JASRAJ KALIANJI & CO., MUMBAI V. ACIT -17(2), MUMBAI

ITA 1250/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7385 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV GUBGOTRA
• Assessee Lawyers: MUKESH ADVANI
• Section: 271(1)(c); 143(3); 133A

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL F BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 1250/MUM/2019 (ASSESSMENT YEAR 2014-15 ) M/S JASRAJ KALIANJI & CO., 58, MINT ROAD, OPP. GPO. FORT, MUMBAI-400001 . PAN: AAAFJ6632K VS. ACIT-17(2) ROOM NO. 123A/134, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT APPELLANT BY : SHRI MUKESH ADVANI (AR) RESPONDENT BY : SHRI RAJEEV GUBGOTRA (DR) DATE OF HEARING : 09.07.2019 DATE OF PRONOUNCEMEN T :17.07.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-28 [THE LD. CI T(A)], MUMBAI DATED 22.01.2019, WHICH IN TURN ARISE FROM THE PENA LTY LEVIED UNDER SECTION 271(1)(C) DATED 12.06.2017 FOR ASSESSMENT Y EAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) -28 MUMBAI, HAS ERRED IN CONFIRMING THE PENALTY LEVIED BY THE ASSES SING OFFICER U/S 271 (1)(C) AMOUNTING TO RS. 10,41,148/- UNDER THE PRETEXT THAT DURING THE COURSE OF SURVEY ACTION WHICH WAS CONDUCTED ON THE ASSESSEE O N 17TH OCTOBER 2013, UNACCOUNTED CASH AMOUNTING TO RS. 30,63,100/- WAS F OUND WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. INSPITE OF THE FACT THAT THE SAME AMOUNT OF RS. 30, 63,100/- WAS OFFERED FOR TAX BY THE ASSESSEE AT THE TIME OF FILING THE RETUR N OF INCOME U/S 139(1) OF ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 2 INCOME TAX ACT, 1961 FOR THE ABOVE MENTIONED ASSESS MENT YEAR & THERE IS NO DIFFERENCE IN THE RETURNED INCOME FILED BY THE A SSESSEE & THE INCOME ASSESSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961, STILL THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-28 HAS ERRED IN CONFIRMING THE PENALTY OF RS. 10,41,148/- U/S 271(1 )(C) OF INCOME TAX ACT, 1961. IN LIGHT OF THE ABOVE SAID FACTS, THE PENALTY CONFI RMED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-28 AMOUNTING TO RS. 10,41,1 48/- OUGHT TO BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF CUSTOM HOUSE AGENT PROVIDING CLEARANCE AND FORWARDING SERVICES TO ITS CLIENTS. A SURVEY ACTION UNDER SECT ION 133A WAS CONDUCTED AT THE PREMISES OF ASSESSEE ON 17.10.2013 . DURING THE COURSE OF SURVEY, A CASH OF RS. 30,63,100/- WAS FOU ND FROM THE PREMISES OF ASSESSEE, WHICH WAS NOT REFLECTED IN TH E BOOKS OF ACCOUNT. THE ASSESSEE SURRENDERED THE SAID AMOUNT FOR TAXATI ON DURING THE SURVEY ACTION. 3. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2 014 DECLARING TOTAL INCOME OF RS. 2,09,90,708/-. THE RETURN OF INCOME W AS SELECTED FOR SCRUTINY. NO ADDITION/VARIATION IN THE RETURN OF IN COME WAS MADE BY ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R UNDER SECTION 143(3) ON 27.12.2016. HOWEVER, THE ASSESSING OFFICE R INITIATED THE PENALTY UNDER SECTION 271(1)(C) FOR FURNISHING INAC CURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. NOTICE UNDER SECT ION 274 R.W.S. ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 3 271 DATED 28.12.2016 WAS SERVED UPON THE ASSESSEE. THE ASSESSING OFFICER HAS NOT RECORDED, IF ANY REPLY WAS FILED BY THE ASSESSEE. THE ASSESSING OFFICER RECORDED THAT IN PRINCIPLE, THE A SSESSEE HAS ACCEPTED THE ASSESSMENT ORDER AND HAS NOTHING TO SAY ON LEVY OF PENALTY UNDER SECTION 271(1)(C). THE ASSESSING OFFICER LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. THE ASSESSING OFFICER WORKED OUT THE PENALTY OF RS. 10,41,148/- IN ITS ORDER DATED 12.06 .2017. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFI CER WAS CONFIRMED. FURTHER, AGGRIEVED BY THE ORDER OF LD CIT(A), THE A SSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF AUTHORI TIES BELOW. THE LD. AR OF THE ASSESSEE SUBMITS THAT DURING THE SURVEY, THE ASSESSEE VOLUNTARILY OFFERED/SURRENDERED RS. 30,63,100/- AND PAID THE DUE TAX. THE ASSESSEE WHILE FILING RETURN OF INCOME INCLUDED THE SUO MOTO INCOME OFFERED/SURRENDERED BY ASSESSEE. THE ASSESSM ENT WAS COMPLETED UNDER SECTION 143(3). NO ADDITION IN THE RETURN OF INCOME WAS MADE BY ASSESSING OFFICER. NO PARTICULARS OF IN COME WAS CONCEALED BY ASSESSEE NOR FURNISHED ANY INACCURATE PARTICULARS IN THE RETURN OF INCOME. THE LD. AR OF THE ASSESSEE SUBMIT S THAT NO PENALTY ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 4 WAS LEVIABLE AS NEITHER THE ASSESSEE CONCEALED ANY PARTICULARS OF INCOME NOR ANY PARTICULARS WERE FOUND TO BE INACCUR ATE AS THE ASSESSING OFFICER MADE NO VARIATION IN THE RETURN O F INCOME. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIE D UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CIT VS. SAS PHARMACE UTICALS (335 ITR 259), HONBLE SUPREME COURT IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158(SC), DECISION OF HYDERABAD T RIBUNAL IN G.S. ARORA IN ITA NO. 1789/HYD/2013, PUNE TRIBUNAL IN AN AND SURESH JAIN IN ITA NO. 353/PUN/2015 AND NANDKISHOR TULSIDAS KAT ORE IN ITA NO. 2174 TO 2180/PN/2014. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT HAD THE SURVEY NOT CONDUCTED AT THE PREMISES OF THE ASSESSEE, THE INCO ME OF ASSESSEE TO THE TUNE OF RS. 30,63,100/- WOULD HAVE ESCAPED FROM THE ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THERE IS N O DISPUTE THAT A SURVEY WAS CONDUCTED AT THE PREMISES OF ASSESSEE ON 30.09.2014 I.E. DURING THE RELEVANT PERIOD FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IF FURTHER NOT IN DISPUTE THAT TH E ASSESSEE DURING THE SURVEY OFFERED THE ADDITIONAL INCOME/SURRENDERED RS . 30,63,100/-. IT IS FURTHER NOT IN DISPUTE THAT THE ASSESSEE WHILE FILI NG RETURN OF INCOME ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 5 INCLUDED THE INCOME SURRENDERED DURING THE SURVEY A ND PAID DUE TAX THEREON. THE ASSESSING OFFICER ACCEPTED THE RETURN OF INCOME WITHOUT ANY VARIATION. HOWEVER, THE ASSESSING OFFICER INITI ATED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT O F INCOME. 7. THE HONBLE DELHI HIGH COURT IN SAS PHARMACEUTICALS ( SUPRA ) HELD THAT THE QUESTION IS WHETHER THE PARTICULARS OF INC OME WERE CONCEALED BY THE ASSESSEE OR NOT, WOULD DEPENDING UPON WHETHE R THE CONCEALMENT AT REFERENCE TO THE RETURN OF INCOME FILED BY THE A SSESSEE. THE WORD IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT WERE PRE-FACED BY THE SATISFACTION OF AO OR CIT(A). WHEN THE SURVEY WAS C ONDUCTED, THE QUESTION OF SATISFACTION OF AO OR CIT(A) DID NOT AR OSE. IT IS THE AO, WHO INITIATED THE PENALTY PROCEEDING AND DIRECTED T HE PAYMENT OF PENALTY. THE AO HAS NOT RECORDED ANY SATISFACTION D URING THE COURSE OF SURVEY. THE DECISION TO INITIATE THE PENALTY PROCEE DING WAS TAKEN WHEN MAKING THE ASSESSMENT. THUS, THE EXPRESSION IN THE COURSE OF ANY PROCEEDING UNDER THIS ACT COULD NOT HAVE THE REFERENCE TO SURVEY PROCEEDING IN THIS CASE. THE CONCEALMENT OF PARTICU LARS OF INCOME OR FURNISH INACCURATE PARTICULARS OF INCOME BY THE ASS ESSEE HAD TO BE IN THE RETURN FILED BY IT. NO PENALTY CAN BE IMPOSED U NLESS THE CONDITION STIPULATED IN THE PROVISIONS DULY UNAMBIGUOUSLY UNS ATISFIED. THE HONBLE COURT FURTHER HELD THAT UNLESS IT IS FOUND THAT THERE WAS ACTUAL ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 6 CONCEALMENT OR NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY COULD NOT BE IMPOSED. WHEN THERE WAS NO SUCH CONCEA LMENT OR NON- DISCLOSURE AS THE ASSESSEE HAS MADE COMPLETE DISCLO SURE IN THE RETURN OFFERED/ THE SURRENDERED AMOUNT FOR THE PURPOSE OF TAX, NO PENALTY IS LEVIABLE. 8. THE HYDERABAD TRIBUNAL IN G.S. ARORA (SUPRA) WHILE REFERRING THE DECISION OF HONBLE DELHI HIGH COURT IN CIT VS. SAS PHARMACEUTICALS (SUPRA) HELD THAT AS PER PROVISIONS OF THE ACT IN O RDER TO ATTRACT PENALTY UNDER SECTION 271(1)(C) EITHER THERE SHOULD BE CONC EALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME, THE ASSESSING OFFICER ACCEPTED THE RETURN INCOME IN THE SCRUTINY ASSESSME NT. THE QUESTION FOR FURNISHING INACCURATE PARTICULARS DOES NOT ARISE ON SUCH FACTS. MOREOVER RETURN INCOME AND ASSESSED INCOME BEING THE SAME, T HE COMPUTATION OF PENALTY ALSO FAILS. IT WAS FURTHER HELD THAT EXPLAN ATION I WITH REFERENCE TO THE EXPRESSING CONCEALED INCOME HAS DEEMED THE A MOUNT CONCEALED INCOME INDICATES THAT AMOUNT ADDED OR DISALLOWED IN COMMUTATING THE TOTAL INCOME OF SUCH PERSON FOR THE PURPOSE OF CLAU SE-(C) OF THIS SUB- SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPEC T OF WHICH PARTICULARS HAVE BEEN CONCEALED. IT WAS FURTHER HEL D THAT THERE IS NO PRESUMPTION THAT AMOUNT UNEARTHED DURING THE COURSE OF SURVEY WILL AUTOMATICALLY BE CONSIDERED AS CONCEALED INCOME. NO ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 7 PROVISION/EXPLANATION SIMILAR TO EXPLANATION-5 WAS PROVIDED IN THE SECTION TO COVER SURVEY CASES. THE INCOME DETECTED/ OFFERED IN SURVEY CANNOT BE DEEMED TO BE CONCEALED INCOME. 9. THE PUNE TRIBUNAL IN ANAND SURESH JAIN (SUPRA) ON S IMILAR GROUNDS OF APPEAL AND THE SIMILAR FACTS HAS HELD THAT ADDITION AL INCOME OFFERED BY ASSESSEE IN SURVEY ACTION AT THE BUSINESS PREMISES, THE SAME DOES NOT PERTAIN THE NATURE OF ADDITIONAL INCOME REFERRED TO IN EXPLANATION-5 TO SECTION 271(1)(C). THE ASSESSEE OFFERED THE ADDITIO NAL INCOME IN THE RETURN OF INCOME, WHICH HAS BEEN ACCEPTED BY ASSESS ING OFFICER PER SAY WITH MINOR VARIATION, THAN IN SUCH CIRCUMSTANCE S, NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE. 10. CONSIDERING THE ABOVE FACTUAL AND LEGAL DISCUSSION, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN LEV YING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HENCE, GROUND O F APPEAL RAISED BY ASSESSEE IS ALLOWED. 11. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/07/2019. SD/- SD/- G. MANJUNATHA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 17.07.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT ITA NO . 1250 MUM 2019-M/S JASRAJ KALIANJI & CO. 8 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR F BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI