Yogita Badgujar, Thane V. Income-tax Officer,

ITA 1768/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1560 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 24-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Search and seizure
• Section: 143(3); 27; 132

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NOS.1768 TO 1771/PN/2014 % % / ASSESSMENT YEARS : 2006-07 & 2009-10 YOGITA BADGUJAR, 204, PASHUPATINATH, C-02, B WING, MAHADEV SANKALP COMPLEX, GANDHARE VILLAR, NEAR KHADAKPADA CHOWK, KALYAN (WEST) THANE 421 301 PAN NO.ANKPB5184H . / APPELLANT V/S ITO, CENTRAL-I, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI ANIL CHAWARE / ORDER PER R.K.PANDA, AM : THE ABOVE 4 APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 08-09-2014 OF THE CIT(A)-I, NAS HIK RELATING TO THE ASSESSMENT YEARS 2006-07 & 2009-10 RESPECTIVE LY. SINCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN TH ESE APPEALS, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. / DATE OF HEARING :12.07.2016 / DATE OF PRONOUNCEMENT:14.07.2016 2 ITA NOS.1768 TO 1771/PN/2014 2. THE ASSESSEE IN ALL THESE APPEALS HAS CHALLENGED THE O RDER OF THE CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S.27 1(1)(C) FOR DIFFERENT YEARS WHICH ARE AS UNDER : ASST. YEAR PENALTY 2006 - 07 15,394/ - 2007 - 08 12,728/ - 2008 - 09 4,271/ - 2009 - 10 5,336/ - 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A RESELLER OF CLOTHS AND DERIVES INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE ACTION US/.132 OF THE I.T. ACT WAS CONDUCTED IN SUYOJIT G ROUP OF CASES ON 17-09-2010. THE RESIDENTIAL PREMISES OF ONE OF IT S DIRECTORS NAMELY SHRI ANANT KESHAV RAJEGAONKAR WERE A LSO SEARCHED U/S.132. DURING THE COURSE OF SEARCH CERTAIN INCRIMINATING DOCUMENTS PERTAINING TO THE ABOVE ASSESSEE WERE SEIZED FROM THE SEARCHED PREMISES. IN RESPONSE TO NOTIC E U/S.153C THE ASSESSEE FILED THE RETURN OF INCOME ON 17-12-2012 DE CLARING TOTAL INCOME OF RS.2,17,963/- INCLUDING ADDITIONAL INCOME OF RS.83,993/-. SIMILAR RETURNS WERE ALSO FILED FOR OTHER DIFFERE NT YEARS. THE AO COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.1 53 OF THE I.T. ACT ACCEPTING THE RETURNED INCOME WHICH WAS FILE D IN RESPONSE TO NOTICE U/S.153C. SINCE THE ASSESSEE HAD DISC LOSED ADDITIONAL INCOME OF RS.83,996/- AS A RESULT OF SEARCH ACTIO N THE AO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT. R EJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE THE AO LE VIED PENALTY OF RS.15,394/- BEING 100% OF THE TAX SOUGHT TO BE EVADED . SIMILARLY, PENALTY HAS BEEN LEVIED BY THE AO FOR OTHER YEAR S ALSO, THE DETAILS OF WHICH ARE SUMMARIZED AS UNDER : 3 ITA NOS.1768 TO 1771/PN/2014 ASST YEAR 2006-07 2007-08 2008-09 2009-10 APPEAL NO. 1768 1769 1770 1771 PENALTY LEVIED U/S. 271 (1)(C) 15394.00 12728 . 00 4271 . 00 5336 . 00 ORIGINAL RETURN OF INCOME FILED ON 3/31/2008 3/31/2008 3/31/2009 7/30/2010 TOTAL INCOME RETURNED 133970 . 00 134500.00 250940 . 00 434210 . 00 SEARCH ON SUYOJIT GROUP DT . 9/17/2010 9/17/2010 9/17/2010 9/17/2010 NOTICE U/S . 153C DT . 7/30/2012 7/30/2012 7/30/2012 7/30/2012 ROI OF INCOME U/S . 153C FILED ON 12/17/2012 12/17/2012 12/17/2012 12/17/2012 TOTAL INCOME RETURNED 217963.00 204891 . 00 264758 . 00 460106.00 ORIGINAL INCOME 133970 . 00 134500 . 00 250940 . 00 434210 . 00 BANK INTEREST (ADDITIONAL INCOME) 83993 . 00 70391.00 13818.00 25896.00 ORDER U/S. 143(3) R.W.S. 153C DT . 3/28/2013 3/28/2013 3/28/2013 3/28/2013 ASSESSED INCOME 217963.00 204891 . 00 264758 . 00 460106.00 4. BEFORE CIT(A) IT WAS ARGUED THAT PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT IS NOT LEVIABLE AS THE AO HAD AC CEPTED THE RETURN FILED IN RESPONSE TO NOTICE U/S.153C. HOWEVER, THE CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESS EE. RELYING ON THE DECISION OF THE PUNE BENCH OF THE TRIBUN AL IN THE CASE OF CHHORIYA GROUP OF CASES VIDE ITA NOS.1389 TO 1395/PN/2012 AND BATCH OF OTHER APPEALS ORDER DATED 2 0-12-2013 HE HELD THAT PROVISIONS OF EXPLANATION 5A TO SECTION 271(1 )(C) OF THE ACT ARE APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE THE ASSESSEE HAS CONCEALED HIS INCOME AND EVADED TAX IN THE ORIGINAL RETURN. 5. AS REGARDS THE CONTENTION OF THE ASSESSEE THAT SHE HAS VOLUNTARILY MADE DISCLOSURES IS CONCERNED, HE HELD THAT TH E SAME IS NOT TENABLE IN THE LIGHT OF SEIZURE OF VARIOUS PAPERS/DOCUM ENTS GIVING DETAILS OF HER UNACCOUNTED TRANSACTION. HE ALSO RELIE D ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MA K DATA PVT. LTD. WHERE IT HAS BEEN HELD THAT WHILE LEVYING THE PENALTY U/S.271(1)(C) OF THE ACT, THE AO SHALL NOT BE CARRIED AWAY BY THE BELIEF OF THE ASSESSEE VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT, ETC., TO EXPLAIN ITS CONDUCT . 4 ITA NOS.1768 TO 1771/PN/2014 REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHING THE VARIOUS DECISIONS HE UPHELD THE PENALTY LE VIED BY THE AO U/S.271(1)(C) OF THE ACT. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE AO. HE SUBMITTED THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. REFE RRING TO THE SAID EXPLANATION HE SUBMITTED THAT EXPLANATION 5A(II) IS APPLICA BLE TO A CASE WHERE IN THE COURSE OF SEARCH INITIATED U/S.132 ON OR AFTER THE IST DAY OF JUNE 2007 THE ASSESSEE IS FOUND TO BE T HE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTR Y IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR OTHER TRANSAC TIONS REPRESENTS HIS INCOME IN PREVIOUS YEAR. 8. HE SUBMITTED THAT IN THE INSTANT CASE NO ENTRIES HA VE BEEN FOUND IN ANY BOOKS OF ACCOUNT AND FURTHER THE ASSESSEE HAS VOLUNTARILY DISCLOSED THE BANK INTEREST AS ADDITIONAL INCOME AND THE SAME WAS NOT DETECTED BY THE SEARCH PARTY OR THE AO . THEREFORE, IN ABSENCE OF SEIZURE OF ANY INCRIMINATING DOCUMENTS AND IN AB SENCE OF ANY ENTRY IN THE BOOKS OF ACCOUNT WHEN THE ASSESSEE HAS VOLUNTARILY DISCLOSED BANK INTEREST INCOME WHICH HAS BEEN ACCEPTED BY THE AO, THEREFORE, THE PROVISIONS OF EXPLANATION 5A TO S ECTION 271(1)(C) OF THE ACT ARE NOT APPLICABLE. HE ACCORDINGLY SUB MITTED THAT THE PENALTY LEVIED BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE DELETED. 5 ITA NOS.1768 TO 1771/PN/2014 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN HIS RETU RN OF INCOME IN RESPONSE TO NOTICE U/S.153C HAS DISCLOSED ADDITIO NAL INCOME OF RS.93,993/-, 70,391/-, 13818/- AND RS.25,896/- ON ACCOUNT OF BANK INTEREST FOR A.Y. 2006-07 TO 2009-10 RES PECTIVELY. THE AO HAS ALSO ACCEPTED THE RETURNS FILED IN RESPONSE T O NOTICE U/S.153C AND NO OTHER ADDITION HAS BEEN MADE. THE DETA ILS OF THE ORIGINAL RETURNS FILED, RETURNS FILED IN RESPONSE TO NOTICE U/S .153C DISCLOSING THE ADDITIONAL INCOME AND THE PENALTY LEVIED ETC. A RE ALREADY GIVEN IN THE TABLE AT PARA NO.3 OF THIS ORDER. W E FIND THE AO LEVIED PENALTY IN ALL THESE YEARS BY INVOKING THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) WHICH HAS BEEN UPHELD B Y THE LD.CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE AS SESSEE THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) AR E NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, SINCE IN HER C ASE, NO SUCH ENTRIES WERE FOUND IN THE BOOKS OF ACCOUNT. 11. WE FIND SOME FORCE IN THE ABOVE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. THE PROVISIONS OF EXPLANATIO N 5A TO SECTION 271(1)(C) OF THE I.T. ACT READ AS UNDER : [EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE IST DAY OF JUNE, 2007, TH E ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AN D THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UT ILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR 6 ITA NOS.1768 TO 1771/PN/2014 (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF AC COUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMED THAT SUCH ENTR Y IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENT S HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND (A) WHERE THE RETURN 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 OF THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETUR N, THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SE ARCH, 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 IN COME.] 12. IN THE INSTANT CASE, A PERUSAL OF THE ORDER NOWHER E SAYS THAT SUCH ENTRIES WERE FOUND IN THE BOOKS OF ACCOUNT OF THE A SSESSEE. FURTHER, A PERUSAL OF THE ORDER DOES NOT SHOW THAT THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF BANK INTE REST WAS DETECTED AS A RESULT OF SEARCH IN THE CASE OF SUYOJIT GR OUP OF CASES. THE ASSESSEE IN THE INSTANT CASE HAS VOLUNTARILY OFFERED THE BANK INTEREST AS ADDITIONAL INCOME FOR THE ABOVE 4 YEARS IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S.153C AND THE AO HAS ACCEP TED SUCH RETURN FILED IN RESPONSE TO NOTICE U/S.153C WITHOUT MAKING ANY FURTHER ADDITION. UNDER THESE CIRCUMSTANCES, WHEN NO INCRIMINATING MATERIAL WAS FOUND SHOWING THE EARNING OF SUCH BANK INTEREST BY THE ASSESSEE AND SINCE THE ASSESSEE HAS V OLUNTARILY OFFERED THE BANK INTEREST AS ADDITIONAL INCOME IN THE RETUR N FILED IN RESPONSE TO NOTICE U/S.153C, THEREFORE, WE ARE OF THE CON SIDERED OPINION THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 27 1(1)(C) OF THE ACT ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 13. THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF 7 ITA NOS.1768 TO 1771/PN/2014 CHHORIYA GROUP RELIED ON BY THE LD. CIT(A) IN OUR OPINION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE THE FACT S IN THAT CASE ARE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT IT IS NO T A FIT CASE FOR LEVY OF PENALTY BY INVOKING THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE I.T. ACT. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO CANCEL THE PENALTY. 14. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-07-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED :14 TH JULY , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-I, NASHIK 4. % S / THE CIT (CENTRAL), NAGPUR 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , // ( + //TRUE COPY // 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE