Shri Satish Shamandas Aswani, Pune V. ACIT, Central Circle 1(1), Pune

ITA 1995/PUN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0811 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: R G NAHAR
• Keywords: Income from undisclosed sources
• Section: 143(3); 153A; 27; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO S . 1991 & 1 992 /PN/20 1 2 / ASSESSMENT YEAR S : 200 6 - 07 & 20 07 - 08 SHRI ANIL SHAMANDAS ASWANI SHAH KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN: A EHPA4916N VS. THE ASST. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE 1( 1 ), PUNE . / RESPONDENT . / ITA NO.1 993 /PN/201 2 / ASSESSMENT YEAR: 200 6 - 07 SHRI RAJKUMAR S HAMANDAS ASWANI SHAH KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN : AEZPA7340C VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1 ), PUNE . / RESPONDENT ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 2 . / ITA NO.1 994 /PN/201 2 / ASSESSMENT YEAR: 200 7 - 08 SHRI SHRICHAND SHAMANDAS ASWANI SHAH KHANDELWAL JAIN & ASSOCIATES, SHAH KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN : AE H PA 1627G VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), PUNE . / RESPONDENT . / ITA NO.1 99 5 /PN/201 2 / ASSESSMENT YEAR: 200 7 - 08 SHRI S ATISH SHAMANDAS ASWANI SHAH KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN : A EVPA4467N VS. THE ASST. COMMISSIONER OF INCOME TAX, C ENTRAL CIRCLE 1(1), PUNE . / RESPONDENT ASSESSEE BY : SHRI R.G. NAHAR REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 09 . 11 .2015 / DATE OF PRONOUNCEMENT: 04 . 1 2 .2015 / ORDER PER SUSHMA CHOWLA, JM: OUT OF THIS B U NCH OF FIVE APPEAL S , TWO APPEALS ITA NO S .1991 & 1992/PN/2012 ARE MOVED BY THE SAME ASSESSEE SHRI ANIL SHA MANDAS ASWANI AGAINST SEPARATE ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 3 ORDER S OF CIT (A) - I , PUNE , BOTH DATED 29 . 0 6 .201 2 RELATING TO ASSESSMENT YEAR S 200 6 - 07 A ND 20 07 - 08 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . THE APPEAL IN ITA NO.1993/PN/2012 IS MOVED BY SHRI RAJKUMAR SHAMANDAS ASWANI IS AGAINST ORDER OF CIT (A) - I, PUNE , DATED 29 . 06 .201 2 RELATING TO ASSES SMENT YEAR 200 6 - 07 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT . SIMILARLY, APPEALS IN ITA NOS.1994 & 1995/PN/2012 ARE MOVED BY TWO RELATED PERSONS SHRI SHRICHAND SHAMANDAS ASWANI AND SHRI SATISH SHAMANDAS ASWANI AGAINST SEPARATE ORDER S OF CI T (A) - I, PUNE , BOTH DATED 29 . 06 .201 2 RELATING TO ASSESSMENT YEAR 2007 - 08 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT . 2. ALL THE APPEALS RELATE TO ONE GROUP ON SIMILAR GROUNDS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO S .199 1 TO 1995 /PN/2012 HAS RAISED THE FOLLOWING COMMON GROUNDS OF APPEAL: - 1 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF THE ACT IT BE HELD THAT, PENALTY IMPOSED U/S. 271(1)(C) BY THE AO IS UNWARRANTED, UNJUSTIFIED, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT IT IS NOT THE FIT CASE FOR IMPOSITION OF PENALTY IN TERMS OF PROVISIONS OF SEC. 271(1)(C) OF THE ACT . IT FUR THER BE HELD THAT NO PENALTY SHOULD HAVE BEEN IMPOSED U/S. 271(1)(C) OF THE ACT. THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) BE DELETED. 2 . THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE, RAISE ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE APPEAL IN ITA N O.1991/PN/2012 IS NOT PRESSED, HENCE, THE SAME IS DISMISSED AS NOT PRESSED. FURTHER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE POINTED OUT THAT THE ISSUE IN BALANCE FOUR APPEALS RELATE TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WHEREIN PENALTY HAS BEEN LEVIED BY INVOKING EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT ON INCOME ASSESSED IN THE HANDS OF ASSESS EE PURSUANT TO SEARCH ON THE PREMISES OF THE ASSESSEE ON 13.08.2008. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE ARISING IN ALL FOUR APPEALS IS SIMILAR AND HE FURTHER ADMITTED THAT NO ORIGINAL RETURN OF INCOME ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 4 WAS FIL ED BY ANY OF THE ASSESSEES AND ONLY IN RESPONSE TO NOTICES ISSUED UNDER SECTION 153A OF THE ACT, THE RETURN OF INCOME WAS FILED. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT IT FITS INTO THE EXPLANATION 5A TO SECTION 27 1(1)(C) OF THE ACT AND THE ONLY OBJECTION WAS TO THE QUANTUM OF PENALTY TO BE LEVIED. IT WAS THE CASE OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT HAVING REGARD TO THE SOURCE OF INCOME I.E. REMUNERATION RECEIVED FROM THE PARTNERSHIP CONCERN, WHO HAD INITIALLY FILED THE RETURN OF INCOME BEFORE THE DATE OF SEARCH, BUT WHERE THE PARTNERS HAD FAILED TO FURNISH RETURN OF INCOME IN TIME, BUT HAD PAID THE TAXES, THE PENALTY AT MOST SHOULD BE LEVIED @ 100%. 5. IN RESPECT OF THE FACTS IN ITA NO.199 3 AND 1995/PN/2012 , THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF PAPERS FOUND DURING THE COURSE OF SEARCH, WHICH INCOME WAS DECLARED IN THE RETURN OF INCOME FURNISHED P URSUANT TO NOTICES ISSUED UNDER SECTION 153A OF THE ACT. THE PLEA WAS THAT THOUGH THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WERE ATTRACTED, BUT THE PENALTY AT MOST SHOULD BE LEVIED @ 100% AND NOT @ 150% AS LEVIED BY THE ASSESSING OF FICER. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE RESPECTIVE ORDERS OF CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEALS IS IN RELATION TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 5A TO THE SAID SECTION. THE ASSESSEE WAS A PARTNER IN THE FIRM M/S. ASWANI ASSOCIATES AND THE FIRM HAD FILED ITS RETURN OF INCOME ALONG WITH AUDITED ACCOUNTS AND TAX AUDIT REPORT ON 31.10.20 07 . THE ASSESSEE HAD RECEIVED REMUNERATION FROM THE SAID PARTNERSHIP FIRM, BUT IT FAILED TO FURNISH ANY RETURN OF INCOME UNDER SECTION 139(1) OR UNDER SECTION 139(4) OF THE ACT . THE PREMISES OF THE ASSESSEE WAS SEARCHED ON 13.08.2008 AND NOTICE UNDER SEC TION 153A OF THE ACT WAS ISSUED. THE ASSESSEE FURNISHED RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE ISSUED UNDER ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 5 SECTION 153A OF THE ACT DECLARING INCOME FROM REMUNERATION FROM THE PARTNERSHIP FIRM AT RS. 1,04,71,400/ - . THE SAID REMUNERATION DUE TO TH E ASSESSEE WAS REFLECTED IN THE PROFIT AND LOSS APPROPRIATION ACCOUNT FILED ALONG WITH BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE PARTNERSHIP FIRM CONCERNED. THE ASSESSEE CLAIMS TO HAVE PAID THE TAXES, BUT NO RETURN OF INCOME WAS FILED TILL THE DATE O F SEARCH. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE WAS COMPLETED BY ACCEPTING THE SAID INCOME DECLARED BY THE ASSESSEE AND NO FURTHER ADDITION WAS MADE BY THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT ON 31.12.201 0. THE CASE OF THE ASSESSEE BEFORE US WAS THAT HE AND HIS BROTHER SHRI SHRICHAND SHAMANDAS ASWANI COULD NOT PA Y THE TAXES FOR WANT OF MONEY AND THEREFORE, THE RETURN OF INCOME WAS NOT FURNISHED IN TIME. HOWEVER, AFTER PAYMENT OF TAXES AND IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE RETURN OF INCOME WAS FILED. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, THE CASE OF THE ASSESSEE WAS THAT THERE WAS NO CONCEALMENT OF INCOME NOR FURNISHING OF ANY INACCURATE PAR TICULARS OF INCOME. FURTHER, NO UNDISCLOSED ASSETS OR UNACCOUNTED INCOME WAS FOUND FROM THE ASSESSEE AND THE INCOME ASSESSED IN THE HANDS OF THE ASSESSEE WAS ONLY ON ACCOUNT OF REMUNERATION RECEIVED FROM THE PARTNERSHIP FIRM, WHICH WAS DECLARED BY THE SAI D FIRM PRIOR TO THE DATE OF SEARCH. HOWEVER, THE ASSESSING OFFICER REJECTING THE CLAIM OF THE ASSESSEE HELD THE ASSESSEE EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT @ 150%. CONSEQUENTLY, PENALTY OF RS.52,16,135/ - WAS LEVIED AGAINST THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08. 8. THE CASE OF THE ASSESSEE BEFORE US IS LIMITED AS TO THE RATE OF PENALTY TO BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT . THE INCOME ASSESSED IN THE HANDS OF THE ASSESSEE IS ON ACCOUNT OF REMUNERATION RECEIVED F ROM THE PARTNERSHIP FIRM , IN WHICH HE WAS A PARTNER AND DUE TO THE TECHNICAL DEFAULT OF NOT PAYING THE TAXES IN TIME, BECAUSE OF NON - AVAILABILITY OF FUNDS, THE RETURN OF INCOME WAS NOT FURNISHED IN TIME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE HAS FAIRLY ADMITTED THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT ARE ATTRACTED. WE HAVE ALSO ADJUDICATED ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 6 SIMILAR ISSUE OF LEVY OF PENALTY UNDER EXPLANATION 5A TO SECTION 271(1)(C) R.W.S. 153A OF THE ACT IN MRS.SARITA KAUR MANJ EET SINGH CHOPRA VS. ITO IN ITA NO. 1562/PN/2013, RELATING TO ASSESSMENT YEAR 2009 - 10, ORDER DATED 30.10.2015. FOLLOWING THE SAME PARITY OF REASONING AND IN VIEW OF THE ADMISSION OF ASSESSEE, WE UPHOLD THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 5A. HOWEVER, LOOKING AT THE SOURCE OF INCOME IN THE HANDS OF ASSESSEE I.E. REMUNERATION RECEIVED FROM PARTNERSHIP FIRM, WHICH WAS DECLARED AND CLAIMED AS DEDUCT ION BY THE REGISTERED FIRM M/S. ASWANI ASSOCIATES , PRIOR TO SEARCH UPON THE ASSESSEE, WE ARE OF THE VIEW THAT IT IS A FIT CASE WARRANTING THE REDUCTION IN THE RATE OF PENALTY TO BE LEVIED FROM 150% TO 100%. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO COMPUTE PENALTY UNDER SECTION 271(1)(C) OF THE ACT @ 100% AND REVERSE T HE ORDER OF CIT(A) IN THIS REGARD IN UPHOLDING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT @ 150%. 9. THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE ISSUE RAISED IN ITA NO.1994/PN/2012 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.1992/ PN/2012. IN THE SAID CASE, TAXES WERE PAID ON 31.10.2010 I.E. ALONG WITH RETURN OF INCOME FURNISHED UNDER SECTION 153A OF THE ACT . T HE NATURE OF INCOME ASSESSED IN THE HANDS OF THE SAID ASSESSEE , WAS THE REMUNERATION RECEIVED FROM PARTNERSHIP CONCERN . F OLLOWING THE PARITY OF REASONING AS IN ITA NO.1992/PN/2012 , WE UPHOLD THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 5A. HOWEVER, WE DIRECT THE ASSESSING OFFICER TO LEVY THE PENALTY @ 100% AS AGAINST 150%. REVERSING THE ORDER OF CIT(A), WE PARTLY ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 10. NOW, IN THE FACTS OF APPEALS FILED BY THE ASSESSEE IN ITA NOS.1993 AND 1995/PN/2012 , ADDITIONAL INCOME DECLARED IN THE HANDS OF THE ASSESSEE WERE ON ACCOUNT O F PAPERS FOUND DURING THE COURSE OF SEARCH, WHICH WAS DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT. FOLLOWING THE PARITY OF REASONING AS IN EARLIER YEARS, WE DIRECT THE ASSESSING OFFICER TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT @ 100% AND NOT @ 150%. ITA NO S. 1991 TO 1995 /PN/201 2 SHRI ANIL SHAMANDAS ASWANI & ORS. 7 REVERSING THE ORDER OF CIT(A), WE PARTLY ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 11 . IN THE RESULT, APPEAL IN ITA NO.1991/PN/2012 IS DISMISSED AND THE APPEALS IN ITA NO S.1992 TO 1995/PN/2012 ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 4 TH DAY DECEMBER , 201 5 . SD/ - SD/ - (PRADIP KUMAR KEDIA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 4 TH DECEMBER , 2015. GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / TH E APPELLANT ; 2. / THE RESPONDENT; 2. / 3. ( ) / THE CIT (A) - I , PUNE ; 4. / THE CIT - (C) , PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE