SANJEEV MUKHIJA, MUMBAI V. DCIT CEN CIR 5, MUMBAI

ITA 1305/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8320 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: A K GHOSH
• Section: 271(1)(c); 143(3); 133A; 274; 143(2); 131; 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI S. RIFAUR REHMAN, ACCOUNTANT MEMBER ITA NO. 1305/MUM/2017 (ASSESSMENT YEAR 2008-09 ) SANJEEV MUKHIJA 154/155, KEWAL INDUSTRIAL ESTATE, SENAPATI BAPAT MARG, LOWER PAREL (W), MUMBAI- 400013 PAN: ADDPM4155C VS. DCIT CENTRAL CIRCLE-5 (NOW DCIT, CC-1(4), OLD CGO BLDG, ROOM NO. 901, ANNEX, 9 TH FLOOR, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : SHRI A.K. GHOSH (AR) RESPONDENT BY : SHRI V. VINOD KUMAR (SR. DR) DATE OF HEARING : 14.01.2020 DATE OF PRONOUNCEMEN T : 14.01.2020 ORDERUNDER 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. CIT(A)-47, MUMBAI DATED 30.11.2016, WHICH ARISES FROM AGAINST THE PENALTY LEVIED UNDER SECTION 271(1)(C) DATED 29.08.2017 FOR ASSESS MENT YEAR 2008- 09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND WAS DIRECTOR IN M/S GOLDEN SEAM TEXTILES PVT. LTD. A SE ARCH AND SEIZURE ACTION WAS CONDUCTED UNDER SECTION 132 ON 11.01.201 2 IN CASE OF M/S MANDHANA INDUSTRIES LTD. A SURVEY ACTION WAS CONDUC TED UNDER SECTION 133A IN CASE OF M/S GOLDEN SEAM TEXTILES PVT. LTD. DURING THE COURSE OF SURVEY, A RED COLOUR DIARY WAS SEIZED VIDE ANNEX URE A/GST/1 ON IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 2 11.01.2012. THE SEIZED DIARY BELONGING TO THE ASSES SEE. IN THE DIARY CERTAIN CASH ENTRIES CONSISTING OF RS. 9 LACS AGAIN ST THE NAMES OF RADHIKA, MINAL AND RITU AND RS. 6 LACS AGAINST THE NAMES OF TEJ AND SUDHA WAS RECORDED. THE STATEMENT OF ASSESSEE WAS R ECORDED UNDER SECTION 131 ON 27.04.2012 WHEREIN THE ASSESSEE ADMI TTED THE ADDITIONAL INCOME OF RS. 15 LACS, RECEIVED ON SALE OF RESIDENT IAL PROPERTY IN JAIPUR AND THE CASH COMPONENT WAS PAID TOWARDS PURC HASE OF FIVE RESIDENTIAL PROPERTIES IN BANGALORE. 3. A NOTICE UNDER SECTION 153C WAS SERVED UPON THE ASS ESSEE ON 02.12.2013. IN RESPONSE TO THE NOTICE UNDER SECTIO N 153C, THE ASSESSEE FILED RETURN OF INCOME ON 04.02.2014 DECLARING TOTA L INCOME OF RS. 82,67,975/-. THE ASSESSING OFFICER AFTER SERVING ST ATUTORY NOTICE UNDER SECTION 143(2) AND 141(1) COMPLETED THE ASSESSMENT ON 27.03.2014 ACCEPTING THE RETURN OF INCOME OF RS. 82,67,975/- A ND INITIATED THE PENALTY UNDER SECTION 271(1)(C). SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S 271(1)(C) WAS ISSUED TO THE ASSESSEE. THE ASS ESSEE FILED ITS REPLY IN RESPONSE TO THE SAID SHOW CAUSE NOTICE. THE REPL Y FILED BY ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSIN G OFFICER CONCLUDED THAT IT IS PROVED THAT ASSESSEE HAS FURNI SHED THE INACCURATE PARTICULARS AND CONCEALED ITS INCOME AND THAT THE C ASE OF ASSESSEE IS COVERED BY EXPLANATION 5A TO SECTION 271(1)(C) OF T HE I.T. ACT. THE ASSESSING OFFICER LEVIED THE PENALTY @ 100% OF TAX SOUGHT TO BE IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 3 EVADED. THE ASSESSING OFFICER COMPUTED THE PENALTY OF RS. 5,09,850/- VIDE ITS ORDER DATED 29.04.2014. ON APPEAL BEFORE T HE LD. CIT(A), THE ACTION OF ASSESSING OFFICER IN LEVYING THE PENALTY WAS UPHELD. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE A SSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN PASSING EX-PARTE ORDER WITH OUT AFFORDING REASONABLE OPPORTUNITY OF HEARING. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 5 ,09,850/- LEVIED BY THE AO U/S 271(1)(C) DESPITE THE FACT THAT THE LD. AO NEITHER IN THE SHOW CAUSE NOTICE NOR IN THE ASSESSMENT ORDER SPECIFIED UNDER WHICH CHARGE HE IS CONTEMPLATING TO LEVY PENALTY. 2. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. AT THE OUTSET OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITS THAT HE IS NOT PRESSING THE GROUND NO.1. CONSIDERING THE SUBMISSION OF LD. AR O F THE ASSESSEE, GROUND NO.1 WHICH RELATES TO DENIAL OF REASONABLE O PPORTUNITY BY LD. CIT(A) IS DISMISSED AS NOT PRESSED. 3. GROUND NO.2 RELATES TO LEVY OF PENALTY UNDER SECTIO N 271(1)(C). THE LD AR FOR THE ASSESSEE SUBMITS THAT A REGULAR ASSESSME NT ORDER UNDER SECTION 143(3) FOR AY 2008-09 WAS PASSED ASSESSING TOTAL INCOME OF IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 4 ASSESSEE AT RS. 67,67,890/-. THE LD. AR OF THE ASSE SSEE SUBMITS THAT A SEARCH ACTION WAS CARRIED OUT ON MANDHANA INDUSTRIE S LTD. A SURVEY WAS CONDUCTED ON M/S GOLDEN SEAM TEXTILES PVT. LTD. DURING THE COURSE OF SURVEY, A DIARY WAS IMPOUNDED CONTAINING VARIOUS ENTRIES IN THE NAME OF VAISHALI, RADHIKA, MINAL, RITU, TEJ & S UDHA SHOWING CASH ENTRY AGAINST THEIR NAMES. THE STATEMENT OF ASSESSE E WAS RECORDED ON 27.04.2012. THE LD. AR OF THE ASSESSEE PLACED ON RE CORD THE COPY OF STATEMENT RECORDED UNDER SECTION 131 BY INVESTIGATI NG TEAM. THE LD. AR OF THE ASSESSEE SUBMITS THAT DURING THE STATEMEN T, THE ASSESSEE DISCLOSED THE ADDITIONAL INCOME OF RS. 15 LACS. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT A NOTICE UNDER SECTIO N 153C WAS SERVED UPON THE ASSESSEE ON 02.012.2013. IN RESPONSE TO TH E NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 04.02.2014 DECLA RING INCOME OF RS. 82,67,975/- ( 67,67,890/- + 15,00,000/-). THE RETU RN INCOME WAS ACCEPTED BY ASSESSING OFFICER WITHOUT ANY VARIANCE, WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S 153C DA TED 27.03.2014. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT ONL Y A SURVEY ACTION WAS CARRIED OUT AT THE ASSESSEE. A SEARCH WAS CARRI ED OUT IN CASE OF MANDHANA INDUSTRIES LTD. NOTICE UNDER SECTION 153C WAS NOT VALID AGAINST THE ASSESSEE AS NO INCRIMINATING MATERIAL W AS UNEARTHED AGAINST THE ASSESSEE IN THE SEARCH CARRIED OUT ON MANDHANA INDUSTRIES LTD. THOUGH THE NOTICE UNDER SECTION 153C WAS NOT VALID AGAINST. THE IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 5 ASSESSEE HAS NOT CHALLENGED THE VALIDITY OF NOTICE UNDER SECTION 153C AND THAT RETURN OF INCOME IN RESPONSE TO NOTICE UND ER SECTION 153C WAS FILED DUE TO IGNORANCE. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE ASSESSEE NEITHER FURNISHED INACCURATE PARTICULA RS OF INCOME NOR CONCEALED ANY INCOME. THE ASSESSEE DISCLOSED ADDITI ONAL INCOME OF RS. 15 LACKS DURING THE SURVEY AND OFFERED THE SAME WHI LE FILING RETURN OF INCOME. THE ASSESSING OFFICER WHILE PASSING THE ASS ESSMENT ORDER HAS NOT SPECIFIED THE LIMB OF CHARGES AS TO WHETHER THE PENALTY IS INITIATED FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) WHILE PASSING THE PENALTY OR DER, PASSED THE ORDER BY INVOKING THE PROVISION OF EXPLANATION 5A T O SECTION 271(1)(C). THE PROVISION OF EXPLANATION 5A IS NOT APPLICABLE I N THE PRESENT CASE. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASS ESSEE RELIED UPON THE DECISION OF TRIBUNAL IN SAMSON PERINCHERRY VS. ACIT IN ITA NO. 4625 TO 4630/M/2013 DATED 11.10.2013, WHICH IS AFFIRMED BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. SAMSON PERINCH ERRY ITA NOS.1154, 953, 1097 AND 1226 OF 2014 DATED 05.01.20 17. 4. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FOR THE REVENUE SUBMI TS THAT DURING THE SURVEY ACTION, A DIARY WAS IMPOUNDED WHICH CONTAINS INCRIMINATING EVIDENCE WITH REGARD TO CERTAIN UNACCOUNTED RECEIPT AND PAYMENT OF MONEY. THE ASSESSEE WAS CONFRONTED WITH REGARD TO T HE CONTENTS IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 6 MENTIONED ON PAGE NO. 183 OF SAID DIARY. THE ASSESS EE ADMITTED IN HIS STATEMENT RECORDED UNDER SECTION 131 ON 27.04.2012 ABOUT UNACCOUNTED CASH OF RS. 15 LACS. THE SAID CASH TRANSACTION WERE NOT RECORDED IN THE BOOKS OF ACCOUNT NOR DISCLOSED BY ASSESSEE IN ORIGI NAL RETURN OF INCOME. THE ASSESSEE IS NOT ELIGIBLE IN ANY LEVERAG E OR ANY LENIENCY. THE ASSESSEE HAS NOT CHALLENGED THE VALIDITY OF NOT ICE UNDER SECTION 153C AND HAS ACCEPTED BY FILING RETURN OF INCOME. T HE ASSESSEE NOW CANNOT CHALLENGED THE VALIDITY OF NOTICE UNDER SECT ION 153C BY TAKING PLEA THAT THE ASSESSEE WAS COVERED ONLY ON SURVEY A ND NO SEARCH ACTION WAS CARRIED OUT ON THE ASSESSEE OR NO INCRIM INATING MATERIAL WAS FOUND IN THE SEARCH CONDUCTED ON THE GROUP. THE LD DR PRAYED FOR DISMISSAL OF THE APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE REPR ESENTATIVES AND PERUSED THE RECORD. THERE IS NO DISPUTE THAT A SEAR CH WAS CONDUCTED ON MANDHANA INDUSTRIES LTD. AND A SURVEY ON M/S GOLDEN SEAM TEXTILES PVT. LTD. FURTHER, THERE IS NO DISPUTE THAT IN SURV EY A DIARY WAS IMPOUNDED, WHEREIN CERTAIN INCRIMINATING EVIDENCE W AS FOUND. FURTHER, THERE IS NO DISPUTE THAT THE STATEMENTS OF ASSESSEE ARE RECORDED ONLY UNDER SECTION 131 AND THE ASSESSEE OFFERED ADDITION AL INCOME OF RS. 15LACKHS . FURTHER, THERE IS NO DISPUTE THAT ADDITI ONAL INCOME OFFERED BY ASSESSEE WAS ACCEPTED BY ASSESSING OFFICER WITHOUT ANY VARIANCE. PERUSAL OF ASSESSMENT ORDER DATED 27.03.2015 PASSED UNDER SECTION IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 7 143(3) R.W.S 153C, REVEALS THAT THE ASSESSING OFFIC ER INITIATED THE PENALTY UNDER SECTION 271(1)(C) WITHOUT SPECIFYING ANY LIMB OF CHARGE OR INVOKING THE PROVISION OF EXPLANATION 5A OF SECT ION 271(1)(C). THE LD. AR OF THE ASSESSEE HAS PLACED ON RECORD THE STA TEMENT OF ASSESSEE RECORDED UNDER SECTION 131 ON 11.01.2012 AND 27.04. 201. IT WAS BROUGHT TO OUR NOTICE THAT DURING THE STATEMENT REC ORDED ON 27.04.2012, IN QUESTION NO. 4, THE INVESTIGATING TEAM CONFRONTE D WITH THE ASSESSEE FACT THAT DURING THE COURSE OF SURVEY UNDER SECTION 133A OF T HE I.T. ACT, 1961 AT 45, HEGGADADEVANAPURA VILLAGE, GOLDEN PALM RESORT ROAD, BANGALORE-562123, INTER ALIA, A RED KOTAK DIA RY (PAGES 1 TO 197) WAS IMPOUNDED AS ANNEXURE A/GST/1 ON 11/01/2 012. THE SAID DIARY IS SAID TO BE BELONGING TO YOU . THIS FACT CLEARLY SUGGEST THAT A ONLY A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE ASSESSEE. 6. ADMITTEDLY, NO STATEMENT OF ASSESSEE WAS EVER RECOR DED UNDER SECTION 132(4) BY INVESTIGATION TEAM. THOUGH, ADMITTEDLY A NOTICE UNDER SECTION 153C, WAS SERVED UPON THE ASSESSEE AND IN R ESPONSE TO THE NOTICE, THE ASSESSEE FILED HIS RETURN OF INCOME AND OFFERED THE ADDITIONAL INCOME DISCLOSED DURING THE SURVEY, WHILE FILING TH E RETURN OF INCOME. THE ADDITIONAL INCOME WAS ACCEPTED BY ASSESSING OFF ICER WITHOUT ANY VARIANCE. THERE IS NO EVIDENCE AGAINST THE ASSESSEE WHICH MAY SUGGEST THAT THE CASE OF ASSESSEE WAS COVERED UNDER SECTION 132, EXCEPT NARRATION BY ASSESSING OFFICER IN THE ASSESSMENT OR DER. RATHER, THE IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 8 STATEMENTS RECORDED BY INVESTIGATING TEAM ITSELF CL EARLY SUGGEST THAT THE CASE OF ASSESSEE WAS COVERED BY SURVEY ACTION O NLY. 7. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER INVOKED THE PROVISION OF EXPLANATION 5A OF SECTION 271(1)( C) SPECIFICALLY DEALS WITH THE SEARCH INITIATED UNDER SECTION 132 AND NOT FOR SURVEY ACTION UNDER SECTION 133A. 8. WE HAVE FURTHER NOTED THAT BEFORE PASSING THE ORDER , THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 274 R.W.S 271(1 )(C) DATED 27.03.2013 AND AGAIN ON 04.09.2014. THE ASSESSING O FFICER RECORDED THAT ASSESSEE FILED HIS REPLY IN RESPONSE TO THE SH OW CAUSE NOTICE. THE ASSESSING OFFICER IN HIS ORDER HAS NOT MENTIONED TH E CONTENTS OF REPLY IN RESPONSE TO NOTICE. THE ASSESSING OFFICER SIMPLY RECORDED THAT THE STATEMENT OF ASSESSEE WAS CONSIDERED BUT NOT FOUND ACCEPTABLE ON THE GROUND THAT (I) DURING THE SEARCH, THE ASSESSEE ADM ITTED UNEXPLAINED MONEY, (II) THE ASSESSEE HAS NOT APPROACHED THE APP ELLATE AUTHORITY, (III) THE ASSESSEE FURNISHED INACCURATE PARTICULARS, (IV) THE CASE OF ASSESSEE IS COVERED BY EXPLANATION 5A AND (V) THE ASSESSEE INDU LGED IN AVOIDING THE LEGITIMATE TAX. THE ASSESSING OFFICER BY INVOKI NG EXPLANATION 5A TO SECTION 271(1)(C) LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. 9. AS NOTED ABOVE, THE EXPLANATION 5A IS NOT APPLICABL E IN THE PRESENT CASE. AS THE CASE OF ASSESSEE WAS NOT COVERED BY SE ARCH ACTION, RATHER A IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 9 SURVEY ACTION WAS CARRIED OUT. WE HAVE NOTED THAT T HOUGH THE ASSESSEE HAS NOT CHALLENGED THE ISSUANCE OF NOTICE UNDER SEC TION 153C. ON OUR SPECIFIC QUESTION TO THE LD AR FOR THE ASSESSEE THE LD AR FOR THE ASSESSEE SUBMITTED, SINCE THE RETURN OF INCOME FIL ED IN RESPONSE TO THE NOTICE UNDER SECTION 153C WAS ACCEPTED WITHOUT ANY VARIANCE AND DUE TO THE IGNORANCE THE ASSESSEE HAS NOT CHALLENGED TH E VALIDITY OF NOTICE UNDER SECTION 153C. IN OUR CONSIDERED VIEW, THE ASS ESSEE IS NOT PRECLUDED FROM RAISING OBJECTION AGAINST THE VALIDI TY OF NOTICE UNDER SECTION 153C, IF THE SAME WAS NOT VALID AND WARRANT ED ON THE FACTS OF THE CASE. 10. WE ARE CONSCIOUS OF THE FACT THAT THE PRESENT PROCE EDING ARE RELATED TO THE VALIDITY OF PENALTY LEVIED UNDER SECTION 271(1) (C). AS NOTED ABOVE, THE ADDITIONAL INCOME OFFERED BY ASSESSEE IN HIS RE TURN OF INCOME HAS BEEN ACCEPTED BY ASSESSING OFFICER. THE FACT OF CO NCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF I NCOME CAN BE ESTABLISHED WITH REFERENCE TO THE INCOME DECLARED I N THE RETURN OF INCOME. IN THE PRESENT CASE, THE INCOME DECLARED IN THE RETURN OF INCOME HAS BEEN ACCEPTED; THEREFORE, IT CANNOT BE T HE CASE OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN OUR VIEW THERE IS NO OCCASION FOR THE ASSESSEE TO EVADE THE TAX AS THE ASSESSEE OFFERED THE ADDITIONAL INCOME DECLARED DUR ING THE SURVEY IT A NO. 1305 MUM 2017-SANJEEV MUKHIJA 10 ACTION WHILE FILING THE RETURN IN RESPONSE TO THE N OTICE UNDER SECTION 153C. 11. IN VIEW OF THE ABOVE DISCUSSION, WHEN THE INCOME DE CLARED IN THE RETURN OF INCOME WAS ACCEPTED WITHOUT ANY VARIANCE. THE ASSESSEE HAS NEITHER CONCEALED THE INCOME NOR FURNISHED ANY INAC CURATE PARTICULARS OF INCOME WHILE FILING RETURN OF INCOME. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 /01/2020. SD/- SD/- S.RIFAUR RAHMAN PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 14 .01.2020 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI