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

ITA 148/RJT/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2209 (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: 17-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Section: 143(3); 27

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 RITEN SAROJCHANDRA GOR, KHUSHBOO , 118 - C, ODHAV PARK - 1, MUNDRA ROAD, BHUJ - KUTCH PAN: ABEPG4071G (APPELLANT) VS THE ACIT, CENTRAL CIRC LE - 2, RAJKOT (RESPONDENT) REVENUE BY : S H RI C.S. ANJARIA , D . R. ASSESSEE BY: S H RI MEHUL RANPURA , A.R. DATE OF HEARING : 17 - 03 - 2 016 DATE OF PRONOUNCEMENT : 22 - 03 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS BATCH OF ASSESSEE S SIX APPEAL S FOR ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 , AR ISES FROM A COMMON ORDER OF THE CIT(A) - IV, AHMEDABAD DATED 23 - 02 - 2012 (IN FIRST FIVE CASES) IN APPEAL NO S. CIT(A) - IV/175 - C, 176 - C, 177 - C, 179 - C & 180 - R/CC - 1/10 - 11 CONFIRMING PENALTIES OF RS. 1,88,000/ - , RS. 1,62,000/ - , I T A NO . 146 TO 150 & 314 / RJT /20 12 A Y 200 3 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 I.T.A NOS. 146 TO 150 & 314 /RJT /20 12 A.Y. 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 PAGE NO SHRI RITEN SAROJCHANDRA GOR VS. ACI T 2 RS. 2 LACS, RS. 30,000/ - AND RS. 2,98,000/ - ; RESPECTIVELY , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT T HE ACT . SIXTH APPEAL ITA 314/RJT/2012 ASSAILS CORRECTNESS OF SECTION 271AAA PENALTY OF RS. 1,01,000/ - IN ASSESSMENT YEAR 2009 - 10 IMPOSED BY BOTH THE LOWER AUTHORITIES. 2. BOTH PARTIES STATE AT THE OUTSET RELEVANT FACTS AND CIRCUMSTANCES INVOLVED IN FI RST FIVE APPEA LS ARE IDENTICAL. THIS ASSESSEE IS A CONTRACTOR AND DEALS IN LAND TRADING. HE APPEARS TO HAVE FILED HIS REGULAR RETURN OF RS. 54,876/ - , NO RETURN, RS. 96,366/ - , RS. 67,530/ - , RS. 1,09,527/ - ; RESPECTIVELY. THE DEPARTMENT CARRIED OUT A SEARC H IN HIS CASE ON 15 - 09 - 2008 AT HIS RESIDENTIAL PREMISES. THE ASSESSEE APPEARS TO HAVE DISCLOSED ADDITIONAL INCOMES OF RS. 31 LACS AND RS. 12,36,650/ - VIDE LETTER DATED 18 - 10 - 2008 AND 06 - 11 - 2008; RESPECTIVELY. THIS CULMINATED IN INITIATION OF SECITON153A PROCEEDINGS EXCEPT IN THE LAST ASSESSMENT YEAR 2009 - 10 WHEREIN THE SAME WERE U/S. 143(3) , THE ASSESSEE FILED POST SEARCH RETURNS IN FIRST FIVE ASSESSMENT YEARS DISCLOSING ADDITIONAL INCOMES OF RS. 6,24,440/ - EACH IN ASSESSMENT YEARS 2003 - 04 TO 2005 - 06, RS. 1,60,000/ - AND RS. 8,96,000/ - IN THE NEXT TWO ASSESSMENT YEARS FOLLOWED BY A SUM OF RS. 10,10,000/ - IN ASSESSMENT YEAR 2009 - 10. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER FRAMED ASSESSMENTS IN ALL C A SES ON 30 - 04 - 2010 ADMITTING THE SAME WITHOUT RESULT ING IN ANY ADDITION. HE ALSO INITIATED THE IMPUG N ED PENAL TY PROCEEDINGS; ALL U/S. 271(1)(C) AND 271AAA INDI C ATED HEREINABOVE, AGAINST THE ASSESSEE ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF I.T.A NOS. 146 TO 150 & 314 /RJT /20 12 A.Y. 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 PAGE NO SHRI RITEN SAROJCHANDRA GOR VS. ACI T 3 INCOME/HAVING CONCEALED UNDISCLOSED INCO ME. QUANTUM PROCEEDINGS APPEAR TO HAVE ATTAINED FINALITY AT THIS STAGE. 3. WE COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSEE S UNIFORM STAND ADOPTED IN ALL CASES WAS THAT HE HAD DISCLOSED ADDITIONAL INCOMES IN ORDER TO AVOID LITIGATION AND PUNITIVE ACTION AND TO BUY MENTAL PEACE. HE PLEADED ABSENCE OF ANY ADDITION BEING MADE THEREIN. HE HIGHLIGHTED THE FACT THAT THERE WAS NO SEIZURE OF ANY ASSETS AS ACQUIRED BY UTILIZING THE UNDISCLOSED INCOME IN QUESTION . THIS FAILED TO CONVINCE THE ASSESSING OF FICER. HE OBSERVED IN THE IMPUGNED PENALTY ORDERS PASSED ON 26 - 10 - 2010 REITERATING SEARCH QUANTUM DEVELOPMENTS THAT THE ASSES SEE HAD CONCEALED AND FURNISHED INACCURATE PARTICULARS OF INCOME/UNDISCLOSED INCOME IN ALL ASSESSMENT YEARS(SUPRA) MAKING HIMSELF LIABLE FOR PENAL ACTION. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INCOMES IN QUESTION HAD SEEN LIGHT OF THE DAY ON L Y BECAUSE OF THE SEARCH ACTION HEREINABOVE. HE PROCEEDED ON THIS REASONING AND IMPOSE D THE IMPUGNED PENALTIES. THE C IT(A) CONFIRMS T HE SAME. 4 . WE HAVE HEARD BOTH THE SIDES. CASE FILE PERUSED. BOTH PARTIES REITERATE THEIR RESPECTIVE PLEADINGS AGAINST AND FOR THE IMPUGNED PENALTIES. RELEVANT FACTS ALREADY STAND NARRATED IN THE PRECEDING PARAGRAPHS. IT IS TO BE SEEN THAT THE CIT(A ) RELIES HEAVILY UPON ASSESSEE S STATEMENTS AND DISCLOSURES DURING SEARCH. THIS SEARCH UNEARTHED CASH SUM OF RS. 6,14,520/ - . THE ASSESSEE CLAIMED THAT A SUM OF RS. 2 LACS THEREIN WAS A CASH BALANCE OF A TEMPLE A ND R EST I.T.A NOS. 146 TO 150 & 314 /RJT /20 12 A.Y. 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 PAGE NO SHRI RITEN SAROJCHANDRA GOR VS. ACI T 4 WAS HIS PART OF HIS SAVINGS. NEXT DIS CLOSURE WAS OF ESTIMATED PROFIT S IN THE NAME OF ONE SHRI DEVRAJ WHICH WAS CLAIMED TO BE THAT OF HIMSELF. THERE CAN HARDLY BE ANY DI SPUTE THAT FIRST INSTANCE IS LACK OF PROPER EXPLA NA TION FOLLOWED BY SUBSTANTIVE COGENT EVIDENCE. THE LATTER ONE IS ONLY A CASE OF ESTIMATION WHEREIN THE ASSESSEE HAD CLAIMED SOMEBODY ELSE PR OFITS TO BE THAT OF HIMSELF. WE ARE OF THE OPINION THAT THE IMPUGNED PENALTY PROVISION DOES NOT APPLY AS BOTH THESE EVENTUALITIES ARE IN THE NATURE OF LACK OF SUBSTANTIVE EVIDENCE /EXPLA NATION AND CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AS HELD BY THE LOWER AUTHORITIES. WE REITERATE THAT THE IMPUGNED PENALTY IS U/S. 271(1)(C) WHEREIN THE CRUCIAL EXPRESSION USED IS MAY AND NOT SHALL . MEANING THEREBY THAT EACH AND EVERY CASE OF DISCLOSURE IN A SEARCH CASE DOES NOT NECESSARILY INVOKE THE IMPUGNED CONCEALMENT PENALTY. BOTH PARTIES FURTHER POINT OUT THAT WE HAVE ALSO HEARD A BATCH OF PENALTY APPEALS ITA 140 TO 145/RJT/2012 FOR THE VERY ASSESSMENT YEARS IN CASE OF SHRI UMIAYASHANKAR LALJI GOR ON 15 - 03 - 2016 INVOLVING IDENTIC AL FACTS. WE FIND THAT SAID ASSESSEE HAS SUCCEE DED IN HIS APPEALS. WE FOLLOW THE SAME REASONING HEREIN AS WELL AND ACCEPT ASSESSEE S CONTENTIONS SEEKING TO DELETE THE IMPUGNED PENALTIES U/S. 27 1(1)(C) OF THE ACT IN ASSESSMENT YEARS 2003 - 04 TO 2008 - 09. ITA NOS. 146 TO 150/RJT/2012 ARE ALLOWED. 5. WE COME TO ASSESSMENT YEAR 2009 - 10 INVOLVING 271AAA PENALTY AS INDICATED HEREINABOVE. WE HAVE ALREADY STATED IN THE PRECEDING PARAGRAPHS THAT LAST ASSESSMENT YEAR 2009 - 10 INVOLVES I.T.A NOS. 146 TO 150 & 314 /RJT /20 12 A.Y. 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 PAGE NO SHRI RITEN SAROJCHANDRA GOR VS. ACI T 5 SECTION 271AAA PENALTY @ 10% OF RS. 10,10,000/ - COMING TO BE RS. 1,01,000/ - . IT EMERGES THAT THE ASSESSING OFFICER REJECTED ASSESSEE S CLAIM OF IMMUNITY ON THE GROUND OF VARIOUS CLAUSES (A TO D) THERE UNDER I.E. WHERE THE INCOME OFFERED IS OTHER THAN THAT IN SEARCH STATEMENT FOLLOWED BY ITS MANNER OF DERIVING, SUBSTANTIATION AND PAYMENT OF TAX ALONG WITH INTEREST. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE FAILED TO FULFILL THE SAME SO AS TO CLAIM IMMUNITY. 6. TH E CIT(A) HOLDS IN THE LOWER APPELLATE ORDER THAT THE ASSESSEE HAS ONLY FULFILLED FIRST TWO CONDITIONS OF HAVING SPECIFIED MANNER OF EARNING OF THE UNDISCLOSED INCOME ALONG WITH ITS SUBSTANTIATION BUT THE THIRD PAYMENT OF TAX AND INTEREST HAS NOT BEEN SATIS FIED. THIS MAKES HIM TO CONFIRM THE ASSESSMENT YEAR S ACTION. 7. HEARD BOTH SIDES. THERE IS NO DISPUTE THAT THE CIT(A) HIMSELF HOLDS THAT ALTHOUGH THE ASSESSEE HAS PAID RELEVANT TAXES AND INTEREST AFTER PENALTY ORDER BUT B EFORE THE LOWER APPELLATE ORD ER. A CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA 288/RJT/2012 PRATAP B. THAKKER VS. ACIT DECIDED ON 09 - 03 - 2013 RELIES UPON ANOTHER CO - ORDINATE BE N CH OF THE TRIBUNAL IN ITA 1326/KOL/2011 DCIT VS. PIONEER MARBLES TO CONCLUDE 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 D RAW SUPPORT THEREFROM AN D HOLD THAT THE IMPUGNED SECTION I.T.A NOS. 146 TO 150 & 314 /RJT /20 12 A.Y. 2003 - 04 TO 2005 - 06 & 2007 - 08 TO 2009 - 10 PAGE NO SHRI RITEN SAROJCHANDRA GOR VS. ACI T 6 271AAA DESERVES T O BE DELETED. ORDERED ACCORDINGLY. ITA 314/RJT/2012 SUCCEEDS. 8. THE ASSESSEE S ALL SIX APPEALS ARE ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 22 - 03 - 201 6 SD/ - SD/ - (ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22 /03 /2016 AK / C - OPY 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