Income Tax Officer,Khamgaon, Buldhana V. Smt Farida Y. Bohra, Buldhana

ITA 148/NAG/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9686 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 13-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Assessee Lawyers: S C THAKAR; C J THAKAR
• Keywords: Unexplained expenditure; Bonafide belief
• Section: 153A; 27; 132

Judgement Text

ITA NO S . 142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 142&143/ NAG / 20 10 ASSESSMENT YEAR : 2004 - 05 & 2006 - 06 ITO KHAMGAON BULDHANA VS. RASHIDA M. BOHRA BULDHANA (APPELLANT) (RESPONDENT) AIFPB 2194R ITA NO.144&145/NAG/2010 ASSESSMENT YEAR : 2004 - 05 & 2006 - 06 ITO KHAMGAON BULDHANA VS. FAKHERA FIDAHUSSAIN BOHRA BULDHANA (APPELLANT) (RESPONDENT) PAN NO.AIFPB 2192K ITA NO.146 TO 149/NAG/2010 ASSESSMENT YEAR : 2002 - 03 TO 2005 - 06 RESPECTIVELY ITO KHAMGAON BULDHANA VS. FARIDA Y. BOHRA BULDHANA (APPELLANT) (RESPONDENT) PAN NO.AIFPB 2197N APPELLANT BY: DR. MILIND BHUSARI, CIT(DR) RESPONDENT BY: SHRI C.J. THAKAR, ADVOCAT E & SHRI S.C. THAKAR, ADVOCATE DATE OF HEARING: 16.10.2012 DATE OF PRONOUNCEMENT: 18.10.2012 ORDER PER BENCH : - SINCE ALL THESE APPEALS INVOLVE THE COMMON ISSUE, THEREFORE, THESE APPEALS ARE DISPOSED OF BY THIS COMMON ISSUE. THE ONLY ISSUE INVOLVED IN THES E APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 21.5.2010 RELATE TO THE DELETION OF THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. AT ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 2 THE OUTSET, BOTH THE LD. A.R. & LD. D.R. AGREED THAT THE FACTS IN ALL THESE APPEALS FILED AGAINST THE ORDER OF THE CIT(A) ARE COMMON AND IT WAS MENTIONED THAT ALL THESE APPEALS BE DISPOSED OF ON THE BASIS OF THE FACTS IN THE CASE OF SMT. RASHIDA M. BOHRA. 2. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH U/S 132(1) OF THE INCOME - TAX ACT AGAINST BOHRA GROUP OF CASES AT 7, TANK ROAD, KHAMGAON ON 30.5.2004 AND 31.5.2004. THE ABOVE REFERRED ASSESSEE S ARE THE ASSESSE E S IN BOHRA GROUP WHICH GROUP IS CONSISTED OF SHRI YAHYABHAI, HIS WIFE FARIDABAI, THEIR SONS MURTUZA, FIDAHUS SAIN, NOORDUDIN AND SMT. RASHIDA, W/O MURTUZA AND SMT. FAKHERA, WIFE FIDAHUSSAIN. THEY ALL RESIDE TOGETHER, HAVE COMMON MESS AND THEY CARRY ON THEIR ACTIVITIES AT 7, TANK ROAD, KHAMGAON. DURING THE COURSE OF SEARCH VARIOUS FIXED DEPOSIT WITH VARIOUS BANK S IN THE NAMES OF VARIOUS MEMBERS OF BOHRA GROUP AND BENAMIDARS WERE FOUND. IN THE STATEMENT RECORDED U/S 132(4), THE GROUP DECLARED THEIR ENTIRE INVESTMENTS IN FIXED DEPOSITS, BANK ACCOUNT, PROPERTIES, EXPENSES ETC. THEIR INCOME FOR VARIOUS YEARS FROM AS SESSMENT YEAR 1999 - 2000 TO ASSESSMENT YEAR 2005 - 06 GIVING THE BREAKUP IN THE WRITTEN STATEMENT DATED 8.9.2009, ASSESSEE WISE. TOTAL OF SUCH INVESTMENTS AND EXPENSES CAME TO RS.4,98,96,642/ - UP TO ASSESSMENT YEAR 2004 - 05. AFTER CONSIDERING THE INVESTMENT AND UNEXPLAINED EXPENDITURE FOR THE ASSESSMENT YEAR 2005 - 06, TOTAL INCOME OF THE GROUP FROM ASSESSMENT YAR 1999 - 2000 TO ASSESSMENT YEAR 2005 - 06 WAS OFFERED AND DECLARING RS.6,09,23,165/ - IN THE HANDS OF THE 7 ASSESSEES. THE RETURNS IN PURSUANCE OF THE NOT ICE U/S 153A OF THE ACT DATED 3.12.2004 WERE FILED FOR THEIR INCOME FOR THE ASSESSMENT YEAR 1999 - 2000 TO 2004 - 05 ON 28.2.2005 FOR ASSESSMENT YEAR 2005 - 06 ON 30.11.2005 IN ACCORDANCE WITH THE DECLARATION MADE U/S 132(4) OF THE ACT. TAXES ON THE INCOME DECL ARED WERE ALSO PAID. IN THE ASSESSMENT FRAMED U/S 153A READ WITH SECTION 143(3), THE ASSESSING OFFICER ACCEPTED THE INCOME AS DECLARED BUT MADE ADDITION ON ESTIMATE BASIS INCOME FROM BUSINESS AND INITIATED THE PENALTY PROCEEDINGS BY RECORDING AS UNDER: RECORD SHOWS THAT THE RETURN OF INCOME HAS BEEN FILED BY THE ASSESSEE FOR THE FIRST TIME AFTER RECEIPT OF NOTICE U/S 153A FROM THE DEPARTMENT. THEREFORE THE ENTIRE ASSESSED INCOME IS TREATED AS CONCEALED INCOME AND PENAL PROCEEDINGS U/S 271(1)(C) ARE INIT IATED. ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 3 3. THE CIT(A) DELETED THE ADDITIONS MADE ON ACCOUNT OF THE BUSINESS ACTIVITIES AND NO FURTHER APPEAL WAS FILED BY THE REVENUE BEFORE THE TRIBUNAL. ULTIMATELY, THE RETURN INCOME BY THE ASSESSEE WAS ACCEPTED WITHOUT ANY VARIATION. THE ASSESSEE SUBM ITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF THE PENALTY PROCEEDINGS U/S 271(1)(C) THAT THERE WAS NO QUESTION OF ANY CONCEALMENT OF INCOME OR FURNISHING OF ANY INACCURATE PARTICULARS THERE OF AS THE ENTIRE INCOME DECLARED BY THE ASSESSEE U/S 132 (4) AND THE INCOME AS RETURNED IN PURSUANCE OF NOTICE U/S 153A WAS ACCEPTED WITHOUT ANY VARIATION. THUS, THERE IS NO CONCEALMENT EITHER ACTUAL OR DEEMED. IT WAS FURTHER SUBMITTED THAT IN NON - FILING OF THE RETURNS EARLIER WAS DUE TO BONAFIDE BELIEF AND RE ASONABLE BELIEF THAT THE ASSESSEE HAVING DECLARED THE INCOME FULLY AND TRULY AND HAVING CO - OPERATED WITH THE DEPARTMENT IN THE MATTER OF ASSESSMENT AND PAYMENT OF TAXES. NO QUESTION OF LEVYING THE PENALTY ARISE. THE LEVY OF THE PENALTY IS DISCRETIONARY A ND LOOKING TO THE CIRCUMSTANCES OF THE CASE, PENALTY SHOULD BE DROPPED. THE ASSESSING OFFICER DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE BUT LEVIED PENALTY U/S 271(1)(C). 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CALLI NG FOR THE REMAND REPORT FROM THE ASSESSING OFFICER DELETED THE PENALTY IN EACH OF THE CASE RELYING ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. CIT 83 ITR 26 (SC) , CIT VS. SHYAMLAL 266 ITR 156 (MP), CIT VS. SURESH M ITTAL 241 ITR 125 (MP) & CIT VS. SURESH MITTAL 251 ITR 9 (SC). BEFORE US, THE LD. D .R. VEHEMENTLY CONTENDED THAT IT IS A FACT THAT THE ASSESSEE HAS NOT FILED ANY RETURN PRIOR TO THE SEARCH. IN THE STATEMENT RECORDED U/S 132(4), THE ASSESSEE HAS ACCEPTED THE INCOME AND ACCORDINGLY FILED THE INCOME TAX RETURN IN PURSUANCE TO THE NOTICE ISSUED U/S 153A. THIS IS A CLEAR CUT CASE OF CONCEALMENT OF INCOME. THE ASSESSEE WAS FULLY AWARE THAT HIS INCOME HAS MUCH MORE THAN THE TAXABLE LIMIT AND HE WAS UNDER AN OB LIGATION TO FILE THE INCOME TAX RETURN. HAD THERE BEEN NO SEARCH IN THE CASE OF THE ASSESSEE, THE QUESTION OF DECLARING THE INCOME BY THE ASSESSEE WOULD HAVE NOT ARISE. THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY U/S 271(1)(C). ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 4 5. THE LD. A.R. ON THE OTHER HAND VEHEMENTLY CONTENDED THAT THE CASE OF THE ASSESSEE IS DULY COVERED WITHIN THE EXEMPTION GIVEN UNDER EXPLANATION 5 OF SECTION 271(1)(C). HE REFERRED TO SECTION 271(1)(C) E XPLANATION 5 SUB CLAUSE 2 THERE OF. HE CONTENDED THAT THE ASSESSEE IN THE COURSE OF SEARCH DECLARED THE INCOME IN THE STATEMENT MADE U/S 132(4) AND HAS ALSO EXPLAINED HOW THE INCOME HAS BEEN DERIVED BY HIM. THE ASSESSEE ALSO PAID THE TAX TOGETHER WITH THE INTEREST IN RESPECT OF THE INCOME SO DECLARED. 6. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. THIS IS NOT A DISPUTED FACT THAT THE SEARCH HAD BEEN TAKEN PLACE ON 30.5.2004. WHATEVER INCOME HAS BEEN RETURNED BY THE ASSESSEE IN THE RETURN FILED I N PURSUANCE TO NOTICE ISSUED U/S 153 WERE DULY DECLARED BY THE ASSESSEE IN THE STATEMENT MADE U/S 132(4). WE HAVE GONE THROUGH THE PROVISION OF SECTION 271(1)(C) AS WELL AS EXPLANATION 5. WE NOTED THAT THE ASSESSING OFFICER HAS IMPOSED THE PENALTY U/S 27 1(1)(C) ON THE ASSESSING OFFICER BY INVOKING EXPLANATION 5. EXPLANATION 5 READS AS UNDER: EXPLANATION 5 WHERE IN THE COURSE OF A [SEARCH INITIATED UNDER SECTION 132 BEFORE THE 1 ST DAY OF JUNE, 2007], THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME, -- (A) F OR ANY PREVIOUS YEAR WHICH HAS E NDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) F OR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB - SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, [UNLESS, -- (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED, -- (I) I N A CASE FALLING UNDER CLAUSE (A), BEFORE THE DATE OF THE SEARCH; AND (II) I N A CASE FALLING UNDER CLAUSE (B), ON OR BEFORE SUCH DATE, ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 5 I N THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE [CHIEF COMMISSIONER OR COMMISSIONE R] BEFORE THE SAID DATE; OR (2) H E, IN THE COURSE OF THE SEARCH, MAKES A STATEMENT UNDER SUB - SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT O F HIS INCOME WHICH HAS NOT BEEN DISCLOSED AS FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN [***] SUB - SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND P AYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME . ] 7. FROM THE PERUSAL OF THE SAID EXPLANATION, IT IS APPARENT THAT FIRST PART OF THE EXPLANATION MAKES THE ASSESSEE LIABLE FOR PENALTY U/S 271(1)(C) IN CASE THE ASSESSEE IS FOUND DURI NG THE COURSE OF THE SEARCH INITIATED U/S 132 BEFORE 1 ST JUNE, 2007. THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING HIS INCOME WHOLLY OR IN PART (A) FOR ANY PREVIOUS YEAR ENDED BEFORE THE DATE OF THE SEARCH BUT THE ASSESSEE HAS NOT FURNISHED ITS RETURN OF INCOME FOR SUCH YEAR BEFORE THE DATE OF THE SEARCH OR IF THE ASSESSEE HAS FURNISHED THE RETURN HE HAS NOT DECLARE D SUCH INCOME. OR (B) OR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF THE SEARCH. 8. UNDER THESE CIRCUMSTANCES, THE ASSESSEE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH I NCOME. THERE ARE TWO EXCEPTIONS GIVEN UNDER EXPLANATION 5 WHEN ASSESSEE SHALL NOT BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. SUB CLAUSE 1 ASSESSEE AGREES IS NOT APPLICABLE TO HIM. THE ASSESSE E CLAIMS THAT HIS CASE FALLS WITHIN THE SECOND EXEMPTION I.E. CLAUSE 2. WE NOTED THAT THIS CLAUSE 2 CAN BE APPLIED IF THE FOLLOWING PRE - CONDITIONS ARE SATISFIED. (A) THE ASSESSEE ACCEPTS IN THE STATEMENT MADE U/S 132 (4) THAT ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF THE TIME SPECIFIED U/S 139(1) OF THE AC T. ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 6 (B) THE ASSESSEE HAS ALSO SPECIFIED IN THE STATEMENT, THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND (C) THE ASSESSEE PAYS THE TAXES TOGETHER WITH INTEREST, IF ANY ON THE INCOME SO DECLARED. 9. WE NOTED THAT IN THE CASE OF THE ASSESSEE, THE S EARCH HAS TAKEN PLACE ON 30.5.2004. THE RETURNS FOR THE ASSESSMENT YEAR 2004 - 05 & 2005 - 06 WERE TO BE FILED UP TO 31.10.2004 AND 31.10.2005. THE ASSESSEE HAS ALSO DECLARED THE MANNER IN WHICH THE INCOME HAS BEEN DERIVED AND HAS ALSO PAID THE TAX TOGETHER WITH THE INTEREST WHICH IS NOT DENIED BY THE DEPARTMENT. 10. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO PENALTY CAN BE IMPOSED SO FAR IT RELATE TO ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 . ACCORDINGLY, WE CONFIRM THE ORDER DE LETING THE PENALTY BY THE CIT(A) IN ITA NO S . 142, 143, 144, 145, 148 & 149 IN VIEW OF APPLICABILITY OF CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C). 11. NOW COMING TO THE PENALTY IMPOSED FOR THE EARLIER YEAR I.E. ASSESSMENT YEAR 2002 - 03 AND 2003 - 04 , THE SE TWO APPEALS ARE ITA NOS. 146 & 147. IN THIS REGARD, WE ARE OF THE OPINION THAT THE PENALTY HAS TO BE IMPOSED AS THE TIME FOR FILING THE RETURNS HAS ALREADY EXPIRED AND ASSESSEE WILL NOT BE COVERED UNDER THE EXCEPTION 2 GIVEN UNDER EXPLANATION 5. OUR AF ORESAID VIEW IS DULY S U PPORTED BY THE DECISION OF AHMEDABAD BENCH OF TRIBUNAL IN THE CASE OF ACIT VS. RUPESH BHOLIDAS PATEL 309 ITR (AT) 217. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) FOR A.Y. 2002 - 03 AND 2003 - 04 AND RESTORE THE ORDER OF A.O. LEVYI NG THE PENALTY U/S 271(1)(C). 12. IN THE RESULT, ITA NOS.146 & 147 FILED BY THE REVENUE STANDS ALLOWED. 13. IN THE RESULT, ITA NOS.142, 143, 144, 145, 148 & 149 ARE DISMISSED WHILE ITA NOS.146 & 147 ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 18.10.2012 SD/ - SD/ - ( D.T. GARASIA ) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 18 TH OCTOBER , 20 1 2 ITA NOS.142 TO 149/NAG/2010 RASHIDA M. BOHRA ETC. BULDHANA 7 COPY TO 1 ITO, KHAMGAON, BULDHANA 2 SMT. RASHIDA M. BOHRA, 7, TANK ROAD, KHAMGAON, DIST . BULDHANA 3 SMT. FAKHERA FIDAHUSSAIN BOHRA, 7, TANK ROAD, KHAMGAON, DIST. BULDHANA 4 SMT. FARIDA YAHYABHAI BOHRA, 7, TANK ROAD, KHAMGAON, DIST. BULDHANA 5 THE CIT (CENTRAL) , NAGPUR 6 THE CIT (A) , NAGPUR 7 THE DR, ITAT, NAGPUR 8 GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NAGPUR