Joyce John, CHENNAI V. ACIT, Tambaram

ITA 1685/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58051 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 12-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S VENUGOPALAN
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NOS. 1683 & 1684/(MDS)/2011 ASSESSMENT YEARS : 2004-05 & 2005-06 DR. JOHN ARTHUR, Q-221, NEHRU BAZAAR, AVADI, CHENNAI 600 054 PAN - ACTPJ 4822 A VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-I, TAMBARAM. (APPELLANT) (RESPONDENT) ITA NOS. 1685 & 1686/(MDS)/2011 ASSESSMENT YEARS : 2005-06 & 2006-07 MRS. JOYCE JOHN, NO.149, GJB ESTATE, KUMARAN NAGAR, AVADI, CHENNAI 600 054. PAN - AHHPJ 4073 A VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-I, TAMBARAM. (APPELLANT) (RESPONDENT) ASSESSEES BY : SHRI S. VENUGOPALAN, CA DEPARTMENT BY : SHRI G. NANDHA KUMAR, IRS, COMMISSIONER OF INCOME-TAX DATE OF HEARING : 19 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 22 ND MARCH, 2012 ITA 1683 TO 1686/11 :- 2 -: O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THESE FOUR APPEALS ARE FILED BY TWO ASSESSEES FOR TWO ASSESSMENT YEARS EACH. IN THE CASE OF DR. JOHN ART HUR, THE APPEALS ARE FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06. IN THE CASE OF MRS. JOYCE JOHN, THE APPEALS ARE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. 2. DR. JOHN ARTHUR IS A MEDICAL DOCTOR WORKING IN A PRIMARY HEALTH CENTER. HE ALSO TAKES CARE OF A HOSPITAL, IMMANUEL MULTI SUPER SPECIALTY AND GENERAL HOSPITAL AT AVADI WHIC H IS IN FACT RUN BY MRS. JOYCE JOHN. 3. THERE WAS A SURVEY ACTION UNDER SEC.133A IN THE CASE OF THE ASSESSEES. IT WAS KNOWN AT THAT TIME THAT TWO SONS OF THE ASSESSEES HAVE JOINED MBBS FOR WHICH THE ASSESSEES HAVE PAID CAPITATION FEES OF ` 8 LAKHS EACH. THESE FACTS WERE ADMITTED BY THE ASSESSEES AND THERE IS NO CONTROVERSY ON IT. ITA 1683 TO 1686/11 :- 3 -: 4. THE ASSESSEES ALSO AGREED TO OFFER THESE AMOUNTS AS INCOME TAXABLE IN THEIR HANDS AT ` 4 LAKHS PER ASSESSMENT YEAR. DR. JOHN ARTHUR AGREED TO OFFER ` 8 LAKHS AS INCOME TAXABLE IN HIS HANDS FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06. MRS. JOY CE JOHN ALSO AGREED TO OFFER AN ADDITIONAL INCOME OF ` 8 LAKHS IN HER HANDS FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. 5. THESE ADMISSIONS WERE ACTED UPON BY THE ASSESSEE S AND REVISED RETURNS WERE FILED BY THEM, IN WHICH THESE ADDITIONAL INCOMES HAVE BEEN OFFERED AND TAXES WERE ALSO PAID. THE REVISED RETURNS WERE REGULARIZED AFTER ISSUING NOTICES UNDE R SEC.148 AND THE ASSESSMENTS WERE COMPLETED ACCEPTING THE ADDITIONAL INCOMES OFFERED BY THE ASSESSEES, AS STATED ABOVE. 6. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMEN T PROCEEDINGS, HELD A VIEW THAT THE ASSESSEES ARE ANS WERABLE FOR THE OFFENCE UNDER SEC.271(1)(C) IN AS MUCH AS THEY HAVE CONCEALED THE PARTICULARS OF INCOME TAXABLE IN THEIR HANDS. HE I SSUED NOTICES AND INVITED OBJECTIONS. THE ASSESSEES EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE ADDITIONAL INCOMES WERE ADMITTED A ND OFFERED WITHOUT ANY DISPUTE AND THE TAXES HAVE BEEN PAID AN D AS SUCH, ITA 1683 TO 1686/11 :- 4 -: THERE IS NO CONCEALMENT OF INCOME IN THE HANDS OF T HE ASSESSEES. AS THE INCOME OFFERED BY THE ASSESSEES HAVE BEEN AC CEPTED AND ASSESSED BY THE ASSESSING OFFICER, THEY ARGUED THAT THERE IS NO CASE OF FURNISHING OF INACCURATE PARTICULARS EITHER. BU T THE EXPLANATIONS OFFERED BY THE ASSESSEES WERE TURNED DOWN BY THE AS SESSING OFFICER AND PENALTIES HAVE BEEN LEVIED. 7. WHEN THE PENALTY ORDERS WERE TAKEN IN FIRST APPE ALS, THE COMMISSIONER OF INCOME-TAX(APPEALS) HELD THAT EVEN THOUGH THE ASSESSEES HAVE OFFERED ADDITIONAL INCOMES AND PAID TAXES THEREON, IT ALSO HAPPENED BECAUSE OF THE INVESTIGATION CARRI ED ON BY THE REVENUE UNDER SEC.133A AND, THEREFORE, THE OFFER OF ADDITIONAL INCOMES CANNOT BE HELD TO BE A VOLUNTARY ACT. HE A CCORDINGLY, CONFIRMED THE PENALTY ON THE GROUND THAT THE ASSESS EES HAVE CONCEALED PARTICULARS OF INCOME. 8. IT IS AGAINST THE ABOVE ORDERS THAT THE ASSESSEE S HAVE COME IN SECOND APPEALS, BEFORE US. 9. WE HEARD SHRI S.VENUGOPALAN, THE LEARNED CHARTER ED ACCOUNTANT APPEARING FOR THE ASSESSEES AND SHRI G. NANDA KUMAR, ITA 1683 TO 1686/11 :- 5 -: THE LEARNED JOINT COMMISSIONER OF INCOME-TAX APPEAR ING FOR THE REVENUE. 10. THE FACTS OF THESE CASES ARE STRAIGHT AND SIMPL E. THERE WAS A SURVEY ACTION UNDER SEC.133A. ADDITIONAL INCOMES WERE ADMITTED BY THE ASSESSEES. THOSE ADMISSIONS WERE DILIGENTLY ACTED UPON BY FILING REVISED RETURNS AND PAYING TAXES DUE THEREON . IT IS ALSO TO BE SEEN THAT THE ADDITIONAL INCOMES OFFERED BY THE ASS ESSEES WERE ACCEPTED AND ASSESSED BY THE ASSESSING AUTHORITY AS SUCH, WITHOUT ANY DISPUTE. THEREFORE, REGARDING THE QUANTUM OF I NCOME OFFERED BY THE ASSESSEES AND ASSESSED BY THE ASSESSING OFFICER , THERE CANNOT BE A SITUATION OF CONFLICT, WHAT HAS BEEN ADMITTED WAS OFFERED AND WHAT WAS OFFERED HAS BEEN ASSESSED. 11. NOW, THE QUESTION IS ONLY IN RESPECT OF CONDUCT OF THE ASSESSEES THAT BY NOT DISCLOSING THIS INCOME IN THE IR ORIGINAL RETURNS, WHETHER THEY HAVE CONCEALED ANY PARTICULARS OF INCO ME IN THEIR HANDS. IT IS TO BE SEEN IN THE PRESENT CASES THAT AS AGAINST THE ORIGINAL RETURNS FILED BY THE ASSESSEES, INTIMATION PROCEEDINGS WERE CONCLUDED UNDER SEC.143(1). THEREFORE, IT IS TO BE SEEN THAT THE ORIGINAL RETURNS FILED BY THE ASSESSEES HAVE COME T O A LOGICAL CONCLUSION. THE FIRST PHASE OF EVENTS ENDED THERE. THE ASSESSING ITA 1683 TO 1686/11 :- 6 -: OFFICER HAS NOT FOUND OUT ANY CASE OF CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS WITH REFERENCE TO THE ORIGINAL RETURNS FILED BY THE ASSESSEES. THE SECOND PHASE OF THE EVENTS BEGIN WITH THE SURVEY MADE UNDER SEC.133A. IT IS I N THE COURSE OF SURVEY THAT THE RELEVANT DETAILS WERE COLLECTED AND THE ADDITIONAL INCOMES WERE ADMITTED. THESE ADDITIONAL INCOMES WE RE OFFERED BY FILING REVISED RETURNS. THESE REVISED RETURNS WERE ACCEPTED BY THE ASSESSING AUTHORITY AND THE QUANTUM OF INCOMES OFFE RED BY THE ASSESSEES HAVE BEEN ACCEPTED. THEREFORE, IT IS NOT POSSIBLE TO HOLD THAT THE THERE WAS ANY CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS WITH REFERENCE TO THE REVISE D RETURNS ALSO. 12. IN SHORT, THE ORIGINAL RETURNS AND THE REVISED RETURNS HAVE COME TO THEIR OWN LOGICAL CONCLUSIONS AND WHEN THES E RETURNS ARE CONSIDERED INDEPENDENTLY, THERE CANNOT BE A CASE TH AT THE ASSESSEES HAVE CONCEALED INCOME OR FURNISHED INACCU RATE PARTICULARS EITHER IN THE ORIGINAL RETURNS OR IN TH E REVISED RETURNS OF INCOME. 13. NOW, THE RESIDUAL QUESTION IS WHETHER THE ASSES SING OFFICER CAN CLUB THESE RETURNS TOGETHER TO MAKE OUT A CASE OF CONCEALMENT ITA 1683 TO 1686/11 :- 7 -: OF INCOME AGAINST THE ASSESSEES IN THE LIGHT OF THE ADDITIONAL INCOMES OFFERED BY THE ASSESSEES, AS A RESULT OF TH E SURVEY CARRIED OUT BY THE DEPARTMENT. 14. IT IS PARTICULARLY IN THIS CONTEXT THAT THE CON DUCT OF THE ASSESSEES HAS TO BE EXAMINED. THE ASSESSEES HAVE R EADILY ADMITTED THE INCOME AND FILED THE REVISED RETURNS A ND PAID TAXES THEREON. THE ASSESSEES HAVE NOT CHOSEN TO EXPLAIN THAT WHETHER THEY HAD SUFFICIENT SOURCES TO FINANCE THE MEDICAL STUDY OF THEIR SONS TO THE EXTENT OF ` 16 LAKHS. THEY HAVE NOT MADE ANY ATTEMPT TO EXPLAIN BEFORE THE AUTHORITIES THAT THE ENTIRE AMOU NT COULD NOT BE TREATED AS UNREPORTED INCOME. THE SURVEY WAS MADE AND THESE MATTERS WERE DISCUSSED AND IMMEDIATELY THEREAFTER T HE ASSESSEES OFFERED ADDITIONAL INCOME OF ` 8 LAKHS EACH RESPECTIVELY IN THEIR HANDS AND FILED RETURNS FOR TWO ASSESSMENT YEARS AN D PAID TAXES THEREON. THIS CONDUCT OF THE ASSESSEES DEMONSTRATE S THAT THE ASSESSEES HAD READILY CO-OPERATED WITH THE DEPARTME NT TO PURCHASE PEACE AND ALSO TO AVOID LITIGATION. 15. THE HONBLE SUPREME COURT IN THE CASE OF CIT V. SURESH CHANDRA MITTAL (251 ITR 9) HAS CONSIDERED EXACTLY A SIMILAR CASE. ITA 1683 TO 1686/11 :- 8 -: THE ASSESSEE IN THAT CASE ORIGINALLY FILED RETURNS WITH MEAGER INCOME. THE REVISED RETURNS WERE FILED FOR HIGHER INCOME AFTER SEARCH AND NOTICE FOR REOPENING THE ASSESSMENT. TH E ASSESSEE READILY OFFERED ADDITIONAL INCOME IN THE REVISED R ETURNS TO PURCHASE PEACE AND AVOID LITIGATION. THE HONBLE SUPREME CO URT HELD THAT IN SUCH CIRCUMSTANCES THE CONCEALMENT OF INCOME IS NOT PROVED AND, THEREFORE, PENALTY CANNOT BE LEVIED. 16. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT V. AMPLE PROPERTIES LTD. (334 ITR 460) HAS HELD SIMILA RLY, WHERE, AGAIN THE ASSESSEE HAD OFFERED ADDITIONAL INCOME TO AVOID LITIGATION AND PENALTY WAS FOUND TO BE UNJUSTIFIED. 17. IN THE LIGHT OF THE CONDUCT OF THE ASSESSEEES A ND IN THE LIGHT OF THE ABOVE JUDICIAL PRONOUNCEMENTS, WE FIND THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN READING THE ORIGINAL RE TURNS AND THE REVISED RETURNS TOGETHER TO MAKE OUT A CASE OF CONCEALMENT. THEREFORE, LEVY OF PENALTY IN THESE CASES IS NOT JUSTIFIED. THEY A RE DELETED. 18. IN RESULT, THESE APPEALS FILED BY THE ASSESSEES ARE ALLOWED. ITA 1683 TO 1686/11 :- 9 -: ORDER PRONOUNCED ON THURSDAY, THE 22 ND OF MARCH, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 22 ND MARCH, 2012. MPO* COPY TO: (1) PETITIONE R (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.