ACIT CC 31, MUMBAI V. VIJAY MEHTA, MUMBAI

ITA 2320/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78851 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 23-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 153A; 27; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI . . , , . . !' # , $ BEFORE SHRII P BANSAL, JUDICIAL MEMBER & SHRI N K B ILLAIYA, AM ./ ITA NO.2320/MUM/2012 % &% / ASSESSMENT YEAR 2007-08 THE ACIT CENT. CIR. 31, MUMBAI. VS. SHRI VIJAY MEHTA, 106/107, PRESTIGE CHAMBERS, 1 ST FLOOR, KALYAN STREET MASJID BUNDER MUMBAI- 400 009. PAN: AACPM2655H ( '( /APPELLANT) ( )*'( /RESPONDENT) APPELLANTS BY : SHRI RAVI PRAKASH RESPONDENT BY : SHRI ANUJ KISNADWALA + ,-# / DATE OF HEARING :12.05.2014. ./& + ,-# / DATE OF PRONOUNCEMENT : 12.05.2014 0 0 0 0 / O R D E R PER N K BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-40, MUMBAI, DATED 13.01.2012 PERTAINING TO A.Y. 2007-08 . THE GRIEVANCES OF THE REVENUE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 27 1(1)(C) OF THE I.T.ACT, 1961 AMOUNTING TO RS.24,39,409/- WITHOUT A PPRECIATING THE FACT THAT THE ASSESSEES CASE DOES NOT FALL U/S. 27 1AAA AS THE DUE DATE FOR FILING THE ROI HAD ALREADY EXPIRED AND THE ASSE SSEE DID NOT DECLARE ITA NO.2320/MUM/2012 2 THE INCOME IN THE REGULAR RETURN FILED WHICH WAS AD MITTED IN STATEMENT RECORDED U/S. 132(4) OF THE I.T.ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT PENALTY U/S. 2 71AAA WAS LEVIABLE INSTEAD OF PENALTY U/S. 271(1)(C). 2. IN THIS CASE THE RETURN OF INCOME WAS FILED ON 3 1.10.2007 DECLARING TOTAL INCOME AT RS.14,88,429/- A SEARCH AND SEIZURE ACTIO N U/S. 132 OF THE ACT WAS CARRIED OUT ON 05.10.2007 IN THE CASE OF M/S. MEHTA TRANSPORT SERVICES (I) LTD. THE OFFICE/RESIDENTIAL PREMISES OF THE COMPANY AND ITS DIRECTORS/ CONNECTED PERSONS WERE ALSO COVERED. THE ASSESSEE IS A DIRECTOR OF M /S. MEHTA TRANSPORT SERVICES (I) LTD. THE ASSESSEE IS ALSO A DIRECTOR OF JAY LEELA LOGISTICS PVT. LTD., AND PROPRIETOR OF M/S. VIJAY JAYENDRA MEHTA. ADDITIONAL INCOME HA S BEEN DECLARED U/S. 132(4) OF THE ACT. THE TOTAL ADDITIONAL INCOME ON ACCOUNT OF SEIZED PAPERS AND OTHER DISCREPANCIES FOUND OUT TO BE TAXED IN THE YEAR UND ER CONSIDERATION WAS FINALLY COMPUTED BY THE AO AS UNDER: NATURE OF INCOME AMOUNT UNEXPLAINED CASH FOUND (P-7) 59680 UNEXPLAINED JEWELLERY (P-7) 1124597 UNEXPLAINED ENTRY IN SEIZED PAPERS (1073790 + 500000) (P-9) 1573970 UNVERIFIABLE EXPENSES (P-10) 4488961 TOTAL ADDITIONAL INCOME 7247208 LESS AMOUNT ALREADY OFFERED IN RETURN OF INCOME FILED 7000000 NET ADDITIONAL INCOME TO BE TAXED 247208 SUBJECT TO THE ABOVE REMARKS, THE TOTAL INCOME OF T HE ASSESSEE FOR THIS YEAR IS COMPUTED AS UNDER: I. INCOME FROM BUSINESS/PROFESSION : TOTAL INCOME AS PER RETURN FILED U/S 153A RS.85,99 ,887/- ADD : FURTHER ADDITIONAL INCOME AS DISCUS SED RS. 2,47,208/- TOTAL INCOME RS.88,47,095/- ROUNDED OFF TO RS.88,47,100/ - AGRICULTURAL INCOME FOR RATE PURPOSE RS.32,040/- ITA NO.2320/MUM/2012 3 3. PENALTY PROCEEDINGS U/S. 271(1)(C) AND 271AAA WE RE INITIATED. HOWEVER, NOTICE FOR PENALTY U/S. 271(1)(C) OF THE ACT WAS ON LY ISSUED. ON NON-RECEIPT OF REPLY FROM THE ASSESSEE, THE AO PROCEEDED WITH THE LEVY O F PENALTY U/S. 271(1)(C) OF THE ACT INVOKING THE PROVISIONS OF EXPLANATION 5A TO SE CTION 271(1)(C). ACCORDING TO THE AO THE ASSESSEE HAS DEEMED TO HAVE CONCEALED THE PA RTICULARS OF INCOME AMOUNTING TO RS.72,47,208/- THE PENALTY WAS LEVIED @100% OF THE TAX SOUGHT TO BE EVADED. THE PENALTY WAS QUANTIFIED AT RS.24,39, 409/- 4. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTE R BEFORE THE CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE CIT(A) THAT THE AO CO ULD NOT HAVE LEVIED PENALTY U/S. 271(1)(C) IN TERMS OF PROVISIONS OF SECTION 271AAA CLAUSE (3). IN SHORT, THE ASSESSEES MAIN CONTENTION BEFORE THE CIT(A) WAS TH AT THE PROVISIONS OF SECTION 271(1)(C) DO NOT APPLY ON THE FACTS OF THE CASE AND THE RELEVANT PROVISIONS APPLICABLE WERE OF SECTION 271AAA. AFTER CONSIDERI NG THE FACTS AND THE SUBMISSIONS, THE CIT(A) HELD AS UNDER: 4.3 I HAVE CAREFULLY CONSIDERED THE ISSUE. THE AP PELLANT HAD FILED REGULAR RETURN U/S. 139(1) ON 31.10.2007 DISCLOSING INCOME AT RS.14,88,429/- . A RETURN WAS ALSO FILED IN RESPON SE TO NOTICE U/S. 153A ON 23.11.2009 DECLARING INCOME AT RS.85,99,890 /- WHICH INCLUDED THE ADDITIONAL INCOME DECLARED U/S. 132(4) OF RS.70,00,000/-. THE ASSESSMENT HAS BEEN COMPLETED U/S. 153A AND 143 (3) OF THE IT ACT AT RS.88,47,100/- THIS CLEARLY INDICATES THAT THE ASSESSMENT HAS BEEN COMPLETED U/S. 153A TAKING INTO ACCOUNT THE RE TURN FILED U/S. 153A, IN WHICH ADDITION OF RS.2,47,208/- ONLY HAS B EEN MADE. THEREFORE, THE ACTION OF THE LD. AO IN LEVYING A PE NALTY U/S. 271(1)(C) BY COUNTING ON THE DIFFERENCE BETWEEN THE ASSESSED INCOME U/S. 153A AND THE RETURNED INCOME IN THE RETURN U/S. 139(1) C ANNOT BE APPROVED. THERE IS ADDITION OF RS.2,47,208/- ONLY TO THE RETURNED INCOME U/S. 153A WHICH IS THE RELEVANT RETURN FOR T HE ASSESSMENT ORDER IN QUESTION. 4.4 ACCORDINGLY, IT IS HELD THAT PENALTY IS NOT LEV IABLE U/S. 271(1)(C) AS THE CORRECT PROVISION FOR THE PENALTY WOULD BE U /S. 271AAA. THE LD. AO HAS HIMSELF INITIATED PENALTY U/S. 271AAA ALSO I N THE ASSESSMENT ORDER AND HE WOULD BE AT A LIBERTY TO TAKE AN APPRO PRIATE VIEW IN THIS REGARD. WITHOUT PREJUDICE, EVEN IF THE PENALTY U/S. 271(1)(C) HAD BEEN HELD TO BE LEVIABLE, THE TAX SOUGHT TO BE EVADED WA S REQUIRED TO BE ITA NO.2320/MUM/2012 4 COMPUTED ON THE BASIS OF THE DIFFERENCE BETWEEN ASS ESSED INCOME AND RETURNED INCOME U/S. 153A. THE LD. AO IS, ACCORDIN GLY, DIRECTED TO DELETE THE PENALTY LEVIED AT RS.24,39,409/- 5. AGGRIEVED, THE REVENUE IS BEFORE US. THE LEARNE D DR STRONGLY SUPPORTED THE FINDINGS OF THE AO. THE COUNSEL FOR THE ASSESSEE R EITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES. UNDISPUTEDLY, THE SEARCH TOOK PLACE ON 05.10.2007. THE IMMEDIATE PREVIOUS YEAR ENDED ON 31.03.2007 FOR WHICH THE DUE DATE OF FILING THE RET URN OF INCOME WAS 31.10.2007. THE ASSESSEE HAD FILED ITS ORIGINAL RETURN OF INCOM E ON 31.10.2007. CONSIDERING THESE FACTS, PROVISIONS OF SECTION 271AAA SQUARELY APPLY, WHICH RELATES TO THE SEARCH INITIATED U/S. 132 ON OR AFTER THE FIRST DAY OF JUN E 2007 BUT BEFORE THE FIRST DAY OF JULY 2012. IN THE CASE IN HAND, THE SEARCH WAS INI TIATED ON 05.10.2007. CLAUSE 3 OF SECTION 271AAA IS THE MOST RELEVANT SECTION, WHICH READ AS UNDER: NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF S UBSECTION (1) OF SECTION 271(1)(C) SHALL BE IMPOSED UPON THE ASSESSE E IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUBSECTION (1). 7. A BARE READING OF THIS CLAUSE CLEARLY SUGGESTS T HAT IT EXCLUDES LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. IN THE CASE IN HAND THE AO HAS LEVIED PENALTY U/S. 271(1)(C) OF THE ACT WHICH IS AGAINST THE FACTS OF THE CASE AND ALSO AGAINST THE PROVISIONS OF THE LAW. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF MAY, 2014. SD/- SD/- (I P BANSAL) (N K BILLAIYA) /JUDICIAL MEMBER # # # # / ACCOUNTANT MEMBER MUMBAI; 1 DATED :12 TH MAY, 2014. SA ITA NO.2320/MUM/2012 5 0 0 0 0 + ++ + ), ), ), ), 2 &, 2 &, 2 &, 2 &, / COPY OF THE ORDER FORWARDED TO : 1. '( /THE APPELLANTS. 2. )*'( / THE RESPONDENT. 3. 3 ( ) / THE CIT(A), MUMBAI. 4. 3 / CIT 5. 45 ), , , / DR, F BENCH, ITAT, MUMBAI 0 / BY ORDER, * , ), //TRUE COPY// / 6 7 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI