G.Muralidharan, CHENNAI V. ITO, Villupuram

ITA 1197/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9511 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 19-05-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N MUTHUKUMARAN RETD ACIT
• Keywords: Business income; Revised return
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NOS. 1197 & 1198/MDS/2015 / ASSESSMENT YEARS : 2008-09 & 2009-10 G. MURALIDHARAN, PROP: SATHYA SWEET STALL, 3A, KUTCHERRY ROAD, VILLUPURAM. PAN AANPM5579K APPELLANT) V. THE INCOME-TAX OFFICER, WARD-I(2), VILLUPURAM. RESPONDENT) / APPELLANT BY : SHRI N. MUTHUKUMARAN (RETD.ACIT) / RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT ! / DATE OF HEARING : 17.03.2016 '# ! / DATE OF PRONOUNCEMENT : 27.04.2016 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 13.3.2015 FOR THE ASSESSMENT YEARS 2008-09 AN D 2009- - - ITA 1197 & 1198/15 2 10, WHEREIN HE HAS CONFIRMED THE PENALTY U/S.271(1) (C) OF THE ACT. 2. THE FACTS OF THE CASE AS NARRATED IN ASSESSMENT YEAR 2008-09 ARE THAT THE ASSESSEE IS ENGAGED IN THE BUS INESS OF SWEET STALL AND HOTEL ACTIVITIES AT KALLAKURICHI. THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 30.3.2009 DECLARING TOTAL INCOME OF ` 1,79,805/-. IN THE ORIGINAL RETURN OF INCOME THE ASSESSEE DISCLOSED A TURNOVER OF ` 27,05,360/- AGAINST WHICH HE ADMITTED A NET PROFIT OF ` 1,66,192/- . THE ORIGINAL RETURN OF INCOME CONSISTED ASSESSEE ON 23.3.2010 AND IT WAS REVEALED THAT ASSE SSEE DID NOT MAINTAIN BOOKS OF ACCOUNT FOR HIS HOTEL AND SWEET SALE BUSINESS ACTIVITIES. THE ASSESSEE ALSO ACTED A S AN AGENT FOR FINANCIERS AND RECEIVED COMMISSION INCOME . IT WAS ALSO FURTHER REVEALED THAT ASSESSEE UNDERTOOK RENOVATION WORK IN HIS RESIDENCE AT NO.43C, KULATHU METTU STREET, KALLAKURICHI. DURING THE COURSE OF SURVEY A CTION, THE ASSESSEE'S SALES ACTIVITIES WERE MONITORED AND WAS QUESTIONED ABOUT THE EXTENT OF THE INCOME EARNED FR OM THE BUSINESS ACTIVITIES. BASED ON THE SALES ACTIVITIES MONITORED - - ITA 1197 & 1198/15 3 ON THE DAY OF SURVEY ASSESSEE INVENTORISED THE SALE S AND WORKED OUT HIS TURNOVER UNDER THE AVERAGE METHOD AT ` 1,47,00,000/-, ` 1,57,50,000 AND ` 3,06,60,000 RESPECTIVELY FOR THE YEARS ENDED 31.3.2008, 31,3.20 09 AND 31.3.2010 RELEVANT TO THE A.YS. 2008-09, 2009-10 AN D 2010-11. CONSEQUENT TO THE SURVEY ACTION U/S.133A CONDUCTED ON 23.3.2010, THE ASSESSEE FILED HIS REVI SED RETURN OF INCOME FOR THE A.Y. 2008-09 ON 8.6.2010 A DMITTING TOTAL INCOME OF ` 8,84,113/- WITH THE FOLLOWING BREAK-UP: BUSINESS INCOME AS PER THE ORIGINAL RETURN INCLUDING CASH CREDIT ` 2,51,192 ADD: ADDITIONAL INCOME OFFERED ON THE BASIS OF PROFIT ON THE ADDITIONAL TURNOVER OF ` 1,19,94,640/- ` 7,04,308 --------------- GROSS TOTAL INCOME ` 9,55,500 LESS: DEDUCTION U/S.80C ` 71,387 --------------- TAXABLE INCOME ` 8,84,113 ========= 2.1 THEREAFTER, THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE WAS REGULARIZED BY ISSUING NOTICE U/S. 148 OF THE I.T. ACT, ON 28.7.2010. IN RESPONSE TO THE NOTICE I SSUED U/S. 148 THE ASSESSEE HAD FILED A LETTER STATING THAT TH E REVISED - - ITA 1197 & 1198/15 4 RETURN FILED BY HIM ALREADY ON 8.6.2010 MAY BE TREA TED AS THE ONE FILED IN RESPONSE TO THE NOTICE ISSUED. THE CASE WAS SCRUTINIZED AND ASSESSMENT ORDER U/S.143(3) R.W .S. 147 WAS PASSED ON 25.3.2011 ASSESSING THE INCOME OF ` 8,84,113/- ACCEPTING THE REVISED RETURN OF INCOME FILED. THE PENALTY PROCEEDINGS U/S.271(L)(C) WAS ALSO INIT IATED IN THE COURSE OF PROCEEDINGS U/S.143(3) R.W.S. 147 DAT ED 25.3.2011 TOWARDS UNEXPLAINED SOURCE FOR THE SUM OF ` 7,04,308/- OFFERED IN THE RE-ASSESSMENT PROCEEDINGS BY THE ASSESSEE. THEREAFTER THE ASSESSEE VIDE LETTER D ATED 7.2.2011 STATED THAT HE DID NOT HAVE ANY BANK ACCOU NT AND THAT HE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. IN RESPONSE TO THE SHOW CAUSE NOTICE SERVED U/S.274 R.W.S.271, THE ASSESSEE VIDE ITS REPLY DATED 11.4.2 011 STATED THAT (I) HE HAD FILED REVISED RETURN OF INCO ME IN RESPONSE TO THE SURVEY MADE ON 23.3.2010 (II) IN TH E REVISED RETURN HE HAD FILED AN INCOME AS DEPOSED IN THE SWORN STATEMENT (III) THE REVISED TOTAL INCOME RETU RNED WAS ACCEPTED WITHOUT ANY FURTHER ADDITION AND (IV) HE H AD COOPERATED IN THE FINALIZATION OF THE ASSESSMENT - - ITA 1197 & 1198/15 5 PROCEEDINGS AND ALSO PAID THE TAX DEMANDED. THE AO WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE IN THE COURSE OF THE PENALTY PROCEEDINGS AND LEVIED A PENALTY OF ` 2,10,400/- U/S.271(1)(C) OF THE ACT VIDE HIS ORDER DATED 29.09.2011. WHILE LEVYING PENALTY, THE AO RELIED O N VARIOUS CASE LAWS IN SUPPORT OF THE CONTENTION THAT PENALTY IS ATTRACTED U/S.271(1)(C) IN THIS CASE. AGAINST T HIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS), WH O CONFIRMED THE FINDING OF THE AO IN LEVYING PENALTY ON THE CONCEALED INCOME OF ` 7,04,308/-. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THERE WAS A SURVEY U/S.133A OF THE ACT IN THIS CASE ON 23.3.2010. THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 30.3.2009 ADMITTING A TOTAL INC OME OF ` 1,79,805/-. CONSEQUENT TO THE SURVEY, THE ASSESSEE FILED REVISED RETURN ON 8.6.2010 ADMITTING A TOTAL INCOME OF ` 8,84,113/- AND THE ASSESSMENT WAS COMPLETED ON 25.3.2011. THUS, THERE WAS NO ADDITION WHILE COMPL ETING THE ASSESSMENT U/S.143(3) R.W.SEC.147 OF THE ACT AN D THERE WAS NO DIFFERENCE BETWEEN THE RETURNED INCOME AND - - ITA 1197 & 1198/15 6 ASSESSED INCOME. THE LD. DR RELIED ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF P.C.JOSEPH & BROS. V. CIT (108 TAXMAN 253). HE FURTHER RELIED ON THE DECIS IONS OF THE MADRAS HIGH COURT IN THE CASES OF CIT V. J.K.A.SUBRAMANIA CHETTIAR (110 ITR 602) AND CIT V. S. KRISHNASWAMY & SONS (219 ITR 157). HOWEVER, THE LD . AR CONTENDED THAT SINCE THERE IS NO DIFFERENCE IN RETU RNED INCOME AND ASSESSED INCOME, PENALTY CANNOT BE LEVIE D. WE ARE NOT IN AGREEMENT WITH THE ABOVE PROPOSITION. HAD IT BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE FILED T HE REVISED RETURN. DUE TO SURVEY, THE ASSESSEE WAS FO RCED TO FILE A REVISED RETURN AS HELD BY THE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. V. CIT (358 ITR 596) THAT : THE SURRENDER OF INCOME IN THIS CASE WAS NOT VOLUN TARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE I N VIEW OF DETECTION BY THE ASSESSING OFFICER IN THE S EARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. T HE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN T HE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE R ETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH W AS SURRENDERED LATER DURING THE COURSE OF THE ASSESSME NT PROCEEDINGS. CONSEQUENTLY, IT WAS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOM E. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN TH E - - ITA 1197 & 1198/15 7 SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TR UE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEA R TO YEAR. THE ASSESSING OFFICER HAD RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED THE TRUE PARTICULARS OF INCO ME AND WAS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTIO N 271 READ WITH SECTION 274 OF THE ACT. THERE WAS NO ILLEGALITY IN THE DEPARTMENT INITIATING PENALTY PROCEEDINGS. IN VIEW OF THE ABOVE, WE CONFIRM THE LEVY OF PENALT Y FOR THE ASSESSMENT YEAR 2008-09. 4. FOR THE ASSESSMENT YEAR 2009-10, THERE WAS A SURVEY U/S.133A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 23.3.2010. SUBSEQUENT TO THE SURVEY TH E ASSESSEE FILED HIS RETURN OF INCOME ON 8.6.2010 ADM ITTING AN INCOME OF ` 13,68,890/- AND THIS RETURN WAS FILED WITHIN THE TIME LIMIT U/S.139(4) OF THE ACT. THE ASSESSME NT WAS MADE DETERMINING THE INCOME AT THE SAME FIGURE. TH OUGH, THERE WAS A SURVEY, WE CANNOT SAY THAT THE ASSESSE E HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME, AS THE RETURNED INCOME AND T HE ASSESSED INCOME IS SAME AND THE ASSESSMENT WAS RESULTED IN NO ADDITION. SINCE, THE RETURN OF IN COME WAS FILED WITHIN THE TIME LIMIT PRESCRIBED U/S.139(4) O F THE ACT, IN - - ITA 1197 & 1198/15 8 OUR OPINION, PENALTY CANNOT BE LEVIED U/S.271(1)(C) OF THE ACT. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN IT A NO.1197/MDS/2015 IS DISMISSED AND ITA NO. 1198/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 27 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 27 TH APRIL, 2016. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.