Mohmed Amin A Dadu, Sabarkantha V. The Dy.CIT.,S.K.Circle, Himatnagar

ITA 1320/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63025 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: S N DIVATIA
• Keywords: Revised return
• Section: 148

Judgement Text

ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, A HMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO.1320 & 1321/AHD/2010 (ASST. YEARS: 2005-06 & 2006-07) SHRI MOHAMED AMIN A.DADU PROP. OF AUSTRALIA STUDY CENTER, 10 RONAK SOCIETY, MODASA. (SABARKANTHA) (APPELLANT) VS. DEPUTY COMMISSIONER OF INCOME TAX, SABARKANTHA CIRCLE, HIMATAGAR. (RESPONDENT) PAN: ABNPD9003C APPELLANT BY : SHRI S.N.DIVATIA RESPONDENT BY : SHRI C.S. ANJARIA ( )/ ORDER DATE OF HEARING : 22-08- 2012 DATE OF PRONOUNCEMENT : 19 -10-2012 PER: SHRI ANIL CHATURVEDI, A.M. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINS T THE ORDER OF LD. CIT (A)-VI, AHMEDABAD VIDE ORDER NO. CIT (A)-VI/214 & 215/DCIT.SK/HMT09-10 BOTH DATED 25-1-2010 FOR THE A SSESSMENT YEARS 2005-06 AND 2006-07 RESPECTIVELY. ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 2 2. THE ONLY EFFECTIVE GROUND OF APPEAL IN BOTH THE APPEALS IS WITH RESPECT TO THE LEVY OF PENALTY U/S. 271(1) (C) .SIN CE THE FACTS ARE SIMILAR BOTH THE APPEALS ARE HEARD TOGETHER AND DISPOSED BY CONSOLIDATED ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DOING THE BUSINESS OF EDUCATIONAL CONSULTANCY TO THE STUDENTS DESIROUS OF STUDY IN AUSTRALIA. THE ASSESSEE CHARGES PROFESSIONAL FEES A ND RECEIVES COMMISSION FROM THE UNIVERSITY IN WHICH THE STUDENT S HAVE SECURED ADMISSION. THE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 DECLARING TOTAL INCOME OF RS.14,36,180/-. A SURVEY U/S.133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 11-9-20 08 WHEREIN THE STATEMENT OF THE ASSESSEE WAS RECORDED AND THE ASSE SSEE MADE A DISCLOSURE AGGREGATING RS.75 LAKHS TOWARDS PROFESSI ONAL EXPENSES CLAIMED IN THE YEAR A.Y. 2005-06 TO 2009-10.THE ASSESSEE FI LED REVISED RETURN FOR A.Y. 2005-06 ON 24-9-2008 BY DECLARING INCOME OF RS .19,94,180/- WHEREIN HE INCLUDED THE INCOME DISCLOSED OF RS.4.5 LAKHS DU RING SURVEY PROCEEDINGS. LATER ON THE A.O. ISSUED NOTICE U/S. 1 48 AND FRESH ASSESSMENT WAS COMPLETED AND THE INCOME OF RS.19,14 ,180/- WAS DETERMINED BY A.O. SUBSEQUENTLY A.O. VIDE ORDER DAT ED 25-5-2009 LEVIED PENALTY U/S. 271(1)(C) OF RS.1,51,470/- U/S. 271(1) (C) ON THE ADDITION OF RS.4,50,000/- IN RESPECT OF THE UNDISCLOSED INCOME DECLARED IN THE REVISED RETURN OF INCOME. AGGRIEVED BY THE ORDER OF A.O. TH E ASSESSEE CARRIED THE MATTER BEFORE THE CIT (A) ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 3 4. CIT (A) UPHELD THE ORDER OF THE A.O. FOR THE RE ASON THAT THE ASSESSEE HAD FILED REVISED RETURN ONLY AFTER THE SURVEY PROC EEDINGS. AGAINST THE ORDER OF THE CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFOR E US. 5. BEFORE US THE LD. A.R. SUBMITTED THAT THE SURVEY PARTY DID NOT FIND ANY EVIDENCE REGARDING BOGUS EXPENDITURE. THE ASSESSEE WAS ALSO NOT FURNISHED THE COPY OF THE STATEMENT OF VARIOUS PART IES RECORDED BEHIND THE BACK OF THE ASSESSEE. THE LD. A.R. ALSO SUBMITTED T HAT IN THE STATEMENT RECORDED THE ASSESSEE HAD CLEARLY STATED THAT THE D ISCLOSURE WAS MADE TO BUY PEACE AND AVOID LITIGATION AND WITH A REQUEST N OT TO LEVY PENALTY. HE POINTED TO REPLIES TO QUESTIONNO.35, 36, 42 PLACED AT PAGE 110A OF THE PAPER BOOK. THE LD. A.R. FURTHER SUBMITTED THAT THE A.O. HAS FAILED TO PROVE THAT THE EXPLANATION OFFERED BY THE ASSESSEE WITH R ESPECT TO THE GENUINENESS OF EXPENSES WAS BOGUS. HE ALSO PLACED O N RECORD THE CONFIRMATION OF LEDGER ACCOUNTS OF SOME OF THE SERV ICE PROVIDERS ALONG WITH THE COPY OF THE STATEMENT OF SOME OF THE SERVICE PR OVIDERS, WHICH WAS RECEIVED BY THE ASSESSEE LATER ON, WHICH GOES TO CO NFIRM THAT THOSE PARTIES ACTED AS SERVICE PROVIDER TO THE ASSESSEE. THE LD. A. R. FURTHER SUBMITTED THAT THE SURVEY PARTY HAS NOT FOUND ANY MATERIAL WH ICH ESTABLISHES THAT PROFESSIONAL CHARGES WERE BOGUS. HE FURTHER RELIED ON THE DECISIONS IN THE CASE OF PRAMILA BHATIA (ITA NO.1929/DEL/2011), AJAY SANGARI & CO. (2011) 140 TTJ (CHD.) 388 AND DILIP YASHWANT OAK (2011) 13 8 TTJ (PUNE) 559. 6. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORD ER OF THE A.O. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE SURVEY U/S.133A WAS CARRIED ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 4 OUT ON 11-9-2008 AT THE BUSINESS PREMISES OF THE AS SESSEE. DURING THE COURSE OF SURVEY THE ASSESSEE MADE DISCLOSURE AGGRE GATING TO RS.75 LACS TOWARDS PROFESSIONAL EXPENSE CLAIMED IN A.Y. 2005-0 6 TO 2009-10. SUBSEQUENTLY, FOR A.Y. 2005-06, THE ASSESSEE FILED REVISED RETURN AND DECLARED INCOME OF RS.19,94,180/- WHICH INCLUDED RS .4.5 LACS DISCLOSED DURING THE COURSE OF SURVEY. ASSESSMENT WAS COMPLET ED ON 31-12-12008 AND THE INCOME OF RS.19.94 LACS DECLARED BY THE ASS ESSEE WAS ACCEPTED. PENALTY WAS LEVIED BY THE A.O. FOR THE REASON THAT THE ASSESSEE HAD INCLUDED IN THE RETURN OF INCOME THE ADDITIONAL INC OME ONLY ON ACCOUNT OF SURVEY U/S. 133A. 8. CLAUSE (C) OF SECTION 271(1) AUTHORIZES THE A.O. TO IMPOSE THE PENALTY WHEN THE A.O. IS SATISFIED THAT THE ASSESSE E HAS EITHER (A) CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) FUR NISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE PRESENT CASE, IT IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AS IN THE INCOM E TAX RETURN THE PARTICULARS OF INCOME HAVE BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE INCOME T AX RETURN AND THE INCOME RETURNED WAS ALSO ACCEPTED AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. THE ASSESSEE HAS MADE A COMPLETE DISCLOSURE IN THE INCOME TAX RE TURN AND OFFERED THE SURRENDERED AMOUNT TO TAX. IN SUCH A CASE IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED INCOME OR THERE WAS NON DISC LOSURE ON THE PART OF THE ASSESSEE SO AS TO LEVY PENALTY. THE A.O. HAS AL SO NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE DECLARATION OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURN OR HIS EXPLANATION W AS NOT BONAFIDE. IT IS A ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 5 SETTLED LAW THAT THE PROVISIONS OF SECTION 271(1) ( C) HAVE TO BE CONSTRUED STRICTLY. NO PENALTY CAN BE LEVIED UNLESS THE CONDI TIONS STIPULATED IN THE PROVISIONS STIPULATED ARE DULY AND UNAMBIGUOUSLY SA TISFIED. IN THE CASE OF CIT VS. SURAJ BHAN (2007) 159 TAXMAN 26 WHILE FOLLO WING THE DECISION IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 25 1 ITR 9 (SC) HAS HELD THAT WHEN AN ASSESSEE FILES A REVISED RETURN SHOWIN G HIGHER INCOME AND GIVES AN EXPLANATION THAT HE OFFERED HIGHER INCOME TO BUY PEACE OF MIND AND AVOID LITIGATION, PENALTY CANNOT BE IMPOSED MER ELY ON ACCOUNT OF HIGHER INCOME HAVING BEEN SUBSEQUENTLY DECLARED. THUS IN T HE PRESENT CASE CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, AN D RESPECTFULLY FOLLOWING THE DECISION OF PUNJAB AND HARYANA HIGH COURT, WE ARE O F THE VIEW THAT NO PENALTY CAN BE LEVIED IN THE PRESENT CASE. WE THUS DIRECT THE A.O. TO DELETE THE PENALTY. I.T.A. NO.1`321/AHD/2010 A.Y. 2006-07. 9. BEFORE US AT THE OUT SET LD. A.R. AND D.R. SUBMI TTED THAT THE FACT IN THE PRESENT CASE ARE SIMILAR TO THAT OF ITA NO.1320 EXCEPT FOR THE QUANTUM OF PENALTY AND THEREFORE THEY HAVE SIMILAR SUBMISSI ONS TO MAKE. 10. IN THE PRESENT CASE SINCE BOTH THE PARTIES HAV E ACCEPTED THAT THE FACTS ARE SIMILAR TO THAT OF ITA NO.1320/AHD/2010, WE FOR SIMILAR REASONS STATED HEREINABOVE DIRECT THE DELETION OF PENALTY I N THE PRESENT CASE ALSO. THUS THE GROUND OF THE ASSESSEE IS ALLOWED. ITA NO.1320 & 1321/AHD/2010 . A.YRS. 2005- 06 & 2006- 07. . 6 10. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19- 10- 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) VI, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD 1.DATE OF DICTATION 27 - 8 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 17 / 10 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 17 - 10 - 2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 19 - 10 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 19 -10 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19 -10 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER