JASMIT SINGH TIBB, MUMBAI V. ITO 20(1)(3), MUMBAI

ITA 2225/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8778 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 12-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Onus to prove

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNALH BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2225/MUM/2016 ( / ASSESSMENT YEAR: 2007-08) JASMIT SINGH TIBB. DR. CHARAT SINGH BUNGALOW, DR. CHARAT SINGH COLONY, ANDHERI (EAST) MUMBAI 400 093 / VS. INCOME TAX OFFICER 20(1)(3) PIRAMAL CHAMBERS LALBAUG, MUMBAI - 400012 ./ ./ PAN/GIR NO. AAGPT0546G ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 12.01.2017 /DATE OF PRONOUNCEMENT: 20.01.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 08.02.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-36, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2007- 08 WHEREIN THE PENALTY LEVIED BY THE ASSESSING OFFICER BY VIRTUE OF ORDER DATED 30.09.2014 TO THE TUNE OF RS.3,31,315/- WAS CONFIRMED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY: NONE DEPARTMENT BY: SHRI M. C. OMI NINGSHEN ITA NO.2225.M.16 A.Y. 2007-08 2 THE LEARNED CIT(A) OUGHT TO HAVE TAKEN THE ABOVE FACTS IN TO CONSIDERATION. THE LEARNED CIT(A) OUGHT TO HAVE DIRECTED THE A.O. TO REWORK THE PENALTY ON THE BASIS OF RECTIFICATION RESULTS. YOUR APPELLANT PRAYS FOR DIRECTIONS TO THE A.O. TO RECOMPUTE PENALTY AFTER GIVING PROPER EFFECT TO HON. ITATS ORDER CITED ABOVE. YOUR APPELLANT PRAYS FOR GRANT OF SUCH RELIEF AS HON. MEMBERS DEEM FIT AND PROPER IN THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT WAS AN INDIVIDUAL AND WAS DERIVING INCOME FROM RUNNING OUTLETS FOR THE SALE OF FRANKIES. THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y.2007-08 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,72,880/-. THE RETURN WAS PROCESSED AND SELECTED FOR SCRUTINY. AT THE TIME OF SCRUTINY, IT WAS NOTICED THAT THE SALES EFFECTED BY THE APPELLANT WAS VERY LOW WHEN COMPARED TO THE NUMBER OF OUTLETS RUN BY THE ASSESSEE AND THE VOLUME OF BUSINESS. THE ASSESSING OFFICER RECORDED THE STATEMENT OF THE ELDER BROTHER OF THE APPELLANT WHO WAS ACTIVELY INVOLVED IN THE BUSINESS AND ALSO CARRIED OUT AN EXERCISE TO QUANTIFY THE PRODUCTION OF FRANKIES ON THE BASIS OF USAGE OF RAW MATERIAL SUCH AS MUTTON, CHICKEN, PANEER ETC. AND ARRIVED NET PROFIT OF RS.38,96,989/-. THE APPELLANT FILED AN APPEAL AGAINST THE SAID ASSESSMENT ORDER AND THE CIT(A) UPHELD THE ADDITION TO THE TUNE OF RS.19,12,268/-. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) AND LEVIED THE PENALTY TO THE TUNE OF RS.3,31,315/- U/S.271(1)(C) OF THE ACT. IN THE INTERIM PERIOD THE ASSESSEE FILED AN APPEAL BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL AND HONBLE INCOME TAX APPELLATE TRIBUNAL DECIDED THE ITA NO.2225.M.16 A.Y. 2007-08 3 MATTER OF CONTROVERSY BY VIRTUE OF ORDER IN ITA NO.8426/MUM/2010 DATED 22.01.2014 (ORDER M.A. NO.266/MUM/2014 DATED 18.08.2014), WHEREIN THE HONBLE TRIBUNAL ALLOWED WASTAGE @ 15%. SINCE ASSESSMENT PROCEEDINGS WAS ALSO CONFIRMED BY THE CIT(A) ON 07.05.2014, THEREFORE CONSIDERING THIS FACT THAT ASSESSMENT HAS BEEN UPHELD BY THE CIT(A) AND THE HONBLE ITAT ONLY REDUCED 15% WASTAGE, THE ASSESSING OFFICER LEVIED THE PENALTY TO THE TUNE OF RS.3,31,315/- WHICH WAS CONFIRMED. FEELING AGGRIEVED, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 & 2:- 4. UNDER THIS ISSUE THE ASSESSEE CHALLENGED THE CONFIRMATION OF THE PENALTY ORDER BY THE CIT(A) ON THE GROUND OF THAT THE ORIGINAL ASSESSMENT WAS BASED ON ESTIMATE BASIS AND BASED ON CONJUNCTURES AND SURMISES, THEREFORE, NO PENALTY IS LIABLE TO BE LEVIABLE IN THE INTEREST OF JUSTICE. HOWEVER, ASSESSEE FAILED TO APPEAR BEFORE US. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS STRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. ANYHOW, IT IS NOT IN DISPUTE THAT THE ORIGINAL ASSESSMENT WAS DONE ON ESTIMATION BASIS. NOTHING CAME INTO THE NOTICE THAT THE ASSESSEE FURNISHED THE INACCURATE PARTICULARS AND CONCEALED HIS INCOME. THE ADDITION IF ANY IS ON THE ESTIMATED BASIS. NO PENALTY IS LIABLE TO BE LEVIABLE IF THE ASSESSMENT IS BASED ON THE ESTIMATION BASIS AND IN THIS REGARD WE SUPPORT OF THE LAW SETTLED IN THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE TITLED AS CIT VS. AERO TRADERS PVT. LTD. (2010) 322 ITR 316 (DELHI) AND HONBLE PUNJAB AND HARIYANA HIGH COURT IN CASE TITLED AS HARIGOPAL SINGH VS. CIT (2002) 258 ITR 85 (P&H) AND HONBLE GUJARAT HIGH COURT IN CASE TITLED AS CIT ITA NO.2225.M.16 A.Y. 2007-08 4 VS. SUBHASH TRADING CO. 221 ITR 110 (GUJ.). WHEREIN IT IS SPECIFICALLY HELD THAT THE INCOME IF ANY ASSESSED ON ESTIMATED BASIS AND THAT BY ITSELF DOES NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE EITHER CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THERE HAS TO BE A POSITIVE ACT OF CONCEALMENT ON HIS PART AND THE ONUS TO PROVE THIS WAS ON THE DEPARTMENT. IN THE SAID CIRCUMSTANCE, WE ARE OF THE VIEW THAT THE CIT(A) HAS PASSED THE ORDER WRONGLY AND ILLEGALLY WHICH IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW THEREFORE, THE SAME IS HEREBY ORDERED TO BE SET ASIDE. ACCORDINGLY, THE PENALTY IS HEREBY ORDERED TO BE DELETED. 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2017 . SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 20 TH JANUARY, 2017 MP / 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