ITO WD 1(3), KALYAN V. PANKAJ JAYANTILAL GADA, BHIWANDI

ITA 1760/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83778 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 09-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2013
• Court: TRIBUNAL
• Department Lawyers: CICRCUMSTANCES OF CASE; AAA OF INCOME TAX ACT A Y
• Assessee Lawyers: O P MEENA NON
• Keywords: Document seized; Documents seized
• Section: 143(3); 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER ITA NO.1760/MUM/2013 ASSESSMENT YEAR: - 2006-07 ITA NO.1761/MUM/2013 ASSESSMENT YEAR: - 2008-09 INCOME TAX OFFICER, WD 1(3) KALYAN, 1 ST FLOOR, MHOAN PLAZA, WAYALE NAGAR, KADAKPADA, KALYAN, VS.` PANKAJ JAYANTILAL GADA PROP. OF M/S RIDDHI TEXTILES, 232, MULCHAND COMPOUND, KANERI, AGRA ROAD, BHIWANDI 421 302. PAN:- AAWPG9314R APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF CIT(|A)| BOTH DATED 30.11.2012, ARISING FRO M PENALY ORDER PASSED U/S 271(1)(C) AND 271AAA OF THE INCOME TAX ACT FOR THE A .Y. 2006-07 AND 2008-09 RESPECTIVELY. NON HAS APPEARED ON BEHALF OF THE ASS ESSEE DESPITE THE SERVICE OF NOTICE OF HEARING OF APPEAL, THEREFORE, WE PROPOSE TO HEAR AND DISPOSE OFF THESE APPEAL EX-PARTE. FOR A.Y. 2006-07, THE REVENUE HAS RAISED FOLLOWING G ROUND. ON THE FACTS AND CICRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A)-I, THANE ERRED IN CANCELLING THE PENALTY LEVIED U/S 271(1)(C) OF T HE I.T. ACT, OVERLOOKING THE FACT THAT THE CONDITIONS LAID DOWN IN SECTION 271(1)(C) OF I. T. ACT ARE NOT SATISFIED BY THE ASSESSEE. REVENUE BY O.P. MEENA ASSESSEE BY NONE DATE OF HEARING 09.09.2014 DATE OF PRONOUNCEMENT 12.09.2014 PANKAJ JAYANTILAL GADA 2 | P A G E 2. WE HAVE HEARD LD. DR AND CONSIDERED THE RELEVANT MATE RIAL ON RECORD. SINCE NOBODY HAS APPEARED ON BEHALF OF THE ASSESSEE, WE DID NOT HAVE THE PRIVILEGE TO HEAR THE ASSESSEE. BREIF FACTS OF THE CASE ARE THAT A SEARCH & SIEZURE ACTION U/S 132 OF THE INCOME TAX ACT IN THIS CASE W AS CARRIED OUT ON 12.07.2007. IN RESPONSE TO STATUTORY NOTICE U/S 153A, THE ASSES SEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2006-07 DECLARING TOTAL INCOME OF RS. 1 6,75,643/-. THE RETURNED INCOME OF THE ASSESSEE INCLUDES UNDISCLOSED RENTAL IN COME OF RS. 1,48,050/- AND INFLATED EXPENSES AMOUNTING TO RS. 12,57,209/-. TH E ASSESSMENT U/S 153A R.W.S 143(3) WAS COMPLETED ON 30.12.2009 AT RS. 16,75,640/ -. SINCE THE RETURNED INCOME OF THE ASSESSEE INCLUDED UNDISCLOSED RENTAL INC OME AND INFLATED EXPENSES, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U /S 271(1)(C) OF THE INCOME TAX ACT AND LEVIED PENALTY OF RS. 4,84,246/-. 3. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEFOR E CIT(A). CIT(A) CANCELLED THE PENALTY ON THE GROUND THAT THE ASSESSING OFFICER HAS NOWHERE HAS MADE OUT A CASE FOR CONCEALMENT OF INCOME OR ESTABLISHING THAT THE INACCURATE PARTICULARS OF INCOME HAVE BEEN DELIBERATELY FILED BY THE ASSESSEE . WE NOTE THAT THE ASSESSMENT WAS COMPLETED BY ACCEPTING THE RETURN OF INCOME FILED BY THE ASSESSEE U/S 153A WITHOUT ANY ADDITION, THEREFORE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN DELETING THE PE NALTY FOR THE A.Y. 2006-07 AND THE SAME IS UPHELD. 4. FOR A.Y. 2008-09, THE REVENUE HAS RAISED FOLLOWI NG GROUNDS:- ON THE FACTS AND CICRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-I, THANE ERRED IN CANCELLING THE PENALTY LEVIED U/S 271AAA OF THE I.T. ACT, OVERLOOKING THE FACT THAT THE CONDITIONS LAID DOWN IN SECTION 271AAA(2) OF I.T. A CT ARE NOT SATISFIED BY THE ASSESSEE. 5. THE FACTS ARE SIMILAR AS TO THE FACTS OF A.Y. 2 006-07. AS THE ASSESSEE FILED THE RETURN OF INCOME U/S 153A, WHEREIN INCLUDED ADDITION AL INCOME ON ACCOUNT OF RENT INCOME AND UNACCOUNTED STOCK, THE PENALTY PROCEE DINGS U/S 271AAA WERE PANKAJ JAYANTILAL GADA 3 | P A G E INITITATED BY THE ASSESSING OFFICER AGAINST THE UNDIS CLOSED INCOME OF RS. 30,65,000/- ON ACCOUNT OF UNACCOUNTED STOCK. THE ADDI TIONAL INCOME WAS DECLARED IN THE STATEMENT RECORDED U/S 132(4) DURING T HE SEARCH AND ALL TAXED AND INTEREST PAID ON THIS ADDITIONAL INCOME. IT IS PERT INENT TO NOTE THAT AS PER THE PROVISIONS OF SECTION 271AAA, NO PENALTY CAN BE LEV IED INTER ALIA IF THE ASSESSEE PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RES PECT OF THE UNDISCLOSED INCOME AS CONTEMPLATED UNDER SUB-SECTION 2 OF SECTION 271AAA. F OR READY REFERENCE WE QUOTE THE PROVISIONS OF SECTION 271AAA. PENALTY WHERE SEARCH HAS BEEN INITIATED . 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CAS E WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSE E SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PRE VIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, ( I ) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE M ANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOS ED INCOME WAS DERIVED; AND ( III ) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE ( C ) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDI SCLOSED INCOME REFERRED TO IN SUB- SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION, ( A ) UNDISCLOSED INCOME MEANS ( I ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 , WHICH HAS ( A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR ( B ) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMI SSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR PANKAJ JAYANTILAL GADA 4 | P A G E ( II ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FA LSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCT ED; ( B ) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YE AR ( I ) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE S AID DATE; OR ( II ) IN WHICH SEARCH WAS CONDUCTED.] 6. THE CIT(A) HAS DELETED THE PENALTY BY RECORDING THE FACT THAT THE ADDITIONAL INCOME OFFERED FOR TAXATION WAS ACCEPTED IN AS MUCH A S THERE WAS NO DETAILED DISCUSSION OF ANY SEIZED DOCUMENTS IN THE ASSESSMENT O RDER. FURTHER THE ASSESSEE HAS PAID ALL DUE TAXES ON THE ADDITIONAL INCOME OFFERED BEFORE FILING THE REGULAR RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A. WH EN THE PROVISIONS OF SECTION 271AAA ARE UNAMBIGUOUS ON THE POINT THAT IF THE ASS ESSEE HAS ALREADY PAID THE DUE TAX AND INTEREST ONT THE ADDITIONAL/UNDISCLOSED IN COME THEN NO PENALTY SHALL BE LEVIED AS PER THE PROVISIONS OF SECTION 271AAA(1 ). ACCORDINGLY, WE DO NOT FIND ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN CANCEL LING THE PENALTY LEVIED U/S 271AAA. 7. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF SEPTEMBER 2014 SD/- SD/- (N.K. BILLAIYA) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 12-9 -2014 SKS SR. P.S,