Shri Shailesh D. Prajapati, Ahmedabad V. The ACIT, Central Circle-2(2), Ahmedabad

ITA 2220/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0601 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA SR D R
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Search and seizure
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , ITA. NO. 2220/AHD/2013 (ASSESSMENT YEAR:2010-11) & IT(SS)A NOS.340 TO 343/AHD/2013 (ASSESSMENT YEARS:2004-05 & 2007-08) SHAILESH D. PRAJAPATI M. K. HOUSE, NR. TIRUPATI MARBLES, GANDHINAGAR HIGHWAY ROAD, MOTERA, SABARMATI, AHMEDABAD APPELLANT VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), 3 RD FLOOR, AYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD RESPONDENT PAN: AGCPP8621N /BY APPELLANT :SHRI SUNIL H. TALATI, A.R. /BY RESPONDENT :SHRI ADITYA SHUKLA, SR. D.R. ! '# /DATE OF HEARING : 14.07.2016 ! '# /DATE OF PRONOUNCEMENT : 21.09.2016 ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J.M: ALL THESE APPEALS HAVE BEEN FILED BY ASSESSEE AGAIN ST THE RESPECTIVE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-III, AHMEDABAD, FOR ALL A.YS. 2004-05 TO 2007-08 & 2010-11. SINCE ALL APPEALS PERTAIN TO SAME ASSESSEE AND SIMILAR ISSUES WERE RAISED IN ALL APPEALS; THEREFOR E, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO CIT(A) CONFIRMING THE LEVY PENALTY U/S. 271(1)(C ) OF THE INCOME TAX ACT. THE BRIEF FACTS OF THE CASE ARE THAT A SE ARCH U/S. 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF PRAJA PATI GROUP ON 08.12.2009. DURING THE COURSE OF SEARCH, C ERTAIN DOCUMENTS BELONGING TO ASSESSEE WERE FOUND AND SEIZ ED FROM THE PREMISES SEARCHED OF PRAJAPATI GROUP. AS T HE ASSESSEE WAS NOT SEARCHED, ASSESSING OFFICER ISSUED NOTICE U/S. 153C OF THE INCOME TAX ACT. ON RECEIPT OF NOT ICE U/S. 153C OF THE ACT, RETURN OF INCOME WAS FILED DECLARI NG TOTAL INCOME FOR EACH OF THE A.YS. AS UNDER: ASSESSMENT YEAR RETURNED INCOME U/S. 153COF THE ACT (IN RS.) DATE OF FILING RETURN U/S. 153COFTHEACT 2004 - 05 18,36,040/ - 22/12/2011 2005 - 06 20,32,360/ - 22/12/2011 2006 - 07 29,39,980/ - 22/12/2011 2007 - 08 30,06,840/ - 22/12/2011 ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 3 3. THE ASSESSMENT ORDERS WERE PASSED AFTER DETAILED SCRUTINY. MOREOVER IN EACH OF THE YEARS CERTAIN ADD ITIONS WERE MADE DISBELIEVING THE AGRICULTURAL INCOME AS D ECLARED BY THE ASSESSEEAND CERTAIN INCOME WAS ESTIMATED AS NON- AGRICULTURAL INCOME AND TREATED AS OTHER INCOME/SUN DRY RECEIPTS. THE ASSESSEE DID NOT CHALLENGE THE ASSESS MENT ORDERS BEFORE APPELLATE AUTHORITY. THE ASSESSING OF FICER THEREFORE LEVIED THE PENALTY U/S. 271(1 )(C) OF THE ACT ON THE INCOME SO ASSESSED. THE ASSESSEE CHALLENGED ALL THE SE PENALTY ORDERS BEFORE CIT(A) WHO VIDE A CONSOLIDATE D ORDER PASSED FOR A.Y. 2004-05 TO A.Y. 2009-10 AND ANOTHER ORDER PASSED FOR A.Y. 2010-11 CONFIRMED THE PENALTY ON TH E INCOME DETERMINED BY THE ASSESSING OFFICER U/S. 153 C OF THE ACT. 4. SAME HAS BEEN OPPOSED ON BEHALF OF ASSESSEE. ASSESSEE CONTENDED THAT BOTH ON FACTS AS WELL AS ON LAW, PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE LEVIED. THE CONTENTION OF ASSESSEE HAS BEEN REJECTED BY CIT(A) INTER ALIA STATED THAT PENALTY U/S. 271(1)(C) OF THE ACT IS CORRECTLY LEVIED AND PENALTY COULD NOT HAVE BEEN LEVIED U/S. 271AAA OF THE ACT. WHILE DOING SO, CIT(A) MENTIONED THAT P ENALTY U/S 271AAA OF THE ACT CAN BE LEVIED ONLY IN WHOSE C ASE WHERE SEARCH U/S. 132 OF THE ACT HAS BEEN CONDUCTED . AS NO SEARCH WAS CONDUCTED ON ASSESSEE AND ONLY NOTICE U/S. 153C OF THE ACT WAS ISSUED, PENALTY U/S. 271(1)(C) WAS CORRECTLY LEVIED AS HELD BY CIT(A). CIT(A) ALSO RE JECTED THE STAND OF ASSESSEE THAT PENALTY CANNOT BE LEVIED BEC AUSE ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 4 INCOME AS DECLARED IN RETURN OF INCOME U/S.153C OF THE ACT AND INCOME AS PER ASSESSMENT ORDER IS SAME. CIT(A) HELD THAT PENALTY HAS BEEN CORRECTLY LEVIED BECAUSE EXPL ANATION 5A IS APPLICABLE IN CASE OF ASSESSEE AND CASE OF AS SESSEE IS COVERED BY THE DECISION OF ITAT, AHMEDABAD 'B' BENC H IN CASE OF ACIT CC-1(3), AHMEDABAD VS. KIRIT DAHYABHAI PATEL REPORTED IN (2009) 121 ITD 159 (AHD)(TM). 4.1 IN THIS REGARD, STAND OF ASSESSEE HAS BEEN THAT NOT ONLY ASSESSING OFFICER WHO HAS ISSUED NOTICE U/S.15 3C BUT CIT(A) HAS ALSO CONFIRMED THAT THERE WAS NO SEARCH U/S.132 OF THE ACT ON THE ASSESSEE. IN THIS REGARD, LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT PENALTY CA NNOT BE LEVIED U/S.271AAA BUT U/S.271(1)(C) OF THE ACT O NLY. ACCORDING TO LEARNED AUTHORIZED REPRESENTATIVE, BOT H, THE ASSESSING OFFICER IN PENALTY ORDER AS WELL AS CIT(A ) WHILE CONFIRMING THE PENALTY HAS HELD THAT AS PER THE CON DITIONS LAID DOWN IN EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT, ASSESSEE IS DEEMED TO HAVE CONCEALED THE PARTICULAR S OF INCOME. HOWEVER, IT WAS OBVIOUS THAT EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT AS REPRODUCED BY ASSES SING OFFICER AS WELL AS CIT(A) APPLIES ONLY AND ONLY IN CASES WHERE IN COURSE OF SEARCH INITIATED U/S.132 OF THE ACT ON OR AFTER 01/06/2007.......'. THE NOTICE ISSUED AND ASSESSMENT FRAMED U/S.153C OF THE ACT AND THERE WAS NO SEARCH IN CASE OF ASSESSEE. THEREFORE, PENALTY SHO ULD NOT HAVE BEEN LEVIED BY INVOKING EXPLANATION 5A OF SECT ION 271(1)(C) OF THE ACT. LEARNED AUTHORIZED REPRESENT ATIVE ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 5 SUBMITTED THAT THE DECISION RELIED UPON BY CIT(A) I N CASE OF ACIT CC-1(3), AHMEDABAD VS. KIRIT DAHYABHAI PATEL ( SUPRA) HAS BEEN REVERSED BY HON'BLE GUJARAT HIGH COURT, WH ICH HAS NOT BEEN DISPUTED BY REVENUE AUTHORITIES BEFORE US. 4.2 BEFORE ME, LEARNED AUTHORIZED REPRESENTATIVE, P ENALTY CANNOT BE LEVIED BECAUSE AS PER EXPLANATION 1, THE PENALTY CAN BE LEVIED ON AMOUNT ADDED OR DISALLOWED WHILE COMPUTING THE TOTAL INCOME. IN ALL THE ASSESSMENT YEARS, THE ASSESSED INCOME [AFTER RELIEF GRANTED BY CIT(A) ], THE ASSESSED INCOME IS SAME AS PER RETURNED INCOME U/S. 153C OF THE ACT. THEREFORE IN SUCH CASE, AS WELL, PENAL TY CANNOT BE LEVIED AS THE INCOME SURRENDERED IN THE RETURN F ILED ON THE BASIS OF STATEMENT RECORDED WAS FULLY DECLARED AND TAXES HAVE BEEN PAID THEREON. 4.3 IN THIS REGARD, ASSESSEE RELIED ON THE DECISION OF MUMBAI ITAT BENCH IN CASE OF ITO VS. GOPE M. ROCHLA NI (49 TAXMAN 46), WHEREIN IT HAS BEEN HELD THAT EVEN AFTER PURSUATION TO SEARCH PROCEEDINGS, ASSESSEE DECLARED INCOME BEFORE EXPIRY OF DUE DATE U/S. 139(4) OF THE ACT, THAN EVEN UNDER EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT, PENALTY CANNOT BE LEVIED. ON OTHER HAND, LEAR NED DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE O RDERS OF AUTHORITIES BELOW AND REQUESTED TO DISMISS THE ALL APPEALS FILED BY ASSESSEE. 5. THE MAIN QUESTION BEFORE ME IS WHETHER PENALTY C AN BE LEVIED UNDER EXPLANATION 5A OF SECTION 271(1)(C) OF THE ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 6 ACT. I FIND THAT ITAT, KOLKATA B BENCH IN CASE O F DCIT VS. AVINASH CH. GUPTA [2011] 44 SOT 85 (KOL.), WHEREIN ASSESSEE FILED HIS RETURN OF INCOME DECLARING CERTA IN INCOME. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATI ON WAS CONDUCTED AT BUSINESS PREMISES OF ASSESSEE AND DURI NG SAID ACTION, A DISCLOSURE U/S.132(4) WAS MADE. THE REUPON, IN RESPONSE TO A NOTICE U/S.153A, ASSESSEE FILED A RETURN DECLARING INCOME WHICH INCLUDED AMOUNT DECLARED BY ASSESSEE U/S.132(4) OF THE ACT. ASSESSING OFFICER TOOK A VIEW THAT AS RETURN FOR A.Y.2005-06 WAS ALREADY FIL ED BEFORE DATE OF SEARCH WHEREIN INCOME ADMITTED U/S.132(4) O F THE ACT WAS NOT DISCLOSED, ASSESSEE WAS GUILTY OF CONCE ALMENT OF PARTICULARS OF INCOME. HE THUS, PASSED A PENALT Y ORDER U/S.271(1)(C) OF THE ACT WHETHER IMMUNITY UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WAS A VAILABLE EVEN IN RESPECT OF INCOME DISCLOSED FOR YEARS EARLI ER TO DATE OF SEARCH. ITAT DECIDED THE ISSUE IN FAVOUR OF ASS ESSEE. 5.1 I ALSO FIND THAT ACIT VS. SHANTILAL JERAMBHAI MAHESHWARI - ITA NO.69/RJT/2009 (ITAT RAJKOT), WHER EIN IT HAS BEEN HELD AS UNDER: 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR AND THE LD. REPRESENTATIVE FOR THE ASSESSEE. ADMITTEDLY, THERE WAS A SEARCH IN THE PREMISES OF T HE ASSESSEE AND THE ASSESSEE HAS FILED RETURN OF INCOM E IN PURSUANCE TO NOTICE U/S153A OF THE ACT. THE ASSESSING OFFICER ACCEPTED THE FILED BY ASSESSEE WITHOUT ANY FURTHER ADDITION. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 27L(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HIMSELF HAS DISCLOS ED UNDISCLOSED INCOME OF RS.20,55,000. THE FACT REMAIN S ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 7 THAT THE UNDISCLOSED INCOME IS DISCLOSED IN THE RET URN FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT . ONCE THE ASSESSEE HAS FILED THE RETURN OF INCOME CONSEQUENT TO THE NOTICE ISSUED U/S 153A OF THE ACT ALL PENDING PROCEEDINGS FOR THOSE ASSESSMENT YEARS SHALL STAND ABATED AND THEREFORE, THE INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF THE RETURN OF INCO ME FILED BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT. ADMITTEDLY, THE ASSESSEE HAS DISCLOSED THE UNDISCLOSED INCOME OF RS.20,55,000 IN THE RETURN OF INCOME FILED CONSEQUENT TO THE ISSUE OF NOTICE U/S 153A OF THE ACT, THEREFORE, IN OUR OPINI ON, THERE CANNOT BE ANY CONCEALMENT OF INCOME. ON IDENTICAL SET OF FACTS AS RIGHTLY SUBMITTED BY THE LD.DR AND THE LD. REPRESENTATIVE FOR THE ASSESSEE, THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2001-02 IN ITA NO.68/RJT/2009 ORDER DATED 27.05.2011 HAS CONFIRMED IDENTICAL ORDER OF THE CIT(A). A SIMILAR VIEW WAS ALSO TAKEN BY THE KOLKA TA BENCH B OF THE TRIBUNAL IN THE CASE OF DY.CIT VS AVINASH CH. GUPTA (SUPRA). IN VIEW OF THE ABOVE DISCUSSION, IN OUR OPINION, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER . WE HAVE NO REASON TO INTERFERE WITH THE ORDER OF TH E CIT(A). ACCORDINGLY THE SAME CONFIRMED. 5.2 I FIND THAT ITAT B BENCH IN CASE OF SANDIP NA VNITLAL SHAH VS. ACIT IN IT(SS)A NOS. 506, 507 & 508/AHD/20 11, WHEREIN IT HAS BEEN HELD AS UNDER: 4. IN VIEW OF ABOVE DISCUSSION, WE FIND THERE IS N O DIFFERENCE BETWEEN RETURNED INCOME AND ASSESSED INCOME AND AS SUCH THERE IS NO UNDISCLOSED INCOME. IT IS UNDISPUTED THAT ASSESSEE HAS PAID ALL THE TAXES DUE ON RETURNS FILED IN LIEU OF NOTICES U/S.153A. UNDE R THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT IT IS N OT RELEVANT WHETHER RETURN OF INCOME WAS FILED BY ASSE SSEE PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF S PECIFIC PROVISION OF SECTION 153A OF THE INCOME TAX ACT, RE TURN ITA NO. 2220/AHD/13 & IT(SS)A NOS.340 TO 343 AHD/13 A.YS. 2010-11, 04-05 TO 07-08 [SHAILESH D. PRAJAPAT I VS. ACIT] PAGE 8 OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT IS TO BE CONSIDERED AS RETURN FILED U/S. 139 OF THE ACT AS ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, RETURN IS TO BE CONSIDER ED FOR THE PURPOSE OF PENALTY U/S. 271(1)(C) AND PENALTY I S TO BE LEVIED ON INCOME ASSESSED. AS THERE IS NO DIFFE RENCE BETWEEN RETURN OF INCOME AND ASSESSED INCOME, SO, I N VIEW OF CASE OF KIRIT DAHYABHAI PATEL [SUPRA] , NO PENALTY U/S. 271(1)(C)/271AAA IS LEVIABLE AND ACCORDINGLY, ORDER OF LEVY PENALTY FOR ALL THE THRE E YEARS ARE QUASHED. ASSESSING OFFICER IS DIRECTED ACCORDI NGLY. 6. IN VIEW OF ABOVE FACTUAL AND LEGAL DISCUSSION, T HESE APPEALS FILED BY ASSESSEE ARE ALLOWED. 7. AS A RESULT, ALL FOUR APPEALS FILED BY ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF SEPTEMBER, 2016. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER AHMEDABAD: DATED 21/09/2016 TRUE COPY S.K.SINHA ! / COPY OF ORDER FORWARDED TO:- () * / REVENUE 2) / ASSESSEE -)./.01! 2! / CONCERNED CIT 4) 2!- / CIT (A) 5)67 8!019 '019: / / DR, ITAT, AHMEDABAD ;)8 <=> ? / GUARD FILE. BY ORDER / 9 /: .* '019: /