED HIS SUBMISSIONS MADE IN THE ASSESSMENT PROCEEDINGS, PEN ALTY PROCEEDINGS AND APPELLATE PROCEEDINGS AND SUBSTANTIATED HIS ARG UMENTS THAT THE ASSESSEE HAS VOLUNTARILY SURRENDERED THE INCOME IN THE SURVEY AND OFFERED THE SAME FOR TAX DURING THE ASSESSMENT PROC EEDINGS. THE ASSESSEE IS AN ARCHITECT MADE INVESTMENTS IN THE IM PUGNED PROPERTY AND THE SOURCE BEING THE BANKING CHANNEL AND PROFES SIONAL INCOME AND LOAN FROM FINANCIAL INSTITUTION BUT IN ORDER TO BUY PEACE WITH THE DEPARTMENT, THE ASSESSEE HAS OFFERED INCOME AND PAI D THE TAXES AND PRAYED FOR DELETION OF PENALTY. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND OPPOSED THE GRO UNDS OF THE ASSESSEE. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. THE LD. AUTHORISED REPRESENTATIVE SUBSTANTI ATED HIS ARGUMENTS ON A LIMITED ISSUE THAT IN SURVEY OPERATIONS DUE TO CONFUSION AND DISTURBED STATE OF MIND THE ASSESSEE HAS ACCEPTED T HE DISCLOSURE THOUGH HAVE VALID EXPLANATIONS FOR INVESTMENTS IN IMPUGNED PROPERTY ITA NO.1177/MDS/2012. :- 6 -: BEING BANK LOAN, PROFESSIONAL INCOME AND OTHER BUT IN ORDER TO BUY PEACE HE HAS VOLUNTARILY ACCEPTED AND NOT RETRACTE D THE DISCLOSURE AND FILED REVISED STATEMENT OF INCOME OF :59,90,07 2 IN THE ASSESSMENT PROCEEDINGS. THE FACT THAT DUE TO SURVE Y OPERATIONS, THE ASSESSEE HAS VOLUNTARILY OFFERED INCOME IN THE ASSE SSMENT PROCEEDINGS TO THE SATISFACTION OF THE ASSESSING OFFICER. THE ASSESSEE HAS NOT CONTESTED THE ADDITIONS IN THE ASSESSMENT ORDER AND PAID THE TAXES INCLUDING INTEREST AND PRODUCED THE CHALLANS IN THE PENALTY PROCEEDINGS BUT THE LD. ASSESSING OFFICER THOUGH CONSIDERED THE FACTS OF CO- OPERATION AND PAYMENT OF TAXES BUT FOR SURVEY THIS INCOME WAS OFFERED AND TAXED. THE DEPARTMENT COULD NOT SUBSTANTIATE T HE ADDITION WITH ANY CORROBORATIVE EVIDENCE OF SURVEY OPERATIONS AN D THE INCOME OFFERED BY THE ASSESSEE IS BASED ON REVISED STATE MENT FILED ON 26.08.2010. CONSIDERING THE FACTUAL ASPECTS THE AS SESSING OFFICER HAS ONLY CONSIDERED THE INCOME OFFERED BY THE ASSESSEE AND MADE ASSESSMENT WITHOUT ANY CREDITABLE DOCUMENTARY EVID ENCE FOUND IN THE SURVEY OPERATIONS. THE PENALTY PROCEEDINGS ARE NOT AUTOMATIC AND EVERY ADDITION IS NOT A GATEWAY FOR LEVYING PENALTY WE DRAW SUPPORT FROM THE PRINCIPLES LAID DOWN IN CASE OF CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 , (KARNATAKA) WERE IT WAS HELD THAT THE PENALTY PROCEEDINGS ARE NOT AUTOMATIC AND THEY ARE ITA NO.1177/MDS/2012. :- 7 -: DISTINCT AND WE ALSO RELY ON JURISDICTIONAL HIGH CO URT DECISION OF CIT VS. S. KHADER KHAN & SON 300 ITR 0157 AND ACCORDINGLY WE SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED ON THURSDAY, THE 24TH DAY OF MA RCH, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 0 / DATED: 24.03.2016 KV 1 ) +#-23 43&- / COPY TO: 1 . '( / APPELLANT 3. ! 5- () / CIT(A) 5. 3 89 +#-# / DR 2. +,'( / RESPONDENT 4. ! 5- / CIT 6. 9:% ; / GF