R. Vijayasekharan, Coimbatore V. ACIT, Coimbatore

ITA 1841/CHNY/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7591 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Income from undisclosed sources; Document seized; Principle of natural justice; Assessment record; Documents seized

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.1841/MDS/2013 ' $ %$ / ASSESSMENT YEAR : 2009-2010 SHRI. R. VIJAYASEKHARAN, 104, TK MARKET, COIMBATORE 641 001. [PAN ABRPV 7468H] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III, COIMBATORE 641 018. ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE *+&' ( ) /RESPONDENT BY : SHRI. R. DURAIPANDIAN, IRS, JCIT. ( , / DATE OF HEARING : 21-01-2016 -.% ( , / DATE OF PRONOUNCEMENT : 24-03-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIM BATORE IN APPEAL NO.48/12-13, DT 23.08.2013 FOR THE ASSESSMENT YEAR 2009-2010 PASSED U/S.271(1)(C) AND 250 OF THE INCOME TAX ACT , 1961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA NO.1841/MDS/2013. :- 2 -: 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE HONOURABLE COMMISSIONER OF INCOME TAX APPEAL IS UNJUSTIFIED IN CONFIRMING THE ORDER OF THE ASST. COMMISSIONER OF INCOME TAX. 2. AT THE TIME OF SURVEY NO DOCUMENTS OR PAPERS WERE SEIZED BUT THE ASSESSEE HAS AGREED TO OFFER ADDITIONAL INCOME OF =10,00,000/- TO NUY PEACE WITH THE DEPARTMENT. 3. THE ASSESSEE HAS OFFERED WHATEVER HE HAD AGREED AT THE TIME OF SURVEY IN ADVAITH REALTIY AND SRI VARI TRADERS. BUT IN HIS INDIVIDUAL CAPACI TY THE INCOME WAS OMITTED TO BE OFFERED WHICH WAS A GENUINE MISTAKE AND NOT DELIBERATE. THE ASSESSEE HAS VOLUNTARILY AT THE TIME OF ASSESSMENT PROCEEDINGS PAID THE TAXES DUE ON THE ADDITIONAL INCOME OF =10,00,000/- AND REVISED COMPUTATION WAS FILED ALONGWITH THE CHALLAN FOR PAYMENT OF TAX. 3. THE BRIEF FACTS OF THE CASE, THE ASSESSEE IS AN IND IVIDUAL AND IN THE BUSINESS OF JEWELLERY AND FILED RETURN OF I NCOME ON 23.09.2010 DISCLOSING TOTAL INCOME OF =5,34,671/-. THE CASE W AS SELECTED FOR SCRUTINY AND SOURCES BEING INCOME FROM BUSINESS, I NCOME FROM OTHER SOURCES AND AGRICULTURAL INCOME. THERE WAS SURVEY U /SEC.133 OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 30 .07.2009 AND STATEMENTS WERE RECORDED. THE LD. AUTHORISED REPRE SENTATIVE OF THE ASSESSEE APPEARED AND FILED EXPLANATIONS AND SUBMIT TED DETAILS OF AGRICULTURAL INCOME ALONGWITH PROOF OF OWNERSHIP W ITH CHITTA/ADANGAL AND CROPS CULTIVATED. THE LD. ASSESSING OFFICER V ERIFIED THE DOCUMENTARY EVIDENCES AND DEDUCTIONS CLAIMED UNDER CHAPTER VIA. ITA NO.1841/MDS/2013. :- 3 -: THE ASSESSEE IN THE SURVEY OPERATIONS TO BUY PEACE WITH THE DEPARTMENT HAS VOLUNTARILY OFFERED INCOME OF =10,00 ,000/- AS PER SWORN STATEMENT RECORDED ON 30.07.2009. BUT AT THE TIME OF FILING RETURN OF INCOME IT WAS NOT INCLUDED FOR TAXATION. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED REVISED COMPUTATION SHEET BY LETTER DATED 25.11.2011 OFFERING AS INCOME FROM OTHER SOUR CES THE ASSESSING OFFICER CONSIDERED THE REVISED STATEMENT AND ADDED =10,00,000/- TO THE RETURNED INCOME AND ASSESSED TOTAL INCOME OF =1 5,34,671/-. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED PENALTY NOTICE AND IN COMPLIANCE, THE ASSESSEE FILED WRITTEN SUBMISSIONS ON 04.06.2012 EXPLAINING THAT THE ASSESSEE GAVE SWORN STATEMENT I N DIFFERENT CAPACITIES ONE AS MANAGING DIRECTOR OF ADVAITH REA LITY PVT. LTD AND AS PARTNER OF SHRI. VARI TRADERS AND INDIVIDUAL CAPACI TY. THE ASSESSEE OFFERED =10,00,000/- TO TAX AS ADDITIONAL INCOME BA SED ON CERTAIN LOOSE SHEETS WITH GOOD FAITH TO AVOID LITIGATION AN D BUY PEACE WITH THE DEPARTMENT. BUT THE ASSESSING OFFICER RELIED ON SU BMISSIONS OF THE INFORMATION AND ASSESSMENT RECORDS AND SWORN STATEM ENT OF THE ASSESSEE AT QUESTION NO.5 WERE ASSESSEE ADMITTED THAT HE HAS EARNED =10,00,000/- AND OFFERED TO TAX. FURTHER, T HE LD. ASSESSING OFFICER ALLEGED THAT BUT FOR SURVEY, THE ASSESSEE ADMITTED UNACCOUNTED INCOME FROM BUSINESS IN REVISED STATEME NT AS RETURN OF INCOME FILED WITHOUT THE DISCLOSURE. THE ASSESSEE APPLIED ON ITA NO.1841/MDS/2013. :- 4 -: 02.11.2011 FOR COPY OF SWORN STATEMENT RECORDED I N SURVEY OPERATION AND ADMITTED =10,00,000/- TO TAX. THE LD. ASSESSIN G OFFICER RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CA SE OF M. SAJJANRAJ NAHAR VS. CIT 155 TAXMAN 536 (MAD)/283 ITR 230 AND MINIMUM PENALTY OF =3,39,900/- U/S.271(1) (C) OF THE ACT F OR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME TO THE EXTENT OF =10,00,000/-. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE SUBSTANTIATED ARGUMENTS OF ASSESSME NT PROCEEDINGS IN SURVEY OPERATIONS THE ASSESSEE HAS DEPOSED SWORN STATEMENTS AS (I) PARTNER OF SRI VARI TRADERS (II) DIRECTOR OF ADVAI TH REALITY P. LTD (3) PROPRIETOR. THE ASSESSEE AGREED TO OFFER ADDITIONA L INCOME IN PARTNERSHIP FIRM AND COMPANY BUT OFFERED =10,00,000 /- IN HIS INDIVIDUAL INCOME STATUS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON PERUSAL OF THE ASSESSMENT RECORDS AND GROUNDS RAISED BY THE ASSESSEE FOUND THAT IN ORDER TO BUY PEACE AND GOOD FAITH HAS PAID THE TAXES AND NOT CONTESTED THE QUANTUM APPEAL. TH E LD. AUTHORISED REPRESENTATIVE ARGUED THAT AT THE TIME OF SURVEY NO DOCUMENT OR PAPERS WERE SEIZED AND ASSESSEE OFFERED ADDITIONAL INCOME BUT ON VERIFICATION OF FACTS FROM RECORDS THERE WERE SLIPS AND LOOSE SHEETS ITA NO.1841/MDS/2013. :- 5 -: FOUND WITH REFERENCE TO GOLD PURCHASES AND JEWELLER Y BUSINESS AND INCOME FROM JEWELLERY. THE ASSESSEE WHEN QUESTIONE D IN SURVEY OPERATION HAS OFFERED =10,00,000/- AS INCOME FROM JEWELLERY BUSINESS AND SUCH TRANSACTION MADE OUTSIDE BOOKS OF ACCOUNTS . THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY ORDER WITH THESE OBSERVATIONS. AGGRIEVED BY THE COMMISS IONER OF INCOME TAX (APPEALS) ORDER, THE ASSESSEE ASSAILED AN APPEA L BEFORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE REITER ATED SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND C OMMISSIONER OF INCOME TAX (APPEALS) AND SUBSTANTIATED THE GROUNDS WITH ARGUMENTS THAT THE ASSESSEE IN SURVEY OPERATIONS U/SEC.133A O F THE ACT HAS VOLUNTARILY OFFERED INCOME FOR TAXATION AND AGREED TO PAY INCOME TAX ON ADDITIONAL INCOME. THE ASSESSEE IS A PARTNER, DIRECTOR OF PRIVATE LIMITED COMPANY AND ALSO RUNNING BUSINESS IN INDIVI DUAL CAPACITY. THE SURVEY TOOK PLACE AT BUSINESS PREMISES AND THE DEPA RTMENT HAS RECORDED SWORN STATEMENTS. THE ASSESSEE OFFERED TO PAY TAX ON ADDITIONAL INCOME IN COMPANY AND PARTNERSHIP FIRM A ND OFFERED =10,00,000/- AS INCOME IN INDIVIDUAL CAPACITY IN JE WELLERY BUSINESS. THE DEPARTMENT HAS CONSIDERED THE ADDITIONAL INCOME AND LEVIED TAX IN THE ASSESSMENT ORDER. THE ASSESSEE IN ORDER TO BUY PEACE WITH THE DEPARTMENT PAID TAXES ON ADDITIONAL INCOME AND PROD UCED CHALLAN IN ITA NO.1841/MDS/2013. :- 6 -: THE PENALTY PROCEEDINGS. THE LD. AUTHORISED REPRES ENTATIVE EXPLAINED CIRCUMSTANCES AND THE VITAL ROLE OF ASSESSEE AS PAR TNER, DIRECTOR AND PROPRIETOR AND CO-OPERATED IN THE ASSESSMENT PROCEE DING AND SUBSTANTIATED HIS BONAFIDES ON PAYMENT OF TAXES. F URTHER DEPARTMENT HAS NOT FOUND DOCUMENTS OR PAPER DURING SURVEY BUT INORDER TO AVOID LITIGATION ACCEPTED THE ADDITIONAL INCOME AND PRAYE D FOR DELETION OF PENALTY. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES JUDICIAL DECISION S. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO FILED PAPER BOOK CONTAINING COPY OF DOCUMENTS, IMPOUNDED IN SURVEY AND SWORN STATEMENT AND VEHEMENTLY ARGUED THAT THE ASSESSEE HAS CONCELED TH E FACTUAL ASPECTS OF EARNING INCOME AND PRAYED FOR DISMISSAL OF APPEA L. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD AND JUDICIAL DECISIONS CITED. THE LD. AUTHO RISED REPRESENTATIVE EXPLAINED THE CIRCUMSTANCES OF OFFERING OF INCOME B Y THE ASSESSEE IN THE SURVEY OPERATIONS. THE ASSESSEE ACCEPTED =10, 00,000/- AS ADDITIONAL INCOME BUT FAILED TO INCLUDE IN THE RETU RN OF INCOME FILED ON 23.09.2010 BUT SUBSEQUENTLY IN THE ASSESSMENT PROCE EDINGS FILED A REVISED STATEMENT AFTER OBTAINING THE CERTIFIED CO PY OF SWORN STATEMENT ON 02.11.2011 IN ORDER TO BUY PEACE WITH THE DEPARTMENT, ITA NO.1841/MDS/2013. :- 7 -: THE ASSESSEE HAS NOT CONTESTED THE ADDITION OR FILE D AN APPEAL BUT PAID TAXES TO SUBSTANTIATE THE CO-OPERATION EXTENDED W ITH THE DEPARTMENT. THE ROLE OF THE ASSESSEE AT THE TIME O F SURVEY WERE SWORN STATEMENTS WERE RECORDED AS CAPACITY OF DIREC TOR, PARTNER OF SHRI VARI TRADERS AND PROPRIETOR OF THE JEWELLERY B USINESS AND ASSESSEE OFFERED ADDITIONAL INCOME OF =10,00,000/- FROM JEWE LLERY BUSINESS. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED PAPER BOOK WITH SEIZED DOCUMENTS AND DREW ATTENTION TO THE COPIES OF INC RIMINATING MATERIAL AND IMPOUNDED DURING THE SURVEY, RELATING TO JEW ELLERY BUSINESS. THE STATEMENTS RECORDED IN REGIONAL LANGUAGE WITH T RANSLATION COPY ON VARIOUS QUESTION IN SURVEY OPERATIONS. ON PERUSAL O F MATERIAL EVIDENCE FILED BY REVENUE FOR THE FIRST TIME BEFORE US, WE F OUND THE EVIDENTIAL VALUE OF DOCUMENTS SEIZED PERTAINING TO JEWELLERY B USINESS ALONGWITH SCRIBBLING OF THE ASSESSEE, PRIME FACIE COULD NOT EXPLAIN WHETHER IT PERTAINS TO COMPANY/PARTNERSHIP OR INDIVIDUAL. CONS IDERING THE APPARENT FACTS AND CIRCUMSTANCES WE ARE OF THE OPIN ION THAT DOCUMENTS FILED WERE NEVER PUT TO TEST RELATED TO THE ASSESSEE PROPRIETOR BUSINESS AND CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, THE BENEFIT OF EXAMINATION HAS TO BE PROVIDED TO BO TH THE PARTIES. THEREFORE, WE FIND IT APPROPRIATE TO SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND REMIT THE ENTIRE ISSUE IN DISPUTE TO THE FILE OF THE COMMISSIONER OF INCOME T AX (APPEALS) WHO ITA NO.1841/MDS/2013. :- 8 -: SHALL EXAMINE THE EVIDENCE FILED AND THE ASSESSEE SHALL BE PROVIDED WITH ADEQUATE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 24TH DAY OF MA RCH, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI / / DATED:24.03.2016 KV 0 ( *',12 32%, / COPY TO: 1 . &' / APPELLANT 3. 4, () / CIT(A) 5. 278 *',' / DR 2. *+&' / RESPONDENT 4. 4, / CIT 6. 89$ : / GF