Dr.C.N.Rajadurai, CHENNAI V. ACIT, Madurai

ITA 1628/CHNY/2014

• Counselvise Citation: 162821714 RSA 2014
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N RENGARAJ
• Assessee Lawyers: V S JAYAKUMAR
• Section: 5(2); 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1627, 1628, 1629, 1630, 1631 & 1632/MDS/2014 ( )( / ASSESSMENT YEARS : 1999-2000 TO 2004-05 DR. C.N. RAJADURAI, 48, SIVAN KOIL STREET, KODAMBAKKAM, CHENNAI - 600 024. PAN : AETPR 1746 K V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, MADURAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH.V.S. JAYAKUMAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. N. RENGARAJ, CIT 1 / 2% / DATE OF HEARING : 11.06.2015 3') / 2% / DATE OF PRONOUNCEMENT : 03.07.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS)-I, MADURAI, DATED 28.03.2014 AND PERTAIN TO ASSESSMENT 2 I.T.A. NOS.1627 TO 1632/MDS/14 YEARS 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04 AND 2004- 05. SINCE COMMON ISSUE ARISES IN ALL THESE APPEALS , WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF BY THIS COM MON ORDER. 2. SHRI V.S. JAYAKUMAR, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'TH E ACT'). THE ASSESSEE, A MEDICAL PRACTITIONER IN AYURVEDHA AND S IDDHA, FILED THE RETURN OF INCOME UNDER SECTION 153A CONSEQUENT TO S EARCH. FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSEE FILED RETUR N ON 17.12.1999 BEFORE THE DATE OF SEARCH, IN THE REGULA R COURSE, DISCLOSING A TOTAL INCOME OF ` 77,823/-. AFTER THE SEARCH, THE ASSESSEE FILED RETURN UNDER SECTION 153A OF THE ACT DISCLOSING PROFESSIONAL INCOME OF ` 1,97,820/- AND AGRICULTURAL INCOME OF ` 40,000/-. THE ASSESSING OFFICER ACCEPTED THE RETUR N FILED BY THE ASSESSEE UNDER SECTION 153A OF THE ACT. HOWEVER, T HE ASSESSING OFFICER FOUND THAT THERE WAS A DIFFERENCE BETWEEN T HE INCOME DISCLOSED IN THE RETURN FILED UNDER SECTION 153A OF THE ACT AND THE RETURN FILED BEFORE THE DATE OF SEARCH, OF ` 1,20,997/-. THE ASSESSING OFFICER FOUND THAT THERE WAS A CONCEALMENT OF INCOM E. ACCORDING TO THE LD. COUNSEL, NO CASH WAS SEIZED DURING THE COUR SE OF SEARCH OPERATION UNDER SECTION 132 OF THE ACT WITH REGARD TO INCOME. 3 I.T.A. NOS.1627 TO 1632/MDS/14 THEREFORE, WHEN THE ASSESSEE FILED THE RETURN UNDER SECTION 153A OF THE ACT, ALL THE INCOME WHICH WERE ADMITTED AND DISCLOSED UNDER SECTION 132(4) OF THE ACT CANNOT BE A BASIS FOR LEV Y OF PENALTY. EVEN OTHERWISE, WHEN THE ASSESSEE FILED RETURN DISC LOSING ALL THE INCOME AND NO ADDITION WAS MADE, THERE CANNOT BE AN Y LEVY OF PENALTY IN VIEW OF THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN ACIT V. SHRI SHANTILAL JERAMBHAI MAHESWARI IN I.T.A . NO.68/RJT/2009 DATED 27 TH MAY, 2011, A COPY OF THE ORDER IS AVAILABLE AT PAGE 12 OF THE PAPER-BOOK. THE LD.COU NSEL FURTHER SUBMITTED THAT OTHER THAN REGISTRATION CHARGES OF ` 1000/- FOR THE ASSESSMENT YEAR 1999-2000, ALL OTHER INCOME DISCLOS ED WERE ADMITTED. NO ADDITION WAS MADE. SIMILARLY, FOR OT HER ASSESSMENT YEARS ALSO, NO SUCH ADDITIONS WERE MADE. HENCE, AC CORDING TO THE LD. COUNSEL, IT IS NOT A CASE FOR LEVY OF PENALTY. THE LD.COUNSEL HAS ALSO PLACED HIS RELIANCE ON THE DECISION OF THE DEL HI BENCH OF THIS TRIBUNAL IN SITA RAM GUPTA V. ACIT IN I.T.A. NO.183 5/DEL/2013 DATED 30.06.2014. 3. ON THE CONTRARY, SHRI N. RENGARAJ, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS TO EXPLAIN WHY THE INCOME COULD NOT BE DISCLOSED IN THE ORIGINAL RETUR N FILED BEFORE THE DATE OF SEARCH. SINCE INCRIMINATING MATERIALS WERE FOUND DURING THE 4 I.T.A. NOS.1627 TO 1632/MDS/14 COURSE OF SEARCH OPERATION, THE ASSESSEE HAS DISCLO SED ALL THE INCOME. IN THE ABSENCE OF EXPLANATION, ACCORDING T O THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY LEVIED PENALTY WH ICH WAS CONFIRMED BY THE CIT(APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. FOR THE A SSESSMENT YEAR 1999-2000, THE ASSESSEE FILED RETURN OF INCOME ON 1 7.12.1999 DISCLOSING INCOME OF ` 77,823/-. THE SEARCH WAS ADMITTEDLY CONDUCTED ON 6.08.2004, AFTER EXPIRY OF THE TIME LI MIT PROVIDED FOR ISSUING OF NOTICE UNDER SECTION 143(2) OF THE ACT. THEREFORE, THE ASSESSMENT PROCEEDING ON THE BASIS OF RETURN OF INC OME FILED ON 17.12.1999 IS NOT PENDING. IN OTHER WORDS, THE ASS ESSMENT PROCEEDINGS ON THE BASIS OF RETURN FILED ON 17.12.1 999 IS TERMINATED BY OPERATION OF LAW. THEREFORE, THE ASSESSING OFFI CER HAS TO PASS ASSESSMENT ORDER FOR THE BLOCK PERIOD ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE PENALTY PROCEEDING, IT IS FOR THE ASSESSEE TO EXPLAIN WHY THE INCOME CANNOT B E DISCLOSED IN THE ORIGINAL RETURN. NOW THE ASSESSEE CLAIMS PRIVI LEGE UNDER SECTION 132(4) READ WITH EXPLANATION 5 TO SECTION 2 71(1)(C) OF THE ACT. THE LD.COUNSEL, BY PLACING RELIANCE ON THE DE CISION OF DELHI BENCH OF THIS TRIBUNAL IN SITA RAM GUPTA V. ACIT IN I.T.A. 5 I.T.A. NOS.1627 TO 1632/MDS/14 NO.1835/DEL/2013 DATED 30 TH JUNE, 2014, A COPY OF WHICH IS AVAILABLE AT PAGE 14 OF THE PAPER-BOOK, SUBMITTED T HAT WHEN NO QUESTION WAS ASKED BY THE REVENUE AUTHORITIES, IT I S A PRESUMPTION THAT THE ASSESSEE HAD DISCLOSED ALL INCOME UNDER SE CTION 132(4) OF THE ACT. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE DELHI BENCH OF THE TRIBUNAL (SUPRA). THE DELHI BENCH F OUND THAT UNLESS THE AUTHORIZED OFFICER PUTS A SPECIFIC QUESTION WIT H REGARD TO THE MANNER IN WHICH THE INCOME HAS BEEN DERIVED, WHILE EXAMINING UNDER SECTION 132(4) OF THE ACT, IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THIS REGARD. THE DELHI BENC H HAS ALSO OBSERVED THAT MERE NON-STATEMENT OF THE MANNER IN W HICH SUCH INCOME WAS DERIVED WOULD NOT MAKE EXPLANATION 5(2) INAPPLICABLE. THE DELHI BENCH HAS ALSO PLACED ITS RELIANCE ON THE JUDGMENT OF THE GUJARAT HIGH COURT IN CIT V. MAHENDRA C. SHAH (2008 ) 299 ITR 305. WE HAVE CAREFULLY GONE THROUGH STATEMENT SAID TO BE RECORDED FROM THE ASSESSEE ON 06.08.2004 DURING THE COURSE O F SEARCH OPERATION UNDER SECTION 132(4) OF THE ACT. IN RESP ONSE TO QUESTION NO.20, AT PAGE 29 OF THE PAPER-BOOK, THE ASSESSEE A CCEPTED THE INCOME OF ` 26 LAKHS FOR THE FINANCIAL YEAR 2002-03. THE ASSES SEE HAS ALSO OFFERED AND ACCEPTED A SUM OF ` 75 LAKHS PER YEAR. FOR THE PERIOD FROM 1.4.2004 TO 30.7.2004, THE ASSESSEE ACC EPTED THAT THE RECEIPT COMES TO NEARLY ` 25 LAKHS AND OFFERED THE SAME FOR TAXATION 6 I.T.A. NOS.1627 TO 1632/MDS/14 IN THE CURRENT YEAR. FOR THE PURPOSE OF CONVENIENC E, WE ARE REPRODUCING QUESTION NO.20 AND ANSWER OF THE ASSESS EE:- Q.20 : ACCORDING TO THE SAID CASE SHEETS THE TOTAL FOR CHENNAI, TRICHY, SALEM, COIMBATORE, COMES TO 1. 1 CRORE APPROXIMATELY AND FOR OTHER MOFUSSIL STATIONS BY ADOPTING AN AVERAGE AMOUNT OF ` 60 LAKHS THE TOTAL COMES TO ` 1.70 CRORES FOR THE PERIOD FROM 1.5.2002 TO TILL DATE. THE AVERAGE RECEIPTS FOR 1ASSESSEEMONTH WORK OUT TO ` 6.20 LAKHS. HENCE FOR THE FY 1.5.2002 TO 31.3.2003 (EXCEPT 1 MONTH) THE TOTAL RECEIPTS WORKS OUT TO ` 70,00,000 APPROXIMATELY. FOR THE NEXT FY 2003-04 THE TOTAL RECEIPTS WORK OUT TO ` 77.55 LAKHS FOR THE PERIOD FROM 1.4.2004 TO 30.7.2004 WORKS OUT TO ` 25 LAKHS (I.E. FOR 4 MONTHS) SO IT COULD BE SEEN FROM THE ABOVE THAT THE TOTAL RECEIPTS FOR THE PERIOD FROM 1.5.2002 TO 31.3.2002 WORKS OUT TO ` 70 LAKHS BUT YOU HAD ADMITTED IN THE STATEMENT ONLY ` 44.4 LAKHS. THEREFORE, THERE IS A CLEAR SUPPRESSION OF ` 26.00 LAKHS APPROXIMATELY. WHAT IS YOUR EXPLANATION FOR TH IS? ANS : I ACCEPT THAT THERE IS SUPPRESSION OF ` 26 LAKHS FOR THE FY 2002-03 FOR THE SUBSEQUENT FY'S I HAVE NOT FILED THE RETURNS. I WILL ACCEPT THE RECEIPT @ ` 75 LAKHS PER YEAR AND WILL OFFER THE SAME AS UNACCOUNTED RECEIPTS. FOR THE PERIOD FROM 1.4.2004 TO 30.7.2004 (CURRENT YEAR) THE RECEIPTS COMES TO ` 25 LAKHS AND THE SAME WILL BE ADMITTED FOR THE CURRENT YEAR. 5. IN VIEW OF THE ABOVE, IT IS TO BE EXAMINED WHETH ER THE ASSESSEE IS ELIGIBLE FOR PRIVILEGES PROVIDED IN EXP LANATION 5 TO SECTION 271(1)(C) OF THE ACT. BOTH THE AUTHORITIES BELOW HAD NO OCCASION TO EXAMINE THE SAME. THEREFORE, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECO NSIDERED BY THE 7 I.T.A. NOS.1627 TO 1632/MDS/14 ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE OF LEVY OF PENAL TY IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE EXP LANATION OFFERED BY THE ASSESSEE UNDER SECTION 132(4) OF THE ACT, JUDGM ENT OF THE GUJARAT HIGH COURT IN MAHENDRA C. SHAH (SUPRA) AND THE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL IN SITA RAM GUPTA (SUPRA), AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, ALL THE SIX APPEALS OF THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 3 RD JULY, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD JULY, 2015. KRI. / -267 87)2 /COPY TO: +, /APPELLANT / -.+, /RESPONDENT / 1 92 () / CIT(A)-I, MADURAI / 1 92 /CIT, CENTRAL-II, CHENNAI / 7: -2 /DR / ;( < /GF.