The ACIt, Circle-3, Baroda V. Krupesh Narharibhai Patel, Baroda

ITA 1962/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5953 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIRMIT ME H TA

Judgement Text

, C CC CH HH H IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.1961/AHD/2014 ( / ASSESSMENT YEAR : 2009-10) THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 3, 3 RD FLOOR, AAYKAR BHAVAN PLOT NO.69, GIDC KANSARI, RACE COURSE CIRCLE, BARODA. VS. VARSHABEN SURENDRABHAI PATEL, 15, PARSHARMA SOCIETY, SUBHANPURA, BARODA. ! PAN/GIR NO. : ADOPP 2084 N I.T.A. NO.1962/AHD/2014 ( / ASSESSMENT YEAR : 2009-10) THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 3, 3 RD FLOOR, AAYKAR BHAVAN PLOT NO.69, GIDC KANSARI, RACE COURSE CIRCLE, BARODA. VS. KRUPESH NARHARIBHAI PATEL, 15, PARSHARMA SOCIETY, SUBHANPURA, BARODA. ! PAN/GIR NO. : ADHPP 6422 B ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI MUDIT NAGPAL, SR. D.R. #'%$ / RESPONDENT BY : SHRI NIRMIT MEHTA, A.R. & ' (%) * / DATE OF HEARING 12/02/2018 +,-. %) * / DATE OF PRONOUNCEMENT 26/02/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THESE ARE TWO APPEALS BY THE DEPARTMENT AGAINST T HE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- IV, AHMEDABAD, ITA NOS. 1961 & 1962/AHD/2 014 ACIT VS. VARSHABEN SURENDRABHAI PATEL & KRUPESH NAR HARIBHAI PATEL ASST.YEARS 2009-10 - 2 - VIDE APPEAL NOS.CIT(A)-IV/90/BRD/CC-1/13-14 AND CIT (A)- IV/4/BRD/CC-1/13-14 DATED 09/04/2014 FOR THE ASSESS MENT YEARS (AYS) 2009-10. 2. SINCE IN THESE TWO APPEALS ISSUES AND ASSESSMENT YEAR ARE COMMON ONLY FIGURES ARE DIFFERENT THEREFORE FOR THE SAKE O F CONVENIENCE, WE WOULD LIKE TO DISPOSE OF BOTH APPEALS BY WAY OF A COMMON ORDER. IN THESE APPEALS FOLLOWING GROUNDS HAVE TAKEN BY THE APPELLA NT: 2.1 IN ITA NO.1961/AHD/2014 FOR ASST. YEAR 2009-10: 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S .271AAA OF THE ACT OF RS.31,80,600/-, WITHOUT APPRECIATING THE FAC T THAT PENALTY HAS BEEN RIGHTLY LEVIED AS PER THE PROVISIONS OF SE CTION 271AAA OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S .271AAA OF THE ACT OF RS.31,80,600/- BY HOLDING THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS REQUIRED FOR IMMUNITY FROM LEVY OF P ENALTY U/S.271AAA OF THE ACT, WITHOUT APPRECIATING THE FAC T THAT ASSESSEE HAS FAILED TO SPECIFY AND SUBSTANTIATE THE MANNER I N WHICH UNDISCLOSED INCOME, ADMITTED BY HER, HAS BEEN DERIV ED AND THUS, FAILED TO FULFILL THE CONDITIONS OF SUB-SECTION (2) (I) & (2)(II) OF SECTION 271AAA OF THE ACT, WHICH ARE THE BASIC COND ITIONS FOR IMMUNITY FROM PENALTY U/S.271AAA OF THE ACT. 2.2 IN ITA NO.1962/AHD/2014 FOR ASST. YEAR 2009-10: 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S .271AAA OF THE ACT OF RS.50,42,600/-, WITHOUT APPRECIATING THE FAC T THAT PENALTY HAS BEEN RIGHTLY LEVIED AS PER THE PROVISIONS OF SE CTION 271AAA OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S .271AAA OF THE ITA NOS. 1961 & 1962/AHD/2 014 ACIT VS. VARSHABEN SURENDRABHAI PATEL & KRUPESH NAR HARIBHAI PATEL ASST.YEARS 2009-10 - 3 - ACT OF RS.50,42,600/- BY HOLDING THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS REQUIRED FOR IMMUNITY FROM LEVY OF P ENALTY U/S.271AAA OF THE ACT, WITHOUT APPRECIATING THE FAC T THAT ASSESSEE HAS FAILED TO SPECIFY AND SUBSTANTIATE THE MANNER I N WHICH UNDISCLOSED INCOME, ADMITTED BY HER, HAS BEEN DERIV ED AND THUS, FAILED TO FULFILL THE CONDITIONS OF SUB-SECTION (2) (I) & (2)(II) OF SECTION 271AAA OF THE ACT, WHICH ARE THE BASIC COND ITIONS FOR IMMUNITY FROM PENALTY U/S.271AAA OF THE ACT. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT A SEARCH WAS CARRIED OUT U/S.132 OF THE INCOME TAX ACT IN CA SE OF APPELLANT ON 11/02/2009. THEREAFTER, APPELLANT FILED RETURN OF I NCOME ON 30/09/2009 DECLARING TOTAL INCOME OF RS.3,49,63,370/-. THE ASS ESSMENT WAS FINALIZED U/S.143(3) OF THE ACT ON 23/12/2010 ACCEPTING THE R ETURN OF INCOME AS ASSESSED INCOME. 4. DURING THE SEARCH, THE APPELLANT DISCLOSED RS.3, 18,06,000/-. THE AO INITIATED THE PENALTY U/S.271AAA OF THE ACT IN R ESPECT OF THIS AMOUNT. THE APPELLANT CLAIMED THAT PENALTY CANNOT B E LEVIED AS THIS CASE IS COVERED WITH THE PROVISION OF SECTION 271AAA OF THE I.T. ACT BUT LD. AO WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE APPELLANT AND LEVIED THE PENALTY U/S.271AAA AMOUNTING TO RS.3,18, 06,000/-. 5. THEREAFTER, ASSESSEE PREFERRED FIRST STATUTORY A PPEAL BEFORE THE LD.CIT(A) AND LD. CIT(A) DELETED THE PENALTY WITH F OLLOWING OBSERVATION THAT HE HAS OF THE CONSIDERED OPINION THAT SO FAR A S THE MANNER OF EARNING THE INCOME AND SUBSTANTIATING THE SAME IS CONCERNED , THE APPELLANT HAS, IN HIS VIEW, NOT SPECIFIED THE MANNER OF EARNING THE U NDISCLOSED INCOME AS WELL AS SUBSTANTIATED THE SAME SINCE NO QUESTION AS REGARDS SPECIFICATION ITA NOS. 1961 & 1962/AHD/2 014 ACIT VS. VARSHABEN SURENDRABHAI PATEL & KRUPESH NAR HARIBHAI PATEL ASST.YEARS 2009-10 - 4 - OF MANNER OF EARNING THE UNDISCLOSED INCOME AND SUB STANTIATION THEREOF WAS PUT FORTH IN STATEMENT RECORDED U/S.132(4) OF T HE ACT. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE APPELLANT HAS FAILED TO RESPOND TO ANY OF THE QUESTIONS RELATING TO THE MANNER OF EARN ING UNDISCLOSED INCOME AS WELL AS SUBSTANTIATING THE SAME EVEN DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF THIS, THE APPELL ANT IS DEEMED TO HAVE FULFILLED THE FIRST TWO CONDITIONS FOR AVAILING OF IMMUNITY FROM PENALTY PROCEEDINGS U/S.271AAA OF THE ACT. SHE CONCEALED TH E PENALTY LEVIED BY THE AO. 6. NOW DEPARTMENTS APPEAL IS BEFORE US. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDERS. LD.AR HAS CITED AN ORDER OF CO-ORDINATE BENCH IN IT A NO.1954/AHD/2014 FOR ASST. YEAR 2009-10 IN THE MATT ER OF ACIT VS. SHRI NAVIN NATUBHAI PATEL. IN THE SAME ORDER, OBSER VATION OF JURISDICTIONAL HIGH COURT IN THE MATTER OF MAHENDRA C. SHAH 299 ITR 305 HAS BEEN MENTIONED WHICH IS REPRODUCED HERE AS UNDER: 15. INSOFAR AS THE ALLEGED FAILURE ON THE PORT OF THE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) OF TH E ACT REGARDING THE MANNER M WHICH SUCH INCOME HAS BEEN, DERIVED, SUFFICE IT TO STATE THAT WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORI ZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN TH E PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE ST ATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE, THE STAT EMENT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR, AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT F ORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUC H STATEMENT IS BEING ITA NOS. 1961 & 1962/AHD/2 014 ACIT VS. VARSHABEN SURENDRABHAI PATEL & KRUPESH NAR HARIBHAI PATEL ASST.YEARS 2009-10 - 5 - RECORDED, AS NOTED BY ALLAHABAD HIGH COURT IN CASE OF RADHA KISHAN GOEL (SUPRA) SECONDLY, CONSIDERING THE SOCIAL ENVIR ONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHETHER LITERA TE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY EXCEPTION NO. 2 WHILE MAKING STATEMENT UNDER SECTIO N 132(4) OF THE ACT. THE VIEW TAKEN BY THE TRIBUNAL AS WELL AS ALLAHABAD HIGH COURT TO THE EFFECT THAT EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE, INCOME IS DECLARED AND T AX THEREON PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION NO.2 IN EXPLANATION 5 I S COMMENDABLE. 8. WE FIND THAT LD. CIT(A) HAS FOLLOWED THE AFORESA ID DECISION OF JURISDICTIONAL HIGH COURT AND PASSED REASONED AND D ETAILED ORDER. THEREFORE, WE DO NOT WANT TO INTERFERE IN THE ORDER S PASSED BY THE LD. CIT(A) AND RESPECTFULLY FOLLOWING THE ABOVE SAID JU DGMENT WE DISMISS BOTH APPEAL OF THE DEPARTMENT. 9. IN THE RESULT, APPEALS FILED BY THE DEPARTMENT A RE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 26/02/2018 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 26/02/2018 PRITI YADAV, SR.PS ITA NOS. 1961 & 1962/AHD/2 014 ACIT VS. VARSHABEN SURENDRABHAI PATEL & KRUPESH NAR HARIBHAI PATEL ASST.YEARS 2009-10 - 6 - !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-IV, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 12/02/2018 (DICTATION-PAD 2 P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19/02/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER