The ACIT, 2 (1), V. M/s Anand Marketing,

ITA 241/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0069 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-09-2009
• Assessment Year: misc
• Appeal Filed On: 30-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S C GOYAL
• Keywords: Revised return
• Section: 271(1)(c); 153A; 264; 139(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI BHAVNESH SAINI, JM & SHRI V.K. GUPTA, A M ITA NO.241/IND/2008 AY: 2002-03 (PAN AAKFA 8371 J) ACIT-2(1), UJJAIN APPELLANT VS. M/S. ANAND MARKETING, FAWWARA CHOWK, NAI SADAK, UJJAIN RESPONDENT DEPARTMENT BY SMT. APARNA KARAN, ADDL. CIT, DR ASSESSEE BY SHRI S.C. GOYAL, ADV. O R D E R PER V.K. GUPTA, AM THIS APPEAL FIELD BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. CIT(A)-UJJAIN DATED 25.3.2008 FOR THE ABOVE AY. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND PERUSE D THE FINDINGS OF THE AUTHORITIES BELOW. 3. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN RESTRICTING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) TO RS.1,31,328/- AS AGAINST RS.4,23,672/- AND FOR HOLD ING THAT EXPLANATION (5) TO SEC. 271(1)(C) WAS APPLICABLE. 4. THE FACTS, IN BRIEF, ARE THAT THERE WAS A SEARCH ACTION AGAINST THE ASSESSEE ON 25.9.2003. NOTICE U/S 153A WAS ISSUED. THE ASSESSEE 2 FILED RETURN OF INCOME ON 7.12.2005 DECLARING TOTAL INCOME AT RS.17,65,340/-. THE AO MADE VARIOUS ADDITIONS AGGRE GATING TO RS.12,20,698/-. THE LD. CIT(A) GAVE RELIEF TO THE A SSESSEE AND GAVE CERTAIN DIRECTIONS TO THE AO WHEREIN THE ASSES SMENT WAS REFRAMED AT RS.18,93,381/-. THE AO, THEREAFTER, INI TIATED PENALTY PROCEEDINGS U/S 271(1)(C). THE AO HELD THAT SINCE T HE ASSESSEE DECLARED THIS INCOME ONLY WHEN THE SEARCH ACTION U/ S 132 WAS CARRIED OUT, HENCE, SUCH DECLARATION COULD NOT BE C ONSIDERED AS MADE VOLUNTARILY. ACCORDINGLY, HE LEVIED PENALTY AT RS.5,55,000/-. THE LD. CIT(A), ON APPEAL BY THE ASSESSEE, HELD THA T INCOME WHICH HAD BEEN OFFERED/SURRENDERED DURING THE COURS E OF THE SEARCH COULD NOT BE SUBJECTED TO PENALTY U/S 271(1) (C) IN VIEW OF EXPLANATION (5) THERETO. ACCORDINGLY, HE REDUCED TH E QUANTUM OF PENALTY TO RS.1,31,328/-. AGGRIEVED BY THIS, THE RE VENUE IS IN APPEAL BEFORE US. THE LD. DR SUBMITTED THAT PROVISI ONS OF EXPLANATION (5) TO SEC. 271(1)(C) WERE NOT APPLICAB LE FOR THE REASON THAT THE ASSESSEE HAD NOT DECLARED SUCH INCO ME U/S 132(4) OF THE ACT AND ALSO FOR THE REASON THAT ASSE SSEE HAD NOT FILED RETURN OF INCOME FOR AY 02-03 BEFORE THE DATE SPECIFIED U/S 139(1) AND ALSO DID NOT DISCLOSE THE MANNER IN WHIC H SUCH DECLARED INCOME HAD BEEN EARNED. THE LD. COUNSEL FO R ASSESSEE, ON THE OTHER HAND, CONTENDED THAT THE IMPUGNED INCO ME HAD BEEN OFFERED/SURRENDERED DURING THE COURSE OF THE S EARCH AND 3 REFERRED TO THE PAGE 8 OF THE PAPER BOOK TO SHOW TH E CONTENTS OF THE DECLARATION MADE BY THE ASSESSEE. HE ALSO CONTE NDED THAT THE ASSESSEE, IN THE SAID STATEMENT, HAD ALSO STATED TH E NATURE OF SUCH DECLARED INCOME AND IF HENCE CONDITIONS OF EXP LANATION (5) TO SEC. 271(1)(C) IN THIS REGARD, HAD BEEN MET AND FOR THIS PREPOSITION, HE PLACED RELIANCE ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA K ISHAN GOEL AS REPORTED IN 278 ITR PAGE NO.454. HE ALSO DREW OUR A TTENTION IN THE OBSERVATIONS OF THE HONBLE HIGH COURT THAT IF THERE WAS NOTHING TO THE CONTRARY IN THE STATEMENT RECORDED U /S 132(4) OF THE ACT, IN THE ABSENCE OF ANY SPECIFIC STATEMENT A BOUT THE MANNER IN WHICH SUCH INCOME HAD BEEN ARRIVED, IT CO ULD BE INFERRED THAT SUCH INCOME HAD BEEN ARRIVED FROM THE BUSINESS WHICH THE ASSESSEE WAS CARRYING ON AND IN FACT IN T HE PRESENT CASE, THE ASSESSEE HAD STATED THAT IT WAS ITS INCOM E FROM BUSINESS. HENCE, CONDITIONS OF EXPLANATION (5)(2) H AD BEEN MET. HE ALSO SUBMITTED THAT ASSESSEE HAD DECLARED THIS I NCOME AND HAD ALSO PAID TAXES THEREON, HENCE, MERELY BECAUSE THE RETURN OF INCOME FILED SUBSEQUENTLY, THE ASSESSEE COULD NOT B E SAID TO HAVE NOT COMPLIED WITH THE CONDITIONS OF EXPLANATION (5) (2) TO SEC. 271(1). THE LD. COUNSEL FOR ASSESSEE FURTHER CONTE NDED THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHH ABRA EMPORIUM AS REPORTED IN 264 ITR PAGE 249 HAD CONFIRMED THE O RDER OF THE 4 TRIBUNAL UNDER THE SIMILAR FACTS I.E. IN THAT CASE, A REVISED RETURN HAD BEEN FILED AFTER INCLUDING THE AMOUNT SURRENDER ED DURING THE COURSE OF THE SEARCH AND IN THE PRESENT CASE ALSO, THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/ S 153A HAD ALSO INCLUDED AMOUNT SO SURRENDERED. LD. COUNSEL FOR ASS ESSEE, THEREAFTER ALSO RELIED ON THE DECISION OF THE TRIBU NAL IN THE CASE OF GULABRAI V. GANDHI VS. ACIT AS REPORTED IN (2003) 7 9 TTJ (MUM) 498 FOR THE PREPOSITION THAT ALL THE CONDITIONS MEN TIONED IN EXPLANATION (5) TO SEC. 271(1) HAD BEEN COMPLIED W ITH. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES AND MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE AO, IN THE PENALTY ORDER, HAS HIMSELF MENTIONED THE FACT THAT THE IMPUGNED AMOUNT HAS BEEN DISCLOSED BY THE ASSESSEE IN THE CO URSE OF SEARCH, HENCE, THE CONTENTION OF THE LD. DR THAT IT WAS NOT A CASE COVERED BY THE PROVISIONS OF SEC. 132(4) IS DEVOID OF ANY MERIT, HENCE, REJECTED. AS REGARDS THE OTHER CONTENTION TH AT THE ASSESSEE HAD NOT FILED RETURN BEFORE THE SPECIFIED DATE AS PER SEC. 139(1), WE FIND THAT THE SEARCH HAS TAKEN PLACE ON 22.9.2003 AND DUE DATE FOR FILING THE RETURN OF INCOME FOR THE IM PUGNED PREVIOUS YEAR AS PER SEC. 139(1) IS SUBSEQUENT TO THE DATE OF THE SEARCH AND THE ASSESSEE HAS FILED RETURN THEREAFTER IN COM PLIANCE TO NOTICE ISSUED BY THE DEPARTMENT U/S 153A, HENCE, TH E OTHER CONDITION OF EXPLANATION (5)(2) I.E. THE INCOME WHI CH HAS BEEN 5 OFFERED/SURRENDERED HAD NOT BEEN DISCLOSED IN ANY R ETURN OF INCOME FILED BEFORE THE SEARCH, IS ALSO MET. THE TH IRD CONDITION FOR PAYMENT OF TAX ALONG WITH INTEREST HAD ALSO BEEN CO MPLIED. FURTHER, IN THE STATEMENT GIVEN BY THE ASSESSEE DUR ING THE COURSE OF THE SEARCH, IT HAS BEEN STATED THAT THIS WAS HIS UNDISCLOSED INCOME FROM THE BUSINESS WHICH HAS TO BE VIEWED AS DISCLOSURE OF MANNER IN WHICH SUCH INCOME HAD BEEN EARNED AND, TH EREFORE, THIS CONDITION OF EXPLANATION (5)(2) IS ALSO MET. W E FURTHER FIND THAT JUDICIAL DECISIONS CITED BY THE ASSESSEE AS ME NTIONED HEREIN BEFORE ALSO SUPPORT THE CLAIM OF THE ASSESSEE. IN T HIS VIEW OF THE MATTER, WE HOLD THAT THE ORDER OF THE LD. CIT(A) IS CORRECT IN LAW. HENCE, WE CONFIRM THE SAME. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON .9.2009. SD/- SD/- JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24.9.2009 !VYAS!