ACIT CEN CIR 2, THANE V. RAJESH P. SHAH, BHIWANDI

ITA 1852/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92557 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 26-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Section: 153A

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ./ I.T.A. NO.1852 /MUM/2011 ( / ASSESSMENT YEAR : 2005-2006 ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -2, THANE PAWAR INDUSTRIAL ESTATE, EDULJI ROAD, CHARAI, THANE 400 601. / VS. SHRI RAJESH P. SHAH, 309, SHANTI SAGAR, NARPOLI GAON, DEVJI NAGAR, BHIWANDI. ./ PAN : AVPPS2809B ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI AKHILENDRA P. YADAV R E SPONDENT BY : NONE / DATE OF HEARING : 10-03-2015 / DATE OF PRONOUNCEMENT : 15-05-2015 [ !' / O R D E R PER R.C. SHARMA, A.M . : THIS IS AN APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 1, THANE DATED 15-11-201 0 FOR THE A.Y. 2005-06 IN THE MATTER OF IMPOSITION OF PENALTY OF RS. 5,93,473 /- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. AT THE TIME OF HEARING, NOBODY FROM ASSESSEES SIDE HAS APPEARED INSTEAD OF GIVING NOTICES TO THE ASSESSEE. THE BENC H, THEREFORE DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. D.R. AN D CONSIDERING THE MATERIAL PLACED ON RECORD. ITA 1852/M/11 2 3. THE FACTS OF THE CASE ARE THAT, THERE WAS A SEAR CH & SEIZURE OPERATION CARRIED OUT IN THE PREMISES OF THE ASSESSEE ON 05/0 1/06. IN RESPONSE TO THE NOTICE U/S 153C, THE ASSESSEE FILED A RETURN ON 05/ 01/07, ADMITTING A TOTAL INCOME OF RS. 20,25,360/-. EARLIER THE ORIGINAL RET URN HAD BEEN FILED ON 30/10/05, ADMITTING A TOTAL INCOME OF RS 2,79,776/- . THE AO, THEN, PROCEEDED TO COMPLETE THE ASSESSMENT ACCEPTING THE RETURNED INCOME AT RS 20,25,360/- AND INITIATED PENALTY PROCEEDINGS HOLDI NG THAT, THE ADDITIONAL INCOME HAD BEEN OFFERED ONLY AS A RESULT OF SEARCH. THE AO AFTER AFFORDING OPPORTUNITY TO THE ASSESSEE, PASSED ORDER IMPOSING A PENALTY OF RS 5,93,473/-. THE FOLLOWING IS THE REASONING GIVEN BY THE AO FOR LEVY OF PENALTY. IT IS CLEAR THAT, IT IS ONLY AFTER THE SEARCH THAT THE ASSESSEE HAD FILED INCOME ON HIGHER SIDE U/S 153A FROM 2,79,7761- U/S 139(1) TO RS 20,25,3601-.) THE INCRIMINATING EVIDENCES GATHERED DURING THE SEARCH AND ADMISSION OF THE ASSESSEE DURING THE COURSE OF SEARCH, CLEARLY REFLECTS THAT, ASSESSEE HAS NOT SHOWN HIS TRUE AND CORRECT INCOME AND THAT THE ASSESSEE HAS DECLARED ADDITIONAL INCOME ON LY SINCE THE EVIDENCES GATHERED DURING THE SEARCH REFLECTED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME AND HAD FUR NISHED INACCURATE PARTICULARS OF SUCH INCOME. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, ANALYSIS OF MATERIAL SHOWED THAT THE A SSESSEE HAD EARNED INCOME WHICH WAS NOT REFLECTED IN THE RETURN OF INC OME FILED BY THE ASSESSEE U/S 153A OF THE IT ACT AND ALSO THAT THE A SSESSEE FILED RETURN OF HIGHER INCOME U/S 153A AS A RESULT OF SEARCH ONL Y. THUS, IT IS LEARNT THAT, THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF HIS INCOME. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE P ENALTY AFTER HAVING FOLLOWING OBSERVATION:- 5. I FIND THAT I THE INCOME HAS BEEN DECLARED ON T HE BASIS OF ESTIMATE @ 8 % OF THE TURNOVER IN CONTRACT BUSINESS. IN MY VIEW, PENALTY CANNOT BE LEVIED ON INCOME WHICH IS QUANTIFIED ON THE BASIS OF ESTIM ATE. MOREOVER, THE APPELLANT HAS MADE DISCLOSURE IN THE STATEMENT RECO RDED U/S 132(4) TO THE EFFECT THAT HE WOULD ADMIT INCOME @ 8 % OF CONTRACT RECEIPTS. 6. THE ABOVE SUBMISSIONS AND THE DECISIONS RELIED U PON ARE PERUSED AND CONSIDERED. AS STATED ABOVE, THE APPELLANT HAS DISC LOSED THE INCOME ARISING OUT OF UNACCOUNTED TURNOVER, ADMITTED IT DULY IN TH E RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A AND PAID TAXES WITH INTEREST AND THE SAME HAS BEEN ITA 1852/M/11 3 ACCEPTED BY THE AO IN THE ASSESSMENT, HENCE THERE I S NO CASE FOR LEVY OF PENALTY U/S 271(1)(C). 7. IN THIS CASE THE APPELLANT HAD DULY INCLUDED THE ADDITIONAL INCOME SURRENDERED BY HIM IN HIS STATEMENT ON OATH RECORDE D U/S 132(4) OF THE IT ACT , 1961 IN THE INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE IT ACT. THE AO HAS HELD THAT THE APPELL ANT DISCLOSED HIGHER INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/ S 153A ONLY BECAUSE OF THE SEARCH & SEIZURE ACTION. THE AO LEVIED PENALTY U/S 271(1)(C) OF THE IT ACT, 1961 HOLDING THE APPELLANT RESPONSIBLE FOR NON DISC LOSURE OF HER TRUE AND FULL INCOME IN HER ORIGINAL RETURN FILED U/S 139(1) OF T HE IT ACT, 1961. THE ACTION OF THE AO DOES NOT APPEAR TO BE LEGALLY SUSTAINABLE. N O CONCEALMENT PENALTY IS LEVIABLE ON THE INCOME DISCLOSED IN THE RETURN OF I NCOME FILED IN RESPONSE TO NOTICE U/S 153A OF THE IT ACT, 1961. THIS VIEW HAS BEEN UPHELD BY THE LD. ITAT, 'B' BENCH, PUNE IN THE CASE OF SMT SARALA M AHUJA VS DCIT, CENTRAL CIRCLE, KOLHAPUR IN ITA NO 1301 TO 1304/PN/~ DECID ED ON 26/10/07. THE CONCEALMENT OF INCOME HAS TO BE DETERMINED WITH REF ERENCE TO THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A OF THE IT ACT , 1961 AND NOT WITH REFERENCE TO THE INCOME RET URNED IN THE ORIGINAL RETURN FILED U/S 139(1). THERE IS NO DIFFERENCE IN THE INC OME RETURNED BY THE APPELLANT IN THE RETURN OF INCOME FURNISHED IN RESPONSE TO N OTICE U/S 153A OF THE IT ACT AND THE ASSESSED INCOME U/S 153A(B) OF THE IT ACT A ND AS SUCH, THERE IS NO CONCEALMENT OF INCOME IN THIS CASE. 8. IN VIEW OF THE FACTS MENTIONED ABOVE, I FIND THA T CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C) IS FULLY APPLI CABLE IN THIS CASE AND HENCE THE APPELLANT IS ENTITLED FOR GETTING BENEFIT OF IM MUNITY FROM THE LEVY OF PENALTY U/S 271(1)(C). IN VIEW OF THE FACTS AND LE GAL POSITION EXPLAINED ABOVE, THE PENALTY OF RS. 5,93,473/- LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961 IS HEREBY SET ASIDE. AGGRIEVED BY THE ABOVE ORDER OF LD. CIT(A), THE REV ENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE LD. D.R. AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FROM THE RECORD, WE FIND THAT THE PENALTY W AS IMPOSED WITH RESPECT TO THE DISCLOSURE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT WHEREIN THE ASSESSEE ADMITTED INCOME @ 8% OF THE CONTRACT RECEI PTS. THE LD. CIT(A) AFTER RECORDING THE FINDINGS TO THE EFFECT THAT THE ASSES SEE HAS DISCLOSED THE INCOME ARISING OUT OF UNACCOUNTED TURNOVER ADMITTED IT IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT AND PAID TAXES WI TH INTEREST AND THE SAME HAS BEEN ACCEPTED BY THE A.O. IN THE ASSESSMENT FRA MED. THE LD. CIT(A) ALSO OBSERVED THAT THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED BY THE ITA 1852/M/11 4 ASSESSEEE IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND THE ASSESSED INCOME U/S 153A(B) OF THE ACT WERE SAME AS SUCH THERE IS N O CONCEALMENT OF INCOME IN THIS CASE. THE LD. CIT(A) ALSO OBSERVED THAT CLA USE 2 OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT IS FULLY APPLICABLE, T HEREFORE, THE ASSESSEE IS ENTITLED FOR GETTING BENEFIT OF IMMUNITY FROM THE L EVY OF PENALTY U/S 271(1)(C) OF THE ACT. WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF LD. CIT(A) FOR DELETING THE PENALTY AS CLAUSE 2 OF EXPLANATION 5 TO SECTI ON 271(1)(C) WAS FULLY APPLICABLE TO THE CASE OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2015. !' # $% &! ' 15-05-2015 ( ) SD/- SD/- (I.P. BANSAL) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 15-05-2015 [ .6../ RK RKRK RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT(A) 1 THANE 4. 7 / CIT (CENTRAL), PUNE 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI J BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI