Shri Pankaj G. Parikh, Anand V. The Income tax Officer, Ward-2, Nadiad

ITA 1715/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9038 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-09-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 04-07-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Revised return
• Section: 271(1)(c); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA NO.1715/AHD/2005 [ASSTT.YEAR : 2002-2003] SHRI PANKAJ G. PARIKH PROP. OF VIHAR HOSPITAL OPP: DSP OFFICE DR.COOK ROAD, ANAND. VS. ITO, WARD-2 NADIAD. ASSESSEE BY : SHRI ASEEM L. THAKKAR REVENUE BY : SHRI C.K.MISHRA O R D E R PER R.V.EASWAR, VICE-PRESIDENT : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE PENALTY OF RS.1,33,500/- IMPOS ED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. THE ASSESSEE IS A CARDIOLOGIST PRACTISING IN ANA ND, GUJARAT. HE ALSO RUNS A NURSING HOME. DURING A SURVEY CONDUCTED UNDER SE CTION 133A IN THE PREMISES ON 22-7-2003 CERTAIN BOOKS OF ACCOUNTS AND DIARIES WERE FOUND AND IMPOUNDED. FROM THESE IT WAS NOTICED THAT THE ASSE SSEE HAD DISCLOSED PROFESSIONAL RECEIPTS OF RS.39,87,515/- AS PER THE RETURN FILED ON 14-10-2002, WHEREAS THE DIARIES SHOWED THE PROFESSIONAL RECEIPT S FOR THE YEAR UNDER APPEAL TO BE RS.43,22,660/-. THE ASSESSEES INCOME FOR TH E YEAR UNDER APPEAL WAS THUS FOUND TO BE UNDERSTATED TO THE EXTENT OF RS.3,35,14 5/-. IN ANSWER TO QUESTION NO.23 ASKED OF THE ASSESSEE IN THE COURSE OF THE ST ATEMENT RECORDED ON THE DATE OF THE SURVEY, THE ASSESSEE HAS STATED THAT HE IS U NABLE TO EXPLAIN THE DIFFERENCE. IN ANSWER TO QUESTION NO.27 STATED THAT HE WAS ALSO UNABLE TO EXPLAIN THE DIFFERENCE OF RS.8,35,690/- IN RESPECT OF THE ASSES SMENT YEAR 2000-2001. THE INABILITY OF THE ASSESSEE TO EXPLAIN THE DIFFERENCE S WAS AGAIN EXPRESSED ON 24-7- 2003. PAGE - 2 ITA NO.1715/AHD/2005 -2- 3. ON 10-10-2003 THE ASSESSEE FILED A REVISED RETUR N OF INCOME FOR THE YEAR UNDER APPEAL INCLUDING THEREIN RS.4,45,000/- AS UN RECORDED INCOME LEFT OUT TO RECORDED IN BOOKS DUE TO INADVERTENCE, NO DECLARED AS INCOME. ALONG WITH THE RETURN OF INCOME THE ASSESSEE FILED A NOTE WHIC H HAS BEEN REPRODUCED IN PARA-2.4 OF THE ASSESSMENT ORDER, THE GIST OF WHICH IS THAT A MISTAKE HAD OCCURRED DUE TO INADVERTENCE WHEN THE ACCOUNTANT RE CORDED THE RECEIPTS IN THE BOOKS OF ACCOUNTS, THAT THE BANK STATEMENT WAS NOT AVAILABLE AND THEREFORE THE ACCOUNTANT COULD NOT RECONCILE THE BOOKS OF ACCOUNT S WITH THE BANK STATEMENTS, THAT SUCH MISTAKE LED TO AN OMISSION OF RS.4,45,000 /- FROM THE PROFESSIONAL RECEIPTS FOR THE ASSESSMENT YEAR 2002-2003, THAT WH ILE WRITING THE BOOKS FOR THE YEAR ENDED 31-3-2003, THE ACCOUNTANT NOTICED THE DI FFERENCE IN THE BANK BALANCES AND REALISED THE ERROR IN NOT INCLUDING TH E AFORESAID AMOUNT IN THE RETURN FOR THE A.Y.2002-2003, THAT HE HAD INCLUDED THE ABOVE AMOUNT IN THE PROFESSIONAL RECEIPTS SHOWN IN THE TRIAL BALANCE AS ON 31-3-2003 WHICH WAS FOUND DURING THE SURVEY AND THAT IN THESE CIRCUMSTA NCES A REVISED RETURN WAS BEING FILED FOR THE YEAR UNDER APPEAL INCLUDING THE AMOUNT OF RS.4,45,000/- AS THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002-2003. 4. THE AO COMPLETED THE ASSESSMENT ON THE BASIS OF THE REVISED RETURN AND ACCEPTED THE SAME. HOWEVER, HE INITIATED PENALTY P ROCEEDINGS FOR CONCEALMENT OF THE INCOME. THE ASSESSEE EXPLAINED IN WRITING THAT THE OMISSION WAS A BONA FIDE ERROR AND WHAT WAS NOT INCLUDED FOR THE ASSESSMENT YEAR 2002-2003 WAS ACTUALLY INCLUDED IN THE PROFESSIONAL RECEIPTS FOR THE ASSESSMENT YEAR 2003- 2004 AS CAN BE SEEN FROM THE TRIAL BALANCE AS ON 31 -3-2003 WHICH WAS ALSO FOUND DURING THE SURVEY AND THAT IN SUCH A SITUATIO N IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED HIS INCOME. THE AO HOWEVER DID NOT ACCEPT THE ASSESSEES EXPLANATION AND HELD THAT IT WAS ONLY AFTER THE ASS ESSEE WAS CONFRONTED WITH THE UNDERSTATEMENT OF THE PROFESSIONAL RECEIPTS IN THE ORIGINAL RETURN THAT THE ASSESSEE CAME OUT WITH THE ABOVE EXPLANATION, THAT THE ASSESSEE CANNOT PLACE THE BLAME ON HIS ACCOUNTANT AND WASH OFF HIS HANDS AND THAT THE FILING OF THE PAGE - 3 ITA NO.1715/AHD/2005 -3- REVISED RETURN WAS AN EVENT THAT TOOK PLACE AFTER T HE OMISSION WAS DETECTED BY THE DEPARTMENT DURING THE SURVEY. THE AO ON THIS B ASIS HELD THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME TO THE EXTENT O F RS.4,45,000/- AND IMPOSED PENALTY OF RS.1,33,500/- BY ORDER DATED 28- 9-2004. THE PENALTY HAVING BEEN CONFIRMED BY THE CIT(A), THE ASSESSEE I S IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE FACTS AND THE RIVAL CONTE NTIONS. THE MAIN CONTENTION OF THE ASSESSEE IS THAT IT WAS A BONA FI DE OMISSION AND NOT A DELIBERATE CONCEALMENT AS CAN BE CORROBORATED BY TH E FACT THAT IN THE TRIAL BALANCE AS ON 31-3-2003 WHICH WAS FOUND DURING THE SURVEY, THE PROFESSIONAL RECEIPTS SHOWN FOR THAT YEAR WERE MORE BY RS.4,45,0 00/-. IN OTHER WORDS THE CONTENTION OF THE ASSESSEE IS THAT AS SOON AS THE O MISSION WAS DETECTED, THE ACCOUNTANT INCLUDED THE SAID AMOUNT IN THE PROFESSI ONAL RECEIPTS FOR THE NEXT ASSESSMENT YEAR. IT IS SUBMITTED THAT THIS SHOWS T HE BONA FIDE OF THE ASSESSEE AND ALSO THAT THE OMISSION WAS A BONA FIDE OR INADV ERTENT ERROR. WE ARE INCLINED TO GIVE THE BENEFIT OF DOUBT TO THE ASSESS EE BECAUSE IT IS NOT DENIED THAT THE TRIAL BALANCE AS ON 31-3-2003 WAS FOUND DURING THE SURVEY AND THAT IT SHOWED THE PROFESSIONAL RECEIPT OF RS.46,58,485/- W HICH WAS MORE THAN THE RECEIPTS OF RS.40,81,930/- SHOWN IN THE IMPOUNDED D IARY RELATING TO THE YEAR ENDED 31-3-2003. THESE FACTS ARE NOTED IN PARA-2.5 AND 4.6 OF THE ASSESSMENT ORDER ITSELF. IT IS NOT THE CASE OF THE AO THAT TH E DIFFERENCE BETWEEN THESE TWO FIGURES IS NOT ON ACCOUNT OF THE NON-DISCLOSURE OF RS.4,45,000/-, BUT IS ENTIRELY DUE TO OMISSION OF PROFESSIONAL INCOME EARNED DURIN G THE PERIOD FROM 1-4-2002 TO 31-3-2003. IN THE ABSENCE OF SUCH A FINDING AND GIVING THE BENEFIT OF DOUBT TO THE ASSESSEE, HIS CLAIM THAT THE PROFESSIONAL RE CEIPT OF RS.4,45,000/- WHICH WAS OMITTED TO BE INCLUDED IN THE RETURN FILED ORIG INALLY FOR THE YEAR UNDER APPEAL WAS PROPOSED TO BE INCLUDED IN THE RETURN FO R THE YEAR ENDED 31-3-2003 (A.Y.2003-2004) AND TO THIS END EVEN THE TRIAL BALA NCE WAS PREPARED AND KEPT WHICH WAS FOUND DURING THE SURVEY, HAS TO BE ACCEPT ED. NO DOUBT THE PAGE - 4 ITA NO.1715/AHD/2005 -4- ASSESSEES BOOKS WERE AUDITED AND IT DID OCCUR TO U S THAT THE PROBABILITY OF BOTH THE ACCOUNTANT AND THE AUDITOR MAKING THE SAME MIST AKE IS LESS; HOWEVER, SOMETIMES IT MAY HAPPEN THAT THE AUDITOR ALSO FAILE D TO DETECT THE ERROR, A POSSIBILITY THAT CANNOT BE TOTALLY RULED OUT, THOUG H IT MAY BE VERY RARE. IN OUR VIEW THEREFORE IT CANNOT BE ASSERTED WITHOUT ANY DO UBT THAT THE ASSESSEE CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTIC ULARS THEREOF WITH REGARD TO THE INCOME OF RS.4,45,000/-. WE ACCORDINGLY CANCEL THE PENALTY AND ALLOWED THE APPEAL WITH NO ORDER AS TO COSTS. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 18 TH SEPTEMBER, 2009. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 18-09-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD