Shri Ashok Shantilal Jain, Pune V. DCIT, Central Circle 2(2), Pune

ITA 1727/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85334 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 10-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim
• Section: 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1727/PN/2013 (ASSESSMENT YEAR 2001-02) SHRI ASHOK SHANTILAL JAIN, 16/A, HIMALAYA ESTATE, SHIVAJINAGAR, PUNE 411 005. PAN : AAOPJ0817C . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), PUNE. . RESPONDENT ASSESSEE BY : MR. P. D. KUDVA DEPARTMENT BY : MR. RAVI PRAKASH DATE OF HEARING : 24-12-2014 DATE OF PRONOUNCEMENT : 31-12-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-CENTRAL, P UNE DATED 13.06.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 24.1 2.2007 PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX A CT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2001-02. 2. IN THIS APPEAL, THE ONLY ISSUE AGITATED BY THE A SSESSEE IS WITH REGARD TO THE PENALTY U/S 271(1)(C) OF THE ACT SUSTAINED BY T HE CIT(A) WITH RESPECT TO AN INCOME OF RS.1,89,000/- WHICH WAS DISCLOSED IN THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO A NOTICE ISSUED U/S 153A(A) OF THE ACT. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I NDIVIDUAL IS DERIVING INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND BUSIN ESS INCOME BY WAY OF BEING PARTNER IN VARIOUS FIRMS. A SEARCH ACTION U/ S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND HIS BUSINESS CONCERNS ON ITA NO.1727/PN/2013 27.04.2005. AS A CONSEQUENCE, THE ASSESSING OFFICE R ISSUED NOTICES U/S 153A(A) OF THE ACT CALLING FOR THE RETURN OF INCOME . IN RESPONSE, FOR ASSESSMENT YEAR 2001-02 ASSESSEE FILED HIS RETURN O F INCOME DECLARING AN INCOME OF RS.9,71,086/- AS AGAINST THE INCOME OF RS .7,82,086/- DECLARED IN THE RETURN OF INCOME ORIGINALLY FILED U/S 139(1) OF THE ACT. THE DIFFERENCE OF RS.1,89,000/- WAS ON TWO COUNTS, NAMELY, (I) WRONG CLAIM OF DEDUCTION U/S 24 OF THE ACT RS.39,000/- MADE EARLIER WHICH WAS COR RECTED; AND, (II) AN AMOUNT OF RS.1,50,000/- WAS OFFERED TO COVER UP CASH EXPEN SES AND WITHDRAWALS. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 153A (B) OF THE ACT DATED 28.12.2007 AT AN INCOME OF RS.10,00,720/-, WHICH, I NTER-ALIA, INCLUDED AN ADDITION OF RS.29,627/- TO THE RETURNED INCOME. SU BSEQUENTLY, VIDE ORDER DATED 16.06.2008, THE ASSESSING OFFICER LEVIED A PE NALTY U/S 271(1)(C) OF THE ACT OF RS.80,247/- WITH RESPECT TO THE DIFFERENCE I N THE INCOME ASSESSED OF RS.10,00,720/- AND THE INCOME THAT WAS ORIGINALLY R ETURNED BY THE ASSESSEE IN THE RETURN FILED U/S 139(1) OF THE ACT OF RS.7,82,0 86/-. THE CIT(A) DELETED THE PENALTY WITH RESPECT TO THE ADDITION OF RS.29,627/- MADE IN THE ASSESSMENT BUT RETAINED THE PENALTY WITH RESPECT TO THE AMOUNT OF RS.1,89,000/-, WHICH REPRESENTED THE DIFFERENCE BETWEEN THE INCOME ORIGI NALLY RETURNED AND THE INCOME RETURNED SUBSEQUENT TO THE SEARCH ACTION. A GAINST SUCH A DECISION OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US . 4. THE AMOUNT OF RS.1,89,000/- WHICH HAS BEEN SUBJE CT TO PENALTY U/S 271(1)(C) OF THE ACT COMPRISES OF TWO LIMBS. FIRST LY, THE ASSESSEE NOTED THAT IT HAD WRONGLY CLAIMED A DEDUCTION U/S 24 OF RS.39,000 /- AGAINST RENTAL INCOME FROM OPEN PLOT. SUCH A CLAIM MADE IN THE RETURN OF INCOME FILED ORIGINALLY U/S 139(1) OF THE ACT WAS CORRECTED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A(A) OF THE ACT. SECONDLY, IN THE RETURN FILED IN THE RESPONSE TO NOTICE U/S 153A(A) OF THE ACT, ASSESSEE DISCLOSED ADDITIONAL I NCOME OF RS.1,50,000/- TO COVER SHORTFALL IN DRAWINGS AND EXPENSES. ASSESSEE EXPLAINED THAT THIS ERROR ITA NO.1727/PN/2013 WAS NOTED WHEN ACCOUNTS FOR THE ENTIRE GROUP WERE B EING PREPARED AND FINALIZED WITH PROFESSIONAL HELP. IT WAS CONTENDED THAT ASSESSEE WAS FILING RETURNS OF INCOME FOR LAST 20 YEARS AND THAT HE WAS NOT REQUIRED TO MAINTAIN ANY BOOKS OF ACCOUNT EVEN AS PER THE STATUTORY PROV ISIONS. WHILE FILING THE RETURN IN RESPONSE TO NOTICE U/S 153A(A) OF THE ACT , A CASH-FLOW WAS PREPARED WHICH WAS VERIFIED BY AN EXPERT AND AS AN ABUNDANT PRECAUTION IN ORDER TO COVER SHORTFALL IN DRAWINGS AND EXPENSES FOR PROPER TY, ASSESSEE DECLARED AN ADDITIONAL AMOUNT OF RS.1,50,000/- VOLUNTARILY AND PAID TAXES. 5. IN THIS BACKGROUND, THE LD. REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT ON THE AFORESAID AMOUNTS ESPECIALLY WHEN THERE IS NO MATER IAL TO SUGGEST THAT THE SEARCH BROUGHT ANY INCRIMINATING EVIDENCE TO DEMONS TRATE ANY CONCEALMENT. IT WAS ALSO POINTED OUT THAT THE INCOME RETURNED IN RESPONSE TO NOTICE U/S 153A(A) OF THE ACT HAS BEEN ACCEPTED. APART THEREF ROM, IT HAS BEEN POINTED OUT THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PRAMILA D. ASHTEKAR AND ORS. VS. ITO VIDE ITA NOS. 354 TO 367/PN/2010 D ATED 14.09.2012 HAS HELD THAT THERE WAS NO JUSTIFICATION FOR LEVYING PE NALTY WITH RESPECT TO THE INCOME RETURNED IN RESPONSE TO NOTICE ISSUED U/S 15 3A(A) OF THE ACT HAS BEEN ASSESSED AS SUCH. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE CONTENDED THAT THE RETURN FILED IN RESP ONSE TO NOTICE ISSUED U/S 153A(A) OF THE ACT SHOWS THAT EARLIER THE SAID INCO MES WERE NOT DISCLOSED BY THE ASSESSEE. THEREFORE, THE AFORESAID AMOUNTS HAV E BEEN JUSTIFIABLY SUBJECT TO PENALTY U/S 271(1)(C) OF THE ACT. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN OUR CONSIDERED OPINION, ON BOTH THE ASPECTS, THERE IS NO JUSTIFICA TION FOR THE LEVY OF PENALTY U/S ITA NO.1727/PN/2013 271(1)(C) OF THE ACT. THE NECESSARY INGREDIENTS RE QUIRED FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE CONSPICUOUS BY THEIR A BSENCE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES RELATING TO THE INCOME OF R S.1,89,000/- DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME FILED IN RESPO NSE TO NOTICE U/S 153A(A) OF THE ACT. THEREFORE, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY WITH RESPEC T TO THE INCOME OF RS.1,89,000/- DECLARED BY THE ASSESSEE IN HIS RETUR N OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A(A) OF THE ACT OVER AND ABOVE THE INCOME DECLARED IN THE RETURN OF INCOME ORIGINALLY FILED U/S 139(1) OF THE ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2014. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 31 ST DECEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-CENTRAL, PUNE; 4) THE CIT-CENTRAL, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE