Singhai Vikas Kumar Jain, Jabalpur V. Income Tax Officer Ward 1 (2), Jabalpur

ITA 231/JAB/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5610 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 11-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA
• Keywords: Income from undisclosed sources; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY , HONBLE JUDICIAL MEMBER ITA NO. 2 3 1 / J AB /201 3 (ASST. YEAR : 200 3 - 0 4 ) SINGHAI VIKAS KUMAR JAIN, CHHATRAPATI BHAWAN , WRIGHT TOWN, JABALPUR. VS. ITO, WARD - 1(2), JABALPUR. PAN NO. AEDPJ 3251 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MUKESH AGRAWAL A R . DEPARTMENT BY : S HRI D.R. LATHORIYA - DR DATE OF HEARING : 0 7 / 0 4 /201 6 . DATE OF PRONOUNCEMENT : 0 7 / 04 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , JABALPUR , DATED 01 /0 3 /201 2 . 2. THE SOLE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 80,084/ - UNDER SEC. 271(1)(C) OF THE ACT . 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME SHOWING TOTAL INCOME OF RS. 46,126/ - FROM BUSINESS AND RS. 2,02,315/ - FROM AGRICULTURE. IN THE ASSESSMENT FRAMED, THE INCOME OF THE ASSESSEE WAS ASSESSED FROM BUSINESS AT RS. 2,00,991/ - AND AGRICULTURAL INCOME AT RS. 1,54,865/ - AS INCOME FROM UNDISCLOSED SOURCES AND 2 ITA NO. 2 3 1 / JAB /201 3 PENALTY UNDER SEC. 271(1)(C) WAS LEVIED FOR RS. 80,084/ - FOR CONCEALMENT OF INCOME. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE LEVY OF PENALTY. 5. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED BEFORE US THAT THE HON'BLE MADHYA PRADESH HIGH COURT IN ITA NO. 68/2009 ORDER DATED 10/07/2013 HAS ADMITTED THE APPEAL OF THE ASSESSEE ON QUANTUM ADDITION BY FRAMING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: - WHETHER THE TRIBUNAL HAS ERRED IN P ASSING THE IMPUGNED ORDER WITHOUT PROPERLY APPRECIATING THE FACT THAT THE ORDER PASSED BY THE CIT(A PPEAL ) BASED ON INTERNET DATA IS ERRONEOUS, ARBITRARY AND WITHOUT ANY BASIS, WHEN THE APPELLANT HAD PROPERLY EXPLAINED AND PROVED THE SALE OF AGRICULTURAL PR ODUCE BY WAY OF RELEVANT BILLS OF SALE AND VOUCHERS? THEREFORE, IT WAS THE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. NAYAN BUILDERS AND DEVELOPERS VS. ITO IN ITO NO. 2379/MUM/2009 IN ASSESSMENT YEAR 1997 - 98 VIDE ORDER DATED 18/03/2011 , DELETED THE LEVY OF PENALTY BY OBSERVING THAT THE ADDITIONS , IN RESPECT OF W H ICH , PENALTY WAS CONFIRMED HAVE BEEN ACCEPTED BY THE HON'BLE BOMBAY HIGH COURT LEADING TO SUBSTANTIAL QUESTION OF LAW. WHEN THE HIGH COURT ADMITS SUBSTANTIAL QUESTION OF LAW ON AN ADDITION, IT BECOMES APPARENT THAT THE ADDITION IS CERTAINLY DEBATABLE. IN SUCH CIRCUMSTANCES , PENALTY CANNOT BE LEVIED UNDER SEC. 271 (1)(C) AS HAS BEEN HELD IN SEVERAL CASES INCLUDING RUPAM MERCANTILE VS. DCIT [ (2004) 91 ITR 237 (AHD.) (TM) ] AND SMT. RAMILA RATILAL SHAH VS. ACIT [(1998) 60 TTJ (AHD.) 171]. THE TRIBUNAL WENT ON TO OBSERVE THAT THE ADMISSION O F SUBSTANTIAL QUESTION OF LAW BY THE HON'BLE HIGH COURT LENDS CREDENCE TO THE BONA FIDE S OF THE ASSESSEE IN CLAIMING DEDUCTION . ONCE IT TURNS OUT THAT THE CLAIM OF THE ASSESSEE COULD HAVE 3 ITA NO. 2 3 1 / JAB /201 3 BEEN CONSIDERED FOR DEDUCTION AS PER A PERSON PROPERLY INSTRUCTED I N LAW AND IS NOT COMPLETELY DEBARRED AT ALL, THE MERE FACT OF CONFIRMATION OF DISALLOWANCE WOULD NOT PER SE LEAD TO THE IMPOSITION OF PENALTY . SINCE, THE ADDITIONS IN RESPECT OF WHICH PENALTY HAS BEEN UPHELD IN THE PRESENT PROCEEDINGS, HAVE BEEN HELD BY T HE HON'BLE HIGH COURT TO BE INVOLVING A SUBSTANTIAL QUESTION OF LAW, IN OUR CONSIDERED OPINION, THE PENALTY IS NOT EXIGIBLE UNDER THIS SECTION. THEREFORE, ORDERED FOR DELETION OF PENALTY. 6 . IN THE INSTANT CASE ALSO, THE FACTS ARE IDENTICAL TO THE FACTS BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF NAYAN BUILDERS AND DEVELOPERS (SUPRA) , THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DELETE THE LEVY OF PENALTY UNDER SEC. 271(1)(C) OF RS. 80,084/ - . 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 0 7 TH DAY OF APRIL , 201 6 AT JABALPUR . S D/ - SD/ - ( N.K. CHOUDHRY ) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 0 7 TH APRIL , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, JABALPUR.