Shri Pravinbhai Amarshibhai Patel, Ahmedabad V. The Income Tax Officer, Ward-7(4), Ahmedabad

ITA 243/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5900 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV HEARING CONCLUDED ON
• Assessee Lawyers: CHHAJED
• Keywords: Unexplained investment; Depreciation; Income from undisclosed sources; Additional evidence; Revised return
• Section: 142(1); 133A; 133(6); 139(5); 131; 132; 139

Judgement Text

I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM ] I.T.A. NO. 243 /AHD/201 4 ASSESSMENT YEAR S: 20 09 - 10 P RAVINBHAI AMARSHIBHAI PATEL ............APPELLANT 8, SURESHWARI SOCIETY, NARANPURA, AHMEDABAD 3 80 013. [PAN: A CMPP 3180 C ] VS INCOME TAX OFFICER WARD 7 ( 4 ), AHMEDABAD . ...........RESPONDENT APPEARANCES BY M.S. CHHAJED FOR THE APPELLANT S.K. DEV FOR THE RESPONDENT HEARING CONCLUDED ON: 0 2 .03.2017 ORDER PRONOUNCED ON : 22 .05.2017 O R D E R 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 2 6 TH DECEMBER, 2013, PASSED BY THE LEARNED CIT(A), CONFIRMING PENALTY OF RS.2,12,973/ - IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME X ACT, 1961, FOR THE ASSESSMENT YEAR 2009 - 10. 2. GRIEVANCES OF THE ASSESSEE, IN SUBSTANCE, IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE IMPUGNED PENALTY. 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IT IS A CASE IN WHICH THE ASSESSEE HAD REVISED HIS RETURN OF INCOME, ON HIS OWN, TO OFFER CAPITAL GAINS OF RS.8,89,600/ - WHICH WERE INADVERTENTLY LEFT OUT OF THE ORI GINAL RETURN OF INCOME. THE AS SES S ING OFFICER, HOWEVER, WAS OF THE VIEW THAT IF THE CASE OF THE ASSESSEE WAS NOT PICKED UP FOR SCRUTINY ASSESSMENT, HE WOULD NOT HAVE DISCLOSED THE I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 2 OF 8 SAID CAPITAL GAINS. ACCORDINGLY, HE PROCEEDED TO IMPOSE THE PENALTY OF RS.2,12,973/ - , BEING EQUIVALENT TO 100% OF THE TAX SOUGHT TO BE EVADED. AGGRIEVED, ASSE SSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE HEARD THE R IVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LE G AL POSITION. 5. I FIND THAT THE ISSUE IN APPEAL IS SQUARELY COVERED BY A DIVISION BENCH DECISION OF THIS TR IBUNAL , IN THE CASE OF JAYSUKH M . PARMAR [(2014) 149 ITD 75 (AHD)] WHEREIN THE TRIBUNAL HAS, INTER ALIA , OBSERVED AS FOLLOWS : - ............ ............WE FIND THAT IN THE SAID NOTICE, THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) HAS ASKED THE ASSESSEE TO PRODUCE COPIES OF THE RETURN OF INCOME FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 ALONG WITH ALL THE ANNEXURE LIKE THE BALANCE - SHEET AND THE PROFIT AND LOSS ACCOUNT, ETC., ALONG WITH LIST OF BANK ACCOUNTS, BANK BOOK, CASH BOOK FOR THE SAID PERIOD. FROM THIS NOTICE, IT DOES NOT TRANSPIRE THAT ANY MATERIAL WAS AVAILABLE WITH THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATI ON) REGARDING UNACCOUNTED INVESTMENT MADE BY THE ASSESSEE. THE RELEVANT PART OF THE STATEMENT RECORDED BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) ON NOVEMBER 24, 2008 BEING QUESTION NO. 7 AND THE REPLY IS REPRODUCED BY THE ASSESSING OFFICER ON PA GE 2 OF THE ASSESSMENT ORDER IN WHICH IT IS STATED BY THE ASSESSEE THAT AFTER THE RECEIPT OF NOTICE UNDER SECTION 131, THE ASSESSEE APPROACHED THE CHARTERED ACCOUNTANT FOR GUIDANCE AND HE ADVISED THE ASSESSEE THAT THE INVESTMENT IN THE KOTAK SECURITIES IS NOT REFLECTED IN THE PERSONAL BALANCE - SHEET AND HE ADVISED THE ASSESSEE TO FILE REVISED RETURN FOR THE ASSESSMENT YEAR 2008 - 09 SHOWING ADDITIONAL INCOME OF RS. 5 LAKHS. IT IS ALSO STATED BY THE ASSESSEE IN THE REPLY THAT THE REVISED RETURN OF INCOME WAS AL READY FILED BY THE ASSESSEE. THESE FACTS SHOW THAT THE REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE BEFORE RECORDING OF THE STATEMENT BEFORE THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) UNDER SECTION 131 BUT THE SAME WAS FILED AFTER THE RECEIPT OF NOTICE UNDER SECTION 131 ASKING THE ASSESSEE TO PRODUCE THE COPIES OF RETURN OF INCOME AND ENCLOSURES ALONG WITH BOOKS, ETC. IN THE LIGHT OF THESE FACTS, WE EXAMINE THE APPLICABILITY OF VARIOUS JUDGMENTS CITED BY THE LEARNED AUTHORISED REPRESENTATIVE : 9. RELIANCE WAS PLACED BY THE LEARNED AUTHORISED REPRESENTATIVE ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF DY. CIT V. DR. SATISH B. GUPTA [2010] 42 SO T 48 (AHD.) . THE FACTS OF THAT CASE ARE THAT A SURVEY UNDER SECTION 133A WAS CARRIED OUT ON SEPTEMBER 22, 2006 AT THE PREMISES OF THE ASSESSEE, WHO IS A PRACTICING DOCTOR, AND DURING THE COURSE OF SURVEY, THE ASSESSEE DISCLOSED UNACCOUNTED INCOME OF RS. 3 2.85 LAKHS AND THEREAFTER, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS.37.57 LAKHS WHICH INCLUDED UNACCOUNTED INCOME OF RS. 32 LAKHS AS DECLARED BY THE ASSESSEE DURING THE COURSE OF SURVEY. THE ASSESSMENT WAS FINALLY COMPLETED AT A FIGURE OF RS. 38,12,360 AND THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT IN RESPECT OF A SUM OF RS. 32.85 LAKHS DECLARED BY THE ASSESSEE DURING THE COURSE OF SURVEY. UNDER THESE FACTS, PENALTY WAS DELETED BY T HE TRIBUNAL BY MAKING FOLLOWING OBSERVATIONS AS PER PARAGRAPH 7 OF THAT TRIBUNAL ORDER : I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 3 OF 8 '7. THUS THE BASIS FOR LEVY OF PENALTY IS RETURN OF INCOME. IF ANY AMOUNT HAS BEEN SHOWN IN THE RETURN OF INCOME THEN IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEAL ED ANY PARTICULAR ABOUT THAT INCOME OR FURNISHED INACCURATE PARTICULARS IN RELATION THERETO. THERE CANNOT BE ANY CONCEALMENT PRIOR TO FILING OF RETURN. QUESTION OF CONSIDERING WHETHER THE ASSESSEE IS LIABLE FOR ACTION UNDER SECTION 271(1)(C) WOULD ARISE ON LY WHEN RETURN OF INCOME IS SCRUTINISED BY THE ASSESSING OFFICER AND HE FINDS SOME MORE ITEMS OF INCOME OR ADDITIONAL INCOME OVER AND ABOVE WHAT IS DECLARED IN THE RETURN. IF IT IS SO, THE ASSESSEE WOULD BE LIABLE FOR ACTION UNDER SECTION 271(1)(C) IN RESP ECT OF SUCH ITEMS ONLY WHICH ARE DISCOVERED BY THE ASSESSING OFFICER ON THE SCRUTINY OF RETURN OF INCOME OR AFTER CARRYING OUT INVESTIGATION AND DISCOVERING SOME MORE ITEMS OF INCOME NOT FOUND DECLARED OR MENTIONED IN THE RETURN OF INCOME. PRIOR TO FILING OF RETURN OF INCOME THERE IS NO CONCEPT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. 8. THE INITIAL PHRASE USED IN SECTION 271(1)(C) SUGGESTS THAT THE ASSESSING OFFICER HAS TO FIND IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT...THAT THE A SSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN FACT THE PROCEEDINGS AGAINST THE ASSESSEE WOULD START ONLY AFTER RETURN OF INCOME IS FILED BY THE ASSESSEE OR AFTER ISSUANCE OF STATUTORY NOTICE AGAI NST HIM SUCH AS UNDER SECTION 142(1) OR UNDER SECTION 143(2). CARRYING OUT SURVEY UNDER SECTION 133A IS NOT AT ALL ANY PROCEEDINGS. PROCEEDINGS AS USED IN SECTION 271(1)(C) ARE STATUTORY PROCEEDINGS INITIATED AGAINST THE ASSESSEE EITHER BY ISSUANCE OF STAT UTORY NOTICE OR AFTER FILING OF RETURN OF INCOME. SURVEY UNDER SECTION 133A OR SEARCH UNDER SECTION 132 OR ISSUANCE OF NOTICE UNDER SECTION 133(6), FOR EXAMPLE, ARE ONLY MEANS OF COLLECTING EVIDENCE AGAINST THE ASSESSEE AND ARE NOT EQUIVALENT TO STATUTORY PROCEEDINGS. ANOTHER CRITERIA OF FINDING OUT AS TO WHETHER PARTICULAR ACTION IS A STATUTORY PROCEEDINGS OR NOT IT IS TO BE SEEN WHETHER IT CAN BE BROUGHT TO A LEGAL CONCLUSION AGAINST THE ASSESSEE BY DETERMINING HIS RIGHT OR LIABILITY. MERELY CARRYING OUT SURVEY UNDER SECTION 133A DOES NOT CREATE ANY LIABILITY AGAINST THE ASSESSEE WHICH IS CREATED ONLY THROUGH ASSESSMENT PROCEEDINGS OR PENALTY PROCEEDINGS. THEREFORE, THE LEARNED DEPARTMENTAL REPRESENTATIVE IS INCORRECT IN HIS SUBMISSION THAT SURVEY BEING A PROCEEDINGS AND THE ASSESSING OFFICER HAS DISCOVERED CONCEALMENT DURING SURVEY, THEREFORE, THE ASSESSEE IS LIABLE FOR PENALTY UNDER SECTION 271(1)(C). IN THIS REGARD WE REFER TO SOME COMMON DEFINITIONS OF WORD 'PROCEEDINGS'. PROCEEDINGS - PROCEEDINGS HAVE BE EN DEFINED IN VARIOUS WAYS. IT INCLUDES ANY SUIT, APPEAL OR APPLICATION. IT INCLUDES ANY PROCEDURAL MEANS FOR SEEKING REDRESS FROM THE TRIBUNAL OR COURT ; THE BUSINESS CONDUCTED BY A COURT OR OTHER OFFICIAL BODY, THE TERM 'PROCEEDINGS' MAY INCLUDE THE INST ITUTION OF ACTION AGAINST DEFENDANT, THE SUBMISSIONS OF DEFENCE AND TRIAL. IT ALSO MEANS A LEGAL ACTION OR PROCESS AND ACT DONE BY AN AUTHORITY OF A COURT OF LAW ; ANY STEP TAKEN BY EITHER PARTY IN A LEGAL PROCEEDING, AN ACTION OR COURSE OF ACTION BEFORE A COURT. IT IS ALSO A PRESCRIBED MODE OF ACTION FOR CARRYING INTO EFFECT A LEGAL RIGHT. IN ITS ORDINARY ACCEPTANCE PROCEEDINGS MEANS FORM AND MANNER OF CONDUCTING JUDICIAL BUSINESS BY A QUASI JUDICIAL AUTHORITY, THE FORM IN WHICH ACTIONS ARE TO BE BROUGHT A ND DEFENDED AND THE MODE OF DECIDING SUITS OR OF OPPOSING JUDGMENTS OR OF EXECUTING THEM. THE WORD 'PROCEEDINGS' ALSO INCLUDES WITHIN ITS AMBIT ALL MATTERS COMING UP FOR ADJUDICATION. IT IS ALSO A PRESCRIBED COURSE OF ACTION FOR THE ENFORCEMENT OF LEGAL RI GHT. IT HAS BEEN HELD IN D.B.S. FINANCIAL SERVICES P. LTD. V. SMT. M. GEORGE, ITO (SECOND) [1994] 207 ITR 1077 (BOM) BY THE HON'BLE BOMBAY HIGH COURT, IN TH E CONTEXT OF ACTION UNDER SECTION 133(6), THAT A PROCEEDING UNDER THE INCOME - TAX ACT BY ITS VERY NATURE MUST BE SPECIFIC AND IT MUST RELATE TO SPECIFIC INDIVIDUAL OR ENTITY. THE TERM 'PROCEEDINGS' USED IN SECTION 133(6) MEANS A PENDING OR EXISTING PROCEEDI NGS. IN OTHER WORDS CALLING FOR INFORMATION IN ITSELF IS NOT A PROCEEDING. SINCE SECTION 133A IS AN ACTION FOR CALLING OF INFORMATION, IN ITSELF IT IS NOT A PROCEEDING. I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 4 OF 8 9. FURTHER CLAUSE (C) TO SECTION 271(1) MENTIONS 'AS CONCEALED OR FURNISHED'. T HEY ARE PAST - TENSE WORDS INDICATING THAT THE ASSESSEE HAS COMMITTED CERTAIN ACT ON WHICH PENALTY IS LEVIABLE. THUS THE ACT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS SHOULD BE VIEWED BY THE ASSESSING OFFICER AS DONE WITH RESPECT TO RETURN OF IN COME. THE OMISSION OR COMMISSION OR CONTUMACIOUS CONDUCT HAS TO BE VIEWED FROM THE RETURN OF INCOME AND IF CERTAIN THING IS NOT DISCLOSED OR NOT FURNISHED THEREIN ONLY THEN IT CAN BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISH ED INACCURATE PARTICULARS OF INCOME. PRIOR TO THIS ASSESSEE HAS NOT DONE ANY CONTUMACIOUS CONDUCT ON WHICH PENALTY CAN BE LEVIED. MERELY BECAUSE CERTAIN RECEIPTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNT OR RECEIPTS ARE NOT ISSUED TO THE PATIENTS, BUT INCOM E THEREFROM WAS FINALLY DECLARED IN THE RETURN OF INCOME, THEN THERE IS NO CONTUMACIOUS CONDUCT. FOR NOT MAINTAINING BOOKS OF ACCOUNT OR NOT ISSUING RECEIPTS TO THE PATIENTS FOR THE AMOUNT RECEIVED BY THE ASSESSEE, THE BOOKS, AT THE BEST, CAN BE REJECTED B Y INVOKING PROVISIONS OF SECTION 145(3) AND INCOME CAN BE ESTIMATED IN ACCORDANCE WITH SECTION 144. BUT WHERE THE ASSESSING OFFICER ACCEPTS THE INCOME DECLARED IN THE RETURN OF INCOME THEN THE ASSESSEE CANNOT BE CHARGED FOR ANY CONTUMACIOUS CONDUCT. THERE ARE, IN FACT, SEVERAL JUDGMENTS ACCORDING TO WHICH PENALTY IS NOT LEVIABLE IF ADDITION IS DELETED. THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN CIT V. PARKASH INDUSTRIES LTD. [2010] 322 ITR 622 (P&H) HELD THAT BASIS FOR LEVY OF PENALTY IS RETURNED INCOME. IF ADDITIONS ARE DELETED IN QUANTUM PROCEEDINGS PENALTY COULD NOT BE IMPOSED. THE HON'BLE HIGH COURT HAS HELD AS UNDER (HEADNOTE) : 'A SEARCH SHOWED THAT TH E ASSESSEE HAD RECEIVED AMOUNT OF RS.3.5 CRORES FROM THE BANK ACCOUNT OF S, FARIDABAD. IT WAS OBSERVED THAT THE FIRM WAS A BOGUS FIRM AND THE CLAIM OF THE ASSESSEE THAT THE AMOUNT WAS RECEIVED TOWARDS CONSIDERATION FOR SALE OF MATERIAL, WAS NOT ACCEPTED. H ENCE, ADDITION WAS MADE TO THE DECLARED INCOME. FURTHER ADDITIONS WERE MADE BY HOLDING THAT LEASE RENT SHOWN TO HAVE BEEN PAID BY THE ASSESSEE HAD NOT IN FACT BEEN PAID AND THE CLAIM FOR DEPRECIATION COULD NOT BE ALLOWED AS THE MACHINERY WAS NOT IN THE POS SESSION OF THE ASSESSEE DURING PHYSICAL VERIFICATION. THE COMMISSIONER (APPEALS) UPHELD THE ADDITION IN RESPECT OF RECEIPTS SHOWN TO HAVE BEEN MADE FROM S BUT DELETED THE ADDITION TOWARDS LEASE RENT AND DEPRECIATION ALLOWANCE, TAKING INTO ACCOUNT ADDITIONA L EVIDENCE LED BY THE ASSESSEE. ON FURTHER APPEAL, THE TRIBUNAL UPHELD THE PLEA OF THE ASSESSEE IN RESPECT OF AMOUNT RECEIVED FROM S BUT DISMISSED THE APPEAL OF THE REVENUE IN RESPECT OF DELETIONS IN RESPECT OF LEASE RENT AND DEPRECIATION ALLOWANCE. THE TR IBUNAL CANCELLED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEAL, THAT AS REGARDS THE DELETION BY THE COMMISSIONER (APPEALS) AFTER REFERRING TO THE ADDITIONAL EVIDENCE LED BE FORE HIM, THE TRIBUNAL HAD EXAMINED THE MATTER AND RECORDED THAT A REMAND REPORT WAS DULY SOUGHT AND THUS NO PREJUDICE WAS CAUSED BY CONSIDERING THE ADDITIONAL EVIDENCE. WITH REGARD TO THE AMOUNT, RECEIVED FROM S THE MATTER WAS IN THE REALM OF APPRECIATION OF EVIDENCE. EVEN IF IT IS HELD THAT TWO VIEWS ARE POSSIBLE, THE INFERENCE DRAWN BY THE TRIBUNAL, BEING THE FINAL FACT FINDING AUTHORITY, COULD NOT BE HELD TO BE PERVERSE. THE CANCELLATION OF PENALTY WAS VALID.' SIMILAR VIEW HAS BEEN TAKEN IN THE FOLLOWIN G JUDGMENTS ALSO : (I) CIT V. RELIANCE PETROPRODUCTS P. LTD. [2010] 322 ITR 158 (SC) ; (II) CIT V. BADRI PRASAD KASHI PRASAD [1993] 200 ITR 206 (ALL) ; I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 5 OF 8 (III) PRABHAT OIL TRADERS V. ITO (NO. 3) [1996] 218 ITR (AT) 39 (AHD) ; (IV) CITY DRY FISH CO. V. CIT [1999] 238 ITR 63 (AP) ; (V) CIT V. MOHD. BUX SOKAT ALI [2004] 265 ITR 326 (RAJ) ; AND (VI) ASSTT . CIT V. VIP INDUSTRIES LTD. [2009] 122 TTJ (MUM) 289 : [2009] 30 SOT 254 (MUM) 10. OUR VIEW THAT NO PENALTY IS LEVIABLE IF IMPUGNED AMOUNT IS DISCLOSED IN THE RETURN OF INCOME IS SUPPORTED BY THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE C ASE OF SMT. GOVINDA DEVI V. CIT [2008] 304 ITR 340 (ALL) . IN THAT CASE THE ASSESSEE RECEIVED LOTTERY PRIZE MONEY IN JANUARY, 1992 AND DISCLOSED THE SAME IN THE RETURN FILED FOR THE ASSESSMENT YEAR 1992 - 93 AND PAID THE TAXES. THE ASSESSING AUTHORITY PASSED AN EX PARTE ASSESSMENT ORDER AND EX PARTE PENALTY ORDER IN THE ASSESSMENT YEAR 1991 - 92. IT WAS HELD BY THE HON'BLE COURT THAT ONCE PRIZE MONEY HAS BEEN DISC LOSED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1992 - 93 AND ALSO TAXES WERE PAID THEN ASSESSING AUTHORITY HAD APPARENTLY COMMITTED AN ERROR IN LEVYING THE PENALTY. IN K. C. BUILDERS V. ASSTT. CIT [2004] 265 ITR 562 (SC) IT WAS HELD : THE HON'BLE APEX COURT THAT WHERE ADDITIONS ARE MADE IN THE ASSESSMENT ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT. NO PENALTY WOULD SURV IVE IF ADDITION DID NOT SURVIVE. IN CIT V. S. S. K. G. ARTHANARISWAMY CHETTIAR [1982] 136 ITR 145 (MAD) THE HON'BLE MADRAS HIGH COURT HELD THAT PENALTY CAN BE IMPOSED WITH REFERENCE TO THE CONCEALMENT DONE IN THE ORIGINAL RETURN FILED UNDER SECTION 139. IN THE CASE OF SULEMANJI GANIBHAI V. CIT [1980] 121 ITR 373 (MP) IT WAS HELD THAT AN ASSESSEE INCURS PENALTY UNDER SECTION 271(1)(C) IF HE FILES INACCURATE PARTICULARS OR HIS INCOME IN THE RETURN OR CONCEALS THE PARTICULARS OF INCOME THEREIN. THERE CAN BE NO CONCEALMENT UNTIL THERE IS A DUTY TO DISCLOSE. THE DUTY TO DISCLOSE PARTICULARS OF INCOME ARISES AT THE TIME WHEN THE ASSESSEE FURNISHES RETURN OF INCOME UNDER SECTION 139 AND IF IN FILING HIS RETURN HE CONCEALS THE PARTICULARS OF INCOME OR FURNISHES INACCURATE PARTICULARS HE INCURS PENALTY UNDER SECTION 271(1 )(C). IN THE CASE OF PATNA GUINEA HOUSE V. CIT [2000] 243 ITR 274 (PATNA) IT IS HELD THAT THERE IS NO CASE FOR LEVY OF PENALTY IF INCOME IS DISCLOSED IN THE RETURN OF INCOME BUT THE ASSESSEE HAS REFUSED TO DISCLOSE SOURCE OF INCOME.' 10. IN THAT CASE, THE ASSESSEE DECLARED ADDITIONAL INCOME IN THE COURSE OF SURVEY AND THEREAFTER, INCLUDED THE SAME IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND EVEN UNDER THESE FACTS, THE TRIBUNAL CAME TO THE CONCLUSION THAT PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE. 11. IN THE PRESENT CASE, REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE ON NOVEMBER 24, 2008 IN WHICH ADDITIONAL INCOME WAS DECLARED BY THE ASSESSE E. THE STATEMENT RECORDED BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) IS DATED NOVEMBER 28, 2008 AND IN THE SAME STATEMENT, THE ASSESSEE CONFESSED REGARDING THIS INVESTMENT OUT OF ADDITIONAL INCOME AS DECLARED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME FILED ON NOVEMBER 24, 2008. HENCE, THE REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE BEFORE RECORDING OF STATEMENT BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION). SO FAR NOTICE UNDER SECTION 131 OF THE INCOME TAX ACT, 1961 ISSUED BY T HE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) IS CONCERNED, THE SAME ALSO ONLY REQUIRES THE ASSESSEE TO FURNISH COPIES OF THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 ALONG WITH ALL THE ANNEXURES THERETO LIKE T HE I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 6 OF 8 BALANCE - SHEET, THE PROFIT AND LOSS ACCOUNT, ETC., AND THE ASSESSEE WAS ALSO ASKED TO PRODUCE LIST OF BANK ACCOUNT, BANK BOOK, CASH BOOK, ETC., FOR THE SAID PERIOD. HENCE, IN THE SAID NOTICE ISSUED BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) UND ER SECTION 131 OF THE INCOME - TAX ACT, 1961 ON NOVEMBER 20, 2008, THERE IS NO INDICATION REGARDING ANY ADVERSE MATERIAL HAVING BROUGHT OUT ON RECORD BY THE DEPARTMENT REGARDING ANY CONCEALMENT OF INCOME BY THE ASSESSEE. THE ASSESSEE'S EXPLANATION IS THIS TH AT THIS INVESTMENT WAS MADE OUT OF PAST SAVINGS BUT ON RECEIPT OF THIS NOTICE UNDER SECTION 131 OF THE INCOME - TAX ACT, 1961, THE ASSESSEE CONSULTED A CHARTERED ACCOUNTANT WHO ADVISED THE ASSESSEE TO FILE REVISED RETURN OF INCOME AND INCLUDE ADDITIONAL INCO ME IN THE SAME TO COVER THIS INVESTMENT SINCE HE WAS NOT IN A POSITION TO SUBSTANTIATE HIS EXPLANATION THAT THE INVESTMENT WAS MADE OUT OF PAST SAVINGS. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE REVISED RETURN OF INCOME WAS NOT FILED BY THE ASSE SSEE OR THAT THE SAME IS NOT VALID. IN FACT, THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FILED HIS ORIGINAL RETURN OF INCOME ON AUGUST 18, 2008 AND THE REVISED RETURN OF INCOME WAS FILED ON NOVEMBER 24, 2008 DECLARING ADDI TIONAL INCOME OF RS. 5 LAKHS. HENCE, IT IS NOT IN DISPUTE THAT THE REVISED RETURN WAS FILED WELL IN TIME AS PERMITTED IN LAW AND THE SAME IS VALID. IN OUR CONSIDERED OPINION, THE FACTS OF THE PRESENT CASE ARE EVEN BETTER THAN THE CASE CITED BY THE LEARNED AUTHORISED REPRESENTATIVE AS NOTED ABOVE AND THEREFORE, BY FOLLOWING THIS TRIBUNAL DECISION, PENALTY IN THE PRESENT CASE IS DELETED. 12. NOW, WE CONSIDER THE APPLICABILITY OF VARIOUS JUDGMENT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE FIRST JUD GMENT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THE JUDGMENT OF THE HON'BLE GAUHATI HIGH COURT RENDERED IN THE CASE OF F.C. AGARWAL V. CIT [1976] 1 02 ITR 408 (GAU.) , WHICH IS CONFIRMED BY THE HON'BLE APEX COURT AS PER THE JUDGMENT IN G.C. AGARWAL V. CIT 1990] 186 ITR 571 (SC) . IN THAT CASE ALSO, THE A SSESSEE FILED REVISED RETURN OF INCOME UNDER SECTION 139(5) OF THE INCOME - TAX ACT, 1961 AND DECLARED ADDITIONAL INCOME AS COMPARED TO THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE INCOME - TAX ACT, 1961 AND UNDER THESE FACTS, THE PENALTY WA S IMPOSED BY THE ASSESSING OFFICER WHICH WAS CONFIRMED BY THE TRIBUNAL AS WELL AS BY THE HON'BLE HIGH COURT ALSO. IN THAT CASE, IT IS NOTED BY THE HON'BLE GAUHATI HIGH COURT THAT CENTRAL BOARD OF DIRECT TAXES HAD ISSUED INSTRUCTIONS DATED JANUARY 5, 1971 W HEREIN THE BOARD HAD STATED CLEARLY THAT IF THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS FALSE, HE MIGHT FILE REVISED RETURN TO AVAIL OF THE CONSEQUENTIAL DISCOVERY. IN THAT CASE, IT WAS HELD THAT SINCE THE SAID INSTRUCTIONS WERE ISSUED ON JANUARY 5, 1971 AND REVISED RETURN WAS FILED ON MARCH 20, 1968 AND MARCH 23, 1968 AND PENALTY ORDER WAS PASSED BY THE INSPECTING ASSISTANT COMMISSIONER ON MARCH 21, 1970, THE SAID REVISED RETURN WERE NOT FILED IN PURSUANCE TO ADVERTISEMENT ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES ON JANUARY 5, 1971 AND, THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR THE BENEFIT OF THIS ADVERTISEMENT/INSTRUCTION. IN THE PRESENT CASE, THE ASSESSMENT YEAR INVOLVED IS 2008 - 09 AND HENCE, THE ASSESSEE IS VERY MUCH ENTITLED TO THE BENEFIT OF THI S ADVERTISEMENT/INSTRUCTION AND, THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. 13. THE SECOND DECISION CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT RENDERED IN THE CASE OF CIT V. HAJI P. MOHAMMED [1981] 132 ITR 623/6 TAXMAN 374 (KER) . THE FACTS OF THAT CASE ARE THAT THE ASSESSEE, INDIVIDUAL, WAS A CONTRACTOR EXECUTING WORKS FOR PWD AND F OR THE ASSESSMENT YEAR 1971 - 72, HE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 21,240 UNDER THE HEAD 'INCOME FROM BUSINESS' BEING THE 10 PER CENT. OF THE AGGREGATE AMOUNT OF RS. 2,12,388 SAID TO HAVE BEEN RECEIVED BY HIM FROM THE DEPARTMENT. ON TH E BASIS OF INFORMATION IN HIS POSSESSION, THE INCOME - TAX OFFICER ON DECEMBER 10, 1971 ENQUIRED ABOUT THE AMOUNT RECEIVED BY HIM FROM IRRIGATION DEPARTMENT AND NOT INCLUDED IN THE RETURN. THEREAFTER, THE ASSESSEE SUBMITTED THE REVISED RETURN ON DECEMBER 27, 1971 DECLARING AN INCOME OF RS. 33,020 WORKED OUT BY ADDITION OF RS. 1,17,796 TO RS. I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 7 OF 8 2,12,388 AND APPLYING 10 PER CENT. AS THE PROFIT RATE TO THE TOTAL. UNDER THESE FACTS, THE PENALTY WAS IMPOSED BY THE ASSESSING OFFICER WHICH WAS DELETED BY THE APPELLATE ASSISTANT COMMISSIONER AND THE TRIBUNAL BUT THE HON'BLE HIGH COURT HAS CONFIRMED THE PENALTY ON THIS BASIS THAT IT CANNOT BE SAID THAT THE ASSESSEE WAS UNAWARE OF THE FACT OF HAVING RECEIVED THE SUM OF RS.1,17,633 IN RESPECT OF HIS CONTRACT WITH THE IRRIG ATION DEPARTMENT. THIS FACT WAS ALSO NOTED BY THE HON'BLE HIGH COURT THAT REVISED RETURN WAS FILED BY THE ASSESSEE AFTER THE INCOME - TAX OFFICER HAD CONFRONTED WITH THE INFORMATION IN HIS POSSESSION REGARDING THE IMPUGNED RECEIPT AND THEREFORE, IT CANNOT BE REGARDED AS REVISED RETURN FILED UNDER SECTION 139(5) BECAUSE THERE WAS NO DISCOVERY BY THE ASSESSEE OF ANY OMISSION OR WRONG STATEMENT HAVING BEEN MADE BY HIM BY INADVERTENCE IN THE ORIGINAL RETURN. IN THE PRESENT CASE, THE FACTS ARE DIFFERENT. IN THE PR ESENT CASE, THERE IS NO DEFINITE INFORMATION IN THE POSSESSION OF THE DEPARTMENT REGARDING ANY ADDITIONAL INCOME OF THE ASSESSEE AND ON ISSUANCE OF NOTICE UNDER SECTION 131 OF THE INCOME - TAX ACT, 1961 BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION), T HE ASSESSEE NOTED THAT HIS INVESTMENTS WERE MADE OUT OF PAST SAVING BUT SINCE HE COULD NOT SUBSTANTIATE THIS EXPLANATION, HE WAS ADVISED BY HIS CHARTERED ACCOUNTANT TO FILE REVISED RETURN OF INCOME BY DECLARING ADDITIONAL INCOME. IN OUR CONSIDERED OPINION, THE FACTS OF THE PRESENT CASE ARE DIFFERENT AND, THEREFORE, THIS JUDGMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. 14. THE THIRD JUDGMENT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT RENDERED IN TH E CASE OF S.R. ARULPRAKASAM V. SMT. PREMA MALINI VASAN, ITO [1987] 163 ITR 487/33 TAXMAN 387 (MAD) . THIS JUDGMENT IS REGARDING THE PROCEEDINGS UNDER SECTION 276C READ WITH SECTION 277 OF THE INCOME - TAX ACT, 1961 AND VARIOUS SECTIONS OF THE INDIAN PENAL CODE, 1860 FOR OFFENCES AND PROSECUTIONS. IN THE PRESENT CASE, THE ISSUE INVOLVED IS REGARDING PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) AND, THEREFORE, THIS JUDGMENT OF THE HON'BLE MADRAS HIGH COURT HAS NO RELEVANCE IN THE PRESENT CASE. 15. THE NEXT JUDGMENT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS ANOTHER JUDGMENT OF THE HON'BLE MADRAS HIGH COURT RENDERED IN THE CASE OF RAVI & CO. V. ASST. CIT [2004] 271 ITR 286/143 TAXMAN 287 (MAD) . IN THAT CASE, THE REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE AFTER ISSUE OF NOTICE BY T HE ASSESSING OFFICER UNDER SECTION 143(2) OF THE INCOME - TAX ACT, 1961 ALONG WITH QUESTIONNAIRE CALLING FOR CERTAIN DETAILS. IN THAT CASE, CLEAR FINDING IS GIVEN BY THE TRIBUNAL THAT MUCH BEFORE THE REVISED RETURN FILED BY THE ASSESSEE, THE QUESTIONNAIRE HA D BEEN ISSUED BY THE ASSESSING OFFICER CALLING FOR CERTAIN DETAILS AND THE ASSESSEE FILED REVISED RETURN ONLY THEREAFTER AND HENCE, IT WAS HELD BY THE TRIBUNAL THAT THE REVISED RETURN HAS NOT BEEN FILED VOLUNTARILY IN A BONA FIDE MANNER. IN THE PRESENT CAS E, THE NOTICE UNDER SECTION 131 OF THE INCOME - TAX ACT, 1961 WAS ISSUED BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) ON NOVEMBER 20, 2008 AND IN THE SAID NOTICE ALSO, THE ASSESSEE WAS ASKED TO FURNISH COPIES OF RETURN OF INCOME FILED FOR THE ASSESSM ENT YEARS 2007 - 08 AND 2008 - 09 ALONG WITH ALL ANNEXURES LIKE THE BALANCE - SHEET AND THE PROFIT AND LOSS ACCOUNT AND THE ASSESSEE WAS ASKED TO FURNISH LIST OF BANK ACCOUNTS, BANK BOOK AND CASH BOOK, ETC. AND HENCE, IT IS SEEN THAT NO SPECIFIC QUESTIONNAIRE WA S ISSUED BY THE DEPUTY DIRECTOR OF INCOME - TAX (INVESTIGATION) AND REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE IMMEDIATELY ON NOVEMBER 24, 2008 AND IT IS EXPLAINED THAT THE ASSESSEE HAD EXPLAINED REGARDING THE INVESTMENT IN QUESTION WHICH IS MADE BY THE ASSESSEE OUT OF HIS PAST SAVING BUT SINCE THE ASSESSEE WAS NOT IN A POSITION TO SUBSTANTIATE THIS EXPLANATION, THE ASSESSEE WAS ADVISED BY THE CHARTERED ACCOUNTANT TO FILE THE REVISED RETURN OF INCOME AND DECLARE ADDITIONAL INCOME IN THIS REGARD AND HE NCE, THE FACTS OF THE PRESENT CASE ARE DIFFERENT AND, THEREFORE, THIS JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. I.T.A. NO.24 3 /AHD/201 4 ASSESSMENT YEARS: 20 09 - 10 PAGE 8 OF 8 16. AS PER THE ABOVE DISCUSSION, WE FIND THAT NONE OF THE JUDGMENTS CITED BY THE LEARNED DEPARTMEN TAL REPRESENTATIVE IS APPLICABLE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT AND THE ISSUE INVOLVED IN THE PRESENT CASE IS SQUARELY COVERED BY THE TRIBUNAL DECISION CITED BY THE LEARNED AUTHORISED REPRESENTATIVE AND HENCE, WE DELETE THE PENALTY IN THE PRESENT CASE BY RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION CITED BY THE LEARNED AUTHORISED REPRESENTATIVE AND AS PER THE ABOVE DISCUSSION. 6. THE VIEW S SO EXPRESSED BY THE DIVISION BENCH ARE BINDING ON ME. RESPECTFULLY FOLLOWING THE SAME, I UPHOL D THE PLEA OF THE ASSESSEE. ACCORDINGLY , T HE IMPUGNED PENALTY MUST STAND DELETED. I, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY OF RS.2,12,973/ - . 7. IN THE RESULT, T HE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY O N THE 22 ND DAY OF MAY , 2017 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: AHMEDABAD, THE 22 ND DAY OF MAY , 2017. COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD