Smt. Sonalben Pareshkumar Dave, Anand V. The Income tax Officer, Ward-4, Anand

ITA 2318/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0351 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 1999-2000
• Appeal Filed On: 16-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH SR DR
• Assessee Lawyers: S N DIVETIA
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.2318-2323/AHD/2012 ASSESSMENT YEARS :1999-00 TO 2003-04 SONALBEN PARESHKUMAR DAVE SHAISHAV BUNGLOW, NR. H.M. PATEL STATUE, VALLABH VIDHYANAGAR, ANAND 3880001 [ PAN NO.ACXPD 8936B ] V/S . INCOME TAX OFFICER, WARD-4, ANAND / APPELLANT .. / RESPONDENT) /BY ASSESSEE SHRI S.N.DIVETIA, AR /BY REVENUE SHRI D.K. SINGH, SR-DR /DATE OF HEARING 19-12-2012 ! /DATE OF PRONOUNCEMENT 18-01-2013 ' ' ' ' / // / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THESE ARE SIX APPEALS OF SAME ASSESSEE ARE DIRECTE D AGAINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME-TAX (APP EALS)-IV, BARODA (CIT(A) FOR SHORT) OF SAME DATE I.E., 21-08-2012 PERTAINING TO ASSESSMENT YEARS (AY) 1999-00 TO 2003-04. ALL THE APPEALS ARE HEARD TOGET HER AND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER. THE GROUN DS RAISED BY ASSESSEE IN ALL THE APPEALS ARE IDENTICAL, EXCEPT DIFFERENCE IN AMOUNT, AND, HENCE, WE REPRODUCE OF GROUNDS OF APPEAL FROM THE APPEAL FILE D BY ASSESSEE FOR AY 1999-00. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- ITA NO.2318/AHD/2012 FOR A.Y. 99-00. ITA NO.2318-23/AHD/2012 A.YS. 99-00 TO 03-04 SONALBEN P DAVE V. ITO WD-4, ANAND PAGE 2 1.1 THE ORDER PASSED U/S. 250 ON 21.08.2012 FOR AY 1999-2000 BY CIT(A)-IV BARODA, CONFIRMING THE PENALTY IS WHOLLY ILLEGAL, U NLAWFUL AND WITHOUT JURISDICTION. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY FAILED TO APPRECI ATE THAT IN ABSENCE OF SPECIFIC CHARGE OF CONCEALMENT OF INCOME OR FURNISH ING INACCURATE PARTICULARS OF INCOME , THE ENTIRE PROCEEDINGS, WERE ILLEGAL AN D UNLAWFUL SO THAT THE PENALTY IMPOSED BY AO DESERVES TO BE DELETED. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING PENALTY OF RS.14,771 IMPOSED U/S. 271(1)(C) BY AO I N RESPECT OF ESTIMATED ADDITION TOWARDS TUITION FEES. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE PENALTY OF R S.14,771/P IMPOSED U/S. 271(1)C) BY AO IN RESPECT OF ESTIMATED ADDITION TOW ARDS TUITION FEES. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND ENGAGED IN THE BUSINESS OF RUNNING TUITION CLASSES. DURING THE YEAR UNDER CONSIDERATION A SURVEY ACTION U/S 133A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED AT THE PREMISES OF THE ASS ESSEE AND THE ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE ACT WAS FRAMED THEREB Y THE ADDITION ON PROTECTIVE BASIS WAS MADE IN THE HANDS OF THE ASSESSEE AND SUB STANTATIVE WAS MADE IN THE HANDS OF THE HUSBAND OF THE ASSESSEE, SHRI PARE SH M DAVE. A PENALTY PROCEEDING WAS SEPARATELY INITIATED. THE MATTER WAS CARRIED IN QUANTUM PROCEEDINGS UP TO HONBLE ITAT AND HONBLE ITAT VID E ORDER ITS ORDER DATED 31-08-2010 HELD THE INCOME FROM COACHING CLASS BELO NGED TO THE ASSESSEE AND THEREFORE, THE ADDITION IN THE HANDS OF THE ASS ESSEE WAS SUSTAINED AND IN THE CASE OF SHRI PARESH M DAVE WAS DELETED. THE PEN ALTY PROCEEDINGS WERE SEPARATELY CONCLUDED AND A PENALTY U/S. 271(1) OF THE ACT WAS LEVIED. AGAINST THIS ORDER, THE ASSESSEE FILED APPEAL BEFO RE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE DISMI SSED THE APPEAL. 3. NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ADDITION FROM RUNNING COACHING CLASSES BY THE ASSESSEE WAS MADE O N PROTECTIVE BASIS BY ITA NO.2318-23/AHD/2012 A.YS. 99-00 TO 03-04 SONALBEN P DAVE V. ITO WD-4, ANAND PAGE 3 THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT, W HEREAS THE SUBSTANTIVE ADDITION WAS MADE IN THE CASE OF HER HUSBAND SHRI P ARESH M DAVE. HOWEVER, THE HONBLE COORDINATE BENCH HELD THAT THE COACHING CLASSES WERE RUN BY THE ASSESSEE AND TUITION INCOME WAS CHARGED TO TAX IN H ER HANDS ON SUBSTANTIVE BASIS. HE SUBMITTED THAT WHEN THE INCOME IS ASSESSE D BY AO ON PROTECTIVE BASIS NO PENALTY U/S 271(1) OF THE ACT IS ATTRACTE D BECAUSE IT DOES NOT AMOUNT TO EITHER CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. THE VERY FACT THAT THE ASSESSMENT HAS BE EN MADE ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE BY AO THAT ITSELF AMOUNTS TO UNCERTAINTY ABOUT THE TAXABILITY OF SUCH INCOME IN THE HANDS OF SUCH ASSESSEE. IT WILL BE APPRECIATED THAT WHEN THE AO IS NOT CERTAIN OR DEFI NITE ABOUT ITS TAXABILITY IN THE HANDS OF THE ASSESSEE, HOW SUCH INCOME COULD BE SAID TO BE HAVE BEEN CONCEALED OR FURNISHED INACCURATE PARTICULARS OF IN COME BY HER. HE SUBMITTED THAT IN ANY WAY THE MATTER, SUCH ASSESSMENT AMOUNTS TO A DEBATABLE ISSUE SO THAT NO PENALTY IS ATTRACTED. IN SUPPORT OF HIS CON TENTION, HE RELIED ON THE VARIOUS CASE LAW OF ITA NO. 6296-6197/M/2010 ORDER DATED 21-10-2011 AND IN THE CASE OF DCIT V. SMT. PANNABEN P DESAI (2001) 79 ITD 30 (AHD) K. DEEDAR AHMED V. ITO (2005) 97 ITD 240 (HYD), SUPER STEELS (SALES) CO. 178 ITR 451 (CAL) AND METAL STORES V. CIT 186 ITR 612 (GAU). HE FURTHER SUBMITTED THAT ADMITTEDLY THE ADDITION OF TUITION I NCOME IS MADE ON ESTIMATE BASIS AND NO PENALTY U/S. 271(1) IS ATTRACTED WHEN INCOME IS ASSESSED ON ESTIMATE BASIS IN THIS REGARD HE RELIED ON THE DECI SION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT V. SUBASH TRADING CO. (1996) 221 ITR 110 (GUJ) AND THE JUDGMENT OF HONBLE PUNJAB & HARY ANA HIGH COURT RENDERED IN THE CASE OF HARIGOPAL SINGH V. CIT (2002) 258 ITR 85 (P&H) AND THE JUDGMENT OF HONBLE SUPREME COURT RENDERED IN THE C ASE OF SANGUR VANASPATI MILLS 308 ITR 18 (ST) (SC). HE SUBMITTED THAT IT CAN BE NOTICED FROM THE ASSESSMENT ORDER PASSED BY AO THAT THE PENALTY PROC EEDINGS WERE INITIATED FOR CONCEALING THE PARTICULARS OF INCOME AND FURNIS HING INACCURATE PARTICULARS OF INCOME. EVEN WHILE PASSING THE PENALTY ORDER, TH E AO IN PARA-6.9 HAS HELD THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME. HE SUBMITTED THAT ITA NO.2318-23/AHD/2012 A.YS. 99-00 TO 03-04 SONALBEN P DAVE V. ITO WD-4, ANAND PAGE 4 THE INITIATION OF PENALTY WAS VAGUE AND UNCLEAR AS TO THE NATURE OF THE DEFAULT. THE PENALTY IMPOSED ON AN ALTOGETHER DIFFERENT DEFA ULT I.E. CONCEALING THE PARTICULARS OF INCOME. AND IN ANY VIEW OF THE MATTE R, IT WILL BE APPRECIATED THAT WHEN THE ADDITION IS MADE IN RESPECT OF TUITION INC OME, IT RESULTS INTO CONCEALING THE INCOME RATHER THAN FURNISHING THE IN ACCURATE PARTICULARS. HE RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT GURAJAT-III V. MANU ENGG. WORKS (1980) 122 ITR 306 (GUJ) AND THE ORDER OF HONBLE CO-ORDINATE BENCH IN THE CASE OF SMT. RAMILABEN RATILAL SHAH V. ACIT (1998) 60 TTJ 171 (AHD). LD. COUNSEL FOR THE ASSES SEE VEHEMENTLY ARGUED THAT THERE WAS NO OCCASION TO IMP OSE PENALTY UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ON THE CONTRARY, LD. SR-DR STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT LD. CIT(A) HAS EXAMINED ALL THE SUBMISSIONS OF THE ASSE SSEE AND WAS JUSTIFIED IN CONFIRMING THE PENALTY. HE PLACED RELIANCE ON THE J UDGMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF A.M. SHAH & CO. V. CIT (1999) 238 ITR 415 (GUJ). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND CASE LAWS CITED BY LD. COUN SEL OF THE ASSESSEE. THE CONTENTS OF THE ASSESSEE IS THREE FOLD (I) FIRSTLY THAT IN ORIGINAL ASSESSMENT ADDITION WAS MADE ON PROTECTIVE BASIS (II) SECONDLY , THE ADDITION IS MADE ON THE ESTIMATION OF TUITION INCOME AND (III) THAT IN THE ASSESSMENT ORDER THE AO HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALING TH E PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. THEREF ORE, THERE WAS NO CLEAR-CUT FINDING WHETHER THE ASSESSEE COMMITTED DEFAULT OF F URNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING THE MATERIAL PA RTICULARS. WE FIND FORCE INTO THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE AS A DMITTEDLY, IN ORIGINAL ASSESSMENT ADDITION WAS MADE ON PROTECTIVE BASIS. M OREOVER, IT IS UNDISPUTED FACT THAT TUITION INCOME IS ASSESSED ON ESTIMATION BASIS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT P ENALTY AS LEVIED CAN NOT BE SUSTAINED. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID IN THE DECISION OF ITA NO.2318-23/AHD/2012 A.YS. 99-00 TO 03-04 SONALBEN P DAVE V. ITO WD-4, ANAND PAGE 5 HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE C ASE OF CIT V. SUBHASH TRADING COMPANY (1996) 221 ITR 110 (GUJ) AND SLP (CIVIL) NO. 31541 PF 2008 IN THE CASE OF CIT V. SANGRUR VANASPATI MILLS LTD AND THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF HARIGOPAL SINGH (SUPRA) WE DELETE THE PENALTY IMPOSED BY ASSESSING OFFICER. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. 7. THE FACTS ARE IDENTICAL AND TAKING A CONSISTENT VIEW IN ASSESSEES APPEAL IN ITA NO.2318/AHD/2012 IN PARA-4 & 5 OF THI S ORDER, THE APPEALS OF ASSESSEE IN ITA NO. 2319-2323/AHD/2012 ARE ALLOWED. 8. IN COMBINED RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP #$%- 18/01/2013 ,-. / ' ' ' ' 001 001 001 001 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $.$04 5 / CONCERNED CIT 4. 5- / CIT (A) 5. 1 89 0004, 04!, ,-. / DR, ITAT, AHMEDABAD 6. 9<= >? / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ @/, $ 04!, ,-. / ITA NO.2318-23/AHD/2012 A.YS. 99-00 TO 03-04 SONALBEN P DAVE V. ITO WD-4, ANAND PAGE 6 STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 02/01 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 02/01 4) DATE OF CORRECTION 03/01 5) DATE OF FURTHER CORRECTION 04/01 6) DATE OF INITIAL SIGN BY MEMBERS 07/01 7) ORDER UPLOADED ON 18/01 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 18/01