Shri Shyamal Dhar, Kolkata V. DCIT, Circle - 49, Kolkata, Kolkata

ITA 2155/KOL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7648 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 02-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 02-12-2010
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Condonation of delay
• Section: 143(3)

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B, KOL KATA [ , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SRI N.VIJAYAKUMARAN, JUDICIAL MEMBER & SRI C.D. RAO, AC COUNTANT MEMBER $ $ $ $ / ITA NO. 2155 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2007-08 SHRI SHYAMAL, DHAR. KOLKATA, (PAN-ADOPD6771E) DY.COMMISSIONER OF INCOME-TAX CIRCLE-49, KOLKATA. (+, / APPELLANT ) - - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI S.K.TULSIYAN /0+, 1 2 ' / FOR THE RESPONDENT: / SRI P.S. DUTTA 3 1 !# / DATE OF HEARING : 27/12/2011 4' 1 !# / DATE OF PRONOUNCEMENT : 6/01/2012 '5 / ORDER ( ), (N. VIJAYAKUMARAN), JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. C.I.T.(A)- XXXII, KOLKATA DATED 17/6/2010. THE ASSESSMENT YEA R INVOLVED IS 2007-08. 2. AT THE OUTSET WE OBSERVE THAT THE APPEAL BY THE ASSESSEE IS LATE BY 40 DAYS. THE ASSESSEE HAS FILED A PETITION SEEKING CONDONATION O F THE SAID DELAY AND EXPLAINED THE CAUSE OF SUCH DELAY. ACCORDING TO THE ASSESSEE, AL L THE INCOME-TAX MATTERS WERE BEING LOOKED AFTER BY A TAX PRACTITIONER, SRI UTTAM ROY, WHO DUE TO HIS ILL HEALTH FAILED TO REPRESENT THE CASES OF THE ASSESSEE BEFORE THE DEPA RTMENT DURING THE PERIOD FROM JUNE, 2009 TO SEPTEMBER, 2010. ON GETTING THE PENA LTY ORDER RAISING HEAVY DEMAND, WHICH WAS SUSTAINED BY THE LD. C.I.T.(A), THE ASSES SEE WAS CONFOUNDED AND AT A LOSS ABOUT COURSE OF ACTION ON HIS BEHALF. THE ASSESSEE ALSO FILED AN AFFIDAVIT FROM THE TAX PRACTITIONER SRI UTTAM ROY AFFIRMING THAT HE DOES N OT REPRESENT OTHER ASSESSEES BEFORE THE DEPARTMENT AND THERE WAS SOME INADVERTENT OMISS ION/FAILURE/DEFAULT IN TAKING APPROPRIATE COURSE OF ACTION IN THE MATTER OF THE A SSESSEE. THE ASSESSEE COME ACROSS THE PRESENT LAWYER AND ON PROPER ADVICE RECEIVED FR OM HIM, THE INSTANT APPEAL WAS FILED AND IN DUE COURSE IT WAS DELAYED. THE LEARNED COUNS EL OF THE ASSESSEE SUBMITTED THAT DUE TO ERSTWHILE TAX PRACTIONERS FAILURE/OMISSION TO L OOK INTO THE MATTER, THE DELAY WAS 2 CAUSED. HE FURTHER SUBMITTED THAT NO LITIGANT DOES STAND TO BENEFIT BY LODGING AN APPEAL LATE WHEN THERE IS DEMAND AND PENALTY IMPOSED. THE REFORE, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE APPEAL IN TIME. THE REASONS ALSO AFFIRM THAT THERE WAS NO WILLFUL NEGLIGENCE OR MALAFIDES ON THE PART OF THE ASSESSEE. FURTHER, CONSEQUENCES OF APPROPRIATE ACTION OF THE ERSTWHILE TAX PRACTITI ONER SHOULD NOT BE VISITED ON THE ASSESSEE. THE LEARNED COUNSEL, THEREFORE, PRAYED F OR CONDONATION OF DELAY AND ADMISSION OF THE APPEAL FOR DISPOSAL ON MERITS. 2.1. WE HAVE HEARD THE PARTIES AND GONE THROUGH TH E CONDONATION PETITION AND THE AFFIDAVIT OF SRI UTTAM ROY, TAX PRACTITIONER. THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & ORS. [167 I.T.R. 471 (SC)] HAS DIRECTED TO ADOPT A PRAGMATIC AND LIBERAL APPROACH WHILE CONSID ERING THE PETITION FOR CONDONATION OF DELAY. WE, THEREFORE, RESPECTFULLY RELYING UPON TH E ABOVE DECISION OF HONBLE SUPREME COURT AND CONSIDERING THE FACTS OF THE CASE DEEM IT PROPER TO CONDONE THE DELAY OF 40 DAYS IN RESPECT OF THE APPEAL BEFORE US AND ADMIT T HE SAME FOR HEARING ON MERITS. 3. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, TH E ASSESSEE FILED HIS RETURN DECLARING INCOME OF RS.35,36,760/-, WHICH WAS DULY PROCESSED U/S. 143(1) OF THE ACT. A SURVEY OPERATION WAS CONDUCTED AT THE PREMISES OF T HE ASSESSEE AND ON THE IMPOUNDED DOCUMENTS, THE LD. A.O. COMPLETED THE ASSESSMENT U/ S. 143(3) OF THE ACT ON A TOTAL INCOME OF RS. 54,44,430/-, WHEREBY, INTER ALIA, THE ADDITIONS ON THE FOLLOWING COUNTS OVER AND ABOVE SHOWN BY THE ASSESSEE HAVE BEEN MADE :- I) INCOME FROM SREEMAN GUEST HOUSE RS.2,62 ,086 II) INCOME ON EXTRA WORK FROM SREEMAN CONSTRUC TION RS.3,29,099 III) DISCREPANCY IN STOCK IN SREEMAN JEWELLERS RS.2,28,500 RS.8,19,685. THE LD. A.O., THEREFORE, INITIATED PENALTY PROCEEDI NGS U/S. 271(1)(C) OF THE ACT HOLDING THAT THE ASSESSEE HAS DELIBERATELY CONCEALED THE IN COME UNDER THE ABOVE HEADS AND LEVIED PENALTY OF RS.2,75,907/-, BEING 100% OF TAX SOUGHT TO BE EVADED. PENALTY WAS UPHELD BY THE LD. C.I.T.(A) BY OBSERVING THAT THE A SSESSEE HAS FAILED TO FURNISH ANY EXPLANATION BEFORE THE LD. A.O., WHO LEVIED THE PEN ALTY UNDER PROVISION OF EXPLANATION 1(A) TO SEC. 271(1)(C) OF THE ACT. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE OBS ERVE THAT THE PENALTY RELATES TO THREE DIFFERENT ADDITIONS. THE FIRST ONE IS THE AL LEGED INCOME FROM SREEMAN GUEST 3 HOUSE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT IN RESPECT OF INCOME FROM SREEMAN GUEST HOUSE, THE EXPENDITURE AMOUNTING TO R S.1,96,609/-, FOR WHICH DETAILS WERE FILED, WERE NOT ENTERED IN THE BOOKS. THESE E XPENSES FOR THE MONTH OF APRIL, 2006 TO 06/2/2007 AS CLAIMED WERE NOT ENTERED IN THE BOO KS. THE LEARNED COUNSEL EXPLAINED THAT THE EXPENSES WERE NOT ENTERED IN THE BOOKS, BU T THE SOURCES WERE EXPLAINED. HOWEVER, THE ADDITION WAS MADE, BUT IT IS NOT AUTOM ATIC THAT PENALTY SHOULD ALSO BE CONFIRMED. HENCE, THERE WAS NO OMISSION OR CONCEAL MENT ON THE PART OF THE ASSESSEE. THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. RELIANCE PETROPRODUCTS (P) LTD. [(2010) 322 ITR 158 (SC)] WILL APPLY IS THE AR GUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE LD. A.O. IN THE PENALTY ORDER. 5. THE NEXT ADDITION RELATES TO DISCREPANCY IN THE STOCK OF JEWELLERY OF SREEMAN JEWELLERS FOUND DURING SURVEY ON 06/3/2007. ON VER IFICATION PHYSICAL DIFFERENCE WAS UNEARTHED WHICH, ACCORDING TO THE LD. A.O. REMAINED UNEXPLAINED TO THE TUNE OF RS. 2,28,500/- BEING THE VALUE OF 250.022 GMS. THE LD. A.O. TREATED THIS ASS CONCEALED INCOME. HE WAS OF THE VIEW THAT THE ASSESSEE DELIB ERATELY CONCEALED THE INCOME BY NOT SHOWING THE STOCK OF JEWELLERY TO THE ABOVE EXTENT. 6. ON THIS ISSUE ALSO, THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT THE DISCREPANCY IN STOCK COMES IN THIS WAY. THE CUSTOM ERS GOLD LYING IN THE VAULT AS PER THE ASSESSEES LETTER DATED 12/4/2007 IS 1559.100 GMS. IN RECONCILIATION STATEMENT VIDE ANOTHER LETTER OF THE ASSESSEE DATED 20/4/2009 THE ASSESSEE EXPLAINED THAT THE CUSTOMERS GOLD LYING IN THE VAULT IS 1309.078 GMS. THAT BEING THE DIFFERENCE, THE LD. A.O. FOUND THAT 250.022 GMS [1559.100 GMS 1309.07 8 GMS] IS THE UNEXPLAINED STOCK. HOWEVER, THE LEARNED COUNSEL EXPLAINED BEFORE US TH AT THE GOLD WAS RECEIVED FROM KARIGARS FOR APPROVAL AND THE DISCREPANCY AROSE TOG ETHER WITH CUSTOMERS GOLD LYING IN THE VAULT. THEREFORE, THE RECONCILIATION STATEMENT WAS SUBMITTED ON 20/4/2009. IT HAS BEEN EXPLAINED ON THE DATE OF SURVEY THAT THE ASSES SEES BOOKS OF ACCOUNT WERE INCOMPLETE AS ENTRIES WERE NOT MADE, BECAUSE NO ACC OUNT WAS MAINTAINED THOUGH THE ASSESSEES OPENING AND CLOSING STOCK VALUES WERE TH E SAME AND THIS HAS RESULTED IN INCOMPLETE REPORT. THAT IS WHY THE ASSESSEE AFTER CONSIDERING ALL THE FACTS PREPARED A FINAL ACCOUNT AND ACTUAL PROFIT EARNED WAS OFFERED FOR TAXATION. IN THAT WAY, THE 4 QUANTUM HAS ALSO ATTAINED FINALITY. ON THE OTHER H AND, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL PLACED ON RECORD. SURVEY IN THIS CASE WAS CONDUCTED ON 06/3/ 2007 AND STOCK OF JEWELLERY AS PER PHYSICAL VERIFICATION WAS VERIFIED. THE ASSESSEE F ILED RECONCILIATION OF THE STOCK AND THAT IS WHY A DISCREPANCY IN STOCK OF JEWELLERY WAS FOUN D. HOWEVER, THE SOURCE WAS EXPLAINED AND AFTER KNOWING THAT THERE IS DISCREPANCY, THE AS SESSEE OFFERED THE SAME FOR TAXATION WITHOUT ANY PROTEST BEFORE THE SURVEY PARTY ITSELF. THAT BEING THE CASE, THERE IS NO MALA FIDE ON THE PART OF THE ASSESSEE AND THE ASSESSEE C OOPERATED WITH THE DEPARTMENT BY FILING THE DETAILS, NAMES, ADDRESSES ALONG WITH THE QUANTITY OF GOODS IN RESPECT OF KARIGARS GOLD AND CUSTOMERS GOLD LYING IN THE VAU LT OF THE ASSESSEE AND, THEREFORE, THE BONAFIDE ACTION OF THE ASSESSEE HAS TO BE ACCEPTED, INASMUCH ASS THERE IS NO DELIBERATE INTENTION TO CONCEAL OR FILE INACCURATE PARTICULARS OF INCOME. IN SUCH CIRCUMSTANCES, THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) COMES TO THE RESCUE OF THE ASSESSEE. HENCE , WE ARE OF THE VIEW THAT THE PENALTY IN RESPECT OF THE ADDITION OF INCOME FROM SREEMAN G UEST HOUSE AND DISCREPANCY OF STOCK IN RESPECT SREEMAN JEWELLERS WILL NOT STAND TO TEST AND IT IS TO BE DELETED. ACCORDINGLY, PENALTY IMPOSED ON THESE TWO ACCOUNTS ARE DELETED. 8. COMING TO THE ADDITION UNDER THE HEAD EXTRA WO RK, SURVEY PARTY IDENTIFIED DOCUMENT MARKED SC/50 IN RESPECT OF SREEMAN CONSTRU CTION. IN RESPECT OF EXTRA WORK THE TERM WHILE AND CASH WAS WRITTEN. ADMITTEDL Y, VIDE ASSESSEES LETTER DATED 20/4/2009, WHITE INDICATES CHEQUE RECEIPT AND CA SH INDICATES CASH RECEIPT. THE LD. A.O. AFTER VERIFYING THE LEDGER ACCOUNTS FOUND THAT RS.1 8,64,129/- WAS IN THE FORM OF CHEQUE AND THE BALANCE SUM OF RS.12,51,901/- WAS IN THE FO RM OF CASH. HOWEVER, AS PER THE SURVEY DOCUMENTS SC/50, THE CASH RECEIPT IS RS.15.8 0 LAKHS AND, THEREFORE, THE DIFFERENCE COMES TO RS.3,29,099/- [RS.15,80,000 R S.12,51,901]. ON THIS ISSUE ALSO, THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY CONTEND ED THAT DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) WILL COME TO THE RESCUE. HE FURTHER SUBMITTED THAT THERE IS NO CONC EALMENT AND ALL WERE ADDED AND THE QUANTUM ATTAINED FINALITY. IN SUCH CIRCUMSTANCES I T IS NOT AUTOMATIC THAT PENALTY TO BE CONSIDERED AS THE QUANTUM IS IDENTIFIED. THE LEARN ED COUNSEL SUBMITTED THAT THE 5 EXPENSES WERE NOT ENTERED IN THE BOOKS. THE DIFFER ENCE IS OUT OF THE EXPENSES WHICH WERE NOT ENTERED IN THE BOOKS. HE FURTHER SUBMITTED THAT ONCE THE SOURCE WAS EXPLAINED, THERE IS NO OMISSION OR CONCEALMENT. ON THE OTHER H AND, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENCE, WE OBSERVE THAT ON THIS ADDITION WITH REGARD TO EXTRA WORK IN RESPECT OF SREEMAN CONSTRUCTION, DOCUMENT M ARKED SC/50 CLEARLY SHOWS THE CASH RECEIPT OF RS.15.80 LAKHS. LEDGER ACCOUNT SHO WS EXTRA WORK TO THE EXTENT OF RS.31,16,030/- AND THE SUM OF RS.18,64,129/- IS IN THE FORM OF CHEQUE RECEIPT. THE DIFFERENCE COMES TO ONLY RS.12,51,901/-. THE SURVE Y DOCUMENT SHOWS CASH RECEIPT OF RS.15.80 LAKHS. HOWEVER, THE ASSESSEE COULD NOT EX PLAIN FURTHER EXCEPT THE CHEQUE RECEIPT UNDER THE TERM WHITE AND THE CASH RECEIPT AND THIS DIFFERENCE WAS NOT SHOWN AS INCOME OF THE ASSESSEE. THEREFORE, THE LD. A.O. HA S RIGHTLY ADDED THIS DIFFERENCE AS CONCEALED INCOME OF THE ASSESSEE AND THAT BEING SO, WE ARE OF THE VIEW THAT THE PENALTY HAS TO BE LEVIED. THE LD. A.O. IN THE COURSE OF AN Y PROCEEDINGS WAS SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOM E AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HERE IN THIS CASE, BY THE DOCUMENT SC/50, THE LD. A.O. FOUND CHEQUE RECEIPT AS WELL AS CASH RECEIPT, BUT THESE WERE NOT BROUGHT IN THE LEDGER ACCOUNT AND THUS IT AMOUNTS TO CONCEALMENT OF PARTICULARS OF HI S INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THE EXPLANATION OFFERE D BY THE ASSESSEE IS NOT SATISFACTORY IN THE EYE OF LAW. HENCE, WE ARE OF THE VIEW THAT THE PENALTY ON THIS ADDITION OF RS.3,29,099/- IS TO BE SUSTAINED. THE LD. A.O. HAS LEVIED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. HE IS DIRECTED TO COMPUTE THE PENALTY AT THE SAME RATIO WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF EXTRA WO RK IN RESPECT OF SREEMAN CONSTRUCTION ALONE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 6 '5 #' 7 8 69 THIS ORDER IS PRONOUNCED IN THE COURT ON 6/1/2012 SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( ) (C.D. RAO), ACCOUNTANT MEMBER (N.VIJAYAKUMARAN) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 06-01-2012 6 $ $ $ $ / ITA NO. 2155 (KOL) OF 2010 '5 1 /%% :'';- COPY OF THE ORDER FORWARDED TO: 1. +, / THE APPELLANT : SHRI SHYAMAL DHAR, 165/1, BANGUR AVENUE, BLOCK-A, KOLKATA-700 055. 2 . /0+, / THE RESPONDENT : THE D.C.I.T., CIRCLE-49, KOLKATA 3. %5 () : THE CIT(A)-XXXII, KOLKATA 4. %5 / THE C.I.T., KOL , KOLKATA. 5. >%8 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6. GUARD FILE . 0 /%/ TRUE COPY, '5/ BY ORDER, (DKP) ASSTT. REGISTRAR .