Asst. Commissioner of Income Tax,Central Circle, Panaji., Panaji V. M/s Parabola Land & Holding Pvt. Ltd., Goa

ITA 184/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1546 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SMRITI BHARDWAJ LD
• Keywords: Bogus Share capital
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 183/PNJ/2015 : (A.Y 2011 - 12) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PANAJI, GOA. (APPELLANT) VS. M/S. PARABOLA LAND MANAGEMENT PVT. LTD., F - AS - 2, ASTRAL GARDEN, NEXT TO EDEN WOOD, TALEIGAO, GOA PAN : AAFCP8977R (RESPONDENT) ITA NO. 184/PNJ/2015 : (A.Y 2011 - 12) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PANAJI, GOA. (APPELLANT) VS. M/S. PARABOLA LAND & HOLDING PVT. LTD., F - AS - 2, ASTRAL GARDEN, NEXT TO EDEN WOOD, TALEIGAO, GOA PAN : AAFCP8978A (RESPONDENT) ITA NO. 1 85 /PNJ/2015 : (A.Y 2011 - 12) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PANAJI, GOA. (APPELLANT) VS. M/S. GOA ORGANICS PVT. LTD. , F - AS - 2, ASTRAL GARDEN, NEXT TO EDEN WOOD, TALEIGAO, GOA PAN : AA DCG6559Q (RESPONDENT) ASSESSEE BY : PRAMOD Y. VAIDYA , ADV. REVENUE BY : SMT. SMRITI BHARDWAJ, LD. DR DATE OF HEARING : 0 6 /08/2015 DATE OF PRONOUNCEMENT : 0 6 /08/2015 O R D E R PER GEORGE MATHAN : 1. ITA NO. 183/PNJ/2015 IS AN APPEAL FILED BY THE REVENUE IN THE CASE OF M/S. PARABOLA LAND MANAGEMENT PVT. LTD. AGAINST THE ORDER OF CIT(A), PANAJI - 2 IN ITA NOS. 365/CIT(A) - VI/BNG/2013 - 14 & 67/CIT(A) - 2/PNJ/14 - 15 DT. 2 ITA NOS. 183 TO 185/PNJ/2015 (A.Y : 2011 - 12) 2.1.2015 FOR THE A.Y 2011 - 12 . ITA NO. 184/PNJ/2015 IS AN APPEAL FILED BY THE REVENUE IN THE CASE OF M/S. PARABOLA LAND & HOLDING PVT. LTD. AGAINST THE ORDER OF CIT(A), PANAJI - 2 IN ITA NOS. 366/CIT(A) - VI/BNG/2013 - 14 & 66/CIT(A) - 2/PNJ/14 - 15 D T. 2.1.2015 FOR THE A.Y 2011 - 12. ITA NO. 185/PNJ/2015 IS AN APPEAL FILED BY THE REVENUE IN THE CASE OF M/S. GOA ORGANICS PVT. LTD. AGAINST THE ORDER OF CIT(A), PANAJI - 2 IN ITA NOS. 367/CIT(A) - VI/ BNG/2013 - 14 & 68/CIT(A) - 2/PNJ/14 - 15 DT. 2.1.2015 FOR THE A.Y 2011 - 12. 2. S MT. SMRITI BHARDWAJ, LD. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI PRAMOD Y. VAIDYA, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. AS ALL THE THREE APPEALS INVOLVE THE SAM E ISSUE AND THE GROUNDS RAISED ARE ALSO IDENTICAL, ALL THESE THREE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 3. IT WAS SUBMITTED BY THE LD. DR THAT ALL THE APPEALS WERE AGAINST THE CANCELLATION OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT. IT WA S THE SUBMISSION THAT THE ASSESSEES ARE PRIVATE LIMITED COMPANIES. THERE WAS A SEARCH ACTION U/S 132 IN THE CASE OF SHRI PRAKASH KITTUR AND OTHERS ON 16.4.2010. FOR THE A.Y 2011 - 12 THE ASSESSEE, M/S. PARABOLA LAND MANAGEMENT PVT. LTD. FILED ITS RETURN OF INCOME ON 29.9.2011 DECLARING TOTAL INCOME OF RS. 8,99,69,724/ - . THE ASSESSEE, M/S. PARABOLA LAND & HOLDING PVT. LTD. FILED ITS RETURN OF INCOME FOR THE A.Y 2011 - 12 ON 29.9.2011 DECLARING TOTAL INCOME OF RS. 3,49,69,890/ - AND THE ASSESSEE, M/S. GOA ORGAN ICS PVT. LTD. FILED ITS RETURN OF INCOME FOR THE A.Y 2011 - 12 ON 29.9.2011 DECLARING TOTAL INCOME OF RS. 7,50,00,000/ - . IT WAS THE SUBMISSION THAT THE ASSESSMENTS WERE COMPLETED U/S 143(3) ON 29.11.2012. IT WAS THE SUBMISSION THAT THE ASSESSMENTS WERE COM PLETED ACCEPTING THE RETURNED INCOME. IT WAS THE SUBMISSION THAT IN THE COURSE OF THE SEARCH, EVIDENCE WAS FOUND THAT THE ASSESSEES HAD RECEIVED SHARE APPLICATION MONEY WHICH IS BOGUS AND IT WAS ONLY ON ACCOUNT OF THE SAID SEARCH THAT THE ASSESSEES HAD DI SCLOSED 3 ITA NOS. 183 TO 185/PNJ/2015 (A.Y : 2011 - 12) THE BOGUS SHARE CAPITAL AND CONSEQUENTLY, PENALTY U/S 271(1)(C) HAD BEEN LEVIED. IT WAS THE SUBMISSION THAT THE LD. CIT(A) DELETED THE PENALTY ON THE GROUND THAT THE ASSESSEES HAD FILED THEIR RETURN OF INCOME IN A ROUTINE MANNER WELL WITHIN THE TI ME AND DISCLOSED THE INCOME AND NO ADDITION WAS MADE IN THE RETURNED INCOME. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HELD THAT THE BASIC PRE - CONDITION FOR LEVY OF PENALTY IS THAT THERE IS CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCO ME IN THE RETURN OF INCOME. IT WAS THE SUBMISSION THAT THE ASSESSEES HAD RECORDED THE BOGUS SHARE CAPITAL IN THEIR BALANCE - SHEET. THE ASSESSEES HAS ATTEMPTED TO CONCEAL THEIR INCOME AND CONSEQUENTLY, THE ORDERS OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED . 4. IN REPLY, LD. AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, THE RETURNED INCOME OF THE ASSESSEES HAVE BEEN ACCEPTED. A PERUSAL OF THE PROVISIONS OF SEC. 271(1)( C) SHOWS THAT IT IS ONLY IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT , IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME PENALTY U/S 271(1)(C) CAN BE LEVIED. THE PROCEEDINGS UNDER THIS ACT, IN THE CASE OF THE ASSESSEES START WHEN THE PROCEEDINGS HAVE BEEN INITIATED. THIS IS NOT A CA SE WHERE A SEARCH HAS BEEN CONDUCTED ON THE ASSESSEES. THE SEARCH HAS BEEN CONDUCTED ON A THIRD PARTY. THEREFORE, THE PROCEEDINGS IN THE PRESENT ASSESSEES CASES WOULD INITIATE WHEN THE RETURN OF INCOME IS FILED. ANY ACT DONE BY THE ASSESSEES BEFORE FIL ING SUCH RETURNS BUT IN RELATION TO THE SAID ASSESSMENT ORDERS WOULD NOT LEAD TO CONSEQUENCE OF MENS REA OR EVEN AN ACT OF CONCEALMENT OR AN ACT OF FURNISHING OF INACCURATE PARTICULARS. A PERUSAL OF THE ASSESSMENT ORDERS CLEARLY SHOW THAT A STATEMENT WAS RECORDED FROM ONE SHRI HEMANT SHARMA WHO HAS REFERRED TO THE 4 ITA NOS. 183 TO 185/PNJ/2015 (A.Y : 2011 - 12) ASSESSEE - COMPANIES FOR HAVING DONE CERTAIN MONEY LAUNDERING ACTS OR BOGUS SHARE APPLICATION MONEY ACTS. THE SAID SHRI HEMANT SHARMA HAS NOT BEEN PUT TO ANY OF THE ASSESSEES FOR CROS - EXAMINATION. EVEN ACCEPTING THAT WHAT IS SAID BY SHRI HEMANT SHARMA IS CORRECT AND THE ASSESSEES HAVE OBTAINED BOGUS SHARE CAPITAL THROUGH SHRI HEMANT SHARMA, STILL THE FACT THAT THE ASSESSEES DID NOT PROCEED WITH SUCH FRAUDULENT ACTIVITIES OR CULMINATED IN THE FILIN G OF THEIR RETURN SUPPRESSING SUCH BOGUS SHARE CAPITAL ONLY GOES IN FAVOUR OF THE ASSESSEES. IN FACT, THE HON'BLE SUPREME COURT IN THE CASE OF BRIJ MOHAN REPORTED IN 120 ITR 1 HAS HELD THAT IN THE CASE OF A PENALTY, HOWEVER, WE MUST REMEMBER THAT A PENAL TY IS IMPOSED ON ACCOUNT OF THE COMMISSION OF A WRONGFUL ACT, AND PLAINLY IT IS THE LAW OPERATING ON THE DATE ON WHICH THE WRONGFUL ACT IS COMMITTED WHICH DETERMINES THE PENALTY . HERE, THE ASSESSEES HAVE NOT COMMITTED A WRONGFUL ACT FOR THE PURPOSE OF LE VY OF PENALTY U/S 271(1)(C) INSOFAR AS THE ASSESSEES HAVE FILED THEIR RETURN OF INCOME DECLARING ALL THEIR INCOME MUCH BEFORE ANY ACTION OR PROCEEDINGS HAVE BEEN EVEN CONTEMPLATED IN THE CASE OF THE ASSESSEES. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW TH AT THE FINDINGS OF THE LD. CIT(A) THAT THE BASIC PRE - CONDITION FOR LEVY OF PENALTY IS THAT THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE RETURN OF INCOME IS ON A CORRECT FOOTING AND THE CANCELLATION OF THE P ENALTY BY THE LD. CIT(A) STANDS UPHELD. 6. IN THE RESULT, ALL THE APPEALS OF THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 6 /08/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 0 6 /08/ 201 5 *SSL* 5 ITA NOS. 183 TO 185/PNJ/2015 (A.Y : 2011 - 12) COPY TO : (1) APPELLANT (2) RESPONDENT (I) M/S. PARABOLA LAND MANAGEMENT PVT. LTD., (II) M/S. PARABOLA LAND & HOLDING PVT. LTD. AND (III) M/S. GOA ORGANICS PVT. LTD. (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 6 ITA NOS. 183 TO 185/PNJ/2015 (A.Y : 2011 - 12) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 06/08/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06/08/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 06/08/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 06/08/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 06/08/2015 SR.PS 6. DATE OF PRONOUNCEMENT 06/08/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 06/08/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER