The ACIT, Circle-1, Bhavnagar V. Shri Bhavinkumar M.Dagli, Bhavnagar

ITA 1179/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76897 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 19-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2011
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Question of law; Revised return
• Section: 27

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , ! '# ! '# ! '# ! '#, , , , $ $ $ $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NOS. 1179/AHD/2011 ASSESSMENT YEAR 2005-06 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, BHAVNAGAR VS SHRI BHAVINKUMAR M DAGLI 509, KAHAN JYOT, OPP. DIGAMBAR JAIN MANDIR, SONGADH-364250. BHAVNAGAR. PAN: ADYPD0074C %&/ APPELLANT ()%& / RESPONDENT REVENUE BY : SHRI P.L. KUREEL, SR. DR ASSESSEE(S) BY : SHRI S.N. SOPARKAR WITH SHRI P.M. MEHTA !* + #,/ // / DATE OF HEARING : 19/06/2014 -./ + #, / DATE OF PRONOUNCEMENT: 30/06/2014 0 0 0 0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XX, AHMEDABAD DATED 31.01.2011. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CITA[A] ERRED ON LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 1,61,66,230.00 LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ORIGINALLY ON 27- ITA NO. 1179/AHD/2011 SHRI BHAVINKUMAR M DAGLI, BHAVNAGAR. AY 2005-06 - 2 - 3-2006 DISCLOSING INCOME AT RS. 5,52,179.00. THEREA FTER, NOTICE U/S. 143[2] WAS ISSUED ON 4-10-2006. AFTER THIS, THE ASSESSEE F ILED A SECOND RETURN WHEREIN DECLARING ITS TOTAL INCOME AT RS. 4,44,82,9 30.00 ON THE BASIS OF PEAK DEPOSIT IN HIS BANK ACCOUNT, WHICH HE COULD NO T SUBSTANTIATE WITH EVIDENCE. 4. THE INVESTIGATION IN THE CASE OF THE ASSESSEE I N PURSUANCE TO SEC. 143[2] NOTICE DATED 4-10-2006 WAS STARTED BY T HE A.O. ON 24-8-2007 ISSUING A NOTICE U/S. 142[1] OF THE ACT. THEREAFTER , ASSESSMENT U/S. 143[3] WAS COMPLETED ON 24-12-2007 AT THE TOTAL INCOME OF RS. 4,81,14,680.00. 5. THEREAFTER, THE A.O. LEVIED PENALTY U/S. 271(1) (C) OF RS. 1,61,66,230.00 FOR FURNISHING INACCURATE PARTICULAR S OF INCOME AND CONCEALMENT OF INCOME OF RS. 4,81,14,680.00 ON THE GROUND THAT THE SECOND RETURNED FILED BY THE ASSESSEE WAS NOT A VALID REVI SED RETURN AND THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE ON 31-3- 2007 WAS AFTER ISSUANCE OF NOTICE U/S. 143[2] OF THE ACT AND THEREFORE, IN HIS VIEW, THE SUBSEQUENT DISCLOSURE BY THE ASSESSEE CANNOT BE ACCEPTED AS VO LUNTARY DISCLOSURE BY THE ASSESSEE. ACCORDING TO THE A.O., THE ASSESSEE D ISCLOSED THE ADDITIONAL INCOME BECAUSE HE KNEW THAT HIS CASE IS TAKEN UP FO R INVESTIGATION AND IN THE COURSE OF INVESTIGATION, HE MAY NOT BE ABLE TO DEFEND HIS RETURN OF INCOME. 6. ON APPEAL, CITA[A] DELETED THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT ON THE BASIS OF HIS FINDING THAT DISCLOSURE OF ADDITIONAL INCOME BY THE ASSESSEE ON 31-3-2007 WAS PRIOR TO DETECTION BY THE DEPARTMENT. 7. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE CONT ENDED THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS NOT A VALI D REVISED RETURN, AS THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS NOT WITHI N THE TIME PRESCRIBED U/S. 139[1] OF THE ACT. HE ALSO POINTED OUT THAT NOTICE U/S. 143[2] WAS ISSUED IN ITA NO. 1179/AHD/2011 SHRI BHAVINKUMAR M DAGLI, BHAVNAGAR. AY 2005-06 - 3 - THE CASE OF THE ASSESSEE PRIOR TO DISCLOSURE OF INC OME BY THE ASSESSEE ON 31-3-2007. 8. ON THE ABOVE FACTS, THE DR ARGUED THAT CIT[A] W AS NOT JUSTIFIED IN CANCELLING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. FOR THIS, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIG H COURT IN THE CASE OF SNITA TRANSPORT [P] LTD. V. ASSISTANT COMMISSIONER OF INCOME TAX [2014] 42 TAXMANN.COM 54 [GUJARAT]. 9. ON THE OTHER HAND, THE AR OF THE ASSESSEE SUPPO RTED THE ORDER OF THE CIT[A] AND SUBMITTED THAT THE CASE OF THE AS SESSEE IS SQUARELY COVERED BY THE DECISION OF THE HON. DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX V. ASHOK RA J NATH [2013] 33 TAXMANN.COM 588 [DEL. TRIBUNAL]. 10. WE FIND THAT IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT SECOND RETURN FILED BY THE ASSESSEE ON 31-3-2007 WAS NOT A VALID REVISED RETURN. THE ONLY DISPUTE BEFORE US IS THAT AS PER THE DEPAR TMENT, AS THE ADDITIONAL INCOME DISCLOSED IN THE SUBSEQUENT RETURN WAS AFTER ISSUE OF NOTICE U/S. 143[2] AND THEREFORE, THE INFORMATION SO DISCLOSED CANNOT BE TREATED AS VOLUNTARY DISCLOSURE AND THEREFORE, PENALTY U/S. 27 1(1)(C) WAS JUSTIFIED WHEREAS, AS PER THE AR OF THE ASSESSEE, SINCE THE A DDITIONAL INCOME WAS DISCLOSED PRIOR TO DETECTION BY THE DEPARTMENT, THE SAME WAS A VOLUNTARY DISCLOSURE AND THEREFORE, THE CIT[A] WAS JUSTIFIED IN DELETING PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 11. IT IS OBSERVED THAT THE INVESTIGATION IN THE I NSTANT CASE WAS COMMENCED BY THE A.O. ONLY ON 24-8-2007 BY ISSUE OF 142[1] NOTICE. NO MATERIAL WAS BROUGHT BEFORE US TO SHOW THAT THERE W AS ANY MATERIAL AVAILABLE WITH THE DEPARTMENT PRIOR TO 31-3-2007 TO SHOW THAT THERE WAS SOME ADDITIONAL INCOME THEN THE INCOME DISCLOSED IN THE ORIGINAL RETURN ASSESSABLE IN THE HANDS OF THE ASSESSEE. IN THE CIR CUMSTANCES, IN OUR ITA NO. 1179/AHD/2011 SHRI BHAVINKUMAR M DAGLI, BHAVNAGAR. AY 2005-06 - 4 - CONSIDERED VIEW, IT CANNOT BE HELD THAT THE DISCLOS URE OF ADDITIONAL INCOME BY THE ASSESSEE ON 31-3-2007 WAS AFTER ITS DETECTIO N BY THE DEPARTMENT. 12. WE FIND THAT THE DECISION OF THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF SNITA TRANSPORT [P] LTD. V. ASSISTANT C OMMISSIONER OF INCOME TAX [2014] 42 TAXMANN.COM 54 [GUJARAT] IS NOT APPLI CABLE ON THE FACTS OF THE INSTANT CASE. IN THAT CASE, THE HON. GUJARAT HI GH COURT OBSERVED THAT A SURVEY WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 30-1-2003 WHEREIN THE ASSESSEE ACCEPTED IN THE STATEMENT RECORDED OF HAVI NG DEBITED BOGUS EXPENDITURE IN ITS BOOKS OF ACCOUNT. AFTER THE ABOV E SURVEY AND RECORDING OF STATEMENT, ONLY THE ASSESSEE DISCLOSED ADDITIONAL I NCOME BY WAY OF A REVISED RETURN ON 11-3-2003 AND ON THESE CIRCUMSTAN CES, THE HONBLE HIGH COURT FOUND LEVY OF PENALTY U/S. 271(1)(C) WAS JUST IFIED. THUS, IT IS OBSERVED IN THAT CASE, THE ASSESSEE DISCLOSED THE ADDITIONAL INCOME AFTER THE SAME WAS DETECTED DURING THE COURSE OF THE SURVEY BY THE DEPARTMENT. WHEREAS, IN THE INSTANT CASE, THERE IS NO SUCH MATERIAL TO S HOW THAT THE DEPARTMENT HAD ACTUALLY DETECTED ANY INCOME OF THE ASSESSEE WH ICH WAS NOT DISCLOSED IN THE RETURN PRIOR TO 31-3-2007, WHEN THE ASSESSEE DI SCLOSED ITS ADDITIONAL INCOME. 13. ON THE OTHER HAND, WE FIND THAT THE DELHI BENC H OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX V. ASHOK RAJ NATH [2013] 33 TAXMANN.COM 588 [DEL. TRIBUNAL] HAS HELD AS UNDER:- 18. MERELY BECAUSE A NOTICE U/S. 143[2] HAD ALREAD Y BEEN ISSUED AND THE ASSESSEE FILED REVISED RETURN THEREAFTER, D ISCLOSING ADDITIONAL INCOME TOWARDS CAPITAL GAINS, WHICH WAS NOT CORRECT LY SHOWN IN THE ORIGINAL RETURN, THAT WAS NOT TANTAMOUNT TO DETECTI ON OF CONCEALMENT OF INCOME U/S. 271(1)(C) OF THE ACT. THE HON. M.P. HIGH COURT IN THE CASE OF CIT V. S V ELECTRICALS {P} LTD. [2005] 274 ITR 334/[2006] 155 TAXMAN 158 AND THE HON. JHARKHAND HIGH COURT IN CIT V. ASHIM KUMAR AGARWAL [2005] 275 ITR 48/[2006] 153 TAXMAN 2 26 HELD THAT THERE THE ASSESSEE SURRENDERS HIS FULL INCOME, THOU GH AT A LATER STAGE, THERE WAS NO QUESTION OF ANY CONCEALMENT ON HIS PAR T AND CONSEQUENTLY, NO PENALTY U/S. 271(1)(C) WAS LEVIABL E, AND THAT AN OMISSION FROM RETURN OF INCOME DID NOT AMOUNT TO CO NCEALMENT. THE HON. JURISDICTIONAL HIGH COURT WHILE ADJUDICATING T HE ISSUE OF LEVY OF ITA NO. 1179/AHD/2011 SHRI BHAVINKUMAR M DAGLI, BHAVNAGAR. AY 2005-06 - 5 - PENALTY U/S. 271(1)(C) IN THE CASE OF CIT V. HARNAR AIN IN THEIR DECISION DATED 31-10-2011 IN ITA NO. 2072/2010 CONCLUDED THA T SURRENDER OF THE AMOUNT BY THE ASSESSEE AFTER RECEIPT OF THE QUE STIONNAIRE COULD NOT LEAD TO AN INFERENCE THAT IT WAS NOT VOLUNTARY, IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SUGGEST THAT IT WAS BOGUS OR UNTRUE. IT IS FURTHER, EVIDENT THAT THERE WAS NEITHER ANY DETECTI ON NOR ANY INFORMATION IN THE POSSESSION OF THE REVENUE WHICH MIGHT LEAD TO A CONCLUSION THAT THERE WAS A DETECTION BY THE REVENU E OF CONCEALMENT. ACCORDINGLY, THE QUESTION OF LAW FRAMED IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 19. IN THE INSTANT CASE, THE ASSESSEE VOLUNTARILY D ISCLOSED ADDITIONAL INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND PAID TAX THEREON. IN THE LIGHT OF VIEW TAKEN IN THE AFORESAI D DECISIONS, IT CANNOT BE SAID THAT IN THE CASE BEFORE US, ADDITIONAL INCO ME DISCLOSED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS NOT VOLUNT ARY OR THAT THE ASSESSEE WANTED TO CONCEAL THE INCOME. EVEN THOUGH THE REVISED RETURN WAS FOUND TO BE INVALID, THE A.O. ACCEPTED T HE INCOME AS DECLARED IN THE REVISED RETURN AND COMPUTATION. THE A.O. DID NOT BRING ANY MATERIAL ON RECORD THAT THE DECLARATION OF INCO ME MADE BY THE ASSESSEE IN HIS REVISED RETURN OR HIS EXPLANATION W AS NOT BONA FIDE. IN THESE CIRCUMSTANCES, THERE APPEARS TO BE NO BASIS F OR IMPOSITION OF PENALTY ON THE GROUND THAT THE ASSESSEE FURNISHED I NACCURATE PARTICULARS OF INCOME. SINCE THE REVENUE HAVE NOT P LACED BEFORE US ANY MATERIAL NOR BROUGHT TO OUR NOTICE ANY CONTRARY DECISION SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, W E ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO. 1 IN THE APPEAL IS DISMISSED. 14. WE FIND THAT THE ISSUE INVOLVED IN THE INSTANT CASE IS SQUARELY COVERED BY THE ABOVE CITED DECISION OF THE TRIBUNAL. WE, TH EREFORE, FOLLOWING THE SAME, DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT[A]. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 30 TH OF JUNE, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/ /06/2014 GHANSHYAM MAURYA, SR. P.S.