DCIT, UDAIPUR V. Shri Piyush Maroo, UDAIPUR

ITA 21/JODH/2014

• Counselvise Citation: 2123314 RSA 2014
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-05-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Initiation of penalty proceedings; Revised return
• Section: 143(3); 142(1); 139(5); 131; 246; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 21/JODH/2014 (A.Y. 2010-11) THE DY. C.I.T. VS. SHRI PIYUSH MAROO CENTRAL CIRCLE 1 S /O SHRI SHANTI LAL MARO O UDAIPUR 13-14, BHANBAG, NEW FATEHPURA UDAIPUR PAN NO. AIBPM 0729 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA DEPARTMENT BY : SHRI N.A. JOSHI, DR. DATE OF HEARING : 21.05.2014 DATE OF PRONOUNCEMENT : 09.06.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE FOR A.Y 2010-11 AGAINST THE ORDER OF THE CIT(A), CENTRAL JA IPUR, DATED 25.11.2013. 2 2. THE REVENUE HAS RAISED THE FOLLOWING SOLE GROUND OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY AT RS. 10. LAKHS LEVIED U/S 271AAA OF THE I.T. ACT BECAUSE IN THE SEARCH STATEMENT THE ASSESSEE HAS NOT SPECIFIED THE MANNER IN WHICH SUCH INCOME WAS DERIVED AND ALSO FAILED TO SUBSTANTIATE THE MANNER IN WHICH IT WAS DERIVED AND THEREFORE NO IMMUNITY FROM PENALTY WAS AVAILABLE. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED RETURN OF INCOME [ROI] FOR A.Y. 2010-11 ON 28.07.20 10 DECLARING INCOME OF RS. 2,31,08,690/-. A SEARCH U/S 132(1) OF THE INCOME-TAX ACT, 1961 ['THE ACT', FOR SHORT] WAS CONDUCTED IN T HIS CASE ON 10.3.2010. ASSESSMENT U/S 143(3) WAS COMPLETED ON 13.12.2011 AND PENALTY OF RS. 10 LAKHS WAS IMPOSED VIDE ORDER DATED 13.12.2011. IN APPEAL, THE ASSESSEE WAS SUCCESSFUL IN GETTING THE PENALTY DELETED. THIS PENALTY WAS IMPOSED BECAUSE I N THE STATEMENT RECORDED U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT, THE FATHER OF THE ASS ESSEE HAD ADMITTED CONCEALED INCOME BUT FAILED TO SUBSTANTIAT E THE MANNER IN 3 WHICH THE INCOME WAS DERIVED. CONSEQUENTLY, PENALT Y PROCEEDINGS U/S 271AAA OF THE ACT WERE INITIATED AND PENALTY @ 10% OF THE AMOUNT SURRENDERED U/S 132(4) WAS IMPOSED. ON IDEN TICAL FACTS, THE CUTTACK BENCH OF THE ITAT IN THE CASE OF PRAMOD KUMAR JAIN VS. JCIT REPORTED IN [2012] 77 DTR 244 FOR A.Y. 2008-0 9 HAS DELETED SIMILAR PENALTY. BY FOLLOWING THE TRIBUNAL ORDER O F THE CUTTACK BENCH, THE LD. CIT(A) HAS DELETED THIS PENALTY. 5. BEFORE US, BOTH THE PARTIES HAVE REITERATED THEI R EARLIER STAND. WE HAVE FOUND THAT THIS PENALTY IS IN RESPECT OF SU RRENDERED AMOUNT WHICH WAS MADE DURING THE SEARCH WHEN THE STATEMENT OF THE FATHER OF THE ASSESSEE WAS RECORDED U/S 132(4) OF T HE ACT WHICH WAS LATER ON RECTIFIED BY THE ASSESSEE IN HIS STATEMENT RECORDED U/S 131 OF THE ACT, SUBSEQUENTLY, IN POST SEARCH INVESTIGAT IONS. ON IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE THIS BENCH HAS ALSO RENDERED SIMILAR DECISIONS. WE ARE AWARE THAT UNDER IDENTIC AL FACTS AND CIRCUMSTANCES WE HAVE TAKEN SIMILAR VIEW IN MANY CA SES INCLUDING THE RECENT CASE OF DCIT VS. SHRI BABULAL MOTAVAT IN ITA NO. 93/JU/2014 FOR 2009-10 VIDE ORDER DATED 07.05.2014 WHEREIN IT HAS BEEN HELD AS UNDER: 4 5. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R. AND CAREFULLY PERUSING THE ENTIRE MATERIAL ON RECORD, WE HAVE FOUND THAT DURING SEARCH, THE ASSESSEE MADE A STATEMENT U/S 132(4) OF THE ACT AND SUBSEQUENTLY, HIS STATEMENT U/S 131 OF THE ACT WAS ALSO RECORDED. WHEN THE ASSESSEE WAS CONFRONTED WITH INCRIMINATING EVIDENCE, THE ASSESSEE MADE SURRENDER WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, THE PENALTY WAS INITIATED AND IMPOSED BECAUSE HE COULD NOT EXPLAIN THE MANNER IN WHICH THE UNDISCLOSED INCOME HAD BEEN DERIVED BY HIM. IN FACT, THE TRANSACTIONS WHICH COULD NOT BE VERIFIED FROM THE REGULAR BOOKS OF ACCOUNT OF ASSESSEES BUSINESS WERE SURRENDERED BY HIM. IT IS A FACT THAT THE A.O. HAS ADMITTED THIS SURRENDER ON THE BASIS OF ASSESSEES BUSINESS ACTIVITY BEING CARRIED ON BY HIM. THERE IS NO SPECIFIC FINDING OR EVIDENCE WITH REFERENCE TO THE SEIZED MATERIAL OR IN THE STATEMENT FROM WHICH CONTRARY VIEW CAN BE TAKEN. ON SIMILAR FACTS, THE CUTTACK BENCH OF THE ITAT WHILE DECIDING THE CASE OF PRAMOD KUMAR JAIN REPORTED IN [2012] 77 DTR 244, WHICH HAS ALSO BEEN RELIED UPON BY THE LD. CIT(A), HAS TAKEN A VIEW THAT THERE IS NO PRESCRIBED METHOD TO 5 INDICATE THE MANNER IN WHICH INCOME WAS GENERATED WHEN THE DEFINITION OF UNDISCLOSED INCOME HAS BEEN DEFINED IN THE ACT ITSELF WHEN NO INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED EITHER WHOLLY OR PARTLY WHICH ONUS LAY UPON THE ASSESSEE STOOD DISCHARGED. THEREFORE, LEVY OF PENALTY U/S 271AAA OF THE ACT HAS BEEN CORRECTLY DELETED BY THE LD. CIT(A). 6. WE HAVE FURTHER FOUND THAT THIS ISSUE STANDS COVERED AGAINST THE REVENUE BY THE ITAT JODHPUR BENCH IN THE CASE OF THE DY. CIT VS. SHRI MANSOOR ALI HITAWALA ITA NO. 530/JU/2013 DECIDED ON 05.03.014 FOR A.Y. 2010-11 WHEREIN AT PARA 8 THE TRIBUNAL HAS HELD AS UNDER: 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE INCLINED TO GO ALONGWITH THE LD. CIT(A). IT IS TRUE THAT INITIATION AND IMPOSITION OF PENALTY U/S 271AAA OF THE ACT ARISES ONLY IN SEARCH CASES. IT IS ALSO A LEGAL FACT THAT THE ASSESSEE CAN SEEK EXONERATION FROM THE PENALTY U/S 271AAA OF THE ACT. THEREFORE, NATURALLY THE DISCLOSURE HAS TO BE MADE CONSEQUENT UPON THE SEARCH CONDUCTED U/S 132 OF THE ACT. BUT WHEN THE ASSESSEE FULFILLS THE CONDITIONS OF SUB-SECTION (2) OF SECTION 271AAA OF THE ACT, HE IS ENTITLED TO BENEFIT OF THIS 6 PROVISION. BUT THE ASSESSEE HAS OFFERED UNDISCLOSED INCOME OF RS. 1,10,18,966/- IN HIS ORIGINAL RETURN FILED FOR A.Y. 2010-11 AGAINST THE ACTUAL UNDISCLOSED INCOME OF RS. 1,27,91,718/-. THE REVISED RETURN ADMITTED COMPLETE UNDISCLOSED INCOME OF RS. 1,27,91,718/- WAS FILED BEFORE THE A.O. ISSUED NOTICE U/S 142(1) AND WITHIN THE TIME LIMIT PRESCRIBED U/S 139(5) OF THE ACT. THUS, IT IS FOUND THAT THE ASSESSEE HAS DISCLOSED THE ENTIRE UNDISCLOSED INCOME AND HAS OFFERED IT FOR TAXATION. THE ASSESSEE HAS ALSO EXPLAINED THE UNDISCLOSED INCOME WAS EARNED FROM HIS BUSINESS ALONGWITH PROVIDING DETAILS OF PROJECTS COMPLETED/INCOMPLETE WHILE REPLYING TO QUESTION NO. 3 OF HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. COPY OF THIS STATEMENT IS PLACED AT PAGE 16 OF THE PAPER BOOK. WE ARE SATISFIED THAT THE ASSESSEE HAS EXPLAINED THE MODUS OF EARNING THIS INCOME IN HIS STATEMENT EITHER U/S 132(4) AND 131 OF THE ACT. IT IS TRUE THAT NO SPECIFIC MANNER OF DISCLOSING THE UNDISCLOSED INCOME IS PROVIDED IN THE ACT. THEREFORE, ONLY ON THIS ULTRA TECHNICAL POINT, PENALTY U/S 271AAA OF THE ACT CANNOT BE IMPOSED. IN THIS REGARD, DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL [2006] 152 7 TAXMAN 290 [ALL] AND THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH [2008] 172 TAXMAN 58 [GUJ] ARE RELEVANT. MOREOVER, FROM THE STATEMENTS, WE HAVE OBSERVED THAT THE AUTHORIZED OFFICER HAS NOT SPECIFICALLY ASKED TO THE ASSESSEE DURING SUCH PROCEEDINGS ABOUT THE MANNER IN WHICH THE ASSESSEE HAS EARNED UNDISCLOSED INCOME. REGARDING OBSERVATION OF THE A.O. THAT THE ASSESSEE SHOULD HAVE APPEALED AGAINST THE INITIATION OF PENALTY PROCEEDINGS, THERE IS NO SUCH PROVISION U/S 246 (1) TO FILE APPEAL AGAINST SUCH INITIATION OF PENALTY PROCEEDINGS. ALSO THE A.O. WITHOUT MAKING FURTHER ADDITION ASSESSED THE INCOME AT RETURNED INCOME IN THE ASSESSMENT ORDER. THUS, THE OBSERVATION OF THE A.O. THAT THE ASSESSEE HAD INTENTIONALLY EVADED TAX IS BASED ON INCORRECT FACTS. ACCORDINGLY,, WE FIND FORCE IN THE OBSERVATIONS OF THE LD. CIT(A) AND THEREFORE, CONFIRM HIS FINDINGS. WE DO NOT FIND MERIT IN THE GROUNDS RAISED IN THIS APPEAL WHICH ARE LIABLE TO BE DISMISSED. THEREFORE, WE DO NOT FIND MERIT IN THE GROUND RAISED IN THIS APPEAL BY THE REVENUE AND DISMISS THE SAME BY RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER DATED 05.03.2014 [SUPRA]. 8 ACCORDINGLY, WE CANNOT ALLOW THIS APPEAL OF THE REVENUE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LD. CIT(A) WHO HAS DELETED THE IMPUGNED PENALTY. ACCOR DINGLY, WE DISMISS THE GROUND RAISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 09 TH JUNE, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09 TH JUNE, 2014 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR