PADMAJA S. SIRIGERI, MUMBAI V. ITO 21(3)(4) (OLD JURISDICTION), MUMBAI

ITA 1334/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9370 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Accommodation entries; Revised return
• Section: 143(3); 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCHES E, MUMBAI BEFORE SHRI G S PANNU, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 1334/MUM/2017 ASSESSMENT YEAR : 2006 2007 SMT PADMAJA S SIRIGERI 297, TARDEO ROAD, WILLE MANSION, 1 ST FLOOR, OPP BANK OF INDIA, NANA CHOWK MUMBAI 400 007 PAN AQTPS6276M VS ITO 26(2)(4) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJKUMAR SINGH -AR RESPONDENT BY : SHRI V JUSTIN -DR DATE OF HEARING : 23 . 08 .2017 DATE OF PRONOUNCEMENT : 27 .0 9 .2017 O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE UNDER SECTION (U/S) 2 53 OF THE INCOME-TAX ACT (ACT), IS DIRECTED AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS)-38 {CIT(A)}, MUMBAI, DATED 29.11.2016 FOR ASSESSMENT YEAR(AY) 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, PENAL TY IMPOSED U/S 271(1)(C) AT RS. 53,280/- BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD. C.I.T. (APPEALS) IS BAD IN LAW AND VOID AB INITIO FOR THE FOLLOWING STATED REASONS:- I. NOTICE DATED 31-01-2014 ISSUED U/S 274 R.W .S. 271 IN STANDARD FORMAT IS WITHOUT STRIKING OUT INAPPLICABL E PORTION THEREFORE IT IS NOT DISCERNIBLE WHETHER PENALTY PRO CEEDING WAS INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME, ITA NO.1334/MUM/2017 SMT PADMAJA S SIRIGERI 2 II. AND AGAINST THE PENALTY' PROCEEDING STAT ED TO BE INITIATED U/S 271(1)(C) IN THE RELEVANT ASSESSMENT ORDER ON T HE ALLEGED CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF I NCOME, IN THE ORDER PASSED U/S 271(1)(C) ON 22-07-2014 PENALTY HA S BEEN IMPOSED FOR THE ALLEGED CHARGE OF CONCEALMENT OF PA RTICULARS OF INCOME. IN VIEW OF THE ABOVE, ALLEGED PENALTY IMPOSE D U/S 271(L)(C) BEING UNLAWFUL AND LEGALLY UNTENABLE THEREFORE SA ME MAY KINDLY BE QUASHED. 2. THAT WITHOUT PREJUDICE TO APPEAL GROUND NO. 1, EVEN ON MERIT OF THE CASE, ALLEGED PENALTY IMPOSED U/S 271(1)(C) AND CONFIRMED BY THE LOWER AUTHORITIES IS WITHOUT PROPERLY APPREC IATING THE ENTIRETY OF THE FACTS OF THE CASE, LEGAL POSITION A ND RELEVANT JUDICIAL RULINGS THEREFORE SAME MAY KINDLY BE DELET ED. 3. THAT APPELLANT CRAVES THE LEAVE TO AMEND, ALTER, SU BSTITUTE AND OR TO RAISE NEW OR ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR WAS COMPLETED U/S. 143(3) R.W.S. 14 7 ON 31.01.2014. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R DENIED THE CLAIM OF LONG TERM CAPITAL GAIN TO THE ASSESSEE HOLDING THAT THE ASSESSEE AVAILED ACCOMMODATION ENTRIES FROM MUKESH CHOKSHI ENTITIES AND TREATED THE AMOUNT AS UNACCOUNTED MONEY. THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) @100% ON THE TAX SOUGHT TO BE EVADED AND WORKED OUT THE PENALTY AT ` 53,280/- VIDE ITS ORDER DATED 22.07.2014. ON APPEA L, THE CIT(A) SUSTAINED THE PENALTY. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED AR FOR THE ASSESSEE ARGUED THAT NOTI CE U/S. 148 DATED 26.03.2013, WAS SERVED AND SUBSEQUENTLY REMINDERS W ERE SENT. IN RESPONSE, ITA NO.1334/MUM/2017 SMT PADMAJA S SIRIGERI 3 THE ASSESSEE FILED RETURN OF INCOME ON 28.11.2013 D ECLARING TAXABLE INCOME AT ` 4,18,210/-, WHICH INCLUDED EXEMPT LONG TERM CAPITAL GAIN OF ` 3,52,445/- THE INCOME WAS OFFERED FOR TAXATION BEFORE THE ISSU ANCE OF NOTICE U/S. 143(2). THE ASSESSEE HAS NOT CONCEALED ANY INCOME RATHER OFFERED THE LONG TERM CAPITAL GAIN AS INCOME IN THE REVISED INCOME, WHICH WAS ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSEE HAS NOT FILED ANY APPEAL DUE TO SMALLNESS OF THE AMOUNT. IT WAS ARGUED THAT THE ASSESSEE NEITHE R CONCEALED PARTICULARS OF INCOME NOR FILED INACCURATE PARTICULARS. THE LEARN ED AR FURTHER ARGUED THAT THE NOTICE U/S. 274 R.W.S.271 (1)(C) WAS ISSUED ON A PRINTED PROFORMA AND THE ASSESSING OFFICER HAS NOT STROKED OUT INAPPROPRIATE PORTION IN THE NOTICE. IN SUPPORT OF HIS SUBMISSION, THE LEARNED AR RELIED ON THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG FACTORY 263 ITR 153 (KAR); DECISION OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 0009 (SC) AND THE ORDER DATE D 19.08.2016 OF THE MUMBAI BENCHES OF THE TRIBUNAL IN THE CASE UNIVERSA L MUSIC INDIA PVT. LTD. IN ITA NO.6752/MUM/2017. 4. ON THE OTHER HAND, THE LEARNED DR ARGUED THAT TH E ASSESSEE WAS AWARE OF THE PROBLEM IN HER RETURN OF INCOME THAT S HE HAS AVAILED ACCOMMODATION ENTRIES AND THE TRANSACTIONS WERE NOT GENUINE AND IT WAS ONLY TO ESCAPE LIABILITY, OFFERED THE INCOME AS OT HER INCOME IN THE REVISED RETURN. IN THE CONTEXT OF THE GROUND RAISED BY THE ASSESSEE PERTAINING TO ITA NO.1334/MUM/2017 SMT PADMAJA S SIRIGERI 4 NON-STRIKING OF INAPPROPRIATE PORTION OF NOTICE U/S . 274, THE LEARNED DR RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KAUSHALYA & ORS 216 ITR 660 (BOM). 5. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH TH E MATERIAL AVAILABLE ON RECORD ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSMENT WAS REOPENED U/S. 147 BY ISSUING NOTICE U/S. 148 ON 22.03.2015. THE ASSESSEE FILED HERE RETURN OF INCOME ON 28.11.2013. THE NOTICE U/S. 143(2) R.W.S. 147 WAS ISSUED ON 06.12.2013. THE ASSESSEE IN HER REVISED RETURN OF INCOME OFFERED AN AMOUNT OF ` 3,52,445/- FOR TAX. FURTHER THE ASSESSEE IN THE NOTE ATTACHED WITH THE STATEMENT OF INCOME HAS SPEC IFIED THAT TO AVOID LITIGATION AND BUY PEACE AND TO REMAIN CORDIAL WITH THE DEPARTMENT, THE ASSESSEE HAD OPTED TO OFFER THE EXEMPT LONG TERM CA PITAL TAX AS TAXABLE INCOME. THE ASSESSEE IN REPLY TO NOTICE U/S. 274 R. W.S. 271(1)(C) HAS SPECIFIED THAT DISPUTED LONG TERM CAPITAL GAIN HAS VOLUNTARILY BEEN OFFERED BY THE ASSESSEE TO AVOID LITIGATION AND BUY PEACE. WE HAVE FURTHER NOTICED THAT THE ASSESSEE HAS OFFERED IMPUGNED INCOME BEFORE ISS UANCE OF NOTICE U/S. 143(2) R.W.S. 147 DATED 06.12.2013. THE ASSESSING OFFICER WHILE PASSING PENALTY ORDER HAS NOT PROPERLY CONSIDERED THE REPLY OF THE ASSESSEE FILED IN RESPONSE TO NOTICE U/S. 274 R.W.S. 271(1)(C). 6. THE HONBLE APEX COURT IN CASE OF SURESH CHANDRA MITTAL (SUPRA), HELD THAT WHEN THE ASSESSEE HAS DECLARED ADDITIONAL INCO ME TO BUY PEACE AND TO ITA NO.1334/MUM/2017 SMT PADMAJA S SIRIGERI 5 COME OUT OF VEXED LITIGATION, THE PLEA OF THE ASSES SEE COULD BE TREATED AS BONA FIDE AND THE PENALTY WAS NOT LEVIABLE. WE HAV E SEEN THAT THE ASSESSEE HAS VOLUNTARILY OFFERED LONG TERM CAPITAL GAINS FOR TAX. THE ASSESSEE HAS FURNISHED NECESSARY INFORMATION IN THE NOTES OF ACC OUNT WHILE FILING THE RETURN OF INCOME. IN OUR CONSIDERED VIEW, THE ASSESSEE HA S NEITHER CONCEALED NOR FILED ANY INACCURATE PARTICULARS OF INCOME WHILE FI LING THE REVISED RETURN OF INCOME. THUS, THE ORDER PASSED BY THE ASSESSING OF FICER U/S. 271(1)(C) DATED 22.07.2014 IS NOT SUSTAINABLE. IN THE RESULT THE GR OUND NO.2 OF THE APPEAL IS ALLOWED. AS WE HAVE ALLOWED THE APPEAL OF THE ASSES SEE ON GROUND NO.2, HENCE, THE DISCUSSION ON GROUND NO.1 OF THE APPEAL HAS BECOME ACADEMIC. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (G S PANNU) (PAWAN SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 27 TH SEPTEMBER, 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI