DEVANAND DODEJA HUF, ULHASNAGAR V. ITO WD 2(1), THANE

ITA 2001/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0262 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Source of fund; Revised return
• Section: 142(1); 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 2001 / MUM/ 20 1 6 ( / ASSESSMENT YEAR: 20 07 - 08 ) DEVANAND DODEJA HUF FLAT NO. 302, NEELKANT.APT., NEAR FISH MARKET, ULHASNAGAR - 421001 / VS. ITO WARD 2(1) A - WING, 6 TH FLOOR, ASHAR IT PARK RD. NO. 16 - Z, WAGLE INDL. ESTATE, THANE - 400604. ./ ./ PAN/GIR NO. : AADHD 4193 G ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 23 .1 1 .2017 / DATE OF PRONOUNCEMENT : 14 . 02 .2018 / O R D E R PER AM ARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 01 . 12 .201 5 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 07 - 08 WHERE I N THE PENALTY LEVIED BY THE AO HAS BEEN CONFIRMED. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING PENALTY OF RS.1,16,773/ - LEVIED BY ASSESSING OFFICER U/S. 271(L)(C). THE LEARNED CII'(A) ERRED IN NOT APPRECIATING THE FAC TS AND CIRCUMSTANCES UNDER WHICH THE APPELLANT HAD FILED ORIGINAL RETURN OF INCOME AND HAD FILED REVISED RETURN OF INCOME BEFORE RECEIPT OF ANY INQUIRY OR NOTICE U/S.148 FROM THE ASSESSING OFFICER. ASSESSEE BY : SHRI BHUPENDRA SHAH (AR) REVENUE BY: SHRI RAJAT MITTAL ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 2 THE LEARNED CIT (A) FAILED TO CONSIDER THE FACT THAT THE P ENALTY ORDER PASS BY THE ASSESSING OFFICER WAS ONLY ON THE BASIS OF TAX EVASION PETITION AND THE PENALTY ORDER DOES NOT RECORD SATISFACTION OF THE ASSESSING OFFICER THAT ASSESSEE HAS CONCEALED PARTICULARS OF HER INCOME OR FURNISHED INACCURATE PARTICULARS O F SUCH INCOME. THE LEARNED CIT(A) ERRED & IGNORED THE FACT THAT THE ASSESSING OFFICER HAS NOT CANCELLED THE SENTENCE WHETHER ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN PENALTY NOTICE U/S.274 R,W.S. 271(L)(C) ISSUED TO THE ASSESSEE. THE APPELLANT CRAVES TO ADD. SUBSTITUTE, ALTER, AMEND AND/OR MODIFY THE GROUNDS OF APPEAL AS AND WHEN GIVEN. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETUR N OF INCOME FOR THE A.Y. 2007 - 08 ON 20.04 .2 0 0 0 7 DECLARING TOTAL INCO ME TO THE TUNE OF RS.1,94,838/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THE NOTICED WAS ISSUED ON 26.03.2012 WHICH WAS SERVED UPON THE ASSESSEE ON 16.04.2012. THE ASSESSEE IN RESPONSE TO THE NOTICE REQUESTED TO CONSIDER THE REVISED RETURN FILED ON 28.06.2012 DECLARING TOTAL INCOME OF RS.5,94,838/ - AS RETURN OF INCOME FILED IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT. THEREAFTER THE NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. A FTER THE REPLY OF THE ASSESSEE , THE INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS. 1,94,838/ - . SINCE THE INCOME TO THE TUNE OF RS.4,00,000/ - WAS NOT DISCLOSED IN THE E ARLIER RETURN FILED BY ASSESSEE, T HEREFORE, THE PENALTY PROCEEDING U/S 271 (1)(C) O F THE ACT WAS INITIATED. THE NOTICE OF PENALTY WAS GIVEN AND AFTER CONSIDER ING THE REPLY , THE PENELTY TO THE TUNE OF RS.1,16,773/ - WAS LEVIED. T HE ASSESSEE FILED A N A PPEAL BEFORE THE CIT(A) WHO CONFIRM ED ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 3 THE PENALTY , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CASE OF THE ASSESSEE HAS DULY BEEN COVERED BY ORDER OF HONBLE IT AT IN ITA. NO. 3847 TO 3848/M/2016 TITLE AS MURLI DODEJA VS. ITO DATED 17.02.2017. IN WHICH THE PENALTY LEVIED BY THE AO L IN SIMILAR CIRCUMSTANCES HAS BEEN ORDER TO BE DELETED IN THE CASE OF HIS BROTHER, T HEREFORE, THE PENALTY IS LIABLE TO BE DELETED. ON T HE OTHER HAND, THE LD. REPRESENTATIVE OF THE REVENUE HAS REFUTED THE SAID CONTENTIONS. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE HONBLE ITAT IN ITA. NO. 3847 TO 3848/M/2016 TITLE AS MURLI DODEJA VS. ITO DATED 17.02.2017 . TH E RELEVANT FINDING IN PARA NO. 8 IS HEREBY REPRODUCED BELOW AS UNDER: - 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD AND CASE LAWS RELIED UPON BY THE RIVAL PARTIES. WE HAVE OBSERVED THAT THE ASSESSEE FILED OR IGINAL RETURN OF INCOME ON 9TH AUGUST, 2005. THE ASSESSEE HELD BANK ACCOUNT WITH UNION BANK OF INDIA, SHAHAD , ULHASNAGAR IN WHICH ASSESSEE HAD DEPOSITED AN AMOUNT OF RS. 1.5 LACS IN CASH WHICH WAS NOT DECLARED AND DISCLOSED IN THE RETURN OF INCOME ORIGINA LLY FILED WITH THE REVENUE ON 09 - 08 - 2005. IT IS THE CONTENTION OF THE ASSESSEE THAT HE RELIED ON THE EXPERT ADVISE OF HIS TAX - CONSULTANT WHO ADVISED HIM THAT THE SAID AMOUNT RECEIVED WAS NOT TAXABLE BEING HIS SHARE IN PROFITS AND INVESTMENT IN DISCONTINUED FAMILY BUSINESS OF PROPERTIES ON REALIZATION OF FUNDS INVESTED IN THE PROPERTIES ON FAMILY SEPARATION . THE ASSESSEE FILED SO CALLED REVISED RETURN OF INCOME ON 28TH FEBRUARY, 2011 WHEREIN SAID ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 4 CASH DEPOSIT OF RS.1.50 LACS IN UNION BANK OF INDIA, SHAHAD W AS DULY INCLUDED AS INCOME ALTHOUGH THE PRESCRIBED TIME LIMIT FOR FILING REVISED RETURN OF INCOME AS PRESCRIBED U/S 139(5) OF THE ACT HAD LAPSED LONG BACK ON 31 - 03 - 2007. THE SAID SO CALLED REVISED RETURN OF INCOME WAS ALSO NOT FILED BY THE ASSESSEE WITH JU RISDICTIONAL AO BUT WITH THE ITO, KALYAN , BUT SAID SO CALLED REVISED RETURN OF INCOME WAS ADMITTEDLY FILED PRIOR TO ISSUANCE OF SEPARATE NOTICES U/S 148 OF THE ACT BY ITO, KALYAN AND AS WELL BY THE JURISDICTIONAL AO WHICH REMAINED UNCONTROVERTED AND IS A N ADMITTED POSITION BETWEEN THE RIVAL PARTIES AS NOTICES U/S 148 OF THE ACT WAS ISSUED BY THE ITO, KALYAN AS WELL JURISDICTIONAL AO ONLY IN THE MONTH OF MARCH 2012 WHILE THE SO CALLED REVISED RETURN OF INCOME WAS FILED EARLIER ON 28 - 02 - 2011. IT IS THE SAY OF THE REVENUE THAT TAX EVASION PETITION WAS FILED AGAINST THE ASSESSEE WHICH WAS INVESTIGATED BY REVENUE SINCE SEPTEMBER 2010 WHICH IS THE MAIN REASON FOR THE ASSESSEE FILING SO CALLED REVISED RETURN OF INCOME WITH THE REVENUE ON 28 - 02 - 2011. IT WAS THE CO NTENTION OF THE REVENUE THAT VERY FEW PERCENTAGE OF THE CASES ARE SELECTED FOR SCRUTINY AND HAD THERE BEEN NO TAX EVASION PETITION FILED AGAINST THE ASSESSEE , THE ASSESSEE WOULD NOT HAD COME FORWARD TO FILE THE SO CALLED ITA NO. 3847/MUM/2016 & ITA NO. 38 48/MUM/2016 9 REVISED RETURN OF INCOME ON 28 - 02 - 2011. THUS, IT IS THE CONTENTION OF THE REVENUE THAT THE ALLEGED REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 28 - 02 - 2011 INCLUDING THE SAID UNDISCLOSED INCOME OF RS.1,50,000/ - WHICH WAS DEPOSITED IN CAS H IN AN UNDISCLOSED BANK ACCOUNT WITH UNION BANK OF INDIA WOULD HAVE NEVER COME INTO NOTICE OF THE REVENUE AND THERE WOULD HAVE BEEN LOSS OF REVENUE. MERELY BECAUSE TAX EVASION PETITION IS FILED AGAINST THE TAXPAYER DOES NOT MEAN THAT THE TAX - PAYER HAS CON CEALED INCOME OR FURNISHED IN - ACCURATE PARTICULARS OF INCOME AND IT COULD NOT BE SAID WITH THE CERTAINTY THAT THE REVENUE WILL IN EACH OF SUCH CASES SHALL PROCEED AGAINST THE TAXPAYER BY RE - OPENING THE CONCLUDED ASSESSMENT IN EACH AND EVERY TAX EVASION PET ITION FILED AGAINST THE TAX - PAYER. THE TAX - PAYER CAN ALWAYS COME FORWARD AND EXPLAIN AND ACCOUNT FOR ITS SOURCES OF INCOME WITH THE RETURN OF INCOME FILED WITH THE REVENUE. THE TAX - PAYER CAN ALSO COME FORWARD WITH AN EXPLANATION THAT CERTAIN RECEIPTS WERE NOT INCLUDED AS INCOME IN THE RETURN OF INCOME FILED WITH THE REVENUE AS THE SAID RECEIPTS DO NOT BEAR THE CHARACTER OF INCOME WITHIN THE FOUR CORNERS OF CHARGING PROVISIONS OF THE ACT OR THE RECEIPT HAD A CHARACTER OF BEING AN EXEMPT INCOME WITHIN STATUTO RY PROVISIONS OF THE ACT OF ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 5 1961 . THERE ARE ALSO POSSIBILITIES THAT THE TAX EVASION PETITIONS COULD BE FILED TO CAUSE VENGEANCE ON THE TAX - PAYER WITH A MALICE TO SEEK REVENGE AND RETRIBUTION AGAINST THE TAX - PAYER. THE FATE OF TAX EVASION PETITION HINGES O N THE OUTCOME OF AN ENQUIRY AND INVESTIGATION CONDUCTED BY THE REVENUE. THE TAX - PAYER MAY WHEN TAX - EVASION PETITION IS FILED AGAINST HIM ALSO RE - VISIT HIS FINANCIAL DATA FOR THE RELEVANT PERIOD AND IN ORDER TO AVOID UNNECESSARY AND PROTRACTED LITIGATION WI TH REVENUE COME FORWARD TO FILE REVISED COMPUTATION OF INCOME AND PAY TAXES WITH APPLICABLE INTEREST ON SOME ADDITIONAL DISCLOSURE OUT OF CAUTION TO AVOID LITIGATION. THIS IS A NORMAL AND REASONABLE HUMAN CONDUCT WHICH FALLS WITHIN PREPONDERANCE OF HUMAN P ROBABILITIES . THE ASSESSEE IN THE INSTANT CASE CAME FORWARD AND FILED SO CALLED REVISED RETURN OF INCOME ON 28 - 02 - 2011 ALBEIT BEYOND STIPULATED TIME U/S 139(5) OF THE ACT OF 1961 WHICH EXPIRED ON 31 - 03 - 2007 BUT BEFORE ITA NO. 3847/MUM/2016 & ITA NO. 3848/ MUM/2016 10 ISSUANCE OF NOTICE U/S 148 OF THE ACT BY THE REVENUE IN THE MONTH OF MARCH 2012 AS WELL THE ASSESSEE FILED AFFIDAVIT DATED 21 - 03 - 2011 EXPLAINING FACTS AND CIRCUMSTANCES UNDER WHICH THE SAID CASH OF RS.1,50,000/ - WAS DEPOSITED IN HIS BANK ACCOUN T WHICH WAS NOT INCLUDED IN THE RETURN OF INCOME FILED WITH THE REVENUE WHICH SHOWS AND PROVES BONA - FIDE CONDUCT OF THE ASSESSEE . THE ASSESSEE HAD SUBMITTED THAT THE SAID RECEIPT OF RS.1,50,000/ - WHICH WAS DEPOSITED IN CASH IN BANK ACCOUNT WITH UNION BANK OF INDIA, SHAHAD WAS ADVISED TO BE TAX - FREE BY HIS TAX - EXPERT ADVOCATE FOR LAST THIRTY YEARS. IT IS ALSO SUBMITTED THAT THE ASSESSEE BEING NOT HIGHLY EDUCATED PERSON TRUSTED THE SAID ADVOCATE TAX - EXPERT AND DID NOT INCLUDED THE SAID RECEIPT OF RS.1,50,000 / - IN THE RETURN OF INCOME FILED WITH THE REVENUE. THE ASSESSEE HAD ALSO FILED AN AFFIDAVIT DATED 21 - 03 - 2011 EXPLAINING THE FACTS AND CIRCUMSTANCES WHEREIN THE SAID INCOME WAS NOT INCLUDED AS INCOME IN THE RETURN OF INCOME ORIGINALLY FILED WITH THE REVENUE . REVENUE COULD NOT CONTROVERT THE CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE TO PROVE THAT THE SAID AFFIDAVIT HAD A FALSE OR UNTRUE AVERMENTS MADE BY THE ASSESSEE. IN OUR CONSIDERED VIEW KEEPING IN VIEW FACTS AND CIRCUMSTANCES OF THE CASE, PENALTY LE VIED U/S 271(1)(C) OF THE ACT CANNOT BE SUSTAINED UNDER THE AFORE - STATED CIRCUMSTANCES AS THE ASSESSEE HAD CAME FORWARD WITH AN EXPLANATION WHICH IS A REASONABLE AND BONAFIDE EXPLANATION COMPLYING WITH THE MANDATE OF SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 1 AND HENCE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AS CONFIRMED BY LEARNED CIT(A) IS HEREBY ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 6 ORDERED TO BE DELETED. THUS, THE ASSESSEES APPEAL IN ITA NO. 3847/MUM/2016 FOR ASSESSMENT YEAR 2005 IS ALLOWED. WE ORDER ACCORDINGLY. 5 . ON APPRAISAL OF THE ABOVE MENTIONED ORDER , IT IS QUITE CLEAR THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE IS QUITE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE CASE TITLE D AS MURLI DODEJA (SUPRA). IN THE INSTANT CASE, ALSO THE ASSESSEE HAS FILED TH E REVISED RETURN ON 28.04.2011 BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT DATED 26.03.2012. THE ASSESSEE HAS ALREADY DISCLOSED THE TRANSACTION BEFORE THE REVENUE AND HAS ALSO PAID THE TAX THEREON. THE EXPLANATION OF THE ASSESSEE IS REASONABLE AND BONA FI DE EXPLANATION. THEREFORE, IN THE SAID CIRCUMSTANCES, THE PENALTY IS NOT LEVIABLE. RESPECT FULLY FOLLOWING DECISION OF THE COORDINATE BENCH IN THE CASE OF MURLI DODEJA (SUPRA), W E ARE OF THE VIEW THAT THE FINDING OF THE CIT(A) IS NOT JUSTIFIABLE, THEREFORE, THE SAME IS HEREBY ORDERED TO BE SET ASIDE. ACCORDINGLY,W E DELETE THE PENALTY. 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 14 . 02 . 201 8 SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 14 . 02 . 201 8 VIJAY ITA. NO.2295 /M/201 6 A.Y. 20 10 - 11 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI