SHREE SIDDHIVINAYAK ENTERPRISES, MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 1708/MUM/2013

• Counselvise Citation: 170819914 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: MATHURIA
• Keywords: Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , BEFORE SHRI R. C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER . / ITA NO . 1708 / MUM./ 2013 ( / ASSESSMENT YEAR : 200 5 06 ) . / ITA NO .1709 / MUM./ 2013 ( / ASSESSMENT YEAR : 2006 07 ) M/S. SHREE SIDDHIVINAYAK ENTERPRISES RH 4, BALAJI KRUPA COMPLEX PLOT NO.3 A, SECTOR 28, N ERUL NAVI MUMBAI 400 707 PAN ABQFS9295J .. / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 39, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... / RESPONDENT / REVENUE BY : SHRI NEIL PHILIP / ASSESSEE BY : S HRI M.S. MATHURIA / DATE OF HEARING 18.03.2015 / DATE OF ORDER 15.05.2015 / ORDER , / PER SANJAY GARG , J UDICIAL MEMBER TH E PRESENT APPEAL S PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE IMPUGNED ORDER S BOTH DATED 1 ST FEBRUARY 2013 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) - 41 , MUMBAI, RELEVANT TO THE M/S. SHREE SIDDHIVINAYAK ENTERPRISES 2 ASSESSMENT YEA RS 2005 06 AND 2006 07 RESPECTIVELY . SINCE THE ISSUE S INVOLVED IN BOTH THE APPEALS ARE IDENTI CAL IN NATURE, HENCE THE SAME ARE TAKEN TOGETHER , FOR THE SAKE OF CONVENIENCE , BY THIS COMMON ORDER. 2. THE FACTS, FOR THE SAKE OF CONVENIENCE, HAVE BEEN TAKEN FROM ITA NO.1708/MUM./2013, FOR THE ASSESSMENT YEAR 2005 06. THE SOLE ISSUE RAISED BY THE ASSESSEE IS IN RELATION TO THE CONFIRMATION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION UNDER SECTI ON 132 WAS CARRIED OUT IN THE CASE OF THE ASSESSEE. DURING THE SEARCH, IT WAS FOUND THAT THE ASSESSEE HA D NOT FILED ITS RETURN OF INCOME FROM THE ASSESSMENT YEAR 2003 04 ONWARDS. A STATEMENT OF SHRI MADAN KOLAMBEKAR, WHO WAS THE MAIN PERSON OF THE ASSESSEE FIRM , WAS RECORDED ON 11 TH MAY 2009 DURING THE SEARCH PROCEEDINGS IN THIS RESPECT WHEREIN HE ADMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAD NOT FILED ITS RETURN S OF INCOME FOR THE ASSESSMENT YEAR 2003 04 TO 2009 10 WITHIN THE DUE DATES FOR FI LING OF THE SAME UNDER SECTION 139. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY THE ASSESSEE ONLY ON 7 TH DECEMBER 2010 I.E., IN RESPONSE TO THE NOTICE UNDER SECTION 153A ISSUED TO THE ASSESSEE AFTER SEARCH ACTION. THE ASSESSMENT UNDE R SECTION 143(3) R/W 153A OF THE ACT WAS COMPLETED ACCEPTING THE RETURN ED INCOME AND WITHOUT ANY FURTHER ADDITIONS. THE ASSESSING OFFICER OBSERVED THAT THE CASE OF THE ASSESSEE M/S. SHREE SIDDHIVINAYAK ENTERPRISES 3 WAS COVERED UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT AND THE ASSESS EE, THEREFORE, HAD BEEN DEEMED TO HAVE CONCEALED THE PARTICULARS OF ITS INCOME OF ` 7,37,000. HE, THEREFORE, IMPOSED PENALTY OF ` 7,37,000 ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. 4. THE LEARNED CIT(A) ALSO CONFIRMED THE PENALTY OBSERVING THAT THE CASE OF THE ASSESSEE WAS DULY COVERED UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. THE SAID EXPLANATION 5A TO SECTION 271(1)(C), FOR THE SAKE OF CONVENIENCE, IS REPRODUCED AS UNDER: EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED U NDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ( I ) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR TH ING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR ( II ) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, ( A ) WHERE THE RETU RN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR ( B ) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, TH EN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE ( C ) OF SUB - SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. M/S. SHREE SIDDHIVINAYAK ENTERPRISES 4 5. ON THE PERUSAL OF THIS EXPLANATION, THE CASE OF THE ASSESSEE SEEMS TO BE COVERED ON THE FACE OF IT . H OWEVER, WE FIND THAT THE SAID EXPLANATION HAS BEEN INSERTED WITH RETR OSPECTIVE EFFECT FROM 1 ST JUNE 2007, WHICH CAN BE APPLIED FOR THE ASSESSMENT YEAR 2007 08 ONWARDS. HOWEVER, THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS 2005 06 , H ENCE, THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) ARE NOT APPLICA BLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEES CASE SEEMS TO BE COVERED UNDER THE EXCEPTIONS TO EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. HENCE, THE PENALTY IMPOSED BY APPLYING THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) IS LIABLE TO BE DELETED. WE HOLD ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ITA NO.1709 /MUM./2013 THIS APPEAL IS RELATING TO THE ASSESSMENT YEAR 2006 07. 7. AS WE HAVE HELD ABOVE THAT THE EXPLANATION 5A TO SECTION 271(1)(C) IS EFFECTIVE FROM 1 ST JUNE 2007 ONLY, HENCE, THE SAME CANNOT BE APPLIED TO THE ASSESSMENT YEAR 2006 07 ALSO. THE PENALTY LEVIED UNDER EXPLANATION 5A FOR THE ASSESSMENT YEAR UNDER CONSIDERA TION IS M/S. SHREE SIDDHIVINAYAK ENTERPRISES 5 THUS NOT SUSTAINABLE IN THE EYES OF LAW. IN VIEW OF OUR FINDINGS GIVEN ABOVE, THE PENALTY LEVIED UNDER SECTION 271(1)(C) IN RESPECT OF THE ASSESSMENT YEAR 2006 07 IS ALSO NOT SUSTAINABLE. THEREFORE, THE PENALTY LEVIED IN THIS YEAR IS ALSO DELETED. 7. 7. IN THE RESULT, APPEALS FILED THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 15.5.2015 SD/ - . . R.C. SHARMA ACCOUNTANT MEMBER SD/ - SANJAY GARG JUDICIAL MEMBER MUMBAI, DATED : 15.5.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, MUMBAI CITY CONCERNED ; (5) THE DR, ITAT, MUMBAI ; (6) GUARD FILE . TRUE COPY BY ORDER PRADEE P J. CHOWDHURY SR. PRIVATE SECRETARY ASS ISTANT REGISTRAR ITAT, MUMBAI