The ITO, Ward-6(1), Ahmedabad V. Shri Mahendra M. Vyas, Ahmedabad

ITA 1307/AHD/2007

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2123 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-04-2013
• Assessment Year: misc
• Appeal Filed On: 30-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.1307/AHD/2007 ( % & '& / ASSESSMENT YEAR : 1986-87) THE ITO WARD-6(1) AHMEDABAD % / VS. SHRI MAHENDRA M.VYAS 7, VASANT VIHAR SOCIETY VIGHAG-2 NAVRANGPURA,AHMEDABAD ./ ./ PAN/GIR NO. : AAZPV 5876 C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI D.K.SINGH, SR.D.R. / RESPONDENT BY : SHRI VARTIK CHOKSHI / DATE OF HEARING : 08/04/2013 !'# / DATE OF PRONOUNCEMENT : 24 TH MAY 2013 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF THE LD.CIT(APPEALS)-XII, AHMEDABAD DATED 28.12 .2006 PASSED FOR A.Y. 1986-87 AND THE SUBSTANTIVE GROUND IS IN R ESPECT OF REDUCTION OF PENALTY IMPOSED U/S.271(1)(A) FROM RS. 12,98,292/- TO RS.22,316/-. ITA NO.1307/AHD /2007 THE ITO VS. SHRI MAHENDRA M.VYAS ASST.YEAR - 1986-87 - 2 - 2. THE IMPUGNED PENALTY WAS LEVIED U/S.271(1)(A) VI DE AN ORDER DATED 30/03/2005, WHEREIN IT WAS NOTED THAT ASSESSE E IN INDIVIDUAL CAPACITY HAD NOT SUBMITTED THE RETURN U/S.139(1) OF IT ACT. AN ACTION U/S.132 WAS CARRIED OUT AT THE RESIDENTIAL P REMISES OF THE ASSESSEE ON 8.9.1988. IN THE ABSENCE OF ANY RETUR N U/S.139(1) OF IT ACT, REVENUE DEPARTMENT HAD ISSUED A NOTICE U/S.148 OF IT ACT ON 01/03/1990. EVEN NO RETURN OF INCOME WAS SUBMITTED IN RESPONSE TO THE SAID NOTICE U/S.148 WHICH WAS STATED TO SEVERED ON 03/03/1990. THEREUPON, AN ASSESSMENT U/S.144 R.W.S.147 WAS COMP LETED ON 31/03/1992 DETERMINING THE TOTAL INCOME AT RS.26,11 ,410/-. WHEN THE MATTER WAS CARRIED BEFORE LD.CIT(A), THAT ASSES SMENT WAS SET ASIDE. THEREAFTER, THE SET ASIDE ASSESSMENT WAS C OMPLETED ON 28/02/1994 DETERMINING THE TOTAL INCOME AT RS.19,65 ,757/-, SIMULTANEOUSLY PENALTY PROCEEDINGS U/S.271(1)(A) WA S INITIATED. THE AO HAS ALSO NOTED THAT AGAINST THE QUANTUM ADDI TION, AN APPEAL WAS PREFERRED BY THE ASSESSEE WHICH WAS PARTLY ALLO WED. AGAINST THAT ORDER, DEPARTMENT HAD FILED AN APPEAL BEFORE T HE ITAT AHMEDABAD AND VIDE AN ORDER DATED 14.3.2001 (APPEAL NO.4001/AHD/2002) THE MATTER WAS SET ASIDE AND REST ORED BACK TO THE FILE OF THE AO FOR FRESH ORDER. THEREAFTER, AN ORDER U/S.143(3) R.W.S.254 WAS PASSED BY THE AO ON 26.3.2003 DETERMI NING THE TOTAL INCOME AT RS.19,79,250/-. IN THAT ORDER, AS WELL, THE PENALTY PROCEEDINGS U/S.271(1)(A) WAS INITIATED. SO, THE A O HAS NOTED THAT WHILE COMPLETING THE ASSESSMENTS ON 31/3/1992, 28/0 2/1994 AND ITA NO.1307/AHD /2007 THE ITO VS. SHRI MAHENDRA M.VYAS ASST.YEAR - 1986-87 - 3 - 26/03/2003, THE PENALTY U/S.271(1)(A) WAS INITIATED FOR NON- SUBMISSION OF RETURN OF INCOME U/S.139(1) OF THE A CT. AS PER AO, THE RETURN OF INCOME WAS DUE U/S.139(1) ON 31.8.198 6. SINCE NO RETURN OF INCOME WAS FILED TILL THE SAID DATE THE A O HAD PROPOSED TO LEVY A PENALTY FROM 31.8.1986 TO 31.03.1992 (THE DA TE ON WHICH THE ORIGINAL ASSESSMENT U/S.143(3) WAS COMPLETED). A D EFAULT OF 67 MONTHS WAS COMPUTED. IT WAS CONCLUDED THAT ALTHOU GH THE ASSESSEE HAD TAXABLE INCOME, BUT WITHOUT ANY REASONABLE CAUS E FAILED TO FURNISH THE RETURN U/S.139(1) OF IT ACT, HENCE LIAB LE TO BE PENALISED U/S.271(1)(A), THEREFORE THE IMPUGNED PENALTY OF RS .12,98,292/- WAS IMPOSED. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE ASSESSEE HAD STRONGLY REFUTED THE ALLEGATION OF THE AO THAT NO RETURN WAS FILED U/S.139(1) OF IT ACT. IN SUPPORT OF THE SAID CONTENTION, THE ASSESSEE HAD FURNISHED COPY OF ACKN OWLEDGEMENT OF THE RETURN AND AN ORDER U/S.143(1) OF IT ACT. IT W AS PLEADED THAT IN VIEW OF THE RETURN HAD ALREADY BEEN FILED, THERE WA S NO JUSTIFICATION FOR LEVY OF PENALTY FROM THE PERIOD 31.08.1986 UPTI LL THE ISSUE OF NOTICE U/S.148 DATED 01/03/1990. RELIANCE WAS PLAC ED ON CIT VS. MARFATIA & CO. (1982) 136 ITR 159 (M.P.). 3.1. APART FROM THE ABOVE, IT WAS ALSO PLEADED THAT THE IMPUGNED PENALTY WAS LEVIED ON THE BASIS OF INCOME ASSESSED AT RS.19,79,250/- ITA NO.1307/AHD /2007 THE ITO VS. SHRI MAHENDRA M.VYAS ASST.YEAR - 1986-87 - 4 - BUT THAT INCOME WAS FURTHER MODIFIED. THE ULTIMATE INCOME WAS ASSESSED AT RS.3,60,352/- VIDE AN ORDER PASSED U/S. 154 DATED 10/11/2006. THE LD.CIT(A) WAS CONVINCED WITH THOS E ARGUMENTS AND THEREAFTER HELD THAT PENALTY FOR A PERIOD OF SE VEN MONTHS ONLY COULD BE LEVIED ON THE TAX FINALLY DETERMINED. TH E FINDING OF THE LD.CIT(A) IS REPRODUCED BELOW:- 5. I HAVE CAREFULLY CONSIDERED THE ORDER U/S.271( 1)(A) AND THE ABOVE SUBMISSIONS. ON THE FACTS IT IS FOUND TH AT THE APPELLANT HAD FILED RETURN U/S.139(1) ON 26-12-1986 . THE APPELLANT IS HAVING INCOME BY WAY OF SHARE IN PROFI T OF FIRM AND BOIS. THE FIRM HAD FILED RETURN ON 26-12-1986. THUS THE APPELLANT HAD NOT COMMITTED ANY DEFAULT IN FURNISHI NG THE RETURN U/S.139(1). IT IS, THEREFORE, HELD THAT THE A.O. COULD NOT HAVE LEVIED PENALTY ON THE APPELLANT FOR THE PERIOD FROM 31-8- 1986 TILL THE RETURN U/S.148 IS FILED. THE SECOND ASPECT TO BE CONSIDERED IS THAT THE APPELLANT HAD NOT FILED RETU RN IN RESPONSE TO NOTICE U/S.148. IN THIS CONNECTION IT IS SEEN THAT THE APPELLANT WAS SUBJECTED TO SEARCH AND THAT AS S TATED BY THE APPELLANT COPY OF SEIZED MATERIAL WAS NOT AVAILABLE TILL JULY 1991. HENCE THE APPELLANT COULD NOT BE CONSIDERED TO BE IN DEFAULT TILL THAT TIME. AFTER GETTING XEROX COPIES , AT LEAST ONE MONTH WOULD BE REQUIRED TO FURNISH THE RETURN U/S.1 48. HENCE, I HOLD THAT FOR THE DELAY IN FURNISHING RETURN IN R ESPONSE TO NOTICE U/S.148 PENALTY COULD NOT BE LEVIED FOR THE PERIOD UPTO 31-8-1991. FOR THE PERIOD FROM 31-8-1991 TO THE DA TE OF ASSESSMENT ORDER THE A.O. WAS JUSTIFIED IN LEVYING PENALTY WHICH WOULD BE A PERIOD OF ABOUT 7 MONTHS. IT IS FURTHER NOTICED THAT THE A.O. HAS LEVIED PENA LTY ON THE TAX DETERMINED ON INCOME OF RS.19,79,250/-. HOWEVER, T HE ITA NO.1307/AHD /2007 THE ITO VS. SHRI MAHENDRA M.VYAS ASST.YEAR - 1986-87 - 5 - INCOME SO ASSESSED HAS BEEN SUBSEQUENTLY MODIFIED T O RS.3,60,252/- AND TAX ON SUCH MODIFIED INCOME IS DE TERMINED AT RS.1,59,426/-. I HOLD THAT, THEREFORE, PENALTY FOR A PERIOD OF 7 MONTHS COULD BE LEVIED ON THIS TAX OF RS.1,59,426 /- WHICH WORKS OUT TO RS.22,316/-. THE PENALTY LEVIED IS AC CORDINGLY REDUCED TO RS.22,316/-. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES A S ALSO CONSIDERING A SHORT COMPILATION FILED, WE ARE OF TH E CONSIDERED OPINION THAT THERE WAS NO FALLACY IN THE ORDER OF L D.CIT(A) THROUGH WHICH HE HAS REDUCED THE IMPUGNED PENALTY LEVIED U/ S.271(1)(A) OF IT ACT. REVENUE DEPARTMENT HAS NOT CHALLENGED THE FACT WHICH WAS APPRECIATED BY LD.CIT(A) IN RESPECT OF THE ASSESSEE FURNISHING THE INCOME-TAX RETURN. A PHOTOCOPY OF THE ACKNOWLEDGEM ENT IS PLACED ON RECORD. EVEN BEFORE US THROUGH COMPILATION, THE ASSESSEE HAS VEHEMENTLY CONTESTED THAT FOR A.Y. 1986-87, THE ASS ESSEE HAD REQUESTED FOR AN EXTENSION OF TIME FOR FURNISHING O F RETURN BY MOVING AN APPLICATION THROUGH FORM NO.6 DATED 28/07 /1986. THE ASSESSEE HAD REQUESTED TO GRANT EXTENSION FOR FURNI SHING OF RETURN UPTO 30/09/1986. THE RETURN WAS LATER ON FILED ON 26/12/1986 WHICH WAS ASSESSED IN SUMMARY ASSESSMENT U/S.143(1) VIDE ORDER DATED 30-06-1988. BECAUSE OF THESE EVIDENCES, WH ICH WERE NOT CONTROVERTED BY THE REVENUE DEPARTMENT, LD.CIT(A) H AS RIGHTLY GRANTED PART RELIEF TO THE ASSESSEE. WE ARE NOT IN CLINED TO INTERFERE ITA NO.1307/AHD /2007 THE ITO VS. SHRI MAHENDRA M.VYAS ASST.YEAR - 1986-87 - 6 - WITH THOSE FACTUAL AS ALSO LEGAL FINDINGS OF LD.CIT (A). RESULTANTLY, WE FIND NO FORCE IN THIS GROUND OF THE REVENUE, HEN CE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. SD/- SD/- ( &..'# ) ( ' ' ( ) $ )* $ ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 24 / 5 /2013 &.., .*../ T.C. NAIR, SR. PS ') * +,- .'-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-XII, AHMEDABAD 5. 234 **-., -.#, 5'$,$ / DR, ITAT, AHMEDABAD 6. 467 8 / GUARD FILE. ')% / BY ORDER, 2 * //TRUE COPY// // 0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DIRECT-DICTATION ON COMPUTER DATED 16.5.13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.5.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 27.5.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.5.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER