ACIT, Circle-1(2), Hyderabad V. M/s Deepak Transport Agency Limited, Hyderabad

ITA 1686/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77899 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Assessment record; Revised return
• Section: 142(1); 133A; 139(5); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE S/SHRI CHANDRA POOJARI, A.M. & SAKTIJIT DEY, J.M. ITA.NO.1686/HYD/2013 ASSESSMENT YEAR 2009-10 ACIT, CIR - 1(2), HYDERABAD. VS. M/S DEEPAK TRANSPORT AGENCY LIMITED, HYDERABAD. PAN: AAACD7752M (APPELLANT) (RESPONDENT) FOR ASSESSEE : SRI P. MURALI MOHAN RAO FOR REVENUE : SHRI SOLGY JOSE T KOTTARAM DATE OF HEARING : 01-04-2014 DATE OF PRONOUNCEMENT : 16.05.2014 ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGA INST THE ORDER DATED 10-9-2013 OF CIT (A)-II, HYDERABAD PER TAINING TO ASSESSMENT YEAR 2009-10. 2. THE DEPARTMENT IS AGGRIEVED BY THE ACTION OF THE CIT (A) IN DELETING THE PENALTY IMPOSED U/S 271(1)(C ) OF THE ACT. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN TRANSPORTATION BUSINESS. A SURVEY U/S 133A WAS CON DUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 6/10/2008. DU RING SURVEY PROCEEDINGS, THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS.3.30 CRORES. SUBSEQUENTLY, THE ASSESSEE FILED ITS RETU RN OF INCOME ON 15-3-2010 DECLARING TOTAL INCOME OF RS.3,36,25,860/ - WHICH INCLUDED THE INCOME OF RS.3,30,00,000/- OFFERED AT THE TIME OF SURVEY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING 2 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. OFFICER CALLED UPON THE ASSESSEE TO FURNISH CERTAIN DETAILS WITH REGARD TO THE EXPENDITURES WHICH WERE NOT COVERED B Y TDS. ON EXAMINING THE DETAILS SUBMITTED BY THE ASSESSEE, TH E ASSESSING OFFICER NOTICED THAT IN RESPECT OF EXPENDITURE AMOU NTING TO RS.37.45 CRORES, PAYMENTS WERE MADE ON SOME TRUCKS WHICH AGGREGATED TO RS.50,000/-. IT WAS FURTHER OBSERVED THAT THE ASSESSEE DID NOT PRODUCE ALL THE DETAILS WITH REGAR D TO THE EXPENDITURE OF RS.37.45 CRORES. WHEN THIS WAS POIN TED OUT TO THE ASSESSEE THE ASSESSEE OFFERED AN AMOUNT OF RS.40 LA KH AS ADDITIONAL INCOME BY LETTER DATED 29-12-2011. ACCO RDINGLY, THE ASSESSEE COMPLETED THE ASSESSMENT BY DETERMINING TH E TOTAL INCOME AT RS.4,26,56,860/- AS PER THE DECLARATION M ADE BY THE ASSESSING OFFICER IN THE RETURN OF INCOME AS WELL AS IN COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE, AS IT APPEAR S FROM THE FACTS ON RECORD, ACCEPTED THE INCOME DETERMINED BY THE ASSESSING OFFICER BY NOT FILING ANY APPEAL BEFORE THE FIRST A PPELLATE AUTHORITY. 4. THE ASSESSING OFFICER SUBSEQUENT TO THE COMPLET ION OF THE ASSESSMENT ISSUED A NOTICE DIRECTING THE ASS ESSEE TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C ) OF THE ACT SHALL NOT BE IMPOSED. IN RESPONSE TO THE SAID NOTICE, TH E ASSESSEE EXPLAINED THAT AS IT HAS DECLARED ADDITION AL INCOME OF RS.3,30,00,000/- AND RS.40,00,000/- VOLUNTARILY AND HAD FULLY CO-OPERATED WITH THE DEPARTMENT, NO PENALTY U /S 271(1)(C) SHOULD BE IMPOSED. IT WAS FURTHER SUBM ITTED THAT SINCE THE ASSESSEE HAS ACCEPTED THE INCOME DETERMINED TO BUY PEACE WITH THE DEPARTMENT, THERE CANNOT BE ANY INFERENCE THAT EITHER THERE IS CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME S O AS TO IMPOSE PENALTY U/S 271(1)( C) OF THE ACT. THE ASS ESSING OFFICER HOWEVER WAS NOT CONVINCED WITH THE EXPLANA TION OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FILED REVISED RETURN ONLY BECAUSE OF THE S URVEY 3 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. OPERATION CARRIED OUT IN ITS BUSINESS PREMISES. TH EREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS VOLUNTARILY DE CLARED THE ADDITIONAL INCOME OF RS.3.30 CRORES. HE FURTHE R WAS OF THE VIEW THAT EVEN DURING ASSESSMENT PROCEEDINGS, I NSTEAD OF PROVIDING DETAILS THE ASSESSEE HAS SIMPLY AGREED FOR ADDITION OF RS.40 LAKH WHICH PROVES THAT THE ASSESS EE HAS NOT FURNISHED THE CORRECT PARTICULARS OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER PASSED AN ORDER ON 22-6- 12 IMPOSING PENALTY OF RS.1,25,66,000/- U/S 271(1)( C ) OF THE ACT. BEING AGGRIEVED OF THE PENALTY ORDER SO PASSED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) . 5. IN COURSE OF HEARING BEFORE THE CIT (A), IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE RETURN FILED BY THE ASSESSEE IS THE ONLY RETURN AND NO REVISED RETU RN WAS FILED AS STATED BY THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE DECLARATION OF ADDITIONAL INCOME OF RS.3.3 0 CRORES DURING THE SURVEY OPERATION AND ADDITIONAL AMOUNT O F RS.40 LAKH OFFERED DURING THE ASSESSMENT PROCEEDINGS WAS MADE AS CERTAIN VOUCHERS WERE DEFECTIVE AND THE ENTIRE D ETAILS AS CALLED FOR COULD NOT BE PRODUCED BEFORE THE CONCER NED AUTHORITIES. IT WAS FURTHER CONTENDED THAT THE ASS ESSEE THEREFORE CAME FORWARD TO VOLUNTARILY DECLARE THE I NCOME IN THE RETURN FILED BEFORE RECEIVING ANY NOTICE FROM T HE DEPARTMENT. THE CIT (A) AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE IN THE LIGHT OF THE RATIO LAID DOWN IN CERTAIN JUDICIAL PRECEDENTS DELETED THE PENALTY BY HOLDING AS UNDER:- 6. THE INFORMATION ON RECORD IS CAREFULLY EXAMINED . THE OBSERVATION MADE BY THE ASSESSING OFFICER THAT THE RETURN FILED BY THE ASSESSEE WAS A REVISED RETU RN IS FACTUALLY INCORRECT. FROM THE ASSESSMENT RECORD AND ALSO FROM THE ASSESSMENT ORDER IT IS EVIDENT TH AT THE APPELLANT FIELD THE ORIGINAL RETURN, A BELATED RETURN FOR ASST. YEAR 2009-10 ON 15-3-2010 DECLARIN G TAXABLE INCOME OF RS.3,86,25,860/-. THE MAIN 4 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. BUSINESS OF THE APPELLANT IS TRANSPORTATION OF GOOD S. FOR THIS PURPOSE IT HIRES THE TRUCKS. FOR SUCH PURPOSE HE INCURS HEAVY EXPENDITURE TOWARDS LORRY HIRE CHARGES. IN THIS LINE OF BUSINESS IT IS NOT POSSIBLE TO KEEP PROPER VOUCHERS FOR ALL THE EXPENSES. ACCORDINGLY, TO CURE SUCH DEFECTS, THE APPELLANT OFFERED RS.3.30 CRORES DURING SURVEY PROCEEDINGS AND RS.40,00,000/- DURING ASSESSMENT PROCEEDINGS. THEREAFTER, HE FILED ORIGINAL RETURN OON 15-3-2010 ADMITTING THE INCOME DECLARED DURING SURVEY AND THIS RETURN IS FILED WELL WITHIN THE TIM E ALLOWED U/S 139(5) I.E. BEFORE MARCH, 2010. THE ASSESSING OFFICER MAY BE CORRECT IN SAYING THAT, BU T FOR THE SURVEY OPERATIONS THE ASSESSEE WOULD NOT HAVE DISCLOSED THE AMOUNT OF RS.3.30 CRORS. HOWEVER, PENALTY U/S 271(1) OF THE ACT CANNOT BE LEVIED ON MERE ASSUMPT0ONS/PRESUMPTIONS/SUSPICION. IT WAS HELD IN THE CASE OF CIT VS. SAS PHARMACEUTICALS 335 ITR 259 (DELHI) THAT NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS AR E UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING THE SURVEY, MAY BE IT WOULD NOT HAVE DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE A PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1) HAS TO BE CONSTRUED STRICTLY. UNLESS, IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON DISCLOSURE OF A PARTICULAR INCOME, PENALTY CANNOT B E IMPOSED. FURTHER, THE HONBLE ITAT IN THE CASE OF HOE LEATHER GARMENTS LTD. VS. DCIT, CIRCLE-2(2) HYDERABAD (2010) 39 SOT 210 HELD THAT FOR LEVYING PENALTY U/S 271(1)(C ), IT IS TO BE FOUND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS AND HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. AQ CLEAR FINDING MUST BE RECORDED THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. WHEREVER INCOME RETURNED BY THE ASSESSEE IS ENHANCED BY THE ASSESSING OFFICER, THE PENALTY PROVISION IS NOT AUTOMATICALLY ATTRACTED. 6.1. IN THE GIVEN SET OF FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY LEVIED BY THE ASSESSING OFFIC ER IS DELETED AS THE INCOME WAS ADMITTED BY THE ASSESSEE IN ITS ORIGINAL RETURN FILED ON 15-3-2010 AND THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY SPECIFIC INSTANCES OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THERE CANNOT B E ANY PENALTY ON THE ROUND SUM ADDITIONS MADE ON ESTIMATE BASIS. ACCORDINGLY, PENALTY LEVIED U/S 271(1)(C ) IS DELETED. 5 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. 5. THE LEARNED DR AT THE OUTSET SUBMITTED BEFORE US THAT THE ASSESSING OFFICER IS FACTUALLY INCORRECT W HILE OBSERVING IN THE PENALTY ORDER THAT THE ASSESSEE HA S FILED ORIGINAL RETURN ON 6-10-2008 AND REVISED RETURN ON 15-3- 2010. THE LEARNED DR FAIRLY SUBMITTED THAT THE AS SESSEE HAS ACTUALLY FIELD ONLY ONE RETURN OF INCOME AND TH AT IS FILED ON 15-3-2010 AND AS SUCH THERE IS NO REVISED RETUR N FILED BY THE ASSESSEE AS WRONGLY OBSERVED BY THE ASSESSI NG OFFICER. THE LEARNED DR HOWEVER CONTENDED THAT O NLY AS A RESULT OF SURVEY, THE ASSESSEE CAME FORWARD TO DISC LOSE THE ADDITIONAL INCOME WHICH OTHERWISE THE ASSESSEE WOUL D NOT HAVE DISCLOSED. IT WAS THEREFORE CONTENDED THAT TH E INTENTION OF THE ASSESSEE NOT TO DISCLOSE THE INC OME IS CLEAR FROM THE FACT THAT NOT ONLY ASSESSEE DISCLO SED ADDITIONAL INCOME AT THE TIME OF SURVEY BUT ALSO DURING THE ASSESSMENT PROCEEDINGS. THIS, ACCORDING TO THE LEA RNED DR, IS SUFFICIENT TO PROVE THAT THE ASSESSEE HAS CONCEA LED THE PARTICULARS OF INCOME AND HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, PENALTY IMPOSED BY THE ASSESSING OFFICER WAS JUSTIFIED. 6. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED THA T THE ASSESSEE HAS FILED THE RETURN OF INCOME WITHIN THE TIME PROVIDED U/S 139 OF THE ACT BEFORE RECEIVING ANY NO TICE FROM THE DEPARTMENT. THEREFORE, RETURN OF INCOME FILED BY THE ASSESSEE VOLUNTARILY OFFERING ADDITIONAL INCOME AT THE TIME OF SURVEY PROVES THAT THE ASSESSEE HAS ACTED BONA FIDE WITHOUT HAVING ANY INTENTION TO EITHER CONCEAL THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. SO FAR AS THE INCOME OF RS.40 LAKH OFFERED AT THE TIME OF ASSESSMENT PROCEEDINGS, IT WAS CONTENDED BY THE LEARNED AR THAT SINCE THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON THE PAYMENT EXCEEDING RS.50,000/- AND WAS NOT 6 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. ABLE TO FURNISH THE DETAILS IN RESPECT OF THE ENTIR E PAYMENT, IT AGREED FOR THE ADDITION OF RS.40 LAKH BUT THAT F ACT ALONE CANNOT LEAD TO THE CONCLUSION THAT THE ASSESSEE C ONCEALED ITS INCOME. IN SUPPORT OF SUCH CONTENTION THE LEA RNED AR RELIED UPON THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. SURESH CHANDRA MITTAL (251 ITR 9) AND NUMBER OF OTHER DECISIONS. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD. ON A PERUSAL OF THE PENALTY ORDER PASSE D BY THE ASSESSING OFFICER IT BECOMES ABSOLUTELY CLEAR THAT THE ASSESSING OFFICER HAS PRESUMED THAT THE ASSESSEE HA S DECLARED THE ADDITIONAL INCOME IN THE REVISED RETUR N ONLY AS A RESULT OF SURVEY WHICH OTHERWISE ASSESSEE WOULD NOT HAVE DISCLOSED. THE ENTIRE BASIS OF IMPOSITION OF PENAL TY U/S 271(1)(C ) OF THE ACT BY THE ASSESSING OFFICER IS O N THE ASSUMPTION THAT THE ASSESSEE HAS FILED REVISED RETU RN DECLARING ADDITIONAL INCOME OF RS.3.30 CRORES. HOW EVER, THIS FINDING OF THE ASSESSING OFFICER IS FACTUALLY INCORRECT. AS IS REVEALED FROM THE FACTS AVAILABLE ON RECORD WHIC H IS ALSO FAIRLY ADMITTED BY THE LEARNED DR THE ASSESSEE HAS FILED ONLY ONE SINGLE RETURN OF INCOME ON 15-3-2010 DECL ARING INCOME OF RS.3,86,25,860/- INCLUDING THE ADDITIONAL INCOME OF RS.3.30 CRORES OFFERED AT THE TIME OF SURVEY. I T IS FURTHER EVIDENT THAT THE ASSESSEE HAS FILED RETURN OF INCOM E VOLUNTARILY WITHIN THE TIME ALLOWED UNDER THE STA TUTE EVEN BEFORE A NOTICE U/S 139 OR 142(1) WAS ISSUED TO THE ASSESSEE BY THE DEPARTMENT. THEREFORE, THE BONAFID E OF THE ASSESSEE IN DECLARING THE INCOME CANNOT BE PUT TO Q UESTION. IN THE CIRCUMSTANCES, THE VERY BASIS FOR IMPOSITION OF PENALTY BY THE ASSESSING OFFICER BECOMES UNSUSTAINA BLE AS HE HAS WRONGLY PROCEEDED ON THE BASIS THAT THE ASS ESSEE 7 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. HAS FILED A REVISED RETURN PURSUANT TO THE SURVEY O PERATION DECLARING THE ADDITIONAL INCOME. 8. SO FAR AS ADMISSION OF RS.40 LAKH DURING THE ASSESSMENT PROCEEDINGS IS CONCERNED, IT IS VERY MU CH CLEAR FROM THE ASSESSMENT ORDER, AS THE ASSESSEE HAS MADE PAYMENTS EXCEEDING RS.50,000 WITHOUT DEDUCTING TDS, SUCH PAYMENTS COULD NOT BE ALLOWED AS PER THE PROVI SIONS CONTAINED U/S 40A(IA) OF THE ACT. THEREFORE, THE A SSESSEE AGREED FOR ADDITION OF THE SAID AMOUNT. FURTHERMOR E, CONSIDERING THE NATURE OF BUSINESS AND THE MAGNITUD E OF THE BUSINESS WHICH IS SPREAD OVER ACROSS THE COUNTRY AS THE ASSESSEE IS HAVING MORE THAN 60 BRANCHES, IT IS NOT ALWAYS POSSIBLE TO MAINTAIN VOUCHERS FOR ALL THE EXPENDITU RES INCURRED CONSIDERING THE FACT THAT SOMETIMES PAYME NTS HAVE TO BE MADE TO ILLITERATE PERSONS LIKE DRIVERS OF THE VEHICLES WHO MAY NOT BE WILLING TO ACCEPT CHEQUE P AYMENTS AND IT IS ALSO DIFFICULT TO MAINTAIN VOUCHERS FOR S UCH EXPENDITURE. IN THE CIRCUMSTANCES, WILLINGNESS OF THE ASSESSEE TO ACCEPT SUCH ADDITIONAL INCOME IN NO WAY PROVES THAT THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNI SHED INACCURATE PARTICULARS OF INCOME. FOR IMPOSITION O F PENALTY U/S 271(1) OF THE ACT, ASSESSING OFFICER HAS TO ESTABLISH ON RCORD WITH PROPER MATERIALS THAT THE ASSESSEE HA S CONCEALED PARTICULARS OF ITS INCOME OR FURNISHED I NACCURATE PARTICULARS OF INCOME AND THERE MUST BE A DELIBERAT E OR CONSCIOUS ATTEMPT ON THE PART OF THE ASSESSEE TO CO NCEAL ITS INCOME. A PERUSAL OF THE PENALTY ORDER, IN NO WAY ESTABLISHES THE FACT OF CONCEALMENT OR FURNISHING I NACCURATE PARTICULARS OF INCOME. ONLY BECAUSE THE PENALTY PR OVISION HAS BEEN INGRAINED IN THE STATUTE, IT CANNOT BE IMP OSED AUTOMATICALLY IN EVERY CASE WHERE ADDITIONS ARE MAD E WITHOUT LOOKING INTO THE FACTS INVOLVED AND EXPLANA TION OF 8 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD. THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE, A S CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME HAS NOT BEEN ESTABLISHED, IN OUR VIEW, THE CIT (A) WAS JUSTIFIED IN DELETING THE PENALTY I MPOSED. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER PASSED BY THE CIT (A). HENCE, THE GROUNDS RAI SED ARE DISMISSED. 9. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT ST ANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 .05.2 014. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIA L MEMBER HYDERABAD, DATED 16 TH MAY, 2014 JMR* COPY TO : 1. ACIT, CIR - 1(2), 4 TH FLOOR, AAYAKAR BHAVAN, HYDERABAD. 2. M/S DEEPAK TRANSPORT AGENCY LTD., 8 TH FLOOR, RAGHAVA RATNA TOWERS, CHIRAG ALI LANE, ABIDS, HYDERABAD. 3. CIT(A) - II, HYDERABAD 4. CIT - I, HYDERABAD 5. D.R. ITAT, B BENCH, HYDERABAD. 9 ITA.NO.1686 OF 2013 M/S. DEEPAK TRANSPORT AGENCY LTD., HYD.