Shri Dhanji Shankarji Gor, Bhuj V. The Assistant Commissioner of Income Tax, Central Circle-2, RAJKOT-GUJARAT

ITA 136/RJT/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2208 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: MJ RANPURA
• Keywords: Income from undisclosed sources
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI DHANJIBHAI SHANKARJI GOR, SHANKARSAMOSA HOUSE, NR. S.T. BUS STAND, BHUJ PAN: ADGPG3360J (APPELLANT) VS THE ACIT, CENTRAL CIRCLE - 2, RAJKOT (RE SPONDENT) REVENUE BY : S H RI C.S. ANJARIA , D . R. ASSESSEE BY: S H RI M.J. RANPURA , A.R. DATE OF HEARING : 16 - 03 - 2 016 DATE OF PRONOUNCEMENT : 22 - 03 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS IS A BATCH OF S EVEN APPEAL S. THE RELEVANT ASSESSMENT YEARS ARE FOR A.Y. 2003 - 04 TO 2009 - 10. FIRST SIX ASSESSMENT YEARS GIVE RISE TO ASSESSEE S APPEALS ITA NOS. 134 TO 139/RJT/2012 AGAINST CIT(A) - I V, AHMEDABAD S COMMON ORDER DATED 23 - 02 - 2012 UPHOLDING I T A NOS . 134 TO 139 & 321 / RJT /20 12 A SSESSMENT YEAR 200 3 - 04 TO 2009 - 10 I.T.A NO. 134 TO 139 & 321 /RJT /20 12 A.Y. 2003 - 04 TO 2009 - 10 PAGE NO SHRI DHANJIBHAI SHANK ARJI GOR VS. ACIT 2 PENALTIES OF RS. 33,100/ - , RS. 10,200/ - , RS. 9,300/ - , RS. 4,32,000/ - , RS. 9,600/ - AND RS. 2,37,000/ - IMPOSED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT RESPECTIVELY . LAST ASSESSMEN T YEAR 2009 - 10 INVOLVES ITA 321/RJT/2012 ASSAILING CORRECTNESS OF SECTION 271AAA PENALTY OF RS. 65,000/ - AS IMPOSED BY BOTH THE LOWER AUTHORITIES. 2. WE COME TO RELEVANT FACTS. THE ASSESSEE/AN INDIVIDUAL DERIVES INCOME FROM A FOOD OUTLET AND OTHER SOU RCES. HE APPEARS TO HAVE FILED REGULAR RETURNS OF INCOME IN ASSESSMENT YEARS 2003 - 04 TO 2008 - 09 STATING INCOMES OF RS. 64,400/ - , RS. 72,880/ - , RS. 1,09,570/ - , RS. 124,600/ - , RS. 1,48,390/ - , RS. 1,60,350/ - ; RESPECTIVELY. THIS FOLLOWED IMPUGNED SEARCH ACTIO N ON 15 - 09 - 2008 AT HIS RESIDENTIAL PREMISES. HE APPEARS TO HAVE DISCLOSED UNACCOUNTED INCOME OF RS. 32,52,634/ - FROM ASSESSMENT YEAR 2002 - 03 TO 2009 - 10 TO THE TUNE OF RS. 58,200/ - RS. 1,33,303/ - , RS. 50,611/ - , RS. 73,761/ - , RS . 13,64,810/ - , RS. 89,661/ - R S. 9,40,288/ - , RS. 5,42,000/ - RESPECTIVELY IN A LETTER DATED 10 - 10 - 2008. THIS CULMINATED IN 153A PROCEEDINGS EXCEPT IN ASSESSMENT YEAR 2009 - 10. THE ASSESSEE DISCLOSED ABOVE STATED ADDITIONAL INCOMES IN HIS RETURNS IN PURSUANCE TO THE SAME. TH E LAST AS SESSMENT YEAR INVOLVED A REGULAR RETURN OF RS. 6,50,000/ - . THE ASSESSING OFFICER FRAMED SEARCH ASSESSMENTS IN FIRST FIVE CASES AND A REGULAR ONE IN THE LAST ASSESSMENT YEAR ON 25 - 06 - 2010 ADMITTING THE SAME. HE INITIATED THE IMPUGNED PE N ALTY PROCEEDINGS A LLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S OF I.T.A NO. 134 TO 139 & 321 /RJT /20 12 A.Y. 2003 - 04 TO 2009 - 10 PAGE NO SHRI DHANJIBHAI SHANK ARJI GOR VS. ACIT 3 INCOME/UNACCOUNTED UNDISCLOSED INCOME IN QUESTION. THERE IS NO DISPUTE THAT QUANTUM PROCEEDINGS ATTAINED FINALITY AT THIS STAGE. 3. WE COME TO THE IMPUGNED PENALTY PROCEEDINGS U/S. 271(1)( C) IN ASSESSMENT YEARS 2003 - 04 TO 2008 - 09. THE ASSESSEE PLEADED THERE IN THAT HE HAD ADMITTED ADDITIONAL INCOME DURING SEARCH, FILED RETURN WHICH STOOD ACCEPTED AND THAT THERE WAS NO SEIZURE OF ANY ASSETS. HE WOULD STATE THAT HIS ADMISSION OF INCOME WAS TO BUY MENTAL PEACE AND AVOID ANY LITIGATION INCLUDING PUNITIVE ACTION. THE SAME FURTHER STATED THAT SECTION 271(1)(C) EXPLANATION 5A DEEMED CONCEALMENT CONCEPT DID NOT APPLY IN FACTS OF THE INSTANT CASE. THE ASSESSING OFFICER IN PENALTY ORDER DATED 24 - 1 2 - 2010 INVOKED THIS DEEMED CONCEALMENT PROVISION, QUOTED CHRONOLOGY OF EVENTS DURING SEARCH AND QUANTUM TO CONCLUDE THAT THE ASSESSEE HAD CONCEALED HIS INCOME. THE CIT(A) CONFIRMS ASSESSING OFFICER S ACTION IN IMPOSING THE IMPUGNED SECTION 271(1)(C) PENAL TIES. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILE. IT EMINATES FROM THE CASE RECORDS THAT THE LOWER AUTHORITIES HAVE MAINLY RELIED UPON ASSESSEE S DISCLOSURE DURING SEARCH OF RS. 32,52,634/ - AS HIS ADDITIONAL INCOME. WE FIND THAT THERE IS NO SPECIFIC INCRIMINATING MATERIAL QUOTED IN THE SHAPE OF MONEY, BULLION OR JEWELLERY AS SPECIFIED U/S. 153A OF THE ACT SO AS TO LINK THE SAME TO HIS ABOVE STATED UNACCOUNTED INCOME. WE FURTHER FIND THAT WE HAVE ALREADY DELETED IDENTICAL PENALTIES IN I TAS 140 TO 145/RJT/2012 IN CASE UMIYASHANKER LALJI GOR S CONNECTED CASES INVOLVING SIMILAR FACTS AND I.T.A NO. 134 TO 139 & 321 /RJT /20 12 A.Y. 2003 - 04 TO 2009 - 10 PAGE NO SHRI DHANJIBHAI SHANK ARJI GOR VS. ACIT 4 CIRCUMSTANCES . WE HAD HEARD THESE CASES ON 15 - 03 - 2003. BOTH PARTIES CATEGORICALLY STATED THAT RELEVANT FACTS INVOLVED ARISE FROM THE SAME SEARCH CONDUCTE D ON 15 - 09 - 2008. WE ACCORDINGLY FOLLOW THE SAME REASONING HEREIN AS WELL AND DELE TE THE IMPUGNED SECTION 271(1)(C) PENALTIES UNDER CHALLENGE IN ASSESSMENT YEARS 2003 - 04 TO 2008 - 09. ASSESSEE S APPEALS ITA 134 TO 139/RJT/2012 SUCCEED. 5. THIS LEAVES US WITH ASSESSEE S APPEAL ITA 321/RJT/2012 CHALLENGING SECTION 271AAA PENALTY OF RS. 65,000/ - ON HIS TOTAL UNDISCLOSED INCOME OF RS. 6,50,000/ - @ 10% AS IMPOSED BY BOTH THE LOWER AUTHORITIES. THE ASSESSING OFFICER REJECTED ASSESSSEE S IMMUNITY PLEA U/S. 271A AA OF THE ACT UNDER CLAUSES (A) TO (D) ON THE GROUND THAT RELEVANT CONDITIONS ON ASSESSEE S PART I.E. WHERE THE UNDISCLOSED INCOME IS OTHER THAN THE SEARCH STATEMENT IS NOT FURTHER EXPLAI NED BY SPECIFYING THE MANNER DERIVING THE SAME, ITS SUBSTANTIATION AS FOLLOWED BY PAYMENT OF TAXES AND INTEREST ARE NOT SATISFIED. THE CIT(A) IN THE LOWER APPELLATE ORDER UPHOLDS THE SAME ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT PAID TAX AND INTEREST IN QUESTION TILL PASSING OF THE IMPUGNED PENALTY ORDER. HE HOLDS THA T THE ASSESSE E HAS FULFILLED ALL THE OTHER RELEVANT CONDITIONS AS DISCUSSED IN THE PENALTY ORDER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILE. IT EMERGES FROM THE LOWER APPELLATE ORDER THAT THE ASSESSEE HAS PAID TAXES AND INTEREST BEFOR E PASSING OF THE LOWER APPELLATE ORDER. A CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA 288/RJT/2012 PRATAP B. THAKKER I.T.A NO. 134 TO 139 & 321 /RJT /20 12 A.Y. 2003 - 04 TO 2009 - 10 PAGE NO SHRI DHANJIBHAI SHANK ARJI GOR VS. ACIT 5 VS. ACIT DECIDED ON 09 - 03 - 2013 RELIES UPON ANOTHER CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA 1326/KOL/2011 DCIT VS. PIONEER MARBLES TO CONCLU DE THAT EVEN IF AN ASSESSEE PAYS SUCH TAXES AND INTEREST BEFORE PASSING OF LOWER APPELLATE ORDER IN PENALTY PROCEEDINGS, IT AMOUNTS TO A SUBSTANTIVE COMPLIANCE AND SUCH A PENALTY IS NOT SUSTAINABLE. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON FACTS OR LAW. WE DRAW SUPPORT THEREFROM AND HOLD THAT THE IMPUGNED SECTION 271AAA DESERVES TO BE DELETED. ORDERED ACCORDINGLY. ITA 321/RJT/2012 SUCCEEDS. 7 . THE ASSESSEE S ALL SEVEN APPEALS ARE ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 22 - 03 - 201 6 SD/ - SD/ - (ANIL CHATURVE DI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22 /03 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT