Shri S. Elango, CHENNAI V. DCIT, CHENNAI

ITA 2128/CHNY/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3948 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DURAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Revised return
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , !' . #$#% , & '' ( [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./ I.T.A. NO.2128/MDS/2013 / ASSESSMENT YEAR : 2006-2007 SHRI. S. ELANGO, SEA CASTLE, NO.46/20, NORTH CRESCENT ROAD, T.NAGAR, CHENNAI 600 017. [ PAN AACPE 6397G] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(1) CHENNAI. ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI. DURAI PANDIAN, ADDL CIT. / DATE OF HEARING : 09-11-2016 ! / DATE OF PRONOUNCEMENT : 23-11-2016 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST AN ORDER DATED 30.09.2013 OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI. 2. ASSESSEE HAS FILED THIS APPEAL WITH A DELAY OF TEN DAYS. CONDONATION PETITION HAS BEEN FILED. REASONS SHOWN FOR THE DELAY ARE JUSTIFIED. DELAY IS CONDONED. APPEAL IS ADMITTED. ITA NO. 2128/MDS/2013. :- 2 -: 3. ASSESSEE ASSAILS LEVY OF PENALTY U/S.271(1) (C) OF THE INCOME TAX ACT, 1961 (HEREIN REFERRED AS THE ACT) 4. FACTS APROPOS ARE THAT ASSESSEE WAS SUBJECTED TO SE ARCH ON 14.02.2007. IN THE COURSE OF SEARCH, IT WAS FOUND THAT ASSESSEE HAD PAID A CONSIDERATION OF @60,00,000/- FOR PURCHASING A PROPERTY AT KOLLIMALAI, SURVEY NO.52, 53, 55 & 56 AT THINNANUR VILLAGE. HOWEVER, THE CONSIDERATION MENTIONED IN THE SALE DEED WAS ON LY @11,00,000/-. IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT, AS SESSEE ADMITTED THAT HE HAD PAID ON CASH OF @49,00,000/- OUT OF UNA CCOUNTED INCOME FROM THE REAL ESTATE BUSINESS. PRIOR TO THE DATE OF SEARCH, ON 31.10.2006 ASSESSEE HAD FILED RETURN FOR THE IMPUG NED ASSESSMENT YEAR DECLARING AN INCOME OF @1,44,04,500/- AND AGRI CULTURAL INCOME OF @5,69,518/-. AFTER THE SEARCH, A NOTICE U/S.153A O F THE ACT WAS ISSUED TO THE ASSESSEE. ASSESSEE FILED A RETURN ON 09.05.2 008 DECLARING INCOME OF @1,91,57,250/- INTER-ALIA INCLUDING THE S UM OF @49,00,000/- OFFERED AS ADDITIONAL INCOME DURING THE COURSE OF SEARCH, WHILE KEEPING THE AGRICULTURAL INCOME AT THE ORIGINAL AMO UNT. THE ASSESSMENT WAS THERE AFTER COMPLETED, WHEREIN TWO A DDITIONS WERE MADE ONE FOR UNDERSTATING CLOSING STOCK @2,52,952/ -, AND OTHER DISBELIEVING AGRICULTURAL INCOME OF @5,69,518/- CLA IMED BY THE ASSESSEE. ITA NO. 2128/MDS/2013. :- 3 -: 5. THEREAFTER, PENALTY PROCEEDING WERE INITIATED U/S.2 71 (1) (C) OF THE ACT. LD. ASSESSING OFFICER PROPOSED LEVY OF PENALTY @49,00,000/- ADMITTED DURING THE COURSE OF SEARCH A ND FOR SUM OF @2,52,952/- AND @5,69,518/- ADDED IN THE ASSESSMENT . REPLY OF THE ASSESSEE WAS THAT FOR THE ADDITIONAL INCOME OF @49, 00,000/- OFFERED IN THE RETURN FILED PURSUANT TO NOTICE U/S.153A OF THE ACT, IT WAS SAVED FROM PENALTY BY PROVISO (2) TO EXPLANATION 5 TO SEC .271(1) (C) OF THE ACT. AS PER ASSESSEE, VARIANCE ADMITTED IN THE SWO RN STATEMENT RECORDED U/S.132(4) OF THE ACT WAS OFFERED IN THE R ETURN OF INCOME AND TAXES PAID THEREON. IN SO FAR AS @2,52,952/- AND @ 5,69,518/- WERE CONCERNED, SUBMISSION OF THE ASSESSEE WAS THAT THER E WAS NO CONCEALMENT OR FURNISHING OF ANY INACCURATE PARTICU LARS. HOWEVER, THESE EXPLANATIONS WERE NOT ACCEPTED BY THE LD. AS SESSING OFFICER. HE LEVIED PENALTY ON ALL THREE ITEMS. 6. ASSESSEE MOVED IN APPEAL BEFORE THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) AGAINST LEVY OF PENALTY. THE L D. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE PENALTY LEVIED ON THE ADDITIONS OF @2,52,952/- AND @5,69,518/-, WHILE SUSTAINING PENAL TY LEVIED ON SUM OF @49,00,000/- ADMITTED BY THE ASSESSEE IN THE RETURN OF INCOME FILED. IN SO FAR AS FORMER TWO AMOUNTS WERE CONCERNED, LD. CI T(A) WAS OF THE OPINION THAT THERE WAS NO INTENTION TO CONCEAL ANY INCOME AND HENCE LEVY OF PENALTY WAS NOT WARRANTED. IN SO FAR AS LA TTER AMOUNT WAS ITA NO. 2128/MDS/2013. :- 4 -: CONCERNED, LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT PROVISO (2) TO EXPLANATION 5 TO SEC. 2 71(1) (C) OF THE ACT DID NOT SAVE THE ASSESSEE, SINCE ORIGINAL RETURN W AS FILED PRIOR TO THE DATE OF THE SEARCH. ACCORDING TO HIM, BUT FOR THE SEARCH, ASSESSEE WOULD NOT HAVE DISCLOSED THE ON-MONEY PAID BY HIM FOR THE PURCHASE OF PROPERTY. 7. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE STRONG LY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) TO THE EXTENT HE SUSTAINED THE PENALTY, SUBMITTED THAT THE ASSESSEE HAD DISCLOSED THE INCOME COMING OUT OF THE SALE AGR EEMENT FOUND DURING THE COURSE OF SEARCH, IN THE REVISED RETURN FILED. ACCORDING TO HIM ASSESSEE WAS SAVED BY PROVISO (2) TO EXPLANATI ON 5 TO SEC.271(1) (C) OF THE ACT. RELIANCE WAS PLACED ON THE DECISION OF A CO-ORDINATE BENCH IN THE CASE OF ACIT VS. M/S. JAYA EDUCATIONAL TRUST (ITA NO.1359/MDS/2012, DATED 22.01.2016) . 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE S TRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. UNDISPUTED FACT AR E THAT ASSESSEE HAD ACCEPTED PAYMENT OF ON-MONEY OF @49,00,000/- IN THE STATEMENT RECORDED BY HIM U/S.132(4) OF THE ACT, AT THE TIME OF SEARCH. THE LAST ITA NO. 2128/MDS/2013. :- 5 -: DATE FOR FILING RETURN FOR THE IMPUGNED ASSESSMENT YEAR 2006-2007 WAS 31.10.2006. ASSESSEE HAD FILED RETURN ON 31.10 .2006 DISCLOSING INCOME OF @1,44,04,500/-. WHAT THE LD. AUTHORISED REPRESENTATIVE CLAIMS TO BE A REVISED RETURN, IS ACTUALLY A RETUR N FILED PURSUANT TO NOTICE U/S.153A OF THE ACT. NOTICE WAS ISSUED ON 07.02.2008 AND THE RETURN PURSUANT TO SUCH NOTICE WAS FILED ON 09.05.2 008. AT THIS JUNCTURE, IT IS NECESSARY TO HAVE A LOOK AT EXPLANA TION (5) TO SEC. 271(1) (C) OF THE ACT IS REPRODUCED HEREUNDER:- EXPLANATION 5. WHERE IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 BEFORE THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREA FTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASS ESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME:- (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE TH E DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YE AR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE S UCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE, SUC H INCOME HAS NOT BEEN DECLARED THEREIN ; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFT ER THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE D ATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITIO N OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UNLESS, (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING I N SUCH INCOME ARE RECORDED, (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE THE DATE OF THE SEARCH ; AND ITA NO. 2128/MDS/2013. :- 6 -: (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BEFO RE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLO SED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE S AID DATE ; OR (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATEM ENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY , BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN AC QUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO F AR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXP IRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139, A ND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME . CONTENTION OF THE ASSESSEE THAT HIS CASE FALLS WITH IN THE SECOND PROVISO TO EXPLANATION 5 TO SEC. 271(1) (C) OF THE ACT. SU CH PROVISO CLEARLY STIPULATE THAT THE DISCLOSURE MADE IN THE STATEMEN T RECORDED UNDER SECTION 132(4) OF THE ACT SHOULD BE PART OF THE IN COME LIABLE TO BE SHOWN IN A RETURN OF INCOME STILL TO BE FURNISHED . HOWEVER, IN THE CASE BEFORE US, ASSESSEE HAD ALREADY FURNISHED HIS RETURN OF INCOME U/S.139(1) OF THE ACT MUCH PRIOR TO DATE OF SEARCH . HIS SUBSEQUENT DISCLOSURE OF ON-MONEY IN THE RETURN FILED PURSUANT TO NOTICE U/S.153A OF THE ACT WOULD NOT QUALIFY FOR THE BENEFIT OF SE COND PROVISO. AS MENTIONED BY THE LD. CIT(A) IN HIS ORDER, ASSESSEE WOULD NOT HAVE DISCLOSED THE ON-MONEY BUT FOR THE SALE AGREEMENT F OUND DURING THE SEARCH WHICH CLEARLY DEMONSTRATE SUCH PAYMENTS. TH US, ADDITIONAL ITA NO. 2128/MDS/2013. :- 7 -: INCOME OFFERED IN THE RETURN FILED PURSUANT TO NOTI CE U/S.153A OF THE ACT WAS NOT A VOLUNTARY ONLY BUT ONLY DUE TO COM PULSION ARISING OUT OF SEARCH. ASSESSEE IS SQUARELY CAUGHT UNDER THE MA IN LIMB OF EXPLANATION 5 TO SEC. 271(1) (C) OF THE ACT. AS FO R THE DECISION OF CO- ORDINATE BENCH IN THE CASE OF M/S. JAYA EDUCATIONAL TRUST (SUPRA) RELIED ON BY THE ASSESSEE, THE FIRST RETURN ITSELF WAS FILED AFTER DATE OF SEARCH. AS AGAINST THIS, HERE THE RETURN U/S.139(1) OF THE ACT WAS FILED PRIOR TO THE DATE OF SEARCH. WE, AR E THEREFORE OF THE OPINION THAT LEVY OF PENALTY WAS RIGHTLY MADE BY T HE LD. ASSESSING OFFICER. WE DO NOT FIND ANY REASON TO INTERFERE WI TH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DI SMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 23 RD DAY OF NOVEMBER, 2016, AT CHENNAI SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( !' . #$#% ) (ABRAHAM P. GEORGE) & / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED:23RD NOVEMBER, 2016 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF