The ACIT,Valsad Circle, Valsad V. Shri Rajan Manubhai Desai, Valsad

ITA 2386/AHD/2012

• Counselvise Citation: 238620514 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 25-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: K N BHATT
• Keywords: Unexplained cash credit; Bonafide belief
• Section: 43B; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT M EMBER ACIT, VALSAD CIRCLE, SURYAPRAKASH CHAMBERS DHARAMPUR RAOD, VALSAD (APPELLANT) VS SHRI RAJAN MANUBHAI DESAI, PROP RAJAN ELECTRICALS, C-ROAD, PALITHILL-3 TITTHAL RAOD, VALSAD (RESPONDENT) REVENUE BY: SRI O.P. BATHEJA, SR.D.R. ASSESSEE BY: SRI K.N. BHATT, A.R. DATE OF HEARING : 04-12-2013 DATE OF PRONOUNCEMENT : 13-12-20 13 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A), VALSAD DATED 13-08-2012. 2. REVENUE IS AGGRIEVED BY THE ACTION OF LD. CIT(A) IN DELETING THE PENALTY IMPOSED BY AO U/S. 271(1)(C) OF THE ACT. ITA NO. 2386/AHD/2012 ASSESSMENT YEAR 2009-10 I.T.A NO.2386 /AHD/2012 A.Y. 2009-10 PAGE NO ACIT VS. RAJAN MANUBHAI DESAI PROP. RAJAN ELECTRICA L 2 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL AND FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 45,1 0,200/-. WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT, T HE AO MADE ADDITION ON ACCOUNT OF UNPAID LIABILITY OF SERVICE TAX AND UNEX PLAINED CASH CREDIT AMOUNTING TO RS. 20,02,587/- AND RS. 1,50,000/- RES PECTIVELY AND DETERMINED THE TOTAL INCOME OF ASSESSEE AT RS. 80,26,845/-. T HE ASSESSEE WENT IN APPEAL BEFORE CIT(A) WHO DELETED THE ADDITION OF RS. 1,50 ,000/- ON THE ISSUE OF UNEXPLAINED CASH CREDIT BUT SUSTAINED THE ADDITION OF RS. 20,02,887/- ON THE ISSUE OF UNPAID SERVICE TAX LIABILITY. SUBSEQUENTL Y, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WERE INITIATED BY AO AND A PEN ALTY OF RS. 6,80,679/- WAS LEVIED ON THE GROUND THAT ASSESSEE FURNISHED IN ACCURATE PARTICULARS OF INCOME. LD. CIT(A) DELETED THIS PENALTY BY OBSERVI NG AS UNDER: - 4.3 DECISION :- I HAVE CONSIDERED THE OBSERVAT ION OF THE AO IN THE ASSESSMENT ORDER AS WELL AS THE CONTENTION RAIS ED BY THE AR OF THE APPELLANT. THE FINDINGS OF THE AO ARE PERUSED. IT SEEMS THAT THE APPELLANT HAS CLAIMED WRONGFUL DEDUCTION FU RNISHING INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALING THE IN COME ITSELF. HE HAS ALSO OBSERVED THAT THE APPELLANT MUST HAVE ADMI TTED HIS DEFAULT/ MISTAKE ONLY WHEN NOTICE U/S 142(1) WAS ISSUED AND SERVED UPON HIM DATED 05/09/2011 THOUGH HE HAS ACKNOWLEDGED THE FAC T THAT THE APPELLANT SURRENDERED THE AMOUNT OF RS.20,02,587/- IN RESPECT OF UNPAID SERVICE TAX U/S 43B OF THE ACT VIDE LETTER D ATED 14/12/2011. THE ARGUMENTS ADVANCED BY THE AR OF THE APPELLANT A RE CONSIDERED. HE HAS RIGHTLY POINTED OUT THAT THE FACTS OF UNPAID SERVICE TAX LIABILITY WAS VERY WELL DISCLOSED ON THE FACE OF THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. THEREFORE, THE ISSUE OF CONCEALMENT OF INCOME FOR NON DISCLOSURE OF FACT IS RULED OUT. I.T.A NO.2386 /AHD/2012 A.Y. 2009-10 PAGE NO ACIT VS. RAJAN MANUBHAI DESAI PROP. RAJAN ELECTRICA L 3 SO FAR AS THE POINT OF ADMISSION OF MISTAKE BY THE APPELLANT IS CONCERNED THE AO NEEDLESSLY EMPHASIZING AS TO AT WH AT POINT OF TIME THE ADMISSION OF MISTAKE HAS TO BE MADE. IT IS ENOU GH TO PROVE THE BONA FIDES OF THE APPELLANT THAT HE ADMITS THE MIST AKE SURRENDERS THE AMOUNT OF UNPAID SERVICE TAX DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THEREFORE, ON BOTH OF THE COUNTS UPON WHICH THE AO HAS LEVIED A PENALTY DOESN'T JUSTIFY. THE AR OF THE APP ELLANT HAS DEALT WITH ALL OF THE ASPECTS MORE PARTICULARLY THE DISCLOSURE OF FACTS, BONAFIDE BELIEFS OF THE APPELLANT AND THEREBY THE BONAFIDE E XPLANATION IN RESPECT OF THE ISSUE RAISED BY THE AO AND THE ACTIN G OF THE APPELLANT ON THE ADVICE OF THE COUNSEL QUOTING VARIOUS PRONOU NCEMENTS DECIDED IN FAVOUR OF THE APPELLANT FURNISHING THE COPIES TH EREOF CONTENDED THAT THE PENALTY LEVIED BY THE AO IS UNWARRANTED. CONSIDERING ALL THE ASPECTS EXPLAINED BY THE AR OF THE APPELLANT BACKED UP BY THE VARIOUS PRONOUNCEMENTS AND FACTS O F THE CASE, THE PENALTY LEVIED BY THE AO IS DELETED . 4. BEFORE US LD. DR RELIED ON THE ORDER OF AO WHILE LEARNED COUNSEL OF THE ASSESSEE RELIED ON THE ORDER OF LD. CIT(A) AND FOLLOWING CASE LAWS. 1. CIT VS. RELIANCE PETROPRODUCTS PVT. LTD (2010) 3 22 ITR 158 (SC) 2. MAK DATA P. LTD VS. CIT (2013) 358 ITR 593 (SC) 3. NORTH LAND DEVELOPMENT & HOTEL CORP. LTD VS. CI T (2012) 349 ITR 363 (SC) 4. MAMTA MACHINERY P. LTD VS. ACIT (ITAT AHMEDABAD) (ITA/2380/AHD/2002) 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT LD. CIT(A) WHILE DELETING THE PENALTY HAS GIVEN A C ATEGORICAL FINDING THAT UNPAID SERVICE TAX LIABILITY WAS DISCLOSED IN THE B ALANCE SHEET FILED BY THE I.T.A NO.2386 /AHD/2012 A.Y. 2009-10 PAGE NO ACIT VS. RAJAN MANUBHAI DESAI PROP. RAJAN ELECTRICA L 4 ASSESSEE ALONG WITH THE RETURN OF INCOME. THIS FIN DING HAS REMAINED UNCONTROVERTED BY THE REVENUE AT THE TIME OF HEARIN G BEFORE US, THEREFORE WE FEEL THAT PENALTY U/S. 271(1)(C) FOR CONCEALMENT OF INCOME OR FOR FILING OF INACCURATE PARTICULARS OF INCOME CANNOT BE LEVIED I N THIS CASE IN VIEW OF THE CASE LAWS RELIED BY THE ASSESSEE AND THEREFORE WE A RE NOT INCLINED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (A.K. GARODIA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 13/12/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,