Sri B. Gajendra Kumar, Haleyangady V. ITO, Mangalore

ITA 1212/BANG/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63817 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-11-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 21-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

ITA.1212 TO 1218/BANG/2009 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NOS.1212 TO 1218/BANG/2009 (ASSESSMENT YEARS : 2001-02 TO 2006-07) SHRI. B. GAJENDRA KUMAR, PROP : SRI DURGA CREDITS & INVESTMENTS, 'VASUDEVA', MAIN ROAD, HALEYANDAGI 574 146 (D.K).. APPELLANT V. INCOME-TAX OFFICER, WARD -1(1), MANGALORE .. RESPONDENT APPELLANT BY : SHRI. BALRAM R. RAO, ADVOCATE RESPONDENT BY : SHRI. MANOJ KUMAR, ADDL.CIT O R D E R PER BENCH : THESE APPEALS ARE FILED BY THE ASSESSEE. THE APPE ALS ARE FILED FOR SEVEN CONSECUTIVE ASSESSMENT YEARS 2001-02 TO 2 006-07. THESE APPEALS ARE DIRECTED AGAINST THE COMMON ORDER PASSE D BY THE COMMISSIONER OF INCOME-TAX(A) AT MANGALORE, ON 20.1 0.2009. THESE APPEALS ARISE OUT OF THE PENALTY ORDERS PASSED BY T HE ASSESSING OFFICER U/S.271(1)(C) OF THE INCOME-TAX ACT, 1961. ITA.1212 TO 1218/BANG/2009 PAGE - 2 02. THE ASSESSING OFFICER HAS LEVIED PENALTIES FOR THE SEVEN IMPUGNED ASSESSMENT YEARS AS DETAILED IN THE TABLE GIVEN BELOW : ASSESSMENT YEAR INCOME CONCEALED ` `` ` PENALTY LEVIED ` `` ` 2000-01 33,82,335 11,00,000 2001-02 13,98,111 4,81,000 2002-03 9,08,241 2,70,000 2003-04 10,13,681 3,14,000 2004-05 6,84,620 2,01,000 2005-06 8,65,644 2,90,000 2006-07 8,01,585 2,02,140 TOTAL 90,54,217 28,57,140 03. THESE PENALTIES WERE CONFIRMED BY THE COMMISSIO NER OF INCOME-TAX(A) AND THEREFORE THE SECOND APPEALS BEFO RE THE TRIBUNAL. 04. WE HEARD SHRI. BALRAM R. RAO, ADVOCATE, APPEARI NG FOR THE ASSESSEE AND SHRI. MANOJ KUMAR, THE LEARNED COMMISS IONER OF INCOME-TAX APPEARING FOR THE REVENUE. 05. IN THE CASE OF THE ASSESSEE, THERE WAS A SURVEY U/S.133A IN THE COURSE OF WHICH VERACITY OF CERTAIN CREDITORS REFL ECTED IN THE BOOKS OF ACCOUNT AT THE BUSINESS PLACE, WERE FOUND OUT AND E XAMINED. THOSE BOOKS WERE NOT IN FACT PART OF THE REGULAR BOOKS O F ACCOUNTS MAINTAINED BY THE ASSESSEE. THE ASSESSEE AGREED WI TH THE ASSESSING ITA.1212 TO 1218/BANG/2009 PAGE - 3 AUTHORITY TO OFFER THOSE CREDITS AS ITS INCOME FOR THE IMPUGNED ASSESSMENT YEARS AS THE ASSESSEE WAS NOT IN A POSIT ION TO CONVINCINGLY EXPLAIN THE DETAILS OF THOSE CREDITS FOR WANT OF CO MPREHENSIVE EVIDENCES. ADDITIONAL INCOME WERE ACCEPTED AND ASS ESSMENTS WERE COMPLETED ACCORDINGLY. THE ASSESSEE ACCEPTED THE Q UANTUM ADDITIONS AND DID NOT GO IN FOR FURTHER APPEALS. THE CONTENT ION OF THE ASSESSEE IS THAT THERE WAS AN UNDERSTANDING BETWEEN THE ASSESSE E AND THE DEPARTMENT THAT THE MATTER WOULD BE CLOSED ALONG WI TH THE OFFER OF ADDITIONAL INCOME AND NO PENALTY WOULD BE LEVIED AS THE ASSESSEE HAD COOPERATED WITH THE DEPARTMENT WITH ADDITION OF INC OME AND THERE WAS A TACIT UNDERSTANDING THAT NO FURTHER LITIGATIO N WOULD BE THERE. BUT THE ASSESSING OFFICER ANYHOW OPTED THE WAY OF FORM AL LAW AND LEVIED PENALTY U/S.271(1)(C). IT IS TRUE THAT THERE WAS A SURVEY AND IT WAS AS THE RESULT OF THAT SURVEY THAT THE ASSESSEE HAD TO OFFER ADDITIONAL INCOME WHICH HAVE BEEN ASSESSED IN HIS HANDS. BUT THERE IS ANOTHER CRUCIAL ASPECT IN THE CASE WHICH HAS NOT BEEN PROPE RTY APPRECIATED BY THE ASSESSING AUTHORITY OR BY THE COMMISSIONER OF I NCOME-TAX(A). MANY OF THE CREDITS OFFERED BY THE ASSESSEE AS ITS INCOME FOR A PARTICULAR ASSESSMENT YEAR IN FACT DID NOT BELONG T O THAT PARTICULAR ASSESSMENT YEAR. MAJOR PORTION OF THE CREDITS WERE THE CREDIT BALANCES BROUGHT DOWN FROM EARLIER ASSESSMENT YEARS. STRICT LY SPEAKING AND IN ACCORDANCE WITH SECTION 68, AN ADDITION CAN BE MADE ONLY IN RESPECT ITA.1212 TO 1218/BANG/2009 PAGE - 4 OF THAT CREDIT WHICH IS CREATED IN THE BOOKS OF ACC OUNT AND NOT EXPLAINED IN THAT PARTICULAR FINANCIAL YEAR. THE C REDITORS' BALANCES BROUGHT DOWN FROM EARLIER YEARS CANNOT BE ADDED U/S .68 IN THAT PARTICULAR CURRENT ASSESSMENT YEAR. BUT THE ASSESS EE HAS NOT ARGUED ON THIS POINT AND HE HAS AGREED WITH THE ASSESSING OFF ICER TO OFFER THE ENTIRE CREDITS IN THE RESPECTIVE ASSESSMENT YEARS W ITHOUT DISTINGUISHING BETWEEN CURRENT CREDITS AND PAST CREDITS. IN THAT MANNER, THE ASSESSEE HAS PAID TAX FOR CERTAIN AMOUNT OF ADDITIONS WHICH SHOULD NOT HAVE BEEN CONSIDERED FOR THE RESPECTIVE ASSESSMENT YEARS . THEREFORE, EVEN THOUGH NOT IN THE FORM OF A FORMAL PENALTY, THE ASS ESSEE HAS SUFFERED TAX WHICH MIGHT BE MORE THAN NECESSARY. THIS ADDIT IONAL SUFFERING IN THE HANDS OF THE ASSESSEE HAS NOT BEEN CONSIDERED B Y THE LOWER AUTHORITIES IN A PROPER PERSPECTIVE. THEY HAVE PRO CEEDED TO LEVY THE PENALTY IN A MECHANICAL MANNER TREATING THE PENALTY AS AN INEVITABLE CONSEQUENCE OF ADDITIONS MADE IN THE QUANTUM ASSESS MENTS. 06. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TAKING INTO CONSIDERATION THE ADDITIONAL INJURY SUFFERED B Y THE ASSESSEE IN THE QUANTUM ASSESSMENTS ITSELF, WE FIND THAT IT IS NOT FAIR TO LEVY PENALTIES ON THE ASSESSEE. ACCORDINGLY, WE DELETE THE PENALT IES LEVIED FOR ALL THESE SEVEN ASSESSMENT YEARS UNDER APPEAL. ITA.1212 TO 1218/BANG/2009 PAGE - 5 07. IN RESULT, THESE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 14TH DAY OF MARCH, 2011, AT BANGALORE. SD/- SD/- (SMT. P. MADHAVI DEVI) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT 1. DATE OF DICTATION __________ 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DM _________ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.PS -__ ____________ 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D M ____________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO SR.PS __ ____________ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ____ ____________ 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK _____ ____________ ITA.1212 TO 1218/BANG/2009 PAGE - 6 8. DATE ON WHICH THE FILE GOES TO THE ASST.REGISTRAR _ ______________ 9. DATE OF DISPATCH OF THE ORDER ____ ___________